Kerry Group half year revenues grow 10.7% to US$4bn buoyed by acquisitions

IRELAND – Kerry Group, and Irish dairy cooperative, issued its financial results for the half year ended 30 June 2019 during which the groups revenue increased by 10.7% to US$4 billion (€3.6bn).

The increase in turnover reflected volume growth of 3.3%, flat pricing, and the positive impact of acquisitions. Group earnings before interest, taxation, and amortisation (Ebita) was up 12.6% to US$433.12 millon (€382.9m).

The company’s nutrition and wellbeing technology portfolio exhibited a strong performance in the period, as demand for products with nutritional attributes was noted to have accelerated across the globe.

Foodservice exhibited a growth of 5.3 percent despite some softness in the company’s North American market at the beginning of the year.

Growth was also observed in customized solutions incorporating in particular Kerry’s fermented ingredients, broad protein portfolio, probiotics, fiber systems, botanicals and natural extracts.

Edmond Scanlon, CEO of Kerry Group, said that “Good progress has been made on the integration of recent acquisitions, which are performing very well. We are updating our guidance and expect to achieve growth in adjusted earnings per share of 7% to 9% in constant currency.”

During the period, the Group completed three acquisitions at a total cost of US$366.5 million (€327.2 million) including Ariake U.S.A. and Southeastern Mills’ North American coatings and seasonings business (SEM).

In June, the group officially inaugurated a US$22.4 million (€20 million) state-of-the-art, production facility in India, marking its fourth significant investment in the country.

In overall, Kerry’s Taste & Nutrition business recorded 3.8 percent volume growth during the period, while its Consumer Foods arm saw volume growth of 0.6 percent.

“While heightened consumer pricing and uncertainty impacted market volume growth rates in some developed markets, our unique and industry-leading business model and integrated taste and nutrition positioning continued to deliver significant value for our customers in meeting rapidly evolving consumer needs.”

However, developing market growth was reported at 9.1 percent, with Asia Pacific Middle East and Africa (APMEA) developing markets being the main driver.

The region reported a 13.3 percent growth in revenue to US$681.2 million (€608m), primarily reflecting 9.6 percent volume growth and the contribution from business acquisitions.  

By the end of the six month period, the company’s net debt was listed at US$2.1 billion (€1.9 billion) after recently agreeing a new five year US$1.2 billion (€1.1 billion) revolving credit facility which extends the maturity profile of the Group’s available credit facilities. 

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