Kerry Group Sees 5.9% Revenue Decline Amid Falling Dairy Prices
Source: The DairyNews
Kerry Group reported a 5.9% year-on-year revenue decline to €3.9 billion during the first half of 2024, driven by a 4% decrease in prices. Despite this, the group's taste & nutrition division saw a 3.1% increase in sales volumes, reaching €3.4 billion, and group EBITDA rose by 6.6% (€34 million) to €552 million.
However, profit after tax fell significantly, dropping 19.6% from €357.9 million to €291.5 million, due to a €241 million revenue shortfall and higher costs. While sales volumes increased by 1.7% in H1, driven by a 1.5% surge in Q2, the group faced deflation, unfavorable currency exchange, and disposals, leading to a notable decline in turnover.
Kerry's Irish dairy business reported an earnings increase of €6 million to €35 million despite a 1.9% revenue decline to €592 million, with sales volumes and prices both decreasing by 1.9% and 6.9% respectively.
Amid these challenges, Kerry Group expanded its Cheesestrings manufacturing capacity in Charleville and introduced the SMUG hybrid range of oat and dairy-based milk, cheese, and butter products.
Earnings per share increased by 9.1% on a constant currency basis to 194.1 cent, and the group approved a 10.1% higher interim dividend of 38.1 cent per share. Kerry also repurchased €279 million in shares during H1 and plans to initiate a further share buyback program.
"We are pleased to report a good performance across the first half of the year. Taste & Nutrition delivered good volume growth ahead of our end markets, with strong profit growth and margin expansion across the business, contributing to our earnings per share growth of 9.1% in the period," said Edmond Scanlon, CEO of Kerry Group. "Taste & Nutrition volume growth was led by strong performances in the foodservice channel across all three regions, as we continue to support established foodservice chains evolve and develop their businesses, while working with emerging leaders to upscale their operations and offerings."
In the taste & nutrition segment, food service sales volumes increased by 7.3%, with business volumes growing by 6.6% in emerging markets in the Middle East and Africa. Kerry derived revenues of €1.9 billion in the Americas, with sales volumes up by 3.4%, led by snacks, meals, and bakery products.
In Europe, the group reported sales of €708 million, with volumes declining by 1% compared to a strong H1 2023, although beverages outperformed dairy and snacks. In APMEA, sales volumes increased by 5.5%, with revenues reaching €794 million, reflecting strong growth in the Middle East and Africa and stability in China.
Kerry's Irish dairy business reported an earnings increase of €6 million to €35 million despite a 1.9% revenue decline to €592 million, with sales volumes and prices both decreasing by 1.9% and 6.9% respectively.
Amid these challenges, Kerry Group expanded its Cheesestrings manufacturing capacity in Charleville and introduced the SMUG hybrid range of oat and dairy-based milk, cheese, and butter products.
Earnings per share increased by 9.1% on a constant currency basis to 194.1 cent, and the group approved a 10.1% higher interim dividend of 38.1 cent per share. Kerry also repurchased €279 million in shares during H1 and plans to initiate a further share buyback program.
"We are pleased to report a good performance across the first half of the year. Taste & Nutrition delivered good volume growth ahead of our end markets, with strong profit growth and margin expansion across the business, contributing to our earnings per share growth of 9.1% in the period," said Edmond Scanlon, CEO of Kerry Group. "Taste & Nutrition volume growth was led by strong performances in the foodservice channel across all three regions, as we continue to support established foodservice chains evolve and develop their businesses, while working with emerging leaders to upscale their operations and offerings."
In the taste & nutrition segment, food service sales volumes increased by 7.3%, with business volumes growing by 6.6% in emerging markets in the Middle East and Africa. Kerry derived revenues of €1.9 billion in the Americas, with sales volumes up by 3.4%, led by snacks, meals, and bakery products.
In Europe, the group reported sales of €708 million, with volumes declining by 1% compared to a strong H1 2023, although beverages outperformed dairy and snacks. In APMEA, sales volumes increased by 5.5%, with revenues reaching €794 million, reflecting strong growth in the Middle East and Africa and stability in China.
