Disclaimer: Forward Looking Statements - Kerry Group ?· Disclaimer: Forward Looking Statements ...…

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  • Disclaimer: Forward Looking Statements

    This presentation/announcement may contain forward looking statements with projections regarding, among other things, the

    Groups 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 Walls

    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 20132017)

    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

    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

  • 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

  • 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

  • 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

    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

  • 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

    Were committed to expanding our footprint beyond the UK and Ireland into new markets, to reach new customers

  • Securing Sustainable GrowthEmbedding Sustainability in Our Business

    Kerrys 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

  • Kerrys 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 Kerrys 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 Kerrys 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

  • 18

  • 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

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