Kerry Group PLC's (Tralee, Ireland) 2012 group sales rose 10.3% to €5.8 billion, reflecting like-for-like (LFL) growth of 1.7% reflecting acquisitions net of disposals and currency translation.
Despite challenging market conditions in some consumer food and beverage categories, in particular in relatively mature developed market sectors, Kerry said demand for new product development remained strong driven by consumer health and wellness trends towards "clean label," "high fiber," "heart healthy," reduced calorie, enhanced nutritional and dietary products.
The company said continuing business volumes rose 2.8% and pricing/mix was up 0.1%. Volume growth and trading performance in ingredients and flavors markets improved sequentially as the year progressed. For the full year, Kerry's profit after taxation fell to €267 million from €360.7 million a year earlier. Excluding certain items such as brand-related intangible asset amortization, adjusted earnings rose to €417.2 million from €374.5 million.
Kerry also reiterated that the group’s primary consumer foods’ markets in Ireland and the U.K. remain highly competitive due to the adverse impact of economic conditions on consumer spending and the response of retailers through deeper and wider promotional activity.
Still, for Kerry’s ingredients and flavors businesses, sales grew by 14% on a reported basis to €4.2 billion reflecting 3.4% LFL growth. Continuing business volumes increased by 4% outperforming market growth rates. Ingredients and flavors accounted for 71% of group revenue and 79% of group trading profit in 2012.
Revenue grew by 9.3% in savory and dairy systems, 18.5% in cereal and sweet systems, 40.7% in beverage systems and 11.5% in pharma, nutritional and functional ingredients.
In North American markets, Kerry again grew solidly with growth across major food and beverage accounts and foodservice providers. It also said it had encouraging market development and expansion in Latin America. Revenue in the Americas region jumped 16% to €1.81 billion, reflecting 3.2% LFL growth. Savory, dairy and culinary as well as cereal and sweet, beverage systems and flavors all performed well.
In Europe, Middle East and Africa (EMEA) markets, sales rose 9.5% to €1.61 billion, reflecting LFL growth of 0.5%. Savory, dairy and culinary maintained satisfactory growth momentum despite a challenging trading environment. It said cereal and sweet systems and flavors performed well and beverage systems and flavors benefited from the acquisition of Cargill’s flavors business in December 2011. Functional ingredients maintained solid growth.
In Asia Pacific, the company noted the pace of urbanization coupled with Gross Domestic Product and food expenditure growth in Asia-Pacific developing markets helped growth. Kerry’s sales in the region grew by 19.9% to €726 million reflecting 9.5% LFL growth. Savory, dairy and culinary maintained solid growth momentum. Sweet technologies again advanced considerably with continued growth in bakery applications particularly in Thailand, China and the Philippines. Beverage technologies grew strongly across the region. Functional ingredients continued to outperform market growth rates in the region.
For 2013, Kerry expects 7% to 11% growth in adjusted earnings per share.