Revenues fall by almost 10% at Kerry Group as consumer demand remains subdued

Group said consumer demand remained "relatively subdued" following high inflation

Edmond Scanlon, Chief Executive Officer, Kerry Group. PIC: MAXWELLS DUBLIN

Kerry Group posted an almost 10% drop in revenues in the first three months of this year with consumer demand remaining "relatively subdued" following high inflation.

However, the group saw its earnings before interest, tax, depreciation and amortisation (Ebitda) rise by 1.4%, driven by cost efficiencies, portfolio developments and the effect of pricing. 

The group's volumes rose by just under 2% in the period, while prices dropped by 5.5% as inflation cooled.

European sales volumes were down 1.4% in the first three months of the year compared to the same period in 2023 as consumer demand was hit by rising price levels. 

Volumes in the Americas region was up by 3.6%  following strong customer inventory management in these markets towards the end of 2023, Kerry Group said.

The food giant said its taste and nutrition division was driven by a strong food service performance, with sales growing by 3.1% amid price decreases of almost 4%.

Prices in Kerry’s dairy division fell by 13.7% from January to March, driven by a reduction in input costs compared to the same period last year. The group also posted a 3% fall in volumes.

The group also updated its adjusted earnings per share guidance which it said "reflected its new share buyback programme." 

Last year, Kerry said its €300 million share buyback programme would help ease the steady decline in the company’s share price over recent months.

It now expects an adjusted earnings per share growth this year of between 5.5% and 8.5% on a constant currency basis, up from its previous forecast of 5% to 8% growth.

“Consumer market dynamics remain similar to those outlined at our full year results,” said Kerry Group chief executive, Edmond Scanlon.

“We are pleased to report a good start to the year given market dynamics. As part of our capital allocation framework as previously indicated, we are announcing a new share buyback programme, and the expected net earnings per share accretion has been reflected in our updated guidance range,” he added.