Kerry Group half-year results show promising performance, including Taste & Nutrition volume growth

31 Jul 2024 --- Kerry Group’s half-year results reveal a strong performance, with the group’s revenue reaching €3.9 billion (US$4.2 billion) through a volume growth of 1.7%. The volume of the Taste & Nutrition category grew by 3.1%.

“We are pleased to report a good performance across the first half of the year. Taste & Nutrition delivered good volume growth ahead of our end markets, with strong profit growth and margin expansion across the business, contributing to our earnings per share growth of 9.1% in the period,” comments CEO Edmond Scanlon. 

“Taste & Nutrition volume growth was led by strong performances in the foodservice channel across all three regions, as we continue to support established foodservice chains evolve and develop their businesses while working with emerging leaders to upscale their operations and offerings.”

Market performance
Kerry Group shares that consumer demand across the F&B markets was “muted” throughout the first part of 2024 due to inflation. Customer innovation centered on new taste profiles and value options. Interest in product “renovation” to enhance nutrition characteristics was also pronounced.

The group’s revenue growth also comprised of “pricing deflation of 4.0%, unfavorable translation currency of 0.9% and the effect from disposals net of acquisitions of 2.7% resulting in lower reported revenue for the period of 5.9%.” Group EBITDA increased by 6.6% to €552 million (US$597 million).

Kerry Group CEO Edmond Scanlon (Image credit: Kerry Group).Scanlon explains that volume growth in the retail channel was driven by good performances in the Americas and APMEA, led by a “very strong growth” in snack applications thanks to Kerry’s range of savory taste profiles and Tastesense salt-reduction technologies.

“From a capital allocation perspective, we continued to invest to support the organic development of our business while also completing the Lactase enzymes business acquisition and progressing our share repurchase activity through the period,” he adds.

“Given the strength of our financial performance and our innovation pipeline, today we are updating our full-year constant currency adjusted earnings per share guidance to 7% to 10%.”

Business review
The group’s EBITDA margin increase was driven by benefits from its Accelerate Operational Excellence Programme, a positive impact from portfolio developments, operating leverage, product mix and the net effect from pricing.

During the same period, constant currency-adjusted earnings per share increased by 9.1% and an increase of 7.8% in reported currency. Basic earnings per share decreased, which Kerry Group sees as “reflecting the profit on disposal of businesses and assets in the prior year.”

Overall, the strong volume growth in Taste & Nutrition was les by foodservice performance, led by Snacks, Meals and Beverage EUMs. 

Taste & Nutrition business volumes in emerging markets increased by 6.6% in the period, led by performance in the Middle East and Africa.

In North America, the Snack category experienced the highest growth, with Kerry’s savory taste profiles and Tastesense salt-reduction technologies driving this performance. 

In LATAM, good growth was achieved in Mexico across Beverage and Snacks, with Brazil delivering “a solid performance.”