KERRY GROUP – AN INTRODUCTION
25 . 02 . 14
This presentation/announcement may contain forward looking statements with projections concerning,
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.
DISCLAIMER: FORWARD LOOKING STATEMENTS
KERRY GROUP AT A GLANCE
KERRY WORLDWIDE KIF SALES BY REGION 2013
Note: * As at 21-02-2013
Ingredients & Flavours €4,327m Consumer Foods €1,601m
Ingredients & Flavours €558m Consumer Foods €129m
Consumer Foods 27%
Ingredients & Flavours 73%
Consumer Foods 19%
Ingredients & Flavours 81%
REVENUE 2013 TRADING PROFIT 2013
Americas 44%
Asia-Pacific 18% EMEA 38%
Note: sales in the Republic of Ireland were < 10% of Group revenue
Consumer Foods Sales are to UK and Ireland
€5.8BN
REVENUE
EBITDA
€720M
ENTERPRISE
VALUE*
€9BN
130 PRODUCTION
FACILITIES
24K EMPLOYEES
Manufacturing Plants
Sales Offices
19
86
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87
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KERRY FINANCIAL PERFORMANCE 1986-2013 1
986
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
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10
20
11
20
12
20
13
Note: * before brand related intangible asset amortisation and non-trading items. From 2011, with 2004 to 2010 re-presented, computer software is treated as a cost in calculating adjusted EPS
REVENUE 1986-2013 (€M) TRADING PROFIT 1986-2013 (€M)
CAGR
+11.1%
337
5,837
CAGR
+17.8%
0.48
40.0
ADJUSTED EPS* 1986-2013 (CENT) DIVIDEND 1986-2013 (CENT)
CAGR
+13.9%
7.6
257.9
CAGR
+15.0%
14
611
STRATEGIC PLATFORM DEVELOPMENT – ACQUISITION HISTORY
2000-2013 | 148 ACQUISITIONS
2000 Savoury & Dairy
(DAIRY HERITAGE)
SAVOURY & DAIRY
53 Acquisitions
FLAVOURS
56 Acquisitions
FUNCTIONAL INGREDIENTS
& ACTIVES Emulsifiers, Hydrocolloids, Yeast, Proteins, Enzymes,
Cultures, Fermented Ingredients
CEREAL & SWEET
33 Acquisitions
DEVELOPING MARKETS
11 New Countries
BEVERAGE Beverage Flavour & Bases, Syrups & Sauces, Brewing
Ingredients
PHARMA Cell Nutrition, Excipients
1 Kerry
KERRY GROUP VISION
MARKET LEADERSHIP
TASTE GENERAL
WELLNESS & NUTRITION
DEVELOPING MARKETS
BRANDS CHANNEL
HEALTHY LIVING SNACKING
SUSTAINABILITY
INGREDIENTS & FLAVOURS CONSUMER
FOODS
1 KERRY
Note: * before brand related intangible asset amortisation and non-trading items (net of tax) | ** Assumes market growth rate of 2% to 3% p.a. and neutral currency and raw materials
ADJUSTED EPS* GROWTH +10% P.A
REVENUE GROWTH
Ingredients & Flavours 4% to 6% p.a. Consumer Foods 2% to 3% p.a. Group 3% to 5% p.a.**
MARGIN EXPANSION
Ingredients & Flavours 50 bps p.a. Consumer Foods 20 bps p.a. Group 30 bps p.a. (+ an additional 100 bps at end of Kerryconnect project)
RETURN
ROACE* 12%+ CFROI 12%+ ROAE*15%+
GROUP LONG TERM TARGETS (5 YEARS 2013 – 2017)
Kerry Ingredients & Flavours
develops, manufactures and
delivers innovative taste systems,
functional and nutritional
ingredients and integrated
solutions for the food, beverage
and pharmaceutical markets.
Ingredients &
Flavours
Savoury & Dairy Systems & Flavours 44%
Beverage Systems & Flavours 19%
Cereal & Sweet Systems & Flavours 18%
Pharma/Functional Ingredients 10%
Regional Ingredients 9%
INGREDIENTS & FLAVOURS – BUSINESS OVERVIEW
Americas 44%
EMEA 38%
Asia-Pacific 18%
REVENUE BY TECHNOLOGY
REVENUE BY REGION
SUPPLYING
CUSTOMERS IN
140
COUNTRIES
#1 FOR INGREDIENTS &
FLAVOURS
TASTE &
NUTRITION
UNPARALLELED
POSITIONING
Developed 76%
Developing 24%
REVENUE
€4.3BN
#1 DEVELOPING
MARKETS
(€1BN)
#1 R&D SPEND
800+ SCIENTISTS
#1 MARKET
POSITIONS
Note: where Kerry Ingredients & Flavours plays
RETAIL BRANDS
STORE BRANDS
RESTAURANTS
FUNCTIONAL INGREDIENTS & FLAVOURS
Emulsifiers
Enzymes
Cultures
Hydrocolloids
Colours
Proteins
Flavours
Pharma
INTEGRATED SOLUTIONS
Kerry is the leader in the development of a new sector
of the supply chain: supplying integrated solutions that
provide marketers with components that speed product
development and reduce manufacturing investment.
For example
Beverage that Delivers the Nutrition
Found in a Bowl of Cereal
With a foundation of rheology, nutrition & taste science,
and our cereal, proteins, flavour, taste modulators and
texturants technologies, we formulate a beverage that is
great tasting and delivers high levels of whole grains and
protein while ensuring process stability.
COMMODITIES
Dairy
Flour
Fruits
Oils
Soya
Spices
Starch
Sugar
INDUSTRY SUPPLY CHAIN – HOW KERRY ADDS VALUE
PRODUCT GROUPS PRODUCT SUB-GROUPS
DIVERSIFIED PRODUCT PORTFOLIO
SAVOURY & DAIRY
SCIENCE
CEREAL & SWEET SCIENCE
BEVERAGE SCIENCE
FUNCTIONAL INGREDIENTS
& ACTIVES
PHARMA SCIENCE
› Meat Coatings & Flavourings › Dry & Wet Dairy Ingredients › Savoury & Dairy Flavours
› Fermented Ingredients › Enzymes › Soy Ingredients
› Pharma Excipients › Cell Nutrition Proteins › Media Ingredients
› Sweet Flavours › Confections & Coated Sweets › Sweet Particulates
› Beverage Flavours & Bases › Beverage Syrups & Sauces › Natural Flavour Ingredients
› Dry & Wet Culinary Sauces › Functional Meat Systems › Emulsifiers & Texturants
› Chocolate & Compounds › Cereal Shapes, Agglomerates &
Pieces › Baked & Dough Sweet Products
› Beverage Processing Aids › Complete Beverage
Solutions
› Specialised Functional Proteins
› Dairy Proteins
KERRY GROUP – WORLDWIDE LOCATIONS
Manufacturing Plants
Sales Offices
* As at 31/12/2012
MANUFACTURING FOOTPRINT
› ARGENTINA
› AUSTRALIA
› BELARUS
› BRAZIL
› CANADA
› CHINA
› COSTA RICA
› DENMARK
› FRANCE
› GERMANY
› INDIA
› INDONESIA
› IRELAND
› ITALY
› MALAYSIA
› MEXICO
› NETHERLANDS
› NEW ZEALAND
› PHILIPPINES
› POLAND
› UK
› USA
› SOUTH AFRICA
› THAILAND
KERRY’S INNOVATION PLATFORMS
DEVELOPING MARKETS
GENERAL WELLNESS & NUTRITION
TASTE
INGREDIENTS & FLAVOURS GROWTH STRATEGIES
ORGANIC AND ACQUISITIVE GROWTH
Filling the nation’s fridges with simply brilliant food. We are one of the leading suppliers of added-value branded and customer branded chilled food products.
Consumer
Foods
CONSUMER FOODS OVERVIEW
CONSUMER FOODS SIGNIFICANT CUSTOMERS
REGION TECHNOLOGY CUSTOMERS
GB
Ireland
Rest of Europe
Meat & Savoury Provisions
Meal Solutions
Dairy Products
Brand
Private Label
› Leading supplier of Chilled Foods across Ireland, UK and selected
European markets.
› Focused portfolio of strong brands with No. 1 positions
› Our key brands include Richmond, Denny, Dairygold, Cheestrings,
Low Low, Walls and Mattessons.
› Operating across all retail channels, Multiple Grocers,
Convenience and Online.
› Supplying all the key supermarket chains including in the UK,
Tesco, Sainsbury’s, Asda and Morrisons, in Ireland, Tesco,
Musgraves and Dunnes and in Europe, Carrefour, Rewe, Auchan
and LeClerc
DIVERSIFIED PRODUCT PORTFOLIO
GB Cheese
GB Yellow Fats
Ireland
GB Cooked Meats
GB Pastry
GB Rasher
GB Sausage
Ireland
GB Chilled Ready Meals
GB Ready to Cook
GB Frozen Ready Meals
Ireland
SEGMENT MARKETS KEY PRODUCT MARKET POSITION
MEAT & SAVOURY PROVISIONS
€6.7BN
DAIRY PRODUCTS
€4.9BN
MEAL SOLUTIONS
€3.7BN
› #1&2 breakfast product brands in
Ireland
› #1&2 cooked meat brands in Ireland
› #1&2 sausage brands in GB
› #2 (fastest growing) meat snacking
brand in GB
› #2 customer brand pastry in GB
› Largest branded dairy supplier in
Ireland
› #1 spreads brand in Ireland
› #1 cheese brand in Ireland
› #1 kids cheese snack in GB
› #1 customer brand dairy spreads
and RTE cheese in GB
› #1 GB customer brand supplier of
› – chilled ready meals
› – frozen ready meals
› – ready to cook
BRAND PRIORITIES
CORPORATE PRIORITIES LOCAL BRANDS
OTHERS
INCREASED MARKET POLARISATION
STRUCTURE CHANNELS
CONVENIENCE
HEALTHY & NUTRITIONAL
CONSUMER FOODS’ MARKETS – ‘A NEW REALITY’
ECONOMY IMPACTING SHOPPING BEHAVIOURS AND RETAILER CHOICE
Smaller formats
Growth of discounters
Growth of online and
mobile shopping
‘Click and collect’
Expanding needs around convenience
Product versatility
Snacking ‘on-the-go’ offerings
MORE RESOURCEFUL CONSUMER PRIORITISING SPEND
Taste +
Quality
Nutritional benefits
Clarity of health
information
Trusted Brands
‘Little & Often’
35%-40% sold on
promotion
Own label growth
KERRY FOODS GROWTH STRATEGY
› Portfolio investment for today’s consumer
› Aligned to requirements for
› Reconfigured Kerry Foods Model
› Our brands: Kerry Foods leading brands are big and growing
› Snacking lines: innovative meat and dairy snacking lines
› Healthy living: healthy products consumed with confidence
› Channel alignment: repositioned for today’s shopper requirements (including online)
› Quality business portfolio aligned to Group growth objectives
› Non core businesses held for sale
Convenience Snacking
‘on-the-go’
Healthy
Lifestyles
Trusted
Brands
Home Cooking Needs
Strategic
Initiatives
CAPITAL FOR GROWTH
OPERATING MODELS BUSINESS STRATEGIES
Kerry Ingredients & Flavours
‘Go-to-market Strategy’
Kerry Foods ‘Go-to-market Strategy’
KERRYCONNECT
‘Enabling better business’
Standardised ways of working
Common data
Integrated ICT system
Driving market leadership and global
alignment
Optimising scale and efficiency benefits
Building talent for a global organisation
CAPITAL FOR GROWTH
GENERAL WELLNESS
& NUTRITION DEVELOPING
MARKETS TASTE CAPABILITY
GLOBALLY TECHNOLOGY
DEVELOPMENT KERRYCONNECT
CAPITAL EXPENDITURE
Performance
REVENUE AND ADJUSTED EPS* 1986-2013
337 370 504 710 742
959 1,050 1,117 1,121 1,523 1,566 1,707
2,200 2,456 2,622
3,003
3,755 3,693 4,129
4,430 4,646 4,788 4,791
4,521 4,960
5,302
5,848 5,837
0
1000
2000
3000
4000
5000
6000
7000
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
7.6 8.4 12.7 16.3 17.6 21.1 23.0 25.9 28.9 35.8 38.7 46.7 57.4
68.0 79.2
87.9 101.8
112.1 122.3
130.8 132.8 142.4
151.8 163.9
192.1
213.4
234.0
257.9
0.0
50.0
100.0
150.0
200.0
250.0
300.0
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012** 2013
Note: * before brand related intangible asset amortisation and non-trading items (net of tax) | ** Restated to reflect the adoption of IAS 19 (2011) Employee Benefits
REVENUE 1986-2013 (€M)
ADJUSTED EPS* 1986-2013 (CENT)
REVENUES AND PROFITABILITY
11.3% 11.8% 11.9% 12.0%
12.9%
5.0%200
250
300
350
400
450
500
550
600
2009 2010 2011 2012* 2013
Trading Profit Trading Margin
4.1 4.4 4.6 4.8 4.8
4.5 5.0
5.3 5.8 5.8
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013
356 380 384 401 409 422 470
501 559
611
0
100
200
300
400
500
600
700
2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013
7.7% 8.1% 7.8% 7.7% 8.0%
0.5%50
70
90
110
130
150
2009 2010 2011 2012* 2013
Trading Profit Trading Margin
Note: * 2012 restated to reflect the adoption of IAS 19 (2011) ‘Employee Benefits’
GROUP REVENUE (€BN) GROUP TRADING PROFIT (€M)
INGREDIENTS & FLAVOURS – TRADING PROFIT (€M) CONSUMER FOODS – TRADING PROFIT (€M)
10 YEAR
CAGR
4.7%
10 YEAR
CAGR
7.1%
STRONG EARNINGS GROWTH WHILE INCREASING RETURN ON CAPITAL EMPLOYED
50.0
75.0
100.0
125.0
150.0
175.0
200.0
225.0
250.0
275.0
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
13.0%
14.0%
15.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012** 2013
EPS*
CEN
T
RO
AC
E %
EPS* ROACE*
Note: * before brand related intangible asset amortisation and non-trading items (net of tax) | ** 2012 restated to reflect the adoption of IAS 19 (2011) ‘Employee Benefits’
CASH FLOW, EPS & DIVIDENDS
519
618 601
673 720
0
100
200
300
400
500
600
700
800
2009 2010 2011 2012** 2013
367
305 279
344
412
0
50
100
150
200
250
300
350
400
450
2009 2010 2011 2012** 2013
25.0
28.8 32.2
35.8
40.0
0.0
10.0
20.0
30.0
40.0
50.0
2009 2010 2011 2012 2013
Note: * before brand related intangible asset amortisation and non-trading items (net of tax) | ** 2012 restated to reflect the adoption of IAS 19 (2011) ‘Employee Benefits’ and Free Cash Flow also restated for the change to movement in average working capital
0
40
80
120
160
200
240
280
2009 2010 2011 2012** 2013
+10.2%
+8.0%
+17.2%
+11.1% +11.3%
+11.7%
+11.1%
+15.2% +11.8%
+11.2%
EBITDA (€M) FREE CASH FLOW (€M)
EPS* (CENT) DIVIDENDS (CENT)
Sustainability
ENVIRONMENT ECONOMIC
SOCIAL
Bearable Equitable
Sustainable
Viable
‘SECURING SUSTAINABLE GROWTH’ EMBEDDING SUSTAINABILITY IN OUR BUSINESS
Kerry’s sustainability plan represents a journey of continuous improvement
– an ongoing process and strategy to secure sustainable growth
It offers Kerry Group a framework through which to ensure the long-
term development of the organisation by building competitiveness,
while at the same time enhancing the quality of life and protecting
our natural resources.
› Integrated in 1 Kerry strategies and operational activities
› Directed and governed by our Kerry Sustainability Council
› Groupwide time-bound, quantified targets established to measure progress
ENVIRONMENT SUSTAINABILITY
MARKET SUSTAINABILITY
WORKPLACE SUSTAINABILITY
COMMUNITY SUSTAINABILITY
SECURING SUSTAINABLE GROWTH
20
14
Go
als
Thre
e Ye
ar S
trat
egic
Pla
n
Asp
irat
ion
s 1 KERRY SUSTAINABILITY PROGRAMME 2012-2015
ENVIRONMENT MARKETPLACE WORKPLACE COMMUNITY
CLIMATE EFFICIENCY WASTE
Continue to improve our environmental
stewardship
Drive efficiency in resource use (energy &
water)
Exceed in efforts to reduce waste and
increase recycling
Manage climate change, drive efficiency in resource use and reduce waste
Develop long and short term sustainability gains in operations
Deliver on our brand sustainability strategy plan
Achieve our annual goal for ISO 14001 approvals
Achieve an overall 12% reduction in greenhouse gas emissions by 2014 (compared to baseline year 2009)
Reduce water use by 4% by 2014 (compared to baseline year 2011)
Reduce waste by 6.5% by 2014 (compared to baseline year 2011)
Implement our Origin Green Programme in Ireland
QUALITY SOURCING NUTRITION
Through our leading innovation and product development expertise, we will continue to enhance the nutritional value of our ingredients and continue to assist our valued customers
Make quality a distinguishing capability
Ensure responsible sourcing practices
Ensure 75% of strategic supply partners are formalised as members of SEDEX
Leverage Kerry’s ingredients & flavours technology platforms and applications expertise to improve nutritional values of
food and beverage products in partnership with our customers
Embed positive nutritional values in product development and innovation programmes aligned to customer
requirements
Achieve Global Food Safety Initiative (GFSI)
certification of all Kerry manufacturing sites
Partner with our customers in sustainable
sourcing of strategic ingredients
Implementation of 1 Kerry Global Quality Management System (GQMS)
Certify all plants against an accredited Global Food Safety Initiative (GFSI) safety standard
Achieve our annual targets for SEDEX membership
Achieve 100% sourcing of sustainable palm oil for all Kerry Foods branded products
Implement our Origin Green Programme in Ireland
PEOPLE ETHICS
Continue to conduct our business in a
responsible and ethical manner and be an employer of choice
Through our Code of Conduct we will continue to provide a safe and healthy environment in which to work
Drive ethical business practices and compliance to Kerry Code of Conduct
Ensure wages are competitive and all labour standards are fair, equitable and meet or exceed local guidelines
Embrace diversity across our workforce, our customer base and the communities
we serve
Promote Kerry employee brand values
Formalise policies in line with Human
Rights Conventions
Implement 1 Kerry Global Health & Safety
Management Systems
Achieve a 5% reduction in the Accident
Incident Rate (AIR)
Implement our Origin Green Programme
in Ireland
SOCIAL ECONOMIC
Be a responsible neighbour by driving and
supporting outreach initiatives in our local communities
Continue to partner with international programme to alleviate world hunger in developing regions
Assist and actively engage in development programmes in our communities to improve – health and nutrition,
entrepreneurship, amenity/community development projects, education, sport and the arts
Assist Concern Worldwide in implementing the ‘RAIN’ (Realigning
Agriculture to Improve Nutrition) project in the developing world
Formalise community engagement programmes in all our communities
Share community support best practices
Support employee philanthropy
programmes
Implement our Origin Green Programme
in Ireland
Appendix
SHAREHOLDER ANALYSIS
UK 17%
North America 17%
Continental Europe / Rest of World 16%
Ireland 4%
Retail 32%
Kerry Co-operative 14%
INSTITUTIONAL ANALYSIS
Institutions 54%
Shares in issue at December 2013: 175,723,078