Kerry Group on course to record growth of between 4% and 6% in 2017
Kerry Group is on course to record growth in adjusted earnings per share of 4% to 6% on a reported basis in 2017, according to the company’s CEO Edmond Scanlon.
He made the comment as the group published its interim management report for the first nine months of this year.
“The Kerry Business Model continues to deliver speedy innovation in response to the pace of change in the food and beverage industry.
“We achieved good volume growth in the first nine months of 2017 and for the full year, taking into account the 4% currency translation headwind, we expect to achieve growth in adjusted earnings per share of 4% to 6% on a reported basis to a range of 336 to 343 cent per share,” Scanlon said.
The report outlined that Kerry Group maintained a strong business momentum in third quarter of 2017. Successful innovation in response to consumer health and wellness trends drove good volume growth ahead of category growth rates, it added.
The continuing positive momentum reflects the adaptability and agility of Kerry’s business model in meeting customer requirements across multiple end-use-markets and broadening diverse market channels, the report explains.
Significant growth opportunities allegedly continue to arise across developed and developing markets through the group’s investment in pioneering technologies – assisted by Kerry’s Innovation Centre network and ‘in-market’ Development and Application Centres.
Taste & Nutrition Technologies and Systems reportedly delivered: good growth in North America; a solid performance in Latin America; good growth in the EMEA (Europe, the Middle East, and Africa) region; and continued double digit growth in Asia.
Meanwhile, despite increasing inflationary pressures in the UK consumer foods market, Kerry Foods maintained good volume growth – benefiting in particular from increased snacking trends in dairy and meat categories.
Up until the end of September, business volumes on a group-wide basis increased by 4.2%, the latest figures show. Pricing increased by 2% against a background of approximately 4% higher raw material costs.
On the other hand, reported revenues increased by 4.5% – reflecting the strong business volume growth, increased pricing, adverse currency translation impact of 1.9%, adverse currency transaction impact of 0.3% and the effect of acquisitions net of disposals of 0.5%, the report added.
The divisional trading profit margin decreased by 70 basis points, as the underlying business margin improvement was offset by adverse sterling exchange rate movements, the group explained.
Net debt at the end of the third quarter of 2017 remains similar to the end of last year, standing at €1.3 billion.
In recent weeks, Kerry Group confirmed the acquisition of Ganeden – which claims to be a leading technology innovation company focused on patented probiotics and related technologies.
Based in Cleveland, Ohio, the company has an extensive library of published studies and more than 135 patents for technologies in the supplement, food, beverage, nutrition and personal care markets.
Furthermore, the group also acquired US-based Dottley Spice in October. The company is reportedly a leading supplier of seasonings and coatings to the meat processing industry and foodservice sector in North America.
An agreement has also been reached to acquire the US-based kettle business of Tyson Foods, a leading provider of culinary systems and custom solutions to the foodservice channel in North America.
The transaction – which is subject to regulatory approval – is expected to be completed by year end, according to the report.