Kerry chief executive 'pleased' with results

THE CHIEF executive of the Kerry Group has said he was “very pleased” with its results for 2009, particularly given the difficult economic environment.

Last year was “a stress test for our business strategy, and I think we came through with flying colours”, Stan McCarthy said during a presentation in Dublin.

The group’s performance this year was “pretty good so far”, he said. The Kerry share price finished at €23.30 yesterday, up 2.5 per cent on the day.

The group reported a 6 per cent increase in profits before tax and non-trading item to €335.8 million, and a 4.8 per cent fall in revenue on a like-for-like basis to €4.5 billion.

The group’s Irish food business was down “seven to eight per cent” but its UK food business increased, making for a flat result overall.

He said the group had an 80 basis points increase to its trading profit margin to 9.3 per cent. He was “confident” the group could deliver earnings in the 182 to 185 cent per share range in 2010, compared to the 166½ cent figure for last year.

He said the performance of all group businesses in the final quarter of 2009 was particularly encouraging.

Mr McCarthy said the group’s reorganised ingredients and flavours business delivered “strong results”. The consumer foods division “performed well” despite the slump in consumer spending in Ireland and the UK, and the impact of the sterling-euro exchange rate.

The ingredients and flavours business had revenue of €3.2 billion, which constituted a like-forlike reduction of 4.5 per cent. Trading profit was €340 million, an increase of 4.9 per cent.

Consumer foods had a 6.1 per cent drop in revenue to €1.7 billion and an unchanged trading profit at €122 million.

The group said consumer spending in Ireland fell by 7.5 per cent during the year and the consumer price index by 5 per cent. The fall in food prices was 8 per cent. Exports from Ireland to the UK were hit by the currency rate.

The group spent €291 million on acquisitions during 2009 and could spend a similar amount this year without affecting its balance sheet.

He said the group now has “a truly durable business that can continue to prosper”.

Kerry is the leading player in the €50 billion ingredients and flavours market, with a €3.3 billion share which it intends to continue to grow. “There are plenty of benefits from scale and Kerry can deal with scale. Not all companies can.”

The group revenue by geography is 63 per cent located in Europe, 28 per cent in the Americas, and 9 per cent in Asia. The group has recently moved into the Indonesian market in Asia.

Asked if the Government was doing enough for exporting companies, Mr McCarthy said the only reason Kerry was successful was that more than 20 years ago it had gone abroad to seek business.

“We can’t be waiting for Government to provide solutions. We’ve got to want it for ourselves in the first place.” However, he did believe Government had “lost track” for a time of the fact that Ireland was dependent on exports.