Kerry Group (KRZ) Q4 2023 earnings summary

Executive summary

• Solid FY 2023 performance: Taste & Nutrition volume growth of 1.1% and 50 bps EBITDA margin expansion, despite challenging market conditions and lower Dairy Ireland results.

• Group revenue was €8,020m, reported growth -8.6%; EBITDA was €1,165m and EBITDA margin 14.5%.

Financial highlights

• Adjusted EPS was 430.1c; basic EPS was 410.4c. Adjusted EPS growth was 1.2% in constant currency and -2.4% reported.

• Free cash flow rose to €701m from €640m; cash conversion improved to 92% from 82%.

• Revenue components included volume growth of -0.9%, pricing of -0.7%, and translation currency impact of -2.9%.

Outlook and guidance

• FY 2024 constant-currency adjusted EPS growth guidance is 5% to 8%, including low-single-digit volume growth and good EBITDA margin expansion.

• Guidance assumes a tax rate towards 15% and average shares in issue of ~174.1m; it includes the announced lactase enzymes acquisition, expected to close in April 2024.

• 2026 targets: Taste & Nutrition margin of 20%+ and group margin of 18%+, supported by operating leverage, mix, portfolio, efficiency and deflation.