Kerry Group has announced revenue growth of 3.4% for the first quarter of 2020 up to March 31.
Business volume growth rose marginally by 0.2%, while pricing rose by 0.5%. Group trading margin was maintained over the first three months, and was up 30 basis points (bps), excluding one-off items.
Earnings guidance, however, has been withdrawn due to uncertainty around duration and impact of Covid-19, the group reports.
Consumer demands for nutrition and wellness, trusted ingredients and sustainability have continued to increase at pace over recent months, Kerry’s interim management statement notes.
These consumer-driven changes are impacting the end-to-end supply chain, as retailers and customers seek to quickly adapt to address these evolving needs.
The group noted that the pricing increase of 0.5% is primarily due to higher raw material prices in the Consumer Foods division, a transaction currency impact of 0.1%, contribution from business acquisitions of 1.3% and a favourable translation currency impact of 1.3%.
Group trading margin was maintained, with Taste & Nutrition’s trading margin in line with last year and Consumer Foods trading margin expanding by 10bps.
Kerry Group said it has a very strong balance sheet with net debt at the end of March of €1.9 billion with an average maturity period of 5.7 years, and committed undrawn facilities of €1.1 billion.
As announced on February 18, the group has proposed a final dividend of 55.1c per share for approval at the annual general meeting (AGM).
Commenting, Kerry Group CEO Edmond Scanlon said:
The Covid-19 pandemic is a truly unprecedented event, impacting the daily lives of people across the world.
Our global supply chain remains robust, thanks to the tremendous efforts of our operations teams right across our entire manufacturing footprint of 150 plants.
We made a strong start to the year, with good underlying performance and particularly strong growth in the Americas.
Since March, the restrictions on movement have significantly impacted customer demand beyond China and across the food-service channel.
Based on the current restrictions, we expect the impact on second quarter performance to be much more significant than the first quarter.
“We continue to support our customers through this period and are working on a number of actions to mitigate the Covid-19 impact, including helping them move their offerings across channels and categories, planning for post-restriction product launches, while implementing internal cost actions.”