Q3 2017 Interim Management Statement November 2017
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, 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. Therefore actual results may differ materially from these projections. These forward looking statements speak only as of the date they were made and the Group undertakes no obligation to publicly update any forward looking statement, whether as a result of new information, future events or otherwise. 2
Performance Overview Brian Mehigan Chief Financial Officer
Strong Underlying Performance Q3 YTD 2017 HIGHLIGHTS • Volume growth +4.2% VOLUME GROWTH • Taste & Nutrition +4.6% 4.6% • Consumer Foods +2.5% 4.2% • Pricing +2.0% • Group trading margin maintained • Underlying margin expansion offset by transaction currency headwind 2.5% • Taste & Nutrition +20bps • Consumer Foods (70bps) • Strong cash flow delivery • Confident of delivering good revenue growth and earnings guidance Taste & Nutrition Consumer Foods Group 4
Q3 YTD 2017 Business Overview REVIEW OF BUSINESS • Developed – overall stable while consumer trends driving major disruption and fragmentation MARKETS • Developing – general improvement in market dynamics • Strong volume growth – continued growth ahead of our markets HIGHLIGHTS • Inflationary input costs – continuing to manage via partnership pricing model • Acquisitions – Ganeden, Dottley Spice & Kettle business of Tyson Foods announced since interim • Taste & Nutrition – Kerry business model providing platform for growth BUSINESS PERFORMANCE • Consumer Foods – good volume growth via innovation in snacking and convenience 5
Q3 YTD Revenue Growth Analysis REVIEW OF BUSINESS Q3 YTD Q3 YTD 2016 2017 4.5% Volume Volume 4.2% 3.6% Translation Transaction Acquisition/ Price currency currency disposal (1.9%) (0.3%) 2.0% 0.5% 6
Taste & Nutrition REVIEW OF YTD GROWTH YT BUSINESS Revenue +4.6%* Trading margin +20bps REVENUE GROWTH BY REGION* • Volume growth ahead of our markets: 10.9% - Good growth across global, regional & local customers - Strong growth in clean label, natural extracts & our nutritional portfolio 4.6% • Foodservice & C-store – strong performance globally driven by Beverage systems & Meat systems 3.7% 3.4% • Price inflation of 2.0% reflecting our customer pricing pass-through model • Margin progression – underlying growth driven by operating leverage, product mix & efficiencies AMERICAS EMEA APAC T&N ASIA-PACIFIC AMERICAS EMEA • Developed – Good growth through Authentic • Developed – strong • Good growth across all regional performance in Meat and Taste into Beverage, Snacks and Dairy EUMs developing markets Beverage EUMs • Developing – Russia performing well with • Strong growth in Beverage, Dairy and • Developing – Brazil delivering improved performance in Sub-Saharan Africa Meat EUMs and MENAT good growth, Mexico and • Acquisition integration and footprint Central America softer • Foodservice - strong Q3 volumes from seasonal expansion progressing well products / LTOs 7 Note: * volume growth
Consumer Foods REVIEW OF YT YTD GROWTH BUSINESS Revenue +2.5%* Trading margin (70bps) Volume growth led by good growth in Food-to-go and Convenience Meal Solutions • Inflationary environment with 1.9% average pricing across the period • Innovations performing well – e.g. Fire & Smoke meat snacking & new out-of-home meal solutions • Underlying margin improvement of 30bps more than offset by transaction currency headwind of 100bps • CONVENIENCE MEAL SOLUTIONS EVERYDAY FRESH FOOD-TO-GO • Chilled category – solid • Richmond’s recent relaunch delivering • Meat snacking – strong growth in performance via innovations with solid performance Fridge Raiders and Fire & Smoke better-for-you, authentic meals • Spreads – traditional category decline, • Food-to-go Solutions – Rollover and • Frozen retail category remains good growth in softer butter technology Wall’s driving growth with new listings challenged offerings • Strong growth through out-of-home • Fire & Smoke deli & sliced meats rollout channel delivering good growth Note: * volume growth 8
M&A Update M&A UPDATE NUTRITION, DEVELOPING AUTHENTIC TASTE WELLNESS & FOODSERVICE MARKETS FUNCTIONALITY Taste Master Tianning Hangman Ben Alimentos Ganeden Dottley Spice Kettle (Tyson) Consideration of €420m 9
Other Financial Matters FINANCIAL MATTERS Raw Materials Inflation continues – increases in dairy, protein, naturals and vanilla Acquisition Progressing as planned, new acquisitions to be incorporated Integration Action plan progressing – restructuring unprofitable businesses, cost optimisation Brexit programme and reducing transaction currency exposure FX Continued translation and transaction headwinds Net Debt Net Debt of €1.3b Capital Markets Will report in line with new structure from 2018 Day 10
Kerry Business Model – Our Platform for Growth BUSINESS MODEL Foundational Integrated Technology Value Creation Channels & Customers Technologies Retail & Foodservice Authentic Taste Taste & Nutrition Nutrition, Wellness Product Process Culinary Development & Solutions Technologies & Insights Applications & Functionality Kerry Foresight & Insight Consumer, Customer, Sensory & Analytical, Market and Regulation 11
Future Prospects OUTLOOK AND FUTURE PROSPECTS • Continued growth ahead of our markets • Unique Kerry business model for global, regional and local customers • Innovation and agility the key drivers of growth • Continued investment for growth • Continued enhancement in breadth and depth of our foundational technologies • Localisation of footprint expansion in key growth markets • Strategic channel development • Continue to pursue strategic acquisition opportunities We are confident of achieving good revenue growth and taking into account the 4% currency translation headwind, we expect to achieve adjusted EPS* growth of 4% to 6% on a reported basis to a range of 336 - 343 cent per share (2016: 323.4 cent) Note: * before brand related intangible asset amortisation and non-trading items (net of related tax) 12
Q3 2017 Interim Management Statement November 2017
Recommend
More recommend
