Kerry Group grows volumes as prices increase 10.6%

Shares in Kerry Group were down in trading today hovering above €90.

Kerry Group grew volumes by 6.6% in the third quarter despite increasing products by more than 10% in response to inflationary pressures.

The food group reported increased revenues of 16.1% in the period comprising of business volume growth of 6.6% and increased pricing of 10.6%. Coming to the end of the year, the company said it was updating its full-year earnings guidance to between 6% and 8% growth.

Shares in Kerry Group were down in trading today hovering above €90. The food giant said the resilience of supply chains remains a key focus across the industry due to volatile global positions. 

They said the consumer landscape continues to evolve with customers continuing to evaluate the relevance and uniqueness of their offering and there was a need to adapt and keep expanding their product ranges. 

"We achieved excellent growth across the period through a combination of strong business volumes and pricing, as we continue to manage through this unprecedented inflationary pricing environment in collaboration with our customers," Kerry Group boss Edmond Scanlon said.

"Our volume growth was broad-based across our regions, channels and markets, led by excellent performances in snacks, beverage, meat and bakery in particular. We also made good strategic progress with further footprint expansion and strategic acquisitions."

The company's Taste & Nutrition business saw strong volume growth across all regions, despite the effect of increased pricing. The snacks, meat, bakery and beverage markets all saw growth despite a 7.5% increase in pricing passed on from the increase in input costs.

Growth was strongest in the Americas, up 9.3% while volumes grew by more than 6% in Europe driven by the snacks, dairy and meals markets. Kerry Group's Dairy Ireland business saw volumes grow 1.8% despite a 36.6% increase in prices due to significant increases in dairy prices and other input costs.

At the end of September, the group’s net debt was €2.4bn. The group’s consolidated balance sheet remains strong which will facilitate the continued organic and acquisitive growth of the group's businesses.

Kerry Group said it remains confident in its ability to manage the current inflationary cycle with its well-established pricing model and cost initiatives.

"While we recognise the current level of uncertainty in the marketplace, we feel very well positioned as we continue to support our customers in addressing the various market challenges and opportunities," Scanlon said. "Given we have now reported the third quarter, we are updating our full-year earnings guidance to 6% to 8% growth on a constant currency basis."

In a note, stockbroker Davy said Q3 marked another quarter of sector-leading volume growth for Kerry’s Taste & Nutrition division reflecting its capability set and customer relevance.

The share price of the Tralee-headquartered food and ingredients giant is down more than 20% since the start of the year to value the Irish multinational on stock markets at €16.5bn.