Introduction Presentation FEBRUARY 2019

Transcription

1 Introduction Presentation FEBRUARY 2019

2 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

3 Kerry Group At a Glance 3

4 Kerry Group At a Glance 6.6 billion REVENUE 806 million TRADING PROFIT 25,000+ EMPLOYEES 18bn ENTERPRISE VALUE 80% TASTE & NUTRITION 20% CONSUMER FOODS 89% TASTE & NUTRITION 11% CONSUMER FOODS 147 PRODUCTION LOCATIONS 140+ SALES IN OVER 140 COUNTRIES Financial Results as of FY 2018 Enterprise Value as of

5 Kerry Our Food and Beverage Heritage Kerry Formed Launch of Kerry Group plc Acquisition of Beatreme in US Enter Latin America Enter Asia-Pacific Evolving Technology Platforms 1 Kerry Programme Global Technology & Innovation Centre Architecture Complete Rich dairy heritage From Food, For Food + Investment in new + technology platforms Unique Business Model DAIRY & SAVOURY INGREDIENTS & FLAVOURS TASTE & NUTRITION 5

6 Consistent Financial Delivery Revenue ( m) +10% CAGR 6,608 Trading Profit ( m) +14% CAGR Adjusted EPS* (cent) Dividend (cent) +13% CAGR % CAGR 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 6

7 Our Business Model Adding Value by offering so much more to our customers Drivers of Value-add Foundational Technologies Development & Applications Culinary & Insights Product Process Technologies Integrated Solutions Single Ingredient Multiple Ingredients Offering Value-add 7

8 Kerry Business Model Foundational Technologies Integrated Technology Value Creation Channels & Customers Global & Regional CPG Authentic Taste Dairy, Savoury, Smoke & Grill, Citrus, Tea & Coffee, Beverage & Sweet Development & Applications Emerging/ Natural Brands Global & Regional Retailers (Store Brands) Retail Culinary & Insights Product Process Technologies Kerry Brands Farm ingredients and third party commodities Nutrition, Wellness & Functionality Proteins, Fibre, Enzymes, Probiotics, Fermented Ingredients, Texturants Meat Dairy Meals Snacks Beverage Bakery & Confectionery Cereal & Sweet Pharma Taste & Nutrition Solutions Kerry Foresight & Insight Consumer, Customer, Sensory & Analytical, Market and Regulation Global & Regional Chains Independent Operators Convenience Brands Emerging Channels Pharma Consumer Food Service 8

9 Strategic Priorities for Growth Taste & Nutrition Consumer Foods Core NEW OCCASIONS NEW CHANNELS Authentic Taste Nutrition, Wellness & Functionality Developing Markets Foodservice NEW CUSTOMERS Adjacencies 9

10 Group Medium Term Targets ( ) On average across the 5 years Growth Volume Growth Margin Expansion Taste & Nutrition 4% to 6% p.a. Taste & Nutrition 40 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 2% above market growth rate Adjusted EPS* +10% p.a. Return ROACE 12%+ Cash conversion >80% Relative TSR outperforming peers *Assumes constant currency and neutral raw material costs I TSR = Total Shareholder Return I Cash conversion is expressed as a percentage of adjusted earnings after tax Adjusted EPS and ROACE are calculated before brand related intangible asset amortisation and non-trading items (net of related tax) 10

11 Taste & Nutrition 11

12 Taste & Nutrition At a Glance Revenue % End Use Market Channel Developed & MEAT 17% TOTAL FOOD 69% RETAIL 73% FOODSERVICE CHAIN 16% TOTAL FOODSERVICE 27% 52% AMERICAS Developing View BEVERAGES 26% PHARMA 5% SNACKS 8% DAIRY 10% MEALS 13% BAKERY & CONFECTIONERY 11% CEREAL, SWEEET & OTHER 10% FOODSERVICE INDEPENDENT OPERATORS 9% FOODSERVICE CONVENIENCE 2% 27% EUROPE 21% APMEA 73% DEVELOPED 27% DEVELOPING 12

13 Today Kerry is Positioned to Play Right Across the Global Marketplace Key Insights Profound consumer led food revolution accelerating Food 2.2TN Beverage 2.5TN Foodservice 3.3TN Highly fragmented marketplace Top 10 Globals Top 10 Globals Top 10 Globals Projected short to medium term market growth of 1-3% Local Smaller Globals Local Smaller Globals Local Smaller Globals Kerry s Holistic Business Model delivering right across all market sectors and geographies Regional Regional Regional Source: Kerry Internal Estimates, Euromonitor, RTS Food Trending, MC Allegra, Technomic, GlobalData 13

14 Diversified Product Portfolio Product Groups Product Sub-groups Market Position Competitors Savoury & Dairy Cereal & Sweet Beverage Savoury & Dairy Flavour Solutions Dairy Ingredients Culinary Sauces Culinary Ingredients Snack Seasonings Meat Coating Systems Functional Meat Systems 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 # 1 in America # 1 in Europe # 1 in Rest of World # 1 in America # 1 in Europe # 1 globally Functional Ingredients & Nutrition Enzymes Fermented Ingredients Protein Fractions Prebiotics, Probiotics & Metabolites Nutritional Beverages Nutrition Solutions Emulsifiers & Texturants # 1 in specialty proteins globally # 2 in emulsifiers globally Pharma Pharma Excipients Cell Nutrition Proteins Media Ingredients We are in 5 of the top ten blockbuster drugs 14

15 Our Markets The consumer is at the centre of everything we do Kerry is a consumer-led organisation. Our business model, structures and strategies continue to evolve, centred around a deep understanding of diverse local consumer preferences across the globe 15

16 Kerry Taste & Nutrition Our Unparalleled Go-To-Market Footprint Naas 2 Global Technology & Innovation Centres Beloit San Juan del Rio Bangalore Shanghai Singapore 6 Regional Technology & Application Centres No.1 INVESTMENT IN R&D Campinas Durban 68 RD&A Locations & Commercial Hubs 16

17 Taste Unique Taste & Nutrition Positioning Nutrition Taste Nutrition 100+ Nutrition Articles 80+ Research Papers 13 White Papers Kerry Consumer First Kerry Compass Kerry Trendspotting 2.0 Consumer Radar Consumer Insights Kerry Focus Eat the Streets Underpinned by 5R Clean Label Strategy Replace Reduce Remove Reposition Reinvent Enabled by our Taste & Nutrition Discovery Centre 50+ Blog Articles 20 Research Partners 6 Specialised Webinars Scientific Advisory Council 17

18 Meeting Customer Clean Label Expectations Replace To replace ingredient(s) with clean label alternatives while retain key functionality, taste and/or nutrition profiles in their products Natural flavours, colours, preservatives and sweeteners Remove To eliminate specific ingredient(s) 'No-No lists BPA free BHT free Underpinned by understanding of the science and regulation of clean label ingredients Reduce To leverage clean label technologies to reduce specific ingredients and simplify product ingredient statements Natural ingredients that are multi-functional Sugar and sodium reduction Reposition Customers asking for creative ways to reposition products in the marketplace Product positioning and format Packaging, culinary processing Small batch, home-cooked, authentic Reinvent Natural brand customers looking to scale their business, while maintaining their identity Certified Organic Non-GMO 18

19 Strategic Priorities for Growth Taste & Nutrition Consumer Foods Core NEW OCCASIONS NEW CHANNELS Authentic Taste Nutrition, Wellness & Functionality Developing Markets Foodservice NEW CUSTOMERS Adjacencies 19

20 Consumer Foods 20

21 Consumer Foods At a Glance Category Brands & Customers Channels FOOD TO GO CONVENIENCE/ HIGH STREET OUT OF HOME ONLINE EVERYDAY FRESH CONVENIENCE MEAL SOLUTIONS SUPERMARKETS 21

22 Diversified Product Portfolio Category Key Products Market Positions EVERYDAY FRESH (Meat and Dairy) 11.5bn CONVENIENCE MEAL SOLUTIONS 4.4bn No.1 position across our categories #1 Sausage Brand in GB and Ireland #1 Cooked Meats Brand in Ireland #1 Dairy Spreads Brand in Ireland #1 Cheese Brand in Ireland #1 Customer Brand Dairy Spreads in GB #1 GB Customer Brand Convenience Meal Solutions FOOD TO GO 15bn Emerging Leader in Food to go #1 Kids Cheese Snack Brand in GB #1 Meats Snack Brand in GB 22

23 Strategic Growth Priorities and Targets on average volume growth across the 5 years Current Winning Positions Future Winning Positions New occasions Dairy Meals No.1 positions Meat New channels Snacking Out of Home Food to go Solutions Grow and outperform in our Core 1-2% New customers Expand our footprint into Adjacencies +10% Deep Consumer Insight Leading Edge Innovation Market Responsive Teams 23

24 Appendix 24

25 Sustainability Governance Board of Directors Chief Executive Kerry Sustainability Council Environment Marketplace Workplace Community Climate Change Resource Efficiency Waste Reduction Nutrition and Health Responsible Sourcing Product Quality Our People Business Ethics Health and Wellbeing Social Impact Economic Development Shared Purpose Four areas of focus, reflecting issues of material importance with associated actions that direct day to day activities 25

26 Environmental Performance Focus Area Carbon Water Waste Waste to Landfill Target -13.0% -7.0% -12.0% 0% 2018 Performance 16.4% 6.6% 22.7% 90% diverted 126% 94% 189% 90% Target Achieved Target Achieved Target Achieved Target Achieved 26

27 Towards 2020 Key Highlights 2018 Sustainability Pillars Environmental Sustainability Marketplace Sustainability Workplace Sustainability Community Sustainability Climate Change Resource Efficiency Waste Reduction Nutrition & Health Responsible Sourcing Product Quality Our People Business Ethics Health & Wellbeing Social Impact Economic Development Shared Purpose REDUCTION IN CARBON INTENSITY Versus 2013 base year REDUCTION IN WASTE INTENSITY Versus 2013 base year RESEARCH, DEVELOPMENT & APPLICATION Industry leading investment RESPONSIBLE SOURCING Certification of milk suppliers maintained at HEALTH & SAFETY Year-on-year reduction in reported incidents 16.4% 275m 8% 1m LEARNING & DEVELOPMENT Courses completed RAIN PROGRAMME Commitment to tackling malnutrition SPECIAL OLYMPICS New partnership to support athletes over 22.7% 100% >102,000 2 YEARS 27

28 Kerry Group Worldwide Manufacturing Footprint San Juan del Rio Beloit Naas Tralee Bangalore Singapore Shanghai Australia Belarus Brazil Canada China Costa Rica Denmark El Salvador France Germany Guatemala India Indonesia Ireland Italy Malaysia Mexico Netherlands New Zealand Oman Panama Philippines Poland Russia Saudi Arabia South Africa South Korea Spain Thailand Turkey UK USA Global Headquarters Global and Regional Technology & Innovation Centres Manufacturing Plants Sales Offices Campinas Durban 900+ scientists with expertise across all disciplines in food science and engineering Serving our customers needs everyday 28

29 Shareholder Analysis Institutional Analysis Institutions 58% Kerry Co-operative 14% North America 19% UK 13% Continental Europe Rest of World 23% Ireland 3% Retail 28% Shares in issue at 31 December 2018: 176,298,416 29

30 Introduction Presentation FEBRUARY 2019