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Kerry reports strong growth despite tough trading conditions

By Nathan Gray , 02-Nov-2012

Kerry reports strong growth despite tough trading conditions

Strong growth in Kerry Group’s ingredients and flavours division has helps to balance out slow-down in consumer goods, as revenues increased by nearly 11% to €4.4 billion.

Kerry Group has reported year-on-year revenue growth of 10.9% for the first nine months of this year, to €4.4bn, with trading profit up by 12.1%. The company added that while revenues were up by 10.9% on a like-for-like basis, excluding the impact of disposals, acquisitions, and currency translations, revenue grew by 2%.

The Irish ingredients and consumer food manufacturer said the third quarter of the year saw the business continue to achieve ‘good organic growth’ – adding that it is confident of achieving growth targets for the full year by delivering nine to eleven per cent growth.

"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," said Kerry in its interim management statement. 

The Group’s ingredients and flavours division continued to be the main driver in this growth, posting a 14.8% cent increase in revenues (representing 3.8% growth on last year) while its consumer foods division continued to be affected by a ‘challenging consumer environment’. As a result consumer goods growth was restricted to 2.4% (representing a 0.9% decrease on last year).

Ingredients and flavours

Kerry said Europe, the Middle East and African (EMEA) regions provided continuing business volumes growth of 1.1%, “despite the prevailing economic impact on consumer trends,” however noted that trading in regional dairy and meat markets ‘remained challenging.’

“The EMEA developing markets continued to benefit from the South Africa based FlavourCraft business acquired in late 2011,” Kerry Group added.

The ingredients giant said its sweet systems have performed well in the premium ice cream sector, while ‘satisfactory progress’ has been made in the cereals and bars markets “despite sectoral competitiveness.”

Kerry also said that it is continuing efforts to integrate the newly acquired Cargill flavours business.

It added that enzymes recorded continued growth in Africa and the Middle East, while primary dairy markets improved during the quarter relative to weak international market conditions in the first half of the year. However development in the beverage sector proved difficult.

Consumer goods

Kerry said its brand performance the meat category was affected by “intense price-driven competition” but noted that Mattessons and Richmond sausages did well, while its ready-meal business also grew.

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