Kerry Group reports business performance for the half year ended 30 June 2021.
- Group revenue of €3.6 billion reflecting 9.0% volume growth – Taste & Nutrition volumes +9.8% (Q2: +18.1%)
- – Consumer Foods volumes +4.6% (Q2: +8.5%)
- Pricing of +0.5%
- Group trading margin +70bps
– Taste & Nutrition +80bps
– Consumer Foods +20bps
- Adjusted EPS of 152.0 cent – up 24.1% on a constant currency basis
- Basic EPS of 128.2 cent (H1 2020: 120.4 cent)
- Free cash flow of €222m reflecting 83% cash conversion
- Interim dividend per share of 28.5 cent (H1 2020: 25.9 cent)
- Guidance updated to reflect business performance and portfolio development
Edmond Scanlon, Chief Executive Officer said: “We are pleased with overall performance in the period, reflecting continued strong growth in our retail channel, with good progression and momentum in foodservice while lapping lower prior year levels. The Americas had good overall volume growth, Europe delivered an excellent relative performance, while growth in APMEA remained strong despite challenging conditions in some local markets. A number of our end use markets had strong category development in the period, with Beverage in particular achieving excellent growth.
Kerry Group had some notable strategic developments this year as they continued to evolve our portfolio. We announced the acquisition of Niacet, which enhances our leadership position in the fast growing food protection and preservation market, while we also reached agreement for the sale of our Consumer Foods’ Meats and Meals business. These transactions will further enhance Kerry’s position as a market-leading taste and nutrition company.
Our performance through the period gives us continued confidence in our full year outlook, while recognising the inherent uncertainty that will remain in many regions through the remainder of the year. Our earnings guidance range has been updated as a result, and we have also reflected the expected impact from portfolio developments.”
Markets and performance
Overall conditions improved in many developed markets, with increased economic activity, reopening levels and consumer confidence, while developing markets saw a lot more variability through the period. At-home consumption remains elevated as work practices and consumers’ daily routines continue to evolve, with the foodservice channel continuing its trajectory of gradual overall recovery.
Their markets remain highly dynamic, as customers seek to address heightened consumer demands for increased health and wellness benefits, plant protein options, digital engagement, and products addressing a number of sustainability measures.
Strategic portfolio developments
The Group announced a number of important strategic developments in the period, with acquisitions aligned to the key strategic growth areas of food protection and preservation as well as proactive health.
As previously announced, they reached agreement to acquire Niacet, which is a global market leader in technologies for food protection and preservation. It brings a complementary product portfolio and enhances Kerry’s leadership position in this fast growing market. It is expected to complete at the end of the third quarter for a consideration of €853m subject to customary closing conditions. The bolt-on acquisition of National Vinegar Co. was completed in the period for a consideration of €25m, adding further capacity and supporting the Group’s growth strategy in natural preservation.
They announced the acquisition of Biosearch, S.A., which is a leading biotechnology company based in Spain. The company provides innovative solutions to the global pharmaceutical, nutraceutical and functional food sectors, with an extensive range of probiotics, scientifically backed innovative botanical extracts and omega-3 oils. The acquisition completed in July for a total consideration of €127m. Supporting the Group’s proactive health strategy, agreement was also reached for the acquisition of Natreon, Inc. with facilities in the USA and India for a consideration of €42m2. This brings leading capability in Ayurvedic and botanical extracts, with a portfolio of clinically backed branded ingredients for stress and sleep under the need state of cognition as well as heart and joint health under healthy ageing.
As previously announced, the Group reached agreement for the disposal of its Consumer Foods’ Meats and Meals business to Pilgrim’s Pride Corporation. Cash consideration for the transaction is €819m and the disposal is expected to close in the final quarter subject to customary closing conditions and regulatory approvals.
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Editor, International Bakery
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