Post on 01-Sep-2018
Disclaimer: Forward Looking Statements
This presentation/announcement may contain forward looking statements with projections regarding, among other things, the
Group’s strategy, revenues, earnings, trading profit, trading margin, finance costs, tax rate, capital expenditure, dividends, cash
flow, net debt or other financial measures, the impact of foreign exchange fluctuations, the impact of raw material fluctuations
and other competitive pressures. These and other forward looking statements reflect management expectations based on
currently available data.
However, actual results will be influenced by, among other things, macro-economic conditions, food industry supply and
demand issues, foreign exchange fluctuations, raw material and commodity fluctuations, the successful acquisition and
integration of new businesses, the successful execution of business transformation programmes and other, as of today,
unknown factors. Therefore actual results may differ materially from these projections.
These forward looking statements speak only as of the date they were made and the Group undertakes no obligation to
publicly update any forward looking statement, whether as a result of new information, future events or otherwise.
2
Kerry Group at a Glance
€6.1bn Revenue
79% | 21%
€750m Trading Profit
86% | 14%
Taste & Nutrition
Consumer Foods
Taste & Nutrition
World leader in Taste & Nutrition serving the food, beverage and pharmaceutical industries
€15bnENTERPRISE VALUE*
130PRODUCTION
LOCATIONS
Consumer Foods
Industry-leading manufacturer and marketer of added-value branded and customer branded chilled food products to Irish, UK and selected international markets
Taste & Nutrition
Consumer Foods
23kEMPLOYEES
3Note: * as at 7-8-2017
Key Milestones
4
1972 1986 1988 1993 1998 2000 2004 2009 2010 2015
1982 1994 2001 2005 2009 2015
Kerry Formed
Listed on Irish Stock Exchange
Acquisition of Beatreme
in USEnter Latin
AmericaEnter
Asia-Pacific
Evolving Technology Platforms
Acquisition of Quest
Kerry Opens Innovation & Technical
Centre in Beloit1 Kerry
Programme
Acquisition of Denny
Acquisition of Mattessons Wall’s
Acquisition of Golden Vale
Acquisition of Noon Foods
Acquisition of Breeo Foods
Repositioned Kerry Foods Portfolio
SAVOURY & DAIRY INGREDIENTS & FLAVOURS TASTE & NUTRITIONSavoury & Dairy | Sweet | Beverage | FI&A | Pharma
Global Technology
& Innovation Centres
Complete
Record year for
acquisitions
History Financial Performance
5
Revenue 1986-2016 (€m) Trading Profit 1986-2016 (€m)
Adjusted EPS* 1986-2016 (cent) Dividend 1986-2016 (cent)
+17%CAGR
+14%CAGR
+13%CAGR
+10%CAGR
337
6,131
0.48
56.0
7.6
323.4
14
750
Note: * before brand related intangible asset amortisation and non-trading items (net of related tax). From 2011, with 2004 to 2010 re-presented, computer software is treated as a cost in calculating adjusted EPS
History – Strategic Platform Development
6
2000
Savoury & Dairy(DAIRY HERITAGE)
SAVOURY & DAIRY
FUNCTIONAL INGREDIENTS
& ACTIVESEmulsifiers, Hydrocolloids, Yeast, Proteins, Enzymes,
Cultures, Fermented Ingredients
CEREAL & SWEET34 Acquisitions
Developing
Markets
11 New
Countries
FLAVOURS
62 Acquisitions
BEVERAGEBeverage Flavour &
Bases, Syrups & Sauces, Brewing
Ingredients
PHARMACell Nutrition,
Excipients
Taste &
Nutrition
Sustainable Business Model
7
Market Leadership
Taste & Nutrition Consumer Foods
Holistic Partnerships
Sustainability
1 Kerry
TasteNutrition & General
WellnessDeveloping
Markets
Consumer
Channel
Customer
Geography
#1 #1
Group Long Term Targets (5 Years 2013–2017)
8
GrowthAdjusted EPS Growth +10% p.a. by:
Volume Growth Margin Expansion
Taste & Nutrition 4% to 6% p.a. Taste & Nutrition 50 bps p.a.
Consumer Foods 2% to 3% p.a. Consumer Foods 20 bps p.a.
Group 3% to 5% p.a.** Group 30 bps p.a.
(**assumes market growth rate of 2% to 3% p.a.) (plus an additional 100 bps from the Kerryconnect project)
ReturnROACE 12%+
CFROI 12%+ ROAE 15%+
16%ASIA-PACIFIC
30%EMEA
Taste & Nutrition at a Glance
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INGREDIENTS
& FLAVOURS
MARKET
POSITIONS
DEVELOPING
MARKETS (€1.2BN)
#1
25% Beverage
17% Meats
9% Dairy
8% Bakery
7% Soups, Sauces & Dressings
5% Cereal & Bars
5% Ice-cream & Desserts
5% Prepared Meals & Sides5% Savoury Snacks
5% Pharma
5% Confectionery
2% Appetisers
2% Others
Revenue by End Use Market
Revenue by Technology
2016 Year On Year
Volume Growth
+3.5% Savoury & Dairy
+8.4% Beverage
+9.3% Pharma/Functional Ingredients
(3.6%) Cereal & Sweet
Regional Ingredients
40% Savoury & Dairy
24% Beverage
16% Pharma/Functional Ingredients
15% Cereal & Sweet
5% Regional Ingredients
54%AMERICAS
74%DEVELOPED
26%DEVELOPING
#1 #1
Dairy protein
Hydrolysed protein
Stabilising systems
Fibre systems
Flavour systems
Flavour modulation
Nutritional lipids
High protein
Heat stable processing
Smooth texture
Digestive comfort
Fruit flavour profile
Protein flavour
High in essential fatty acids
Industry Supply Chain – How Kerry Adds Value
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RETAIL BRANDS
STORE BRANDS
FOODSERVICE
FUNCTIONAL INGREDIENTS & FLAVOURS
Emulsifiers
Enzymes
Cultures
Hydrocolloids
Colours
Proteins
Flavours
Pharma
Integrated Solutions
COMMODITIES
Dairy
Flour
Fruits
Oils
Soya
Spices
Starch
Sugar
e.g. RTD nutritional beverage
SCIENCE & TECHNOLOGYFUNCTIONALITY/VALUE DELIVERED
Note: where Kerry plays
Diversified Product Portfolio
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Product Groups Product Sub-groups Market Position Competitors• Savoury & Dairy Flavour Solutions• Dairy Ingredients• Culinary Sauces• Culinary Ingredients• Snack Seasonings• Meat Coating Systems• Functional Meat Systems
• Enzymes• Fermented Ingredients• Protein Fractions• Prebiotics, Probiotics, & Metabolites• Nutritional Beverages• Nutrition Solutions• Emulsifiers & Texturants
• Sweet Flavours• Confections & Coated Sweets• Sweet Particulates• Chocolate & Compounds• Cereal Shapes & Agglomerates • Baked & Dough Sweet Products• Wet Sweet Systems
• Beverage Flavour Solutions• Sauces & Syrups• Tea & Coffee Concentrates• Beverage Ingredients & Extracts• Creamers & Whips
• Pharma Excipients• Cell Nutrition Proteins• Media Ingredients
Savoury & Dairy
• # 1 in America• # 1 in Europe• # 1 in Rest of World
• # 1 in specialty proteins globally• # 2 in emulsifiers globally
• # 1 in America• # 1 in Europe
• # 1 globally
• We are in 5 of the top ten blockbuster drugs
Cereal & Sweet
Beverage
Functional Ingredients & Nutrition
Pharma
Consumer Foods at a Glance
12
Technology
Meat Products
Meal Solutions
Dairy Products
Region
GB
Ireland
Rest of Europe
Customers
Brand
Private Label
Diversified Product Portfolio
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Segment Key Product Market Position
• Largest branded dairy supplier in Ireland
• #1 spreads brand in Ireland
• #1 cheese brand in Ireland
• #1 kids cheese snack in GB
• #1 customer brand dairy spreads and RTE cheese in GB
• #1&2 sausage brands in GB
• #2 (fastest growing) meat snacking brand in GB
• #1&2 breakfast product brands in Ireland
• #1 cooked meat brand in Ireland
• #1 GB customer brand supplier of
– chilled ready meals
– frozen ready meals
– ready to cook
€5.5bnMEAT PRODUCTS
€4.3bnMEAL SOLUTIONS
€4.5bnDAIRY PRODUCTS
Growth Platforms
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Consumer
We will use consumer-led insight and innovative technology to develop compelling propositions that delight shoppers in our core categories –meat, dairy and meals
Channel
We will ensure our products are readily available to all our consumers, across all channels, when ever and wherever they shop
Customer
We will work collaboratively with our customers to ensure we create products they, and their consumers, love to buy
Geography
We’re committed to expanding our footprint beyond the UK and Ireland into new markets, to reach new customers
‘Securing Sustainable Growth’Embedding Sustainability in Our Business
Kerry’s sustainability plan represents a journey of continuous improvement
– an ongoing process and strategy to secure sustainable growth
It offers Kerry Group a framework through which to ensure the long-term development of the organisation by building competitiveness, while at the same time enhancing the quality of life and protecting our natural resources
• Integrated in 1 Kerry strategies and operational activities
• Directed and governed by our Kerry Sustainability Council
• Groupwide time-bound, quantified targets established to measure progress
ENVIRONMENT SUSTAINABILITY
MARKETPLACE SUSTAINABILITY
WORKPLACE SUSTAINABILITY
COMMUNITY SUSTAINABILITY
15SECURING SUSTAINABLE GROWTH
Kerry’s ‘Towards 2020’ Programme
• A comprehensive programme for sustainable growth
• Four critical areas of focus which reflect global concerns and issues of material importance to our shareholders, employees
and suppliers, translated into actions that help direct our day-to-day activities
• Directed by Senior Leadership through the Kerry Sustainability Council, with functional responsibility for implementation
that embeds sustainability within the business
Environment
Climate Change
Resource Efficiency
Waste Reduction
Marketplace
Nutrition and Health
Responsible Sourcing
Product Quality
Workplace
Our People
Business Ethics
Health and Wellbeing
Community
Social Impact
Economic Development
Shared Purpose
16
Groupwide time-bound, quantified targets established to measure progress
1 Kerry Sustainability Programme – ‘Towards 2020’
17
20
17
Go
als
Five
Yea
r St
rate
gic
Pla
nA
spir
atio
ns
Climate Efficiency Waste• Continue to improve our environmental stewardship
• Drive efficiency in resource use (energy & water)
• Exceed in efforts to reduce waste and increase recycling
• Deliver on our brand sustainability strategy plan
• Achieve 100% ISO 14001 approval (Kerry manufacturing sites)
• Achieve an overall 13% reduction in GHG emissions intensity by 2020 compared to baseline year 2013, reflecting an overall 25% reduction compared to baseline year 2009
• Reduce water intensity by 7% by 2020 compared to baseline year 2013, reflecting an overall reduction of 11% by 2020 compared to baseline year 2011
• Reduce waste intensity by 12% by 2020 compared to baseline year 2013, reflecting an overall 32% reduction compared to baseline year 2011
• Achieve zero waste to landfill where technically feasible in each jurisdiction
• Achieve Group ISO 14001 approval targets for 2017
• Implement Kerry Carbon Reduction Projects for 2017 in line with our 2020 targets
• Implement Kerry Water Reduction Projects for 2017 in line with our 2020 targets
• Implement Kerry Waste Reduction Projects for 2017 in line with our 2020 targets
• Continue to advance our Origin Green Programme in Ireland
Quality Sourcing Nutrition• Through our focus on science and technology development, we
will generate innovative products that contribute to improving health and wellbeing across all life-stages, creating better lifestyles for people today and future generations
• Through our leading innovation and product development expertise, we will continue to enhance the nutritional value of our ingredients and continue to assist our valued customers
• Make quality a distinguishing capability
• Ensure responsible sourcing practices
• Leverage Kerry’s Taste & Nutrition technology platforms and applications expertise to improve nutritional values of food and beverage products in partnership with our customers
• Deliver on our Kerry Foods’ ‘Better For You’ Programme
• Partner with our customers in sustainable sourcing of strategic ingredients. Achieve Kerry sustainable sourcing targets across our raw material categories
• Ensure our Supplier Code of Conduct is communicated to all direct suppliers
• Ensure 100% of ‘high risk’ supply partners are formalised as members of SEDEX
• Maintain Global Food Safety Initiative (GFSI) certification of all Kerry manufacturing sites
• Implement Kerry Global Quality Management System (GQMS) and Kerry Foods Manufacturing Standard (KFMS). Certify all plants against an accredited Global Food Safety Initiative (GFSI) standard
• Maintain SEDEX membership across all Group manufacturing sites
• Maintain SMETA or equivalent certification across all Kerry Developing Market manufacturing plants
• Support and partner with International Nutrition Research programmes
• Achieve Kerry Foods’ ‘Better For You’ Programmes' annual goals
• Progress Kerry sustainable raw material sourcing objectives
• Promote Health, Nutrition & General Wellness through Kerry’s Nutrition Centre of Excellence and the Kerry ‘Health & Nutrition Institute’
• Continue to advance our Origin Green Programme in Ireland
People Ethics• Continue to conduct our business in a responsible and ethical
manner and be an employer of choice
• Through our Code of Conduct we will continue to provide a safe and healthy environment in which to work
• Continue to embrace diversity and promote inclusion across the Group
• Drive ethical business practices and compliance to Kerry Code of Conduct
• Ensure wages are competitive and all labour standards are fair, equitable and meet or exceed local guidelines
• Embrace diversity across our workforce, our customer base and the communities we serve
• Continue to improve Health & Safety metrics across all Group sites
• Promote training and learning opportunities to ensure ongoing development
• Drive day to day business decisions through our defined Kerry Values
• Achieve annual target for all Kerry employees to have completed the Kerry Code of Conduct Training through the Learning Academy
• Ensure compliance with Global Health & Safety Management Systems
• Achieve a 5% reduction in recognised Global Health & Safety metrics across all sites
• Promote diversity by building a workplace that is free of prejudice and actively fosters the appreciation of diversity throughout the organisation
• Continue to advance our Origin Green Programme in Ireland
Social Economic• Be a responsible neighbour by driving and supporting outreach
initiatives in our local communities
• Continue to partner with international programmes to alleviate world hunger in developing regions
• Promote Kerry Community Lead Projects in each region
• Assist and actively engage people in development programmes in our communities to improve: health and nutrition; entrepreneurship; community development; education, arts and sport; sustainable agriculture
• Assist NGO Partners with selected projects in the developing world
• Develop Kerry Community Lead Projects in each region
• Assist community development programmes in association with Kerry Vanilla Project in Madagascar
• Formalise community engagement programmes in all our communities through Kerry Community Relations Committees and Community Relations Ambassadors
• Share Community support best practices through ‘Kerry Community Relations’ site
• Formalise support for employee philanthropy programmes
• Continue to advance our Origin Green Programme in Ireland
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Kerry Group Worldwide
19
Manufacturing Footprint
Australia
Belarus
Brazil
Canada
China
Costa Rica
Denmark
France
Germany
Guatemala
India
Indonesia
Ireland
Italy
Malaysia
Mexico
Netherlands
New Zealand
Panama
Philippines
Poland
South Africa
South Korea
Spain
Thailand
Turkey
UK
USA
Serving our customers’ needs everyday
800+ R&D ScientistsWith expertise across all key disciplines in food science and engineering
Beloit
Campinas
San Juan del RioShanghai
Singapore
Naas
Global and Regional Technology & Innovation Centres
Manufacturing Plants
Sales Offices
Note: as at 31-12-2016
Shareholder Analysis
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North America 20%
UK 16%
Europe (excluding UK and Ireland) 15%
Rest of World 5%
Ireland 3%
Institutional Analysis
Retail 27%
Kerry Co-operative 14%Institutions 59%
Shares in issue at 30 June 2017: 176,114,006