Slide 1: Preliminary Statement of Results
Preliminary Statement of Results 18 February 2020
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 2019
Preliminary Statement of Results 2019 Review of 1 Business Financial 2 Review Outlook & Future 3 Prospects Edmond Scanlon, Chief Executive Officer Marguerite Larkin, Chief Financial Officer
Slide 4: Key Highlights – Continued Delivery and Strategic Development
Key Highlights – Continued Delivery and Strategic Development Growth Integrated Solutions Developing Markets Driven by Taste & Nutrition Kerry’s leading integrated Continued strong growth, volume growth and solutions capability driving technology deployment strategic acquisitions performance and inn
Slide 5: Business Review – Taste & Nutrition
Business Review – Taste & Nutrition 2019 Growth 1 Revenue €6,018m +4.0% Trading margin 15.3% +20bps Continued volume growth ahead of our markets: • Nutrition and wellbeing a key driver of growth • Winning across a diverse customer base • Developing markets +10.0% • Foodservice +5.5% Pricing +0.1% –
Slide 6: Taste & Nutrition - End Use Market Overview
Taste & Nutrition - End Use Market Overview +3% +1% +9% Food EUMs overall delivered good growth – led by Meat and Snacks 0% • Meat – excellent performance driven by clean label, natural Taste & Nutrition +9% preservation and plant-based innovations • Snacks – very strong growth through healthier sna
Slide 7: Taste & Nutrition – Business Growth by Region
Taste & Nutrition – Business Growth by Region Volume Growth Americas Europe APMEA by Region €3.2bn €1.5bn €1.3bn 10.3% • North America – good growth • Performed well, led by good • Strong growth across all Food versus softer market volumes, growth in Beverage, Meat and and Beverage EUMs with Meat an
Slide 8: Business Review – Consumer Foods
Business Review – Consumer Foods 2019 Growth 1 Revenue €1,307m -2.2% / +0.9% Trading margin 7.6% +10bps Everyday Fresh • Solid underlying performance against a backdrop of softer markets • Richmond – good growth in chilled, while frozen challenged • Overall volume performance impacted by ready meals
Slide 9: Acquisitions Completed - Aligned to Strategic Priorities
Acquisitions Completed - Aligned to Strategic Priorities Strategic Strategic Value Priorities Acquisitions Completed Creation Improved Taste Taste Enhanced Nutrition Nutrition New Functionality New Applications Developing Markets New Geographies New Channels Foodservice New Solutions Total Considera
Slide 10: FY 2019 Financial Review
FY 2019 Financial Review €7.2bn €903m 393.7c Trading Adjusted Revenue Profit EPS Marguerite Larkin, Chief Financial Officer
Slide 11: FY 2019 Financial Highlights
FY 2019 Financial Highlights +2.8% volume growth Revenue €7.2bn +9.6% reported growth +9.5% constant currency Trading profit €903m +12.1% reported growth Trading margin 12.5% +30bps margin expansion +8.3% constant currency Adjusted EPS 393.7c +11.4% reported growth Basic EPS 320.4c +4.7% reported gr
Slide 12: Group Revenue Growth Analysis
Group Revenue Growth Analysis 2018 2019 €6,608m €7,241m 9.6% Volume Volume Translation Acquisitions currency 3.6% 2.8% / disposals 2.1% 4.7% © Kerry | 12 | Note: Group net pricing was flat in the year
Slide 13: Group Revenue Breakdown
Group Revenue Breakdown Group Revenue 2019 Taste & Nutrition Volume Growth +2.8% +4.0% 4.4% €7bn 3.8% 4.0% 3.8% €6bn 1 -2.2% €1bn Group Consumer Taste & Q1 Q2 Q3 Q4 Foods Nutrition Kerry Reported Revenue Kerry Volume Growth Market Volume Growth © Kerry | 13 | ¹ Excluding the impact of the ready meal
Slide 14: Group Trading Margin Breakdown
Group Trading Margin Breakdown Kerryexcel €903m €806m FY 2018 Portfolio Mix / Net Price Kerryexcel Kerryexcel Currency Acquisitions Other¹ FY 2019 Operating Leverage Efficiencies Investments Trading 12.2% 0.4% 0.0% 0.3% (0.4%) 0.0% 0.1% (0.1%) 12.5% Margin © Kerry | 14 | ¹ Other comprises Brexit ris
Slide 15: Free Cash Flow
Free Cash Flow 2019 2018 €m €m Trading profit 903 806 Depreciation (net) 191 134 Movement in average working capital (89) (57) Pension contributions paid less pension expense (27) (40) Cash inflow from operations 978 843 Finance costs (net) (81) (65) Taxation (67) (46) Capital expenditure (net) (315
Slide 16: Strong Credit Metrics with Long Maturity Profile
Strong Credit Metrics with Long Maturity Profile Extended Maturity Profile of Net Debt Undrawn €1.1bn RCF 2019 2020 2021 2022 2023 2024 2025 2029 Net Debt of €1.9bn On demand Up to 1 year < 2 years 2 to 5 years > 5 years (€550m) €140m €1m €733m €1,539m Strong Credit Metrics 2019 2018 Net debt: EBITD
Slide 17: Other Matters
Other Matters Finance costs (net) Increase of €15m primarily due to acquisitions and the transition to IFRS 16 Net deficit of €9m – decrease of €35m due to strong return on assets offset by movements in Pension discount rates Non-trading items Net charge of €92m – due to M&A integration & transactio
Slide 18: Outlook & Future Prospects
Outlook & Future Prospects Edmond Scanlon, Chief Executive Officer
Slide 19: Accelerating Consumer Change is Reshaping Our Industry
Accelerating Consumer Change is Reshaping Our Industry Traditional Models Being Redefined Consumer Revolution Driving Customer Transformation Reshaping Industry Food for Life & Wellbeing Managing Accelerating Fragmentation Organisational Agility Critical New Taste Experiences Elevated Nutrition that
Slide 20: Our Sustainability Strategy – Innovation Enabling Sustainable Nutrition
Our Sustainability Strategy – Innovation Enabling Sustainable Nutrition Impact We Innovation Vision 2030 Commitments Will Deliver Sustainable Solutions Sustainable Agriculture Better for People Co-creating solutions with 100% of key raw materials Enabling more sustainable customers that address the
Slide 21: The Nutrition & Wellness Partner … right across the beverage market
The Nutrition & Wellness Partner … right across the beverage market Categories being redefined and reinvented Oat Frappe for Foodservice Sensory Customer & Consumer Insights Functional Oats Ebi-Frappe Authentic Ingredients TasteSenseTM ProDiem Recipes & Fermented Probiotic Kombucha Tea Formulas Exam
Slide 22: Outlook 2020
Outlook 2020 • Continued Delivery and Strategic Development • Taste & Nutrition: Strong innovation pipeline and good growth prospects, as we continue to further deploy our customer-centric business model • Consumer Foods: Continue to selectively focus on growth opportunities • Invest for growth alig
Slide 23: Additional Information
Additional Information KERRY
Slide 24: Revenue Growth Components FY 2019
Revenue Growth Components FY 2019 Transaction Translation Acquisitions/ Volume Price Currency Currency Disposals Total Taste & Nutrition 4.0% 0.1% 0.0% 2.6% 5.8% 12.5% Consumer Foods (2.2%) (0.5%) 0.0% 0.3% 0.0% (2.4%) Group 2.8% 0.0% 0.0% 2.1% 4.7% 9.6% © Kerry | 24 |
Slide 25: Trading Margin by Business
Trading Margin by Business 2019 2018 2019 Trading 2018 Trading Revenue Profit Revenue Profit €m €m % €m €m % Taste & Nutrition 6,017.6 918.5 15.3% 5,350.6 805.3 15.1% Consumer Foods 1,306.6 98.9 7.6% 1,339.0 100.1 7.5% Eliminations/unallocated (82.9) (114.7) (82.0) (99.8) Group 7,241.3 902.7 12.5% 6
Slide 26: EPS Reconciliation
EPS Reconciliation 2019 2018 € cent € cent Basic EPS 320.4 305.9 Brand related intangible asset amortisation 21.4 16.3 Non-trading items (net of related tax) 51.9 31.2 Adjusted EPS 393.7 353.4 Retranslating PY adjusted EPS at current year average fx rates 10.1 Adjusted EPS in constant currency 393.7
Slide 27: Net Debt as at 31 December 2019
Net Debt as at 31 December 2019 @ Floating @ Fixed Debt Rates Rates €m €m €m Euro 1,793 245 1,548 Sterling - - - US dollar 620 397 223 Other 5 5 - Gross debt 2,418 647 1,771 Cash (555) (555) - Net debt 1,863 92 1,771 Gross debt 2019 27% 73% Gross debt 2018 50% 50% Weighted average maturity of debt:
Slide 28: Exchange Rate Movements
Exchange Rate Movements Average Exchange Rates – 2019 v 2018 5% 5% 3% 2% 1% 1% AUD BRL CNY GBP MXN MYR RUB USD ZAR (2%) (2%) (2%) © Kerry | 28 |
Slide 29: Strong Growth While Maintaining Return on Average Capital Employed
Strong Growth While Maintaining Return on Average Capital Employed 500 14% 450 12% 12% 400 393.7 10% 350 353.4 341.2 8% 323.4 300 301.9 6% 278.9 257.9 250 234.0 4% 213.4 200 192.1 2% 150 0% 100 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Adjusted EPS ROACE © Kerry | 29 | Adjusted EPS, ROACE an
Slide 30: Leader in R&D | No. 1 in Developing Markets
Leader in R&D | No. 1 in Developing Markets 283 261 Largest R&D Spend Taste & Nutrition 180 175 €m 108 105 97 97 79 76 35 23 13 Kerry Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 T&N 1,647 Developing Market Sales 1,385 Taste & Nutrition 1,180 1,033 €m 821 73
Slide 31: Share Register
Share Register Institutional Analysis Institutions 60% Kerry Co-operative 13% North America 20% UK 15% Continental Europe | Rest of World 23% Ireland 2% Retail 27% © Kerry | 31 | Shares in issue at 31 December 2019: 176,514,942
Slide 32: Preliminary Statement of Results
Preliminary Statement of Results 18 February 2020