Kerry Group

Sinisa

Sinisa

— 3 min read
Kerry Group

Kerry Group is a global food and beverage company headquartered in Ireland with a strong focus on taste and nutrition innovation. Here are some key details about the company:

History and Background

Kerry Group was founded in 1972 in Listowel, County Kerry, Ireland. It started as a private dairy company and has since grown through numerous acquisitions to become a major international food ingredients and flavors corporation. The company went public in 1986 when it floated on the Irish Stock Exchange.

Business Operations

Kerry Group operates across two main business segments:

  • Taste & Nutrition: This is the company's primary focus, developing ingredients and flavors for the food, beverage and pharmaceutical industries.
  • Kerry Dairy Ireland: This segment manages the company's consumer foods and dairy business in Ireland.

The company employs over 23,000 people globally and has manufacturing, sales and technical centers worldwide. Its global Technology Centre is located in Naas, County Kildare, Ireland.

Products and Services

Kerry Group supplies over 18,000 food, food ingredient and flavor products to customers in more than 140 countries. Some of its key brands include:

  • Big Train
  • Island Oasis
  • DaVinci Gourmet
  • Golden Dipt
  • Ravifruit

The company focuses on creating natural flavors and ingredients that align with consumer preferences for healthier and more sustainable products.

Recent Financial Performance

In 2023, Kerry Group faced some challenges:

  • Group revenue declined by 8.6% to €8 billion.
  • Group volumes declined by 0.9%.
  • The Taste & Nutrition division saw a 1.1% increase in volumes, but this was offset by a 6.5% decline in the Dairy Ireland business.

Despite these challenges, the company reported solid performance in certain areas:

  • Foodservice continued to perform strongly with 7.3% volume growth in the first half of 2024.
  • The company upgraded its full-year guidance for 2024, projecting 7-10% growth in adjusted earnings per share.

Strategy and Outlook

Kerry Group is focusing on expanding its presence in emerging markets and developing its nutrition portfolio. The company is investing in taste capabilities and geographical expansion to position itself for market outperformance and margin progression. While consumer market volumes remain relatively muted, Kerry's innovation pipeline is reported to be strong as it enters 2024.

Based on the provided search results, here's an analysis of Kerry Group's current valuation:

Market Capitalization and Enterprise Value

Kerry Group has a market capitalization of approximately €15-17 billion, with slight variations across sources:

  • €15.04 billion market cap and €16.90 billion enterprise value
  • $17.12 billion (€15.85 billion) market cap as of August 23, 2024
  • €15.32 billion market cap and €16.91 billion enterprise value

The enterprise value is consistently higher than the market cap due to the company's debt position.

Valuation Ratios

Kerry Group's key valuation ratios include:

  • Trailing P/E ratio: 21.70 - 23.47
  • Forward P/E ratio: 17.76 - 19.27
  • Price-to-Sales (P/S) ratio: 1.97 - 1.99
  • Price-to-Book (P/B) ratio: 2.33
  • EV/EBITDA: 14.13 - 14.59

These ratios suggest Kerry Group is trading at a premium compared to the average of its sector (Food Products), which has an average P/E ratio of 13.41.

Analyst Forecasts

Analysts have a generally positive outlook on Kerry Group:

  • 12-month price targets range from €84.00 to €115.00, with a median of €103.00
  • The median target represents a 15.15% increase from the last price of €89.45
  • Out of 13 analysts, 1 rates it as Buy, 7 as Outperform, and 5 as Hold

Financial Performance and Outlook

Kerry Group's recent financial performance has been mixed:

  • Group revenue for H1 2024 fell by 5.9% to €3.9 billion
  • Profits after tax were down 18.5% to €291.5m in H1 2024
  • However, group EBITDA increased by 6.6% to €552m in the same period

Despite these challenges, Kerry Group has upgraded its full-year guidance for 2024, projecting 7-10% growth in adjusted earnings per share.

Conclusion

Kerry Group's valuation appears to be on the higher side compared to its sector average, reflecting investor confidence in its future prospects. The company's strong position in the taste and nutrition market, along with its improved guidance for 2024, supports this premium valuation. However, investors should be aware of the recent revenue and profit declines, which may pose risks if not reversed in the coming quarters.

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