Kerry Group plc

Good morning and welcome to Kerry Group's Q1 2022 results call. Today's conference is being recorded. At this time, I would like to turn the conference over to William Lynch, Head of Investor Relations. Please go ahead, sir.

Thank you, Operator. Good morning and welcome to Kerry's Q1 2022 IMS update call. I'm joined on the call by our CEO, Edmund Scanlon, and our CFO, Marguerite Larkin. Today we'll start with a brief presentation which is available on our website. Edmund will begin with these opening comments before handing over to Marguerite for the performance overview, and we will then open the lines for your questions. Before we begin, please note the usual disclaimer regarding forward-looking statements. I will now hand over to Edmund.

Thanks, William. Good morning, everyone, and thank you, as ever, for joining our call. So beginning with slide four and my overview comments. We're pleased with the strong business growth we delivered in Q1 of 12.9% organic at a group level. Group like-for-like volume growth was up 6.3%, driven by our taste and nutrition business. Within the retail channel, we continued the good overall growth levels we've been tracking, and we achieved strong double-digit growth in the food service channel. which we were seeing strong business momentum, having already surpassed pre-pandemic levels at the back end of last year. We also had excellent growth and significant demand for a range of food waste solutions, as this is an area that our customers and their consumers were already focusing on from a sustainability perspective, and now given the current inflationary environment, the benefits of tackling food waste have even been further elevated. This brings me on to pricing of 6.6% at group level. And as expected, our pricing stepped up in the first quarter of the year. Over the last six months, our teams within our business have been working hard to actively manage through this inflationary environment in close collaboration with our customers. Now moving on to the strategic front, we made a number of important developments in the period. The acquisition of Selecta in Leipzig, Germany was a very important step in enhancing our biotechnology innovation capabilities, and we're very excited about the potential that we see here. Within the AFMIA region, we expanded our local presence in Malaysia with the acquisition of ALMER, and we also made a number of investments in the Middle East and Africa. The Middle East and Africa has been a very strong market for Kerry in recent years, and these investments significantly enhance our ability to deliver sustainable taste and nutrition solutions across the region. Finally, on our markets, and what was very pleasing for me was the resilience of Kerry's overall growth in the period against a highly volatile market backdrop. The inflationary environment and supply chain challenges that were a feature of our markets in the first quarter have been compounded by events in different parts of the world. Firstly, the restrictions in China, which has had an impact on performance in the quarter. And secondly, the war in Ukraine. And just to spend a moment on this, we continue to be horrified by the tragic events we're all seeing. and our hearts go out to the Ukrainian people in what is a truly devastating humanitarian crisis. From the outset, we've done our absolute utmost to take care of our Ukrainian colleagues and their families right across the group, as well as supporting humanitarian efforts. Having initially taken measures to scale back our operations in Russia and Belarus, we took the decision to suspend our operations following extensive consultation with our stakeholders. This was a very complex decision to make with many factors taken into account and not one that was taken lightly. In the food manufacturing sector, we all have an important responsibility across every market in which we operate, given the critical role our sector plays. Our aim, as we said when we announced the suspension, is to do so in a responsible and orderly manner, by fulfilling our legal obligations. We have taken significant steps in reducing operations with one manufacturing line already shut down, and we continue to work through the process in conjunction with the relevant parties and our customers. We'll update you further at our half-year results as we work through the various phases involved. So with that, I'll hand you over to Marguerite.