Kerry Reports Strong Rise in Ingredient Revenues, Posts Trading Profit Milestone of €501m
Kerry Ingredients & Flavours also confirmed that it has completed the acquisition of South African flavours company FlavourCraft for an undisclosed sum, which sees Kerry expand its presence not just in South Africa, serving food manufacturers in the country, but across the continent.
Feb 21 2012 --- Kerry, the ingredients & flavours and consumer foods group, reported a trading profit of €501m for the 2011 period.
In a preliminary trading statement issued this morning the company said revenue increased by 6.4% to €5,302.2bn on a like-for-like (LFL) basis, while business volumes were up 3.3%.
Sales revenue increased by 6.9% from the previous year to €5.3 billion.
Ingredients & Flavors saw their trading margin up 10 basis points to 11.9%
Commenting on the results Kerry Group Chief Executive Stan McCarthy said; “Kerry delivered good profitable growth in 2011 despite weak consumer confidence in many markets and significant raw material & input cost inflation.
“The Group performed well across developed and developing markets while continuing to build our capabilities and positioning for the future. Trading profit reached a milestone level of €501m in 2011. We are confident of achieving our strategic growth objectives for 2012 and expect to achieve seven to ten per cent growth in adjusted earnings per share to a range of 228 to 235 cent per share. The continuing challenging economic landscape across most major economies heightened the requirement for innovation and product differentiation to meet changing consumer requirements.
“While consumer spending remains constrained due to fiscal pressures, demands for all-natural and clean label solutions continue to grow as does the requirement for healthy reformulation, well-being and diet-specific offerings. Cost recovery in the Group’s consumer foods markets in Ireland and the UK proved more challenging due to the prevailing economic situation and level of price promotional activity in both markets. However, while Kerry Foods saw a moderation in volume growth as the year progressed, profitability in the division was maintained due to on-going business efficiency programmes and successful innovation focused on value consumer offerings.”
Kerry’s ‘go-to-market’ strategies, capitalizing on its broad global ingredients & flavors development, technology layering opportunities and end-use-market focus continued to deliver stronger customer engagement and innovation in all regions in 2011. Sales revenue increased on a reported basis by 8.5% to €3,706m, reflecting 7.7% LFL growth. Business volumes grew by 4% and pricing/mix increased by 3.8%.
Trading profit increased by 9.4% LFL to €439m with the division’s trading margin improved by 10 basis points to 11.9%. Innovation continues to be driven by increasing consumer demand for ‘free-from foods’, reduced calorie, reduced salt, reduced fat, higher-fibre, natural flavours and ingredients, enhanced nutritional and dietary products, in addition to continuing trends towards more convenient, cost-effective solutions, healthy snacking options and affordable indulgence; favoring development through Kerry’s range of ingredients, flavours, texture, nutritional and taste solutions.
All Group technology clusters achieved a measure of growth in 2011. Revenue grew by 7.9% in Savoury & Dairy systems, 5.4% in Cereal & Sweet systems, 12.6% in Beverage systems, 9.1% in Pharma, Nutritional & Functional ingredients and by 11.2% in Regional Technologies.
In December the Group completed the acquisition of Cargill’s global flavours business. The business, acquired for a total consideration of US$230m, serves a global customer base through provision of flavour ingredients and flavour systems for beverage, dairy, sweet and savoury applications. It has long standing relationships with leading global food and beverage manufacturers through its integrated flavour development and application centres in France, the UK, South Africa, India, Malaysia, China, the USA, Puerto-Rico, Mexico and Brazil – supported by a network of sales representative offices in 12 other countries.
Kerry Ingredients & Flavours also confirmed that it has completed the acquisition of South African flavours company FlavourCraft for an undisclosed sum, which sees Kerry expand its presence not just in South Africa, serving food manufacturers in the country, but across the continent.
Established in 1993, Durban-based FlavourCraft specialises in the design and manufacture of flavours for meats, soups, sauces, dressings and savoury snacks in the South African and sub-Saharan markets, particularly in Nigeria.
Commenting on the deal Ryan Ponquett Managing Director of FlavourCraft said: “FlavourCraft and Kerry ingredients & Flavours are a perfect fit, with the same views around creating market-leading flavour ingredients. By teaming up with a like-minded global player our customers and those across the continent will gain access to Kerry’s huge taste, ingredients and applications knowledge. This will enable them to bring customer-preferred products to market faster and at better value.”
Kerry’s Africa Zone Director Bart van Schie said: “This acquisition represents a clear illustration of Kerry’s commitment to developing our business across Africa. FlavourCraft’s product portfolio, knowledge and customer base in South Africa, Nigeria and across west Africa will be an asset to us and assist our expansion plans across the continent.”
The FlavourCraft deal also provides Kerry with a major manufacturing facility in Africa, a 4000 square metre factory outside Durban, and brings with it a first class customer and application centre, providing local research and development capability, which will enable Kerry to expand its capability in developing and producing ingredients to meet local market needs.
This latest acquisition complements another recently made by Kerry in the region – that of Cargill’s flavour business in South Africa. Taken together these acquisitions, backed by Kerry’s market leading technologies and R&D capabilities, create a powerful flavours force in the region.
“These really are exciting times for Kerry in South Africa, and we are very much looking forward to working with our new colleagues. Integrating FlavourCraft into our business provides a well established platform for us to apply our expertise in creating consumer-preferred taste solutions for our food and beverage customers across sub-Saharan Africa”, concluded Bart van Schie.
Kerry Ingredients & Flavours also confirmed that it has completed the acquisition of South African flavours company FlavourCraft for an undisclosed sum, which sees Kerry expand its presence not just in South Africa, serving food manufacturers in the country, but across the continent.
Established in 1993, Durban-based FlavourCraft specialises in the design and manufacture of flavours for meats, soups, sauces, dressings and savoury snacks in the South African and sub-Saharan markets, particularly in Nigeria.
Commenting on the deal Ryan Ponquett Managing Director of FlavourCraft said: “FlavourCraft and Kerry ingredients & Flavours are a perfect fit, with the same views around creating market-leading flavour ingredients. By teaming up with a like-minded global player our customers and those across the continent will gain access to Kerry’s huge taste, ingredients and applications knowledge. This will enable them to bring customer-preferred products to market faster and at better value.”
Kerry’s Africa Zone Director Bart van Schie said: “This acquisition represents a clear illustration of Kerry’s commitment to developing our business across Africa. FlavourCraft’s product portfolio, knowledge and customer base in South Africa, Nigeria and across west Africa will be an asset to us and assist our expansion plans across the continent.”
The FlavourCraft deal also provides Kerry with a major manufacturing facility in Africa, a 4000 square metre factory outside Durban, and brings with it a first class customer and application centre, providing local research and development capability, which will enable Kerry to expand its capability in developing and producing ingredients to meet local market needs.
This latest acquisition complements another recently made by Kerry in the region – that of Cargill’s flavour business in South Africa. Taken together these acquisitions, backed by Kerry’s market leading technologies and R&D capabilities, create a powerful flavours force in the region.
“These really are exciting times for Kerry in South Africa, and we are very much looking forward to working with our new colleagues. Integrating FlavourCraft into our business provides a well established platform for us to apply our expertise in creating consumer-preferred taste solutions for our food and beverage customers across sub-Saharan Africa”, concluded Bart van Schie.
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