Kerry Group Plc · EURONEXT:KRZ
Kerry — Investor Day (June 2011)
100 slides from Kerry's investor day presentation, Jun 29, 2011
Slide 1: The Kerry Growth Model – Capital Markets Day
KERRY The Kerry Growth Model Capital Markets Day London Stock Exchange 29 June 2011
Slide 2: Stan McCarthy, CEO
Stan McCarthy CEO 2
Slide 3: Agenda
Agenda Topic Presenter » 2.00 - 2.15 The Kerry Growth Model Stan McCarthy “Unlocking the Potential” » 2.15 - 3.15 The Kerry Growth Opportunity » Ingredients & Flavours Gerry Behan Albert McQuaid Mark McCormack » Consumer Foods Flor Healy » 3.15 - 3.30 Break » 3.30 - 3.45 1 Kerry and Kerryconnect Mic
Slide 4: Disclaimer: Forward Looking Statements
Disclaimer: Forward Looking Statements This presentation contains forward looking statements which reflect management expectations based on currently available data. However actual results will be influenced by macro economic conditions, food industry supply and demand issues, foreign exchange fluct
Slide 5: Introducing Kerry
Introducing Kerry Revenue - 2010 Trading Profit - 2010 » Kerry is the global leader in food Consumer Foods 32% Consumer Foods 25% ingredients & flavours » UK/ROI leader in Ingredients & Flavours Ingredients & Flavours branded and 68% 75% customer branded chilled foods Ingredients & Flavours Consumer
Slide 6: Kerry Worldwide Locations
Kerry Worldwide Locations Head Offices Manufacturing Plants Sales Offices 6
Slide 7: Kerry Business Model – 'Unlocking the Potential'
1 Kerry Business Model – ‘Unlocking the Potential’ » ‘Dual Strategy for Growth’ » Ingredients & Flavours » Consumer Foods » Well balanced portfolio » Consumer/end-use-market focus » Innovation/NPD driving customer alliances/brand development » Proven ability to grow in a changing dynamic marketplace
Slide 8: Kerry Group Growth Model – 1 Kerry Positioning
Kerry Group Growth Model – 1 Kerry Positioning » 1 Kerry embraces Group’s ‘Dual Strategy for Growth’ - building on our global leadership in ingredients & flavours and our chilled foods’ leadership position in the UK and Irish markets » Successful implementation of ‘go-to-market’ strategies in line w
Slide 9: 1 Kerry: 'Unlocking the Potential'
1 Kerry: ‘Unlocking the Potential’ » Value realisation framework » Common Kerry ‘way of working’ » global execution » functional excellence Achievement » Leveraging scale and synergies of long-term » Enabling: growth and » ‘Go-to-market’ strategies, technology financial targets development, end-use-
Slide 10: Adjusted EPS 1986-2010 (cent)
Adjusted EPS* 1986 - 2010 (cent) CAGR CAGR 1986-2010 2007-2010 14.5% 10.6% 200 194.5 180 166.5 160 153.9 143.8 140 131.6 133.9 122.9 120 112.1 101.8 100 87.9 79.2 80 68.0 57.4 60 46.7 38.7 40 35.8 28.9 25.9 21.1 23.0 16.3 17.6 20 12.7 7.6 8.4 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Slide 11: Group Goals & Long Term Targets - Current
Group Goals & Long Term Targets - Current » Group revenue: +2% to +4% (LFL) volume growth » Margin: 10% Group margin in 5 years (30 bps p.a.) » Adjusted EPS* 10%+ » ROAE* 15%+ and CFROI 12%+ Note: * before intangible amortisation and non-trading items 11
Slide 12: Performance v Current Targets
Performance v Current Targets Performance v Targets to Date KPI Target 2008 2009 2010 3 Year Avg +2% to +4% LFL Revenue ✔ +3.4% ✔ +2.2% ✔ +5.5% ✔ +3.7% volume growth 10% trading margin Margin (30bps pa) ✔ 8.5% ✔ 9.3% ✔ 9.5% ✔ +37bps pa Adjusted EPS 153.9c 166.5c 194.5c CAGR 10%+ Growth +7.0%* +8.2%*
Slide 13: Kerry Growth Model: 'Realising the Potential'
Kerry Growth Model: ‘Realising the Potential’ Solid progress against 1 Kerry objectives to-date » Customer centric model delivering: » global alliances » layering technologies/innovation expertise » integrated solutions » brand leadership » Incremental growth in developed markets » Accelerated growt
Slide 14: The Kerry Growth Opportunity: Ingredients & Flavours
Slide 15: Gerry Behan, Albert McQuaid, Mark McCormack
Gerry Behan President & CEO Kerry Ingredients & Flavours Americas Region Albert McQuaid President & CEO Kerry Ingredients & Flavours EMEA Region Mark McCormack President & CEO Kerry Ingredients & Flavours Asia-Pacific Region 15
Slide 16: Business Definition
Business Definition Kerry Ingredients & Flavours develops, manufactures and delivers technology-based ingredients, flavours and integrated solutions for the Food, Beverage and Pharmaceutical markets. 16
Slide 17: 1 Kerry Go-to-Market Structure
1 Kerry Go-to-Market Structure 17
Slide 18: 1 Kerry Growth Model – Driving Profitable Growth
1 Kerry Growth Model – Driving Profitable Growth 18
Slide 19: Kerry Ingredients & Flavours Business Growth Strategies
1 Kerry Ingredients & Flavours Business Growth Strategies Drive Global Accelerate Growth in Leverage Capabilities & Alignment Emerging Markets Grow Expertise - Global Customer & Market - Asia Pacific - Effective & Efficient Management - Latin America Functional Expertise - Global Technology & Applic
Slide 20: Global Customer & Market Management
Global Customer & Market Management » Global Key Account Management » Global commercial lead structure (channel specific) » Expand functional lead responsibility (regulatory, quality, supply chain) to deliver enhanced integration and operating effectiveness » End-Use Market Management » Regionally m
Slide 21: Retail Food & Beverage Market
Retail Food & Beverage Market Global retail revenue of packaged food ($1.9 Trillion USD) and beverages ($1.1 Trillion USD) total ~$3 Trillion USD, with forecasted overall growth around 1-2% GLOBAL RETAIL PACKAGED FOOD – KEY MARKETS GLOBAL RETAIL BEVERAGE – KEY MARKETS MARKET SIZE & ESTIMATED ANNUAL
Slide 22: Foodservice Market
Foodservice Market Global foodservice market estimated at ~$2 Trillion USD and forecasted to grow to $2.2 Trillion USD by 2015 » North America and Western Europe are still projected to account for more than 80% of chain foodservice sales over the next five years » 90% of total consumer foodservice v
Slide 23: Pharmaceutical Market
Pharmaceutical Market The global pharmaceutical market has estimated sales of $875 Billion USD, with the market expected to increase at a compound annual growth rate (CAGR) of 3–6% during the next five years GLOBAL PHARMACEUTICAL MARKET GLOBAL PHARMACEUTICAL MARKET SALES SPLIT BY REGION (2010) SALES
Slide 24: Global Market Strategies – Main Meal
Global Market Strategies – Main Meal » Global connectivity of processor and CPG and foodservice chain relationships » Global meat, poultry and seafood processors play a key role in » Meat, Poultry & the global expansion of foodservice chains Seafood » “Gold Standard” products global collaboration »
Slide 25: Global Market Strategies – Beverage
Global Market Strategies – Beverage » Nutritional Beverages » Deliver value as both an ingredients and flavours supplier and turnkey solutions provider, leveraging: » New processing technology (Aseptic & Retort) » Protein and satiety-enhancing ingredients » Flavour capability » Ingredient and textur
Slide 26: Global Market Strategies – Dairy
Global Market Strategies – Dairy Yoghurt & Smoothie Platform » Capitalise on explosive growth and expansion in various forms of yoghurt (e.g. drinkable, spoonable and frozen) in channels and regions around the world: » North America – per capita consumption to double » Latin America – QSR soft-serve
Slide 27: Global Market Strategies – Confections, Snacking & Bakery
Global Market Strategies – Confections, Snacking & Bakery » Confections & Snacking » Grow platform for indulgent and healthy snacks, creating customised manufactured solutions that leverage our ingredients and flavours portfolio into growing markets: » Performance nutrition snacks » Portion control
Slide 28: Global Market Strategies – Infant & Toddler Nutrition
Global Market Strategies – Infant & Toddler Nutrition Infant & Toddler Nutrition and Snacking is a large growth platform around the world, with Kerry pursuing various growth initiatives » APAC » Historical growth of 20% p.a. in China; market still underpenetrated » Leverage infant nutrition processi
Slide 29: Global Market Strategies – Nutrition
Global Market Strategies – Nutrition » Nutrition will continue to be a driving force for growth in the food and beverage industry » Consumer packaged goods companies and foodservice chain restaurants face growing pressure to deliver nutritious products, and each have different nutritional strategies
Slide 30: Kerry Ingredients & Flavours Business Growth Strategies
1 Kerry Ingredients & Flavours Business Growth Strategies Drive Global Accelerate Growth in Leverage Capabilities & Alignment Emerging Markets Grow Expertise - Global Customer & Market - Asia Pacific - Effective & Efficient Management - Latin America Functional Expertise - Global Technology & Applic
Slide 31: Global Technology & Applications Leadership
Global Technology & Applications Leadership » Execute through regional Centres of Beloit Excellence (COE) supported by satellite customer centres » Best-in-class global development and applications model » Layer and leverage development and Amsterdam process capability » Raw material category techno
Slide 32: Kerry's Technology Size
Kerry’s Technology Size Revenue by Technology Revenue by Region Pharma/Functional Savoury & Dairy Ingredients 9% Systems & Flavours 46% EMEA 38% Asia-Pacific 16% Primary/Regional Ingredients 12% Beverage Systems Cereal & Sweet & Flavours 13% Systems & Flavours 20% Americas 46% * Based on third party
Slide 33: Technology Innovation Strategies
Technology Innovation Strategies Taste Global Taste Solutions Platform Next-generation Flavour Modulation Citrus Platform Expansion Spinning Cone Technology Sauce Platform Natural Food Base Enhancement Systems MSG Replacement Value Nutrition Proteins Platform Yoghurt Platform Emulsion Technology Cle
Slide 34: No One Delivers Taste Like Kerry
No One Delivers Taste Like Kerry Kerry is the global leader in developing and delivering consumer preferred taste solutions. 34
Slide 35: Delivering Consumer-Preferred Taste Solutions
Delivering Consumer-Preferred Taste Solutions 35
Slide 36: Kerry Ingredients & Flavours Business Growth Strategies
1 Kerry Ingredients & Flavours Business Growth Strategies Drive Global Accelerate Growth in Leverage Capabilities & Alignment Emerging Markets Grow Expertise - Global Customer & Market - Asia Pacific - Effective & Efficient Management - Latin America Functional Expertise - Global Technology & Applic
Slide 37: Global Process Manufacturing & Supply Chain Leadership
Global Process Manufacturing & Supply Chain Leadership » Evolve global manufacturing footprint that optimises process technology investment » Evolve a best-in-class functional structure and capability around process manufacturing management » Engineering » Supply Chain » Quality » Manufacturing » Pe
Slide 38: Leading-edge Quality Supplier
Leading-edge Quality Supplier » Regionally managed quality teams with Kerry Quality global governance Management Systems » Management Responsibility » Total Quality philosophy into the complete product life cycle » Food Safety » Regulatory » Global Kerry Quality Management » Design & Development Sys
Slide 39: Kerry Ingredients & Flavours Business Growth Strategies
1 Kerry Ingredients & Flavours Business Growth Strategies Drive Global Accelerate Growth in Leverage Capabilities & Alignment Emerging Markets Grow Expertise - Global Customer & Market - Asia Pacific - Effective & Efficient Management - Latin America Functional Expertise - Global Technology & Applic
Slide 40: Emerging Markets
Emerging Markets Kerry’s strategy in emerging markets - in line with global market trends and issues Global Dynamics Strategies » Multinationals globalising their brands » Capitalise on brand globalisation in (CPG, Foodservice Chains) regions & key growth accounts » Consolidation will accelerate as
Slide 41: Emerging Market Economies – Asia Pacific
Emerging Market Economies – Asia Pacific China: 1.3b $5,878b 10.3% India: 1.2b $1,538b 10.4% Indonesia: 234m $707b 6.1% • Population • Nominal GDP • Real GDP Growth 2011 Developing Asia 3.6b 8.4% Source: IMF 41
Slide 42: Asia Pacific Emerging Markets – Kerry Growth Strategy
Asia Pacific Emerging Markets – Kerry Growth Strategy Dairy Grow wet cheese capabilities Prepared Meals Consumer-preferred taste solutions Investment in Local for noodle applications; Grow wet Capabilities & Structures sauce capabilities Meat Customer Centres Global chain / processor connectivity Ch
Slide 43: Emerging Market Economies – Latin America
Emerging Market Economies – Latin America Mexico: 109m $1,040b 5.5% Colombia: 46m $286b 4.3% Brazil: 193m $2,090b 7.5% • Population • Nominal GDP • Real GDP Growth 2011 Chile: 17m $203b 5.3% Developing Latin America Argentina: 41m $370b 9.2% 572m 4.7% Source: IMF 43
Slide 44: Latin America Emerging Markets – Kerry Growth Strategy
Latin America Emerging Markets – Kerry Growth Strategy Meat Global chain/processor connectivity Savoury Snacks Investment in Local Leverage portfolio of technologies to Capabilities & Structures meet rising consumer demand for healthier products (e.g. sodium reduction, natural, etc.) Customer Centre
Slide 45: Emerging Market Economies – EMEA
Emerging Market Economies – EMEA Poland: 38m $469b 3.8% Russia: 140m $1,465b 4.0% Turkey: 71m $742b 8.2% Saudi Arabia: 26m $444b 2.7% Nigeria: 156m $217b 8.4% • Population • Nominal GDP • Real GDP Growth 2011 South Africa: 50m $357b 2.8% Developing CIS 280m 5.0% Developing Central & Eastern Europe 1
Slide 46: EMEA Emerging Markets – Kerry Growth Strategy
EMEA Emerging Markets – Kerry Growth Strategy Meat Leverage meat systems into poultry across all targeted markets and develop functional meat systems in Investment in Local Russia, Eastern Europe & Middle East Capabilities & Structures Savoury Snacks Target growth in Middle East and Customer Centres
Slide 47: Kerry Ingredients & Flavours Revenue Profile
Kerry Ingredients & Flavours Revenue Profile Mature/Emerging Markets + Acquisitions Impact 30% Revenue 22% 15% 2006 2010 2017 Mature Emerging Emerging markets include Latin & South America, Middle East, Africa, Eastern Europe and Asia Pacific (excluding Australia, New Zealand & Japan) 47
Slide 48: Kerry Ingredients & Flavours Business Growth Strategies
1 Kerry Ingredients & Flavours Business Growth Strategies Drive Global Accelerate Growth in Leverage Capabilities & Alignment Emerging Markets Grow Expertise - Global Customer & Market - Asia Pacific - Effective & Efficient Management - Latin America Functional Expertise - Global Technology & Applic
Slide 49: Business Growth Strategies Will Deliver
1 Kerry Ingredients & Flavours Business Growth Strategies Will Deliver Mature Markets Emerging Markets 1 Kerry Impact » Volume growth 3% - 5% » Volume growth 10% » Global best in class infrastructure Improve margin +50bps p.a » Substantial upfront cost » Capital spend increases » More local customer
Slide 50: 1 Kerry Technology & Product Groups
1 Kerry Technology & Product Groups Functional Ingredients: Bio-ingredients, Emulsifiers and Texturants By working together in the 1 Kerry model, Processing EUMs & Applications we are uniquely able to deliver a number of benefits to our customers. 50
Slide 51: Kerry Ingredients & Flavours Business Growth Strategies
1 Kerry Ingredients & Flavours Business Growth Strategies Drive Global Accelerate Growth in Leverage Capabilities & Alignment Emerging Markets Grow Expertise - Global Customer & Market - Asia Pacific - Effective & Efficient Management - Latin America Functional Expertise - Global Technology & Applic
Slide 52: Acquisition and Development Strategy – Kerry Ingredients & Flavours
Acquisition and Development Strategy – Kerry Ingredients & Flavours 52
Slide 53: oF ul? ¥
oF ul? ¥
Slide 54: Flor Healy, CEO Kerry Foods
Flor Healy CEO Kerry Foods 54
Slide 55: A Leading Player in Food & Beverage and Leaders in Convenient Fridge Food
A Leading Player in Food & Beverage and the Leaders in Convenient Fridge Food Premier Kerry Kraft Unilever Tulip Mars ABF Bakkavor Bakkavor Pepsico Cranswick Coke Dairy Crest Greencore A Leading Player in Food & Beverage Kerry Nestle Samworth and the Leaders in Convenient Fridge Food Danone Arla Mor
Slide 56: With Significant Opportunity for Growth
With Significant Opportunity for Growth 70% of the most frequently consumed foods are stored in the fridge… That’s how many chances you have 42 each week to stand out in the Fridge 24 In the Cupboard 8 In the Freezer (average number of times consumer opens each week) 56
Slide 57: With Significant Opportunity for Growth
With Significant Opportunity for Growth Added Value Chilled Foods Markets €18bn Retail Value Kerry Drive Kerry Nurture €9.5bn Sausage €4.0bn +3.5% vol growth Rashers +1% vol growth Cooked Meats Spreads Meat Snacking RTC Cheese All IOI Categories Pastry Chilled Ready Meals Yogurts Desserts Pizza Past
Slide 58: Key Elements of Kerry Foods Strategy
Key Elements of Kerry Foods Strategy Turn Deep Consumer Foster Customer Support Superior Technology to Fantastic Quality With Insight Into Compelling To Grow Together Create Delicious, Healthy Lean Efficiency Propositions Affordable Food 58
Slide 59: Turning Deep Consumer Insight into Compelling Propositions
Turning Deep Consumer Insight into Compelling Propositions Turning deep consumer insight into compelling propositions 59
Slide 60: Fostering Customer Support to Grow Together
Fostering Customer Support to Grow Together In-Store POS & Dems Delivering a point of purchase vision for Chilled Ready Meals Creating health territories for Chilled Ready Meals across our Customers Healthy Best for the Full with Easy Performance Best Nature Healthy Meals Healthy Think Smart, Food F
Slide 61: Using Superior Technology to Create Delicious, Healthy, Affordable Food
Using Superior Technology to Create Food that is Delicious, Healthy and Affordable Using superior technology to create food that is delicious, healthy and affordable 61
Slide 62: Delivering Fantastic Quality with Lean Efficiency
Delivering Fantastic Quality with Lean Efficiency - Development of - Ongoing Maturity assessment to Kerry Production achieve ambition System - Develop Lean across the - All Sites Engaged extended - Roll out of KPS enterprise KLP - Specialist Training to all sites Maturity - Lean Maturity - 15 Sites
Slide 63: Consumer Foods – Topline Growth Objectives
Consumer Foods – Topline Growth Objectives 2-3% CAGR End Use Markets Drive Categories 3% CRM 4.5% Private Label 1% 1.5% CAGR Savoury Pastry Forecast 2.7% Market CAGR Foodservice 1.5% CAGR Kerry CAGR 1% Cooked Meats Target Branded 3.6% 3.6% CAGR 5% Meat Snacking 5% 1% Cheese 3.1% 2010 2017 63
Slide 64: Consumer Foods Margin Expansion
Consumer Foods Margin Expansion Driven by: +20 bps » Volume growth % Margin p.a. (operational leverage) » Greater efficiencies – Lean Programme and capital investment 2010 2017 » Mix 64
Slide 65: Acquisition and Development Strategy – Kerry Foods
Acquisition and Development Strategy – Kerry Foods 65
Slide 66: Break
Slide 67: 1 Kerry and Kerryconnect
1 Kerry and Kerryconnect Michael O’Neill Group Director of Business Services 67
Slide 68: Agenda
Agenda » 1 Kerry Business Transformation » Why 1 Kerry? » Overview of 1 Kerry Operating Model Project and it’s link to Kerryconnect » Kerryconnect » Objectives & timelines » Kerryconnect progress to date » Kerry’s future with Kerryconnect 68
Slide 69: 1 Kerry Business Transformation
1 Kerry Business Transformation 69
Slide 70: Why 1 Kerry?
Why 1 Kerry? » Aligning the Global Kerry Organisation internally to efficiently deliver “One Face to the Customer” externally » Leverage our talent, capability and scale through a sustainable, efficient global 1 Kerry business model » Enable functional excellence across a diverse portfolio of Techno
Slide 71: 1 Kerry Operating Model Overview
1 Kerry Operating Model Overview » Output of the business planning process, focused on “How” Kerry will organise our people and resources to achieve our Growth Strategy » Developed and championed by the Group and Regional Executive Teams » We designed a “1 Kerry Organisation” with 8 functional works
Slide 72: 1 Kerry Organisation
KERRY UU Back Office Middle Office Front Office Obtain maximum consistency, Pursue consistency across Group Seek consistency across Group, standards, synergies across Group where most appropriate understanding customer base and commercial strategies differ Procurement Process Manufacturing Commercia
Slide 73: Outputs from 1 Kerry Operating Model
Outputs from 1 Kerry Operating Model » Global 1 Kerry Organisation design agreed with clear Roles & Responsibilities » Global 1 Kerry Processes designed and business owned » Global Functional Excellence Programme scoped: » Global Supply Chain Optimisation » Deployment of Lean Manufacturing » Global
Slide 74: 1 Kerry Business Transformation
1 Kerry Business Transformation 74
Slide 75: Kerryconnect Objectives
Kerryconnect Objectives » Implement Kerry Best Practice Processes consistently across the organisation » Implement Master Data Management standards globally to enable one consistent view of our business » Implement an Integrated Global I.C.T. System to enable our processes and Data Model for efficie
Slide 76: The Kerryconnect Programme Plan (€350m)
The Kerryconnect Programme Plan (€350m) Kerryconnect is estimated to be a 7 year programme, investing circa €50m p.a. on average 2009 2010 2011 2012 2013 2014 2015 2016 Phase 0 Phase 1 Phase 1 and 2 Kerryconnect Phase 0: » This was focussed on C.R.M. and Business Intelligence to enable the “Go to Ma
Slide 77: Kerryconnect Timeline
Kerryconnect Timeline 2009 2010 2011 2012 2013 2014 2015 2016 Back Office Operating Model Review Phase 1 Design & Pilot (N.I. & Germany) Phase 1 GB & Irl Deployment Overall Operating Model Review Phase 2 Design & Pilot Phase 1 & 2 Europe Phase 1 & 2 APAC Phase 1 & 2 Americas Globalise 1 Kerry Proces
Slide 78: Progress on Kerryconnect To-date
Progress on Kerryconnect To-date » “Customer Relationship Management” system has been implemented globally and assists in executing efficiently our “Go to Market Strategy” » Global Ways of Working have been designed and agreed for Phase 1 with clear Business Ownership » Phase 1 has been successfully
Slide 79: Kerry's Future With Kerryconnect
Kerry’s Future With Kerryconnect » Kerry best practice can be shared and implemented efficiently across the Group » Consistent Master Data will enable “one global view of our business” for better business decision making » Enable our Global Supply Chain, Manufacturing and Procurement Teams to delive
Slide 80: Summary
Summary » Kerryconnect is a global platform for our 1 Kerry Strategy » Kerryconnect is owned by the Business Executive Teams » Kerryconnect is on time and on budget » Kerryconnect enables and sustains functional excellence for the business Kerryconnect enables Kerry’s complexity to be executed effic
Slide 81: Investment & Financials
Slide 82: Brian Mehigan, CFO
Brian Mehigan CFO 82
Slide 83: Performance v Current Targets
Performance v Current Targets Performance v Targets to Date KPI Target 3 Year Avg 2011 2012 2008 to 2010 +2% to +4% LFL Revenue ✔ +3.7% On track volume growth 10% trading margin Margin (30bps pa) ✔ +37bps pa Behind** Adjusted EPS* CAGR 10%+ On track Growth ✔ 10.6% ROAE* 15%+ ✔ 16.5% On track CFROI 1
Slide 84: Long Term Targets – Investment
Long Term Targets – Investment 84
Slide 85: Operating Model/Kerryconnect – Financial Impact
Operating Model/Kerryconnect – Financial Impact Cost » Programme estimated to cost c. €350m over 7 years (2010 to 2016) » Costs will be weighted to the earlier years but software and hardware investments will be capitalised and amortised » P&L impact approximately €50m per annum on average Savings »
Slide 86: Operating Model/Kerryconnect – Financial Impact
Operating Model/Kerryconnect – Financial Impact Net P&L Impact €'m 1% margin increase 0 2010 2011 2012 2013 2014 2015 2016 2017 Years This 1% margin increase attributable to efficiency gains arising from the operating model and Kerryconnect investment is in addition to the 30bps group margin expansi
Slide 87: Capital Expenditure – % of Revenue
Capital Expenditure – % of Revenue Peer Average 3.9% Increased capital expenditure required to support higher growth markets 87
Slide 88: Return on Average Equity (ROAE)
Return on Average Equity (ROAE*) 10yr 3yr Target Avg Avg 15%+ 18% 15.3% 16.5% 17% 16% 15% 14% 13% 12% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Note: * before intangible amortisation and non-trading items 88
Slide 89: Cashflow Return on Investment (CFROI)
Cashflow Return on Investment (CFROI) 10yr 3yr Target Avg Avg 12%+ 16% 12.0% 12.4% 15% 14% 13% 12% 11% 10% 9% 8% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 89
Slide 90: Dividend Per Share
Dividend Per Share CAGR Target 3yr 1986-2010 double digit Avg 18.6% in line with 12.9% 30 EPS growth 28.8 28 26 25.0 24 22.5 22 20.0 20 18.0 18 16.0 16 14.0 14 12.7 12 11.5 10.0 10 9.1 7.9 8 6.6 5.6 6 4.9 4.2 3.3 3.6 4 2.9 2.5 2.7 2.7 2.1 2.3 2 0.5 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
Slide 91: Long Term Targets – Volume and Margin Growth
Long Term Targets – Volume and Margin Growth 91
Slide 92: Business Growth Strategies Will Deliver
1 Kerry Ingredients & Flavours Business Growth Strategies Will Deliver Mature Markets Emerging Markets 1 Kerry Impact » Volume growth 3% - 5% » Volume growth 10% » Global best in class infrastructure Improve margin +50bps p.a » Substantial upfront cost » Capital spend increases » More local customer
Slide 93: Consumer Foods – Growth Objectives
Consumer Foods – Growth Objectives Volume Growth 2-3% Margin Improvement % Margin +20 bps p.a. Private Label 1.5% CAGR Foodservice 1.5% CAGR Branded 3.6% CAGR 2010 2017 2010 2017 93
Slide 94: Long Term Targets - Summary
Long Term Targets - Summary 94
Slide 95: Long Term Targets
Long Term Targets » Adjusted EPS* Growth 10%+ p.a. Driven by: » Revenue Growth (LFL Volume) Kerry Ingredients & Flavours 4% to 6% p.a. (Including Emerging markets 10% p.a.) Consumer Foods 2% to 3% p.a. Group 3% to 5% p.a. » Margin expansion Kerry Ingredients & Flavours 50 bps p.a. Consumer Foods 20
Slide 96: 'Realising the Potential' Summary and Q&A
KERRY “Realising the Potential” Summary and Q&A
Slide 97: 1 Kerry – 'Realising the Potential'
1 Kerry – ‘Realising the Potential’ 1 Kerry Benefits » Multinationals globalising brands » Ability to grow globally (CPG, efficient global management » Collaborative brand innovation model) » Consumer-ready solutions » Deeper market knowledge » Synergistic benefits through R&D and » Optimisation of
Slide 98: Summary: Our Next Phase of Profitable Growth
Summary: Our Next Phase of Profitable Growth » 1 Kerry » Compass for the future » Realisation of Kerry business potential » Business transformation programme well underway » Providing unrivalled customer solutions to an expanding global consumer marketplace » Investment for growth in developed and d
Slide 99: Q&A
Slide 100: The Kerry Growth Model – Capital Markets Day
KERRY The Kerry Growth Model Capital Markets Day London Stock Exchange 29 June 2011