News: Kerry Calls for a Double
Kerry overcame soaring raw material and energy costs by passing on price increases and improving its supply chain efficiency, resulting in record earnings before tax and write-offs of 500 million euros.
Sales grew 6.7% to 4.8 billion euros on a like-for-like basis (excluding the impact of acquisitions, disposals and currency translation).
McCarthy said Kerry would double revenues to 10 billion euros through a mix of strong organic growth and acquisitions.
Kerry's global food ingredients and flavors business grew faster than its U.K. and Ireland consumer foods operation.
Helped by a double-digit growth in the Asia-Pacific region, like-for-like revenues in the ingredients division rose by 7.8% to 3.3 billion euros, with operating profit of 310 million euros, up 7.6%.
Consumer foods, which now only account for a third of its business, secured sales growth of 5.6% to EUR 1.8 billion, with profit up 6.4% at 119 million euros, the results showed.
In the U.S., which accounts for 27% of Kerry's revenues, McCarthy said there was encouraging demand for natural and healthy ingredients in the ready-to-eat cereal and nutrition sectors.
While in Europe, both alcoholic and non-alcoholic beverages are target growth areas.
Kerry's activities in the manufacture of proteins for cell nutrition were also "a rich vein of growth" in 2007, Davy Research noted.
Sales growth of 17% in the Asia-Pacific region, which now accounts for 9% of the business, were "not an aberration", McCarthy said.
The highlights for its consumer foods division included the Denny brand, with Denny rashers outperforming its category, although sausage sales fell slightly.
The Dawn Benefits range of functional fruit juices increased its segment share from 9.9% to 19.2%.
The expanding Freshways sandwich and snack brand took advantage of the Republic's buoyant "food-to-go" market, while the Low Low brand reached the number two position in cheese, behind Charleville, another Kerry-owned brand.
McCarthy said Kerry's performance was "very credible" in a tough business environment.
Analysts agreed, describing Kerry's preliminary statement of results as "upbeat," "very solid" and "comfortable."
From the March 3, 2008, Prepared Foods e-Flash