Kerry Group sees ‘sustained’ growth despite Brexit headache

Irish food and ingredients company Kerry Group has reported "sustained volume growth" for the first nine months of the year, despite what it described as the current weakness in global markets and the uncertainty caused by Brexit.

On a group basis, the company said business volumes increased by 3.2 per cent, while pricing declined by 2.2 per cent – against a background of approximately 4.5 per cent lower raw material costs.

Reported revenues increased by 0.4 per cent reflecting the business volume growth, lower pricing, and adverse currency translation impact of 4.5 per cent, it said.

Despite the currency headwinds, particularly the recent crash in sterling, Kerry retained its full-year earnings per share growth target of 6-10 per cent.

The group's taste and nutrition businesses achieved 3.4 per cent volume growth on the back of strong health and wellness trends in North America, while net pricing was 2.2 per cent lower.

Global conditions

In consumer foods, Kerry said it maintained a solid business performance despite the prevailing competitive market situation and uncertainty caused by the Brexit.

Business volumes grew by 2.2 per cent while pricing was 2 per cent lower.

In Ireland, its flagship Dairygold label maintained a solid brand performance, assisted by new product launches, while its Charleville product performed well in the cheese sector.

“Overall, global market conditions remained weak – impacted by currency volatility, the changing marketplace and continuing geopolitical issues in some developing regions,” the company said.

The company said consumer trends reflect a widening preference for health and wellness offerings, clean-label solutions, organic lines and convenient products available through more fragmented retail and foodservice channels.

“In turn, this has led to significant product ‘churn’ as food and beverage providers seek growth through innovative, differentiated product developments,” it added.