Kerry Group (KRZ) Q2 2024 earnings summary

Executive summary

• Achieved strong H1 2024 performance with group revenue of €3.9bn, Taste & Nutrition (T&N) volume growth of 3.1%, and group volumes up 1.7% year-over-year, led by foodservice and innovation in snacks and beverages.

• EBITDA increased 6.6% to €552m, with group EBITDA margin expanding 160bps to 14.2% year-over-year.

• Adjusted EPS rose 9.1% in constant currency to 194.1 cent; free cash flow was €445m, reflecting 131% cash conversion.

• Upgraded full-year constant currency adjusted EPS guidance to 7%-10% growth, supported by margin expansion.

• Strategic investments included the acquisition of a lactase enzymes business and €279m in share repurchases.

Financial highlights

• Group revenue reached €3.9bn, with group volumes up 1.7% and T&N volumes up 3.1%.

• EBITDA rose to €552m, with margin up 160bps to 14.2%; T&N EBITDA margin up 130bps to 16.1%.

• Adjusted EPS at 194.1c, up 9.1% in constant currency; basic EPS at 166.7c.

• Free cash flow of €445m, with 131% cash conversion.

• Interim dividend increased 10.1% to 38.1c; €279m in share buybacks.

Outlook and guidance

• Full-year constant currency adjusted EPS guidance upgraded to 7%-10% growth (previously 5.5%-8.5%).

• T&N EBITDA margin on track for circa 18%; volume growth in T&N expected in the 3%-4% range, led by Americas and APMEA.

• Foreign currency translation expected to be a 1% headwind on full-year EPS.

• Innovation pipeline and margin expansion expected to support continued growth, despite subdued consumer demand.

• No significant improvement in market conditions assumed in guidance; promotional activity impact yet to be seen.