Post on 02-May-2018
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Introducing Kerry
• Kerry is a global leader in taste and nutrition
• UK/ROI leader in branded and customer branded chilled foods
• Revenue €6.1bn
• Enterprise value €13bn*
• Market capitalisation €12bn*
Note: *as at 31-12-20162
€6.1bnRevenue
€750mTrading Profit
Sales by Region
79% Taste & Nutrition
21% Consumer Foods
86% Taste & Nutrition
14% Consumer Foods
13% Asia-Pacific
42% Americas
45% EMEA
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Mission Statement
Kerry Group will be:
a world leader in Taste and Nutrition serving the food, beverage and pharmaceutical industries, and
a leading supplier of added value brands and customer branded foods to the Irish, UK and selected international markets
3
Through the skills and wholehearted commitment of
our employees, we will be leaders in our markets –
excelling in product quality, technical and marketing
creativity and service to our customers
We are committed to the highest standards of business
and ethical behaviour, to fulfilling our responsibilities to
the communities which we serve and to the creation of
long-term value for all stakeholders on a socially and
environmentally sustainable basis
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Business Development
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
Global Technology & Innovation Centres
Complete. Record year for acquisitions.
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Revenue and Adjusted EPS*
Note: * before brand related intangible asset amortisation and non-trading items | ** restated to reflect the adoption of IAS 19 (2011) Employee Benefits5
ADJUSTED EPS* 1986-2016 (Cent)
33
7
37
0
50
4
71
0
74
2
95
9
1,0
50
1,1
17
1,1
21
1,5
23
1,5
66
1,7
07
2,2
00
2,4
56
2,6
22
3,0
03 3,7
55
3,6
93
4,1
29
4,4
30
4,6
46
4,7
88
4,7
91
4,5
21
4,9
60
5,3
02
5,8
48
5,8
37
5,7
57
6,1
05
6,1
31
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
7.6 8.4 12
.7
16
.3
17
.6
21
.1
23
.0
25
.9
28
.9
35
.8
38
.7
46
.7
57
.4
68
.0
79
.2
87
.9
10
1.8
11
2.1
12
2.3
13
0.8
13
2.8
14
2.4
15
1.8
16
3.9
19
2.1
21
3.4
23
4.0
25
7.9
27
8.9
30
1.9
32
3.4
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
**
20
13
20
14
20
15
20
16
Revenue 1986-2016 (€M)
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Our Business Structure
6
Taste & Nutrition
Consumer Foods
Agribusiness
Americas Region
EMEA Region
Asia-Pacific Region
Ireland
United Kingdom
Selected International Markets
Ireland
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Kerry Sustainable Business Model – a proven strategy for growth
7
Market Leadership
Taste & Nutrition Consumer Foods
Holistic Partnerships
Sustainability
1 Kerry
TasteNutrition & General
WellnessDeveloping
Markets
Consumer
Channel
Customer
Geography
#1 #1
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Kerry Group – Worldwide Locations
8
Manufacturing Footprint
Global and Regional Technology & Innovation Centres
Manufacturing Plants
Sales Offices
Beloit
Campinas
San Juan del RioShanghai
Singapore
Naas
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
Taste & NutritionKerry is the largest and most technologically advanced developer and provider of taste and nutrition solutions in the world. Kerry has strong customer alliances with leading global, regional and local food, beverage and pharmaceutical companies
€4.9bn
Revenue in 2016
Our leading-edge research in markets and consumer behaviour and our unparalleled expertise in the science of taste allows us to deliver products that nourish and delight consumers
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Our Taste & Nutrition Business Today
10
Technology End Use Market
40% Savoury & Dairy
24% Beverage
16% Pharma/Functional
Ingredients
15% Cereal & Sweet
5% Regional Ingredients
25% Beverage
17% Meats
9% Dairy
8% Bakery
7% Soups, Sauces
& Dressings
5% Confectionery
5% Cereal & Bars
5% Ice-cream & Desserts
5% Prepared Meals & Sides
5% Savoury Snacks
5% Pharma
2% Appetisers
2% Others
74% Developed
26% Developing
54% 30% 16%
Americas EMEA Asia-Pacific
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€65bn Ingredients and Flavours Market
Based on most recently published results for ingredients and flavours divisions only11
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• Kerry is the largest player in the
ingredients and flavours market
• Highly fragmented, but growing
market at 2% to 3% p.a.
• Benefits to being a scale player
• Consolidation potential
Revenue $m
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Kerry Model Delivering in a Changing World
12
Connected
Consumers
Transparent
Global but Local
Health & Wellbeing
Millennials
Taste Nutrition Industry Dynamics
Foodservice E-commerce Developing Markets
Pure & Simple
Authentic & Familiar
Pleasure & Indulgence
Fresh & Invigorating
Free from
Better-for-you
Good-for-you
Tailored-for-you
Clean label
Economic Growth
Globalisation/Nationalism
Channel Disruption
Currency Volatility
Raw Materials
Food-on-the-go
Snacking
Fresh & Clean
Customisation
Premiumisation
Indulgence
Digital
Connected
Convenience
Home Delivery
On Trend
Demographics
Urbanisation
Economic Growth
Food Security
Consumerism
Geopolitical
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Science & Technology Expertise: Delivering for Customers
13
No. 1 for investment in R&D Unique Holistic Technology Model
800+ food scientists
Continued investment in acquiring science and technology
Global Technology & Innovation Centre architecture rolled out
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Kerry’s Unique Taste & Nutrition Growth Model
14
Pure & Simple
Clean Label; Trusted;
No Artificial Ingredients,
Free From
Authentic & Familiar
Cooking Style; Authentic;
Taste of Time; Ethnic
Pleasure &
Indulgence
New Taste; Fine Dining;
Patisserie and
Coffeehouse Experiences
Fresh & Invigorating
Taste w/out Compromise;
Fresh; Healthy Halo;
Natural Mood
TasteFree From
Food Intolerance;
Low/No/Reduced Lactose;
Gluten Free; Clean/Cleaner Label
Better For You
Reduced Sugar;
Salt and Fat;
Balanced Choice
Tailored For You
Infant and Toddler; Performance
and Healthcare Nutrition;
Weight Management
Good For You
Protein Fortification; Carbohydrate
Quality; Healthy Lipids;
Micronutrient Fortification;
Naturally Good For You
Nutrition
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Kerry Taste Research Programme
15
Technology Citrus Natural/ Sugar & Salt Dairy Taste Savoury TasteFocus Extracts Perception Smoke & Grill Yeast
Pure & SimpleConsumer
Analysis
Process
Applications
Pleasure & Indulgence
Fresh & Invigorating
Authentic & Familiar
Partners
Sensory Excellence, Molecular Analytical, Regulatory
Distillation / Extraction / Reduction / Encapsulation / Reaction / Fermentation / Compounding
Beverages, Bakery, Confectionery, Dairy, Meats, Soups & Sauces, Snacks, Prepared Meals, Pharma
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Kerry Nutrition Research Programme
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Lifestage Infant & Children & Early Healthy SeniorsToddlers Adolescents Adulthood Aging
Partners
Weight Management
Allergies and Immunity
General Wellness
Digestive Health
Muscle Health
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Kerry: Leading Partner to Foodservice Channel
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• Largest, most integrated portfolio
• Expertise from ideation to launch
FUNCTIONAL & NUTRITIONAL INGREDIENTS
TASTE SOLUTIONS
DAIRY & CULINARY SYSTEMS
MEAT SYSTEMS
AUTHENTIC CULINARY
FOUNDATIONS
CEREAL SYSTEMS
SWEET SYSTEMS
BEVERAGE SYSTEMS
Natural Preservation
Systems
Specialty Proteins
& Starches
Enzymes
Natural Fermentates
Emulsifiers
& Texturants
Intact Proteins
Protein Hydrolysates
Protein Fractions
Infant Nutritional Proteins
Prebiotics & Probiotics
Nutritional Lipids
Immunity Actives
Sweet Flavours
Savoury Flavours
Dairy Flavours
Natural Extracts
Taste Modulators
Dry Cheese
Dry Dairy
Yoghurt
Dairy Sauces
Frozen Sauces
Broths & Stocks
Herb Reductions
Fermented Ingredients
Oleoresins
Snack Seasonings
Marinades
Smoke Systems
Bread Crumbs
Cracker Meal
Batters
Breaders
Cold-Form
Extrusion
Meat, Vegetable & Herb
Reductions
Smoked & Grill
Stocks & Bouillons
Flavours
Puffing
Extrusion
Co-Extrusion
Granola
Clustering
Toasting
Soy Flour
Jet Cooking
Nuggets
Sprinkles
Chocolate
Compounds
Pralines
Cookie Pieces
Variegates
Enrobing
Panning
Aseptic
Agglomeration
Encapsulation
Functional Lipids
Syrups
Brands
Foodservice Solutions
• Customised menu and branded solutions
• Holistic partnership model
• Kerry Technology & Innovation footprint facilitates global, regional, local development
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Developing Markets: Kerry’s Footprint for Growth
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• Greater China
• India
• Indonesia
• Malaysia
• Philippines
• Thailand
• Vietnam
• South Africa
• Nigeria
• Turkey
• Middle East
• Russia
• Eastern Europe
• Brazil
• Mexico
• Central America
LATAMEMEAASIA-PACIFIC
2008
19%2011
21%2016
26%
• Dynamic growth economies
• Population growth
• Growing consumer spend
• Global, regional and local customer base
• Local taste preference
• Demand for convenience
Leveraging Kerry Global Technologies and Expertise
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Consumer FoodsKerry Foods is a market leading supplier of added-value branded and customer branded chilled food products to the Irish, UK and selected international markets
€1.3bn
Revenue in 2016
Kerry Foods portfolio of consumer branded products includes over 20 high profile brands across three major market sectors; Meat & Savoury Products, Meal Solutions and Dairy Products
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Consumer Foods at a Glance
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Technology
Meat Products
Meal Solutions
Dairy Products
Region
Rest of Europe
Ireland
GB
Customers
Brand
Private Label
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Diversified Product Portfolio
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• 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
MEAT PRODUCTS
€5.5bn
DAIRY PRODUCTS
€4.5bn
MEAL SOLUTIONS
€4.3bn
• #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
Segment Key Product Market Position
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Consumer Foods Strategic Growth Pillars
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We will use consumer-led insight and innovative technology to develop compelling propositions that delight shoppers in our core categories –meat, dairy and meals
We will ensure our products are readily available to all our consumers, across all channels, when ever and where ever they shop
We will work collaboratively with our customers to ensure we create products they, and their consumers, love to buy
We’re committed to expanding our footprint beyond the UK and Ireland into new markets, to reach new customers
GeographyCustomerChannelConsumer
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Kerry Foods: Continued Innovation for Today’s Consumer
23
Authenticity/Flavour Snacking New Health ‘Free from’ Convenience
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SustainabilityKerry is committed to the highest standards of business and ethical behaviour to fulfilling our responsibilities to the communities which we serve and to the creation of long term value for all stakeholders on a socially and environmentally sustainable basis
Environment Sustainability
Marketplace Sustainability
Workplace Sustainability
Community Sustainability
Our Sustainability Framework
www.kerrygroup.com/sustainability
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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
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EnvironmentClimate Change
Resource Efficiency
Waste Reduction
MarketplaceNutrition and Health
Responsible Sourcing
Product Quality
WorkplaceOur People
Business Ethics
Health and Wellbeing
CommunitySocial Impact
Economic Development
Shared Purpose
Groupwide time-bound, quantified targets established to measure progress
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Group Long Term Targets (5 Years 2013–2017)
26
Growth
VOLUME GROWTH
Taste & Nutrition 4% to 6% p.a.
Consumer Foods 2% to 3% p.a.
Group 3% to 5% p.a.**
(** assumes market growth rate of 2% to 3% p.a.)
MARGIN EXPANSION
Taste & Nutrition 50 bps p.a.
Consumer Foods 20 bps p.a.
Group 30 bps p.a.
(plus an additional 100 bps from Kerryconnect project)
Adjusted EPS 10%+ p.a. by:
Return
CFROI 12%+ ROAE 15%+
ROACE 12%+
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Future Prospects: Kerry Model for Future Growth
• Technology leadership for global, regional and local customers
• Aligned and agile for delivery in a changing marketplace
• Focused on end-use-markets and consumer needs
• Supported by Group’s unrivalled Technology & Innovation network (including ‘in-market’ development)
• Recent Groupwide RD&A investment – driver of future performance
• 1 Kerry – distributed risk model
Note: before brand related intangible asset amortisation and non-trading items (net of related tax)27
In 2017, we expect to achieve good revenue growth and 5% to 9% growth in
adjusted EPS* to a range of 339.6 to 352.5 cent per share (2016: 323.4 cent)
Positioned for scalable organic and acquisition growth