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Kerry Group reaffirms full year earnings guidance

Food technology and ingredients company Kerry Group said it was seeing continued strong business growth during the first quarter of 2022 as it reaffirmed its full year earnings guidance.

In a trading update, Kerry reported group volume growth 5.6% for the three months to the end of March.

Kerry said its Taste & Nutrition division saw overall volume growth of 6.8% with strong growth across many developed markets, while Dairy Ireland saw volume growth of 0.7%.

Group reported revenue increased by 8.1% in the three month period.

The company noted that the overall demand environment remained positive, as consumers moved to more “normalised” work environments and increased their social engagement as Covid curbs were dropped.

Overall mobility approached pre-pandemic levels, with travel and out-of-home eating occasions continuing to increase, it added.

But it noted that as consumer preferences continue to evolve with increased demand for new food and beverage experiences, sustainability remains a key factor in purchasing decisions.

“Overall price inflation has now moved into the consciousness of many consumers,” it added.

Kerry said its markets remain highly dynamic with a good overall demand environment, despite current uncertain market conditions in places.

“While our industry is experiencing a period of heightened inflation, we remain confident in our ability to manage through this current cycle with our well-established pricing model and cost initiatives,” it said.

“Kerry remains strongly positioned for growth with a good innovation pipeline. We expect to achieve adjusted earnings per share growth in 2022 of 5% to 9% on a constant currency basis,” it added.

Kerry said that its Dairy Ireland segment saw solid overall volume growth as the business saw significant price increases across the three month period.

Within Dairy Consumer Products, good volume growth was achieved right across the dairy snacking range, led by Cheestrings with increased out-of-home consumption.

It added that volumes in spreadable butter were lower due to reduced promotional activity, while the cheese category had strong comparatives due to a higher level of at-home consumption in the previous year.

Looking ahead, Kerry said its markets remain highly dynamic with a good overall demand environment, despite current uncertain market conditions in places.

“While our industry is experiencing a period of heightened inflation, we remain confident in our ability to manage through this current cycle with our well-established pricing model and cost initiatives,” it said.

“Kerry remains strongly positioned for growth with a good innovation pipeline. We expect to achieve adjusted earnings per share growth in 2022 of 5% to 9% on a constant currency basis,” it added.

Edmond Scanlon, Kerry’s chief executive, said the company was pleased with the start to 2022 despite challenging conditions in a number of markets.

“Taste & Nutrition achieved continued strong growth, particularly in developed markets. This growth was led by the Meat, Snacks and Bakery end use markets. Growth in the retail channel remained strong while foodservice continued its excellent overall growth in the period,” he said.

“We also made good progress on the strategic front, enhancing our biotechnology portfolio with the acquisition of c-LEcta, while expanding our local presence in emerging markets with the acquisition of Almer in Southeast Asia and further enhancing our footprint in the Middle East and Africa,” he added.

Mr Scanlon said that as overall market conditions remain highly dynamic, Kerry is actively managing the inflationary environment in close collaboration with its customers.

“As previously announced, we have taken the decision to suspend our operations in Russia and Belarus and we continue to work through the challenges presented in China since the introduction of localised restrictions,” he said.

“As we commence a new strategic cycle, the progress we’ve made positions us strongly for growth. We are reaffirming our full year earnings guidance,” he added.

Shares in the company moved higher in Dublin trade today.

Article Source – Kerry Group reaffirms full year earnings guidance – RTE

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