Breaking Down Kerry Group plc Financial Health: Key Insights for Investors

Dive into Kerry Group plc's financials where the half‑year revenue of €3.5 billion (to 30 June 2025) and TTM revenue of €6.97 billion (+5.27% YoY) sit alongside a market capitalisation of €12.11 billion and a compelling valuation gap - intrinsic value estimated at €109.35 versus a market price of €79.20 (≈38.10% upside); profitability shows momentum with a half‑year EBITDA margin up 100bps to 16.1%, TTM EBITDA of €556 million and adjusted H1 EPS of 209.2 cents (+9.8% cc), while returns (ROE 11.34%, ROIC 6.27%) and net income (TTM €746 million) reinforce earnings quality; capital structure and liquidity reflect balanced financing with a debt‑to‑equity of 0.60, debt/EBITDA 2.89, current ratio 1.37 and free cash flow of €766 million in 2024 - read on to unpack these metrics, region‑by‑region drivers (Americas strength, mixed APMEA), leverage, valuation ratios (P/E 17.98, EV/EBITDA 11.62, EV/FCF 19.13) and the risks and opportunities that matter to investors

Kerry Group plc (KRZ.IR) - Revenue Analysis

• Half-year (H1) 2025 revenue: €3.50 billion - 3.0% volume growth vs H1 2024.
• Trailing twelve months (TTM) revenue: €6.97 billion - +5.27% YoY.
• Full-year 2024 revenue: €6.93 billion - -0.66% vs 2023.
• Revenue drivers in 2025: strong Americas performance, Europe broadly in line with expectations, APMEA experiencing mixed dynamics.
• Revenue per employee: ~€322,900.
• Market capitalization: €12.11 billion; Price-to-Sales (P/S): 1.74.

• Regional contribution and momentum:
  • Americas: primary growth engine in H1 2025.
  • Europe: stable, meeting company expectations.
  • APMEA: variable market conditions affecting growth pace.
• Implications for investors:
  • Stable revenue base with modest YoY expansion (TTM +5.27%).
  • P/S of 1.74 suggests market valuation roughly in line with peers for a consumer-facing ingredients company.
  • High revenue per employee (~€323k) points to solid workforce productivity.

Kerry Group plc (KRZ.IR) - Profitability Metrics

• Half-year EBITDA margin rose by 100 basis points to 16.1% in 2025 (from 15.1% H1 2024).
• Trailing twelve months (TTM) EBITDA: €556 million, up from €517 million year-over-year.
• Adjusted EPS (half-year): 209.2 cents, a 9.8% increase on a constant currency basis versus prior year.
• Return on Equity (ROE): 11.34%.
• Return on Invested Capital (ROIC): 6.27%.
• TTM Net Income: €746 million; P/E ratio: 17.98.

Kerry Group plc (KRZ.IR) - Debt vs. Equity Structure

• Total liabilities increased to €6.74 billion (Jun 2025), a 7.2% rise from €6.26 billion (Dec 2024), reflecting incremental borrowing or timing of payables.
• Net assets grew to €6.96 billion (Jun 2025), up 3.1% from €6.75 billion, indicating retained earnings or revaluation gains contributing to equity support.

• A debt-to-equity ratio of 0.60 signals a balanced capital structure-debt finances approximately 60% of equity, not an aggressive leverage posture for a consumer ingredients/manufacturing group.
• An interest coverage ratio of 9.13 suggests operating income covers interest expense more than nine times, reducing short‑term default risk and affording flexibility for debt servicing and investment.
• Debt-to-EBITDA at 2.89 represents moderate leverage: within many corporate finance comfort zones (commonly 2-4x), but sensitive to EBITDA volatility in downturns.
• Debt-to-free cash flow of 4.77 indicates it would take nearly five years of current free cash flow to clear debt-reasonable for a stable food ingredients business but worth monitoring if cash conversion weakens.

• Liquidity: strong interest coverage plus growing net assets point to adequate liquidity for servicing obligations, though rising liabilities warrant watchfulness on short-term maturities.
• Capital allocation: moderate leverage provides headroom for strategic M&A or capex but requires disciplined free cash flow generation to avoid balance sheet strain.
• Risk factors: any material EBITDA compression, currency swings, or one-off cash outflows would increase the effective burden of the 2.89x debt-to-EBITDA and 4.77x debt-to-FCF metrics.

Kerry Group plc (KRZ.IR) - Liquidity and Solvency

• Current ratio: 1.37 - the company can cover short-term liabilities with short-term assets, with a comfortable but not excessive margin.
• Quick ratio: 0.99 - near 1.0, indicating a slight dependence on inventory to meet immediate obligations.
• Free cash flow (2024): €766 million, up from €701 million in 2023 - improved ability to fund operations, capex and returns to shareholders.
• Net cash from operating activities (latest): €989 million - a 95% increase year-over-year, signaling stronger underlying cash conversion from operations.
• Net assets (June 2025): €6.96 billion, up from €6.75 billion (Dec 2024) - a 3.1% increase in net asset base.
• Trailing twelve-month net income: €746 million, P/E ratio: 17.98 - earnings-level valuation is moderate relative to price.

• Liquidity interpretation: with a current ratio above 1.3 and a quick ratio just below 1, working capital is adequate but inventory contributes meaningfully to short-term coverage; this is typical for food ingredients and consumer-facing businesses where inventory and receivables represent operating cycle timing.
• Cash flow strength: the near-doubling of operating cash inflows and the rise in free cash flow indicate improving cash generation that supports capex, M&A optionality, and shareholder distributions without materially increasing leverage.
• Solvency and capitalization: rising net assets to €6.96 billion provide a stronger equity buffer; combined with solid earnings (TTM €746m) and a P/E of 17.98, the balance sheet and earnings profile imply moderate financial risk with capacity for strategic investment.

Kerry Group plc (KRZ.IR) - Valuation Analysis

• Intrinsic value: €109.35
• Current market price: €79.20
• Implied upside: 38.10%

• EV/EBITDA of 11.62 points to a moderate premium versus peers in food ingredients and flavoring - not extreme but not deep value.
• Forward P/E at 14.89 suggests the market anticipates continued earnings growth; trailing P/E of 17.98 reflects recent earnings baseline.
• EV/FCF at 19.13 indicates investors are paying a material multiple for cash generation; useful to monitor cash conversion and capex trends.

Kerry Group plc (KRZ.IR) Risk Factors

• Market uncertainty in APMEA: The APMEA region (Asia, Pacific, Middle East & Africa) has shown variable demand across dairy, savory and beverage segments. Exposure to slower growth or volatility in key markets (e.g., China, India, Middle East) can reduce sales growth and delay margin recovery.
• Currency fluctuations: With material revenues and costs denominated in EUR, USD, GBP and various local currencies, FX moves can materially affect reported revenue, margins and translation of foreign earnings. A 5% adverse movement in major FX rates can translate to a multi-percent swing in headline revenue.
• Regulatory changes: Food safety standards, labelling rules, nutritional guidelines and trade policy changes in the EU, US, China and Middle East can increase compliance costs or restrict product formulations or market access.
• Supply chain disruptions: Raw material shortages, logistics constraints, or input-cost spikes (e.g., dairy, proteins, sugar, packaging) can compress margins and force price increases that may reduce demand.
• Competitive pressures: Competitors and private-label players in taste & nutrition, as well as ingredient specialists and CPG customers with in-house capabilities, increase pricing pressure and can erode market share and margins.
• Economic downturns: Recessionary conditions in Europe, North America or key APMEA markets can lower consumer spending on processed and branded foods, reducing volume growth and price elasticity for Kerry's solutions.

• Operational readiness: Production continuity depends on multi-sourced supply of key inputs (dairy proteins, hydrocolloids, flavour precursors). Single-site disruption or supplier insolvency could constrain fulfilment.
• Contract & customer concentration: Large CPG customers account for significant volumes; loss or renegotiation of major contracts could pressure sales and utilisation.
• Input-cost pass-through limits: While Kerry can seek to recover commodity cost increases via pricing, competitive dynamics and customer contracts can limit pass-through, squeezing margins.
• Integration & execution risk: M&A is a growth lever; failure to integrate acquisitions or to realise synergies could keep leverage high and returns muted.

Kerry Group plc (KRZ.IR) - Growth Opportunities

• Geographic expansion: APMEA and LATAM capacity builds to capture rising consumer demand in emerging markets.
• Technology and R&D: Investments in taste systems and bio‑fermentation to broaden ingredient capability and margin potential.
• M&A and partnerships: Strategic acquisitions to add capability, accelerate market access and diversify revenue streams.
• Sustainability: Product and supply‑chain initiatives to meet demand from ESG‑focused customers and retailers.
• Product innovation: New lines and formulation platforms to drive premiumization and differentiated growth.
• Digital & e‑commerce: Enhanced digital selling, data analytics and direct‑to‑customer channels to expand reach.

• Near‑term financial context (indicative, FY 2023/2024): Group revenue ~€9.2bn; adjusted operating profit ~€1.1-1.2bn; net debt ~€1.3bn; capital expenditure ~€200-260m annually. These base metrics frame the returns needed from growth investments.
• Investment prioritization: Allocating capex and M&A to APMEA/LATAM and bio‑fermentation platforms should target payback horizons consistent with group ROIC goals (historical adjusted operating margins and ROIC used as internal benchmarks).
• Revenue diversification: Increasing emerging market sales and specialty ingredient mix can reduce sensitivity to Western market cycles and input cost volatility.

• Operational enablers
• Supply‑chain scale to support new capacity (localized sourcing to lower freight and lead times).
• Talent and technical capability investments for fermentation and advanced taste systems.
• Commercial alignment-packaging, regulatory, and route‑to‑market tailored to each region.