disclaimer: forward looking statements · consumer, customer, sensory & analytical, market and...

IntroductionPresentationNOVEMBER 2019

© Kerry Group 2019 |

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.

2

© Kerry Group 2019 | 3

Kerry GroupAt a Glance

3© Kerry Group 2019 |


Kerry Group At a Glance

Figures as of FY 2018 | Enterprise Value as of 1-11-2019 4

147PRODUCTION

LOCATIONS

€21bnENTERPRISE

VALUE

25,000+EMPLOYEES

€6.6 billionREVENUE

80%TASTE &

NUTRITION

20%CONSUMER

FOODS

€806 millionTRADING PROFIT

89%TASTE &

NUTRITION

11%CONSUMER

FOODS

140SALES IN OVER

140 COUNTRIES


Kerry – Our Food and Beverage Heritage

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

+ +

5


Consistent Financial Delivery

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 6

337

6,608

0.48

70.20

7.6

353.4

14

806Revenue 1986-2018 (€m) Trading Profit 1986-2018 (€m)

Adjusted EPS* 1986-2018 (cent) Dividend 1986-2018 (cent)

+17%CAGR

+14%CAGR

+13%CAGR

+10%CAGR


Our Business Model

7

Integrated Solutions

Multiple Ingredients

Single Ingredient Offering

Value-add

Foundational Technologies

Drivers of Value-add

Culinary & Insights

Development & Applications

Product Process Technologies

Adding Value by offering so much more to our customers


Kerry Business Model

8

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

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

Kerry Foresight & InsightConsumer, Customer, Sensory & Analytical, Market and Regulation

Integrated Technology Value Creation

Product Process Technologies

Development & Applications

Culinary & Insights

Meat

Dairy

Meals

Snacks

Retail

Food Service

Beverage

Bakery & Confectionery

Cereal & Sweet

Pharma

Taste & Nutrition Solutions


Strategic Priorities for Growth

9

Authentic Taste

Taste & NutritionConsumer

Foods

Nutrition, Wellness &

Functionality

Developing Markets

Core

Adjacencies

NEW OCCASIONS

NEW CHANNELS

NEW CUSTOMERSFoodservice


Group Medium Term Targets (2018 – 2022)

*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)

10

Volume 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.

ROACE 12%+ Cash conversion >80%

Relative TSR – outperforming peers

Growth

Return

On average across the 5 years


Taste & Nutrition



52%AMERICAS

Taste & Nutrition At a Glance – Revenue %

End Use Market Channel Developed &

Developing View

21%APMEA

27%EUROPE

73%DEVELOPED

27%DEVELOPING

TOTAL FOOD

69%

BAKERY & CONFECTIONERY

11%

MEAT

17%

BEVERAGES

26%

CEREAL, SWEET & OTHER

10%

MEALS

13%

DAIRY

10%

SNACKS

8%

PHARMA

5%

FOODSERVICE CHAIN

16%

TOTAL FOODSERVICE

27%

FOODSERVICE INDEPENDENT OPERATORS

9%

RETAIL

73%

FOODSERVICE CONVENIENCE

2%

12


Today Kerry is Positioned to Play Right Across the Global Marketplace

Source: Kerry Internal Estimates, Euromonitor, RTS Food Trending, MC Allegra, Technomic, GlobalData 13

Food€2.2TN

Beverage€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

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


Diversified Product Portfolio

14

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


Our Markets

15

The consumer is at the centre of everything we do

Kerry is a consumer-led organisation.

Our business model, structures and

strategies continue to evolve, centred

around a deep understanding of

diverse local consumer preferences

across the globe


Kerry Taste & Nutrition – Our Unparalleled Go-To-Market Footprint

16

2Global Technology & Innovation Centres

6Regional Technology

& Application Centres

68RD&A Locations &Commercial Hubs

No.1INVESTMENT IN R&D

Naas

Beloit

Campinas

San Juan del Rio

Durban

Shanghai

Singapore

Bangalore


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



Meeting Customer Clean Label Expectations

18

ReplaceTo replace ingredient(s) with clean label alternatives while retain key functionality, taste and/or nutrition profiles in their products

• Natural flavours, colours, preservatives and sweeteners

RepositionCustomers asking for creative ways to reposition products in the marketplace

• Product positioning and format

• Packaging, culinary processing

• Small batch, home-cooked, authentic

ReduceTo leverage clean label technologies to reduce specific ingredients and simplify product ingredient statements

• Natural ingredients that are multi-functional

• Sugar and sodium reduction

Underpinned by understanding of the science and

regulation of clean label ingredients

ReinventNatural brand customers looking to scale their business, while maintaining their identity

Certified Organic | Non-GMO

RemoveTo eliminate specific ingredient(s)

• 'No-No’ lists

• BPA free

• BHT free


Strategic Priorities for Growth

19

Authentic Taste

Taste & NutritionConsumer

Foods

Nutrition, Wellness &

Functionality

Developing Markets

Core

Adjacencies

NEW OCCASIONS

NEW CHANNELS

NEW CUSTOMERSFoodservice


Consumer Foods



Consumer Foods At a Glance

21

FOOD TO GO

CONVENIENCE MEAL SOLUTIONS

EVERYDAY FRESH

Category

SUPERMARKETS

CONVENIENCE/ HIGH STREET

Channels

ONLINE

OUT OF HOME

Brands & Customers


Diversified Product Portfolio

22

Category Key Products Market Positions

EVERYDAY FRESH(Meat and Dairy)

€9.0bn

CONVENIENCE MEAL SOLUTIONS

€4.0bn

FOOD TO GO

€15.7bn

• #1 Sausage Brand in GB

• #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 Snacking brand in GB

(combined Kids Cheese and Meat category)

No.1position

across our categories

Emerging Leader in

Food to go


Strategic Growth Priorities and Targets on average volume growth across the 5 years

23

Current Winning Positions

1-2%Grow and outperform in our

No.1 positions

MeatMealsDairy

Core

Future Winning Positions

Snacking Out of Home Food to go Solutions

Expand our footprint into

Adjacencies

New occasions

New channels

New customers

Deep Consumer Insight

Leading Edge Innovation

Market Responsive Teams

Engaged Customer Networks

+10%


Appendix



Sustainability Governance

25

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


Environmental Performance

26

126%

Target Achieved

94%

Target Achieved

189%

Target Achieved

Focus Area Carbon Water Waste Waste to Landfill

2015-2020 Target -13.0% -7.0% -12.0% 0%

2018 Performance -16.4% -6.6% -22.7% 90% diverted

90%

Target Achieved

© Kerry Group 2019 | 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

RAIN PROGRAMME

Commitment to tackling

malnutrition

16.4% €275m 8% €1m

22.7% 100% >102,000 2 YEARS

Environmental Sustainability

Marketplace Sustainability

WorkplaceSustainability

CommunitySustainability


Accelerating Consumer Change – Impacting End-to-end Supply Chain

Source: Mintel, Euromonitor, Global Data, Innova and Kerry Insight 2019 28

Food for Life & Wellbeing• Proactive nutrition • Reduced sugar, salt, fat • Clean & natural • Protein redefined

New Taste Experiences• New world taste• Localisation

Trust is Core• Transparency to green label • Brands with purpose

‘Made-for-me’• Bespoke multi-sensorial experiences • Next generation snacking• Personalised and positive nutrition• Delivery to door

Consumer Revolution Driving Customer Transformation Reshaping Industry

Managing Accelerating Fragmentation • Shorter product development cycles• Innovation to meet personal needs• Tailored brand proposition • Convenience – new packaging formats• Incubation hubs

Being Trusted• Ingredient provenance• Ethical brands• Sustainability central to strategy

Digital Transformation• New age digital connectivity • Growth of virtual start-ups

Supply Chains Being Redefined• More streamlined supply chains• Shorter lead times• Greater collaboration across value chain

Manufacturing Needs Evolving• Multi technology manufacturing network• Localisation of footprint• Process technology flexibility

Organisational Agility Critical• Integrated solutions portfolio• New service models for fragmenting

customer base• Culture and mindset

Integrated Innovation Processes• Locally led, globally connected innovation• Holistic partnerships• Shorter product development cycles• Innovation outsourcing

Elevated Nutrition that Tastes Great• Elevation of nutrition• Sophistication of taste• Authentic and natural


Kerry Group Worldwide

29

Manufacturing Footprint

AustraliaBelarusBrazilCanadaChinaCosta RicaDenmarkEl SalvadorFranceGermanyGuatemalaIndiaIndonesiaIrelandItalyMalaysia

MexicoNetherlandsNew ZealandOmanPanamaPhilippinesPolandRussiaSaudi ArabiaSouth AfricaSouth KoreaSpainThailandTurkeyUKUSA

900+ scientists with expertise across all disciplines in food science and engineering

Serving our customers’ needs everyday

Global Headquarters

Global and Regional Technology & Innovation Centres

Manufacturing Plants

Sales Offices

Campinas

San Juan del Rio

Shanghai

SingaporeBangalore

Beloit

NaasTralee

Durban


Shareholder Analysis

Shares in issue at 1 November 2019: 176,502,486 30

North America 20%

UK 15%

Continental Europe | Rest of World 23%

Ireland 2%

Institutional Analysis

Retail 27%

Kerry Co-operative 13%Institutions 60%

IntroductionPresentationNOVEMBER 2019

disclaimer: forward looking statements · consumer, customer, sensory & analytical, market and...

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