Kerry posts positive growth, despite challenges
The company’s overall sales revenue increased by 6.9% to €5.3bn and trading profit reached a milestone level of €501m. This was driven primarily by the group’s ingredients and flavours division, which increased revenue by 8.5% to €3,706m, with business volumes growing by 3.8% and trading profit increasing 9.4% on a like-for-like basis to €439m.
The strongest growth was in the Asia-Pacific region, with revenue growing by 12% like-for-like (LFL) to €605m, and business volumes increasing by 10% despite the natural disasters that affected the region last year. The company reported that meat technologies experienced strong growth in Australia and New Zealand, particularly in the QSR sector and added-value poultry applications. Revenue in the Americas grew by by 7.1% LFL to €1,558m, driven in part by double-digit growth in the Latin American meat snack sector. In Europe, the Middle East and Africa (EMEA), revenues increased by by 6.9% LFL to €1,475m and business volumes grew by 2.7%.
The group’s consumer food division saw weaker growth, with revenue increasing 3.2% LFL to €1,674m and overall business volumes up just 1.1%. Kerry put this down to losses in Ireland as a result of tightening household budgets and increased competition.
Commenting on the results, Kerry Group chief executive Stan McCarthy said: “Kerry continued to develop successfully and maintain solid earnings growth in 2011, despite the impact of significant raw material and input cost inflation experienced during the year. The group performed well in all key developed markets and continued to extend its market positions in developing markets.
“Good organic growth rates were achieved despite the inflationary environment. Raw material costs increased by over 8% year-on-year, requiring close collaboration with customers to manage cost recovery programmes. The continuing challenging economic landscape across most major economies heightened the requirement for innovation and product differentiation to meet changing consumer requirements.”
Kerry also announced today (21 February) that it has completed the acquisition of South African flavours company FlavourCraft for an undisclosed sum. It said the acquisition of the company, which specialises in the design and manufacture of flavours for meats, soups, sauces, dressings and savoury snacks, would provide its first major manufacturing facility in Africa and allow it to expand its presence across the continent.
Kerry’s Africa Zone director Bart van Schie said: “This acquisition represents a clear illustration of Kerry’s commitment to developing our business across Africa. FlavourCraft’s product portfolio, knowledge and customer base in South Africa, Nigeria and across west Africa will be an asset to us and assist our expansion plans across the continent.”
The deal follows the the acquisition of Cargill’s global flavour business in 2011 for a total consideration of US$230m. The company said that the business, which serves a global customer base, has long-standing relationships with global food and beverage manufacturers through its integrated flavour development and application centres in France, the UK, South Africa, India, Malaysia, China, the USA, Puerto-Rico, Mexico and Brazil.
