Kerry Group has reported revenue of €8.02 billion in 2023, which is down by 8.6% when compared to the previous year (€8.77 billion).
In a preliminary statement of financial results published today (Thursday, February 15), the company said that the drop in revenue was mainly driven by the unfavourable impact of the disposals and foreign currency in the year.
The Taste and Nutrition element of the business saw volumes increase by 1.1%, while Dairy Ireland volumes decreased by 6.5%.
Group EBITDA (earnings before interest, taxes, depreciation, and amortisation) for the year was €1.165 billion, down from €1.216 billion in 2022. EBITDA margin increased by 60bps to 14.5%.
The company had free cash flow of €701 million, reflecting 92% cash conversion.
The company said that organic profit growth was more than offset by the impact of disposals net of acquisitions and unfavourable translation currency.
Basic earnings per share increased by 20% to 410.4 cent (2022: 341.9 cent) primarily reflecting the profit on disposal of businesses and assets in 2023 and the group’s exit from Russia and Belarus in the previous year.
Kerry Group
Edmond Scanlon, Kerry Group chief executive, said the company delivered “a solid performance in 2023” in the face of challenging market conditions.
“Overall Taste & Nutrition volume growth represented an outperformance of our markets.
“APMEA [Asia Pacific / Middle East / Africa] and Europe achieved good volume growth led by a strong performance in the foodservice channel, while volumes in North America were impacted by stocking dynamics and softer market conditions,” he said.
Scanlon said that the performance of Dairy Ireland “reflected challenging market conditions across the year”.
On the back on continued investment and development in the Taste and Nutrition business, he said that Kerry is strongly positioned “for market outperformance and good margin progression in the coming years”.
“As we begin 2024, Kerry’s innovation pipeline is strong, though overall consumer market volumes remain relatively muted, which is reflected in our guidance for the year of 5% to 8% adjusted earnings per share growth in constant currency,” he said.
Taste and Nutrition
The Taste & Nutrition division reported revenue of €6.975 billion reflected volume growth of 1.1% and positive pricing of 1.1%.
The report stated that the division achieved solid overall volume growth against the backdrop of industry destocking and pricing dynamics.
Foodservice grew by 9.3% supported by innovation with quick service restaurants, fast casuals and coffee chains in particular.
The retail channel volume reduction of 2.2% reflected customer inventory management and softer market dynamics.
Dairy Ireland
Reported revenue in Dairy Ireland in 2023 was €1.283 billion, down 6.5% which the report noted “reflected challenging market environment and constrained supply conditions”.
EBITDA in the division stood at €53 million (2022: €71m), while pricing was down by 9.3% due to constrained supply conditions as well as elevated input costs impacting market demand dynamics.
Within Dairy Ingredients, performance was impacted by the sharp fall in dairy market sales prices particularly across the middle part of the year.
Kerry said that dairy consumer products performed well given the market context, supported by good growth in branded cheese.
Speaking on a call with investor analysts this morning, Edmond Scanlon said that Kerry Group would continue to “selectively invest” in the Dairy Ireland business.
On the future for the division he said: “We will always remain open minded in terms of how best to create shareholder value.”
Scanlon said that EBITA in the business is expected to increase to over €60 million in 2024.
The board of Kerry Group has proposed a final dividend of 80.8 cent per A ordinary share, payable on May 10, 2024 to shareholders.
When combined with the interim dividend, the total dividend for the year amounts to 115.4 cent per share (2022: 104.8 cent per share), which is an increase of 10.1% over last year’s dividend.
The group said that its aim is to have double digit dividend growth each year. .
The board plans to announce a further share buyback this year, the details of which will be announced post completion of the existing €300 million programme.
Kerry Group said that it achieved a 48% reduction in Scope 1 & 2 carbon emissions in 2023, while food waste in the company’s operations was cut by 39%.
Kerry’s Annual General Meeting (AGM) is scheduled to take place on May 2, 2024.