In an interim management statement, Kerry has said that it continued to achieve good organic growth in the three month period to 30 September 2012. Performance was solid across all regions, notwithstanding the challenging market conditions in Europe and the continuing competitive consumer foods market situation in Ireland and the UK. Further progress was made in the deployment of resources to meet the Group’s growth objectives and customer requirements in developing markets.
Reported sales revenue for the nine months increased by 10.9% to €4.4 billion reflecting like-for-like [LFL] growth of 2% when account is taken of acquisitions net of disposals and currency translation. Continuing business volumes grew by 2.1% and product pricing/mix increased by 0.8%. Rationalisation volumes arising from restructuring of production across the Group’s manufacturing sites amounted to 0.9% for the period.
Trading profit for the nine months increased by 12.1% on a reported basis. In line with the business momentum reported at the half year stage, the Group’s underlying trading margin performance remained strong in the period. Despite increased unallocated development costs relating to the Group’s ongoing 1 Kerry business transformation programme and global IT project and the dilutive impact of 2011 acquisitions, the Group trading profit margin increased by 10 basis points relative to the same period of 2011. This reflects a 10 basis points increased margin in Ingredients & Flavours and an unchanged margin in Consumer Foods.
Revenues in ingredients & flavours increased by 14.8% on a reported basis, reflecting 3.5% LFL growth. Continuing business volumes grew by 2.9% outperforming growth rates in its markets. The continuing programme to optimise the Group’s manufacturing footprint gave rise to 0.3% volume loss. Pricing/mix increased by 0.9%.
The Americas region achieved solid growth through successful layering of technologies and innovation with key customer accounts resulting in 2.4% continuing business volume growth. Savoury, dairy and culinary systems performed well despite sectoral market challenges in particular in the meat industry.
Indianapolis-based Millennium Foods was acquired in August, further strengthening Kerry’s technologies serving dairy, culinary and prepared meals end-use-markets. Griffith do Brasil, a specialist manufacturer of meat systems, flavours and texturant systems was also acquired – extending the Group’s capability to serve added-value growth segments of the Brazilian meat industry.
Cereal & Sweet systems continued to perform well particularly through successful innovation and launches of ‘bite size’ snackable products. In the beverage sector, Kerry’s expanded beverage flavours capability, following the acquisition of Cargill’s flavours business prior to year end 2011, continued to achieve excellent results.
In the EMEA region, continuing business volumes grew by 1.1% despite the prevailing economic impact on consumer trends. Overall business performance was significantly assisted by the Group’s strategies and transformation programmes. Conditions in regional dairy and meat markets remained challenging. However culinary systems continued to achieve strong market application.
