Preliminary Statement of Results 31 December 2022

RNS Number : 0725Q

Kerry Group PLC

16 February 2023

Date: 16 February 2023

LEI: 635400TLVVBNXLFHWC59

KERRY GROUP

PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2022

A Year of Record Growth in a Dynamic Operating Environment

OVERVIEW

> Group revenue of €8.8 billion reflecting 18.0%¹ organic growth

> Group volume growth of 6.1% and pricing of +11.7%

> Taste & Nutrition volume +7.8% | pricing +8.7%

> Dairy Ireland volume +0.2%² | pricing +36.0%²

> EBITDA increased by 12.9% to €1.2 billion

> EBITDA margin of 13.9% (2021: 14.7%)

> Adjusted EPS of 440.6 cent; +7.3% in constant currency (15.7% reported currency growth)

> Basic EPS of 341.9 cent (2021: 430.6 cent)

> Free cash flow of €640m reflecting 82% cash conversion

> Final dividend per share of 73.4 cent (total 2022 dividend up 10.1% to 104.8 cent)

> Strong progress on sustainability commitments including increasing our nutritional reach to 1.2 billion consumers

Edmond Scanlon, Chief Executive Officer

"As we marked Kerry's 50th year in 2022, we achieved record organic revenue growth against the backdrop of an exceptionally dynamic operating environment. I am proud of the broad-based volume growth we delivered across our end use markets, channels, regions and emerging markets despite the macroeconomic conditions. Our teams worked closely with our customers to actively manage through the inflationary environment, while continuing to innovate and develop their offerings to meet evolving marketplace needs.

We made good strategic progress in the year through development of our innovation platforms, footprint expansion and continued portfolio development. We completed a number of acquisitions aligned to our strategic priorities of Taste, Nutrition and Emerging Markets, and since year-end we announced the potential sale of our Sweet Ingredients Portfolio, as we continue to enhance and refine our business to areas where we can add most value.

While recognising the current market uncertainty, we believe we are strongly positioned to continue to grow our business through this period. In 2023, we expect to achieve 3% to 7% adjusted earnings per share growth on a constant currency basis, before the dilution from the potential sale of the Sweet Ingredients Portfolio."

¹ Comprises volume growth of 6.1%, positive pricing of 11.7% and a favourable transaction currency impact of 0.2%

² Pro-forma performance of re-presented segmental structure excluding the Consumer Foods Meats and Meals business disposal in 2021

Performance

Group reported revenue in the year increased by 19.3% to €8.8 billion. This reflected volume growth of 6.1%, increased pricing of 11.7%, favourable transaction currency of 0.2%, favourable translation currency of 6.8% and contribution from business acquisitions of 4.3%, partially offset by the impact of business disposals of 9.8%.

Group EBITDA increased by 12.9% to €1.2 billion, with an EBITDA margin of 13.9% (2021: 14.7%), as the dilution from the impact of passing through input cost inflation was partially offset by accretion from portfolio developments, operating leverage, mix and efficiency initiatives.

Constant currency adjusted earnings per share increased by 7.3% to 440.6 cent (2021: 12.1% increase). Basic earnings per share was 341.9 cent (2021: 430.6 cent) as the prior year included a credit from the sale of the Consumer Foods Meats and Meals business. The Board recommends a final dividend of 73.4 cent per share, an increase of 10.0% on the final 2021 dividend. Together with the interim dividend of 31.4 cent per share, this brings the total dividend for the year to 104.8 cent, an increase of 10.1% on 2021.

Research and development expenditure amounted to €303m (2021: €297m) and net capital expenditure was €217m (2021: €315m) as the Group continued to invest in its strategic priorities of Taste, Nutrition and Emerging Markets. Free cash flow for the year was €640m (2021: €566m) representing cash conversion of 82%.

Good progress was made in the year against the Beyond the Horizon sustainability strategy and commitments. Kerry increased its nutritional reach to 1.2 billion consumers globally. The Group achieved a 48% reduction in Scope 1 & 2 carbon emissions³, while strong progress was made in reducing food waste in Kerry's operations by 32%³.

³ Progress vs 2017 baseline

Markets

The overall demand environment remained robust through the year despite the macroeconomic backdrop. Consumers continued to seek new taste experiences, cleaner labels and added functional benefits through food and beverages. The cost-of-living crisis has resulted in many consumers looking for relative value options to meet their purchase preferences, depending on their available resources.

Customers continued to prioritise the resiliency of their supply chains through this period of inflationary pressure. Innovation has become increasingly more targeted, as they seek to meet various consumer preferences within different price ranges. Customers are working with and looking for supplier partners to support them in addressing these current market challenges and opportunities, as they navigate through this dynamic operating environment.

Business Reviews

Taste & Nutrition

Excellent growth across our end use markets, regions and channels

2022

Performance⁴

Revenue

€7,417m

7.8%⁵

EBITDA

€1,220m

+20.4%

EBITDA margin

16.5%

-120bps

⁴ performance of re-presented segmental structure | ⁵ volume growth

> Overall volume growth of 7.8% with strong Q4 performance of 6.1%

> Very strong growth across our Food and Beverage EUMs - particularly Meat, Snacks, Dairy and Bakery

> Retail channel volume growth of 5.5% and foodservice growth of 14.0%

> Pricing of 8.7% reflected the management of input cost inflation

> EBITDA margin reduction resulting from the effect of passing through input cost inflation

Taste & Nutrition reported revenue increased by 29.4% to €7.4 billion in the year. This reflected volume growth of 7.8%, increased pricing of 8.7%, favourable transaction currency of 0.2% and translation currency of 8.2%, with a contribution from acquisitions (net of disposals) of 4.5%.

Very strong volume growth was achieved through the year across all regions despite the backdrop of managing significant price increases and supply chain constraints. This volume growth was supported by strong performances in authentic taste technologies across botanicals, natural extracts and Tastesense^® salt and sugar reduction, while Kerry's range of food waste reduction technologies continued to perform well.

The retail channel delivered strong growth with customers targeting innovation around new taste experiences, relative value options, improved nutrition and food waste reduction. Kerry's foodservice channel delivered very strong growth through seasonal products and limited time offerings, combined with continued co-development on back-of-house efficiencies. Business volumes in emerging markets increased by 10.4% in the year, as very strong growth in the Middle East, Southeast Asia and LATAM were partially offset by challenging conditions in China.

Americas Region

> Volume growth of 8.4% with Q4 performance of 6.2%

> Growth led by Meat, Beverage and Bakery

> Very strong growth across both retail and foodservice channels

> LATAM delivered excellent growth

Revenue in the region increased by 33.0% to €4.2 billion in the year. This reflected volume growth of 8.4%, increased pricing of 7.4%, favourable transaction currency of 0.1% and favourable translation currency of 12.5%, with a contribution from acquisitions of 4.6%.

Growth in North America remained strong across both retail and foodservice channels through the year. This was led by an excellent performance in Meat and Meat Alternatives across food preservation, culinary taste, texture systems and clean-smoke technologies. Performance in the Beverage EUM continued to be strong, driven by new innovations incorporating Kerry's authentic natural taste, coffee extract and Tastesense^® sugar reduction technologies. Bakery achieved good growth through increased demand for functional solutions and texture systems, while Snacks continued to deliver strong growth with category leaders. Growth in foodservice remained strong due to seasonal and promotional menu offerings, as well as new launches enhancing back-of-house efficiency for customers across both food and beverage applications.

LATAM delivered excellent growth across the year led by Mexico and Brazil. Volume growth in Mexico was strong across Beverage and Snacks, supported by wins in authentic taste, while volumes in Brazil were driven by performance in Meals and Meat.

Within the global Pharma EUM, volumes in excipients were lower in the year due to supply chain constraints.

During the year, the Group acquired the B2B powdered cheese business and related assets⁶ of The Kraft Heinz Company based in the US, enhancing Kerry's scale, manufacturing capability and customer base in the snacking category.

⁶ In September 2022 Kerry acquired the B2B powdered cheese business and related assets of The Kraft Heinz Company as a carve out business acquisition

Europe Region

> Volume growth of 6.2% with Q4 performance of 6.1%

> Snacks, Dairy and Meals delivered strongest growth

> Growth led by foodservice while retail performed well

Revenue in the region increased by 25.1% to €1.5 billion in the year. This reflected volume growth of 6.2%, increased pricing of 13.9%, favourable transaction currency of 0.2% and translation currency of 2.1%, with a contribution from acquisitions (net of disposals) of 2.7%.

Growth in the year was particularly strong given the economic backdrop in the region. The Snacks EUM delivered strong growth through savoury taste launches and Kerry's Tastesense^® salt reduction technology portfolio, given increased customer focus on enhancing product nutritional profiles. Growth in Dairy was supported by new innovations in ice-cream and dairy alternative launches in the foodservice channel, while Meals continued to achieve good growth through taste systems and functional solutions. Performance in the foodservice channel was supported by continued innovation with quick service restaurants on new menu development and seasonal products.

Growth across the region was strongest in Central and Southern Europe, while the UK and Ireland had a very strong finish to the year. Performance in Eastern Europe was impacted by the ongoing war in the region. During the year, the Group divested its operations in Russia and Belarus, while further investing in its biotechnology capabilities with the acquisition of c-LEcta⁷, which is a leading biotechnology innovation company based in Leipzig, Germany.

⁷ In March 2022 Kerry acquired 93% of the issued share capital of the company c-LEcta GmbH - 'c-LEcta'

APMEA Region

> Volume growth of 8.1% with Q4 performance of 5.9%

> Growth led by Snacks, Meat and Bakery

> Middle East and Southeast Asia achieved excellent growth

Revenue in the region increased by 26.8% to €1.7 billion in the year. This reflected volume growth of 8.1%, increased pricing of 7.1%, favourable transaction currency of 0.2% and translation currency of 4.5%, with a contribution from acquisitions of 6.9%.

Growth in the region was primarily driven by very strong performances in the Middle East and Southeast Asia, partially offset by performance in China, which was impacted by localised COVID-19 related restrictions across the course of the year.

Overall growth was strong across all end use markets and channels. Snacks achieved very strong growth driven by local authentic taste innovations with regional leaders. Growth in Meat was led by savoury taste and smoke innovations, particularly in the foodservice channel, while growth in Bakery was supported by texture solutions and increased demand for preservation systems.

The Group continued to enhance its local presence in the region through the acquisition of Almer⁸ in Malaysia and its continued footprint expansion in the Middle East, which has become an important contributor to growth in the region.

⁸ In March 2022 Kerry acquired 100% of the issued share capital of the company Almer Malaysia Sdn. Bhd. - 'Almer'

Dairy Ireland

Solid performance in a year of significant inflation

Pro-forma⁹

Reported

2022

Performance

Revenue

€1,539m

+0.2%¹⁰

+0.1%¹⁰

EBITDA

€71m

+0.6%¹¹

-48.0%

EBITDA margin

4.6%

-170bps

-310bps

> Overall volume growth of 0.2%⁹ with Q4 volumes of -4.0%⁹ against very strong prior year comparatives

> Pricing of 36.0%⁹ reflected significant increases in dairy prices and other input costs

> EBITDA margin reduction resulting from the effect of passing through input cost inflation

Dairy Ireland reported revenue in the year was €1.5 billion, which represented an increase of 37.1% on a pro-forma basis, driven primarily by increased pricing. Overall reported revenue decreased by 13.4%, as increased pricing was more than offset by the impact of the Meats and Meals business disposal in the prior year.

Overall volumes in Dairy Ireland were similar to the prior year, with the heightened inflationary cost environment resulting in significant price increases across the business.

Within Dairy Consumer Products, overall category volumes in the year were lower, reflective of significant price increases and strong prior year comparatives. Within the spreads category, good performance was achieved across Kerry's customer-branded ranges, while cheese snacking volumes were impacted by reduced promotional activity across the year.

Dairy Ingredients delivered volume growth, while prices remained significantly higher as a result of constrained global supply dynamics.

⁹ Pro-forma performance of re-presented segmental structure excluding the Consumer Foods Meats and Meals business disposal

¹⁰ Volume growth | ¹¹ Comparable 2021 pro-forma EBITDA was €70m

Financial Review

2022

2021

change

€'m

Revenue

+19.3%

8,771.9

7,350.6

EBITDA

+12.9%

1,216.1

1,077.0

EBITDA margin

13.9%

14.7%

Depreciation (net)

(221.6)

(201.5)

Computer software amortisation

(31.8)

(34.6)

Finance costs (net)

(66.2)

(69.9)

Share of joint ventures' results after taxation

(0.4)

Adjusted earnings before taxation

896.1

771.0

Income taxes (excluding non-trading items)

(114.5)

(96.2)

Adjusted earnings after taxation

+15.8%

781.6

674.8

Brand related intangible asset amortisation

(50.9)

(46.2)

Non-trading items (net of related tax)

(124.2)

134.4

Profit after taxation

606.5

763.0

EPS

cent

Basic EPS

(20.6%)

341.9

430.6

Brand related intangible asset amortisation

28.7

26.0

Non-trading items (net of related tax)

70.0

(75.8)

Adjusted* EPS

+15.7%

440.6

380.8

Impact of exchange rate translation

(8.4%)

Adjusted* EPS growth in constant currency

+7.3%

* Before brand related intangible asset amortisation and non-trading items (net of related tax)

See Financial Definitions section for definitions, calculations and reconciliations of Alternative Performance Measures.

Revenue
The table below presents the revenue growth components for the Group and reporting segments. The Dairy Ireland segment is also presented on a pro-forma basis post the disposal of the Consumer Foods Meats and Meals business.
						Reported Revenue
2022	Volume	Price	Currency¹²	Acquisitions	Disposals	Growth

Taste & Nutrition	7.8%	8.7%	8.4%	5.6%	(1.1%)	29.4%


Dairy Ireland Pro-forma	0.2%	36.0%	0.9%	-	-	37.1%


Dairy Ireland Reported	0.1%	22.8%	1.3%	-	(37.6%)	(13.4%)


Group	6.1%	11.7%	7.0%	4.3%	(9.8%)	19.3%

¹² This includes the impact of transaction and translation currency

EBITDA & Margin %
Group EBITDA increased 12.9% from €1.1bn to €1.2bn driven primarily by the strong volume performance in Taste & Nutrition. Reported EBITDA margin of 13.9% (2021: 14.7%) reflects the pricing impact on margin of 180bps, offset by the positive impacts of portfolio development, operating leverage, mix and efficiencies.

Computer Software Amortisation
Computer software amortisation decreased by €2.8m to €31.8m (2021: €34.6m) reflecting the completion of the KerryConnect programme and the disposal of the Meats and Meals business.

Brand Related Intangible Asset Amortisation
Brand related intangible asset amortisation increased to €50.9m (2021: €46.2m) which is reflective of recent acquisition activity.

Finance Costs (net)
Finance costs (net) for the year decreased by €3.7m to €66.2m (2021: €69.9m) primarily due to deposit interest earned on cash at bank. The Group's average cost of finance for the year was 2.3% (2021: 2.7%).

Taxation
The tax charge for the year before non-trading items was €114.5m (2021: €96.2m) representing an effective tax rate of 13.5% (2021: 13.3%) and reflective of the geographical mix of earnings.

Non-Trading Items
During the year, the Group incurred a non-trading charge of €124.2m (2021: €134.4m credit) net of tax. The charge in the year primarily related to the impairment of the Group's Russia and Belarus assets and the previously announced Accelerate Operational Excellence transformation programme, which predominantly reflects consultancy fees, project management costs and costs of streamlining operations while we work to enhance our continuous improvement in manufacturing processes and deliver step-change manufacturing excellence across the organisation. The credit in the prior year primarily related to the gain on the disposal of the Meats and Meals business, partially offset by costs related to acquisition integration.

Foreign Exchange
Group results are impacted by year-on-year fluctuations in exchange rates versus the euro. The primary rates driving the currency impact in the figures above were USD and GBP which had average rates of 1.05 (2021: 1.19) and 0.85 (2021: 0.86) respectively.

Return on Average Capital Employed (ROACE)
In 2022, the ROACE for the Group was 10.3% (2021: 10.5%). The movement is primarily due to the timing of acquisitions and divestments and the translation impact on underlying assets.

Free Cash Flow
In 2022, the Group achieved free cash flow of €640.4m (2021: €566.1m) reflecting 82% cash conversion in the year.
		2022	2021
Free Cash Flow		€'m	€'m
EBITDA		1,216.1	1,077.0
Movement in average working capital		(201.4)	(37.7)
Pension contributions paid less pension expense		(15.7)	(14.7)
Finance costs paid (net)		(62.0)	(71.3)
Income taxes paid		(80.0)	(72.0)
Purchase of non-current assets		(254.7)	(334.6)
Sales proceeds on disposal of non-current assets		38.1	19.4
Free cash flow		640.4	566.1
Cash conversion¹³		82%	84%
¹³ Cash conversion is free cash flow expressed as a percentage of adjusted earnings after taxation

The average working capital investment in the year was primarily due to the strong volume growth and the unprecedented level of inflation. This reflected in a year on year investment in working capital of €224m from December 2021 to December 2022. Overall capital expenditure in the year was lower due to the timing of projects and the conclusion of a number of significant investments in 2021, including the rollout of KerryConnect in North America.

Total Net Debt
Total net debt at the end of the year was €2,217.4m (2021: €2,124.1m).

Key Financial Ratios
The Group's balance sheet is in a strong position. With a Net debt to EBITDA ratio of 1.8 times, the Group has sufficient headroom to support future growth plans.
	2022			2021
Net debt: EBITDA	1.8			2.0
EBITDA: Net interest	18.1			14.9

Financing
Undrawn committed facilities at the end of the year were €1,100m (2021: €1,100m) while undrawn standby facilities were €343.0m (2021: €337.0m).

Share Price and Market Capitalisation
The share price at 31 December 2022 was €84.24 (2021: €113.25) giving a market capitalisation of €14.9bn (2021: €20.0bn). Total shareholder return was -24.7% (2021: -3.7%) as share prices and valuations across the sector were adversely impacted by significant increases in interest rates and macroeconomic developments in the year.

Dividend and Annual General Meeting
During the year, the Group paid an interim dividend of 31.4 cent per A ordinary share, which was an increase of 10.2%. The Board has proposed a final dividend of 73.4 cent per A ordinary share, payable on 12 May 2023 to shareholders registered on the record date of 14 April 2023. When combined with the interim dividend, the total dividend for the year amounts to 104.8 cent per share (2021: 95.2 cent per share), which is an increase of 10.1% over last year's dividend. The Group's aim is to have double digit dividend growth each year. Over 35 years as a listed company, the Group has grown its dividend at a compound rate of 16.1%.

Kerry's Annual General Meeting is scheduled to take place on 27 April 2023.

Future Prospects

The Group began its 2022-2026 strategic cycle with a strong year of growth, good overall financial performance and continued progress against Kerry's Beyond the Horizon sustainability commitments.

At the outset of 2023, while market conditions are currently uncertain, Kerry remains strongly positioned for growth ahead of its markets. The Group will continue to manage input cost fluctuations with its well-established pricing model. Kerry will continue to invest capital aligned to its strategic priorities and strategically evolve its portfolio.

In 2023, the Group expects to achieve 3% to 7% adjusted earnings per share growth on a constant currency basis, before an expected 2% dilution in the year from the potential sale of the Sweet Ingredients Portfolio.


Disclaimer

This Announcement contains forward looking statements which reflect management expectations based on currently available data. However actual results may differ materially from those expressed or implied by these forward looking statements. 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.

CONTACT INFORMATION


Investor Relations

Marguerite Larkin, Chief Financial Officer

+353 66 7182292 \| [email protected]

William Lynch, Head of Investor Relations

+353 66 7182292 \| [email protected]

Media

Catherine Keogh, Chief Corporate Affairs & Brand Officer

+353 45 930188 \| [email protected]

Website

www.kerry.com

Consolidated Income Statement
for the financial year ended 31 December 2022
					Before				Before
					Non-		Non-		Non-	Non-
					Trading		Trading		Trading	Trading
					Items		Items	Total	Items	Items	Total
					2022		2022	2022	2021	2021	2021
	Notes				€'m		€'m	€'m	€'m	€'m	€'m

Continuing operations
Revenue		2			8,771.9		-	8,771.9	7,350.6	-	7,350.6


Earnings before interest, tax, depreciation and amortisation				1/2	1,216.1		-	1,216.1	1,077.0	-	1,077.0

Depreciation (net) and intangible asset amortisation					(304.3)		-	(304.3)	(282.3)	-	(282.3)
Non-trading items		3			-		(146.2)	(146.2)	-	91.5	91.5


Operating profit					911.8		(146.2)	765.6	794.7	91.5	886.2

Finance income					6.6		-	6.6	0.3	-	0.3
Finance costs					(72.8)		-	(72.8)	(70.2)	-	(70.2)
Share of joint ventures' results after taxation					(0.4)		-	(0.4)	-	-	-


Profit before taxation					845.2		(146.2)	699.0	724.8	91.5	816.3


Income taxes					(114.5)		22.0	(92.5)	(96.2)	42.9	(53.3)


Profit after taxation					730.7		(124.2)	606.5	628.6	134.4	763.0


Attributable to:
Equity holders of the parent								606.4			763.0
Non-controlling interests								0.1			-


								606.5			763.0


Earnings per A ordinary share						Cent						Cent

- basic			4			341.9						430.6
- diluted			4			341.3						429.9

Consolidated Statement of Comprehensive Income
for the financial year ended 31 December 2022
		2022		2021
	Note	€'m		€'m

Profit after taxation		606.5		763.0

Other comprehensive income:

Items that are or may be reclassified subsequently to profit or loss:
Fair value movements on cash flow hedges		5.9		(0.3)
Cash flow hedges - reclassified to profit or loss from equity		(2.8)		(0.9)
Net change in cost of hedging		0.8		-
Deferred tax effect of fair value movements on cash flow hedges		(0.2)		0.1
Exchange difference on translation of foreign operations		152.2		217.7
Cumulative exchange difference on translation recycled on disposal	3	14.9		16.2
Items that will not be reclassified subsequently to profit or loss:
Re-measurement on retirement benefits obligation		(13.4)		110.2
Deferred tax effect of re-measurement on retirement benefits obligation		7.6		(20.0)


Net income recognised directly in total other comprehensive income		165.0		323.0


Total comprehensive income		771.5		1,086.0


Attributable to:
Equity holders of the parent		771.4		1,086.0
Non-controlling interests		0.1		-


		771.5		1,086.0


Consolidated Balance Sheet
as at 31 December 2022
			31 December		31 December
			2022		2021
	Note		€'m		€'m

Non-current assets
Property, plant and equipment			2,099.3		2,091.3
Intangible assets			5,720.0		5,580.7
Financial asset investments			58.9		49.9
Investments in joint ventures			41.7		21.7
Other non-current financial instruments			0.3		34.8
Retirement benefits asset			95.6		90.3
Deferred tax assets			71.9		67.8


			8,087.7		7,936.5


Current assets
Inventories			1,354.4		1,204.2
Trade and other receivables			1,423.8		1,181.7
Cash at bank and in hand			970.0		1,039.1
Other current financial instruments			59.5		15.2
Assets classified as held for sale	6		388.0		18.7


			4,195.7		3,458.9


Total assets			12,283.4		11,395.4


Current liabilities
Trade and other payables			1,966.5		1,791.5
Borrowings and overdrafts			701.1		5.6
Other current financial instruments			18.4		40.1
Tax liabilities			190.9		141.6
Provisions			15.3		13.6
Deferred income			3.4		3.0
Total liabilities directly associated with assets classified as held for sale	6		19.7		-


			2,915.3		1,995.4


Non-current liabilities
Borrowings			2,432.6		3,118.0
Other non-current financial instruments			20.3		0.5
Retirement benefits obligation			30.2		24.1
Other non-current liabilities			142.6		153.9
Deferred tax liabilities			452.3		447.3
Provisions			50.5		37.1
Deferred income			16.0		17.9


			3,144.5		3,798.8


Total liabilities			6,059.8		5,794.2


Net assets			6,223.6		5,601.2


Equity
Share capital			22.1		22.1
Share premium			398.7		398.7
Other reserves			64.3		(129.6)
Retained earnings			5,736.8		5,310.0


Equity attributable to equity holders of the parent			6,221.9		5,601.2
Non-controlling interests			1.7		-


Total equity			6,223.6		5,601.2

Consolidated Statement of Changes in Equity
for the financial year ended 31 December 2022
							Attributable to equity holders of the parent
												Non-
	Share							Share	Other	Retained		controlling	Total
	Capital							Premium	Reserves	Earnings	Total	interests	equity
	Note				€'m			€'m	€'m	€'m	€'m	€'m	€'m

Group:

At 1 January 2021	22.1							398.7	(379.5)	4,614.2	4,655.5	-	4,655.5

Profit after taxation	-							-	-	763.0	763.0	-	763.0
Other comprehensive expense			-					-	232.7	90.3	323.0	-	323.0


Total comprehensive income	-							-	232.7	853.3	1,086.0	-	1,086.0

Shares issued during the financial year				-				-	-	-	-	-	-
Dividends paid	5				-			-	-	(157.5)	(157.5)	-	(157.5)
Share-based payment expense	-							-	17.2	-	17.2	-	17.2


At 31 December 2021	22.1							398.7	(129.6)	5,310.0	5,601.2	-	5,601.2

Profit after taxation	-							-	-	606.4	606.4	0.1	606.5
Other comprehensive income	-							-	171.0	(6.0)	165.0	-	165.0


Total comprehensive income	-							-	171.0	600.4	771.4	0.1	771.5

Shares issued during the financial year				-				-	-	-	-	-	-
Dividends paid		5			-			-	-	(173.6)	(173.6)	-	(173.6)
Share-based payment expense	-							-	22.9	-	22.9	-	22.9
Non-controlling interests arising on acquisition						-		-	-	-	-	1.6	1.6


At 31 December 2022	22.1							398.7	64.3	5,736.8	6,221.9	1.7	6,223.6

Other Reserves comprise the following:
			Share-
	Capital	Other	Based			Cost of
	Redemption	Undenominated	Payment	Translation	Hedging	Hedging
	Reserve	Capital	Reserve	Reserve	Reserve	Reserve	Total
	€'m	€'m	€'m	€'m	€'m	€'m	€'m

At 1 January 2021	1.7	0.3	90.2	(472.0)	2.6	(2.3)	(379.5)

Other comprehensive income/(expense)	-	-	-	233.9	(1.2)	-	232.7
Share-based payment expense	-	-	17.2	-	-	-	17.2


At 31 December 2021	1.7	0.3	107.4	(238.1)	1.4	(2.3)	(129.6)

Other comprehensive income	-	-	-	167.1	3.1	0.8	171.0
Share-based payment expense	-	-	22.9	-	-	-	22.9


At 31 December 2022	1.7	0.3	130.3	(71.0)	4.5	(1.5)	64.3

Consolidated Statement of Cash Flows
for the financial year ended 31 December 2022
						2022	2021
				Notes		€'m	€'m

Cash flows from operating activities
Profit before taxation						699.0	816.3
Adjustments for:
Depreciation (net)						221.6	201.5
Intangible asset amortisation						82.7	80.8
Share of joint ventures' results after taxation						0.4	(3.9)
Non-trading items income statement charge/(income)			3			146.2	(91.5)
Finance costs (net)						66.2	69.9
Change in working capital						(224.0)	(184.3)
Pension contributions paid less pension expense						(15.7)	(14.7)
Payments on non-trading items						(85.4)	(76.1)
Exchange translation adjustment						(27.2)	(0.7)


Cash generated from operations						863.8	797.3
Income taxes paid						(80.0)	(72.0)
Finance income received						5.4	0.4
Finance costs paid						(67.4)	(71.7)


Net cash from operating activities						721.8	654.0


Investing activities
Purchase of assets (net)						(221.0)	(300.4)
Proceeds from the sale of assets (net of disposal expenses)						38.1	4.0
Capital grants received						1.4	0.7
Purchase of businesses (net of cash acquired)		7				(353.8)	(1,084.9)
Payments relating to previous acquisitions						(1.8)	(18.9)
Purchase of investments						(10.4)	(4.4)
Purchase of share in joint ventures						(20.4)	-
Disposal of businesses (net of disposal expenses)	3					(15.2)	775.2


Net cash used in investing activities						(583.1)	(628.7)


Financing activities
Dividends paid					5	(173.6)	(157.5)
Payment of lease liabilities						(35.1)	(34.9)
Issue of share capital						-	-
Repayment of borrowings (net of swaps)						(3.0)	(1,093.3)
Proceeds from borrowings						2.0	1,705.0


Net cash movement due to financing activities						(209.7)	419.3


Net (decrease)/increase in cash and cash equivalents						(71.0)	444.6
Cash and cash equivalents at beginning of the financial year						1,033.8	560.3
Exchange translation adjustment on cash and cash equivalents						7.0	28.9


Cash and cash equivalents at end of the financial year						969.8	1,033.8


Reconciliation of Net Cash Flow to Movement in Net Debt
Net (decrease)/increase in cash and cash equivalents						(71.0)	444.6
Cash flow from debt financing						1.0	(611.7)


Changes in net debt resulting from cash flows						(70.0)	(167.1)
Fair value movement on interest rate swaps (net of adjustment to borrowings)						1.4	(0.1)
Exchange translation adjustment on net debt						(29.7)	(19.1)


Movement in net debt in the financial year						(98.3)	(186.3)
Net debt at beginning of the financial year						(2,049.9)	(1,863.6)


Net debt at end of the financial year - pre lease liabilities						(2,148.2)	(2,049.9)
Lease liabilities						(69.2)	(74.2)


Net debt at end of the financial year						(2,217.4)	(2,124.1)


Notes to the Financial Statements
for the financial year ended 31 December 2022

1. Accounting policies

The financial information included within this statement has been extracted from the audited financial statements of Kerry Group plc for the financial year ended 31 December 2022. The auditors' report was unqualified. The financial information set out in this document does not constitute full statutory financial statements for the financial years ended 31 December 2022 or 2021 but is derived from same. The consolidated financial statements of Kerry Group plc have been prepared in accordance with International Financial Reporting Standards ('IFRS'), International Financial Reporting Interpretations Committee ('IFRIC') interpretations and those parts of the Companies Act, 2014 applicable to companies reporting under IFRS. The financial statements comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows and the notes to the financial statements. The Group's financial statements have also been prepared in accordance with IFRS adopted by the European Union ('EU') which comprise standards and interpretations approved by the International Accounting Standards Board ('IASB'). The Group financial statements comply with Article 4 of the EU IAS Regulation. IFRS adopted by the EU differs in certain respects from IFRS issued by the IASB. References to IFRS hereafter refer to IFRS adopted by the EU.

The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities (including derivative financial instruments) and financial asset investments which are held at fair value. Assets and liabilities classified as held for sale are stated at the lower of carrying value and fair value less costs to sell. The investments in joint ventures are accounted for using the equity method.

The Group has determined that earnings before interest, tax, depreciation (net) and amortisation (EBITDA) is a key performance metric used by the Group's Chief Operating Decision Maker (the Executive Directors). From 1 January 2022 EBITDA replaces trading profit as one of the key measures utilised in assessing the performance of the Group. EBITDA represents profit before finance income and costs, income taxes, depreciation (net of capital grant amortisation), intangible asset amortisation, non-trading items and share of joint ventures' results after taxation and is a widely used measure in the evaluation of profitability and performance. This has been reflected in the presentation of the Group's Consolidated Income Statement and note 2 'Analysis of results', as permitted under IAS 1 'Presentation of Financial Statements'.

The Group has updated its 'Basis of consolidation' in respect of a new non-controlling interests policy.

Non-controlling interests
Non-controlling interests represent the portion of the equity of a subsidiary not attributable either directly or indirectly to the Group and are presented separately in the Consolidated Income Statement and within equity in the Consolidated Balance Sheet, distinguished from the Group's shareholders' equity. Where not all of the equity of a subsidiary is acquired, the non-controlling interests are recognised at the non-controlling interest's share of the acquiree's net identifiable assets.

In the 2022 consolidated financial statements, the Group has re-presented corresponding 2021 balances to align with current year presentation in the Consolidated Income Statement, note 2 'Analysis of results' and other notes that do not form part of this document.

Certain income statement headings and other financial measures included in the consolidated financial statements are not defined by IFRS. The Group makes this distinction to enhance the understanding of the financial performance of the business as outlined in the Financial Definitions.

The consolidated financial statements have been prepared on the going concern basis of accounting. The Directors have considered the Group's business activities and how it generates value, together with the main trends and factors likely to affect future development, business performance and position of the Group including liquidity and access to financing and the potential impacts of climate, geopolitical and macroeconomic environment related risks on profitability. There are no material uncertainties that cast significant doubt on the Group's ability to continue as a going concern over a period of at least 12 months from the date of approval of these financial statements.

The Group's accounting policies will be included in the 2022 Annual Report & Accounts, which will be published at the end of March, and are consistent with those described in the 2021 Annual Report & Accounts.

Critical accounting estimates and judgements
The preparation of the Group consolidated financial statements requires management to make certain estimations, assumptions and judgements that affect the reported profits, assets and liabilities.

Estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate was based or as a result of new information or more experience. Such changes are recognised in the period in which the estimate is revised.

In particular, information about significant areas of estimation and judgement that have the most significant effect on the amounts recognised in the consolidated financial statements are described in the respective notes to the consolidated financial statements.

New standards and interpretations
Certain new and revised accounting standards and new International Financial Reporting Interpretations Committee ('IFRIC') interpretations have been issued. The Group intends to adopt the relevant new and revised standards when they become effective and the Group's assessment of the impact of these standards and interpretations is set out below.

The following Standards and Interpretations are effective for the Group in 2022 but do not have a material effect on the results or financial position of the Group:			Effective Date

-	IAS 16 (Amendments)	Property, Plant and Equipment	1 January 2022
-	IAS 37 (Amendments)	Provisions, Contingent Liabilities and Contingent Assets	1 January 2022
-	IFRS 9 (Amendments)	Financial Instruments	1 January 2022
-	IFRS 3 (Amendments)	Business Combinations	1 January 2022
-	IAS 41 (Amendments)	Agriculture	1 January 2022

The following Standards and Interpretations are not yet effective for the Group and are not expected to have a material effect on the results or financial position of the Group:			Effective Date

-	IAS 1 (Amendments)	Presentation of Financial Statements	1 January 2023
-	IFRS 17	Insurance Contracts	1 January 2023
-	IAS 8 (Amendments)	Accounting Policies, Changes in Accounting Estimates and Errors	1 January 2023
-	IAS 12 (Amendments)	Income Taxes	1 January 2023
-	IFRS 16 (Amendments)	Leases	1 January 2024

2. Analysis of results

The Group has determined it has two reportable segments: Taste & Nutrition and Dairy Ireland. The Taste & Nutrition segment is a world leading provider of taste and nutrition solutions for the food, beverage and pharmaceutical markets. Utilising a 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. Kerry is driven to be our customers' most valued partner, creating a world of sustainable nutrition through solving our customers' most complex challenges with differentiated solutions. The Taste & Nutrition segment supplies industries across Europe, Americas and APMEA (Asia Pacific, Middle East and Africa). The Dairy Ireland segment is a leading Irish provider of value-add dairy ingredients and consumer products. Our dairy ingredients product portfolio includes functional proteins and nutritional bases, while our dairy consumer brands can be found in chilled cabinets in retailers across Ireland and the UK.

Prior year 31 December 2021 has been re-presented to reflect the changes in our reporting segments in line with how the Chief Operating Decision Maker (the Executive Directors) assesses the Group's performance from 1 January 2022. The Irish dairy processing activities, previously reported in Taste & Nutrition, have been combined with the remaining dairy activities of the Consumer Foods business and this segment is named Dairy Ireland. Included within the Dairy Ireland 31 December 2021 comparatives are the results of the Consumer Foods Meats and Meals business which was disposed by the Group on 27 September 2021.
						Group				Group
						Eliminations				Eliminations
	Taste &				Dairy	and		Taste &	Dairy	and
	Nutrition				Ireland	Unallocated	Total	Nutrition	Ireland	Unallocated	Total
	2022				2022	2022	2022	2021	2021	2021	2021
	€'m				€'m	€'m	€'m	€'m	€'m	€'m	€'m

External revenue				7,387.0	1,384.9	-	8,771.9	5,689.3	1,661.3	-	7,350.6
Inter-segment revenue				29.6	154.0	(183.6)	-	40.1	116.3	(156.4)	-

Revenue			7,416.6		1,538.9	(183.6)	8,771.9	5,729.4	1,777.6	(156.4)	7,350.6


EBITDA*		1,220.1			70.7	(74.7)	1,216.1	1,013.5	136.0	(72.5)	1,077.0


Depreciation (net)							(221.6)				(201.5)
Intangible asset amortisation							(82.7)				(80.8)
Non-trading items							(146.2)				91.5


Operating profit							765.6				886.2

Finance income							6.6				0.3
Finance costs							(72.8)				(70.2)
Share of joint ventures' results after taxation							(0.4)				-


Profit before taxation							699.0				816.3
Income taxes							(92.5)				(53.3)


Profit after taxation							606.5				763.0


Attributable to:
Equity holders of the parent							606.4				763.0
Non-controlling interests							0.1				-


							606.5				763.0


*EBITDA represents profit before finance income and costs, income taxes, depreciation (net of capital grant amortisation), intangible asset amortisation, non-trading items and share of joint ventures' results after taxation.

Segment assets and liabilities
Assets	8,583.1	766.2	2,934.1	12,283.4	7,801.9	661.9	2,931.6	11,395.4
Liabilities	(1,897.0)	(289.4)	(3,873.4)	(6,059.8)	(1,534.1)	(306.4)	(3,953.7)	(5,794.2)


Net assets	6,686.1	476.8	(939.3)	6,223.6	6,267.8	355.5	(1,022.1)	5,601.2


Other segmental information
Property, plant and equipment additions	238.9	17.6	0.3	256.8	264.4	28.2	0.2	292.8
Depreciation (net)	200.1	20.5	1.0	221.6	169.4	31.5	0.6	201.5
Intangible asset additions	0.4	0.1	11.7	12.2	1.3	0.2	32.6	34.1
Intangible asset amortisation	43.0	0.2	39.5	82.7	28.9	3.9	48.0	80.8
Share of joint ventures' results after taxation	0.4	-	-	0.4	-	-	-	-


Revenue analysis
Disaggregation of revenue from external customers is analysed by End Use Market (EUM), which is the primary market in which Kerry's products are consumed and primary geographic market. An EUM is defined as the market in which the end consumer or customer of Kerry's product operates. The economic factors within the EUMs of Food, Beverage and Pharma & other and within the primary geographic markets which affect the nature, amount, timing and uncertainty of revenue and cash flows are similar.

Analysis by EUM
	Taste &		Dairy		Taste &	Dairy
	Nutrition		Ireland	Total	Nutrition	Ireland	Total
	2022		2022	2022	2021	2021	2021
	€'m		€'m	€'m	€'m	€'m	€'m

Food	4,925.2		1,286.2	6,211.4	3,837.5	1,587.4	5,424.9
Beverage	1,959.1		98.7	2,057.8	1,515.2	73.9	1,589.1
Pharma & other	502.7		-	502.7	336.6	-	336.6

External revenue		7,387.0	1,384.9	8,771.9	5,689.3	1,661.3	7,350.6

Analysis by primary geographic market
Disaggregation of revenue from external customers is analysed by geographical split:
	Taste &		Dairy		Taste &	Dairy
	Nutrition		Ireland	Total	Nutrition	Ireland	Total
	2022		2022	2022	2021	2021	2021
	€'m		€'m	€'m	€'m	€'m	€'m

Republic of Ireland		82.2	458.2	540.4	64.1	394.6	458.7
Rest of Europe	1,459.8		768.8	2,228.6	1,168.7	1,089.6	2,258.3
Americas	4,172.2		84.0	4,256.2	3,137.5	97.7	3,235.2
APMEA	1,672.8		73.9	1,746.7	1,319.0	79.4	1,398.4


External revenue		7,387.0	1,384.9	8,771.9	5,689.3	1,661.3	7,350.6

Information about geographical areas
	Europe	Americas	APMEA	Total	Europe	Americas	APMEA	Total
	2022	2022	2022	2022	2021	2021	2021	2021
	€'m	€'m	€'m	€'m	€'m	€'m	€'m	€'m

Assets by location	5,357.9	5,486.3	1,439.2	12,283.4	5,205.1	4,959.2	1,231.1	11,395.4
Property, plant and equipment additions	55.8	147.4	53.6	256.8	83.7	152.5	56.6	292.8
Intangible asset additions	12.1	0.1	-	12.2	33.1	1.0	-	34.1


The revenue and non-current assets (as defined in IFRS 8 'Operating Segments') attributable to the country of domicile and all foreign countries of operation, for which revenue exceeds 10% of total external Group revenue, are set out below.

Kerry Group plc is domiciled in the Republic of Ireland and the revenues from external customers in the Republic of Ireland were €540.4m (2021: €458.7m). The non-current assets located in the Republic of Ireland are €1,503.6m (2021: €1,598.4m).

Revenues from external customers include €958.9m (2021: €1,379.5m) in the UK and €3,399.8m (2021: €2,610.7m) in the USA. The non-current assets in the UK are €353.3m (2021: €391.9m) and in the USA are €3,267.1m (2021: €3,166.1m). For clarity the UK is included within Europe in the tables above.

There are no material dependencies or concentrations on individual customers which would warrant disclosure under IFRS 8 'Operating Segments'. The accounting policies of the reportable segments are the same as the Group's accounting policies as outlined in the Statement of Accounting Policies. Under IFRS 15 'Revenue from Contracts with Customers' revenue is primarily recognised at a point in time. Revenue recorded over time during the year was not material to the Group.

3. Non-trading items
			2022	2021
		Notes	€'m	€'m

(Loss)/profit on disposal of businesses and assets		(i)	(63.1)	179.7
Global Business Services expansion		(ii)	(13.6)	(33.3)
Acquisition integration costs		(iii)	(20.3)	(54.9)
Accelerate Operational Excellence		(iv)	(49.2)	-


			(146.2)	91.5

Tax on above			22.0	26.3
Tax on inter-group transfer		(v)	-	16.6


Non-trading items (net of related tax)			(124.2)	134.4



(i) Loss on disposal of businesses and assets
		Businesses	*Assets	Total
		2022	2022	2022
	Note	€'m	€'m	€'m

Property, plant and equipment - disposed		(16.0)	(28.6)	(44.6)
Goodwill		(9.6)	(0.3)	(9.9)
Brand related intangible assets		(2.1)	(0.4)	(2.5)
Computer software		(0.2)	(0.3)	(0.5)
Deferred tax assets		-	-	-
Cash disposed		(4.6)	-	(4.6)
Inventories		(21.0)	-	(21.0)
Assets classified as held for sale - disposed		-	(3.0)	(3.0)
Assets classified as held for sale - impaired	6	-	(5.6)	(5.6)
Trade and other receivables		(9.0)	-	(9.0)
Tax receivables		(0.4)	-	(0.4)
Trade and other payables		20.0	-	20.0
Other non-current liabilities		3.0	-	3.0


		(39.9)	(38.2)	(78.1)
Consideration
Cash received		1.8	51.7	53.5
Deferred consideration		8.5	-	8.5
Disposal related costs		(18.5)	(13.6)	(32.1)


		(8.2)	38.1	29.9

Cumulative exchange difference on translation recycled on disposal		(14.9)	-	(14.9)


Loss on disposal of businesses and assets		(63.0)	(0.1)	(63.1)


		Businesses	*Assets	Total
		2022	2022	2022
Net cash inflow on disposal:		€'m	€'m	€'m

Cash received		1.8	51.7	53.5
Less: cash disposed		(4.6)	-	(4.6)
Less: disposal related costs paid		(12.4)	(13.6)	(26.0)


		(15.2)	38.1	22.9


*Assets represent non-current assets and assets classified as held for sale.

(Loss)/profit of disposal of businesses
As previously announced on 4 April 2022, the Group suspended its operations in Russia and Belarus. This suspension was managed in an orderly manner, during which the Group continued to pay employees, fulfilled its legal obligations and a decision was made to classify these businesses as held for sale during H1 2022. On 7 July 2022, the Group reached agreement to sell 100% of the share capital of Unitary Manufacturing Enterprise 'Vitella', a Taste & Nutrition entity based in Belarus. On 22 July 2022, the Group reached agreement to divest 100% of the share capital of Kerry Limited Liability Company, its subsidiary in Russia, to local management. These businesses were not deemed to be discontinued operations and goodwill was allocated to these disposed businesses using an appropriate allocation methodology aligned with IAS 36 'Impairment of Assets'. During the year the Group also disposed of a small cereal operation in North America. The loss on disposal of these businesses was €63.0m (2021: €nil). A tax credit of €4.3m (2021: a tax credit of €nil) arose on the disposal of these businesses.

In 2021 the Group disposed of its Meats and Meals business operating in Ireland and the UK from the Consumer Foods (now Dairy Ireland) division and during the year also disposed of a small operation in Taste & Nutrition Europe for a consideration of €813.6m resulting in a gain of €230.9m. A tax credit of €0.5m arose on the disposal of these businesses.

Profit/(loss) on disposal of assets
During the year, the Group disposed of property, plant and equipment primarily in North America and APMEA for a combined consideration of €51.7m resulting in a gain of €6.2m. In 2021, the Group disposed of property, plant and equipment and computer software in North America, Europe and APMEA for a combined consideration of €19.4m resulting in a loss of €2.6m. A tax charge of €1.9m (2021: a tax credit of €nil) arose on the disposal of assets.

In 2022, certain assets classified as held for sale (note 6) based in the USA and APMEA were impaired to their fair value less costs to sell by €5.6m (2021: €48.6m), consisting of €1.2m (2021: €17.1m) of property, plant and equipment impairment, €2.7m (2021: €nil) of goodwill impairment, €1.7m (2021: €nil) of brand related intangibles impairment and €nil (2021: €31.5m) of estimated costs to sell including marketing, legal, site rectification, environmental and other related expenses necessary to complete the disposals. These assets held for sale are expected to sell in 2023. The related tax credit was €0.5m (2021: €12.2m).

In 2022, there was a specific impairment charge of €0.3m and €0.4m (2021: €nil) in relation to goodwill and brand related intangibles respectively recorded in intangible assets.

(ii) Global Business Services expansion
In 2020, the Group commenced a programme to evolve, migrate and expand its Global Business Services model to better enable the business and support further growth. For the year ended 31 December 2022, the Group incurred costs of €13.6m (2021: €33.3m) reflecting relocation of resources, advisory fees, redundancies and the streamlining of operations. The associated tax credit was €3.0m (2021: €1.2m).

(iii) Acquisition integration costs
These costs of €20.3m (2021: €54.9m) reflect the relocation of resources, the restructuring of operations in order to integrate the acquired businesses into the existing Kerry operating model and external costs associated with deal preparation, integration planning and due diligence. A tax credit of €4.5m (2021: €12.4m) arose due to tax deductions available on acquisition related costs.

(iv) Accelerate Operational Excellence
These costs of €49.2m (2021: €nil) predominantly reflect consultancy fees, project management costs and costs of streamlining operations incurred in the period relating to our Accelerate Operational Excellence transformation programme, which will run until 2024. This material transformation project deploying next generation manufacturing processes, including advanced process controls, is combined with building capabilities within the Group to enhance continuous improvement in manufacturing processes which will deliver step change manufacturing excellence across the organisation. This project will also focus on supply chain excellence, optimising the Group's warehousing and distribution network. A tax credit of €11.6m (2021: €nil) arose due to tax deductions available on accelerated operational excellence costs.

(v) Tax on inter-group transfer
During 2021, a net tax credit of €16.6m arose as a result of the transfer of intangible assets between two wholly owned subsidiaries based in two different tax jurisdictions.

4. Earnings per A ordinary share
	EPS		2022	EPS	2021
	cent		€'m	cent	€'m

Basic earnings per share
Profit after taxation attributable to equity holders of the parent		341.9	606.4	430.6	763.0


Diluted earnings per share
Profit after taxation attributable to equity holders of the parent		341.3	606.4	429.9	763.0


			2022		2021
Number of Shares			m's		m's

Basic weighted average number of shares			177.4		177.2
Impact of share options outstanding			0.3		0.3


Diluted weighted average number of shares			177.7		177.5


Actual number of shares in issue as at 31 December			177.0		176.8

5. Dividends
	2022	2021
	€'m	€'m
Group and Company:

Amounts recognised as distributions to equity shareholders in the financial year
Final 2021 dividend of 66.70 cent per A ordinary share paid 6 May 2022	118.0	107.1
(Final 2020 dividend of 60.60 cent per A ordinary share paid 14 May 2021)

Interim 2022 dividend of 31.40 cent per A ordinary share paid 11 November 2022	55.6	50.4
(Interim 2021 dividend of 28.50 cent per A ordinary share paid 12 November 2021)


	173.6	157.5


Since the financial year end the Board has proposed a final 2022 dividend of 73.40 cent per A ordinary share which amounts to €129.9m. The payment date for the final dividend will be 12 May 2023 to shareholders registered on the record date as at 14 April 2023. The consolidated financial statements do not reflect this dividend.

6. Assets and liabilities classified as held for sale
	2022	2021
	€'m	€'m

Assets classified as held for sale
Property, plant and equipment	100.8	18.7
Goodwill	191.1	-
Brand related intangible assets	42.3	-
Inventories	53.1	-
Trade and other receivables	0.7	-


Total assets classified as held for sale	388.0	18.7


Trade and other payables	(19.7)	-


Total liabilities directly associated with assets classified as held for sale	(19.7)	-


Net assets classified as held for sale	368.3	18.7


Non-current assets are transferred to assets and liabilities classified as held for sale when it is expected that their carrying amounts will be recovered principally through disposal and a sale is considered highly probable. They are held at the lower of carrying amount and fair value less costs to sell.

As announced on 11 January 2023, the Group entered into exclusive negotiations prior to the year ended 31 December 2022 to sell the trade and assets of its Sweet Ingredients Portfolio in the Taste & Nutrition segment, for a consideration of €500m comprising an initial cash consideration of €375m plus a €125m interest bearing vendor loan note. The disposal proceeds are expected to substantially exceed the carrying amount of the related net assets and accordingly no impairment losses have been recognised on the classification of this business as held for sale. The potential sale is subject to relevant regulatory approvals, employee consultation and routine closing adjustments. The associated assets and liabilities have consequently been presented separately as assets held for sale in the financial statements for the year ended 31 December 2022. There will be no material impact recognised in other comprehensive income relating to this transaction.

During the year, the Group also reached agreement to sell a non-core business and its related assets in the APMEA Taste & Nutrition segment. The assets of these businesses have been impaired to their fair value less costs to sell by €2.7m (2021: €nil) of goodwill impairment and by €1.7m (2021: €nil) of brand related intangibles impairment following their transfer to assets held for sale. The fair value less costs to sell of these assets are based on offers received for this business.

These businesses were not deemed to be discontinued operations and goodwill was allocated to these businesses using an appropriate allocation methodology aligned with IAS 36 'Impairment of Assets'. Estimated costs to sell including marketing, legal, site rectification, environmental and other related expenses necessary to complete the disposals incurred to date of €7.6m (2021: €31.5m). These assets held for sale are expected to sell in the first half of 2023.

In 2022, assets classified as held for sale of property, plant and equipment based in the USA in the Taste & Nutrition segment, were impaired to their fair value less costs to sell by €1.2m (2021: €17.1m) following their transfer to assets held for sale. The fair value less costs to sell of these assets are based on offers received for these assets.

In 2021, the Group held property, plant and equipment classified as held for sale in the Taste & Nutrition segment in North America and in the Dairy Ireland segment in the UK.

7. Business combinations

The following acquisitions were completed by the Group during 2022:

Completion

Percentage

Acquisition

Type

date

acquired

Segment

Principal activity

Strategic rationale

Almer Malaysia Sdn. Bhd.

Equity

March

2022

100% share acquisition

Taste & Nutrition

A producer of quality spray dried ingredients servicing the Snacks and Dairy markets based in Malaysia.

Further supports Kerry's growth initiatives in authentic taste and emerging markets.

c-LEcta GmbH*

Equity

March

2022

93% share acquisition

Taste & Nutrition

A leading biotechnology innovation company based in Germany specialising in precision fermentation, optimised bio-processing and bio-transformation for the creation of high-value targeted enzymes and ingredients.

Brings leading innovation capabilities in enzyme engineering, fermentation and bio-processing to further enhance Kerry's key growth platform development.

Natreon, Inc.

Equity

March

2022

100% share acquisition

Taste & Nutrition

A leader in Ayurvedic and botanical ingredients, with strong research capabilities and facilities in the USA and India.

Brings a portfolio of clinically backed branded ingredients across the need states of cognition and healthy ageing.

Certain trade and

assets of The Kraft

Heinz Company

Asset

September

2022

Carve out

business acquisition

Taste & Nutrition

Kerry acquired the powdered cheese business and related assets of The Kraft Heinz Company, based in the US.

Enhances Kerry's scale, manufacturing capability and customer base in the important snacking category.

*The Group has a 93% equity shareholding in c-LEcta GmbH. It is consolidated in the Group financial statements as a 93% owned subsidiary on the basis of contractual arrangements with the remaining portion recognised as non-controlling interests.

The table below provides details of the identifiable net assets, including adjustments to provisional fair values, in respect of the acquisitions completed during the year ended 31 December 2022:

Total

2022

€'m

Recognised amounts of identifiable assets acquired and liabilities assumed:

Non-current assets

Property, plant and equipment

46.4

Brand related intangibles

122.8

Computer software

0.5

Current assets

Cash at bank and in hand

24.8

Inventories

35.1

Trade and other receivables

10.2

Current liabilities

Trade and other payables

(20.0)

Non-current liabilities

Deferred tax liabilities

(21.9)

Other non-current liabilities

(2.2)

Total identifiable assets

195.7

Non-controlling interests

(1.6)

Goodwill

197.8

Total consideration

391.9

Satisfied by:

Cash

376.6

Deferred payment

15.3

391.9

Net cash outflow on acquisition:

Total

2022

€'m

Cash

376.6

Less: cash and cash equivalents acquired

(24.8)

Plus: debt acquired (included in other non-current liabilities above)

2.0

353.8

The acquisition method has been used to account for businesses acquired in the Group's financial statements. Given that the valuation of the fair value of assets and liabilities recently acquired is still in progress, some of the above values are determined provisionally, primarily values relating to property, plant and equipment and liabilities (as not all information is available at this point in time). The valuation of the fair value of assets and liabilities will be completed within the measurement period. For the acquisitions completed in 2021, there have been no material revisions of the provisional fair value adjustments since the initial values were established. The Group performs quantitative and qualitative assessments of each acquisition in order to determine whether it is material for the purposes of separate disclosure under IFRS 3 'Business Combinations'. None of the acquisitions completed during the period were considered material to warrant separate disclosure.

The goodwill is attributable to the expected profitability, revenue growth, future market development and assembled workforce of the acquired businesses and the synergies expected to arise within the Group after the acquisition. €30.3m of goodwill recognised is expected to be deductible for income tax purposes.

Transaction expenses related to these acquisitions of €6.5m were charged in the Group's Consolidated Income Statement during the financial year. The fair value of the financial assets acquired includes trade and other receivables with a fair value of €10.2m and a gross contractual value of €10.4m.

Non-controlling interests represent the portion of the equity of a subsidiary not attributable either directly or indirectly to the Group and are presented separately in the Consolidated Income Statement and within equity in the Consolidated Balance Sheet, and are distinguished from the Group's shareholders' equity. Where not all of the equity of a subsidiary is acquired, the non-controlling interests are recognised at the non-controlling interest's share of the acquiree's net identifiable assets.

The revenue and profit after taxation attributable to equity holders of the parent to the Group contributed from date of acquisition for all business combinations effected during the financial year is as follows:

Total

2022

€'m

Revenue

103.2

Profit after taxation attributable to equity holders of the parent

11.3

The revenue and profit after taxation attributable to equity holders of the parent to the Group determined in accordance with IFRS as though the acquisition date for all business combinations effected during the financial year had been the beginning of that financial year would be as follows:

Kerry Group

Consolidated

excluding

Group

2022

including

acquisitions

€'m

Revenue

174.7

8,668.7

8,843.4

Profit after taxation attributable to equity holders of the parent

15.9

595.1

611.0

8. Events after the balance sheet date

Since the financial year end, the Group has:

entered into exclusive negotiations prior to the year ended 31 December 2022 to sell the trade and assets of its Sweet Ingredients Portfolio, for a consideration of €500m comprising an initial cash consideration of €375m plus a €125m interest bearing vendor loan note as announced on 11 January 2023. The potential sale is subject to relevant regulatory approvals, employee consultation and routine closing adjustments. The associated assets and liabilities have consequently been presented separately as assets held for sale (note 6) in the financial statements for the year ended 31 December 2022; and

proposed a final dividend of 73.40 cent per A ordinary share (note 5).

There have been no other significant events, outside the ordinary course of business, affecting the Group since 31 December 2022.

9. General information

The statutory financial statements of Kerry Group plc for the financial year ended 31 December 2022 were approved by the Board of Directors and authorised for issue on 15 February 2023 and will be filed with the Registrar of Companies following the annual general meeting. The statutory financial statements of Kerry Group plc for the financial year ended 31 December 2021, to which an unqualified audit opinion was received, were annexed to the annual return and filed with the Registrar of Companies.

FINANCIAL DEFINITIONS

Kerry uses a number of financial and non-financial key performance indicators (KPIs) to measure performance across its business. These KPIs help inform decision making, assist effective goal setting and track progress in achieving the Group's strategic objectives. Kerry believes that long-term sustainable success will be achieved by generating value for all stakeholders, while developing and monitoring strategy, managing the risks that face the organisation and embedding the Group's purpose and values. Principal financial definitions used by the Group, together with reconciliations where the non-IFRS measures are not readily identifiable from the financial statements, are as follows:

1. Revenue
Volume growth
This represents the sales growth year-on-year, excluding pass-through pricing on input costs, currency impacts, acquisitions, disposals and rationalisation volumes.

Volume growth is an important metric as it is seen as the key driver of organic top-line business improvement. Pricing therefore impacts revenue growth positively or negatively depending on whether input costs move up or down. A full reconciliation to reported revenue growth is detailed in the revenue reconciliation below.

Revenue Reconciliation
								Reported
	Volume			Transaction			Translation	revenue
2022	growth		Price	currency	Acquisitions	Disposals	currency	growth

Taste & Nutrition		7.8%	8.7%	0.2%	5.6%	(1.1%)	8.2%	29.4%
Dairy Ireland	0.1%		22.8%	0.1%	-	(37.6%)	1.2%	(13.4%)


Group	6.1%		11.7%	0.2%	4.3%	(9.8%)	6.8%	19.3%

2021

Taste & Nutrition		8.7%	0.9%	-	2.4%	-	(2.8%)	9.2%
Dairy Ireland	6.2%		1.8%	-	-	(13.0%)	1.1%	(3.9%)


Group	8.0%		1.2%	-	1.8%	(3.5%)	(1.8%)	5.7%


Prior year 31 December 2021 has been re-presented to reflect the changes in our reporting segments in line with how the Chief Operating Decision Maker (the Executive Directors) assesses the Group's performance from 1 January 2022. The Irish dairy processing activities, previously reported in Taste & Nutrition, have been combined with the remaining dairy activities of the Consumer Foods business and this segment is named Dairy Ireland. Included within the Dairy Ireland 31 December 2021 comparatives are the results of the Consumer Foods Meats and Meals business which was disposed by the Group on 27 September 2021.

Like-for-like¹ Revenue Reconciliation
								Like-for-like
	Volume			Transaction			Translation	revenue
2022	growth		Price	currency	Acquisitions	Disposals	currency	growth

Taste & Nutrition		7.8%	8.7%	0.2%	5.6%	(1.1%)	8.2%	29.4%
Dairy Ireland	0.2%		36.0%	0.2%	-	-	0.7%	37.1%


Group	6.7%		12.9%	0.2%	4.8%	(0.8%)	7.2%	31.0%

2021

Taste & Nutrition		8.7%	0.9%	-	2.4%	-	(2.8%)	9.2%
Dairy Ireland	5.5%		3.2%	-	-	-	0.6%	9.3%


Group	8.2%		1.3%	-	2.1%	-	(2.4%)	9.2%


¹Like-for-like (LFL) growth rates reflect the exclusion of the Consumer Foods Meats and Meals contribution from 2021 comparative calculations, being €0.7bn of revenue in the 2021 comparatives.

2. EBITDA
EBITDA represents operating profit after taxation before finance income and costs, income taxes, depreciation (net of capital grant amortisation), intangible asset amortisation, non-trading items and share of joint ventures' results after taxation. EBITDA is reflective of underlying trading performance and allows comparison of the trading performance of the Group's businesses, either year-on-year or with other businesses.

		2022				2021
		€'m				€'m

Profit after taxation		606.5				763.0
Share of joint ventures' results after taxation		0.4				-
Finance income		(6.6)				(0.3)
Finance costs		72.8				70.2
Income taxes		92.5				53.3
Non-trading items		146.2				(91.5)
Intangible asset amortisation		82.7				80.8
Depreciation (net)		221.6				201.5


EBITDA		1,216.1				1,077.0


3. EBITDA Margin
EBITDA margin represents EBITDA expressed as a percentage of revenue.
		2022				2021
		€'m				€'m

EBITDA		1,216.1				1,077.0
Revenue		8,771.9				7,350.6


EBITDA margin		13.9%				14.7%


4. Operating Profit
Operating profit is profit before income taxes, finance income, finance costs and share of joint ventures' results after taxation.
		2022				2021
		€'m				€'m

Profit before taxation		699.0				816.3
Finance income		(6.6)				(0.3)
Finance costs		72.8				70.2
Share of joint ventures' results after taxation		0.4				-


Operating profit		765.6				886.2


5. Adjusted Earnings Per Share and Performance in Adjusted Earnings Per Share on a Constant Currency Basis
The performance in adjusted earnings per share on a constant currency basis is provided as it is considered more reflective of the Group's underlying trading performance. Adjusted earnings is profit after taxation attributable to equity holders of the parent before brand related intangible asset amortisation and non-trading items (net of related tax). These items are excluded in order to assist in the understanding of underlying earnings. A full reconciliation of adjusted earnings per share to basic earnings is provided below. Constant currency eliminates the translational effect that arises from changes in foreign currency year-on-year. The performance in adjusted earnings per share on a constant currency basis is calculated by comparing current year adjusted earnings per share to the prior year adjusted earnings per share retranslated at current year average exchange rates.
	2022			2021
	EPS		Performance	EPS	Performance
	cent		%	cent	%
Basic earnings per share	341.9		(20.6%)	430.6	37.6%
Brand related intangible asset amortisation	28.7		-	26.0	-
Non-trading items (net of related tax)	70.0		-	(75.8)	-


Adjusted earnings per share	440.6		15.7%	380.8	10.2%

Impact of retranslating prior year adjusted earnings per share at current year average rates*			(8.4%)		1.9%


Growth in adjusted earnings per share on a constant currency basis			7.3%		12.1%


*Impact of 2022 translation was (31.9)/380.8 cent = (8.4%) (2021: 1.9%).

6. Free Cash Flow
Free cash flow is EBITDA plus movement in average working capital, capital expenditure (net), payment of lease liabilities, pensions contributions paid less pension expense, finance costs paid (net) and income taxes paid.

Free cash flow is seen as an important indicator of the strength and quality of the business and of the availability to the Group of funds for reinvestment or for return to shareholders. Movement in average working capital is used when calculating free cash flow as management believes this provides a more accurate measure of the increase or decrease in working capital needed to support the business over the course of the year rather than at two distinct points in time and more accurately reflects fluctuations caused by seasonality and other timing factors. Average working capital is the sum of each month's working capital over 12 months. Below is a reconciliation of free cash flow to the nearest IFRS measure, which is 'Net cash from operating activities'.

	2022		2021
	€'m		€'m
Net cash from operating activities	721.8		654.0
Difference between movement in monthly average working capital and movement in the financial year end working capital		22.6	146.6
Share of joint ventures' results after taxation*	-		3.9
Payments on non-trading items	85.4		76.1
Purchase of assets (net)	(221.0)		(300.4)
Payment of lease liabilities	(35.1)		(34.9)
Proceed from the sale of property, plant and equipment	38.1		19.4
Capital grants received	1.4		0.7
Exchange translation adjustment	27.2		0.7


Free cash flow	640.4		566.1


*Share of joint ventures' results after taxation was not included in the Group's EBITDA, but as a separate line item on the face of the Consolidated Income Statement for the year end 31 December 2022, therefore appears as a reconciling item in the comparative reconciliation for free cash flow.

7. Cash Conversion
Cash conversion is defined as free cash flow, expressed as a percentage of adjusted earnings after taxation. Cash conversion is an important metric as it measures how much of the Group's adjusted earnings is converted into cash.
	2022		2021
	€'m		€'m
Free cash flow	640.4		566.1

Profit after taxation attributable to equity holders of the parent	606.4		763.0
Brand related intangible asset amortisation	50.9		46.2
Non-trading items (net of related tax)	124.2		(134.4)


Adjusted earnings after taxation	781.5		674.8


Cash Conversion	82%		84%


8. Liquidity Analysis
The Net debt: EBITDA and EBITDA: Net interest ratios disclosed are calculated using an adjusted EBITDA, adjusted finance costs (net of finance income) and an adjusted net debt value to adjust for the impact of non-trading items, acquisitions net of disposals and deferred payments in relation to acquisitions.
	2022		2021
	Times		Times

Net debt: EBITDA	1.8		2.0

EBITDA: Net interest	18.1		14.9

9. Average Capital Employed
Average capital employed is calculated by taking an average of the shareholders' equity and net debt over the last three reported balance sheets.
	2022			H1 2022	2021	H1 2021	2020
	€'m			€'m	€'m	€'m	€'m

Equity attributable to equity holders of the parent			6,221.9	6,088.7	5,601.2	4,963.1	4,655.5

Net debt	2,217.4			2,456.3	2,124.1	1,980.6	1,945.1


Total capital employed	8,439.3			8,545.0	7,725.3	6,943.7	6,600.6


Average capital employed		8,236.5			7,089.9


The definition for total capital employed has been updated to reflect lease liabilities in 'Net debt' and 'Equity attributable to equity holders of the parent' as reported on the Consolidated Balance Sheet. This calculation no longer adds back 'Goodwill amortised (pre conversion to IFRS)' to 'Equity attributable to equity holders of the parent', in line with current market practice.

10. Return on Average Capital Employed (ROACE)
This measure is defined as profit after taxation attributable to equity holders of the parent before non-trading items (net of related tax), brand related intangible asset amortisation and finance income and costs expressed as a percentage of average capital employed. ROACE is a key measure of the return the Group achieves on its investment in capital expenditure projects, acquisitions and other strategic investments.
	2022	2021
	€'m	€'m
Profit after taxation attributable to equity holders of the parent	606.4	763.0
Non-trading items (net of related tax)	124.2	(134.4)
Brand related intangible asset amortisation	50.9	46.2
Net finance costs	66.2	69.9

Adjusted profit	847.7	744.7


Average capital employed	8,236.5	7,089.9


Return on average capital employed	10.3%	10.5%


Prior year has been re-presented to align with the updated definition of 'Total capital employed'.

11. Total Shareholder Return
Total shareholder return represents the change in the capital value of Kerry Group plc shares plus dividends in the financial year.
	2022	2021

Share price (1 January)	€113.25	€118.50

Interim dividend (cent)	31.4	28.5

Dividend paid (cent)	66.7	60.6

Share price (31 December)	€84.24	€113.25


Total shareholder return	(24.7%)	(3.7%)


12. Market Capitalisation
Market capitalisation is calculated as the share price times the number of shares issued.
	2022	2021

Share price (31 December)	€84.24	€113.25

Shares in issue ('000)	176,986.5	176,848.5


Market capitalisation (€'m)	14,909.3	20,028.1


13. Enterprise Value
Enterprise value is calculated as per external market sources. It is market capitalisation plus reported borrowings less total cash and cash equivalents.

14. Net Debt
Net debt comprises borrowings and overdrafts, interest rate derivative financial instruments, lease liabilities and cash at bank and in hand.

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END

FR FLFVAFFIELIV

TIDM	KYGA
Share Price	€75.60-1.06%
Market Cap	£12.03bn

TIDM	KYGA
Share Price	€75.60-1.06%
Market Cap	£12.03bn

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Company Information

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Date	16 Feb 2023
Time	07:00:04
Category	Results
ID	0725Q

Date	16 Feb 2023
Time	07:00:04
Category	Results
ID	0725Q