Irish consumer foods firm Kerry Group posted a 3.7% growth in business volume, as well as a slight increase in pricing (+0.9%) in the first quarter of the 2018 financial year.
Reported revenues saw a slight boost of 0.1%, taking into account positive growth and the pricing boost, an adverse transaction currency impact of 0.1%, acquisition contributions of 4%, and an adverse translation currency impact of 8.4%.
The Dairygold spread maker announced it had maintained its group trading margin, with Taste & Nutrition up 20bps and Consumer Foods dropping 60 bps. It explained that margin expansion had been offset by currency transaction impacts.
Healthy Volume Growth
CEO Edmond Scanlon said in a statement, "We are pleased with the start we have made to 2018, which is in line with our expectations as communicated in February. The group continued to deliver healthy volume growth and underlying margin expansion."
"Our industry leading business model and ‘from-food for-food’ heritage are ever more relevant in today’s marketplace and continue to underpin a strong innovation pipeline."
Scanlon also commented that acquisitions over the last year are 'performing well', and that integration is progressing on schedule. In October, the company acquired technology firm Ganeden, which is focused on patented probiotics and related technologies, and has an annual revenue of approximately $25 million.
In the statement, the group also reaffirmed its 2018 guidance of an adjusted EPS of 6% to 10% on a constant currency basis. In 2017, group revenue increased by 4.5% to €6.4 billion, driven by a 4.3% growth in business volumes.
Consumer-Driven Change
The company said in a statement, "The rate of consumer driven change and its impact within the industry and along the supply chain continues at pace."
It identified the impacts of essential consumer trends on growth, such as customers’ preference for 'authentic world' tastes, new snacking formats, clean label, and reduced sugar content.
The Kerry Group's Taste & Nutrition division grew 4.3% in volume, mostly due to the meat, beverage, and snacking categories. Its growth in developed markets such as Europe was described as ‘solid’ at 2.6%, whereas developing markets experienced a robust growth of 9.5%. Foodservice grew at 6.1%, delivering a ‘good performance’.
Its Consumer Foods division experienced a boost of 1.6% in business volume, mostly due to its performance in food-to-go products such as ‘Cheesestrings' and 'Fridge Raiders’, as well as the snacking category. Consumer Goods also saw a decent performance of its Dairygold spread in Ireland, as well as its 'softer butter technology' via private label brands in the UK, despite a difficult traditional spreads category.
Board changes announced at the annual general meeting included the retirement of Michael Dowling, who will be succeeded as chairman by Philip Toomey. Christopher Rogers, senior independent director of home improvement retailer Travis Perkins PLC, will become a non-executive director from 8 May, replacing Toomey.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. Click subscribe to sign up to ESM: European Supermarket Magazine.
