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Kerry First-half 2012 Sales Up 10% on Recent Acquisitions

Posted: August 10, 2012

Kerry Group PLC's (Tralee, Ireland) first-half 2012 sales rose 10% as recent acquisitions helped its ingredients and flavors businesses amid a competitive marketplace where United Kingdom and Irish consumers pursued value offerings. The company also boosted its earnings outlook for the year. 

“We have a strong innovation pipeline and continue to make good progress in implementation of our 1 Kerry Business Transformation program," said Stan McCarthy, Kerry Group's CEO. "We now expect to achieve 8% to 12% growth in adjusted earnings per share in 2012." 

For the first six months ended June 30, the company posted sales of €2.9 billion, up 10% from a year earlier, and up 2.5% on a like-for-like basis reflecting acquisitions of net disposals and currency translation. The company said it benefited from its recent acquisitions. 

By segment, ingredients & flavors revenue for the first half rose 14%, or 3.7% on a like-for-like basis, to €2.07 billion, driven by its reach across food, beverage and pharma end-markets. It also benefited from recent acquisitions including Cargill’s flavors business, SuCrest, FlavourCraft, EBI Cremica, IJC Fillings, General Cereals S.A. and the business and assets of Lactose India.

By region, revenue in the Americas increased by 15% to €876m, or up 3% based on like-for-like growth. While the North American marketplace proved challenging, Kerry said it outperformed market trends and business performance improved encouragingly during the second quarter, benefiting from the strength of its technology portfolio and applications expertise spearheaded through the Kerry Center in Beloit, Wisconsin

Progress in Latin American markets was assisted by strong innovation driven from the Kerry Center in Campinas, Brazil and the recently commissioned new Kerry Center in San Juan del Rio, Mexico. Overall business performance in the region was also boosted by the successful integration of 2011 acquisitions, in particular Cargill’s flavors business, and also by business efficiency improvements from its ongoing 1 Kerry Business Transformation program.

Revenue in the Europe, the Middle East and Africa region (EMEA), rose 11.8% to €820 million, reflecting 1.6% like-for-like growth in the first half. Meanwhile, revenue in Asia-Pacific rose 16.7% to €342 million, reflecting 9.8% like-for-like growth.  

By segment, savory, dairy and culinary systems had mixed performance in the Americas as well as the EMEA. In Asia-Pacific, savory, dairy and culinary performed well, with strong performance by its lipid systems business in the nutritional sector in China and Indonesia in particular.

Cereal and sweet had good performance in the Americas with growth in the confectionery and bakery sectors. The division's performance in EMEA was also strong, boosted by good growth in the dairy sector for its sweet systems operations as well as its SuCrest business operations, which were acquired in October 2011. Sweet technology performance improved in Asia-Pacific, thanks in part to its acquisition of IJC Fillings, which extended its technology base in the ice cream and bakery markets.

Beverage systems and flavors benefited in the Americas from health and wellness trends and "life stage"product launches as well as growth in its Caffe D'Amore-branded food service segment. In the EMEA, United Kingdom and Irish private label beverage sectors provided flavor development opportunities in the soft drinks sector. There was also continued growth in the African brewing market.