For its 2019 financial year, Kerry Group reported double-digit profit growth as the company reached a number of milestones.

The global taste and nutrition giant recorded turnover in excess of €7bn for the first time, while trading profits exceeded €900m for the first time.

Based on the current growth projections set out by CEO Edmond Scanlon and the senior leadership team at Kerry, it won’t be long before the company breaks the €1bn mark for annual profits.

This will be an enormous achievement for Kerry when it happens and underpins its status as a true multinational and one of Ireland’s greatest global success stories.

Amazingly, over 1bn products are consumed around the world every day that contain a Kerry product or ingredient solution.

It won’t be long before the company breaks the €1bn mark for annual profits

Profits

For 2019, Kerry Group saw its trading profits rise by 12% to a record high of €903m as trading profit margins widened slightly to 12.5%. Kerry recorded earnings (EBITDA) of €1.1bn last year as earnings margins widened to 15.1%.

Turnover for the year grew by 10% to a record €7.2bn, which was driven by volume growth of 2.8%, favourable currency movements of 2.1% and contributions from acquisitions of almost 5%.

Kerry said pricing was flat during the year.

During his presentation of the end-of-year results, Scanlon noted how developing markets now account for €1.6bn of total sales and continues to grow at a double-digit pace.

Developing markets

“I’m very happy with our growth in developing markets. It’s been a very important underpin of our business over the last number of years. Our turnover in developing markets is now up to €1.6bn, which when compared to our competitors is very significant,” said Scanlon.

“I would expect that our business in Asia will be bigger than our European business in the not-too-distant future.

Our turnover in developing markets is now up to €1.6bn, which when compared to our competitors is very significant

“Our business in Asia is growing organically at 10% per year or higher and it’s already close to the same size as our European business, which is growing at just 2% to 3% every year,” he added.

Before Christmas, Kerry Group missed out on a high-profile multibillion dollar deal to take over the nutrition division of US conglomerate DuPont.

While acknowledging that DuPont was a business with many technology platforms in the nutrition space, Scanlon brushed off questions about the failed bid for DuPont’s nutrition arm and pointed out that Kerry had still invested more than €0.5bn acquiring 11 businesses during 2019.

Outlook

For 2020, Kerry Group is forecasting continued growth in adjusted earnings per share of 5% to 9%. It said its growth forecast for 2020 reflected the estimated impact that the coronavirus in China would have on its performance in 2020. Kerry said it has a strong innovation pipeline coming through and remains confident in its ability to continue to outperform its markets.

Taste and nutrition

Kerry’s taste and nutrition division remains the backbone of the company, accounting for almost 85% of total revenues. In 2019, turnover in the division grew by 4% to break the €6bn mark. This was driven by higher sales to customers in meat (+9%), snacking (+9%), beverages (+5%) and pharma (+6%) sectors.

Consumer foods

Kerry’s consumer foods division recorded a 2.4% decline in sales in 2019 to €1.3bn. This was due to a 2.2% fall in volumes coupled with a 0.5% decline in sales prices.

Scanlon said the division was operating within a “soft” trading environment with consumer demand in the UK and Ireland quite sluggish.