Kerry Group Plc · EURONEXT:KRZ
Kerry — FY2020 Earnings Presentation
30 slides from Kerry's earnings presentation, Feb 16, 2021
Slide 1: FY 2020 Preliminary Statement of Results
FY 2020 Preliminary Statement of Results 16 February 2021
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 2020
Preliminary Statement of Results 2020 1 Review of Business 2 Financial Review 3 Future Prospects Edmond Scanlon, Marguerite Larkin, Chief Executive Officer Chief Financial Officer © Kerry 2021 | 3 |
Slide 4: Strong Recovery and Continued Strategic Progression
Strong Recovery and Continued Strategic Progression Return To Growth Taste & Nutrition Channels Strategic Developments Strong progress in volume • Retail – sustained strong growth Good progress made across a recovery with Group number of strategic fronts during • Foodservice – continued recovery ret
Slide 5: Business Review – Taste & Nutrition
Business Review – Taste & Nutrition FY 2020 Revenue €5,753m Trading margin 14.2% → Volume reduction of 3.0% in the full year with Q4 growth of 0.7% T&N Quarterly Volumes → Foodservice channel volumes declined 19% with continued recovery (Q4: -8%) → Retail channel performed well through the year 1.2%
Slide 6: Taste & Nutrition – End Use Markets
Taste & Nutrition – End Use Markets -2% -8% 0% +4% -3% Overall performance by EUM impacted by restriction in foodservice +8% channel – most notably Beverage, Meals, Meat and Dairy +6% Retail Channels Taste & Nutrition -4% -4% +1% End Use Market Beverage EUMs – excellent performance in Americas and E
Slide 7: Taste & Nutrition Business Performance by Region
Taste & Nutrition Business Performance by Region Americas Europe APMEA €3.1bn €1.4bn €1.2bn FY: -2.5% | Q4: +0.5% FY: -5.0% | Q4: -0.4% FY: -1.9% | Q4: +2.8% → North America retail delivered strong → Retail delivered good growth in → Retail performed well with strong growth – led by Beverage, Meals
Slide 8: Business Review – Consumer Foods
Business Review – Consumer Foods FY 2020 Revenue €1,279m Trading margin 7.8% → Underlying growth of 2.2% offset by the effect of ready meals contract exit in Everyday Fresh → Richmond – strong growth in traditional and meat-free prior year, resulting in an overall volume reduction of 2.6% offerings
Slide 9: 2020 Financial Review
2020 €7.0bn Financial Revenue Review €797m Trading Profit Marguerite Larkin, Chief Financial Officer 345.4c Adjusted EPS © Kerry 2021 | 9 |
Slide 10: 2020 Financial Overview
2020 Financial Overview Revenue €7.0bn -2.9% volume Trading profit €797m 2019: €903m Trading margin 11.5% 2019: 12.5% Adjusted EPS 345.4c -9.4% constant currency Basic EPS 313.0c -2.3% reported ROACE 9.8% 2019: 11.8% Free cash flow €412m 67% cash conversion © Kerry 2021 | 10 | Note: Alternative perf
Slide 11: Group Revenue Analysis
Group Revenue Analysis 2019 2020 €7.2bn €7.0bn -4.0% Volume Volume Translation 3.6% Acquisitions currency -2.9% Transaction -2.3% Price 1.0% currency -0.1% 0.3% © Kerry 2021 | 11 |
Slide 12: Group Revenue Breakdown
Group Revenue Breakdown Group Revenue 2020 Taste & Nutrition Volume Performance by Channel -2.9% Retail +4% Foodservice (19%) -3.0% €7.0bn €5.8bn (1%) 5% 4% 4% (8%) (15%) 1 -2.6% 2% (49%) €1.3bn Group Consumer Taste & Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Foods Nutrition Reported Revenue Volume Performance © Kerr
Slide 13: Group Trading Margin Breakdown
Group Trading Margin Breakdown Impacted by COVID-19 €903m €797m FY 2019 Operating Net COVID-19 Net Price KerryExcel - Currency Acquisitions FY 2020 Deleverage Costs / Initiatives Net Efficiencies / Portfolio Mix / Investments Trading 12.5% (0.6%) (0.3%) (0.1%) 0.1% (0.1%) – 11.5% Margin © Kerry 2021
Slide 14: Free Cash Flow
Free Cash Flow 2020 2019 €m €m Trading profit 797 903 Depreciation (net) 201 191 Movement in average working capital (103) (89) Pension contributions paid less pension expense (23) (27) Cash flow from operations 872 978 Finance costs paid (net) (74) (81) Income taxes paid (75) (67) Purchase of non-c
Slide 15: Strong Credit Metrics with Long Maturity Profile
Strong Credit Metrics with Long Maturity Profile Maturity Profile of Net Debt Undrawn €1.1bn RCF 2020 2021 2022 2023 2024 2025 2029 Total Net Debt of €1.9bn On demand & up to 1 year < 2 years 2 to 5 years > 5 years (€533m) €105m €1,626m €747m Strong Credit Metrics 2020 2019 Net debt: EBITDA* 1.9x 1.
Slide 16: Evolving Kerry's Global Business Services
Evolving Kerry’s Global Business Services Driving forward our business enablement strategy Finance & HR Functions New Function Scope Certain activities from the following functions → Next Stage of Enablement Scope → Regulatory → Marketing → Broadening Scope & Depth → Procurement → Master Data Manage
Slide 17: Other Matters
Other Matters Kerryconnect North America deployment progressed well Finance Costs Decrease of €9m primarily due to lower interest rates Pension Net deficit of €44m – increase driven by movements in discount rates Non-Trading Items Net charge of €16m primarily due to acquisition integration costs Div
Slide 18: Outlook and Future Prospects
Outlook and Future Prospects Edmond Scanlon, Chief Executive Officer © Kerry 2021 | 18 |
Slide 19: Consumers Adapting to the New Normal
Adapting to Consumers Industry the New Normal Sustainability Imperative Sustainability Focus Want to know what their 70% of industry professionals 85% food product contains expect consumers to be more concerned about sustainability than pre-COVID Nutritional Benefits Pay more attention to Online and
Slide 20: Strategic Acquisitions
Strategic Acquisitions Strategic Acquisition Jining Nature Region APMEA LATAM North America Technologies Savoury Taste Savoury Taste Range of Probiotics End Use Markets Meat, Snacks, Meals Meat, Snacks, Meals Beverage, Supplements Channel Retail Retail / Foodservice Retail and Healthcare Strategic F
Slide 21: Kerry's Proactive Health Positioning
Kerry’s Proactive Health Positioning Deploying our proactive nutrition portfolio in taste and nutrition solutions Functional Food & Beverage Need State Digestive Health Immune Health Women’s Health Cognition Healthy Ageing Life Stage All All Adult, Ageing Infant, Ageing, All Ageing © Kerry 2021 | 21
Slide 22: Future Prospects
Future Prospects Strategic Review The Group is conducting a strategic review of its dairy-related businesses in Ireland and the UK. This business has activities across both Taste & Nutrition and Consumer Foods businesses. We note that there is no certainty that this review will lead to a transaction
Slide 23: Appendix
Appendix
Slide 24: Revenue Components FY 2020
Revenue Components FY 2020 Transaction Translation Acquisitions/ Volume Price Currency Currency Disposals Total Taste & Nutrition (3.0%) 0.1% (0.1%) (2.6%) 1.2% (4.4%) Consumer Foods (2.6%) 1.2% 0.0% (0.7%) 0.0% (2.1%) Group (2.9%) 0.3% (0.1%) (2.3%) 1.0% (4.0%) © Kerry 2021 | 24 |
Slide 25: Trading Margin by Business
Trading Margin by Business 2020 2019 2020 Trading 2019 Trading Revenue Profit Revenue Profit €m €m % €m €m % Taste & Nutrition 5,753.2 814.2 14.2% 6,017.6 918.5 15.3% Consumer Foods 1,278.6 99.2 7.8% 1,306.6 98.9 7.6% Eliminations/unallocated (78.4) (116.2) (82.9) (114.7) Group 6,953.4 797.2 11.5% 7
Slide 26: EPS Reconciliation
EPS Reconciliation 2020 2019 € cent € cent Basic EPS 313.0 320.4 Brand related intangible asset amortisation 23.6 21.4 Non-trading items (net of related tax) 8.8 51.9 Adjusted EPS 345.4 393.7 Retranslating PY adjusted EPS at current year average fx rates – (12.3) Adjusted EPS in constant currency 34
Slide 27: Total Net Debt as at 31 December 2020
Total Net Debt as at 31 December 2020 Debt @ Floating Rates @ Fixed Rates €m €m €m Euro 1,861 133 1,728 Sterling 19 19 - US Dollar 597 393 204 Other 31 31 - Gross debt 2,508 576 1,932 Cash (563) (563) - Total net debt 1,945 13 1,932 Gross debt 2020 23% 77% Gross debt 2019 30% 70% Weighted average ma
Slide 28: Exchange Rate Movements
Exchange Rate Movements Average Exchange Rates – 2020 v 2019 AUD BRL GBP CNY MYR MXN RUB ZAR USD (1%) (1%) (2%) (3%) (3%) (13%) (12%) (15%) (30%) © Kerry 2021 | 28 |
Slide 29: Share Register
Share Register Institutional Analysis Institutions 62% Kerry Co-operative 12% North America 19% UK 15% Continental Europe | Rest of World 26% Ireland 2% Retail 26% © Kerry 2020 | 29 | Shares in issue at 31 December 2020: 176,700,036
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