KERRY GROUP

Transcription

1 KERRY GROUP

2 DISCLAIMER: FORWARD LOOKING STATEMENTS This presentation/announcement may contain forward looking statements with projections concerning, among other things, the Company 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 and therefore actual results may differ materially from these projections. These forward looking statements speak only as of the date they were made and the Company undertakes no obligation to publicly update any forward looking statement, whether as a result of new information, future events or otherwise.

3 1. Kerry Group at a Glance 2. Consumer Foods 3. Ingredients & Flavours Contents 4. Strategic Initiatives 5. Why Kerry?

4 KERRY GROUP AT A GLANCE REVENUE 2013 TRADING PROFIT BN REVENUE Consumer Foods 27% Consumer Foods 19% EBITDA 720M Ingredients & Flavours 73% Ingredients & Flavours 81% ENTERPRISE VALUE* 11BN Ingredients & Flavours Consumer Foods 4,327m 1,601m Note: sales in the Republic of Ireland were < 10% of Group revenue Ingredients & Flavours 558m Consumer Foods 129m KERRY WORLDWIDE KIF SALES BY REGION K EMPLOYEES Asia-Pacific 18% Americas 44% 130 PRODUCTION FACILITIES Manufacturing Plants Sales Offices Consumer Foods Sales are to UK and Ireland EMEA 38% Note: * As at

5 KERRY FINANCIAL PERFORMANCE REVENUE ( M) TRADING PROFIT ( M) 5, CAGR CAGR +11.1% +15.0% ADJUSTED EPS* (CENT) DIVIDEND (CENT) CAGR CAGR % +17.8% Note: * before brand related intangible asset amortisation and non-trading items. From 2011, with 2004 to 2010 re-presented, computer software is treated as a cost in calculating adjusted EPS

6 Filling the nation s fridges with simply brilliant food. Consumer Foods We are one of the leading suppliers of added-value branded and customer branded chilled food products.

7 CONSUMER FOODS OVERVIEW CONSUMER FOODS SIGNIFICANT CUSTOMERS Leading supplier of Chilled Foods across Ireland, UK and selected European markets. Focused portfolio of strong brands with No. 1 positions Our key brands include Richmond, Denny, Dairygold, Cheestrings, Low Low, Walls and Mattessons. Operating across all retail channels, Multiple Grocers, Convenience and Online. Supplying all the key supermarket chains including in the UK, Tesco, Sainsbury s, Asda and Morrisons, in Ireland, Tesco, Musgraves and Dunnes and in Europe, Carrefour, Rewe, Auchan and LeClerc REGION TECHNOLOGY CUSTOMERS GB Ireland Rest of Europe Meat & Savoury Provisions Meal Solutions Dairy Products Brand Private Label

8 DIVERSIFIED PRODUCT PORTFOLIO SEGMENT MARKETS KEY PRODUCT MARKET POSITION MEAT & SAVOURY PROVISIONS 6.7BN #1&2 breakfast product brands in Ireland #1&2 cooked meat brands in Ireland #1&2 sausage brands in GB GB Cooked Meats GB Pastry GB Rasher GB Sausage Ireland #2 (fastest growing) meat snacking brand in GB #2 customer brand pastry in GB Largest branded dairy supplier in Ireland DAIRY PRODUCTS 4.9BN #1 spreads brand in Ireland #1 cheese brand in Ireland GB Cheese GB Yellow Fats Ireland #1 kids cheese snack in GB #1 customer brand dairy spreads and RTE cheese in GB MEAL SOLUTIONS 3.7BN GB Chilled Ready Meals GB Ready to Cook GB Frozen Ready Meals Ireland #1 GB customer brand supplier of chilled ready meals frozen ready meals ready to cook

9 BRAND PRIORITIES CORPORATE PRIORITIES LOCAL BRANDS OTHERS

10 CONSUMER FOODS MARKETS A NEW REALITY ECONOMY IMPACTING SHOPPING BEHAVIOURS AND RETAILER CHOICE INCREASED MARKET POLARISATION Little & Often 35%-40% sold on promotion Own label growth STRUCTURE CHANNELS Smaller formats Growth of online and mobile shopping Growth of discounters Click and collect CONVENIENCE Expanding needs around convenience Product versatility Snacking on-the-go offerings MORE RESOURCEFUL CONSUMER PRIORITISING SPEND HEALTHY & NUTRITIONAL Nutritional benefits Taste + Quality Trusted Brands Clarity of health information

11 Kerry Ingredients & Flavours develops, manufactures and delivers innovative taste systems, Ingredients & Flavours functional and nutritional ingredients and integrated solutions for the food, beverage and pharmaceutical markets.

12 INGREDIENTS & FLAVOURS BUSINESS OVERVIEW REVENUE BY REGION #1 FOR INGREDIENTS & FLAVOURS TASTE & NUTRITION UNPARALLELED POSITIONING REVENUE Americas 44% EMEA 38% Asia-Pacific 18% #1 DEVELOPING MARKETS ( 1BN) #1 MARKET POSITIONS 4.3BN Developed 76% Developing 24% REVENUE BY TECHNOLOGY REVENUE BY END USE MARKETS Savoury & Dairy Systems & Flavours 44% Beverage Systems & Flavours 19% Cereal & Sweet Systems & Flavours 18% Pharma/Functional Ingredients 10% Regional Ingredients 9% Beverage 22% Meats 18% Bakery 11% Dairy 10% Soups, Sauces & Dressings 7% Prepared Meals & Side Dishes 6% Cereal & Bars 5% Savoury Snacks 5% Ice-cream & Desserts 5% Pharma 5% Confectionery 4% Appetisers 2%

13 Kerry Dupont Givaudan DSM ABF McCormick Firmenich Tate & Lyle IFF Symrise Glanbia Ingredients ADM Sensient Chr Hansen Takasago Novozymes $50BN INGREDIENTS AND FLAVOURS MARKET REVENUE $BN (1) 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 (1) Source: most recently published full year results for ingredients and flavour divisions only, Kerry estimates.

14 INDUSTRY SUPPLY CHAIN HOW KERRY ADDS VALUE FUNCTIONAL INGREDIENTS & FLAVOURS Emulsifiers Enzymes Cultures Hydrocolloids Colours Proteins Flavours Pharma INTEGRATED SOLUTIONS Kerry is the leader in the development of a new sector of the supply chain: supplying integrated solutions that provide marketers with components that speed product development and reduce manufacturing investment. RETAIL BRANDS STORE BRANDS Dairy Flour Fruits Oils Soya Spices Starch Sugar COMMODITIES For example Beverage that Delivers the Nutrition Found in a Bowl of Cereal With a foundation of rheology, nutrition & taste science, and our cereal, proteins, flavour, taste modulators and texturants technologies, we formulate a beverage that is great tasting and delivers high levels of whole grains and protein while ensuring process stability. RESTAURANTS Note: where Kerry Ingredients & Flavours plays

15 KERRY S INNOVATION PLATFORMS

16 CUSTOMER INTIMACY MODEL ENABLING GROWTH What does Customer Intimacy Mean? Intimate knowledge of customers businesses Deliver unique insights that help customers make strategic decisions that will help develop their brands and grow their businesses CUSTOMER MARKETING Deep multi-functional, multi-level relationships Tailored approach to customer s ways of working Enabled by: Subject Matter Experts Marketing / Consumer Insights Food Scientists & Flavourists Applications Experts Sensory, Culinary, Analytical Process Engineers CUSTOMER PURCHASING CUSTOMER R&D Global Innovation Infrastructure Global Technology & Innovation Centres Regional Development & Application Centres CUSTOMER MANUFACTURING Innovation Programmes Rapid Fire Development

17 McDonald's Yum! Brands Subway Starbucks Burger King Wendy's Dunkin' Brands Darden Domino's Pizza Nestlé Mondelez PepsiCo Unilever Danone Mars Kellogg's Kraft General Mills Lactalis Groupe STRONGER CUSTOMER ALLIANCES* INGREDIENTS & FLAVOURS CUSTOMERS* % WORLD PACKAGED FOOD MARKET SHARE % WORLD FOODSERVICE MARKET SHARE Note: * above is a sample of key customer alliances Source: Euromonitor 2013

18 STRATEGIC PLATFORM DEVELOPMENT ACQUISITION HISTORY ACQUISITIONS FLAVOURS 56 Acquisitions FUNCTIONAL INGREDIENTS & ACTIVES Emulsifiers, Hydrocolloids, Yeast, Proteins, Enzymes, Cultures, Fermented Ingredients 2000 Savoury & Dairy (DAIRY HERITAGE) DEVELOPING MARKETS 11 New Countries SAVOURY & DAIRY 53 Acquisitions CEREAL & SWEET 33 Acquisitions PHARMA Cell Nutrition, Excipients BEVERAGE Beverage Flavour & Bases, Syrups & Sauces, Brewing Ingredients

19 KERRY GROUP WORLDWIDE LOCATIONS MANUFACTURING FOOTPRINT Manufacturing Plants Sales Offices ARGENTINA AUSTRALIA BELARUS BRAZIL CANADA CHINA COSTA RICA DENMARK FRANCE GERMANY INDIA INDONESIA IRELAND ITALY MALAYSIA MEXICO NETHERLANDS NEW ZEALAND PHILIPPINES POLAND UK USA SOUTH AFRICA THAILAND * As at 31/12/2012

20 Strategic Initiatives

21 1 KERRY TRANSFORMATION BUSINESS STRATEGIES OPERATING MODELS KERRYCONNECT Kerry Ingredients & Flavours Go-to-market Strategy Kerry Foods Go-to-market Strategy Driving market leadership and global alignment Optimising scale and efficiency benefits Building talent for a global organisation Enabling better business Standardised ways of working Common data Integrated ICT system

22 INGREDIENTS & FLAVOURS GROWTH STRATEGIES TASTE GENERAL WELLNESS & NUTRITION DEVELOPING MARKETS ORGANIC AND ACQUISITIVE GROWTH

23 KERRY S TASTE POSITIONING No.1 globally for Taste & Ingredients solutions Food & Beverage focused FLAVOURS EXTRACTS & DISTILLATES Leading Culinary, Applications and Sensory expertise Top 5 Player in global flavours TEXTURE SYSTEMS CONSUMER PREFERRED TASTE TASTE MODULATORS Strong customer alliances Well established capability in developed and developing markets CONCENTRATES & REDUCTIONS

24 KERRY GENERAL WELLNESS & NUTRITION STRATEGY GENERAL WELLNESS WEIGHT MANAGEMENT SPORTS NUTRITION HEALTHCARE NUTRITION INFANT & TODDLER NUTRITION Nutrients Glycaemic Recovery Muscle Digestive Better for you management Endurance health health Food safety and shelf life Appetite modulation Vasodilation Appetite modulation Cognition Immune extension Cognition modulation Maternal nutrition 24

25 KERRY DEVELOPING MARKETS STRATEGY DEVELOPING MARKETS DISTRIBUTION OF INGREDIENTS & FLAVOURS 2013 REVENUES 1BN KERRY GROUP REVENUE IN DEVELOPING MARKETS REVENUE % Asia-Pacific (Greater China, South East Asia and South West Asia) Middle East, North Africa & Turkey, Eastern Europe & Russia, Sub-Saharan Africa LATAM (Brazil, Mexico, South Cone, Andean Region, Central America and Caribbean) 24% INGREDIENTS & FLAVOURS REVENUE FROM DEVELOPING MARKETS REVENUE % 25

26 KERRY GLOBAL FOODSERVICE STRATEGY DUAL STRATEGY GLOBAL FOODSERVICE CHAIN STRATEGY CHARACTERISTICS Deep relationship with focused chain operators Leveraging all Kerry technology and solutions (custom and brands) Innovation focused menu applications; driven by chefs, mixologists and R&D Insight sales approach; service orientation (sensory menu development, trend insights) GLOBAL FOODSERVICE BRAND STRATEGY Brand relationships with millions of independents, regional and select global operators Relationships with leading broadline and specialty distributors Leveraging branded solutions finished products, readily available in Kerry distribution centres Innovation focused on brand solutions; driven by brand marketing Direct marketing focus; broker sales model 26

27 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 longterm development of the organisation by building competitiveness, while at the same time enhancing the quality of life and protecting our natural resources. Bearable SOCIAL Equitable Integrated in 1 Kerry strategies and operational activities Directed and governed by our Kerry Sustainability Council ENVIRONMENT Sustainable Viable ECONOMIC Groupwide time-bound, quantified targets established to measure progress ENVIRONMENT SUSTAINABILITY MARKET SUSTAINABILITY WORKPLACE SUSTAINABILITY COMMUNITY SUSTAINABILITY SECURING SUSTAINABLE GROWTH

28 GROUP LONG TERM TARGETS (5 YEARS ) ADJUSTED EPS* GROWTH +10% P.A VOLUME GROWTH MARGIN EXPANSION Ingredients & Flavours 4% to 6% p.a. Ingredients & Flavours 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. (+ an additional 100 bps at end of Kerryconnect project) RETURN ROACE* 12%+ CFROI 12%+ ROAE*15%+ Note: * before brand related intangible asset amortisation and non-trading items (net of tax) ** Assumes market growth rate of 2% to 3% p.a. and neutral currency and raw materials

29 Conclusion Why Kerry?

30 CONCLUSION WHY KERRY? TECHNOLOGY LEADER MARKET LEADER PROVEN SUCCESS GROWTH POTENTIAL PEOPLE SUSTAINABLE

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