Kerry Group has confirmed that it will commence a €300 million share buyback programme at the beginning of November.
The announcement comes as the global food ingredients company today (Thursday, October 26) reported that its full year earnings guidance is expected to be at the lower end of the 1% to 5% constant currency range previously stated.
In an interim management statement for the third quarter (Q3) of 2023, Kerry said that year-to-date volumes at its dairy business, Dairy Ireland, were down by 6.2%, with margins also impacted by “challenging market conditions”.
Dairy Ireland volumes fell by 12.1% in Q3, “as input cost dynamics continued to impact overall market demand”, while pricing dropped by 17.6% over the period.
Group margin expanded by 100 basis points, driven by the company’s taste and nutrition division, which showed volume growth of 1.6% in Q3 and overall volume growth of 1.5%.
“Overall volumes in the division remained solid considering customer and industry dynamics,” it said.
The financial report shows overall year-to-date pricing of 1.3%, with third quarter pricing reflecting a “deflationary environment”.
Kerry Group
Although market conditions remain uncertain, Kerry Group said it remains “well positioned with a good innovation pipeline”.
It said that the taste and nutrition business is strongly positioned for volume growth and margin expansion.
However, the Dairy Ireland performance continues to be impacted by challenging market conditions.
Commenting on the financial results, Edmond Scanlon, Kerry Group chief executive officer, said:
“We delivered a good overall performance in the period recognising varying conditions across our markets.
“North America saw good improvement through the third quarter, Europe performed in line with expectations while APMEA [Asia Pacific, the Middle East and Africa] continued to deliver strong growth.
“Our unique positioning in foodservice supported our continued strong growth in the channel,” he said.
Scanlon added that given the group’s strong balance sheet and cash flow they have decided to initiate a share buyback programme at the start of next month.
Meanwhile, the Kerry Group board has also agreed to appoint Dr. Genevieve Berger and Prof. Catherine Godson as non-executive directors of the company with effect from November 1, 2023.