Food technology and ingredients company Kerry Group sees no significant risk to its business from either the upcoming US elections or trade tensions with China, its chief executive Edmond Scanlon said today.
The food and beverage sector is likely to be "pretty immune" to changes in the regulatory environment and changes in consumer behaviour in the wake of the November 5 election in the US, Kerry's largest market, Edmond Scanlon said.
"We wouldn't be concerned about it at all," he said.
Asked if any post-election cut to US corporate tax rates to levels closer or lower than Ireland might prompt the company to move its domicile, the CEO said the company "wouldn't be making any rash decisions on moving anywhere".
Donald Trump has pledged to reduce the corporate tax rate to 15% from 21% for companies that make their products in the US, in line with the headline rate for larger companies in Ireland.
Trade tensions between China and Europe and the US are not a significant risk due to the fact that most of Kerry's sales in China are produced locally, Mr Scanlon said.
"In China, we're very, very local," he said. "There isn't a huge amount of trade across borders," he said.
Mr Scanlon was speaking following the publication of results for the third quarter in which Kerry reiterated its forecast of full-year growth in adjusted earnings per share growth of 7%-10% despite a "relatively muted" global market.
Kerry clients have engaged in promotional activity in the US, but those promotional activities "are having a very limited impact actually, in driving demand," the CEO said.
In an interim management statement for the third quarter of this year, Kerry said its group reported revenue dipped by 3% on the back of volume growth of 2.2%, pricing deflation of 3.2%, positive contribution from acquisitions of 0.8% and the effect from disposals of 2.3%.
Kerry said that its Taste & Nutrition division saw volume growth of 3.4% with growth led by Snacks, Beverage and Bakery and broadly in line with market expectations.
Kerry said this represented continued strong volume growth in the Americas, a good performance in APMEA, with volumes in Europe turning positive in the third quarter.
Dairy Ireland posted volume growth of 0.4% driven by Dairy Consumer Products' growth and mix development as well as recovery in Dairy Ingredients.
"Dairy Consumer Products performance was led by good volume growth across Kerry's snacking and branded cheese ranges. Dairy Ingredients volumes reflected soft overall supply conditions, which improved through the period," it added.
Kerry said that consumer demand across many food and beverage markets remained relatively muted in the third quarter following recent inflation in many geographies.
It noted that customer innovation activity across the period was weighted towards renovation of existing products, with an increased focus on nutritional profile enhancement, cost optimisation and improving sustainability characteristics of products.
"A significant level of new product innovation concentrated on addressing increased consumer demand for new taste experiences and providing relative value options," it added.
Edmond Scanlon said the company was pleased with its performance across the first nine months of the year, with continued volume progression through the period, combined with strong margin expansion.
"We remain on track to achieve our full year guidance, and today we reiterate our range of 7% to 10% constant currency adjusted earnings per share growth," he added.
Shares in Kerry Group moved higher in Dublin trade today.
