Kerry Group Plc · EURONEXT:KRZ
Kerry — Q2 2022 Earnings Presentation
31 slides from Kerry's earnings presentation, Jul 29, 2022
Slide 1: H1 2022 Interim Report
H1 2022 ° G = Interim Pe an Report 4 {}/ —_ = Ee ly 2022 ; July “a ,
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, EBITDA, EBITDA margin, finance costs, tax rate, capital expenditure, dividends, cash flow, net debt o
Slide 3: Interim Management Statement 2022
Interim Management Statement 2022 Edmond Scanlon Marguerite Larkin Chief Executive Officer Chief Financial Officer © Kerry 2022 | 3 |
Slide 4: Strong Growth Across a Dynamic Marketplace Maintained
Volume Growth Strong Growth Across a Strong Volume 7.6% 8.0% Growth 6.6% Dynamic Marketplace 5.6% +6.8% (H1) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Pricing 10.4% Pricing Reflecting 5.8% Increased Input Costs 2.6% 1.0% +8.3% (H1) Q3 2021 Q4 2021 Q1 2022 Q2 2022 EBITDA €518m EBITDA % Margin €458m Maintained
Slide 5: Business Review – Taste & Nutrition
Business Review – Taste & Nutrition Continued strong growth across our end use markets, regions and channels H1 2022 Performance¹ Revenue €3,445m +8.6%² EBITDA €515m +24.9% EBITDA margin 15.0% -30bps → Volumes +8.6% with excellent Q2 growth of 10.3% T&N Volume Growth → Pricing +5.9% reflecting incre
Slide 6: Taste & Nutrition Business Performance by Region
Taste & Nutrition Business Performance by Region Americas Europe APMEA €1,934m €729m €768m H1: 9.1% | Q2: 11.4% H1: 7.1% | Q2: 5.9% H1: 9.1% | Q2: 12.1% → North America growth led by → Growth led by Beverage, Dairy and → Overall growth led by Meat, Beverage, Meat and Bakery Snacks Snacks and Bakery
Slide 7: Business Review – Dairy Ireland
Business Review – Dairy Ireland Solid growth as business saw significant price inflation across the period H1 2022 Performance¹ Revenue €695m +2.2%² EBITDA €38m³ +4.6% EBITDA margin 5.5% -140bps → Volumes +2.2% with Q2 performance of +3.3% → Pricing +27.8% reflected significant increases in dairy pr
Slide 8: H1 2022 Financial Review
H1 2022 Financial Review Marguerite Larkin Chief Financial Officer © Kerry 2022 | 8 |
Slide 9: H1 2022 Financial Overview
H1 2022 Financial Overview 6.8% volume growth Revenue €4.1bn 13.3% reported growth EBITDA €518m 13.1% reported growth EBITDA margin 12.8% Margin maintained 9.0% constant currency growth Adjusted EPS 176.4c 16.1% reported growth Basic EPS 128.4c H1 2021: 128.2c ROACE 10.2% H1 2021: 10.7% Free cash fl
Slide 10: Group Revenue Analysis
Group Revenue Analysis H1 2021 H1 2022 13.3% Translation Acquisitions Currency Volume Price 5.8% 4.7% Transaction Currency 6.8% 8.3% Disposals 0.1% LFL Volume LFL Price (12.4%) 7.8%¹ 9.3%¹ © Kerry 2022 | 10 | ¹ Like-for-like (LFL) growth excluding the Consumer Foods Meats and Meals business disposal
Slide 11: Divisional Revenue Analysis
Divisional Revenue Analysis Group Revenue H1 2022 Taste & Nutrition – Quarterly Organic Growth +15.2% 17.7% +6.8% +14.7% +8.6% €4.1bn 7.2% 11.4% €3.4bn 9.8% 7.1% 2.1% 4.6% +30.2% 0.8% 10.3% +2.2% 7.6% 6.2% 6.8% €0.7bn Group Dairy Taste & Q3 Q4 Q1 Q2 Ireland¹ Nutrition 2021 2021 2022 2022 Reported Re
Slide 12: H1 EBITDA Margin Breakdown
H1 EBITDA Margin Breakdown €518m €458m EBITDA 12.8% 0.2% (1.2%) 0.2% 0.1% 0.7% 12.8% Margin © Kerry 2022 | 12 |
Slide 13: H1 Free Cash Flow
H1 Free Cash Flow H1 2022 H1 2021 €m €m EBITDA 518 458 Movement in average working capital (164) (27) Pension contributions paid less pension expense (7) (6) Finance costs paid (net) (15) (22) Income taxes paid (32) (32) Purchase of non-current assets (74) (149) Free cash flow 226 222 Cash conversio
Slide 14: Strong Credit Metrics with Long Debt Maturity Profile
Strong Credit Metrics with Long Debt Maturity Profile Net Debt of €2.5bn €988m €700m Undrawn €743m €748m €1.1bn RCF €21m 2022 2023 2024 2025 2026 2029 2031 €744m Weighted average maturity of 5.1 years Key Credit Metrics¹ H1 2022 FY 2021 H1 2021 Net debt: EBITDA 2.1x 2.0x 1.9x EBITDA: Net interest 16
Slide 15: Other Financial Matters
Other Financial Matters Kerryconnect North America deployment completed in the period Finance Costs €34.1m (H1 2021: €34.2m) Pension Net surplus of €164m driven by favourable discount rates • Divestment of Russia and Belarus businesses – impairment charge Non-Trading Items • Operational excellence p
Slide 16: Outlook and Future Prospects
Outlook and Future Prospects Edmond Scanlon Chief Executive Officer © Kerry 2022 | 16 |
Slide 17: Taste & Nutrition Business Dimensions
Taste & Nutrition Business Dimensions © Kerry 2022 | 17 |
Slide 18: Stronger Positioning Across Both Retail and Foodservice Channels
Stronger Positioning Across Both Retail and Foodservice Channels Retail Foodservice Kerry Volume Growth Kerry Volume Growth 5.7% 18% 17% 5.4% 3.8% 6% 6% 3.5% 3.5% (19%) 2018 2019 2020 2021 H1 2022 2018 2019 2020 2021 H1 2022 Key Retail Channel Dynamics Key Foodservice Channel Dynamics © Kerry 2022 |
Slide 19: Outlook and Future Prospects
Outlook and Future Prospects → While overall market conditions remain uncertain, Kerry is strongly positioned for growth with a good innovation pipeline in a dynamic marketplace → The Group is confident in its ability to manage the current inflationary cycle through its well-established pricing mode
Slide 20: H1 2022 Interim Report
H1 2022 ° G = Interim Pe an Report 4 {}/ —_ = Ee ly 2022 ; July “a ,
Slide 21: Appendix
. i i | Appendix
Slide 22: Revenue Components H1 2022
Revenue Components H1 2022 Transaction Translation Acquisitions Reported Volume Price H1 2022 Currency Currency / Disposals Growth Americas 9.1% 5.4% 0.1% 9.7% 4.8% 29.1% €1,934m Europe 7.1% 7.7% 0.2% 2.4% 10.1% 27.5% €729m APMEA 9.1% 6.0% 0.2% 5.0% 5.8% 26.1% €768m Taste & Nutrition 8.6% 5.9% 0.2%
Slide 23: Taste & Nutrition - Volume Growth By Region and Channel
Taste & Nutrition - Volume Growth By Region and Channel Divisional Breakdown H1 2022 Taste & Nutrition 8.6% Regional Breakdown H1 2022 Dairy Ireland¹ 2.2% Americas 9.1% Group 6.8% Europe 7.1% APMEA 9.1% Channel Breakdown H1 2022 Retail 5.7% Foodservice 16.8% © Kerry 2022 | 23 | ¹ Pro-forma growth ex
Slide 24: H1 2022 EBITDA Margin by Business
H1 2022 EBITDA Margin by Business Group Eliminations & T&N Dairy Ireland Unallocated Group H1 2022 €m €m €m €m Revenue 3,444.9 695.4 (82.5) 4,057.8 EBITDA 515.4 38.4 (36.1) 517.7 EBITDA Margin 15.0% 5.5% 12.8% (A) (B) (C) (A+B+C) Consumer Foods Group Dairy Ireland Meats and Meals Dairy Ireland Elimi
Slide 25: EPS Reconciliation
EPS Reconciliation H1 2022 H1 2021 Growth € cent € cent Basic EPS 0.2% 128.4 128.2 Brand related intangible asset amortisation 13.0 12.6 Non-trading items (net of related tax) 35.0 11.2 Adjusted EPS 16.1% 176.4 152.0 Impact of exchange rate translation (7.1%) Adjusted EPS growth in constant currency
Slide 26: Net Debt as at 30 June 2022
Net Debt as at 30 June 2022 Debt @ Floating Rates @ Fixed Rates €m €m €m Euro 2,475 (38) 2,513 Sterling 10 10 - US Dollar 688 450 238 Other 40 40 - Gross debt 3,213 462 2,751 Cash (757) (757) - Net debt 2,456 (295) 2,751 Gross debt H1 2022 14% 86% Gross debt H1 2021 18% 82% Weighted average maturity
Slide 27: Exchange Rate Movements
Exchange Rate Movements Average Exchange Rates – H1 2022 v H1 2021 17% 10% 10% 9% 5% 4% 4% 3% AUD BRL GBP CNY MYR MXN ZAR USD © Kerry 2022 | 27 |
Slide 28: FY 2022 Guidance – Analysis of Estimated Portfolio Impact
FY 2022 Guidance – Analysis of Estimated Portfolio Impact FY 2022 Range Constant Currency Adjusted EPS guidance - excluding estimated impact from acquisitions & disposals +7.5% to 11.5%¹ Estimated contribution from acquisitions c. +5% Estimated dilution from disposal of Consumer Foods Meats and Meal
Slide 29: Financial Metric Definitions
Financial Metric Definitions Volume Growth ‘Like-for-like’ (LFL) and ‘Pro-Forma’ growth This represents the sales performance year-on-year, excluding pass-through References to ‘like-for-like’ (LFL) and ‘pro-forma’ growth exclude the pricing on raw material costs, currency impacts, acquisitions (net
Slide 30: Share Register Analysis
Share Register Analysis Institutional Analysis Institutions 64% Kerry Co-operative 12% North America 18% UK 17% Continental Europe | Rest of World 26% Ireland 3% Retail 24% © Kerry 2022 | 30 | Shares in issue at 30 June 2022: 176,941,764
Slide 31: H1 2022 Interim Report
H1 2022 ° G = Interim Pe an Report 4 {}/ —_ = Ee ly 2022 ; July “a ,