Food group Kerry said it had good volume growth in the first quarter of the year, boosting revenue.
In an interim management statement for the the first three months of the year, the group said volumes rose 3.1 per cent, with pricing increasing 0.2 per cent over the period. Reported revenue rose 6.3 per cent due in part to the rise in volumes, with favourable currency translations and contribution from acquisitions net of disposals also increasing figures.
Earnings before interest, tax, depreciation and amortisation (ebitda) margin from continuing business operations expanded by 90bps. Net debt was €1.9 billion.
The growth was led by Kerry’s performance in the foodservice and emerging markets. Volume growth in foodservice was 4.7 per cent, driven by new menu innovations, seasonal products and measures to cut costs
Business volumes in emerging markets increased by 6.4 per cent in the period, with Southeast Asia putting in a strong performance.
The Americas region showed volume growth of 3.5 per cent, with the bakery sector achieving strong growth in North America.
Growth in Europe was more muted at 0.1 per cent.
“We delivered a good overall performance in the first quarter, particularly given market conditions,” said chief executive Edmond Scanlon. “We achieved good volume growth in the Americas and APMEA, with Europe similar to the prior year. Our strong EBITDA margin expansion was led by efficiencies delivered through Accelerate operational excellence.”
The group is also looking at a further €300 million share buyback programme when the existing €300 million programme that began in November is completed. As of the end of March, Kerry had repurchased €185 million of ordinary shares under the programme.
Looking ahead, Kerry noted the highly dynamic macroeconomic conditions and the continually evolving tariff and global trade landscape, but said it was well positioned for good volume growth and strong margin expansion.
The group maintained its full year constant currency earnings per share guidance growth of 7 per cent to 11 per cent.
“While recognising the heightened level of market uncertainty, we remain well positioned for good volume growth and strong margin expansion, and we maintain our full-year constant currency earnings guidance,” Mr Scanlon said.
“This is another solid update from Kerry with the Q1 performance in-line and underlying FY guidance reiterated though the incremental FX headwind clearly hampers momentum somewhat,” Goodbody analyst Patrick Higgins said in a research note. “We are likely to leave our underlying estimates broadly unchanged though lower our earnings per share by [about] 3 per cent to account for [foreign exchange] movements.”
“Overall, we retain our positive stance on the stock,” he added, highlighting that Kerry shares trade at a discount to its peers.
Kerry shares rose 0.6 per cent in Dublin to €93.25. The shares are little changed on the year so far.
Davy analysts led by Cathal Kenny meanwhile described the update as “solid” and noted it had maintained its guidance despite the “global uncertainty” amid the tariff threat.
