Kerry Group volume decline leads to lower turnover

As a result of the corona crisis, food group Kerry Group has recorded a volume decline of 2,9% in fiscal year 2020, according to preliminary annual figures released by the company this week. Due to the decrease in volume, turnover fell by 4%. The dividend will be higher than a year earlier.

Kerry Group has a turnover of €2020 billion in 6,95, a decrease of 4% compared to the €7,24 billion in the previous year. This is the result of a drop in volume as a result of the corona crisis (-2,9%). Incidentally, a strong recovery started in the fourth quarter. In this quarter, volume growth came in at 2,2%, but that is not enough to limit the loss in trading profit. Trading profit decreased from €902,7 million to €797,2 million, a decrease of 11,7%. Adjusted profit after tax was €611,3 million, a decrease of 12,2% compared to 2019.

"This has been a unique year in which daily life around the world has been affected by the corona crisis," said Edmond Scanlon, director of Kerry Group. “Last year we saw significant differences in business performance per channel. Continued strong growth was achieved in the retail channel, although the performance in our foodservice channel (particularly in the second quarter) was below average due to all measures against the corona virus ."

A positive figure in the annual report is that the total dividend of Kerry Group over the past year has increased by 10,1% to 86,5 cents. Another positive is that the organization's net debt has decreased from €1,97 billion in 2019 to €1,95 billion in 2020.

Keep investing
Net capital expenditure last year was €311 million, compared to €315 million a year earlier. Research and development expenses amounted to €282 million. In 2019 that was €291 million. "The proactive nature of our business model has been a key driver of our strong recovery. We have supported food service customers in adapting their operations and menus to meet consumer demand for things such as takeaway and delivery." In short: according to the director, continuing to invest was the right choice.

In its annual report, the group also announces its intention to acquire the Spanish company Biosearch Life. This company is active in the nutraceutical and functional food sector. The company produces a range of probiotics, including premium probiotics derived from human breast milk, science-backed botanical extracts, and natural omega-3s.

Opportunities
Kerry Group also sees opportunities in the changes brought about by the corona crisis. “The crisis has accelerated key trends emerging at the start of the year,” Scanlon said. This includes an increasing demand for improvements in health and immunity, options for vegetable proteins and products that meet a range of sustainability criteria. “Consumers are increasingly focused on sustainability, which creates significant opportunities for Kerry and our portfolio.”

Kimberly Baker

Kimberly Bakker is an all-round editor at Boerenbusiness. She also has an eye for the social media channels of Boerenbusiness.

k.baker @boerenbusiness. Nl

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.