SCIENCE-BACKED SUSTAINABLE NUTRITION
Kerry Group
Annual Report 2023
CONTENTS
STRATEGIC
REPORT
Our Performance in 2023 4
At a Glance 6
Chairman's Statement 8
Chief Executive Officer's Review 10 Our People 14
Our Business Model 24
Our Markets 26
Our Strategy 28
Our Technologies 30
Strategy & Targets 32
Key Performance Indicators 34
Financial Review 36
Business Review: Taste & Nutrition 42
Business Review: Dairy Ireland 45
Sustainability Review 46
Risk Management Report 92
DIRECTORS'
REPORT
Board of Directors 108
Report of the Directors 112
Governance Report
Corporate Governance Report 118
Audit Committee Report 135
Governance and Nomination
Committee Report 141
Sustainability Committee Report 148
Remuneration Committee Report 150
FINANCIAL
STATEMENTS
Independent Auditors' Report 184 Financial Statements 192
Notes to the Financial Statements 200
SUPPLEMENTARY INFORMATION
Financial Definitions 269
Kerry Group Annual Report 2023 | 1 |
Strategic Report
STRATEGIC REPORT
Our Performance in 2023 4
At a Glance 6
Chairman's Statement 8
Chief Executive Officer's Review 10 Our People 14
Our Business Model 24
Our Markets 26
Our Strategy 28
Our Technologies 30
Strategy & Targets 32
Key Performance Indicators 34
Financial Review 36
Business Review: Taste & Nutrition 42
Business Review: Dairy Ireland 45
Sustainability Review 46
Better for People 51
Better for Society 56
Better for Planet 62
Climate-Related Risk and Opportunity 70
EU Taxonomy 84
Risk Management Report 92
FUSING SCIENCE AND CULINARY EXPERTISE TO PIONEER SUSTAINABLE NUTRITION SOLUTIONS THAT WILL NOURISH GENERATIONS TO COME
2 Kerry Group Annual Report 2023
Strategic Report
Kerry Group Annual Report 2023 | 3 |
Strategic Report / Our Performance in 2023
OUR PERFORMANCE IN 2023
SOLVING OUR CUSTOMERS' COMPLEX CHALLENGES WITH DIFFERENTIATED SOLUTIONS
4 Kerry Group Annual Report 2023
Strategic Report / Our Performance in 2023
PERFORMANCE MEASURES
Financial
Group Revenue
€8.0bn
2022: €8.8bn
Group EBITDA¹
€1.2bn
2022: €1.2bn
Net Cash from
Operating Activities
€1,038m
2022: €722m
Basic
EPS
410.4c
+20%
2022: 341.9c (20.6%)
Total Dividend
Per Share
115.4c
+10.1%
2022: 104.8c +10.1%
Volume Growth¹
-0.9%
2022: +6.1%
Group EBITDA Margin¹
14.5%
2022: 13.9%
Free Cash Flow¹ (cash conversion %)
€701m
92%
2022: €640m 82%
Constant Currency
Adjusted EPS¹
430.1c
+1.2%
2022: 440.6c +7.3%
Return on Average Capital Employed¹
10.0%
2022: 10.3%
Non-Financial
Consumers reached with Positive and Balanced Nutritional Solutions²
1.25bn
2022: 1.2bn
Scope 1 & 2
Carbon Reduction²
48%
2022: 45%
Reduction in
Food Waste²
39%
2022: 41%
¹ See Key Performance Indicators section pages 34-35 and the Supplementary Information section page 269 for definitions, calculations and reconciliations of Alternative Performance Measures
² See Sustainability Review pages 46-69 for further information on non-financial metrics
Kerry Group Annual Report 2023 | 5 |
Strategic Report / At A Glance
AT A GLANCE
Kerry is a world leader in sustainable taste and nutrition solutions. Using our unique capabilities, we partner with customers to create healthier, tastier, and more sustainable products that are enjoyed by over 1 billion people around the world.
PEOPLE | 21,000+ | 1,100+ | |||
OUR | |||||
Employees | R&D Scientists | ||||
GLOBAL | 137 | 70+ | |||
OUR | |||||
FOOTPRINT | Manufacturing | Technology and | |||
Locations | Innovation Centres | ||||
OUR | +9% | +12% | +12% | +13% | +16% |
PROVEN | Revenue | EBITDA | Adjusted | Share | Dividend |
TRACK | CAGR | CAGR | CAGR | CAGR | CAGR |
EPS | Price | per share |
RECORD1
1 CAGR = Compound Average Growth Rate (1986 - 2023)
6 Kerry Group Annual Report 2023
Strategic Report / At A Glance
OUR BUSINESSES
Taste & Nutrition
A world-leading provider of taste and nutrition solutions for the food, beverage and pharmaceutical markets.
We use our broad range of ingredient solutions to innovate with our customers to create great tasting products, with improved nutrition and functionality, while ensuring a better impact for the planet.
Our leading consumer insights, R&D team of over 1,100 food scientists and extensive global footprint enable us to solve our customers' most complex challenges with differentiated solutions. At Kerry, we are driven to be our customers' most valued partner, creating a world of sustainable nutrition.
Geography | End Use Market | Channel |
7% | ||
24% | 31% |
22% | 26% |
Americas | Food | Retail |
Europe | Beverage | Foodservice |
APMEA | Pharma | |
86% | 96% | |
Group Revenue | Group EBITDA | |
€8.0bn | ||
€1.2bn | ||
14% | 4% |
Taste & Nutrition Dairy Ireland
Dairy Ireland
A leading provider of Irish value-add dairy ingredients and consumer products. Our dairy ingredients product portfolio includes functional proteins and nutritional bases, while our well-loved dairy consumer brands can be found in chilled cabinets in retailers across Ireland and the UK.
Kerry Group Annual Report 2023 | 7 |
Strategic Report / Chairman's Statement
CHAIRMAN'S STATEMENT
KERRY DELIVERED
A RESILIENT
PERFORMANCE
IN 2023 AGAINST
A CHALLENGING
BACKDROP, WHILE
DEMONSTRATING
AGILE CAPITAL
DEPLOYMENT
Overview
I am pleased to report a solid performance against the backdrop of significant macroeconomic challenges and geopolitical issues. During 2023, the Group's Taste and Nutrition segment delivered volume growth which represented a good market outperformance. This exemplifies the resilience of the organisation and our collective drive to deliver long-term sustainable results through the execution of our strategy.
The Group continues to evolve its portfolio to enable long-term growth and solidify our position as a market leader in the industry, meeting our customers' needs to enhance the nutrition, wellness and functionality of their products in a way that protects people and the environment, without compromising on taste.
Strategic Update
2023 is the second year of Kerry's refreshed strategic plan and the management team has continued to make progress in implementing the Group's strategy, supported by agile capital deployment.
Through targeted capital investments and strategic M&A activity, the Group continues to evolve its footprint and technology portfolio to strengthen Kerry's position as a world-leading taste and nutrition company and to enable sustainable long-term growth. To support our growth ambitions, the Group is investing in a range of digital initiatives which will make it easier and faster for our customers to do business with us.
The Group will remain disciplined and flexible in terms of assessing the various capital allocation options
available and will prioritise those that will generate sustained value over the longer-term taking account of prevailing market conditions.
Sustainability
The Group's Beyond the Horizon sustainability strategy underpins Kerry's future growth as we continue to partner with our customers across the globe to create a world of sustainable nutrition.
The Group's standalone Sustainability Committee was established in 2023 to enhance Board oversight of the implementation of the Group's sustainability strategy as we help our customers create healthier, more nutritious products that taste great in a way that protects people and the environment around us.
Details regarding the Group's sustainability strategy, targets, performance, policies and programmes are outlined in the Sustainability Committee Report on pages 148-149, in the Sustainability Review on pages 46-91 and in the 2023 Sustainability Report, which is available on kerry.com.
Corporate Governance
The Board is committed to maintaining the highest standards of corporate governance. During 2023, the Board reviewed the Company's corporate governance policies and procedures to monitor compliance with the UK Corporate Governance Code and the Irish Corporate Governance Annex (together the Code) alongside the latest developments in best practice. We also engaged with our stakeholders during the year as we believe listening to their views and needs
8 Kerry Group Annual Report 2023
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Kerry Group plc published this content on 15 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 March 2024 10:51:26 UTC.