Kerry sees good growth

23 Feb 2017

Kerry Group has announced that it achieved good business volume growth momentum in a competitive market environment and delivered a strong financial performance including record cash generation in 2016.

Kerry sees good growth

Kerry Group has announced that it achieved good business volume growth momentum in a competitive market environment and delivered a strong financial performance including record cash generation in 2016.

Group revenue of €6.1 billion reflected 3.6% business volume growth, with Taste & Nutrition delivering €4.9 billion (4% volume growth) and Consumer Foods €1.3 billion (2.1%).Trading profit increased by 7.1% to €750m. Adjusted EPSS was up 7.1% to 323.4 cents.

“In 2016 Kerry delivered good volume growth and a strong financial performance including sustained business margin expansion, record free cash generation and 7.1% growth in adjusted earnings per share,” said Kerry Group Chief Executive Stan McCarthy. “The Group remains confident of its ability to sustain profitable growth throughout global markets. In 2017 we expect to achieve good revenue growth and 5% to 9% growth in adjusted earnings per share”.

Group businesses responded well to the prevailing business environment, increased currency volatility and marketplace changes by accelerating product innovation and improved commercial effectiveness, Kerry said. Health and wellness trends continued to drive ‘nutritionally minded’ consumer choice, increasing demand for taste, active nutrition, higher protein, natural, ‘free-from’, authentic, clean-label, convenient food and beverage products.

With growing ‘away-from-home’ consumption and increased market fragmentation through retail, foodservice and ecommerce channels, the overall marketplace was marked by significant product ‘churn’ as food and beverage providers targeted growth opportunities through differentiated, innovative product offerings, according to the company. Kerry sad its combined Taste & Nutrition Technologies and Systems were to the fore in meeting customers’ innovation needs for customised solutions responding to consumer requirements.

The Group’s recent investments in its global, regional and in-market Technology & Innovation Centre network and Commercial / Application facilities, coupled with a significant increase in RD&A expenditure in Taste & Nutrition to 5.1% of divisional revenue in 2016, were said to have contributed to increased customer engagement and innovation activity.

Performance was also assisted by businesses acquired in 2015 which Kerry said provided a strong platform for international market development. While many developing markets were impacted by continuing geopolitical issues and significant currency volatility, Kerry noted that it continued to satisfactorily progress market development in all regions and recorded excellent growth in Asia - particularly in Q4.

Groupwide performance in Q4 was said to have reflected good business development momentum against a strong prior year comparable. Notwithstanding the uncertainty and sterling devaluation which followed the UK electorate vote on 23 June to leave the European Union, Kerry Foods, the Group’s consumer foods division, performed well, capturing growing consumer demand for authentic, convenient, nutritionally balanced offerings meeting today’s lifestyle and shopper requirements, the company said.