october 2017 afternoon session - kerry groupweb)-afternoon.pdf · 2017. 10. 11. · afternoon...
TRANSCRIPT
![Page 1: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/1.jpg)
October 2017
Afternoon Session
![Page 2: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/2.jpg)
Chief Financial Officer
![Page 3: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/3.jpg)
Consistent Delivery in a Volatile and Changing Environment
• Delivering growth AND margin expansion
• Developing business portfolio
• Leading in managing change
• Working through currency volatility
• Managing raw material volatility
• Increasing consumer fragmentation
Market Kerry 2012 2013 2014 2015 2016
AUD BRL GBP CAD MYR MXN RUB ZAR USD
2012 2016
Sources: Kerry estimates, ECB FX rates, FAO annual food price index © Kerry 2017 | 3
![Page 4: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/4.jpg)
Progress vs Current Strategic Plan
© Kerry 2017 | 4
Adjusted EPS growth 10%+ +8.4% +9.8%constant currency
Volume growth 3% to 5%** +3.2% ✓
Margin expansion +50 bps*** +70 bps ✓
ROACE 12%+ 13.8% ✓
ROAE 15%+ 17.7% ✓
CFROI 12%+ 11.5% –
Realising Group Targets
* Assumes neutral currency and raw materials | ** Assumes market growth of 2% - 3% p.a. | *** Includes 100 bps benefit arising from the Kerryconnect project
Adjusted EPS, ROACE & ROAE are calculated before brand related intangible asset amortisation and non-trading items (net of related tax)
![Page 5: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/5.jpg)
Consistent Delivery: Growth AND Return
* Before brand related intangible asset amortisation and non-trading items (net of related tax) © Kerry 2017 | 5
142.4 151.8163.9
192.1213.4
234.0257.9
278.9301.9
323.4
0
50
100
150
200
250
300
350
400
0%
2%
4%
6%
8%
10%
12%
14%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
EPS* ROACE*
ROACE* % EPS* CENT
![Page 6: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/6.jpg)
2018 - 2022
![Page 7: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/7.jpg)
© Kerry 2017 | 7
• Authentic taste• Nutrition, Wellness
& Functionality• Foodservice• Developing markets
• Operating leverage• Portfolio evolution• KerryExcel
• Consistent returns• Strong cash conversion• Disciplined capital
allocation
![Page 8: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/8.jpg)
Strategic Targets (2018 – 2022)On average across the 5 years
© Kerry 2017 | 8
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
Adjusted EPS Growth* 10%+ p.a.
ROACE 12%+ Cash Conversion > 80%
Relative TSR – Outperforming Peers
*Assumes constant currency 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)
![Page 9: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/9.jpg)
© Kerry 2017 | 9
• Authentic taste• Nutrition, Wellness
& Functionality• Foodservice• Developing markets
• Operating leverage• Portfolio evolution• KerryExcel
• Consistent returns• Strong cash conversion• Disciplined capital
allocation
![Page 10: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/10.jpg)
Strategic Targets (2018 – 2022)On average across the 5 years
© Kerry 2017 | 10
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
Adjusted EPS Growth* 10%+ p.a.
ROACE 12%+ Cash Conversion > 80%
Relative TSR – Outperforming Peers
4% to 6% p.a.
2% to 3% p.a.
3% to 5% p.a.**
*Assumes constant currency 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)
![Page 11: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/11.jpg)
Taste & Nutrition - Strategic Priorities for Growth
© Kerry 2017 | 11
![Page 12: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/12.jpg)
Kerry Business Model – Delivering Above Market Growth Rates
© Kerry 2017 | 12* On average across the 5 years
![Page 13: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/13.jpg)
© Kerry 2017 | 13
Consumer Foods: Strategic Priorities for GrowthOn average volume growth across the 5 years
![Page 14: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/14.jpg)
© Kerry 2017 | 14
• Authentic taste• Nutrition, Wellness
& Functionality• Foodservice• Developing markets
• Operating leverage• Portfolio evolution• KerryExcel
• Consistent returns• Strong cash conversion• Disciplined capital
allocation
![Page 15: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/15.jpg)
Strategic Targets (2018 – 2022)On average across the 5 years
© Kerry 2017 | 15
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 40 bps p.a.
** Assumes 2% above market growth
Adjusted EPS Growth* 10%+ p.a.
ROACE 12%+ Cash Conversion > 80%
Relative TSR – Outperforming Peers
40 bps p.a.
20 bps p.a.
30 bps p.a.
*Assumes constant currency 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)
![Page 16: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/16.jpg)
Margin Drivers
© Kerry 2017 | 16
• Manufacturing excellence
• Supply chain excellence
• Commercial excellence
• Service excellence
• New foundation technologies
• New markets
• New channels / geographies
• Manage churn with agility
• Fragmentation response
• Localisation of footprint
• Increased R&D
• Kerryconnect/Business Services
• Leverage 1 Kerry platform
• Leverage routes to market
• Leverage customer centres
• Leverage footprint
![Page 17: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/17.jpg)
Kerryconnect Programme – Built for Scale
* ICT cost expressed as a % of revenue © Kerry 2017 | 17
T&N EMEA
T&N Asia-Pacific
Foods (phase 1)
Corporate
2015 – 2017 acquisitions
New cloud platform
Foods (phase 2)
Cloud migration
T&N Latin America
T&N North America
Foods (phase 2)
![Page 18: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/18.jpg)
© Kerry 2017 | 18
• Authentic taste• Nutrition, Wellness
& Functionality• Foodservice• Developing markets
• Operating leverage• Portfolio evolution• KerryExcel
• Consistent returns• Strong cash
conversion• Disciplined capital
allocation
![Page 19: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/19.jpg)
Cash Conversion Target > 80% On average across the 5 years
* Expressed as a percentage of adjusted earnings after tax © Kerry 2017 | 19
![Page 20: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/20.jpg)
© Kerry 2017 | 20
3%-5% of revenue
Continuing to lead industry consolidation
Double digit growth in dividends
Capital Allocation Decision Framework
Reinvestment Returning cash to shareholders
Grow in line with revenue
![Page 21: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/21.jpg)
Disciplined M&A
© Kerry 2017 | 21
Consumer, Customer, Sensory & Analytical, Market and Regulation
![Page 22: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/22.jpg)
© Kerry 2017 | 22
Other Matters
![Page 23: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/23.jpg)
Other Matters
© Kerry 2017 | 23
![Page 24: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/24.jpg)
Brexit – Sterling Mitigation Plans Well Progressed
© Kerry 2017 | 24
![Page 25: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/25.jpg)
Structure Change – Taste & Nutrition
© Kerry 2017 | 25
![Page 26: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/26.jpg)
Strategic Targets (2018 – 2022)On average across the 5 years
© Kerry 2017 | 26
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
Adjusted EPS Growth* 10%+ p.a.
ROACE 12%+ Cash Conversion > 80%
Relative TSR – Outperforming Peers
*Assumes constant currency 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)
![Page 27: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/27.jpg)
© Kerry 2017 | 27
Leading to Better
![Page 28: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/28.jpg)
© Kerry 2017 | 28
![Page 29: October 2017 Afternoon Session - Kerry GroupWeb)-Afternoon.pdf · 2017. 10. 11. · Afternoon Session. Chief Financial Officer. Consistent Delivery in a Volatile and Changing Environment](https://reader036.vdocuments.mx/reader036/viewer/2022071114/5feb25a47c3fbe04bd6a3940/html5/thumbnails/29.jpg)
October 2017