Even a good Brexit will hit UK demand – Kerry CEO
Even an orderly Brexit will cause short-term disruption, Kerry Group CEO Edmond Scanlon has warned.
Regardless of what deal unfolds, he said there will be an impact on consumption and demand in the UK.
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“Right now, we see the market as soft from a demand standpoint in the UK. I don’t see anything positive happening to that demand in the short term, even if there’s a really orderly Brexit,” he said at the group’s 2019 interim report launch. “I don’t necessarily see any significant improvement on consumer demand. From my perspective, we are as well positioned as we possibly can.
“There will be short-term disruption. In the longer term, things will normalise; the question remains what the impact to consumption and demand in the UK environment will be.”
Although Kerry Group last year acquired a Dutch meat-substitute firm controlled by a Belgian private equity firm for €20m, Mr Scanlon does not expect to buy more companies like this.
Despite this, he believes that the trend toward plant-based protein “isn’t a fad”.
“Just because we’re not investing doesn’t mean we don’t see significant opportunity. Plant-based protein is here to stay. There’s huge consumer demand,” he said. “While we see plant-based protein certainly growing and certainly being a trend, not a fad, I don’t see it having any significant impact on Kerry’s business. We think it’s an add-on.”
Sales increased by 10pc year-on-year to €3.6bn in the first six months of 2019, according to interim results from the company.
The increase in turnover reflected volume growth of 3.3pc, flat pricing and the positive impact of acquisitions.
Group earnings before interest, taxation and amortisation (ebita) were up 12.6pc to €382.9m. Analysts had predicted ebita of €377.7m.
Mr Scanlon said he was “pleased with the business performance”.
“While heightened consumer pricing and uncertainty impacted market volume growth rates in some developed markets, our unique and industry-leading business model, and integrated taste and nutrition positioning, continued to deliver significant value for our customers in meeting rapidly evolving consumer needs,” he said.
“Good progress has been made on the integration of recent acquisitions.”