Kerry has reported its interim results for the half year ended June 30, 2011. The company saw a sales revenue increase of 8.4% to €2.6 billion, as well as 3.6% volume growth. Additionally, adjusted EPS was up 9.7% and the interim dividend per share was up 11.4%. Raw material costs during the period increased by 11% relative to the prior year level, and the company’s Ingredients & Flavours division’s volumes grew by 4.1% and Consumer Foods achieved 2% business volume growth. Trading profit increased by 6.1% to €214 million. Notwithstanding the significant increase in raw material and input costs, Ingredients & Flavours maintained a trading margin of 9.2%.
Profit before tax increased to €175 million from the 2010 first half level of €162 million. Profit after tax increased by 9% to €144 million. Adjusted earnings per share increased by 9.7% to 86.8 cents. Basic earnings per share increased by 8.7% to 82.2 cents. The interim dividend of 9.8 cents per share represents an increase of 11.4% over the 2010 interim dividend.
Commenting on the results Kerry Group CEO Stan McCarthy said, “Kerry delivered a solid earnings performance and strong volume growth in the first half of 2011, despite significant raw material and input cost inflation. The group remains confident of achieving its growth targets for the full year and delivering 8-12% growth in adjusted earnings per share as guided at the beginning of the year.”
Ingredients & Flavours revenue increased on a reported basis by 10.4% to €1,973 million, reflecting 9.6% like-for-like (LFL) growth. The group’s integrated technology approach and end-use-market focus continued to deliver a strong innovation pipeline, contributing 4.1% business volume growth in the period. Trading profit grew by 9.7% (LFL) to €181 million maintaining the division’s 9.2% trading margin despite the impact of raw material and input cost increases. Food and beverage consumption trends continue to increase demand for reduced calorie, reduced salt, all-natural solutions and clean product labeling, providing increased opportunities for Kerry to capitalize on its global leadership in development and delivery of consumer preferred taste solutions.
Revenue in the Americas region increased by 9.8% (LFL) to €762 million. Business volumes grew by 3.9% despite challenging market conditions in some industry sectors. Against a background of significant input cost inflation, cost recovery programs proved successful, contributing a 5.9% increase in pricing/mix.
Ingredients & Flavours revenue in the EMEA region increased by 9.3% (LFL) to €653 million. Business volumes grew by 2.9% notwithstanding sector related issues particularly in Eastern European markets. Input cost inflation was overcome through cost recovery programs in collaboration with customers across all end-use-markets. Overall pricing/mix increased by 6.4% in the period.
Kerry also progressed its development across all end-use-markets in the Asia-Pacific region despite the impact of the natural disaster events in Japan, Australia and New Zealand early in the year. Revenue increased by 12.8% (LFL) to €293 million. Business volumes increased by 10% and pricing increased by 4% in response to the raw material inflationary impact. Cost recovery continues where inflationary trends have prevailed.