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Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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Page 1: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the
Page 2: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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.

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Page 3: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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

Page 4: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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

Page 5: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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

Page 6: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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

Page 7: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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

Page 8: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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%+

Page 9: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

16%ASIA-PACIFIC

30%EMEA

Taste & Nutrition at a Glance

9

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

Page 10: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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

10

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

Page 11: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

Diversified Product Portfolio

11

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

Page 12: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

Consumer Foods at a Glance

12

Technology

Meat Products

Meal Solutions

Dairy Products

Region

GB

Ireland

Rest of Europe

Customers

Brand

Private Label

Page 13: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

Diversified Product Portfolio

13

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

Page 14: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

Growth Platforms

14

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

Page 15: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

‘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

Page 16: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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

Page 17: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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

Page 18: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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Page 19: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

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

Page 20: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the

Shareholder Analysis

20

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

Page 21: Disclaimer: Forward Looking Statements - Kerry Group · Disclaimer: Forward Looking Statements ... These forward looking statements speak only as of the date they were made and the