Kerry Sees Steady Growth for First Nine Months of 2011

Kerry issued its interim management statement for the nine months ending Sept. 30, 2011, continuing to record organic growth and solid performance across categories, despite input cost inflation in some segments. The company’s sales revenue for the period increased by 7.9%, reflecting like-for-like growth of 7.3%, and business volumes grew by 3.4% with product pricing/mix increasing by 4%. Relative to the first nine months of 2010, business volumes were ahead 3.9% in ingredients and flavors. Net debt at the end of the period was at €1.2 billion, slightly higher than that reported at the half year stage due to movement in exchange rates and increased investment in the company’s “1 Kerry” business transformation program and working capital. Kerry also reported confidence in achieving its growth targets for the full year and delivering 8–12% growth in adjusted earnings per share.

Specifically for its ingredients and flavors division, the company continued to record growth throughout its regional markets while addressing a challenging economic landscape by focusing attention on consumer offerings and driving product innovation. In the Americas region, Kerry achieved 3.6% growth in business volumes. Its savory and dairy systems continued to perform well, in particular through yogurt applications and coating systems in the meat industry. Cereal and sweet categories remained challenging due to competitive trends and delayed product launches. However Kerry maintained good progress particularly in the bakery sector by incorporating flavors and functional ingredients. Beverage systems and flavors also achieved good growth.

In the EMEA region, Kerry’s business volumes reflect 2.6% regional growth, with overall performance was above industry average, though it varied across end-use and regional markets due to raw material cost pressures. Snack applications continued to provide good growth opportunities for cheese systems and seasonings. Development in the meat sector was constrained due to challenging sectoral issues but poultry applications progressed satisfactorily. Sweet systems achieved good growth in particular through confectionery, yogurt and bakery applications, and the company maintained growth in the ready-to-eat cereals category, which has been challenging. Flavor technologies and demand for all-natural flavor systems continued to provide good growth opportunities in the beverage sector, and solid volume growth was maintained through Kerry’s functional ingredients. Also, primary dairy markets remained firm during the period, benefiting from continued strong demand in importing countries.

The division’s Asia-Pacific markets continued to provide solid growth opportunities, with business volumes growing by 10.1%. Meat technologies grew strongly in Australia, New Zealand and in the expanding regional QSR sector, and dairy and lipid systems again achieved good growth in the nutritional sector. Kerry Pinnacle also continued to grow strongly through value propositions in the lifestyle bakery sector, and the company’s beverage systems and flavors continued to benefit from progressive development and roll-out across the regional QSR sector. Emulsifiers achieved double-digit growth.

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