Slide 1: 2019 Interim Management Report
2019 Interim Management Report 8 August 2019
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: 2019 Interim Management Report
2019 Interim Management Report Review of 1 Business Financial 2 Review Outlook & Future 3 Prospects Edmond Scanlon, Chief Executive Officer Marguerite Larkin, Chief Financial Officer
Slide 4: H1 2019 – Continued Delivery and Evolution of Our Business
H1 2019 – Continued Delivery and Evolution of Our Business Continued Further Portfolio Developing Outperformance Enhancement Market Expansion Consistent volume- Good business development Continued strong growth, driven performance – key drivers being ‘food-for- with further technology ahead of our m
Slide 5: H1 2019 Performance – Delivering Growth and Return
H1 2019 Performance – Delivering Growth and Return Volume Trading Margin Adjusted EPS* (CCY) GROWTH +3.3% +20bps +8.4% Outperforming Progression in line Continued growth market with expectations ROACE Free Cash Flow Dividend RETURN 11.9% €195m +11.9% Reflecting strategic 67% conversion1 23.5c interi
Slide 6: H1 2019 Revenue and Margin Growth
H1 2019 Revenue and Margin Growth Group Taste & Nutrition €3,569m Consumer Foods Volume +3.3% Margin +20bps €2,915m €689m Volume +3.8% Volume +0.6% Margin +20bps Margin 0bps © Kerry 2019 | 6 |
Slide 7: Business Review – Taste & Nutrition
Business Review – Taste & Nutrition H1 2019 Growth 1 Revenue €2,915m +3.8% Trading margin 13.3% +20bps Continued volume growth ahead of our markets: Taste & Nutrition • Meat, Snacks and Beverage EUMs had good growth End Use Markets 2 • Nutrition and wellbeing portfolio performed strongly • Developin
Slide 8: Taste & Nutrition – Business Growth by Region
Taste & Nutrition – Business Growth by Region Volume Growth by Region Americas Europe APMEA 9.6% €1,556m €718m €608m • North America – Meat, Snacks • Beverage had strong broad-based • Meat, Beverage and Snacks EUMs and Dairy EUMs delivered good performance delivered strong growth growth • Meat and S
Slide 9: Business Review – Consumer Foods
Business Review – Consumer Foods Everyday Fresh • Richmond – solid performance led by H1 2019 Growth growth in chicken sausage Revenue €689m +0.6%1 • Spreadable butter continued to perform in a challenged category Trading margin 7.0% 0bps • Solid performance led by brands with private label challeng
Slide 10: H1 2019 Financial Review
H1 2019 Financial Review €3,569m €383m 164.1c Revenue Trading Profit Adjusted EPS Marguerite Larkin, Chief Financial Officer
Slide 11: H1 2019 Financial Highlights
H1 2019 Financial Highlights +3.3% volume growth Revenue €3,569m +10.7% reported growth Trading profit €383m +12.6% reported growth Trading margin 10.7% +20bps margin expansion +8.4% constant currency Adjusted EPS* 164.1c +13.8% reported growth Basic EPS 135.5c +5.6% reported growth Free cash flow €
Slide 12: Revenue Growth Analysis
Revenue Growth Analysis H1 2018 H1 2019 €3,225m €3,569m 10.7% Volume Volume 3.3% 3.6% Translation Acquisitions/ Price currency disposals 2.7% 0.0% 4.7% © Kerry 2019 | 12 |
Slide 13: Continued Volume Growth Ahead of Our Markets
Continued Volume Growth Ahead of Our Markets Group Volume Growth Taste & Nutrition Volume Growth €3.6bn €0.7bn €2.9bn €1.6bn €0.7bn €0.6bn 3.8% 9.6% 3.3% 2.7% 2.2% 0.6% Group Consumer Taste & Nutrition Americas Europe APMEA Foods Kerry Volume Growth Market Volume Growth Kerry Reported Revenue © Kerr
Slide 14: Group Trading Margin Breakdown
Group Trading Margin Breakdown KerryExcel 383 340 H1 2018 Operating leverage Net price KerryExcel KerryExcel Currency Acquisitions Other¹ H1 2019 / Portfolio mix Efficiencies Investments Trading Margin 10.5% 0.3% 0.0% 0.2% (0.4%) 0.1% 0.1% (0.1%) 10.7% © Kerry 2019 | 14 | ¹ Other comprises Brexit ri
Slide 15: Free Cash Flow
Free Cash Flow H1 2019 H1 2018 €m €m Trading profit 383 340 Depreciation (net) 94 67 Movement in average working capital (77) (29) Pension contributions paid less pension expense (11) (22) Cash inflow from operations 389 356 Finance costs (net) (30) (23) Taxation (29) (18) Capital expenditure (net)
Slide 16: Financial Ratios and Debt Profile
Financial Ratios and Debt Profile Returns Target H1 2019 H1 2018 1 ROACE 12% 11.9% 12.4% Banking Ratios Covenant Net debt: EBITDA* Max 3.5x 1.9x 1.5x EBITDA: net interest* Min 4.0x 14.4x 14.8x Maturity Profile of Net Debt €798m €646m €498m €142m €85m 2019 2020 2021 2022 2023 2024 2025 (€251m) © Kerr
Slide 17: Other Matters
Other Matters Increase of €5m to €39m – acquisitions and impact of IFRS 16, partially offset by cash Finance costs generation and reduction in interest rates Pension Net deficit of €64m – increase driven by movements in discount rates Non-trading items Net charge of €34m – acquisition integration an
Slide 18: Outlook & Future Prospects
Outlook & Future Prospects Edmond Scanlon, Chief Executive Officer
Slide 19: Accelerating Consumer Change: Impacting End-to-end Supply Chain
Accelerating Consumer Change: Impacting End-to-end Supply Chain Consumer Revolution Driving Customer Transformation Reshaping Industry Food for Life & Wellbeing Managing Accelerating Fragmentation Organisational Agility Critical • Proactive nutrition • Shorter product development cycles • Integrated
Slide 20: Kerry is the Leading End-to-end Partner for Foodservice Chains
Kerry is the Leading End-to-end Partner for Foodservice Chains Menu Development New Menu Platforms Themed & Seasonal Offerings Nutrition-led Innovation • Proprietary consumer • New menu categories/ • Insight driven strategy • Clean Label/Better for you research channel offerings • On-trend formats a
Slide 21: Customer Partnership – 'Made for Me' Cheese Cap Tea
Customer Partnership – ‘Made for Me’ Cheese Cap Tea Consumer Concept Design & Upscale Understanding Creation Development to Plant Launch Customer & Consumer Insights Natural Flavour & Botanical Extracts Sensory TasteSense™ Authentic Ingredients Recipes & Integrated Formulas Dairy Technology Systems
Slide 22: Kerry's Leading Plant-based Offering – Rooted in Elevated Taste & Enhanced Nutrition
Kerry’s Leading Plant-based Offering – Rooted in Elevated Taste & Enhanced Nutrition Meeting Second Generation Demand Range A Expansion Dairy Free – Cold Brew Soft Serve Cold Brew Extract & Functional Oat Solution • Dairy free • Natural flavour Natural Flavour & TasteSense™ Solution • Clean label •
Slide 23: Continuing to Deliver Strategic Value Through Acquisitions
Continuing to Deliver Strategic Value Through Acquisitions Strategic Strategic Strategic Value Priorities Acquisitions Creation Improved Taste Enhanced Nutrition Taste Nutrition New Functionality New Applications New Geographies Developing Foodservice Markets New Channels New Solutions © Kerry 2019
Slide 24: Outlook 2019
Outlook 2019 • Continue to outperform our markets • Taste & Nutrition: strong innovation pipeline and good growth prospects, as we continue to evolve our unique business model aligned to the changing market landscape • Consumer Foods: building on strategy – realigning core and investing in adjacenci
Slide 25: 2019 Interim Management Report
2019 Interim Management Report 8 August 2019
Slide 26: Additional Information
Additional ees Information
Slide 27: Revenue Growth Components H1 2019
Revenue Growth Components H1 2019 Transaction Translation Volumes Price Currency Currency Acquisitions Total Taste & Nutrition 3.8% 0.0% 0.0% 3.3% 5.9% 13.0% Consumer Foods 0.6% (0.3%) 0.0% 0.3% 0.0% 0.6% Group 3.3% 0.0% 0.0% 2.7% 4.7% 10.7% © Kerry 2019 | 27 |
Slide 28: Trading Margin by Business
Trading Margin by Business H1 2019 H1 2018 Trading Trading Revenue Profit Revenue Profit €m €m % €m €m % Taste & Nutrition 2,915 388 13.3% 2,579 339 13.1% Consumer Foods 689 48 7.0% 685 48 7.0% Eliminations/unallocated (35) (53) – (39) (47) – Group 3,569 383 10.7% 3,225 340 10.5% © Kerry 2019 | 28 |
Slide 29: EPS Reconciliation
EPS Reconciliation H1 2019 H1 2018 Growth € cent € cent % Basic EPS 135.5 128.3 5.6% Brand related intangible asset amortisation 9.3 7.2 – Non-trading items (net of related tax) 19.3 8.7 – Adjusted EPS* 164.1 144.2 13.8% Retranslating PY adjusted EPS at current year average fx rates – 7.2 – Adjusted
Slide 30: Net Debt (€m) as at 30 June 2019
Net Debt (€m) as at 30 June 2019 Debt @ Floating Rates @ Fixed Rates Euro 1,556 762 794 Sterling – – – US Dollar 611 391 220 Other 18 18 – Gross debt 2,185 1,171 1,014 Cash (267) (267) – Net debt 1,918 904 1,014 Gross debt 100% 54% 46% Net debt 100% 47% 53% © Kerry 2019 | 30 |
Slide 31: Shareholder Analysis
Shareholder Analysis Institutions 60% Kerry Co-operative 13% Institutional Analysis North America 20% UK 15% Continental Europe | Rest of World 23% Ireland 2% Retail 27% © Kerry 2019 | 31 | Shares in issue at 31 July 2019: 176,477,146
Slide 32: 2019 Interim Management Report
2019 Interim Management Report 8 August 2019