US ingredients sales drive Kerry Group H1 growth

By Mark Astley

- Last updated on GMT

Related tags Revenue Kerry

Ireland-based food ingredients manufacturer Kerry Group has reported sales revenue of €2.9bn for the six months to the end of June 2012 – a 10% increase on the prior-year period.

The firm’s Ingredients and Flavours business, which accounts for around 70% of the group’s total revenue, drove the sales increase - recording sales growth of 14% during H1 2012.

The segment, which manufactures and markets ingredients, taste solutions and nutritional and functional ingredients for the food, beverage and pharmaceutical sectors, reported sales revenue of €2.073bn for the period.

Meanwhile, the group’s Consumer Foods segment, which includes products such as Cheesestring, reported sales revenue of €881m for H1 – a 1.8% increase on H1 2011.

The firm is now forecasting expected earnings per share growth of between 8% and 12% for the full year.

Developing markets

Ingredients and flavours sales revenue in the Americas region increased 15% to €876m as the firm progressed further in Latin American markets.

Growth in the Americas offset a revenue decrease in In European, Middle Eastern and African (EMEA), which reported a sales drop of 11.8% to €820m compared with the first half of 2011.

Despite the revenue decrease, progress was made in developing markets, the firm has claimed.

“Progress in developing markets benefited significantly from the Durban, South Africa based Flavour Craft business acquired prior to year-end. Dairy systems volumes were negatively impacted due to challenging conditions in the soups, sauces and confectionary markets but dairy flavours recorded good growth in dairy and bakery applications.”

“Cereal & Sweet technologies recorded a strong performance. Sweet systems saw good growth in the dairy sector and, despite the weather-related poor ice cream season in Europe, Kerry achieved good growth through development of novel inclusions for the premium ice cream market.”

The firm added that “good growth”​ was achieved in the Russian and Middle Eastern markets.

Elsewhere, the firm’s UK consumer brands “achieved a solid performance”, ​with Cheesestrings sales helping to drive revenue.

“Cheesestrings outperformed market growth rates in the children’s cheese snack sector. Low Low continued to drive penetration of the UK cheese sector with Low Low Cheddar Spreads and a new range of Low Low ‘Delightfully Creamy Slices’,” ​said the company.

“Cheesestrings again recorded encouraging market development in Germany and the Ficello brand maintained good growth in France.”

Looking ahead

Looking ahead, the firm is confident of achieving its strategic growth objectives for the full year. Considering current trading conditions, the firm has adjusted its earnings per share.

“Kerry achieved a strong financial and operating performance in the first half of 2012 which augers well for the full year,”​ said Kerry Group CEO Stan McCarthy.

“We have a strong innovation pipeline and continue to make good progress in implementation of our 1 Kerry Business Transformation programme. The Group is confident of delivering our full year growth objectives and has revised adjusted earnings per share guidance upwards. We now expect to achieve eight to twelve per cent growth in adjusted earnings per share in 2012.”

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