Kerry Group Plc · EURONEXT:KRZ
Kerry — FY 2021 Earnings Presentation
37 slides from Kerry's earnings presentation, Feb 16, 2022
Slide 1: FY 2021 Preliminary Statement of Results
Slide 2: Disclaimer: Forward Looking Statements
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, n
Slide 3: Preliminary Statement of Results 2021
Preliminary Statement of Results 2021 1 Review of Business 2 Financial Review 3 Future Prospects Edmond Scanlon Marguerite Larkin Chief Executive Officer Chief Financial Officer © Kerry 2022 | 3 |
Slide 4: Good Finish to a Year of Strong Growth and Business Development
Good Finish to a Year of Strong Growth and Business Development Strong Volume Growth Across Our Channels With Strategic Developments 8.0% 7.6% Strategic Portfolio Developments Q4 FY Group Volume Growth New Durban, South Africa facility Capital Markets Day © Kerry 2022 | 4 |
Slide 5: Taste & Nutrition
Taste & Nutrition Strong growth in retail channel, with foodservice volumes finishing the year above 2019 levels FY 2021 Performance Revenue €6,273m +8.3%¹ EBITDA margin 17.5% Trading margin 14.6% T&N Volume Growth → Retail channel delivered strong growth led by Beverage, Meat and Bakery → Foodservi
Slide 6: Taste & Nutrition – End Use Markets
Taste & Nutrition – End Use Markets +11% +14% Performance by EUM +4% Beverage EUMs – excellent performance supported by foodservice channel recovery Taste & Nutrition +4% and innovations in proactive nutrition, authentic taste and plant-based +10% End Use Market 1 Food EUMs overall strong growth dri
Slide 7: Taste & Nutrition Business Performance by Region
Taste & Nutrition Business Performance by Region Americas Europe APMEA €3.2bn €1.6bn €1.4bn +6.7% +9.9% +11.3% → North America retail growth led by → Retail delivered strong growth led by → Retail delivered excellent growth Beverage, Bakery and Meat Meat, Bakery and Dairy led by Meat, Beverage and B
Slide 8: Consumer Foods
Consumer Foods Strong volume growth | Significant change in business from sale of Meats & Meals portfolio FY 2021 Performance Revenue €1,144m¹ +6.0%¹ EBITDA margin 8.7% Trading margin 7.2% → Volume – strong growth across the business → Pricing of 0.5% reflective of increases in input costs and marke
Slide 9: Financial Review
2021 Financial Review Marguerite Larkin Chief Financial Officer © Kerry 2022 | 9 |
Slide 10: 2021 Financial Overview
2021 Financial Overview Revenue €7.4bn 8.0% volume growth EBITDA €1.1bn 14.7% EBITDA margin 9.8% reported growth Trading profit €876m 11.9% trading margin (+40bps) 12.1% constant currency growth Adjusted EPS 380.8c 10.2% reported growth Basic EPS 430.6c FY 2020: 313.0 cent ROACE 9.9% FY 2020: 9.8% F
Slide 11: Group Revenue Analysis
Group Revenue Analysis 2020 2021 €6,953m €7,351m 5.7% Volume Volume Translation Acquisitions currency 3.6% 8.0% / Disposals (1.8%) (1.7%) Price 1.2% © Kerry 2022 | 11 |
Slide 12: Group Revenue Breakdown
Group Revenue Breakdown Group Revenue 2021 Taste & Nutrition Volume Performance by Channel +8.0% Retail +5.4% Foodservice +18.0% +8.3% €7.4bn 6.8% 82% 6% €6.3bn 5% 4% +6.0% 14% 10.1% (8%) €1.1bn Group Consumer Taste & Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Foods Nutrition Reported Revenue Volume Growth © Kerry 202
Slide 13: Group Trading Margin Breakdown
Group Trading Margin Breakdown €876m €797m 2020 Operating Leverage Net Price KerryExcel - Currency Acquisitions 2021 / Portfolio Mix Net Efficiencies / Disposals / Supply Chain¹ / Investments Trading 11.5% 0.6% (0.2%) (0.1%) 0.0% 0.1% 11.9% Margin © Kerry 2022 | 13 | ¹ Represents >10 bps adverse imp
Slide 14: Free Cash Flow
Free Cash Flow 2021 2020 €m €m Trading profit 876 797 Depreciation (net) 201 201 Movement in average working capital (38) (103) Pension contributions paid less pension expense (15) (23) Finance costs paid (net) (71) (74) Income taxes paid (72) (75) Purchase of non-current assets (315) (311) Free cas
Slide 15: Strong Credit Metrics with Long Debt Maturity Profile
Strong Credit Metrics with Long Debt Maturity Profile Maturity Profile of Net Debt Total Net Debt of €2.1bn €977m Undrawn €661m €1.1bn €747m €744m RCF 2021 2022 2023 2024 2025 2026 2029 2031 €1,005m Weighted average maturity of 5.7 years Key Credit Metrics 2021 2020 Net debt: EBITDA 2.0x 1.9x EBITDA
Slide 16: Updated Reporting Segments commencing Q1 2022
Updated Reporting Segments commencing Q1 2022 1 2021 Pro-forma Revenue: The updated reporting segments reflect the disposal of the Consumer Foods Meats and Meals business (2021 reported revenue €0.7bn) on a pro-forma basis. Within Taste and Nutrition, the dairy processing activities in Ireland have
Slide 17: Other Financial Matters
Other Financial Matters Kerryconnect North America deployment scheduled to complete in H1 2022 Finance Costs Decrease of €2m to €70m primarily due to lower interest rates Pension Net surplus of €56m primarily driven by strong asset returns Profit on disposal of Consumer Foods Meat and Meals business
Slide 18: Outlook and Future Prospects
Outlook and Future Prospects Edmond Scanlon Chief Executive Officer © Kerry 2022 | 18 |
Slide 19: Acquisitions Strongly Aligned to Strategy
Acquisitions Strongly Aligned to Strategy © Kerry 2022 | 19 |
Slide 20: Strategic Acquisitions Enhancing Kerry's Biotechnology Capabilities
Strategic Acquisitions Enhancing Kerry’s Biotechnology Capabilities Location Leipzig, Germany Tlalnepantla, Edo. Mexico Employees 101 135 Region Global Americas Markets Bio-Pharma | Food & Beverage Beverage | Dairy | Animal Strategic → Leading innovator of high value targeted → Strong portfolio of m
Slide 21: Outlook and Future Prospects
Outlook and Future Prospects → While market conditions remain uncertain, the Group remains strongly positioned for growth. Kerry’s key growth platforms of Authentic Taste, Food Waste, Plant-based and Health & Bio-Pharma underpin a strong innovation pipeline. → The Group is confident in its ability t
Slide 22: Questions
-_ jestions A a
Slide 23: Appendix
Slide 24: Revenue Components FY 2021
Revenue Components FY 2021 Transaction Translation Acquisitions/ Volume Price Total Currency Currency Disposals Taste & Nutrition 8.3% 1.3% 0.0% (2.7%) 2.1% 9.0% Consumer foods 6.0% 0.5% 0.1% 1.7% (18.8%) (10.5%) Group 8.0% 1.2% 0.0% (1.8%) (1.7%) 5.7% © Kerry 2022 | 24 |
Slide 25: Volume Growth By Region and Channel
Volume Growth By Region and Channel Divisional Breakdown FY 2021 Taste & Nutrition 8.3% Regional Breakdown FY 2021 Consumer Foods 6.0% Americas 6.7% Group 8.0% Europe 9.9% APMEA 11.3% Channel Breakdown FY 2021 Retail 5.4% Foodservice 18.0% © Kerry 2022 | 25 |
Slide 26: Trading Margin by Business
Trading Margin by Business 2021 2020 2021 2020 Trading Trading Revenue % Revenue % Profit Profit €m €m €m €m Taste & Nutrition 6,273.3 913.4 14.6% 5,753.2 814.2 14.2% Consumer Foods 1,143.9 82.1 7.2% 1,278.6 99.2 7.8% Eliminations/unallocated (66.6) (120.0) (78.4) (116.2) Group 7,350.6 875.5 11.9% 6
Slide 27: EPS Reconciliation
EPS Reconciliation 2021 2020 Growth € cent € cent Basic EPS 37.6% 430.6 313.0 Brand related intangible asset amortisation 26.0 23.6 Non-trading items (net of related tax) (75.8) 8.8 Adjusted EPS 10.2% 380.8 345.4 Impact of exchange rate translation 1.9% Adjusted EPS growth in constant currency 12.1%
Slide 28: FY 2022 Guidance – Analysis of Estimated Portfolio Impact
FY 2022 Guidance – Analysis of Estimated Portfolio Impact FY 2022 Range Constant Currency Adjusted EPS guidance - excluding estimated impact of acquisitions & disposals +6.5% to 10.5% Estimated contribution from acquisitions¹ c. +5.0% Estimated dilution from disposal of Consumer Foods Meats & Meals
Slide 29: 2021 Acquisitions Summary
2021 Acquisitions Summary Acquisition Completion Type Activities Consideration Revenue¹ National Vinegar Co. May Asset Food protection & preservation €25m €7m Biosearch S.A. July Equity Proactive nutrition €127m €27m (Now known as Biosearch S.A.U.) Hare Topco, Inc. Sep Equity Food protection & prese
Slide 30: Total Net Debt as at 31 December 2021
Total Net Debt as at 31 December 2021 Debt @ Floating Rates @ Fixed Rates €m €m €m Euro 2,483 (13) 2,496 Sterling 11 11 - US Dollar 634 413 221 Other 35 35 - Gross debt 3,163 446 2,717 Cash (1,039) (1,039) - Total net debt 2,124 (593) 2,717 Gross debt 2021 14% 86% Gross debt 2020 23% 77% Weighted av
Slide 31: Exchange Rate Movements
Exchange Rate Movements Average Exchange Rates – 2021 v 2020 AUD BRL GBP CNY MYR MXN RUB ZAR USD 7% 5% 3% 3% 1% (3%) (5%) (7%) (10%) © Kerry 2022 | 31 |
Slide 32: Share Register Analysis
Share Register Analysis Institutional Analysis Institutions 64% Kerry Co-operative 12% North America 18% UK 18% Continental Europe | Rest of World 25% Ireland 3% Retail 24% © Kerry 2022 | 32 | Shares in issue at 31 December 2021: 176,848,451
Slide 33: Updated Group Reporting Segments
UPDATED GROUP REPORTING SEGMENTS
Slide 34: Updated Group Reporting Segments: Pro-forma Revenue Breakdown
Updated Group Reporting Segments: Pro-forma Revenue Breakdown H1 2021 FY 2021 Americas 1,498 3,138 Europe 585 1,259 APMEA 609 1,319 Taste & Nutrition 2,692 5,716 Dairy Ireland 532 1,121 Intercompany (72) (141) Group 3,152 6,696 Consumer Foods Meats and Meals business disposal 430 655 Reported 2021 r
Slide 35: Updated Group Reporting Segments: Pro-forma Volume Growth Rates
Updated Group Reporting Segments: Pro-forma Volume Growth Rates 2021 Q1 H1 Q3 YTD FY Americas 0.1% 7.3% 6.2% 6.3% Europe (2.0%) 15.8% 13.1% 10.4% APMEA 14.0% 15.7% 13.6% 13.7% Taste & Nutrition 2.5% 10.7% 9.2% 8.7% Dairy Ireland 0.2% 1.0% 2.8% 5.5% Group 1.8% 8.9% 8.0% 8.2% © Kerry 2022 | 35 |
Slide 36: Updated Group Reporting Segments: Pro-forma EBITDA Breakdown
Updated Group Reporting Segments: Pro-forma EBITDA Breakdown Group Eliminations FY 2021 Taste & Nutrition Kerry Dairy Ireland & Unallocated Group Revenue €m 5,716 1,121 (141) 6,696 EBITDA €m 1,013 71 (73)¹ 1,011 EBITDA Margin 17.7% 6.3% 15.1% Group Eliminations H1 2021 Taste & Nutrition Kerry Dairy
Slide 37: Slide 37