Kerry has reported its results for the first quarter ended 31 March 2014. The Ingredients and Flavours business saw 4.4% growth, with Consumer Foods ahead at 0.2%.
The company said that it achieved a satisfactory performance in the first quarter of 2014 despite challenging conditions in many markets and the inflationary impact of adverse currency movements in developing markets. Following a relatively sluggish start to the year, performance in all regions improved in the latter part of Q1. Kerry’s ingredients and Flavours’ taste and nutrition systems performed well and functional ingredients and actives maintained a solid performance, outperforming market growth rates the company said. Developing markets, in particular Asian and Latin American markets, again provided strong growth opportunities. Consumer foods markets in the UK and Ireland remained subdued but Kerry said that its Foods’ flagship brands performed well.
Kerry said that Q1 2014 was a more challenging period overall across food and beverage markets due to industry competitive pressures in response to constrained consumer demand. However Kerry noted that its ingredients and flavours businesses maintained good continuing volume growth ahead of its markets. Continuing business volumes increased by 4% relative to the first quarter of 2013. Pricing increased by 0.4%. Despite inflationary pressures resulting from significant negative currency movements, developing markets achieved strong underlying growth. Functional ingredients and actives recorded a solid performance across all regions – in particular in nutrition sectors. Pricing actions coupled with business efficiency measures helped offset raw material and business overhead inflationary pressures, contributing a 60 basis points improvement in divisional trading profit margin.
The Americas Region saw slower food and beverage industry development in North America with some categories impacted by the severe weather conditions – particularly in the foodservice sector. Kerry said that it grew ahead of sectoral market growth rates across American markets, achieving 4% growth in continuing business volumes. Solid growth was achieved in Latin American markets in the dairy, culinary and beverage sectors. Savoury and dairy technologies performed well in North American markets. Performance in the culinary sector was assisted by Wynnstarr Flavors acquired prior to year-end 2013. Demand for clean label provided good growth opportunities in the meat sector. Market conditions in the cereal and sweet technology sectors proved challenging. Beverage systems and flavours maintained good growth. Cell nutrition applications and excipients continued to record good growth in the pharmaceutical industry.
EMEA Region market conditions, while stable, remained relatively flat from a development and industry growth perspective. Kerry’s continuing business volumes grew by 1% relative to the prior year Q1. Performance in the meat sector improved relative to Q1 2013. Cereal and sweet systems and flavours also performed satisfactorily. Dairy technology applications were impacted by dairy pricing trends. Growth in South African markets proved challenging due to relatively weak market conditions and intense competition. Beverage systems and flavours recorded solid growth in EMEA markets. While demand in international dairy markets remained firm, primary dairy market price returns weakened towards the end of the period due to increased output from major exporting countries. Kerry hydrolysed proteins continued to perform well and strong growth was achieved in premium infant nutrition applications.
Asia Pacific markets provided a solid platform for growth where Kerry recorded a 10.8% increase in continuing business volumes. Strong double digit growth was achieved in regional developing markets which provided excellent growth opportunities for Kerry’s taste and nutritional systems and functional ingredients and actives. Developed markets in the region saw slower growth in a flat and competitive retail environment. In Asia lipid technologies performed well in nutritional applications. Savoury and dairy technologies saw slower growth in regional developed markets. China provided excellent growth opportunities for Kerry technologies in the nutritional and foodservice sectors. A new processing facility was acquired in Nantong which significantly expands the Group’s manufacturing footprint in this fast growing marketplace. Beverage systems again achieved solid growth in the foodservice sector.
Market conditions in Australia and New Zealand proved more challenging due to industry competitive pressures arising from lower retail sales. Kerry Pinnacle maintained a good performance in the lifestyle bakery sector.
The company said that it expects to achieve 6% to 10% growth in adjusted earnings per share to a range of 273 to 284 cent per share in 2014, as previously guided.
The company said that it achieved a satisfactory performance in the first quarter of 2014 despite challenging conditions in many markets and the inflationary impact of adverse currency movements in developing markets. Following a relatively sluggish start to the year, performance in all regions improved in the latter part of Q1. Kerry’s ingredients and Flavours’ taste and nutrition systems performed well and functional ingredients and actives maintained a solid performance, outperforming market growth rates the company said. Developing markets, in particular Asian and Latin American markets, again provided strong growth opportunities. Consumer foods markets in the UK and Ireland remained subdued but Kerry said that its Foods’ flagship brands performed well.
Kerry said that Q1 2014 was a more challenging period overall across food and beverage markets due to industry competitive pressures in response to constrained consumer demand. However Kerry noted that its ingredients and flavours businesses maintained good continuing volume growth ahead of its markets. Continuing business volumes increased by 4% relative to the first quarter of 2013. Pricing increased by 0.4%. Despite inflationary pressures resulting from significant negative currency movements, developing markets achieved strong underlying growth. Functional ingredients and actives recorded a solid performance across all regions – in particular in nutrition sectors. Pricing actions coupled with business efficiency measures helped offset raw material and business overhead inflationary pressures, contributing a 60 basis points improvement in divisional trading profit margin.
The Americas Region saw slower food and beverage industry development in North America with some categories impacted by the severe weather conditions – particularly in the foodservice sector. Kerry said that it grew ahead of sectoral market growth rates across American markets, achieving 4% growth in continuing business volumes. Solid growth was achieved in Latin American markets in the dairy, culinary and beverage sectors. Savoury and dairy technologies performed well in North American markets. Performance in the culinary sector was assisted by Wynnstarr Flavors acquired prior to year-end 2013. Demand for clean label provided good growth opportunities in the meat sector. Market conditions in the cereal and sweet technology sectors proved challenging. Beverage systems and flavours maintained good growth. Cell nutrition applications and excipients continued to record good growth in the pharmaceutical industry.
EMEA Region market conditions, while stable, remained relatively flat from a development and industry growth perspective. Kerry’s continuing business volumes grew by 1% relative to the prior year Q1. Performance in the meat sector improved relative to Q1 2013. Cereal and sweet systems and flavours also performed satisfactorily. Dairy technology applications were impacted by dairy pricing trends. Growth in South African markets proved challenging due to relatively weak market conditions and intense competition. Beverage systems and flavours recorded solid growth in EMEA markets. While demand in international dairy markets remained firm, primary dairy market price returns weakened towards the end of the period due to increased output from major exporting countries. Kerry hydrolysed proteins continued to perform well and strong growth was achieved in premium infant nutrition applications.
Asia Pacific markets provided a solid platform for growth where Kerry recorded a 10.8% increase in continuing business volumes. Strong double digit growth was achieved in regional developing markets which provided excellent growth opportunities for Kerry’s taste and nutritional systems and functional ingredients and actives. Developed markets in the region saw slower growth in a flat and competitive retail environment. In Asia lipid technologies performed well in nutritional applications. Savoury and dairy technologies saw slower growth in regional developed markets. China provided excellent growth opportunities for Kerry technologies in the nutritional and foodservice sectors. A new processing facility was acquired in Nantong which significantly expands the Group’s manufacturing footprint in this fast growing marketplace. Beverage systems again achieved solid growth in the foodservice sector.
Market conditions in Australia and New Zealand proved more challenging due to industry competitive pressures arising from lower retail sales. Kerry Pinnacle maintained a good performance in the lifestyle bakery sector.
The company said that it expects to achieve 6% to 10% growth in adjusted earnings per share to a range of 273 to 284 cent per share in 2014, as previously guided.
