Steady revenue increase reported by Kerry Group

For the first half of this year, Kerry Group’s revenue – on a reported basis – increased by 1.4% to €3.2 billion.

Business volumes grew by 3.6% and pricing increased by 0.6% in the period, according to the group’s Interim Management Report for the half year up until June 30, 2018.

The reported revenue increase reflects the: aforementioned business volume growth and positive pricing; contribution from acquisitions of 3.9%; an adverse translation currency impact of 6.6%; and an adverse transaction currency impact of 0.1%, the report added.

Taste and Nutrition delivered 4.1% volume growth and pricing increased by 0.6%, while Consumer Foods’ business volumes increased by 1.3% and pricing increased by 0.9%.

Constant currency adjusted earnings per share increased by 9% to 144.2c in the first half of 2018, compared to a value of 132.2c at the same point last year.

Meanwhile, basic earnings per share increased by 0.5% to 128.3c at the end of the first six months of 2018, up 0.7c versus a year ago.

The report explained that the interim dividend of 21c per share represents an increase of 11.7% over the 2017 interim dividend.

During the first half of the year, the group also completed a total of four acquisitions and entered into a joint venture at a total cost of €120.3 million.

On June 30, 2018, Kerry Group’s net debt stood at €1,403.3 million; this represented an increase of €61.6 million relative to the December 2017 debt of €1,341.7 million.

‘Healthy volume growth’

Commenting on the results, Kerry Group CEO Edmond Scanlon said: “Evolving consumer trends and the changing marketplace have provided increased opportunities and demand for Kerry’s industry leading RD&A and broad technology portfolio.

This, along with the group’s enhanced end use market focus, drove healthy volume growth and underlying margin expansion in the first half of 2018.

“We also continued to make progress with and invest in business development initiatives aligned to our strategic growth priorities.

“In light of the above, we update our guidance and now expect to achieve growth in adjusted earnings per share of 7% to 10% in constant currency,” he said.

Future prospects

In terms of future prospects, Kerry Group claims to be “well placed to respond to localised consumer trends and customer requirements through industry leading innovation”.

According to the report, growth prospects for the full year “remain strong due to a good innovation pipeline, while bearing in mind the strong comparatives from the second half of 2017″.

The report stated: “The group will continue to invest in business development aligned to strategic growth priorities and lead the continued consolidation of the industry, benefiting from the group’s strong balance sheet and scalable business model.

“In February 2018, we guided growth in adjusted earnings per share of 6% to 10% on a constant currency basis.

“Given the momentum of the business, we now expect to achieve growth in adjusted earnings per share of 7% to 10% in constant currency.”