SUSTAINABILITY: NEW
THINKING IN PRACTICE
‘We live in a world of finite resources’
Consumer is driving
business approach to sustainability
SUSTAINABILITY BUSINESS CASE
GLOBALISATION
Raw material shortages
Water scarcity
Biodiversity loss
Strategy
Brand
Product range
CLIMATE
CHANGE
BUSINESS
PERFORMANCE
EXPANDING
POPULATION
Health & wellness
Sustainable/ethical
consumerism
Online
connectivity/transparency
INCREASING
CONSUMPTION
Carbon & energy
regulation
SUSTAINABILITY: A KEY DRIVER OF BUSINESS PERFORMANCE
‘Sustainable practice will drive sustainable business growth’
Enhance reputation
‘licence to operate’
Build trust with customers
and all stakeholders
Improve business
efficiencies
Drive innovation
Manage risk
Inspire our people
BUSINESS DOESN’T OWN ITS REPUTATION, IT EARNS IT!
SUSTAINABILITY: SUMMARY BUSINESS CASE
Create shared value for business, it’s customers,
agricultural producers, suppliers, investors and employees
BUILDING SUSTAINABLE COMMUNITIES AND IMPROVING LIVELIHOODS
SUSTAINABILITY IS CENTRAL TO KERRY’S MISSION STATEMENT
Kerry Group is committed to the highest standards of business and ethical behaviour, to
fulfilling our responsibilities to the communities which we serve and to the creation of long
term value for all stakeholders on a socially and environmentally sustainable basis
INTRODUCING KERRY
›
›
Enterprise Value €9bn*
›
Market Capitalisation €8bn*
›
Listed on both the Irish and
London Stock Exchanges
TRADING PROFIT 2012
Consumer
Foods 21%
Consumer
Foods 29%
EBITDA €673m**
›
›
REVENUE 2012
Revenue €5.8bn
Ingredients
& Flavours
79%
Ingredients
& Flavours
71%
Ingredients & Flavours
Consumer Foods
€4,225m
€1,712m
Ingredients & Flavours
Consumer Foods
Note: sales in the Republic of Ireland were < 10% of Group revenue
KERRY WORLDWIDE LOCATIONS
KIF SALES BY REGION 2012
Operations in 24 countries
EMEA 39%
›
Sales to 140 countries
›
140 manufacturing sites
›
24,000 employees
Asia-Pacific 17%
Americas
44%
Head Offices
* As at 31-03-2013
€506m
€130m
Manufacturing Plants
Sales Offices
Consumer Foods Sales are to UK and Ireland
8
OUR INGREDIENTS & FLAVOURS’ BUSINESS
KERRY INGREDIENTS & FLAVOURS
›
Kerry Ingredients & Flavours develops, manufactures and delivers
innovative taste systems, functional and nutritional ingredients and
integrated solutions for the food, beverage and pharmaceutical markets
›
The largest player in the ingredients and flavours market
›
2012 revenues were €4.2bn
›
The customer derives maximum synergies through utilising Kerry’s broad
range of food and beverage technologies, applications and culinary
expertise and processing capabilities
›
REGION
Americas 44%
EMEA 39%
Asia-Pacific 17%
No. 1 position in Savoury & Dairy and Cereal & Sweet and key leading
positions in Beverage, Pharma and Functional Ingredients
TECHNOLOGY
END USE MARKET
Savoury & Dairy Systems &
Flavours 44%
Cereal & Sweet Systems &
Flavours 20%
Beverage Systems & Flavours
17%
Pharma/Functional Ingredients
9%
Regional Ingredients 10%
Beverage 22%
Meats 18%
Bakery 13%
Dairy 9%
Soups, Sauces & Dressings 7%
Cereal & Bars 6%
Prepared Meals & Side Dishes 6%
Savoury Snacks 5%
Ice-cream & Desserts 4%
Confectionery 4%
Pharma 4%
Appetisers 2%
KERRY DELIVERS IN COLLABORATION WITH OUR CUSTOMERS
TASTE
CONVENIENCE
CONSUMER
PREFERRED
SOLUTIONS
VALUE
NUTRITION
INGREDIENTS & FLAVOURS’ STRONG CUSTOMER ALLIANCES
GLOBAL TECHNOLOGY APPLICATION AND CULINARY LEADERSHIP
›
›
›
›
Best-in-class global development and applications
model
Layer and leverage development and process
capability
Raw material category technology management
Ensure regional development and management
of customised system technologies while
maintaining global alignment
›
Develop flavours and technical ingredients
platforms globally with regional product
management and application
›
Significant investment in technology know-how
and applications via acquisitions
›
Execute through Kerry Global Technology &
Innovation Centres supported by Regional
Development & Application Centres
Note: * 2008 to 2010 re-presented in line with management reporting changes
R&D EXPENDITURE
220
200
180
160
140
120
100
80
60
40
20
0
4.9%
4.7%
4.6%
4.5%
4.4%
0.0%
-20.0%
-40.0%
156.4
147.8
147.5
167.1
185.9
-60.0%
-80.0%
-100.0%
2008
2009
R&D Expenditure
2010
2011
% of KIF Revenue*
2012
GLOBAL TECHNOLOGY & INNOVATION CENTRES
Naas
San Juan del Rio
Beloit
Johor Bahru
Shanghai
KERRY FOODS
Kerry Foods is a leading
manufacturer of added-value
branded and customer branded
chilled foods to the UK and Irish
consumer foods markets
OUR CONSUMER FOODS’ BUSINESS
CONSUMER FOODS
›
Supplies added value chilled foods across Ireland and the UK
›
2012 revenues of €1.7bn
›
Has achieved #1 brand position in most of its markets through a
process of organic growth, acquisitions and strategic investment
›
Leading supplier of chilled products to all the major supermarkets
including in the UK, Tesco, Morrisons, Sainsbury’s and Asda and in
Ireland, Tesco, SuperValu and Dunnes
›
Key brands include Richmond, LowLow, Wall’s, Dairygold, Charleville,
Mattessons, Cheestrings, Denny
REGION
SIGNIFICANT CUSTOMERS
TECHNOLOGY
CUSTOMERS
GB
Meat & Savoury Provisions
Brand
Ireland
Meal Solutions
Private Label
Other
Dairy Products
KERRY GROUP SUSTAINABLE GROWTH MODEL – 1 KERRY POSITIONING
› 1 Kerry embraces Group’s ‘Dual
Strategy for Growth’
- building on our global leadership
in ingredients & flavours and our
chilled foods’ leadership position in
the UK and Irish markets
› All divisions are well advanced in
the implementation of ‘go-tomarket’ strategies in line with 1
Kerry vision objectives
1 KERRY BUSINESS TRANSFORMATION
BUSINESS STRATEGIES
OPERATING MODELS
KERRYCONNECT
Kerry Ingredients
& Flavours
‘Go-to-market Strategy’
Driving market leadership
and global alignment
‘Enabling better business’
Kerry Foods
‘Go-to-market Strategy’
Optimising scale and
efficiency benefits
Standardised ways of
working
Common data
Securing Sustainable
Growth
Building talent for a
global organisation
Integrated ICT system
‘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
SOCIAL
to ensure the long-term development of the
Bearable
organisation by building competitiveness, while
at the same time enhancing the quality of life
and protecting our natural resources
ENVIRONMENT
SUSTAINABILITY
MARKETPLACE
SUSTAINABILITY
Equitable
Sustainable
Viable
ENVIRONMENT
WORKPLACE
SUSTAINABILITY
SECURING SUSTAINABLE GROWTH
ECONOMIC
COMMUNITY
SUSTAINABILITY
KERRY SUSTAINABILITY JOURNEY: EMBEDDING SUSTAINABILITY IN OUR
BUSINESS
›
Sustainability is at the heart of our
business strategy
›
Integrated in 1 Kerry strategies
and operational activities
›
Executed and delivered by
business leadership and key
functions
›
Groupwide time-bound, quantified
targets established to measure
progress.
›
Directed and governed by our Kerry
Sustainability Council
KERRY GROUP: 1 KERRY SUSTAINABILITY APROACH
FOCUS AREAS
ENVIRONMENT
MARKETPLACE
WORKPLACE
COMMUNITY
1 KERRY SUSTAINABILITY PROGRAMME 2012-2015
1 ENVIRONMENT
2 MARKETPLACE
3 WORKPLACE
4 COMMUNITY
Climate Efficiency Waste
Quality Sourcing Nutrition
People Ethics
Social Economic
Aspirations
Aspirations
Aspirations
Aspirations
Three Year Strategic Plan
Three Year Strategic Plan
Three Year Strategic Plan
Three Year Strategic Plan
2013 Goals
2013 Goals
2013 Goals
2013 Goals
PROGRESS IN ENVIRONMENTAL SUSTAINABILITY
›
We have programmes in place to measure, manage and reduce climate change impacts - good
progress recorded in carbon, energy, water conservation and waste minimisation
›
Joined Carbon Disclosure Project 2010
To achieve targeted 8% reduction in greenhouse gas emissions by the end of 2012 and an overall
12% reduction in emissions by 2014 compared to the 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)
›
Partnering with farmers and our customers in sustainable sourcing of strategic ingredients and
supply chain initiatives
KERRY’S RESPONSIBILITY TO THE MARKETPLACE
›
As the world’s leading supplier of food and beverage ingredients and flavours, Kerry recognises
and embraces our responsibility to our customers and to the broader community to provide
nutrition that can be consumed with confidence as part of a well balanced diet
UNDERSTANDING AND DELIVERING ACROSS THE NUTRITIONAL
MANAGEMENT SPACE
KERRY’S NUTRITION AND HEALTH PORTFOLIO
KERRY FOODS: ‘BETTER FOR YOU PROGRAMME’
SUSTAINABLE SOURCING
›
Partnering with our suppliers and customers in sustainable sourcing of strategic ingredients and
supply chain initiatives
›
SEDEX Membership
›
Partnering with our Dairy Farmers in Ireland in sustainable milk production
› On farm sustainability programme
› Focus on Profit Programme
› Kerry milk contract to 2025
› Kerry Group investment in milk processing
›
Kerry is committed to implementation of Origin Green Programme across our manufacturing
and dairy supplier base in Ireland
IRELAND’S SUSTAINABILITY CREDENTIALS
Ireland has specific natural advantages
› Temperate climate, plentiful rainfall, no water
irrigation, rich soil
› 80% grassland vs. 40% in mainland EU
› Lowest greenhouse gas emissions per kg of milk
solids
› Lowest water stress index in the world
Ireland has an enviable reputation for animal care and
stockmanship
› Excellent quality milk
We have one of the most favourable environmental and
animal welfare conditions in the world
SUSTAINABILITY WORKPLACE PROGRAMMES
›
Central to our success is the commitment, skill and creativity of our people
›
Our focus:
› Through our Kerry Code of Conduct we focus critical attention on ethical business practices
and provision of a safe and healthy workplace
› Provision of structured training and development programmes
› Embed social responsibility as a way of working
› Embrace diversity across our workplace, our customer base and the communities we serve
› Ensure competitive wages and fair/equitable labour standards
SUSTAINABILITY PROGRAMMES IN OUR COMMUNITIES
›
Kerry continues to support outreach activities in our local communities and has developed
specific programmes focusing on:
› Health and Nutrition
› Entrepreneurship
› Amenity/Community Development
› Education, Arts and Sport
› Sustainable Agriculture
KERRY GROUP/CONCERN ‘RAIN’ PROJECT IN AFRICA
›
Pioneering initiative to improve undernutrition and reduce mortality rates in children in developing
world
›
5 year programme launched in December 2011
› Pilot ‘RAIN’ ( Realigning Agriculture to improve Nutrition) project in Zambia
›
Project aims to identify sustainable ,scalable, replicable solutions for prevention of undernutrition
› To influence international policy in relation to prevention of childhood stunting
› And provide valuable learnings around integrated agriculture and nutrition in reducing child
mortality and undernutrition
SUSTAINABILITY OUR JOURNEY
Sustainability critical to our Business Performance, Development and Profitable Growth
Our sustainability goals will be achieved through continued:
›
Successful execution of our 1 Kerry Sustainability Programme 2013-2015
›
Collaboration with our valued customers
›
Engagement with all our stakeholders
›
Passion, capabilities and commitment of our Kerry people
›
Implementation of Origin Green Programme
ENVIRONMENT
SUSTAINABILITY
MARKETPLACE
SUSTAINABILITY
WORKPLACE
SUSTAINABILITY
SECURING SUSTAINABLE GROWTH
COMMUNITY
SUSTAINABILITY