TIDMKYGA
RNS Number : 4653W
Kerry Group PLC
27 April 2016
News release
27 April 2016
Kerry Group AGM: Interim Management Statement
27 April 2016 - Kerry, the global taste & nutrition and
consumer foods group, issues the following Interim Management
Statement for the first quarter ended 31 March 2016. This statement
is issued in conjunction with the Group's Annual General Meeting
which is being held today.
First Quarter Highlights
* 2.9% growth in business volumes
* Taste & Nutrition +3.1%
* Consumer Foods +2.1%
* Group trading margin up 50 basis points
* Taste & Nutrition +40 bps
* Consumer Foods +20 bps
* Integration of 2015 acquisitions progressing well
* Earnings guidance for full year reaffirmed
==========================================================================
Business PERFORMANCE
The Group maintained good business momentum whilst improving the
quality of Group businesses and achieving satisfactory volume
growth in Q1 2016. While overall market conditions remain
challenging, Kerry has sustained a solid innovation pipeline in
response to customer requirements and consumer demand for enhanced
nutritional, wellness and convenience offerings. Good progress has
been achieved to-date in integration of businesses acquired in
2015.
Kerry's Taste & Nutrition technologies and systems achieved
sustained growth in North American markets and an improved
performance in Latin America relative to Q1 2015 despite
significant adverse currency movements. Market conditions in the
EMEA region remain challenging due to the deflationary environment
in regional developed markets and continuing geopolitical
instability in regional developing markets. Kerry maintained solid
business development throughout Asia Pacific markets, delivering
strong business volume growth in regional developing markets. Good
growth was achieved in the foodservice channel in all regions.
As retailers continue to address the changing marketplace in the
UK and Irish consumer foods sectors, market conditions remain
highly competitive. However, Kerry Foods delivered a good business
performance in Q1 2016, capitalising on current snacking,
convenience and food-to-go trends.
Group-wide business volumes grew by 2.9% and net pricing was
1.5% lower in the quarter in line with lower input pricing.
Reported revenues increased by 0.9% reflecting the business volume
growth, lower pricing, a currency translation headwind of 2.3% and
the effect of acquisitions net of disposals of 1.9%.
The Group trading profit margin increased by 50 basis points,
reflecting a 40 basis points improvement in Taste & Nutrition,
a 20 basis points improvement in Kerry Foods, and reduced spend on
the Kerryconnect Programme contributing 10 basis points.
BUSINESS REVIEWS
Taste & nutrition
Combining Kerry's taste capability and unique nutrition &
general wellness enabling technology platforms has continued to
drive strong innovation and customer engagement in all regions.
Building on the Group's significant acquisition investment in 2015,
good progress has been achieved to-date in integration of the
acquired businesses and broadening the acquired technologies into
wider taste and nutrition markets in all regions.
Taste & Nutrition achieved 3.1% business volume growth in
the quarter. Pricing declined by 1.5%. Divisional trading profit
margin increased by 40 basis points.
The Americas Region delivered 3.1% business volume growth in the
period under review. Taste technologies benefitted from a strong
innovation pipeline - assisted by business technologies acquired in
2015. Red Arrow Products acquired in December assisted growth in
the meat and savoury products sector - in particular in North
America. Culinary systems also performed well where KFI Savory
assisted development. Demand for authentic savoury ingredients and
clean-label technologies contributed to good growth in the prepared
meals sector. The savoury snack sector exhibited good growth
opportunities particular in Mexico and Central American markets.
Costa Rican based Baltimore Spice assisted development in the
Caribbean and Central American markets. Market conditions in Brazil
remain challenging due to the inflationary environment but Kerry
achieved sustained growth in the foodservice sector through taste
technologies and sauce systems. Kerry maintained good growth in the
beverage sector assisted by innovative solutions for the fast
growing flavoured spirits and craft beer segments. The Group's
unique 'Crystals' all-natural flavour technology continued to drive
strong growth in the soft drinks sector. Island Oasis and Insight
Beverages, acquired in 2015, significantly broadened Kerry's
offerings and applications in the foodservice and convenience
channels. Kerry's branded beverage lines also recorded good growth
in the foodservice sector. Demand for clean label preservation
systems and extended shelf-life products continued to provide good
growth opportunities in the bakery sector.
Pharma ingredients maintained solid market development progress
through cell nutrition applications. Integration of Biothera Inc's
Wellmune(R) business, acquired in September 2015, was significantly
advanced with application of the unique immune enhancing ingredient
into wider nutritional and food product areas.
EMEA Region market conditions remained challenging where Kerry
recorded 0.2% business volume growth relative to Q1 2015. Demand
for improved nutritional food and beverage offerings and snacking /
convenience lines continued to drive innovation contributing to
significant product 'churn'. Retail food and beverage sectors
remain highly competitive in a deflationary environment in EMEA
developed markets but the foodservice channel provided favourable
growth opportunities in both developed and developing EMEA markets.
Overall market development in regional developing markets remains
seriously constrained by the continuing geopolitical instability
and currency volatility.
Taste technologies and systems maintained good growth,
particularly through foodservice applications. Kerry's branded
beverage offerings continued to progress market development in the
region where 'Big Train' achieved solid growth. Conditions in the
European meat industry overall remain stagnant but Kerry is
progressing added-value sectoral opportunities through layering of
its unique technology portfolio. Dairy taste technologies performed
satisfactorily despite the significant downturn in dairy market
returns. Sweet systems remained challenged due to the highly
competitive industry environment. However, bakery markets again
provided opportunities for Kerry fermentation clean-label
technologies.
The significant reduction in oil revenues and currency
volatility has depressed development in regional developing
markets. Drought conditions in South Africa and Sub-Saharan Africa
also contributed to food inflation in the region which impacted
innovation. Nevertheless Kerry enzyme technologies recorded further
market development in the region. PST Pastacilik Gida acquired in
July 2015, performed well in the bakery, ice cream and foodservice
sectors in Turkey and the Middle East.
Returns in the primary dairy sector weakened further in Q1 2016
due to the continued expansion in output in exporting countries and
a slowdown in demand in importing countries.
Asia Pacific markets again provided a strong platform for growth
of Kerry's Taste & Nutrition technologies and systems. Business
volumes grew by 8.7% relative to Q1 2015 in line with strong market
development in all regional developing markets. Dairy taste systems
saw continued strong growth in Indonesia, the Philippines, Vietnam
and China. Premium noodle applications provided good growth
opportunities in Japan and South Korea. Jungjin Foods, a leading
provider of taste technologies and systems in South Korea was
acquired at the end of the period. Solid market development
continued in India in particular through beverage taste
technologies, meat systems and emulsifier / texturant ingredients.
Regional foodservice markets and c-stores provided excellent growth
opportunities for Kerry beverage taste technologies and sauce
systems. Nutritional beverage and infant nutrition applications
again grew favourably in China and South East Asia. Meat industry
market conditions remained challenging in Australia and New Zealand
but Kerry continued to successfully advance beverage and
nutritional applications in the region.
Consumer foods
Retailers in the UK and Irish consumer foods markets continue to
evolve market positioning and promotional strategies for the
changing consumer shopping and competitive landscape. In general
retailers have focused on EDLP strategies in the prevailing
deflationary environment. However, Kerry Foods repositioned
offerings have continued to capitalise on e-tail, snacking,
convenience and food-to-go trends. Business volumes increased by
2.1% relative to Q1 2015, while pricing decreased by 1.3%. The
divisional trading profit margin increased by 20 basis points due
to the portfolio repositioning and business efficiencies.
Kerry Foods outperformed market growth levels in the chilled
meals category. The 'Bisto' and 'Sharwoods' brands performed well
in the frozen meals sector. 'Mattessons' again grew strongly in the
meat snacking category assisted by a number of successful new
product launches. The UK sausage market remains highly competitive
due to retailer promotional strategies. 'Richmond' recorded good
growth in the frozen sausage sector.
(MORE TO FOLLOW) Dow Jones Newswires
April 27, 2016 02:01 ET (06:01 GMT)
'Cheestrings' continued to perform well in the children's cheese
snack sector and maintained encouraging market development in
mainland European markets. 'Yollies' continued to gain momentum in
the Irish and UK markets. The UK private label spreads category
continued to lose market share to block butter and heavily promoted
branded offerings. Rollover Ltd., acquired in January 2015,
performed well in the leisure and hospitality sectors - extending
Kerry Foods' hot-to-go offering.
In Ireland 'Fire and Smoke' branded sliced cooked meats
maintained good growth. 'Dairygold' maintained brand leadership in
dairy spreads and 'Charleville' achieved good growth in the cheese
sector.
financial review
At the end of March net debt stood at EUR1.6 billion, compared
to EUR1.7 billion at year-end. The Group's consolidated balance
sheet remains strong which will facilitate the continued organic
and acquisitive growth of Group businesses.
FUTURE PROSPECTS
The Board is confident of delivering 6% to 10% growth in
adjusted earnings per share to a range of 320 to 332 cent per share
in 2016 as previously guided, taking into account a 4% currency
headwind at current exchange rates.
-ENDS-
For further information please contact:
Media Investor Relations
Frank Hayes, Director Brian Mehigan, Chief Financial
of Corporate Affairs Officer
Tel: +353 66 718 2304 Ronan Deasy, Group Financial
Email: corpaffairs@kerry.ie Controller
Kerry Web Site: www.kerrygroup.com William Lynch, Head of
Investor Relations
Tel: +353 66 718 2253
Email: investorrelations@kerry.ie
==================================== =========================================
DISCLAIMER: FORWARD LOOKING STATEMENTS
This Announcement contains forward looking statements which
reflect management expectations based on currently available data.
However actual results may differ materially from those expressed
or implied by these forward looking statements.
These forward looking statements speak only as of the date they
were made and the Company undertakes no obligation to publicly
update any forward looking statement, whether as a result of new
information, future events or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCIRMATMBATMLF
(END) Dow Jones Newswires
April 27, 2016 02:01 ET (06:01 GMT)
Kerry (LSE:KYGA)
Historical Stock Chart
From Jul 2024 to Aug 2024
Kerry (LSE:KYGA)
Historical Stock Chart
From Aug 2023 to Aug 2024