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
H1 2015 Interim Management Report Stan McCarthy Brian Mehigan CEO CFO Outlook & Review of Financial Future Business Review Prospects
H1 2015: Results Highlights Adjusted Group Trading Interim Volume ROACE* EPS* Margin Dividend +8.1% +2.7% +40bps +14.1% +11.1% › Adjusted EPS* increased 8.1% to 124.5 cent › Group revenue at € 3.0 billion reflecting 2.7% volume growth › Group trading margin up 40bps › Ingredients & Flavours +40bps › Consumer Foods +20bps › ROACE* 14.1% (H1 2014: 14.3%) › Free cash flow € 192m › Interim dividend increased by 11.1% to 15.0 cent Note: * before brand related intangible asset amortisation and non-trading items (net of related tax) 4
H1 2015 Overview › Changing marketplace, ‘New Consumer’ trends › Changing retail and foodservice dynamics › Increased volatility, impact of currency movements › Developed markets: broadly stable but repositioning for evolving market conditions › Developing markets: geopolitical issues persist but zones more stabilised › Kerry Strategic growth platforms well positioned to respond to customer requirements › Innovation & Technology network providing speed to market › Solid innovation platform through ‘clean label’, ‘free from’ nutritional & wellness offerings › Technology development – organic and acquisition investment › Continued growth in Foodservice channel, c-stores and etail › Kerry Foods’ repositioned portfolio performing well 5
Revenue & Margin Overview GROUP € 3,028m Volume: +2.7% Margin: +40bps INGREDIENTS & FLAVOURS CONSUMER FOODS € 2,318m € 749m Volume: +3.0% Volume: +1.9% Margin: +40bps Margin: +20bps 6
Business Review – Ingredients & Flavours H1 2015 GROWTH Revenue € 2,318m +3.0%* Trading profit € 281m +12.3% Trading margin 12.1% +40bps › Volume +3.0% and pricing (2.8%) › Trading profit +12.3% › Margin growth of 40bps › Taste & Nutrition platforms sustain business development › Solid performance in American markets › Acquisition of Insight Beverages, KFI Savory and Baltimore Spice › EMEA developed markets stabilised – encouraging innovation pipeline › EMEA developing markets – continued market development despite geopolitical issues › Acquisition of IOI Loders Croklaan and PST › Slowdown in Asia economic growth but good Kerry business development › Strong growth in nutritional & wellness applications › Sale of Pinnacle lifestyle bakery in Australia in May Note: * volume growth 7
Ingredients & Flavours Revenue Analysis REVENUE BY TECHNOLOGY* H1 2015 YEAR ON YEAR VOLUME GROWTH Americas +3.3% Taste & Nutrition EMEA +0.7% Asia-Pacific +7.2% Total +3.0% Savoury & Dairy 41% Beverage 20% Cereal & Sweet 17% Functional Ingredients | Pharma 14% Regional Technologies 8% * As at 31 December 2014 8
Business Review – Consumer Foods H1 2015 GROWTH Revenue € 749m +1.9%* Trading profit € 60m (3.9%) Trading margin 8.0% +20bps › Volume +1.9% and pricing (2.6%) › Margin growth of 20bps › Portfolio repositioning to-date delivering against changing consumer environment › MBO of ‘Direct -to- Store’ completed in H1 › Acquisition of Rollover Ltd (UK) – extending Kerry Foods’ ‘hot -to- go’ offering › Strong growth in snacking and meal solutions › Good growth in chilled meals and recovery in frozen › Mattessons Fridge Raiders +8% YOY › Promotional activity impacting UK sausage category › Spreads decline in line with category performance › Denny Gold Medal performing well in Ireland › Successful launch of ‘Fire & Smoke’ range › Charleville solid performance in cheese › Cheestrings – continued growth in France, Germany and Poland › Outperforming growth rates in etail Note: * volume growth 9
Brian Mehigan CFO Financial TRADING PROFIT ADJUSTED EPS REVENUE Highlights € 3,028m € 300m 124.5 cent
Solid Financial Performance in a Changing Market › Changing consumer and economic environment › Input cost deflation › Financial market volatility › 1 Kerry investment › Portfolio repositioning 11
H1 2015 Financial Highlights € 3,028m Revenue +2.7% volume growth € 300m Trading profit +9.0% 9.9% Trading margin +40bps 124.5 cent Adjusted EPS* +8.1% 135.2 cent Basic EPS +22.0% Strong cash € 192m Free cash flow generation Note:* before brand related intangible asset amortisation and non-trading items (net of related tax) 12
Revenue Analysis H1 2014 H1 2015 € 2,893m € 3,028m GROWTH YOY 4.7% VOLUME DISPOSAL/ CURRENCY 2.7% ACQUISITION 8.4% (3.8%) PRICE (2.7%) 13
Revenue – Volume Growth Ahead of Markets Volume +2.7% Price +3.0% (2.7%) 3,000 € 3,028m (2.8%) 2,500 € 2,318m 2,000 +1.9% 1,500 (2.6%) 1,000 € 749m 500 0 Group Ingredients & Flavours Consumer Foods 14
Continued Trading Margin Expansion Margin Progression +40 Trading Margin % +40 bps bps 350 9.9% 12.1% 300 € 300m € 281m 250 +20 200 bps 150 8.0% 100 50 € 60m 0 Group Ingredients & Flavours Consumer Foods 15
Trading Margin Progression H1 2015 – Group 400 350 300 250 200 150 H1 2014 Operating leverage / Net price Currency Kerryconnect / Disposals / H1 2015 efficiencies pension acquisitions Margin 9.5% +0.4% +0.2% +0.0% (0.3%) +0.1% +9.9% 16
Free Cash Flow ( € m) H1 2015 H1 2014 Trading profit 300 275 Depreciation (net) 61 52 Movement in average working capital 9 (73) Pension contributions paid less pension expense (24) (21) Finance costs (22) (21) Taxation (13) (12) Free cash flow before expenditure 311 200 Capital expenditure (net) (119) (98) Free cash flow 192 102 17
Financial Ratios BANKING RATIOS H1 2015 H1 2014 Net debt: EBITDA* 1.6x 1.5x EBITDA: net interest* 19.4x 13.3x RETURN RATIOS ROAE** 18.1% 18.2% ROACE** 14.1% 14.3% CFROI 10.9% 10.7% Note: * calculated in accordance with lender covenants 18 ** before brand related intangible asset amortisation and non-trading items (net of related tax)
Maturity Profile of Net Debt ( € m) H1 2015 H1 2014 Weighted average maturity years 6.1 5.8 654 660 560 479 460 360 260 151 160 85 52 34 60 0 (40) 2015 2015 2016 2017 2020 2022 2023 2025 (140) (178) (240) New 5 year € 1.1bn revolving credit facility now in place – extending debt maturity profile 19
Acquisition and Disposal Update ACQUISITIONS COMPLETED Taste Nutrition Developing Markets Consumer Foods Insight Beverages KFI Savory Others Rollover Ltd ACQUISITIONS SIGNED Taste Nutrition Developing Markets Consumer Foods PST Baltimore Spice IOI Loders Croklaan JV DISPOSALS COMPLETED Ingredients & Flavours Consumer Foods Pinnacle lifestyle bakery Direct-to-Store business 20
Other Financial Matters FINANCE € 36.3m – an increase of € 4.4m due primarily to exchange rate and pension finance COSTS Net pension deficit € 361m – cost up significantly and actions being PENSION taken to address Deployment on track in EMEA and Asia-Pacific. Incremental costs KERRYCONNECT year-on-year € 11m as previously guided Annual impact in line with previous guidance CURRENCY SCOPE Dilution from disposals partially offset by acquisitions in H2 21
Kerry Investor Day 2015 Kerry Investor Day 2015 Kerry Global Technology and Innovation Centre, Naas 15 October 2015
Stan McCarthy CEO Outlook and Future Prospects
The Changing Marketplace – ‘New Consumer’ The ‘New Consumer’ consumption and shopping trends present challenges for traditional food retailers and CPG companies › Demographics › Attitude › Pace of life › Awareness 24
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