FDBusiness.com

Despite the tough trading environment, Kerry Group, the global ingredients, flavours and consumer foods manufacturer, has increased trading profit by 7.1% on a like-for-like basis to Eur5001 million on sales up 6.4% to Eur5.3 billion for the year ended 31st December 2011.

The group’s ingredients & flavours businesses grew steadily in all regions benefiting from Kerry’s breadth and depth of technology and 1 Kerry approach to market development providing industry-leading integrated solutions.  Sales revenue increased on a reported basis by 8.5% to Eur3.71 billion, reflecting 7.7% like-for-like growth. Business volumes grew by 4% and pricing/mix increased by 3.8%. Trading profit increased by 9.4% like-for-like to Eur439 million with the division’s trading margin improved by 10 basis points to 11.9%.

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 Kerry Group’s consumer foods markets inIrelandand 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. Sales revenue increased to Eur1.67 billion reflecting 3.2% like-for-like growth. Overall business volumes grew by 1.1%, reflecting 2.6% volume growth in the UK and a decline of 2.6% in Ireland. Trading profit showed 1% like-for-like growth to Eur130 million. Despite gains through business efficiency programmes, difficulties in cost recovery particularly in private label categories meant that the divisional trading margin was 30 basis points lower at 7.8%.

Kerry Group chief executive Stan McCarthy comments: “Kerry delivered good profitable growth in 2011 despite weak consumer confidence in many markets and significant raw material and input cost inflation. The group performed well across developed and developing markets while continuing to build our capabilities and positioning for the future.”

He adds: “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 (2011 – 213.4 cent).”