Kerry Group PLC · EURONEXT:KRZ
Kerry — Investor Presentation (May 2024)
53 slides from Kerry's investor presentation, May 2024
Slide 1: Intro to Kerry
INTRO TO KERRY May 2024
Slide 2: Disclaimer
Disclaimer 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 or other financial measure
Slide 3: Index
INDEX Who We Are 04 - 08 What We Do 09 - 11 What We Focus On 12 - 19 How We Do It 20 – 30 Why We Do It 31 - 32 How We Contribute 33 - 38 Our Results 39 - 44 Corporate Governance 45 - 47 Innovation Examples 48 - 51 Supplementary Information 52 - 53 © Kerry 2024 | 3 |
Slide 4: Who We Are
WHO WE ARE © Kerry 2024 | 4 |
Slide 5: Kerry Group: Our Leading Global Footprint
Kerry Group OUR LEADING GLOBAL FOOTPRINT AT A GLANCE Kerry is a world-leader in sustainable taste and nutrition solutions. Using our unique capabilities, we partner with customers to create healthier, tastier, and more sustainable products that are enjoyed by over 1 billion people around the world.
Slide 6: The Evolution of Our Taste & Nutrition Business
The Evolution Of Our Taste & Nutrition Business A WORLD LEADER IN SCIENCE-BACKED NUTRITION SOLUTIONS Portfolio Transformation Originally formed as a dairy co-operative, Kerry Taste and listed as a public company in 1986. Nutrition €7bn Ingredients and Over the decades, we established a leading Flavo
Slide 7: Taste & Nutrition: A Well-Balanced, Diversified Global Business
TASTE & NUTRITION A Well-Balanced, Diversified Global Business 7% 31% Food 22% 23% 24% Beverage Pharma Americas 26% Meat Retail END USE GEOGRAPHY Europe Snacks CHANNEL Foodservice APMEA MARKET 10% Dairy Bakery 9% 16% Meals 54% 69% 10% 22 Core Technologies + 25 Process Technology Platforms Global + R
Slide 8: Dairy Ireland
DAIRY IRELAND Leading Market Brands €1.3bn Revenue 7% Our Evolve Sustainability Programme supports the accelerated adoption of science based sustainable actions and best practice of our Irish dairy suppliers. 37% 56% Republic of Ireland UK and Rest of Europe Rest of World © Kerry 2024 | 8 |
Slide 9: What We Do
WHAT WE DO © Kerry 2024 | 9 |
Slide 10: We Solve Our Customers' Complex Challenges with Differentiated Solutions
WE SOLVE OUR CUSTOMERS' COMPLEX CHALLENGES WITH DIFFERENTIATED SOLUTIONS CUSTOMER CHALLENGES KERRY SOLUTIONS © Kerry 2024 | 10 |
Slide 11: Leading in Sustainable Nutrition
Leading in Sustainable Nutrition Supporting our customers across the spectrum with science-backed solutions CUSTOMER Kerry Kerry Food Kerry Carbon ENABLEMENT Nutri-Guide Waste Profiler TOOLS Estimator
Slide 12: What We Focus On
WHAT WE FOCUS ON © Kerry 2024 | 12 |
Slide 13: Our Strategic Framework
Our Strategic Framework The markets we focus on are food, beverage and pharma, and our strategic priorities are taste, nutrition and emerging markets FOOD + BEVERAGE + PHARMA TASTE NUTRITION EMERGING MARKETS © Kerry 2024 | 13 |
Slide 14: Our Industry - More Dynamic Than Ever
Our Industry - More Dynamic Than Ever Kerry is well-positioned to capitalise on macro trends and evolving consumer demands MACRO TRENDS World population is expected to reach 9 billion within the GROWING WORLD POPULATION next 15 years, led by emerging markets 1 1 billion people are expected to enter
Slide 15: How We Deploy Capital
How We Deploy Capital CAPITAL REINVESTMENT CAPITAL RETURNS Capital Expenditure Dividends Target ~4% of revenue Long term policy of double-digit dividend growth Net Cash from Operating Activities M&A Share Buybacks Disciplined and targeted approach €600m of share buybacks across 2023 and 2024 © Kerry
Slide 16: Strategic Capital Investment
Strategic Capital Investment Investing in our leading global footprint to support our customers with local innovation and manufacturing capabilities © Kerry 2024 | 16 |
Slide 17: Portfolio Rotation and Group Revenue Growth
Portfolio Rotation and Group Revenue Growth Since 2017, we have rotated 40% of our corporate portfolio through strategic acquisitions and disposals while also delivering strong growth 1 1bn 1 bn bn 1 bn bn €2.5bn PORTFOLIO ROTATION 1 rganic Gro th Ac uisitions Disposals Note: Organic Growth includes
Slide 18: M&A – Enhancing Our Strategic Platforms and Technology Offering
M&A – Enhancing Our Strategic Platforms and Technology Offering AUTHENTIC TASTE ARIAKE U.S.A. ✓ Savoury Taste JINING NATURE ✓ Dairy Taste ✓ Natural Extracts PROACTIVE HEALTH ✓ Probiotics & Bioactives ✓ Pharma BIOTECHNOLOGY ✓ Microbial Fermentation ✓ Enzymes PRESERVATION ✓ Bio-preservation KEY DIVEST
Slide 19: Dividends – Long Track Record of Dividend Growth
Dividends – Long Track Record of Dividend Growth Dividends Per Share History 37 years of 115.4c Double-digit Dividend Growth +16% CAGR ~€1.3bn of cash returned to shareholders through dividends over past ten years 1986 2023 © Kerry 2024 | 19 |
Slide 20: How We Do It
HOW WE DO IT © Kerry 2024 | 20 |
Slide 21: We Solve Our Customers' Complex Challenges with Differentiated Solutions
WE SOLVE OUR CUSTOMERS' COMPLEX CHALLENGES WITH DIFFERENTIATED SOLUTIONS CUSTOMER CHALLENGES KERRY SOLUTIONS © Kerry 2024 | 21 |
Slide 22: Our Leading Capability in Taste
Our Leading Capability in Taste LEADING TECHNOLOGIES GLOBAL LEADERSHIP POSITIONS → Natural Extracts → Smoke and Grill → Modulation → Umami & Kokumi → Dairy & Non-Dairy → Dairy Taste → Smoke & Reaction → Encapsulation & Delivery Systems → Modulation → Fermentation → Natural Extracts MARKET LEADING PO
Slide 23: Our Capability in Nutrition, Wellness & Functionality
Our Capability in Nutrition, Wellness & Functionality LEADING TECHNOLOGIES DELIVERING SCIENCE BACKED SOLUTIONS → Proteins & Protein Hydrolysates → Probiotics & Bioactives → Lipids → Enzymes & Growth Factors → Bio-preservation → Pharma → Modulation BENEFITS WE DELIVER → Sugar, salt and fat reduction
Slide 24: Leading Investment in Science and Technology Eco-system
€3bn+ Leading investment in science and Research, technology eco-system¹ Development & Applications Capabilities 22 Core Technologies 33 End Use Markets Development and Applications Centres 70+ Technology & Innovation Centres Globally ¹ Cumulative 10 year operating and capital investment © Kerry 202
Slide 25: Market Leading Insights Tools
Market leading Insights Tools Supporting Customers from Uncovering consumer motivations and emerging behaviours, Ideation to Launch providing unparalleled insights into human behaviour Immersive market exploration to Our sensory labs and research inspire the products of the panels allow us to delive
Slide 26: Our Key Market Differentiators
Our Key Market Differentiators Sustainable Foodservice Emerging Nutrition Markets © Kerry 2024 | 26 |
Slide 27: Leading in Sustainable Nutrition
Leading in Sustainable Nutrition Our toolkit of proprietary customer enablement tools, supporting our customers across the sustainable nutrition spectrum with science-backed solutions Kerry Food Kerry Waste Estimator Carbon Profiler Aiding recipe reformulation Combating food loss Enabling our custom
Slide 28: Foodservice – Our Unique Leading Positioning
Foodservice – Our Unique Leading Positioning DRIVERS OF KERRY AND CHANNEL GROWTH Consistently outperforming in a high-growth channel Increased Penetration Channel Growth Drivers Back-of-House New Menu 5% VOLUME €2.1bn Efficiency Solutions Offerings / Platforms CAGR €1.3bn Nutritional Seasonal Items
Slide 29: Emerging Markets – Our Leading Presence
Our Strong Emerging Markets - Our Leading Presence Track Record In Emerging Markets 8% €2.2bn VOLUME CAGR €1.3bn RD&A Centres Manufacturing Facilities Sales Offices 9,000+ 500+ 44 36 34 Total RD&A Manufacturing RD&A Sales employees employees locations centres offices 2017 2023 Note: Detail as per 31
Slide 30: Our People
Our People 21,000+ 1,100+ Employees Scientists 119 55+ Nationalities Countries 37% of women in senior management roles © Kerry 2024 | 30 |
Slide 31: Why We Do It
WHY WE DO IT © Kerry 2024 | 31 |
Slide 32: Inspiring Food, Nourishing Life
Inspiring Food, Nourishing Life Kerry is creating a world of sustainable nutrition for the food, beverage, and pharmaceutical industries. © Kerry 2024 | 32 |
Slide 33: How We Contribute
HOW WE CONTRIBUTE © Kerry 2024 | 33 |
Slide 34: Beyond the Horizon
Beyond the Horizon includes 3 areas BEYOND THE HORIZON Better for Better for Better for People Society Planet Beyond the Horizon, our sustainability strategy, supports Kerry’s ambition to reach over two billion people with sustainable nutrition solutions by 2030 © Kerry 2024 | 34 |
Slide 35: Key Sustainability Targets
Key Sustainability Targets Beyond the Horizon BETTER FOR PEOPLE BETTER FOR SOCIETY BETTER FOR PLANET Achieving the highest 2bn+ CONSUMERS Reaching over two billion people with sustainable nutrition solutions by 2030 50% levels of inclusion, diversity, engagement and belonging with equal 1.5 ºc Our C
Slide 36: Our Progress Towards Our Key Beyond the Horizon Targets
Our Progress Towards Our Key Beyond the Horizon Targets People Reached with Sustainable Scope 1 & 2 Reduction in Nutrition Solutions Carbon Reduction Food Waste versus 2017 baseline versus 2017 baseline Target to reach over 55% 50% 2.0 billion people by 2030 Target reduction by 2030 Target reduction
Slide 37: Partnerships, Impact and Performance
Partnerships, Impact and Performance Value Chain Partnerships Social Impact Environmental and Social Impact Frameworks and Performance © Kerry 2024 | 37 |
Slide 38: Contributing to the UN Sustainable Development Goals
Contributing to the UN Sustainable Development Goals 1 An example of our efforts in supporting this goal is our partnership with Concern Worldwide to help alleviate hunger and provide greater access to nutrition to people in GOAL 2: parts of Kenya. Through our partnership, we help farmers adapt to t
Slide 39: Our Results
Our Results © Kerry 2024 | 39 |
Slide 40: Our Proven Track Record of Growth
Our Proven Track Record of Growth bn 1 bn REVENUE EBITDA 9% 12% CAGR CAGR m m 430.1c 115.4c ADJUSTED EARNINGS PER SHARE DIVIDENDS PER SHARE 12% 16% CAGR CAGR 7.6c 0.48c © Kerry 2024 | 40 | CAGR for years 1986 - 2023
Slide 41: Performance in 2023
Performance in 2023 GROWTH RETURNS SUSTAINABILITY REVENUE EBITDA CASH NUTRITIONA CARBON FOOD WASTE VOLUME MARGIN ROACE L REACH REDUCTION¹ REDUCTION¹ CONVERSION -0.9% +1.1% +60bps 92% 10% 1.25bn 48% 39% Group T&N People Note: Alternative performance measures are outlined in the financial definitions
Slide 42: Consistent Volume Growth – Supported by Diversified Business
Consistent Volume Growth – Supported by Diversified Business Taste & Nutrition volume growth CHANNELS GEOGRAPHIES 6% Emerging Foodservice ~5% ~8% 4% 4% Retail Developed ~3% ~2% 3 Year 5 Year 10 Year Volume CAGR: 2017-2023 CAGR CAGR CAGR © Kerry 2024 | 42 |
Slide 43: EBITDA Margin Progression
EBITDA Margin Progression Taste & Nutrition EBITDA Margin Progression +0.6% +1.0% +0.8% 18% 17 7 +1.0% Group Target 17 -1.9% -0.2% 1 p everage, et rice ther p everage, et rice ix ortfolio Efficiencies Inflation ix ortfolio Efficiencies Deflation © Kerry 2024 | 43 |
Slide 44: Our Targets
Our Targets Volume Growth EBITDA Margin 4-6% 18%+ Growth Average Target By 2026 Cash Return 80%+ 10-12% Return Cash Conversion ROACE Nutritional Carbon Food Waste Reach Reach 2 billion people 55% reduction in 50% reduction Sustainability with sustainable nutrition solutions Scope 1 & 2 carbon emissi
Slide 45: Corporate Governance
CORPORATE GOVERNANCE © Kerry 2024 | 45 |
Slide 46: Corporate Governance
Board of Directors Chairman and Executive Directors Corporate Governance Board Composition 13 Members MR. TOM MORAN MR. EDMOND SCANLON MS. MARGUERITE LARKIN MR. GERRY BEHAN (68)(M) (50)(M) (52)(F) (59)(M) Chairman of the Board Executive Director Executive Director Executive Director Chief Executive
Slide 47: Share Register
Share Register Institutional Analysis Institutions 65% Kerry Co- North America 17% operative 11% UK 19% Continental Europe | Rest of World 26% Ireland 3% Retai l 24% Shares in issue at 31 December 2023: 175,792,661 © Kerry 2024 | 47 |
Slide 48: Innovation Examples
INNOVATION EXAMPLES © Kerry 2024 | 48 |
Slide 49: Salt Reduction in Snacks
Salt Reduction in Snacks MARKET NEED Regulation driving salt reduction MODULATION BUILT SCIENTIFIC & TECHNICAL EXPERTISE FROM A FOOD HERITAGE PROCESS EXPERTISE Cost effectiveness • Unique Breadth of Assets • Bioconversion Technology • Analytical Consumer taste and Raw Materials – • Enzymatic Modific
Slide 50: Coffee Sustainability
Coffee Sustainability MARKET NEED Climate change affecting coffee quality ENESYZ® TECHNOLOGY SCIENTIFIC & TECHNICAL EXPERTISE PLATFORM PROCESS EXPERTISE Cost effective acrylamide reduction • Strain Identification and • Bioprocessing • Enzyme Design Isolation • Media Definition • Omics Adaptable to c
Slide 51: Meat – Clean-Label Shelf-Life Extension
Meat – Clean-Label Shelf-Life Extension MARKET NEED Clean-label extended shelf life SCIENCE PROCESS TECHNOLOGY TECHNICAL EXPERTISE Validated food safety • Microbial Challenge • Fermentation • Meat Application delivery Studies • Drying • Sensory • Anti-microbial Screening • Vacuum & Spray Drying • Da
Slide 52: Supplementary Information
SUPPLEMENTARY INFORMATION © Kerry 2024 | 52 |
Slide 53: 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