Kerry Group has updated its medium-term growth targets and objectives during a Capital Markets presentation today (October 11), as well as confirming a new business acquisition.
The new acquisition will see Kerry Group take over a branded technology company in the US called Ganedan – a company which is focused on probiotics and related technologies.
Addressing investors during the presentation, Kerry Group CEO Edmond Scanlon highlighted that the group expects to deliver in excess of 10% adjusted earnings per share growth – on a constant currency basis – on average per annum over the next five-year cycle.
This will be delivered through achievement of above industry-average volume growth and continued business margin expansion.
“We expect to achieve 3% to 5% volume growth annually on a group-wide basis, with ‘Taste & Nutrition’ targeting 4% to 6% growth and ‘Consumer Foods’ targeting 2% to 3% growth,” Scanlon said.
In terms of trading profit margin progression, the CEO also confirmed that margin in the ‘Taste & Nutrition’ side of the business is targeted to grow by 40 basis points per annum.
Meanwhile, the margin in ‘Consumer Foods’ is targeted to grow by 20 basis points per annum; both of these are expected to contribute to a 30 basis points group margin improvement per annum on average across the five-year cycle, he added.
Commenting on the targets, Scanlon said: “Kerry Group has a unique scalable business model, which I am confident can deliver the continued organic growth of the business across developed and developing markets as planned.
We are in a strong position to lead the continued consolidation of our industry, benefiting from the group’s strong balance sheet, scalable business model and geographic footprint.
“Return On Average Capital Employed (ROACE) is the group’s key financial return metric, the target for which remains to achieve a return in excess of 12% per annum,” he added.
Business acquisition
The acquisition of US-based Ganeden was also confirmed today. Located in Cleveland, Ohio, the company has a current year revenue of approximately $25 million, according to Kerry Group.
Ganeden reportedly has an extensive library of published studies and more than 135 patents for technologies in the supplement, food, beverage, nutrition and personal care markets.
It is hoped that this move will complement the groups’s acquisition of Wellmune in late 2015. Kerry Group’s aim is to extend the acquired Ganeden technologies into wider applications across its global developed and developing markets.