International food and ingredients firm Kerry Group has reported group revenue of €5.8bn, with a sales growth of 4.6 per cent.
The group’s trading profit came in at €611m and was up 9.4 per cent, where its ingredients and flavours business accounted for 73 per cent of its revenue and 81 per cent of its trading profit. In addition earnings per share were up 10 per cent to 258c.
"Kerry’s ingredients and flavours business performed well throughout all geographic markets in 2013, benefiting from its leading taste, nutritional and functional ingredients and actives technology platforms," the company noted in its preliminary results released this morning.
"Demand for nutritional enhancement, health and wellness offerings without compromising on taste, wider flavour profiles, convenient on-the-go and snacking options, coupled with increased momentum towards clean-label solutions continued to drive innovation - providing good growth opportunities for Kerry’s technology portfolio," it said.
In detail, Kerry Group reported revenue grew by 2.2 per cent in savoury and dairy systems, 7.4 per cent in beverage systems, 5.2 per cent in pharma/functional ingredients while cereal and sweet reported revenues declined by 2.4 per cent.
Commenting on the results, Kerry Group chief executive Stan McCarthy said: “The group achieved good underlying growth ahead of our markets in 2013 and a 10.2 per cent increase in adjusted earnings per share. Our performance reflects continued business margin improvement and strong cash generation. We are well focused on our targeted nutrition, taste and developing market platforms for growth. Based on current exchange rates, the Group expects to achieve sic per cent to 10 per cent growth in adjusted earnings per share in 2014."
According to the company, the 2013 performance and results reflect the strength of Kerry’s taste and nutrition platforms and customer-focused business model, supported by major investment in its Kerry Global Technology and Innovation Centres in Singapore and Regional Development and Application Centres in China, India and Thailand in recent years.
In addition the group is also establishing five Regional Customer Centres in Indonesia, Japan, Korea, the Philippines and Vietnam. And last October, Kerry opened a new regional development and application centre in Dubai to serve the group’s customer base in the Middle East, North Africa and Turkey.
In the Asian-Pacific Region, while economic growth was below recent levels in Asia, Kerry said it continued to record strong market development throughout the region.
"Consumer demand in some Asian countries was slightly reduced due to relatively weaker currencies, but demand for the group's nutritional systems, taste solutions and functional ingredients and actives continues to increase at encouraging levels. Reported sales revenue in the region grew by 5.4 per cent to €765m reflecting underlying sales growth of 9.8 per cent. Continuing business volumes grew by 8.2 per cent and pricing increased by 1.6 per cent," it noted.
Closer to home, Kerry Group noted the consumer foods markets in the UK and Ireland remained "highly competitive" due to negative underlying market growth rates, increased market polarisation and a continued high level of promotional activity.
"While Kerry Foods is best positioned in its market categories with strong brand shares, the division continues to focus its business model on its core offerings and to reconfigure its business portfolio for sustained profitable growth in line with Group metrics," it said.
Meanwhile it said work on its Technology and Innovation Centre in Naas, Kildare to serve the group’s global and regional customers in the EMEA region is well advanced and on schedule to be operational in early 2015.
"As announced the group is investing €100m in the new centre that will provide strategic customers with access to Kerry’s complete breadth and depth of technologies and will be a focal point for all scientific research, innovation, technology and product development," it said.
Looking to the trading year ahead, based on current exchange rates, Kerry Group expects to achieve six to 10 per cent growth in adjusted earnings per share to a range of 273 to 284 cent per share in 2014.
"Our market-leading ingredients and flavours technologies are well focused on our targeted nutrition, taste and developing market platforms for growth. Group capital resources will be strategically invested in organic development of these growth platforms and complementary acquisition opportunities will continue to be explored where possible.
"Focused on current market growth sectors and convenience trends, a sustainable growth framework will be prioritised in Kerry Foods which will establish a high-quality business model in line with Kerry’s long-term growth objectives," it added.
Pictured: Kerry Group Chief Executive Stan McCarthy and Brian Mehigan, Chief Financial Officer