Kerry Group has reported a 'good start to the year' with group volumes up 1.9% in the first quarter of its financial year.
The company's Taste & Nutrition business saw volume growth of 3.1%, while Dairy Ireland reported a 70bps increase in EBITDA margin, the company noted.
Group EBITDA margin increased by 140bps driven by cost efficiencies, portfolio developments and the effect of pricing, Kerry Group added.
The overall revenue dropped 9.9% during the quarter, impacted by various factors, including pricing deflation and unfavourable currency translations.
Edmond Scanlon, chief executive officer stated, “We are pleased to report a good start to the year given market dynamics. Taste & Nutrition achieved good volume growth driven by a strong performance within our foodservice channel and we delivered strong margin expansion in the period reflecting the continued development and evolution of our business.”
Divisional Performance
Despite muted consumer demand in several markets, the Taste & Nutrition unit saw good performance during the quarter.
Foodservice continued its momentum with volume growth of 8.6%, supported by menu enhancement activity, seasonal products and back-of-house solutions, while the retail channel returned to overall growth.
Quarterly performance was also driven by snacks, meals, meat and beverages, with the company's recent innovations in healthier, more nutritious products performing well.
The Americas Region returned to volume growth of 3.6% during the quarter, while Europe registered a 1.4% decline against strong comparatives.
Dairy Ireland reported EBITDA growth on the back of pricing effects, while volumes declined 3.0% during the quarter.
The division witnessed good growth in Dairy Consumer Products, which was more than offset by the impact of market supply conditions in Dairy Ingredients.
Outlook
Kerry Group believes it is 'well positioned' for volume growth and good margin expansion with a good innovation pipeline.
The group added that aims to continue to develop its business and portfolio in line with its strategic priorities.
Scanlon added, “Consumer market dynamics remain similar to those outlined in our full-year results. As part of our capital allocation framework as previously indicated, we are announcing a new share buyback programme, and the expected net earnings per share accretion has been reflected in our updated guidance range.”
The group has raised its adjusted earnings per share guidance range to 5.5% to 8.5% growth in constant currency from its previous range of 5% to 8%.
