Food group Kerry said it put in a good performance in the first nine months of the year, following good volume growth in the third quarter.
The performance came despite soft consumer demand in the food and beverage market environment, with macroeconomic and geopolitical uncertainty having an impact on consumers’ outlook.
The Irish food ingredients multinational said volumes grew by 3 per cent in the year to date, with similar growth in its most recent quarter, with gains driven by its bakery, dairy and snacks business. Its Foodservice business also grew during the period.
Price growth of 0.2 per cent was attributed to rising input costs. The company last month said it was starting to pass on higher costs as tariffs impacted the price of ingredients.
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Kerry shares rose 4 per cent in Dublin after the trading update.
Growth in the Americas was supported by product launches, while Europe and the Asia Pacific, Middle East and Africa markets showing volume growth in the third quarter. The company said business volumes in emerging markets were up 5.3 per cent, with Southeast Asia leading the charge. However, Europe was more subdued, it noted.
The period also saw the opening of Kerry Group’s new Biotechnology Innovation Centre in Germany, where it will look to develop its next generation of nutritional products. The hub will be a centre for the research and production of enzymes that can “increase efficiencies” in food production processes.
It also invested in the expansion of its enzyme capacity in Ireland, along with investment in cocoa taste capabilities in France, coffee extraction capability in the Americas and taste capacity in the Middle East and East Africa.
Net debt was €2.2 billion at the end of September, with cash generation, capital investment and the share buyback programme all contributing to the final figure.
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“From a strategic perspective, we continued to develop our business, including further investment in our bio-fermentation and taste technology capabilities, combined with capacity expansion in APMEA and LATAM,” Mr Scanlon said.
“Looking to the remainder of the year, while recognising continued market uncertainty, we remain well positioned for volume growth and strong margin expansion, as we continue to support our customers as an innovation and renovation partner.”
The company maintained its full year constant currency adjusted earnings per share guidance of 7 per cent to 11 per cent growth.
In a note, Davy analysts described the update for the third quarter as “reassuring”. The broker estimated volume growth in the third quarter was largely driven by retail at around 2.9 per cent and foodservice at 3.1 per cent.
“We envisage no material change to our constant currency earnings per share forecast with foreign exchange paring forecasts by c.0.8 per cent,” analysts said.
