Kerry Group (KRZ) Q3 2024 earnings summary

Executive summary

• Group volumes grew 2.2% year-to-date, with Q3 volume growth accelerating to 3.2% and Taste & Nutrition leading at 3.4%; Dairy Ireland volumes up 0.4% YTD and 5.7% in Q3.

• EBITDA margin expanded by 140bps for the Group and 120bps for both Taste & Nutrition and Dairy Ireland, reflecting strong operational performance and product mix.

• Strong performance in the Americas, good results in APMEA, and positive Q3 volume growth in Europe; Foodservice channel delivered robust growth.

• Strategic focus on market penetration, product renovation, enhanced technology, and leveraging regulatory changes in emerging markets.

• Full year constant currency adjusted EPS growth guidance of 7% to 10% reiterated.

Financial highlights

• Group EBITDA margin increased by 140bps year-to-date, driven by operational excellence and product mix.

• Net debt at period end was €1.9 billion, reflecting strong cash generation, capital investments, and share buybacks.

• Group revenue impacted by -3.2% from price, -2.3% from disposals, and -0.7% from FX, partially offset by 2.2% volume growth; acquisitions contributed 0.8%.

• Group pricing down 3.2% year-to-date due to input cost deflation.

• Cash conversion expected to be around 90% for the year, consistent with prior performance.

Outlook and guidance

• Full-year guidance unchanged: constant currency adjusted EPS growth of 7%-10%.

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

• Expect continued volume growth and strong margin expansion, supported by a robust innovation pipeline.

• Sequential improvement in Q4 volume growth anticipated, especially in Taste & Nutrition.

• Innovation pipeline and margin expansion expected to continue, despite muted market demand.