Revenue at Kerry Group saw a decrease of 9.9% for the first three months, or first quarter (Q1), of 2024, according to the group’s interim management statement for that period.
The group said that consumer demand remains relatively subdued during that period, given the recent inflation across many regions globally.
The revenue comprised volume growth of 1.9% and pricing deflation of 5.3%, along with disposals (net of acquisitions) and unfavourable currency conversion, resulting in the 9.9% decrease.
Group earnings before interest, taxes, depreciations and amortisation (EBITDA) increased by 140 basis points (1.4%), as a result of cost efficiencies, portfolio developments and the effects of pricing, Kerry Group said.
In the Kerry Group Taste and Nutrition business, volume growth increased by 3.1%, led by snacks, meals, meat and beverages. However, pricing declined by 3.9%, reflecting the “deflationary environment”, the group said.
Kerry said that Taste and Nutrition “delivered good overall volume growth in the period given relatively muted consumer demand in a number of markets.”
Volume growth in the foodservice sector saw growth of 8.6%. The retail channel, meanwhile, returned to overall growth.
Growth was also seen in savoury taste and the ‘Tastesense’ salt and sugar reduction technologies, as well as Kerry’s “proactive health” technologies.
Regionally, Taste and Nutrition saw volume growth of 3.6% in the Americas in Q1, largely down to growth in snacks, meals and beverages.
The foodservice channel also saw growth in the quarter for that region.
Apart from North America, growth was also seen in Mexico and Brazil, Kerry said.
In Europe, however, volumes fell by 1.4%, largely as a result of the constrained consumer demand in the retail channel.
Asia Pacific, the Middle East and Africa (APMEA) regions saw volume growth of 4.8%, driven by a “strong performance” in the Middle East, Kerry said.
In the Dairy Ireland side of the business, volumes decreased by 3%, while pricing fell back by 13.7%, as a result of a “reduction in dairy input costs year-on-year”.
EBITDA margin in dairy Ireland expanded by 70bps (0.7%). Dairy ingredients volumes were impacted by softer supply across the first quarter, given local market conditions, according to the group.
At the end of March, group net debt was €1.7 billion, which accounts for a new share buyback programme that Kerry announced today (Thursday, May 2) to coincide with the release of its interim management statement.
In line with Kerry’s Capital Allocation Framework, the group announced it will commence a share buyback programme of up €300 million of Kerry Group ordinary shares, subject to approval at the group AGM, which is also taking place today. The programme will be completed by the end of the year at the latest.
The group has proposed a final dividend of 80.8 cent per share for approval at the AGM.
In terms of group outlook, Kerry said it is “well positioned” for volume growth and good margin expansion. However, consumer demand is likely to remain relatively subdued.
Reflecting the new share buyback programme, the group is updating its adjusted earnings per share (EPS) guidance range for the year to 5.5% to 8.5% growth, increasing on the previously-issued guidance range of 5% to 8%.