Tougher climate evident in Kerry full year results
rising for the year and sales inching up by just over 1 per cent
for 2004, the company reports today.
In a year of heavy acquisition, including former ICI subsidiary Quest Food Ingredients and Denmark's Cremo Ingredients among many, the Irish company saw sales lifting by a wisp above 1 per cent on 2003 to €3.8 billion.
The Irish firm could not escape the current climate of squeezed margins, higher raw material prices and "currency turbulence" with operating profit for the year falling by over 8 per cent on 2003 to €238.546.
But sales across its food ingredients units - that represent a generous range of ingredients used by food makers, from soy proteins to fruit preparations, and sweet flavours to emulsifiers - rose by 15.7 per cent to €2.78 billion.
"Development across ingredients and flavour markets in 2004 was driven by the increased focus on the nutritional values of food and beverages and the demand for natural, healthier alternatives coupled with ongoing requirements for enhanced taste, texture and convenience," said Kerry in a statement today.
Representing a generous slice of the group's €712 million acquisition programme in 2004, Kerry consolidated its ingredients position through a range of buys last year.
In a deal worth £249 million (€369m) ICI sold the food ingredients arm of its struggling flavour and fragrance business Quest to Kerry. And dairy ingredients firm Cremo Ingredients, US sweet ingredients company Jana's Classics, and Malaysian Ernsts Food Ingredients padded out the already ample portfolio at Kerry.
Boosting its flavour division - a major revenue stream for the firm - Kerry absorbed four new companies into the unit, including Manheimer and Los Angeles-based fruit flavour firm Flavurence.
Looking ahead, the company underlined the development and application of "leading edge ingredients for consumer nutritional and lifestyle requirements".
Representing 2.8 per cent of group sales, Kerry is at the lower end of ingredients industry spending on research and development, that for some can tip in excess of 12 per cent. But with a spending figure for 2004 equalling €111 million, in 2004 Kerry invested a considerable sum in innovation.
