Kerry ups profits on lower sales

Reporting its 2009 results today (23 February) the Tralee, Co. Kerry, Ireland-based group highlighted sales of €4.5 billion (£3.9bn), a 4.8% reduction on the previous year although trading profit was 3.8% up at €422 million.(£370m). Commenting on the results chief executive Stan McCarthy said; "The Kerry business model performed robustly in what was a challenging environment in 2009, delivering excellent product and business development opportunities, good margin improvement and cash generation." The company said it had made excellent progress in 2009, despite the impact of the challenging economic conditions in all major economies on consumer purchasing. The slowdown in economic growth in all regions had adversely affected consumer confidence which led to increased personal saving and reduced expenditure on food and beverages in most markets. However, strong promotional programmes resulted in increased shopping in value channels and increased market shares for private-label offerings at the expense of premium branded lines. Out-of-home expenditure was reduced which impacted foodservice growth particularly in full-serve restaurants, while major quick-serve outlets saw good growth year-on-year. As a result new-product-development was slow during the year but improved considerably in Q4 as food and beverage manufacturers targeted new growth opportunities and increased market differentiation in response to consumer trends. Business performance throughout Kerry's end-use-markets continued to improve during the year and the Q4 performance of all Group businesses "was particularly encouraging". Kerry had re-organised its ingredients & flavours business model which had delivered strong results. The consumer foods division performed well despite the slump in consumer spending in the Irish and UK markets and the impact of the adverse sterling to euro exchange rate in exporting from Ireland to the UK.