Kerry’s taste and nutrition businesses drive volume growth in Q3

Kerry Group’s global Taste and Nutrition businesses achieved 3.4% volume growth in the nine months to the end of September 2016, driving overall growth in business volumes up 3.2%.

The Group’s interim management statement said that Kerry’s Consumer Foods businesses saw growth of 2.2% for the same period.

Kerry maintained the business momentum reported at the half-year stage in the third quarter delivering sustained volume growth and business margin enhancement.

Kerry’s net debt at the end of the period stood at €1.4 billion compared to €1.7 billion at year-end 2015. The Group’s consolidated balance sheet remains ‘strong’ which will facilitate the continued organic and acquisitive growth of Group businesses.

Going forward, the Group remains confident of delivering an underlying trading performance in the full year as previously guided; growth in adjusted earnings per share in 2016 is expected to be towards the middle to lower end of the 6% to 10% range of 320 to 332c/share.

In the nine months to September 30, 2016, reported revenues increased by 0.4% reflecting the business volume growth, lower pricing, adverse currency translation impact of 4.5%, adverse currency transaction impact of 0.3%, and the effect of acquisitions net of disposals of 4.2%.

Overall, global market conditions remained weak – impacted by currency volatility, the changing marketplace and continuing geopolitical issues in some developing regions, it said.

Consumer trends reflect widening preference for health and wellness offerings, clean-label solutions, organic lines and convenient products available through more fragmented retail and food-service channels.

In turn, the Group said that this has led to significant product ‘churn’ as food and beverage providers seek growth through innovative, differentiated product developments.

Kerry’s Taste and Nutrition Technologies and Systems continued to record good growth in North America, an improved performance in Latin America and excellent growth in Asia.

Market conditions in the Europe, the Middle East and Africe (EMEA) remained subdued due to the deflationary environment, rapidly changing marketplace and instability in developing markets in the region.

Meanwhile, despite the uncertainty and Sterling devaluation resulting from the UK electorate voting to leave the EU, Kerry Foods continued to perform well in the UK and Irish markets.

Consumer Foods

Kerry Foods maintained a solid business performance despite the prevailing competitive market situation and uncertainty caused by the Brexit vote in the UK.

Consumer demand for dairy and meat snack offerings and prepared meals continued to provide good growth opportunities for the division, according to Kerry.

In the nine months to end of September business volumes grew by 2.2%, while pricing was 2% lower.

Divisional trading profit margin increased by 30 base points, benefiting from improved product mix and business efficiencies.

In Ireland ‘Dairygold’ maintained a solid brand performance, assisted by new product launches and ‘Charleville’ performed well in the cheese sector.

‘Fire and Smoke’ branded meat products achieved good growth with the successful launch of a ‘food-to-go’ snacking pots range and new retail listings in the UK market.