Kerry Group sees slight rise in revenue in first half of 2025
Today (Wednesday, July 30) the agri-business published its half year results for 2025.
The report stated that the demand environment across food and beverage markets remained soft through the period, "reflective of cautious consumer behaviour, given the level of macroeconomic and geopolitical uncertainty across different geographies".
Customer innovation centred around new and differentiated flavour combinations, products with functional health benefits and relative value options, according to Kerry.
Renovation activity around enhancing nutritional characteristics of products continued to be a key area of focus for customers, particularly in the North American market.
Reported revenue increased by 1.3% to €3.5 billion in the period, comprising volume growth of 3%, pricing of 0.2%, a favourable transaction currency impact of 0.3%, unfavourable translation currency of 1.9%, contribution from acquisitions of 0.6% and the effect from disposals of 0.9%.
EBITDA (earnings before interest, taxes, depreciation, and amortisation) increased by 7.5% to €556 million, with EBITDA margin increasing by 100bps (basis points) to 16.1%.
This was driven by benefits from the Accelerate Operational Excellence programme, operating leverage, product mix, and the positive effect from acquisitions and disposals, according to the company.
Constant currency adjusted earnings per share increased by 9.8% to 209.2c and an increase of 7.8% in reported currency. Basic earnings per share increased by 9.4% to 182.4c.
Free cash flow was €309 million with cash conversion (calculated on average working capital) of 89% reflective of an investment in working capital lapping a significantly favourable working capital benefit in the comparative period (H1 2024: free cash flow €445 million - which included Kerry Dairy Ireland).
Cash generated from operations was €459 million (H1 2024: €431 million). The interim dividend of 42c per share reflects an increase of 10.2% over the 2024 interim dividend.
During the period, the group repurchased €256 million of Kerry Group plc 'A' ordinary shares under its share buyback programmes.
Chief executive officer of Kerry Group, Edmond Scanlon said: "The first half of the year reflected a good performance particularly given market conditions, where we delivered volume growth and strong margin expansion, driving constant currency EPS growth of 9.8%.
"Volume growth was led by a strong performance in the Americas, with Europe in line with expectations, and growth in APMEA reflective of variable market dynamics. Our strong EBITDA margin expansion was driven by efficiencies delivered through Accelerate Operational Excellence as well as portfolio and product mix benefits.
"We continued to strategically develop our business, including expanding our capacity within APMEA [Asia Pacific, Middle East, and Africa] and LATAM [Latin America], and further investing in our taste and bio-fermentation technology capabilities across the business.
"Looking to the remainder of the year, while recognising a heightened level of market uncertainty, we remain well positioned for volume growth and strong margin expansion, as we continue to support our customers as an innovation and renovation partner," Scanlon stated.
Business volume growth in the period was well ahead of food and beverage end markets, supported by continued product renovation activity in the retail channel and continued innovation in the foodservice channel, according to the results.
Growth in the period was led by 'Beverage, Bakery and Snacks' end markets, supported by strong growth in savoury taste and Tastesense salt and sugar reduction technologies, as well as integrated solutions and Kerry's botanicals, natural extracts and proactive health ingredients.
Volume growth in foodservice of 4.6% represented a significant channel outperformance in the period, given soft traffic data. This growth was driven by strong innovation activity including new menu items, seasonal launches and continued product renovation.
Growth in the retail channel was supported by a step-up in retailer brand innovation and nutritional enhancement renovation activity with a range of customers.
Business volumes in emerging markets increased by 5.6% in the period, led by a strong performance in Southeast Asia and LATAM.
Within the 'Pharma & other EUM', volume growth was driven by cell nutrition and proactive health ingredients for supplement applications.
H1 2025 Performance Revenue €1,911 million +3.7% EBITDA margin 18.5% +90bps
Reported revenue in the region increased by 1.1% to €1,911 million reflecting volume growth of 3.7%, pricing of 0.1%, a favourable transaction currency impact of 0.4%, an unfavourable translation currency impact of 3.2%, contribution from acquisitions of 0.4% and the effect from disposals of 0.3%.
Growth in the first half of the year reflected good performances in both North America and LATAM, according to the agri-business.
Within North America, 'Snacks' delivered strong growth through innovations utilising Kerry's range of savoury taste profiles and Tastesense salt-reduction technologies with global and emerging brands, given continued customer focus on improving the nutritional profiles of their products.
Growth in 'Bakery' was driven by taste and texture solutions as well as enzymes, while performance within the 'Meat' end market reflected softer overall category volumes.
In 'Beverage', good performance was achieved within the refreshing and low/no alcohol categories through botanicals and natural extracts.
Business developments within the region included the continued investment in enhancement of coffee extraction capabilities for food and beverage taste applications.
Within the retail channel, growth was supported by renovation activity across customer and retailer brands, while foodservice growth was led by performance with quick service and fast casual restaurants.
Within LATAM, strong growth was achieved in Brazil and Central America across the Snacks and Meals end markets in particular.
Reported revenue in the region decreased by 0.4% to €731 million reflecting volume growth of 0.2%, pricing of 0.6%, a favourable translation currency impact of 0.4%, contribution from acquisitions of 1.4% and the effect from disposals of 3.0%.
Performance in the region was driven by growth in foodservice through seasonal and new launch activity with quick service restaurants, while performance in the retail channel reflected continued soft market dynamics.
Business developments in the period included strong progress in the development of the new Biotechnology Innovation Centre in Leipzig, Germany, enzyme capacity expansion in Cork, Ireland, and the expansion of Kerry's cocoa taste capabilities in Grasse, France.
Reported revenue in the region increased by 3.3% to €821 million, reflecting volume growth of 4.2%, a pricing reduction of 0.1%, a favourable transaction currency impact of 0.2%, an unfavourable translation currency impact of 1.0%, contribution from acquisitions of 0.4% and the effect from disposals of 0.4%.
Performance in the region was primarily driven by strong growth in Southeast Asia, solid growth in the Middle East and Africa, with volumes in China remaining challenged.
Growth in 'Bakery' was driven by food protection and preservation systems, as well as reformulation activity in cocoa to address supply challenges.
Continuing group revenue for the period was €3.46 billion (H1 2024: €3.42 billion), comprising volume growth of 3%, an overall pricing increase of 0.2%, favourable transaction currency of 0.3%, unfavourable translation currency of 1.9%, contribution from acquisitions of 0.6% and the effect from disposals of 0.9%, resulting in an overall increase of 1.3%.
In Europe, disposal revenue primarily reflects the exit of a manufacturing agreement post the finalisation of the Kerry Dairy Ireland separation in the current year.
Group EBITDA on a continuing basis increased by 7.5% to €555.9 million (H1 2024: €517.2 million). Continuing EBITDA margin of 16.1% (H1 2024: 15.1%) increased by 100bps primarily driven by the benefits from the Accelerate Operational Excellence Programme, operating leverage, product mix and the positive effect from portfolio developments.
Finance costs (net) were €26.5 million (H1 2024: €27.8 million). Interest income increased year on year due to interest on the vendor loan note, fixed dividend income from the retained investment in Kerry Dairy Ireland and higher deposit interest rates on a higher cash balance, offset by interest on the €1 billion senior notes issued in September 2024.
Net debt at the end of the period was €2.06 billion (31 December 2024: €1.93 billion). The increase relative to December reflects strong business cash generation offset by the dividends and the Share Buyback Programme.
The board has declared an interim dividend of 42c per share, compared to the prior year interim dividend of 38.1 cent, payable on 7 November 2025 to shareholders on the record date 10 October 2025.
In April 2025, the board approved a new Share Buyback Programme of up to €300 million. The programme commenced on June 20, 2025 and will end no later than February 27, 2026.
In the period from June 20, 2025 to June 30, 2025 the company purchased 144,699 shares at a total cost of €13.5 million.
The previous Share Buyback Programme announced in November 2024, commenced on November 12, 2024, and was completed on June20, 2025.
In the period to June 30, 2025, the company acquired 2,537,893 shares at a cost of €242.7 million resulting in a total number of shares acquired as part of this programme of 3,181,972 at a total cost of €300.3 million, including transaction costs of €0.3 million.
The board has announced the intention of Gerry Behan to retire from his position at Kerry Group plc and as an executive board director as of December 31, 2025, and over the coming months will be transitioning his responsibilities to members of the executive leadership team.
Chair Tom Moran commented: 'On behalf of the board, I would like to extend our gratitude to Gerry for his exceptional contribution to the growth and development of Kerry across a long and distinguished career since joining in 1986, and we wish him the very best for the future."
Kerry has said that its strong end market outperformance in the first half of the year demonstrates the strength of its strategic positioning within its markets, channels and across its customer base.
Looking to the remainder of the year, while recognising a heightened level of market uncertainty, Kerry Group said it remains well positioned for volume growth and strong margin expansion.
Kerry expects volume growth for the full year to be similar to the first half, with margin expansion in the second half ahead of expectations, and maintains its constant currency adjusted earnings per share guidance of 7% to 11% growth in the full year.
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