Kerry Group sees increase in revenue for 2017

The company announced group revenue of €6.4bn ($7.9bn), reflecting 4.3% business volume growth.

Its adjusted EPS is up 5.5% to 341.2 cent (+9.4% on a constant currency basis), with a final dividend per share of 43.9 cent.

Kerry Group chief executive Edmond Scanlon said Kerry Group delivered strong top line growth and sustained business development in 2017, and that in 2018, the company expects to deliver adjusted earnings per share growth of 6% to 10% on a constant currency basis.

Sterling struggles

The company said the adaptability and agility of its business model proved highly effective across the increasingly fragmented marketplace through multiple retail, foodservice and ecommerce channels.

Its focus on profitable growth was further assisted by technology investment and RD&A expenditure in its Taste & Nutrition division. Kerry Group said Taste & Nutrition Technologies and Systems achieved sustained volume growth in North America, a good performance in Latin America, a solid recovery in the EMEA region and continued double digit growth in Asia.

In the Group's UK and Irish consumer foods markets, while Kerry Foods maintained a strong category and business development focus, benefiting in particular from the increased snacking and 'food-to-go' consumption trends, the underlying divisional business performance was impacted by adverse sterling exchange rate movements.

Business performance

Business volumes grew by 4.3% year-on-year. Net pricing increased by 2% against a background of approximately 4% raw material price inflation.

Currency headwinds accelerated during the year, contributing an adverse 2.4% translation impact and an adverse 0.2% transaction currency impact relative to revenue. Business acquisitions contributed 0.8%.

Americas

Kerry Group said in Latin American markets, a solid overall performance was achieved in Brazil, Mexico and Central America but development in the Caribbean region slowed relative to the prior year.

Sales revenue in the Americas region on a reported basis increased by 3.5% to €2.68bn ($3.3bn), reflecting 3.3% volume growth, a 1.3% increase in net pricing, business acquisitions of 0.4% and an adverse translation currency impact of 1.5%.

Dairy systems recorded good growth in Brazil and the South Cone. Ben Alimentos was acquired in June, expanding the Group's dairy technology capacity in Brazil.

EMEA region

Dairy & Culinary technologies achieved solid growth in 2017, in particular in the foodservice sector through seasonal QSR applications including appetizers, desserts and beverages.

Sweet technologies performed well in the ice cream sector, benefiting from consumer trends favouring premium lines, 'better-for-you' variants and indulgent offerings.

Nutritional technologies maintained good growth through infant and life-stage applications. Lower dairy exports from some exporting countries and strong butterfat demand contributed significant upward momentum to international dairy pricing in the first half of 2017.

However, the Group said a rapid growth in milk output from Q3 saw supply outpacing demand which led to considerably lower dairy market pricing.

Asia-Pacific region

Sales revenue in the Asia-Pacific region on a reported basis increased by 13.1% to €866m ($1.06bn), reflecting 11.1% volume growth, 1.8% increase in net pricing, business acquisitions of 2.9% and an adverse currency translation impact of 2.7%.

The company said enzymes and specialized proteins maintained good growth in Asia.

The Group's operational footprint in the Asia-Pacific region was significantly expanded in 2017 through organic investment and the completion of several acquisitions.

A regional Technology & Innovation Centre was established in Bangalore, India. Regional Application & Development Centres were established in Jakarta, Indonesia; Bangpoo, Thailand and Ho Chi Minh, Vietnam. New production facilities were established across sites located in Plentong, Malaysia; Cikarang, Indonesia; Tumkur, India; Nantong, China; Batangas, Philippines and Brisbane, Australia.

Snacking gains

Snacking occasions continued to drive strong category growth in the cheese category, the company said.

Dairy snacking grew by 11% with 'Cheestrings' and 'Attack-a-Snak' performing well in response to increased marketing support and wider distribution.

In Ireland, Kerry Foods also launched an adult cheese snacking range under the 'Go Go's' brand. 'Charleville' also introduced the premium range 'Crafty Creations' and 'Charleville Snackfuls' snacking products.

Kerry Foods' grocery dairy business maintained growth in what the company called ‘a challenging category environment.’

In the UK, volume growth was achieved through private label customer brands incorporating Kerry's spreadable butter technologies, while in Ireland, 'Dairygold' maintained its market leadership positioning, assisted by product launches and a marketing campaign.