Kerry Positive Following Encouraging Start to 2015

01 May 2015 --- Global ingredients and flavors group Kerry achieved a good start to the year maintaining the positive momentum reported in Q4 2014.

Business volumes grew by 2.5% on a Groupwide basis – slightly ahead of the Q4 2014 level of growth. Net pricing was 2.4% lower, reflecting reduced raw material costs. Reported revenues increased by 4.5% relative to Q1 2014, reflecting the business volume growth, lower pricing, 6.9% positive translation impact due to significant currency tailwinds and (2.5%) business disposal impact. 

Kerry’s Taste & Nutrition technologies and Functional Ingredients & Actives platforms achieved sustained business development across developed and developing markets. Business volumes increased by 2.9% while pricing was 2.3% lower relative to the first quarter of 2014. Divisional trading profit margin increased by 40 basis points as a result of the Group’s business performance and efficiency programmes. 

The Americas Region performed satisfactorily delivering 2.9% volume growth despite the adverse impact of consumer trends in some sectors. Kerry Taste technologies achieved good growth in the meat sector, with performance in the North American culinary segments assisted by Wynnstarr Flavors. Junior Alimentos, acquired in Q4 2014, performed in line with expectations in culinary and sweet foodservice segments in Brazil. The Group’s ‘Dairy Complete’ offering continues to generate a good pipeline of growth throughout American markets. Clean label technologies continued to drive growth in the bakery sector. While traditional cereal markets remain challenged, snacking segments provided encouraging growth opportunities. Beverage systems & flavours maintained a strong business performance in particular the North American aseptic and nutritional applications. 

Foodservice markets again provided strong growth opportunities, in particular for Kerry’s branded food and beverage offerings. Pharma ingredients maintained solid growth through excipient and cell nutrition applications. 

While overall market conditions in the EMEA Region were broadly unchanged, Kerry achieved an improved performance in the region, with business volumes increased by 0.6% compared to the same period of 2014. Despite continuing geopolitical issues, business performance in regional developing markets showed satisfactory improvement. In the dairy sector Kerry’s ‘Dairy Complete’ offering has achieved encouraging business development. Sales in the meat sector were lower except in Eastern Europe. Sweet applications grew satisfactorily in the ice cream and bakery sectors. Beverage systems & flavours maintained a positive business development momentum. Market conditions in Sub-Saharan-Africa recovered relative to Q1 2014. Russia provided good business growth opportunities notwithstanding the economic impact of political issues. MENAT market conditions remain subdued. 

Nutritional applications, developed through continued investment at the Group’s facilities in Ireland, again recorded strong growth across all life-stage end-use-markets, particularly in the infant sector in Asia. Primary dairy market price returns weakened further in Q1 2015 due to a continuing increase in output in exporting countries and softer demand conditions in importing countries. 

At the end of March net debt stood at €1.4 billion. The increase in net debt since year-end reflects the impact of currency translation, capital expenditure and investment in working capital.