Kerry Group first quarter revenues fall 9.9pc

Group revenue was down 9.9pc in the first three months of the year.

Volumes were up 1.9pc, while prices dropped 5.5pc in the period as inflation eased.

The Irish food group’s margin on its earnings before interest, tax, depreciation and amortisation (Ebitda) rose 140 basis points.

This increase was attributed to the effect of price decreases, as well as cost efficiencies and portfolio developments.

European sales volumes were down 1.4pc in the quarter compared with the corresponding period in 2023 as consumers grappled with inflation. Volumes were up 3.6pc in the Americas region following strong inventory management in these markets towards the end of 2023.

Growth in the group’s taste and nutrition division was driven by a strong food-service performance in the first quarter. Volume sales rose by 3.1pc, as prices were down 3.9pc in a deflationary environment.

Prices in Kerry’s dairy division dropped 13.7pc in the first three months of 2024 as dairy input costs were down compared with the same period in 2023. The group also saw a 3pc drop in volumes.

Its dairy ingredients products range was also impacted by “softer overall supply” in the first quarter as a result of market conditions in Ireland.

Kerry updated its adjusted earnings per share guidance. It now expects to achieve adjusted earnings per share growth this year of between 5.5pc and 8.5pc on a constant currency basis.

Previously, it had forecast 5pc to 8pc growth.

This follows the group’s introduction of a new €300m share buyback programme.

“Consumer market dynamics remain similar to those outlined at our full year results,” chief executive officer Edmond Scanlon said, pointing to muted demand.

"As part of our capital allocation framework as previously indicated, we are announcing a new share buyback programme, and the expected net earnings per share accretion has been reflected in our updated guidance range,” he added.

Davy analyst Cathal Kenny wrote in a note to investors that Kerry Group was “well positioned” and is performing well in a “tricky demand environment”.

“Food-service volume growth at 8.6pc was stellar and confirms strong channel execution and client relevancy,” Mr Kenny added.