Kerry Group Posts Solid Half Year Results Amid “Challenging” Market Conditions

Announcing half year results yesterday, Irish food manufacturer Kerry Group highlighted the tough trading conditions but said it was “well positioned” to meet customer requirements in the changing marketplace.

During the six month period ended 30 June, the group’s revenue edged up 0.3% to £3.04bn with good volume growth (+3.2%) offset by currency movements. Trading profit increased by 7.4% to €322m, with margins up 70 basis points to 10.6%.

Its Taste & Nutrition division achieved 3.5% growth in business volumes and pricing was 2.2% lower. Meanwhile, Kerry Foods’ consumer foods business saw volumes grow by 2.3% and pricing was reduced by 2.1%.

The group said that global market conditions remained challenging with slower economic growth, currency volatility and continuing geopolitical instability in particular in many regional developing markets. It also highlighted the changing marketplace – with increased retail fragmentation, continued growth in online shopping, increased penetration of regional brands, ongoing growth in snacking, food-to-go and foodservice demand – contributing to significant product ‘churn’ with increased demand for product differentiation and innovative offerings.

Looking ahead, Kerry said that it expected the international trading environment to remain challenging in the second half of 2016, saying that its “unique taste & nutrition, functional ingredients, and systems model was well positioned to meet customer requirements in the changing marketplace”.

It added: “Businesses acquired in 2015 are performing well providing solid growth opportunities through extension into wider taste & nutrition and foodservice markets. Kerry Foods continues to perform well in its core snacking, convenience, health and food-to-go categories, despite the competitive market conditions in the UK and Irish markets and the macro-economic uncertainty caused by the UK voting to leave the European Union.”