Kerry Group reveals growth plan
Kerry Group, the food manufacturer and producer of Wall’s sausages, has unveiled an ambitious growth plan to investors.
The company has promised to deliver in excess of 10% adjusted earnings per share growth on average per annum in the next five years.
It told investors and City analysts this would be achieved by above-average volume growth, improved margins and the introduction of new efficiency programmes.
In terms of trading profit margin progression, Kerry said that the ingredients and flavours’ margin is expected to grow by 50 basis points per annum and the consumer foods division is targeting 20 basis points improvement per annum, which will contribute a 30 basis points group margin improvement per annum on average across the five-year cycle.
The company also hopes a further 100 basis points improvement to be achieved on completion of the Group’s ‘Kerryconnect’ business enablement programme.
Stan McCarthy, chief executive, said: “We expect to achieve like-for-like (LFL) volume growth of 3% to 5% per annum on a group-wide basis, with our ingredients and flavours businesses targeting 4% to 6% LFL growth (10% in emerging markets) and Kerry Foods, the group’s consumer foods business, targeting 2% to 3% LFL growth.
“The group is investing significant resources in design and implementation of ‘1 Kerry Operating Models’, which, when executed globally, will create enduring competitive advantage for Kerry and our customers.
“The Kerryconnect programme will enable this business transformation programme through implementation of a common integrated global IT system across the group. Our capital spend will increase to support the group’s planned growth over the five-year cycle and expenditure on the Kerryconnect programme will be approximately €350m. Notwithstanding this increased investment in group systems and infrastructure, our financial return target ratios remain above 15% for return on average equity (ROAE) and above 12% for cash flow return on investment (CFROI).”