Disclaimer: Forward Looking Statements This presentation/announcement may contain forward looking statements with projections regarding, among other things, the Company’s strategy, revenues, earnings, trading profit, trading margin, finance costs, tax rate, capital expenditure, dividends, cash flow, net debt or other financial measures, the impact of foreign exchange fluctuations, the impact of raw material fluctuations and other competitive pressures. These and other forward looking statements reflect management expectations based on currently available data. However actual results will be influenced by, among other things, macro-economic conditions, food industry supply and demand issues, foreign exchange fluctuations, raw material and commodity fluctuations, the successful acquisition and integration of new businesses, the successful execution of business transformation programmes and other, as of today, unknown factors and therefore actual results may differ materially from these projections. These forward looking statements speak only as of the date they were made and the Company undertakes no obligation to publicly update any forward looking statement, whether as a result of new information, future events or otherwise. 2
2015 Preliminary Statement of Results 1 Review of Business 2 Financial Review Outlook & Future 3 Prospects Stan McCarthy Brian Mehigan CEO Kerry Group CFO Kerry Group
2015 Full Year Highlights +8.2% +3.8% +40bps 13.6% € 453m +11.1% Adjusted EPS* Volume Group Trading ROACE* Free Cash Total Dividend Margin Flow Group Model & Outperforming Market Strong Financial Strategy Delivers Growth Rates Performance Record year of business Adjusted EPS* up 8.2% 3.8% Volume Growth development in tough to 301.9 cent trading environment Trading Margin +40bps ROACE 13.6% Variable economic growth to 11.5% Significant commodity and Free Cash Flow currency volatility € 453m Consolidating Kerry’s global infrastructure and expanding our technology and market footprint 4 Note: * before brand related intangible asset amortisation and non-trading items (net of related tax)
2015 Overview Developed Markets Developing Markets Macro-economic environment stabilised Slower economic growth • • Consumer spending power remains constrained Geopolitical issues and significant currency movement • • impact ‘New connected consumer’ trends • Localisation of taste drives innovation and domestic • consumption Kerry: well positioned for fast-changing Marketplace Dynamics environment Unprecedented change in response to consumer Unique Kerry Taste & Nutrition model delivering for our • • trends customers and for Kerry Increased nutrition, health and wellness demands Global Technology & Innovation Centre architecture • • drives strong innovation pipeline and speed to market Focus on food safety, clean label and food origin • Kerry Foods – good growth benefitting from portfolio • Millennials driving snacking, ‘food -to- go’, • repositioning foodservice trends Successful business development (acquisition spend • E-commerce outperforming market growth rates • € 888m) Innovation drives product differentiation • 5
Revenue and Margin Overview Group € 6,105m Volume +3.8% Margin +40bps Consumer Foods Taste & Nutrition € 4,716m € 1,476m Volume +4.0% Volume +3.0% Margin +40bps Margin +20bps 6
Business Review – Taste & Nutrition 2015 GROWTH Volume Growth Revenue € 4,716m +4.0%* by Region Trading profit € 663m +11.9% Trading margin 14.1% +40bps 10.1% Continued margin improvement driven by operating leverage, efficiency programmes and • product mix Increased innovation and customer engagement in all regions • 4.1% Foodservice channel – growth in all regions (chains and brands) 4.0% • Unique Taste & Nutrition holistic approach delivers • 0.9% Significant expansion of Kerry Taste & Nutrition technology portfolio • AMERICAS EMEA APAC T&N Americas EMEA Asia-Pacific Improved performance Strong growth – in particular Solid overall performance • • • through beverage especially in Q4 Continued geopolitical impact • technologies and foodservice in regional developing markets Double digit growth despite • Impact of currency in Brazil slowdown in economic growth • Strong customer engagement • Food safety requirements and • nutrition drive innovation 7 Note: * volume growth
Our Taste & Nutrition Business Today Year On Year Volume Growth Revenue By End Use Market +3.4% 24% Beverage Savoury & Dairy 18% Meats Systems & Flavours 9% Dairy +8.6% 9% Bakery Beverage Systems 6% Cereal & Bars & Flavours 6% Soups, Sauces & Dressings End Use Market Technology (1.4%) 5% Ice-cream & Desserts Cereal & Sweet 5% Prepared Meals & Side Systems & Flavours Dishes 5% +8.5% Savoury Snacks 5% Pharma/Functional Pharma Ingredients 4% Confectionery 2% Appetisers Regional Ingredients 2% Others Developed 74% 50% 33% 17% Developing 26% Americas EMEA Asia-Pacific 8
Business Review – Consumer Foods 2015 GROWTH Revenue € 1,476m +3.0%* Trading profit € 126m +0.2% Trading margin 8.5% +20bps Consumer confidence improves in Ireland & UK • Deflationary environment – encouraging volume growth • Margin improvement in 2015 driven by efficiency programmes and repositioned portfolio • Kerry Foods outperforming etail market growth rates • International growth through Cheestrings • Dairy Meat Products Meal Solutions Mattessons double digit growth Dairygold performing well Strong growth in all sectors • • • Richmond – impacted by EDLP Charleville strong – chilled • • performance Fire & Smoke very successful – ready-to-cook • launch in Ireland Yollies gaining momentum • – frozen Denny Gold Medal good brand • growth 9 Note: * volume growth
Performance v 5 Year Group Targets (2013-2017) GROWTH Target (p.a.) 3 Year Performance Adjusted EPS growth* 10%+ +8.8% – ✔ Volume growth** 3% - 5% +3.1% ✔ Margin expansion +30bps +60bps RETURN ✔ ROACE* 12%+ 14.1% ✔ ROAE* 15%+ 18.0% – CFROI 12%+ 11.0% Achieving Group Targets Note: * before brand related intangible asset amortisation and non-trading items (net of related tax). ** Assuming market growth of 2% - 3% p.a. 10 Targets assume neutral currency and raw materials
Financial Highlights € 6,105m Revenue € 700m Trading Profit 301.9 Adjusted EPS Brian Mehigan CFO Kerry Group 11
Consistent Delivery in a Volatile and Changing Environment Currency Volatility USD • Further investment in scientific capability GBP € - 100 • Repositioning of product portfolios ZAR BRL • Investment in flexible technology footprint Raw Material Prices • Robust partnerships / commercial model • Efficiency driven by functional excellence and Kerryconnect Global Market Growth 0.8% p.a. 2013 2015F 12 Source: Euromonitor
2015 Financial Highlights € 6,105m Revenue +3.8% volume growth € 700m Trading profit +10.0% 11.5% Trading margin +40bps 301.9c Adjusted EPS* +8.2% 298.7c Basic EPS +9.4% € 453m Free cash flow 85% conversion** Note: * before brand related intangible asset amortisation and non-trading items (net of related tax) 13 ** expressed as a percentage of adjusted earnings after tax
Revenue Analysis 2014 2015 € 5,757m € 6,105m 6.1% Volume 3.8% Transaction Acquisition/ FX Translation Price/Mix Currency Disposal 6.9% (2.2%) (2.5%) 0.1% 14
Revenue – Volume Growth Ahead of Markets Group Volume € m Growth by Quarter +3.8% 7,000 5.7% 6,000 +4.0% € 6,105 4.1% 5,000 € 4,716 2.9% 2.5% 4,000 3,000 +3.0% 2,000 Q1 Q2 Q3 Q4 € 1,476 1,000 2014 2015 0 Group Taste & Nutrition Consumer Foods Volume Growth 15
Trading Margin – Expansion Ahead of Plan Group % 12.0 +40 11.5 +40 bps 11.0 bps 10.5 10.0 9.5 11.5% 9.0 14.1% € m 2011 2012* 2013 2014 2015 700 Taste & Nutrition € 700 € 663 % 600 14.5 14.0 500 13.5 13.0 +20 12.5 bps 400 12.0 11.5 300 2011 2012* 2013 2014 2015 8.5% Consumer Foods 200 % 100 9.0 € 126 8.5 0 8.0 Group Taste & Nutrition Consumer Foods 7.5 7.0 Margin Progression Trading Margin % 6.5 2011 2012* 2013 2014 2015 16 Note: * 2012 restated due to adoption of IAS 19 (2011) ‘Employee Benefits’
Trading Margin Progression 2015 € 700m € 636m 2014 Operating leverage / Net price Kerryconnect / other Translation currency Disposals / acquisitions 2015 efficiencies Margin 11.1% +0.4% +0.2% (0.2%) (0.1%) +0.1% 11.5% 17
Strong Earnings Growth While Maintaining Return on Capital Employed ROACE % EPS* CENT 350 13.6% 14% 325 300 301.9 12% 275 10.8% 278.9 250 257.9 10% 225 234.0 213.4 200 8% 192.1 175 163.9 150 6% 151.8 142.4 125 132.8 100 4% 75 50 2% 25 0% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EPS* ROACE* 18 Note: * before brand related intangible asset amortisation and non-trading items (net of related tax)
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