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Introducing Kerry: the world’s Leading Taste & Nutrition Company
© Kerry 2019 | 2Note: *Financial Results as of FY 2018 | Enterprise Value as of 15-2-2019
€6.6bnRevenue
€806mTrading Profit
80% Taste & Nutrition
20% Consumer Foods
89% Taste & Nutrition
11% Consumer Foods
• Kerry makes better food in a better way for
a better future
• UK/ROI leader in branded and customer
branded chilled foods
• Revenue €6.6bn
• Enterprise value €18bn*
147PRODUCTION
LOCATIONS
€18bn*
ENTERPRISE VALUE
25,000+EMPLOYEES
140+SALES IN OVER
140 COUNTRIES
Mission Statement
Through the skills and wholehearted commitment
of our employees, we will be leaders in our markets
– excelling in service to our customers through
product quality, technical and marketing creativity
We are committed to the highest standards of
business and ethical behaviour, to fulfilling our
responsibilities to the communities which we serve,
and to the creation of long-term value for all
stakeholders on a socially and environmentally
sustainable basis
© Kerry 2019 | 3
Kerry Group will be:
the world leader in taste and nutrition serving the food, beverage and pharmaceutical industries, and
a leading supplier of added value brands and customer branded foods to the Irish, UK and selected international markets
Kerry – Our Food and Beverage Heritage
© Kerry 2019 | 4
1972 1986 1988 1993 1998 2000 2010 2017
Rich dairy heritage ‘From Food, For Food’
Investment in new technology platforms
Unique Business Model
DAIRY & SAVOURY INGREDIENTS & FLAVOURS TASTE & NUTRITION
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
+ +
Revenue and Adjusted EPS*
© Kerry 2019 | 5Note: * 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
Adjusted EPS* 1986-2018 (CENT)
Revenue 1986-2018 (€’M)3
37
37
0
50
4
71
0
74
2
95
9
1,0
50
1,1
17
1,1
21
1,5
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1,5
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2,2
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2,4
56
2,6
22
3,0
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55
3,6
93
4,1
29
4,4
30
4,6
46
4,7
88
4,7
91
4,5
21
4,9
60
5,3
02
5,8
48
5,8
37
5,7
57
6,1
05
6,1
31
6,4
08
6,6
08
19
86
19
87
19
88
19
89
19
90
19
91
19
92
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93
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94
19
95
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00
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18
7.6 8.4 12
.7
16
.3
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.6
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23
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25
.9
28
.9
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.8
38
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79
.2
87
.9
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2.1
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2.3
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3.9
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2.1
21
3.4
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7.9
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8.9
30
1.9
32
3.4
34
1.2
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86
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88
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89
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92
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01
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**
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Our Business Structure
© Kerry 2019 | 6
Taste & Nutrition
Consumer Foods
Agribusiness+
Primary Dairy
Americas Region
Europe Region
APMEA Region
Ireland
United Kingdom
Selected International Markets
Ireland
Kerry Business Model
Global & Regional Chains
Channels & Customers
Global & Regional CPG
Emerging/Natural Brands
Global & Regional Retailers (Store Brands)
Kerry Brands
Independent Operators
Brands
Emerging Channels
Pharma
Convenience
Retail
FoodService
Consumer
Authentic TasteDairy, Savoury, Smoke & Grill, Citrus, Tea & Coffee, Beverage & Sweet
Farm ingredients and third party commodities
Foundational Technologies
Nutrition, Wellness & FunctionalityProteins, Fibre, Enzymes, Probiotics, Fermented Ingredients, Texturants
Meat
Dairy
Meals
Snacks
Beverages
Bakery & Confectionery
Cereal & Sweet
Pharma
Product Process Technologies
Development & Applications
Kerry Foresight & InsightConsumer, Customer, Sensory & Analytical, Market and Regulation
Taste & Nutrition Solutions
Culinary & Insights
Integrated Technology Value Creation
© Kerry 2019 | 7
Strategic Priorities for Growth
© Kerry 2019 | 8
Authentic Taste
Nutrition, Wellness &
Functionality
Developing Markets Foodservice
Taste & Nutrition Consumer Foods
Core
Adjacencies
New occasions
New channels
New customers
Taste & NutritionKerry is the largest and most technologically advanced developer and provider of taste and nutrition solutions in the world. Kerry has strong customer alliances with leading global, regional and local food, beverage and pharmaceutical companies
€5.4bn
Revenue in 2018
Our leading-edge research in markets and consumer behaviour and our unparalleled expertise in the science of taste allows us to deliver products that nourish and delight consumers
End Use Market
21%APMEA
27%EUROPE
52%AMERICAS
73%DEVELOPED
27%DEVELOPING
Regional View
Developed & Developing View
Taste & Nutrition at a GlanceRevenue %
© Kerry 2019 | 10
17% Meat
11% Bakery & Confectionery
10% Cereal, Sweet & Other
13% Meals
10% Dairy
8% Snacks
26% Beverages
5% Pharma
TOTAL FOOD
69%TOTAL FOOD SERVICE
27%
Channel
16% Food Service Chain
9% Food Service Independent Operators
2% Food Service Convenience
73% Retail
$70bn Ingredients and Flavours Market
• Kerry is the largest player in the ingredients and flavours market
• Highly fragmented market revenue growing at 2% to 3% p.a.
• Benefits to being a scale player
• Consolidation potential
© Kerry 2019 | 11Based on most recently published results for ingredients and flavours divisions only
0
1000
2000
3000
4000
5000
6000
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Ke
rry
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ich
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yle
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anse
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mes
Revenue $m
Today Kerry is Positioned to Play Right Across the Global Marketplace
© Kerry 2019 | 12Source: Kerry Internal Estimates, Euromonitor, RTS Food Trending, MC Allegra, Technomic, GlobalData
Key Insights
• Profound consumer led
food revolution accelerating
• Highly fragmented
marketplace
• Projected short to
medium term market growth of 1-3%
• Kerry’s Holistic
Business Model
delivering right across all market sectors and
geographies
FOOD€2.2TN
BEVERAGES€2.5TN
FOODSERVICE€3.3TN
Top 10 Globals
Smaller Globals
Regional
Local
Top 10 Globals
Smaller Globals
Regional
Local
Top 10 Globals
Smaller Globals
Regional
Local
Our Business Model
© Kerry 2018 | 13
Adding Value by offering so much more to our customers
Integrated Solutions
Multiple Ingredients
Single Ingredient Offering
Value-add
Foundational Technologies
Drivers of Value-add
Culinary & Insights
Development & Applications
Product Process Technologies
No. 1 investment in R&D
Kerry Taste & Nutrition – Our Unparalleled Go-To-Market Footprint
© Kerry 2019 | 14
2Global Technology & Innovation Centres
6Regional Technology
& Application Centres
68RD&A Locations &Commercial Hubs
Naas
Beloit
Campinas
San Juan del Rio
Durban
Shanghai
Singapore
Bangalore
© Kerry 2019 | 15
Taste Nutrition
Underpinned by 5R Clean Label Strategy
Enabled by our Taste & Nutrition Discovery Centre
Unique Taste & Nutrition Positioning
Taste Nutrition
20Research Partners
80+Research
Papers
100+Nutrition Articles
50+Blog
Articles
13White Papers
6Specialised Webinars
Scientific Advisory Council
Replace Reinvent Reduce Remove Reposition
ConsumerInsights
Kerry CompassKerry Consumer First
Kerry FocusConsumer
Radar
Eat the Streets
Kerry Trendspotting
2.0
Industry Leading Authentic Taste Delivery Capability
© Kerry 2019 | 16
Market led technical innovation focused on our growth platforms
Leveraging our • Innovation Centre of Excellence architecture
• Global and local regulatory infrastructure
• Advanced sensory and application capabilities
• Leading applications and culinary expertise
We will continue to proactively invest in• The development of our technology platforms
• Acquiring complementary technologies
Authentic Taste Foundational Technology Platforms
Enabling Growth Strategies
Research Partners
™
Industry Leading Nutrition, Wellness & Functionality Portfolio
© Kerry 2019 | 17
Market led technical innovation focused on our growth platforms
Leveraging our
• Innovation Centre of Excellence architecture and external
partners
• Guided by an expanded global and local regulatory infrastructure
• Scientific and clinical validation programmes
We will continue to proactively invest in
• The development of our technology platforms
• Acquiring complementary technologies
Enabling Growth Strategies
Research Partners
Clean Label | Preservation
Vegetable Protein
Meat Alternatives
Natural Improvers
Nutrition, Wellness & Functionality Foundational
Technology Platforms
Global Market Leader in Foodservice – Added Value Solutions
Enabling Growth Strategies
• Strategic customised deployment of our holistic and
unique business model for Foodservice across global
chains, regional and independent operators (Brands)
• Aggressive geographical category expansion
• Targeted channel expansion in emerging high growth sub-
channels – Convenience and Healthcare
2018
€1.4bn2018-2022
CAGR
+7%
Sample of Our Foodservice Brands
© Kerry 2019 | 18
Kerry is the Leading Partner to the Foodservice Channel
© Kerry 2019 | 19
END-TO-END EXPERTISELARGEST TECH PORTFOLIO
HOLISTIC PARTNERSHIP MODEL BRANDED & BESPOKE PRODUCT SOLUTIONSCollaboration with our customers
and working with their suppliersExpertise secondment
InsightsGlobal Technology CentresNutrition Discovery CentresState-of-the-Art pilot plants
Equipment knowledge and expertiseCommercialisation process
Nutritional & Functional Taste Solutions
Systems: Dairy | Culinary | Meat | Cereal & Sweet |Beverage
From authentic source
OUR PEOPLE: CHEFMANSHIP & APPLICATION EXPERTISE
Chef to chefBaristas and mixologists
Channel & market specialists
Global and RegionalFood and BeverageTurnkey solutions
Growth StrategiesOrganic and acquisitive
• Winning with rapidly growing key regional CPG and retail
players
• Aggressive expansion in Foodservice Channel with global,
regional and independent players (Brands)
• Expand and leverage our industry leading consumer-centric
customer application & product process technology
Infrastructure
• On-going strategic deployment of our unique Kerry authentic
Taste & Nutrition solutions business model
2018
€1.4bn2018-2022
CAGR
+10%
Targets for Growth
APMEA
Greater ChinaIndiaIndonesiaMalaysiaPhilippinesThailand
EUROPE
RussiaEastern Europe
AMERICAS
BrazilMexicoCentral AmericaSouthern ConeAndean
VietnamSouth AfricaWest & East AfricaNigeriaMiddle EastTurkey
Global Market Leader in Developing Markets
© Kerry 2019 | 20
In our industry we are the
largest and
fastest growing
Consumer FoodsKerry Foods is a market leading supplier of added-value branded and customer branded chilled food products to the Irish, UK and selected international markets
€1.3bn
Revenue in 2018
The Kerry Foods portfolio of consumer branded products includes over 20 high profile brands across three major market sectors. Meat & Savoury Products, Meal Solutions and Dairy Products
Consumer Foods at a Glance
© Kerry 2018 | 22
Category Brands & Customers Channels
FOOD-TO-GOEVERYDAY FRESH
CONVENIENCE MEALSOLUTIONS
ONLINE
OUT OF HOME
SUPERMARKETS
CONVENIENCE/ HIGH STREET
Diversified Product Portfolio
© Kerry 2018 | 23
Category Key Products Market Positions
EVERYDAY FRESH(Meat and Dairy)
€11.5bn
CONVENIENCE MEAL SOLUTIONS
€4.4bn
FOOD TO GO
€15bn
• #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
• #1 Kids Cheese Snack Brand in GB
• #1 Meats Snack Brand in GB
No.1position
across our categories
Emerging Leader in
Food to go
Delivering Growth via Innovation for Today’s Marketplace
© Kerry 2018 | 24
Authentic TastesNew Health : Free From, Natural and Clean Living
Convenience
Leveraging Key Consumer Trends
25
SustainabilityKerry is committed to the highest standards of business and ethical behaviour and to fulfilling our responsibilities to the communities which we serve and to the creation of long term value for all stakeholders on a socially and environmentally sustainable basis
Environmental Sustainability
Marketplace Sustainability
Workplace Sustainability
Community Sustainability
Our Sustainability Framework
www.kerrygroup.com/sustainability
Sustainability Governance
© Kerry 2019 | 26
Environment
Kerry Sustainability Council
Marketplace Workplace Community
Chief Executive
Board of Directors
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
2727© Kerry Group 2019 |
‘Towards 2020’ – Key Highlights 2018
Sustainability Pillars
Climate Change Resource EfficiencyWaste Reduction
Nutrition & HealthResponsible SourcingProduct Quality
Our PeopleBusiness Ethics Health & Wellbeing
Social ImpactEconomic DevelopmentShared 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
LEARNING &
DEVELOPMENT
Courses completed
SPECIAL OLYMPICS
New partnership to support
athletes over
CONCERN RAIN PROGRAMME
Commitment to tackling
malnutrition
16.4% €275m 8% €1m
22.7% 100% >102,000 2 YEARS
Environmental Sustainability
Marketplace Sustainability
WorkplaceSustainability
CommunitySustainability
Group Medium Term Targets (2018 – 2022)On average across the 5 years
© Kerry 2019 | 28*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)
GrowthVolume 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.
ReturnROACE 12%+ Cash conversion >80%
Relative TSR – outperforming peers