Kerry Group’s CEO, Edmond Scanlon, has expressed the company’s “strong ambitions” to grow its dairy business division for the foreseeable future. This announcement was made during the company’s Annual General Meeting (AGM) held at the Brandon Hotel in Tralee, Co. Kerry on Thursday, April 27. In recent years, Kerry Group has placed all of the assets of its dairy business into a standalone entity called ‘Dairy Ireland’, which is led by Pat Murphy. The dairy business includes milk processing facilities in Listowel, Co. Kerry and Newmarket and Charleville in Co. Cork.
Scanlon reassured shareholders that there is no change in terms of what they think about the dairy business. He stated that the business continues to perform well in the context of the environment and inflation, and everything else that’s going on. He added that the company will continue to invest in that business selectively around areas where they feel they can grow. The performance of that business continues to be strong in light of all the challenges out there. There is volatility in that business, as everybody in this room knows. But I think the business has been managed in light of that volatility.
Despite the suspension of talks between Kerry Co-op and Kerry Group on a potential dairy business deal in April 2021, Kerry Group remains committed to growing its dairy business. Kerry Co-op is the largest shareholder in Kerry Group with an 11.4% stake in the company worth around €2 billion. The company reported a 10.3% increase in revenues in the first three months of 2023, driven by increased pricing of 8.3%. The overall growth was led by the dairy, snacks, and pharma markets as customers continued to navigate the heightened inflationary environment. The company said the Taste and Nutrition element of the business delivered “solid overall volume growth” despite the effect of increased pricing. There was a volume reduction for the company’s Dairy Ireland division of 5.8% and increased pricing of 14.4%, reflecting the challenging global dairy market conditions.
Scanlon told the AGM that despite the uncertainty in the market, Kerry Group remains confident that it is well-positioned from an overall perspective to achieve its growth ambitions. There continues to be a very strong innovation pipeline right across the business, both geographically and from a technology standpoint. The company believes it will still continue to manage the inflationary environment. It has a well-established model in terms of managing inflation, and it expects that to continue. Kerry Group will continue to invest capital to evolve its portfolio and also to build for growth into the future. For the full year 2023, the company expects adjusted earnings per share growth of 1-5% on a constant currency basis.
Kerry Group’s dairy division has been performing well despite the challenges posed by the global dairy market. The company’s commitment to selectively invest in areas where they feel they can grow is encouraging for shareholders. Despite the suspension of talks between Kerry Co-op and Kerry Group, the company remains confident in its growth ambitions and is well-positioned to achieve them.