The Kerry Group’s preliminary statement of results for the year ending December 2022 has shown volume growth of 6.1% and its group revenue has grown to €8.8 billion.
Edmond Scanlon, chief executive officer said: “As we marked Kerry’s 50th year in 2022, we achieved record organic revenue growth against the backdrop of an exceptionally dynamic operating environment. I am proud of the broad-based volume growth we delivered across our end use markets, channels, regions and emerging markets despite the macroeconomic conditions. Our teams worked closely with our customers to actively manage through the inflationary environment, while continuing to innovate and develop their offerings to meet evolving marketplace needs.
“We made good strategic progress in the year through development of our innovation platforms, footprint expansion and continued portfolio development. We completed a number of acquisitions aligned to our strategic priorities of Taste, Nutrition and Emerging Markets, and since year-end we announced the potential sale of our Sweet Ingredients Portfolio, as we continue to enhance and refine our business to areas where we can add most value.
“While recognising the current market uncertainty, we believe we are strongly positioned to continue to grow our business through this period. In 2023, we expect to achieve 3% to 7% adjusted earnings per share growth on a constant currency basis, before the dilution from the potential sale of the Sweet Ingredients Portfolio.”
Performance
Group reported revenue in the year increased by 19.3% to €8.8 billion. This reflected volume growth of 6.1%, increased pricing of 11.7%, favourable transaction currency of 0.2%, favourable translation currency of 6.8% and contribution from business acquisitions of 4.3%, partially offset by the impact of business disposals of 9.8%.
Group EBITDA increased by 12.9% to €1.2 billion, with an EBITDA margin of 13.9% (2021: 14.7%), as the dilution from the impact of passing through input cost inflation was partially offset by accretion from portfolio developments, operating leverage, mix and efficiency initiatives.
Constant currency adjusted earnings per share increased by 7.3% to 440.6 cent (2021: 12.1% increase). Basic earnings per share was 341.9 cent (2021: 430.6 cent) as the prior year included a credit from the sale of the Consumer Foods Meats and Meals business. The Board recommends a final dividend of 73.4 cent per share, an increase of 10.0% on the final 2021 dividend. Together with the interim dividend of 31.4 cent per share, this brings the total dividend for the year to 104.8 cent, an increase of 10.1% on 2021.
Research and development expenditure amounted to €303m (2021: €297m) and net capital expenditure was €217m (2021: €315m) as the Group continued to invest in its strategic priorities of Taste, Nutrition and Emerging Markets. Free cash flow for the year was €640m (2021: €566m) representing cash conversion of 82%.
Good progress was reported to have been made in the year against Kerry’s Beyond the Horizon sustainability strategy and commitments. Kerry increased its nutritional reach to 1.2 billion consumers globally. The Group achieved a 48% reduction in Scope 1 & 2 carbon emissions, while progress was also reported in reducing food waste in Kerry’s operations by 32%.
Markets
Kerry said the overall demand environment remained robust through the year despite the macroeconomic backdrop. It said consumers continued to seek new taste experiences, cleaner labels and added functional benefits through food and beverages. The cost-of-living crisis has resulted in many consumers looking for relative value options to meet their purchase preferences, depending on their available resources.
Future Prospects
The Group said it began its 2022-2026 strategic cycle with a strong year of growth, good overall financial performance and continued progress against Kerry’s Beyond the Horizon sustainability commitments.
At the outset of 2023, while market conditions are currently uncertain, Kerry stated it remains strongly positioned for growth ahead of its markets. The Group plans to continue to manage input cost fluctuations with its well-established pricing model.
In 2023, the Group expects to achieve 3% to 7% adjusted earnings per share growth on a constant currency basis, before an expected 2% dilution in the year from the potential sale of its Sweet Ingredients Portfolio.
