Kerry Group[1]

8/3/2019 Kerry Group[1]

1/32


2/32


3/32

Kerry Group Profile

Largest ingredients & flavours business in the world

Global No 1 by scale and technology

Blue-chip customer base Broad geographic spread sales in 140 countries

Unrivalled technology synergies, end-use market focus and

applications expertise, supported by industry leading Centres of

Excellence

Leading UK/Irish supplier of branded and customer branded foods

Category leader chilled cabinet

Brand leaders in Irish & UK markets

Leader in selected customer branded growth categories

Unrivalled route to market including dedicated distribution

network in Ireland & UK


4/32


5/32

Kerry Ingredients & FlavoursWorldwide Locations

Manufacturing Plants

Sales Offices


6/32

Ingredients & Flavours Strategic Evolution

1983Kerry Foods Ireland Established

(Retail Dairy Products and Chilled Foods)

1974Listowel P lant Opens

(milk collection, processing andProtein Dairy Technology)

1986

Publicly Traded as Kerry Group PLC(access to funds for growth)

1989Develop NA Food Ingredients P latform

(Beatreme Food Ingredients)

1992-Expanded Food Ingredients Platform Globally

(Europe, Latin America, Asia Pacific)


7/32

Ingredients & Flavours Strategic Evolution

2000 2006Developed Global Flavour P latform (Beverage Focus)

SunPure (US), Manheimer (US), Metrarom (CAN),Crystals International (US), San Giorgio (Italy)

2002-2006Developed Beverage Ingredients and Systems Platform

Stearns & Lehman (Syrups), DaVinci Gourmet (Syrups),

Extreme Foods (Smoothies)

Kerry Technology Evolution

2004

Developed Global Functional Bio-Ingredient PlatformQuest Ingredients (Global)Emulsifiers and Fermented Ingredients

2007One Kerry Strategy for the Americas

Combined functional ingredients, flavours, and ingredient systemsto form integrated Food & Beverage Platforms

2009One Kerry Strategy for Kerry Worldw ide

Disposal of Fragrance and Yog Fruit


8/32

Leading Ingredients and Flavours Companies

Kerry is the largest player

in the ingredients andflavours market

Highly fragmented, but

growing market ($50bn)

Benefits to being a scale

player

Consolidation potential

Revenue m

Most recently published results


9/32

Industry Supply Chain

Customised Ingredient &Flavour Systems

Kerry is the leader in the development of anew sector of the supply chain: supplyingCustomised Ingredient & Flavour Systems

that provide marketeers with componentsthat speed product development and reducemanufacturing investment.

For example, where does .

An Ice Cream mfr. get Cookie Dough?A Frozen Dinner mfr. get Cheese Sauce?

A Bakery get Coloured Sprinkles?A Beverage mfr. get Stabilized Coffeeextract?A Nutrition Bar mfr. get High Protein Crisps?

From Kerry!

Store

Brands

RetailBrands

Restaurants

Dairy

Flour

FruitsOils

Soya

Spices

Starch

Sugar

Commodities

Functional Ingredients

Emulsifiers

Enzymes

CulturesHydrocolloids

Colours

Proteins

Flavours


10/32

Leveraging Kerry TechnologiesExample Culinary Applications

SAUCES

Savoury

Cheese & Dairy

Sweet

Cold Form Extrusion

FlavorCoreFILLINGS

Bake-stable

Cheese & Dairy

Vegetables

Meat

Poultry

Mimix

COATINGSBakable Coatings

Crumbs

Blended Breaders

Batters

Predusts & Matrices

FLAVOURS

Dairy Powders

Savory Flavours

Meat Flavours

Vegetable, Herb & SpiceFlavours

Savoury FlavourModulators

Cheese-based FlavoursDairy-based Flavours

Smoke Flavours

Fibre Fortified


11/32

Leveraging Kerry Technologies

FLAKES

Extruded -

whole grain

Fibre

Protein

Multi-grain

OrganicFlavours

COATED PIECES

Extruded pieces

Clusters / granolas

Cookie dough

Nutty raisins

Flavours

CLUSTERS

Fruit

Whole grain

Fibre

Protein

Vegetable

With & w/out nuts

Omega-3 fortifiedOrganic

Flavours

Preformed

HOT EXTRUSION

Rice crisp

Soy crisp

Fruit / vegetable

Shapes

Colours

Flavours

SOLNUTS

Flavour infused

EXTRUDED PIECES

Sizes and shapes

Whole grain

Fibre

Protein

Fruit / vegetable

Calcium added

Organic

GRANOLA

FruitWhole grain

Fibre

Protein

Multi-grain

Organic

Flavours


12/32

Leveraging Kerry Technologies

Fruit Flavours

Sweet / Brown Flavours

Flavoured Juice Concentrates

Flavour Masking

Sweetness Enhancement

Emulsifiers

Stabilizer Systems

Fibre Systems

Natural Colour Options

Dairy Proteins

Soya Proteins

Low Lactose Proteins

Clear Proteins

etc.

Complete Formulation

Aseptic Packaging

Retort Plastic Bottles

Foodservice Sizing


13/32

Kerry Ingredients & Flavours leveraging technologyleadership in global food and beverage markets

Technology Region

End Use Market

Savoury &Dairy Systems

& Flavours47%

Cereal & SweetSystems & Flavours

16%

BeverageSystems &Flavours

12%

EMEA39%

Asia-Pacific15%

Americas46%

Meats18%

Bakery

12%

Dairy10%

Cereal & Bars6%

Savoury Snacks7%

Prepared Meals6%

Soups, Sauces & Dressings

5%

Appetisers & Side Dishes5%

Ice-cream &Frozen Desserts

4%

Confectionery

4%

Pharma4%

Beverage19%

Primary/RegionalIngredients

15%

Based on third party revenue

FunctionalIngredients

10%


14/32

Convenience, variety, enhanced nutrition /

performance

Clean label, low-sodium, low-calorie, hi-fibre,

fusion flavours

Digestive comfort, bone or heart health

wellbeing

Satiety control / weight management vs.

affordable indulgence

Life-stage nutrition

Demographics, urbanisation, emerging markets

Food safety / security / shelf-life of products

Sustainability provenance of raw materials

Customer alliances customised solutions

Ingredients & Flavours: Growth Drivers


15/32

Global Food and Beverage Trends

Value

Convenience

Indulgenceealth

Formula optimization

Speed-to-marketTechnology layering

Fusion flavoursSensory appealCulinary touch

PortabilityReady-to-useEasy preparation

Sodium reduction

Clean labelsFood safety


16/32

Kerry's Competitive Advantage

Customised Ingredient & Flavour systems

Strong customer alliances

Technology breadth Layering

Applications expertise

Consumer & market understanding

Flexible manufacturing

Global footprint

Each Technology area has a distinctive set of Competitors


17/32


18/32

Kerry Foods An Overview

Category leader - chilled cabinet

Brand leaders - Irish and UK markets

Customer brands selected markets

Manufacturing facilities throughout Ireland and the UK

Dedicated distribution network in Ireland and the UK

Supplier to all major supermarket groups, convenience stores and

independent retailers


19/32

Value Added Dairy

Charleville, Ireland Omagh, N. Ireland

Coleraine, N. Ireland Ossett, UK

Listowel, Ireland Portadown, N. Ireland

3 Dairies (Limerick, Galway, Killarney)

Value Added Meat

Shillelagh, Ireland Poole, UK

Enniskillen, N. Ireland Hyde, UK

Spalding, UK

Meal Solutions

Attleborough, UK Carrickmacross, IrelandBurton-on-Trent, UK London, UK

Food-to-go & Other

40 Depots, UK Dublin, Ireland

12 Depots, Ireland Gainsborough, UK

Thurcroft, UK

Divisional HQ

Egham, UK

Manufacturing Locations


20/32

Major food companies in GB/ IOI(t/ o incl confectionery and beverages)

Premier

Nestle

ABF

Arla

Kerry

Dairy Crest

Northern

UB

Princes

Kellogg

Leading UK/Ireland Consumer Food Groups

The UK/Ireland food and drink market is worth circa100bn.

Source: Nielsen, IGDSource: OC&CSource: OC&C, Nielsen,

TNS, Other

*

*

*

*

* Kerry chilled markets

Major added value chilled foodcompanies (in GB/ IOI)


21/32

Kerry Foods: Market Positioning

#1 UK cheese snack(Cheestrings)

#1 IRL natural cheese(Charleville & Coleraine)

#1 IRL dairy spread(Dairygold)

#1 IRL dairy spread supplier

#1 UK pvt label dairy spreadand cheese supplier

#1 UK sausage (Richmond)

#2 UK sausage (Walls)

Biggest food brand in IRL(Denny)

#1 & 2 IRL cooked meatsbrands (Denny & Shaws)

#1 meat snacks(Mattessons)

#1 UK chilled readymeals supplier

#1 UK frozen ready

meals supplier

#1 UK chilled vansales operation

#1 IRL chil led van salesoperation

#1 IRL sandwich (Freshways)


22/32

Kerry Foods:Product Categories vs Market Channels


23/32

Kerry Foods On-going Innovation Programme


24/32

Consumer Foods Strategy

Continued investment in Fridge Fresh

Leverage brand heritage

Innovation to lead category growth

Continued brand and marketing investment

Reposition Irish brands for value-conscious consumer

Drive efficiencies through lean programme


25/32


26/32

Group Goals & Long Term Targets

Group revenue: +2% to +4% (LFL) volume growth

Margin: 10% Group margin in 5 years

Adjusted EPS* 10%+

ROAE* 15%+ and CFROI 12%+

Note: * before intangible amortisation and non-trading items


27/32

2009 Financial Highlights

4,521m (4.8%) like-for-like

422m 3.8% like-for-like

9.3% +80bps

166.5 cent +8.2%

367m 2008: 227m

Revenue

Trading profit

Trading margin

Adjusted EPS*

Free cash flow

Adjusted profit after tax* 291m +8.4%

Note: * before intangible asset amortisation and non-trading items


28/32

Interim Management Statement(AGM 5 May 2010)

Reported revenues up 5.9% on Q1

Continuing business volumes: Group+5.1%

Ingredients & Flavours +5.2%

Consumer Foods +3.3%

Solid business margin improvement: Group +50bps

Ingredients & Flavours +70bps

Consumer Foods +40bps

Ingredients & Flavours:

solid project/innovation pipeline

layering technologies/cross-selling opportunities

Consumer Foods:

brand investment and repositioning to drive growth

consolidation in customer branded growth categories


29/32

Confident of delivering earnings growth to a range of

182 to 185 cent per share (2009: 166.5 cent)

Prospects: Continued Growth in 2010

Strong operating momentum into 2010 organic growth +

margin expansion

Organisation aligned to economic and market challenges

Ingredients & Flavours:

Solid project/innovation pipeline

Layering technologies/cross-selling opportunities Consumer Foods:

Brand investment and repositioning to drive growth

Consolidation in customer branded growth categories

Strong balance sheet and cash generation


30/32

Group Summary

Global leader in ingredients & flavours

Category leader in chilled foods

Platform

broad technology base

wide customer base

global geographical spread

Business model built for double digit organic growth and

return on investment


31/32


32/32

Documents

Kerry Group[1]