Kerry Group Plc · EURONEXT:KRZ
Kerry — Investor Day (October 2024)
42 slides from Kerry's investor day presentation, Oct 8, 2024
Slide 1: Where Science Drives Impact: Kerry Investor Day
The Future of Sustainable Nutrition Where SCIENCE DRIVES IMPACT Kerry Investor Day 8 October 2024
Slide 2: Disclaimer: Forward Looking Statement
Disclaimer: Forward Looking Statement This presentation may contain forward looking statements with projections regarding, among other things, the Group’s strategy, revenues, earnings, EBITDA, EBITDA margin, finance costs, tax rate, capital expenditure, dividends, share buybacks, cash flow, net debt
Slide 3: Edmond Scanlon, CEO, Kerry Group
EDMOND SCANLON CEO, Kerry Group © Kerry 2024 | 3
Slide 4: Key Takeaways
Key Takeaways 1 AMERICAS The Winning Model 2 FOODSERVICE A Structural Tailwind 3 EMERGING MARKETS Winning Locally 4 PENETRATION GROWTH OPPORTUNITY Greater Than Ever 5 TECHNOLOGY PORTFOLIO EVOLUTION Positioned for Growth © Kerry 2024 | 4
Slide 5: Our Vision: Customers' Most Valued Partner
Our Vision To be Our Customers’ Most Valued Partner, Creating a World of Sustainable Nutrition 21,000+ employees €8.0bn Foodservice Group Revenue 1,200+ R&D scientists 137 manufacturing facilities KEY Emerging GROWTH DIFFERENTIATORS Markets 70+ €1.2bn technology and innovation centres Group EBITDA S
Slide 6: A Well-balanced, Diversified Global Business
Taste & Nutrition – The Leader in Integrated Solutions A Well-balanced, Diversified Global Business END USE CUSTOMER GLOBAL GEOGRAPHY CHANNEL MARKET TYPE MARKETS Americas Food Meat Global Retail Developed Europe Beverage Snacks Regional Foodservice Emerging APMEA Pharma & Other Dairy Local Bakery Me
Slide 7: Dynamic Market with Significant Penetration Growth Opportunity
Dynamic Market with Significant Penetration Growth Opportunity Our growing MARKET PENETRATION OPPORTUNITY €85 BILLION • Nutritional enhancement speciality ingredients and • Cleaner labels flavours markets today. • Sustainability enhancement • Cost reduction solutions €15bn+ CONSUMER DYNAMICS • Healt
Slide 8: Market Penetration Opportunity – Examples
Market Penetration Opportunity – Examples SODIUM SUGAR SUSTAINABILITY REDUCED COST REDUCTION REDUCTION ENHANCEMENTS & COMPLEXITY ~ 30% 5X 20% 25%+ REDUCTION GROWTH INCREASE INCREASE required to reach in low/no sugar in sustainability in US foodservice wage WHO guidelines compared to a standard produ
Slide 9: Your Experience Today: Deep Dive Sessions
Your Experience Today Deep Dive Sessions Emerging Biotechnology Foodservice Taste Markets Solutions A structural A global leader Winning with Redefining tailwind pioneering taste local taste and discovery and for Kerry of the future sustainable applications nutrition
Slide 10: Foodservice – Our History and Track Record
Foodservice – Our History and Track Record Exceptional business growth and Consistent market outperformance expansion in under 25 years ~5% ~3% €2.1bn 2023 2%+ ~€150m 2000 Market Kerry Kerry Volume Growth Outperformance Volume Growth Kerry Foodservice Channel Revenue 2017-2023 Source: Kerry market a
Slide 11: Foodservice – A Structural Tailwind: Why?
Foodservice – A Structural Tailwind WHY? Highly dynamic market With increasing customer Leading to increased market innovation needs outperformance • 56% US food budget spent on • Increased menu innovation food away from home • 52% increase in LTOs since 2019 4%+ • 50,000 p.a. new restaurant • Incre
Slide 12: Foodservice – A Structural Tailwind: How?
Foodservice – A Structural Tailwind TECHNOLOGY BUSINESS INNOVATION PORTFOLIO MODEL HOW? Breadth & depth Longstanding PARTNERSHIPS Deeply embedded & dedicated
Slide 13: What Differentiates Kerry in Taste
Taste – A Global Leader, Pioneering Taste of the Future What Differentiates Kerry in Taste Leading For food, Pioneering authentic from food innovation taste portfolio capability Portfolio of differentiated Crafting taste experiences that Using proprietary fermentation Taste technologies, vertically
Slide 14: Emerging Markets – Our Winning Local Model
Emerging Markets – Our Winning Local Model Strong track record Scale and Portfolio driving A winning team in emerging markets infrastructure positive impact 8% 9,000+ employees Local taste Volume CAGR 500+ R&D scientists Nutrition €2.2bn 36 RD&A centres Customised solutions €1.3bn 44 manufacturing f
Slide 15: Why Biotechnology?
Why Biotechnology? Growing Global Finite natural Sustainably Clean Label Clean Label Functional Population resources Produced Preservation Emulsification Protein Solutions INDUSTRY Supply Chain BIOTECHNOLOGY Taste BIOTECHNOLOGY CHALLENGES Resilience Modulation SOLUTIONS SOLUTIONS €1.3BN Personalised
Slide 16: Albert McQuaid, Chief Science & Technology Officer
ALBERT MCQUAID Chief Science & Technology Officer, Kerry Group © Kerry 2024 | 16
Slide 17: Solving Customers' Challenges with Science-backed Solutions
Solving Our Customers’ Challenges with Science-backed Solutions MARKET DYNAMICS TECHNOLOGIES Recognised Natural Natural Extracts Ingredients Sweet & Salt Modulation Enhanced Nutrition SCIENCE-BACKED Enzymes Health Need States SUSTAINABLE NUTRITION Fermentation SOLUTIONS Food Waste Natural & Conventi
Slide 18: Leading Research, Development & Applications Capabilities
Leading Research, Development & Applications Capabilities 22 33 70+ €3bn+ End Use Markets Technology Core Development and & Innovation Technologies Applications Centres Centres Globally investment in science and technology eco-system1 OUR GLOBAL SCIENCE AND TECHNOLOGY ECO -SYSTEM 1,200+ 200+ 1,400+
Slide 19: Blending Science and Technology Expertise
Leading Research, Development & Applications Capabilities Blending science and APPLICATION technology expertise to INNOVATION Proactive & Reactive Innovating for Today pioneer sustainable solutions that will nourish generations to come. OPEN INNOVATION Innovating Together Evolving Innovating Today f
Slide 20: Research, Development & Applications: Focus Areas
Leading Research, Development & Applications Capabilities Focus Areas Taste Biotechnology • Microbial Fermentation • Natural Extracts ✓ Enzymes • Modulation ✓ Peptides & Organic Acids • Dairy & Non-Dairy ✓ Probiotics, Postbiotics & Bioactives • Smoke & Reaction • Antimicrobial Extracts • Encapsulati
Slide 21: Kerry: Where Science Drives Impact
KERRY WHERE SCIENCE DRIVES IMPACT
Slide 22: Oliver Kelly and Elizabeth Horvath
OLIVER KELLY CEO North America ELIZABETH HORVATH VP Marketing North America © Kerry 2024 | 22
Slide 23: North America is a Highly Dynamic, Energised Marketplace
North America is a Highly Dynamic, Energised Marketplace INDUSTRY LARGEST CONSUMER RESPONSE TO ECONOMY IN DRIVE TO INNOVATION THE WORLD EXPERIMENT & RENOVATE Food and beverage is Nearly 30,000 new food Reformulations among the largest innovations launched accounting for 2/3 of industries in the coun
Slide 24: Taste & Nutrition – Our Business in North America
Taste & Nutrition – Our Business in North America Largest region for Kerry Strong presence Strong track record in North America >6,000 ~3% €3.1bn Volume employees CAGR €1.1bn North America 49 Manufacturing Europe, APMEA, LATAM €3.1bn locations North America business 2008 2023 Financials per FY2023 ©
Slide 25: A Well-balanced, Diversified Business
Taste & Nutrition North America – The Leader in Integrated Solutions A Well-balanced, Diversified Business END USE CUSTOMER CHANNEL MARKET TYPE Food Meat Global Foodservice Beverage Snacks Local and Regional Retail Pharma & Other Dairy • Large and Mid-size Brands • Emerging Brands Bakery • Private l
Slide 26: Playing in the Right Channels & Categories for Above Market Growth
We are Playing in the Right Channels & Categories to Achieve Above Market Growth of our foodservice business is in segments outperforming the channel of our snack business is within the better-for-you segment, outperforming the category by 2x of our meat business is in poultry, consumed 2x more and
Slide 27: Primed to Capture Innovation and Reformulation Opportunities
And are Primed to Capture Innovation and Reformulation Opportunities We’ve seen a 40% growth in foodservice LTO wins within our business in the last 2 years Over the last two years, we have won new business with 19 out of the top 20 foodservice chains Exponential growth in our pipeline with retailer
Slide 28: North America is the Largest Region for Kerry
North America is the Largest Region for Kerry 1 Playing in attractive categories and channels 2 Winning with customers outperforming their peers 3 A consistent track record of winning share in new product innovations 4 A deep portfolio and applications expertise aligned to reformulation activity © K
Slide 29: Our Customer Access is Unparalleled
OUR CUSTOMER OUR OUR FUTURE ACCESS IS RELATIONSHIPS IS BRIGHT UNPARALLELED ARE DEEP
Slide 30: Marguerite Larkin, CFO, Kerry Group
MARGUERITE LARKIN CFO, Kerry Group © Kerry 2024 | 30
Slide 31: Key Messages
Key Messages 1 2 3 STRONG TRACK GROWTH-LED, DISCIPLINED, RECORD BALANCED MODEL STRATEGIC CAPITAL ALLOCATION © Kerry 2024 | 31
Slide 32: Our Long-term Track Record of Growth
Our Long-term Track Record of Growth €8.0bn €1.2bn REVENUE EBITDA 9% 12% CAGR CAGR €337m €20m 1986 2023 1986 2023 430.1c 115.4c ADJUSTED EARNINGS PER SHARE DIVIDENDS PER SHARE 12% 16% CAGR CAGR 7.6c 0.48c 1986 2023 1986 2023 37 year CAGR (1986 – 2023) © Kerry 2024 | 32
Slide 33: Our Growth-led, Balanced Model
Our Growth-led, Balanced Model Growth Return Sustainability Volume Growth Cash Conversion Carbon Reduction Food Waste EBITDA Margin ROACE Nutritional Reach © Kerry 2024 | 33
Slide 34: Volume Growth – Supported by Strong Strategic Positioning
Volume Growth – Supported by Strong Strategic Positioning Taste & Nutrition volume growth Channels Geographies 6% Foodservice Emerging 4% 4% ~5% ~8% Retail Developed ~3% ~2% 3 Year 5 Year 10 Year CAGR CAGR CAGR Volume CAGR: 2017-2023 © Kerry 2024 | 34
Slide 35: Margin Progression and Continued Expansion Opportunity
Margin Progression and Continued Expansion Opportunity Taste & Nutrition EBITDA margin progression Further Margin Expansion 20%+ Opportunities Price inflation Impact ~18% 19%+ 17% ~100bps 2023 2024 argin 2024e Operating Leverage ccelerate rogramme 202 pansion roduct i Cost nitiatives Taste utrition
Slide 36: Strong Free Cash Flow and Increasing Returns
Strong Free Cash Flow and Increasing Returns Free Cash Flow ROACE Cash Conversion ~90% 92% 80%+ 10–12% 10.5% 10.3% 10.3% Target 10.0% Target range €701m 82% € 40m 84% €5 m 2021 2022 2023 2024e 2021 2022 2023 H1 2024 © Kerry 2024 | 36
Slide 37: Our Sustainability Commitments
Our Sustainability Commitments SCOPE 1 & 2 PEOPLE REACHED REDUCTION IN WITH SUSTAINABLE CARBON REDUCTION FOOD WASTE NUTRITION SOLUTIONS 48% reduction in 2023 39% reduction in 2023 1.25 billion people vs 2017 baseline vs 2017 baseline reached in 2023 55% 50% Target to reach over Target reduction Targ
Slide 38: Capital Allocation Priority Framework
Capital Allocation Priority Framework Capital Reinvestment Capital Returns 1st Capital Investment Dividends 2nd 4-5% of revenue Double-digit growth M&A Share Buybacks 3rd Disciplined strategic approach Evaluate ongoing based on market conditions 4th and strategic alternatives Supported by a Strong F
Slide 39: Key Messages
Key Messages 1 2 3 STRONG TRACK GROWTH-LED, DISCIPLINED, RECORD BALANCED MODEL STRATEGIC CAPITAL ALLOCATION © Kerry 2024 | 39
Slide 40: Appendix
APPENDIX © Kerry 2024 | 40
Slide 41: Financial Metric Definitions
Financial Metric Definitions Volume Growth Free Cash Flow This represents the sales performance year-on-year excluding pass- Free cash flow is EBITDA plus movement in average working capital, through pricing on input costs, currency impacts, acquisitions (net of capital expenditure net (purchase of
Slide 42: Where Science Drives Impact: Kerry Investor Day
The Future of Sustainable Nutrition Where SCIENCE DRIVES IMPACT Kerry Investor Day 8 October 2024 © Kerry 2024 | 42