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Kerry Group Full-Year Results: What The Analysts Said

Published on Feb 20 2019 5:50 PM in A-Brands tagged: Davy / Goodbody / Cantor Fitzgerald / Investec / Paywall

Kerry Group Full-Year Results: What The Analysts Said

Kerry Group has posted group revenue of €6.6 billion in full-year 2018, an increase of 3.1%, with its consumer foods business seeing a 0.6% revenue increase.

Commenting on the group's results, Edmond Scanlon, its chief executive, said that the firm reported "volume growth well ahead of our markets [and] underlying margin expansion in line with expectations."

Here's how leading industry analysts viewed its performance.

David Fahy, Cantor Fitzgerald

"Another strong set of results for Kerry, which has risen by 2.4% this morning. Kerry continues to deliver on its medium term goals of EPS growth through strong volumes, margin improvements and prudent acquisitions. The T&N business continues to perform well.

"We continue to like Kerry and advise clients to pick it up as a longer term holding or on weakness. The fundamentals remain supportive with positive secular trends, Asia/EM penetration, high quality (and profitability), cost inflation pass through and above market growth.

"While it trades a 18% premium (12M forward P/E of 23x) to the sector (STOXX 600 Food and Beverage) it remains cheaper than a number of its ingredients peers (Givaudan, Symrise, Chr Hansen). We see it trending toward the current consensus price target (€101.18) over the year. We maintain our Outperform rating."

Jason Molins, Goodbody

"Kerry has this morning reported FY18 results with constant currency EPS increasing by 8.6% to 353.4c, slightly ahead of our forecast of 351.9c driven by a solid performance across both divisions. Volume growth for the Group continued well ahead of underlying markets. Group LFL volumes increased by 3.5% which compares to our forecast of 3.7% and operating profit margins were held flat at 12.2% (GBY 12.2%).

"Kerry continues to perform well with good constant currency EPS growth and strong volume growth in its key Taste & Nutrition division. The group has continued to be active in M&A and we expect this to persist. In terms of outlook, Kerry is guiding to FY19 constant currency EPS growth of 6-10%, which compares to our expectation for c.8%. At this juncture we are unlikely to make material changes to our forecasts."

Liz Coen, Davy

"Kerry Group’s FY 2018 results confirm another year of operating progress and delivery against strategy. Revenue, trading profit and EPS were in line with our expectations. The group enters 2019 with positive momentum across its T&N platform, where sector fundamentals are favourable. It continues to proactively allocate capital for growth and relevancy.

"On first look, we expect a modest upward revision (c.1.0%) to our FY2019 EPS. We reiterate our ‘Outperform’ rating."

Investec

"Kerry this morning issued a solid set of FY18A numbers in line with our and market expectations, reporting a 3.7% increase in adjusted EPS to 353.4c (INVe 352.7c, consensus 350.6c) from a 3.1% increase in Group revenue to €6.61bn (INVe €6.57bn, consensus €6.56bn). Trading profit increased 3.1% to €805.6m (INVe €807.6m).

"FY18A results were in line with market expectations and while guidance of 6% to 10% adj. EPS growth in FY19E suggests a mid-point of 381.7c which is c.1% behind current market forecasts, expectations of FX tailwinds in 2019 will probably result little change to consensus numbers on the back of these results."

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