Kerry revenue hits €7B backed by frozen meals, plant-powered offerings and wellness solutions

16 Feb 2021 --- Kerry Group has posted its business performance for the year ended December 31, 2020, with a group revenue of €7.0 billion (US$8.5 billion). Since the onset of the COVID-19 pandemic, chilled meals were impacted by reduced consumer impulse purchases, while frozen meals benefited from increased retailer stocking in the fourth quarter. 

Plant-based meals had strong growth across both chilled and frozen ranges through the year, with a number of successful launches supporting performance, the company highlights. 

Edmond Scanlon, Kerry’s CEO, highlights “notable distinctions” in business performance across various channels as a knock-on effect of COVID-19. As forecasted by Innova Market Insights, the pandemic has driven up omnichannel purchases and the demand for immunity-fortifying ingredients.

“Sustained strong growth was achieved in the retail channel, primarily through growth in authentic cooking, plant-based offerings and health and wellness products,” Scanlon highlights.

“Performance in our foodservice channel was most significantly impacted in the second quarter, as the introduction of restrictions affected our customers’ operations.”

Plant-based meals had strong growth across both chilled and frozen ranges through the year, with a number of successful launches supporting performance.As the trend of home deliveries is sustained, Kerry provided support for foodservice customers in adapting their operations and menus toward takeaway, online and delivery services.

“We made very good progress on a number of strategic fronts,” says Scanlon. “We commenced the strategic development of our Georgia, US, facility.” 

During the year, the group completed three acquisitions at a total consideration of €280 million (US$350 million).

“We completed a number of key acquisitions aligned to our strategic growth priorities in the year, and have since announced our intention to acquire Spanish-listed Biosearch Life,” Scanlon details.

Group performance
Kerry’s group revenue of €7.0 billion (US$8.5 billion) reflected a reported decrease of 4.0 percent, with an overall volume reduction of 2.9 percent in the year. 

This performance reflected a strong recovery since the early outbreak of the pandemic in April 2020, with a return to volume growth of 2.2 percent in the fourth quarter of the year.

Kerry’s Taste & Nutrition segment reported revenue was €5.8 billion (US$7 billion), reflecting a reported decrease of 4.4 percent, primarily due to lower volumes and adverse translation currency, partially offset by contribution from business acquisitions.

Consumer Foods reported revenue at €1.3 billion (US$1.6 billion), reflecting a decrease of 2.1 percent, as lower volumes due to the previously reported ready meals contract exit and an adverse impact from translation currency were partially offset by increased pricing.

Strong snacking
In particular, Kerry highlights its snacking range and home delivery meals business achieved “very strong growth.” This was led by Fridge Raiders, which benefited from increased at-home snacking consumption. Oakhouse Foods home delivery meals also saw “exceptionally strong growth” in the year.

Fridge Raiders benefited from increased at-home snacking consumption.Net capital expenditure amounted to €311 million (US$377.8 million), down from €315 million (US$382.7 million) in 2019. Meanwhile, R&D expenditure was €282 million (US$342.6 million), down from €291 million (US$353.5 million) in 2019.

Group free cash flow of €412 million (US$500.5 million) and cash conversion of 67 percent in the year (2019: €515 million, US$625.6 million / 74 percent) reflected the impact of COVID-19 and investments to support the ongoing progression of the Kerry connect program across the company’s sites in North America.

Shareholders outlook
The group reported a lower trading profit of €797.2 million (US$968.6 million), from its 2019 value of €902.7 million (US$1 billion) due to the impact of COVID-19.

Meanwhile, basic earnings per share decreased by 2.3 percent to US$313.0 cent (2019: US$320.4 cent).

Kerry’s Board recommends a final dividend of 60.6 cent per share, an increase of 10.0 percent on the final 2019 dividend. Together with the interim dividend of 25.9 cent per share, this brings the total dividend for the year to 86.5 cent, an increase of 10.1 percent on 2019.

Regional performance
Kerry’s revenue in the Americas region was €3.1 billion (US$3.8 billion), reflecting a reported decrease of 3.5 percent, with lower business volumes of 2.5 percent, an adverse translation currency impact of 3.0 percent and contribution from business acquisitions of 1.9 percent.

Regional revenue in the Americas was led by “excellent performance” across the company’s Beverage EUM where Kerry’s immunity enhancing technologies, broad protein portfolio and natural extracts were deployed.Regional revenue in the Americas was led by “excellent performance” across the company’s Beverage EUM, where Kerry’s immunity enhancing technologies, broad protein portfolio and natural extracts were deployed in a number of nutritional, low/no alcohol and plant‐based beverage launches.

In Latin America, Kerry’s foodservice channel was impacted later in the year, but recovered well through the fourth quarter. Brazil returned to growth led by beverage and ice‐cream, while market conditions in Mexico and Central America and the Caribbean (CaCar) remained more challenged.

Revenue in Europe was €1.4 billion (US$1.7 billion), reflecting a reported decrease of 5.6 percent, with lower business volumes of 5.0 percent. Kerry’s improvement in the foodservice channel here was supported by a number of launches incorporating the Radicle portfolio of plant-based technologies.

Revenue in the Asia Pacific, Middle East and Africa (APMEA) region was €1.2 billion (US$1.5 billion), reflecting a reported decrease of 5.2 percent, with lower business volumes of 1.9 percent. Dairy had strong growth from increased demand in the APMEA region for Kerry’s clean label solutions, with Meat also performing well, particularly in the Middle East. 

Meanwhile, healthier snacks with nutritional claims also had a strong performance in China due to increasing emphasis on ingredient label declarations for children in the market.

Edited by Benjamin Ferrer