Kerry Group reaffirms 2022 guidance after strong start to year

Food group Kerry has seen continued strong business growth throughout the first quarter of the year, according to a trading statement in which it reaffirmed its full-year guidance.

The lifting of Covid-19 restrictions saw consumers return to more normalised work environments and increase their social engagement, boosting demand for Kerry’s products over the quarter, the company said.

Reported revenue was up 8.1 per cent for the period, driven by business volume growth of 5.6 per cent, increased pricing of 5.8 per cent, a translation currency tailwind of 5.4 per cent and contribution from business acquisitions of 4 per cent.

Group earnings before interest, tax, depreciation and amortisation margin was 10 basis points (0.1 per cent) higher. Kerry has proposed a final dividend of 66.7 cent per share.

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Among its units, taste and nutrition showed strong volume growth of 6.8 per cent. It performed well in developed markets, led by its meat, snacks and bakery businesses, while both retail and foodservice channels performed well.

Kerry’s Dairy Ireland unit saw growth of 0.7 per cent despite significant price increases across the period. In the dairy consumer products sector, the company’s snacking range was boosted by rising out-of-home consumption.

Dairy ingredients’ performance reflected significant higher prices as a result of constrained global supply dynamics. Organic growth for the group was 11.4 per cent for the quarter, the company said.

Challenging conditions

In emerging markets, business volumes rose by 7.9 per cent. However, strong growth in Latin America, the Middle East and southeast Asia was partially offset by challenging conditions in China.

The Americas regions grew 6.7 per cent, with North America delivering a very good performance supported by the group's new manufacturing facility in Rome, Georgia.

Europe saw volume growth of 8.5 per cent, led by the UK, central Europe and southern Europe.

Chief executive Edmond Scanlon said the group was pleased with the start to the year, despite challenging conditions in a number of markets. He reaffirmed the group's full-year guidance, which predicts adjusted earnings per share growth of 5 per cent to 9 per cent on a constant currency basis.

“As overall market conditions remain highly dynamic, we are actively managing the inflationary environment in close collaboration with our customers,” he said.

"As previously announced, we have taken the decision to suspend our operations in Russia and Belarus and we continue to work through the challenges presented in China since the introduction of localised restrictions."