This is a subscriber-only article
Kerry Group has cut its growth outlook for the full year by 2% to a guidance of 3% to 7% as a result of currency headwinds.
The lower guidance comes on the back of a solid performance in the first half of the year where revenues increased 4.8% to €3.2bn driven by strong organic growth and trading profits up by 5.2% to €338m.
Volumes increased 3.8%, which was ahead of industry levels, while pricing increased 1.8%. Currency headwinds affected the results by 1%.
The ingredients and flavours business delivered volume growth of 4.2% growth while pricing increased 1.7%.
Kerry Foods
Kerry Foods continues to perform well and delivered 2.3% volume growth, despite the uncertainty surrounding Brexit and the significant devaluation of sterling.
Pricing increased by 1.9% across the half year.
Group margins were maintained at 10.6% driven by an improvement in margins in the ingredients and flavours business to reach 13%.
Consumer foods margins fell to 7.6% due to adverse sterling exchange rates.
An interim dividend of 18.8c per share represents an increase of 11.9% over the 2016 interim dividend.
Kerry Group chief executive Stan McCarthy said that “against a background of significant adverse currency movements, the group achieved a strong overall business performance in the first half of 2017, outperforming market growth rates”.
Global revenues
The Asia-Pacific market was the big driver of revenue growth in the half year with business volumes up 10.3% and prices increased by 1.7% leading to an increase in revenues of 14.2% to €419m.
Sales in the Americas region increased 7.6% to €1,339m, with volumes increasing 3.6% and prices up 1.5% and a favourable translation currency impact of 2.5%.
The EMEA region saw sales increase 2.3% to €750m, reflecting 2.3% growth in volumes and a 2.2% increase in pricing, while currency headwinds affected the results by 3%.
The group said the UK market performed well despite food and beverage inflationary trends and the uncertainty surrounding Brexit.
New chief executive
Stan McCarthy is set to retire at the end of September. Edmond Scanlon has been appointed chief executive designate to succeed McCarthy on his retirement.
He has 21 years’ experience with Kerry Group and since 2013 he has been CEO of the Asia Pacific region, a key driver of growth for Kerry in recent years and into the future.
SHARING OPTIONS: