Kerry Group has said it is confident of delivering growth of 6-10% in adjusted earnings per share in 2016.
The company has announced in its Interim Management Statement for the first quarter of 2016 ending March 31.
This growth is expected in the range of 320-332c per share as previously guided and takes into account a 4% currency headwind at current exchange rates.
At the end of March, Kerry Group’s net debt stood at €1.6 billion, compared to €1.7 billion at year-end.
For the first quarter, the Group reported that it maintained good business momentum while improving the quality of Group businesses and achieving ‘satisfactory’ volume growth in the first quarter of 2016.
While overall market conditions remain challenging, Kerry said that it has sustained a solid innovation pipeline in response to customer requirements and consumer demand for enhanced nutritional, wellness and convenience offerings.
Market conditions in the Europe Middle East African (EMEA) region remain challenging due to the deflationary environment in regional developed markets and continuing geopolitical instability in regional developing markets, according to the Group.
Kerry Foods delivered a good business performance in the first quarter of the year, capitalising on current snacking, convenience and food-to-go trends.
Overall, Kerry group-wide business volumes grew by 2.9% and net pricing was 1.5% lower in the quarter in line with lower input pricing.
Reported revenues increased by 0.9% reflecting the business volume growth, lower pricing, a currency translation headwind of 2.3% and the effect of acquisitions net of disposals of 1.9%.
The Group trading profit margin increased by 50 basis points, reflecting a 40 basis points improvement in Taste and Nutrition, a 20 basis points improvement in Kerry Foods, and reduced spend on the Kerryconnect Programme contributing 10 basis points.
The Group found that EMEA region market conditions remained challenging where Kerry recorded 0.2% business volume growth relative to the first quarter of 2015.
Conditions in the European meat industry overall remain stagnant but Kerry is progressing added-value sectoral opportunities through layering of its unique technology portfolio.
Dairy taste technologies performed satisfactorily despite the significant downturn in dairy market returns, the Group announced.
However, returns in the primary dairy sector weakened further in the first quarter of 2016 due to the continued expansion in output in exporting countries and a slowdown in demand in importing countries.
In Ireland, the Group’s ‘Fire and Smoke’ branded sliced cooked meats maintained good growth. Meanwhile, ‘Dairygold’ maintained brand leadership in dairy spreads and ‘Charleville’ achieved good growth in the cheese sector.
The Group’s consolidated balance sheet remains strong which Kerry said will facilitate the continued organic and acquisitive growth of Group businesses.
