Group sales revenue increased 8.7 per cent for the nine months to September 30 2010, said the firm in its interim management statement, while business volumes grew 5.3 per cent despite losses due to rising raw material costs, lower prices and currency impacts.
Ingredients and flavours led the way, with division business volumes up 6% relative to the first nine months of 2009. Despite rising input costs for dairy, sugar, cereal and edible oils, Kerry said performance “remained strong in all regions”.
Agilex acquired
5.2 per cent US volume growth led Kerry to buy California-based Agilex Flavors, which develops sweet, fruit and brown flavours for nutritional, beverage, bakery and confectionery.
Within the US, Kerry cited strong performance in savoury and dairy culinary systems for the premium meals category, while IPM Foods’ shelf-stable systems (acquired in March) “contributed good growth in soups, broths and sauces”.
Dairy applications were weaker due to input price rises, as were sweet applications due to “an early end to the ice cream season”. But cereal NPD proved successful, as did meat and beverage systems due to “new delivery formats and strong uptake of flavour modulation”.
Clean-label surge
Savoury and dairy systems drove 4.3 per cent growth in EMEA (Europe, Middle East and Africa), due to the development of reduced fat, reduced sodium and clean-label applications, while “sweet technologies benefited from a good ice cream season.”
Meanwhile, “Beverage systems and flavours benefited from strong demand for natural products and sweetness modulation.”
Cereals suffered due to sector promotions, while rising input costs hit meat and dairy profits; however, demand for the latter was “firm since the half year stage, absorbing the increased output from supplying countries and release of stocks from global inventories.”
Asian ‘avenues’
Kerry CEO Stan McCarthy pinpointed the Asia-Pacific region for “avenues of growth” at a September earnings conference, and hinted strongly at further acquisitions in the region in the fourth quarter.
Despite no announcements on that count, management said the region continued to drive business growth, with volume sales up 15.8 per cent relative to the first nine months of 2009.
Kerry attributed this to “strong market uptake” for new beverage systems and branded, flavoured beverage products, while “nutritional applications also grew satisfactorily” due to additional Malaysia manufacturing capacity.
Despite debts of €1.04bn, Kerry insisted that cash flows “remain strong” and expects to deliver mid-teen growth in its full-year earnings dividends.