REG - Kerry Group PLC - Preliminary Statement of Results <Origin Href="QuoteRef">KYGa.I</Origin> - Part 3
23/02/2016 07:17
- Part 3: For the preceding part double click ID:nRSW8136Pb
AsiaPacific2015 Total2015 EMEA2014 Americas2014 AsiaPacific2014 Total2014
E'm E'm E'm E'm E'm E'm E'm E'm
Revenue by location of external customers 3,013.3 2,307.9 783.7 6,104.9 3,048.7 1,901.2 806.7 5,756.6
Segment assets by location 4,282.1 2,234.9 496.0 7,013.0 3,601.4 1,770.3 596.1 5,967.8
Property, plant and equipment additions 109.1 66.7 40.6 216.4 138.8 53.1 37.9 229.8
Intangible asset additions 30.9 0.6 0.1 31.6 34.3 1.3 - 35.6
_________ ________ ________ ________ _________ ________ ________ ________
Kerry Group plc is domiciled in the Republic of Ireland and the revenues from
external customers in the Republic of Ireland were E455.0m (2014: E505.4m).
The non-current assets located in the Republic of Ireland are E931.9m (2014:
E905.5m).
Revenues from external customers include E1,710.5m (2014: E1,686.2m) in the UK
and E1,789.2m (2014: E1,491.4m) in the US. The non-current assets in the UK
are E786.7m (2014: E715.1m) and in the US are E1,327.4m (2014: E991.8m). The
Taste & Nutrition and Consumer Foods business reviews, provides a description
of the types of products from which these segments derive their revenues.
During the financial year, the Group renamed its Ingredients & Flavours
operating segment to Taste & Nutrition. This did not result in a change in the
composition of the Group's reportable 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.
3. Non-trading items
2015 2014
Notes E'm E'm
Profit/(loss) on disposal of businesses (i) 22.5 0.1
and assets
Acquisition integration and (ii) (7.8) -
restructuring costs
Impairment of assets held for sale (iii) (5.3) -
________ ________
9.4 0.1
Tax 3.7 3.9
________ ________
13.1 4.0
________ ________
(i) Profit/(loss) on disposal of Businesses *Assets Total
businesses and assets
2015 2015 2015
E'm E'm E'm
Assets
Property, plant and equipment (29.9) (12.5) (42.4)
Assets classified as held for sale (4.0) (4.4) (8.4)
Brand related intangible assets (12.7) - (12.7)
Goodwill (24.8) - (24.8)
Inventory (13.3) - (13.3)
Accounts receivable (27.9) - (27.9)
Accounts payable 24.4 - 24.4
________ ________ ________
Net assets disposed (88.2) (16.9) (105.1)
Consideration
Cash received 153.8 12.7 166.5
Disposal related costs (38.1) - (38.1)
________ ________ ________
Total consideration received 115.7 12.7 128.4
Cumulative exchange difference on (0.8) - (0.8)
translation recycled on disposal
________ ________ ________
Profit/(loss) on disposal of businesses 26.7 (4.2) 22.5
and assets
________ ________ ________
Net cash inflow on disposal:
Total
2015
E'm
Cash 166.5
Less: cash at bank and in hand balance -
disposed of
Less: disposal related costs (38.1)
________
128.4
________
*Assets represent non-current assets
and assets classified as held for sale
During the financial year, the Group
disposed of the Pinnacle lifestyle
bakery business in Australia from the
Taste & Nutrition division and two
businesses in the Consumer Foods
division in the UK. The Consumer Foods
businesses were classified as held for
sale in 2014. Additionally, the Group
disposed of property, plant and
equipment and assets classified as held
for sale, primarily in the US and
Ireland.
In 2014, the profit of E0.1m related
primarily to the disposal of a business
in the Consumer Foods division in the
UK, a subsidiary in Argentina, and the
sale of property, plant and equipment
and assets classified as held for sale
in the US, UK and Ireland. In addition
the cumulative exchange difference on
translation recycled on disposal of a
subsidiary in 2014 was a loss of E0.4m.
A net tax credit of E1.7m (2014: E3.9m)
arose on the disposal of businesses and
assets.
(ii) Acquisition integration and
restructuring costs
The 2015 acquisition integration and
restructuring costs of E7.8m related
primarily to transaction expenses
incurred in completing acquisitions as
well as initial costs in integrating
these acquisitions into the Group's
operations. Details of the acquisitions
completed in 2015 are disclosed in Note
6. In 2015, a tax credit of E2.0m arose
due to tax deductions available on
acquisition integration and
restructuring costs. There were no
acquisition integration and
restructuring costs recorded in non
-trading items in 2014.
(iii) Impairment of assets held for
sale
In 2015, assets classified as held for
sale were impaired to their fair value
less costs to sell by E5.3m. There were
no impairments of assets held for sale
recorded in 2014.
4. Earnings per A ordinary share
EPS 2015 EPS 2014
cent E'm cent E'm
Basic earnings per share
Profit after taxation and attributable to owners of the parent 298.7 525.4 273.0 479.9
Brand related intangible asset amortisation 10.6 18.7 8.2 14.4
Non-trading items (net of related tax) (7.4) (13.1) (2.3) (4.0)
_______ _______ _______ _______
Adjusted earnings 301.9 531.0 278.9 490.3
_______ _______ _______ _______
Diluted earnings per share
Profit after taxation and attributable to owners of the parent 298.4 525.4 272.7 479.9
Adjusted earnings 301.5 531.0 278.6 490.3
_______ _______ ________ ________
In addition to the basic and diluted earnings per share, an adjusted earnings
per share is also provided as it is considered more reflective of the Group's
underlying trading performance. Adjusted earnings is profit after taxation
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.
Number of Shares 2015m's 2014m's
Basic weighted average number of shares 175.9 175.8
Impact of share options outstanding 0.2 0.2
_______ _______
Diluted weighted average number of shares 176.1 176.0
_______ _______
Actual number of shares in issue as at 31 December 175.9 175.8
_______ _______
5. Dividends
2015 2014
E'm E'm
Amounts recognised as distributions to equity shareholders in the financial year
Final 2014 dividend of 31.50 cent per A ordinary share paid 15 May 2015(Final 2013 dividend of 28.00 cent per A ordinary share paid 9 May 2014) 55.4 49.2
Interim 2015 dividend of 15.00 cent per A ordinary share paid 13 November 2015(Interim 2014 dividend of 13.50 cent per A ordinary share paid 14 November 2014) 26.4 23.8
________ ________
81.8 73.0
________ _________
Since the financial year end the Board has proposed a final 2015 dividend of
35.00 cent per A ordinary share. The payment date for the final dividend will
be 13 May 2016 to shareholders registered on the record date as at 15 April
2016. These consolidated financial statements do not reflect this dividend.
6. Business combinations
During 2015, the Group completed a total of 10 acquisitions, all of which are
100% owned by the Group.
Red ArrowProducts OtherAcquisitions Total
2015 2015 2015
E'm E'm E'm
Recognised amounts of identifiable assets acquired and liabilities assumed:
Non-current assets
Property, plant and equipment 16.2 45.0 61.2
Brand related intangibles 199.0 178.3 377.3
Current assets
Cash at bank and in hand 0.5 9.8 10.3
Inventories 11.5 49.7 61.2
Trade and other receivables 14.7 31.9 46.6
Current liabilities
Trade and other payables (6.7) (32.1) (38.8)
Non-current liabilities
Other non-current liabilities - (33.9) (33.9)
________ ________ ________
Total identifiable assets 235.2 248.7 483.9
Goodwill 201.7 207.6 409.3
________ ________ ________
Total consideration 436.9 456.3 893.2
________ ________ ________
Satisfied by:
Cash 892.0
Deferred payment 1.2
________
893.2
________
Net cash outflow on acquisition:
Total
2015
E'm
Cash 892.0
Less: cash and cash equivalents acquired (10.3)
Plus: debt acquired 6.4
________
888.1
________
The acquisition method of accounting has been used to consolidate the
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, the above values are determined provisionally. For the
acquisitions completed in 2014, there have been no material revisions of the
provisional fair value adjustments since the initial values were established.
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.
E279.5m of goodwill recognised is expected to be deductible for income tax
purposes.
Transaction expenses related to these acquisitions of E6.2m were charged in
the Group's Consolidated Income Statement during the financial year. The fair
value of the financial assets includes trade and other receivables with a fair
value of E46.6m and a gross contractual value of E51.3m.
The following acquisitions were completed by the Group during 2015:
Acquisition Acquired Principal activity
Rollover January Rollover operates in the UK 'hot-to-go' market with a strong position in the foodservice channel in consumer foods.
Insight Beverages May Insight Beverages is a leading supplier of custom beverage solutions to the foodservice and convenience store channels in North American markets.
KFI Savory June KFI Savory, the former U.S. based savoury flavour business of Kraft Food Ingredients, an industry leader in grilled flavours including authentic savoury flavours with natural and specialty grill flavours.
Baltimore Spice July Baltimore Spice is a Costa Rican based spices, seasonings and condiments producer strengthening Kerry's market positioning in the culinary and snack sectors in Central America.
Wellmune September Biothera Inc's business produces and markets the unique Wellmune branded natural food, beverage and supplement ingredient clinically proven to strengthen the immune system.
Island Oasis September Island Oasis is a leading provider of all-natural premium cocktail mixes and customised beverage solutions serving 'on-premise', restaurant,leisure and hospitality segments of the U.S. market.
Red Arrow Products December Red Arrow Products is a leading supplier of natural smoke flavours and authentic natural savoury grill flavours serving meat, culinary and food industry markets worldwide.
Other acquisitions Various The Group also acquired three smaller acquisitions in the European taste and nutrition market.
From the date of acquisition, the acquired businesses
have contributed E133.0m of revenue and E5.8m of profit
after taxation and attributable to owners of the parent
to the Group. If the acquisition dates had been on the
first day of the financial year, the acquired businesses
would have contributed E403.0m of revenue and E23.3m of
profit after taxation and attributable to owners of the
parent to the Group.
7. Events after the balance sheet date
Since the year end, the Group has the Group has proposed a final dividend of 35.00 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 2015.
8. General information
The statutory financial statements of Kerry Group plc for the financial year
ended 31 December 2015 were approved by the Board of Directors and authorised
for issue on the 22 February 2016 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 2014,
to which an unqualified audit opinion was received, were annexed to the annual
return and filed with the Registrar of Companies.
SUPPLEMENTARY INFORMATION
FINANCIAL DEFINITIONS
1. Revenue
Volume growth
This represents the sales volume growth year-on-year from ongoing business,
excluding volumes from acquisitions net of disposals. A full reconciliation to
reported revenue growth is detailed in the revenue reconciliation below.
Revenue Reconciliation
Volumegrowth Price Transaction currency Translation currency Acquisitions/Disposals Reportedrevenuegrowth
Taste & Nutrition 4.0% (2.3%) 0.0% 6.9% 0.1% 8.7%
Consumer Foods 3.0% (1.9%) 0.4% 6.6% (10.3%) (2.2%)
Group 3.8% (2.2%) 0.1% 6.9% (2.5%) 6.1%
2. EBITDA
EBITDA represents profit after taxation and attributable to owners of the
parent before finance income and costs, income taxes, depreciation (net),
intangible asset amortisation and non-trading items.
2015 2014
E'm E'm
Profit after taxation and attributable to owners of the parent 525.4 479.9
Finance income (1.8) (1.1)
Finance costs 71.1 54.0
Income taxes 77.4 75.7
Non-trading items (9.4) (0.1)
Intangible asset amortisation 37.4 28.0
Depreciation (including impairment) 128.4 105.8
________ ________
EBITDA 828.5 724.2
________ ________
3. Trading Profit
Trading Profit refers to the operating profit generated by the businesses
before intangible asset amortisation and gains or losses generated from
non-trading items. Trading Profit represents operating profit before specific
items that are considered to hinder comparison of the trading performance of
the Group's businesses, either year-on-year or with other businesses.
4. Trading Margin
Trading Margin represents annual trading profit, expressed as a percentage of
revenue.
5. Non-Trading Items
Non-trading items refers to gains or losses on the disposal of businesses,
disposal of assets (non-current assets and assets classified as held for
sale), costs in preparation of disposal of assets, material acquisition
transaction costs and material acquisition integration and restructuring
costs. It is determined by management that each of these items relate to
events or circumstances that are non-recurring in nature.
6. Operating profit
Operating profit is profit before income taxes, finance income and finance
costs.
7. Other external charges
Other external charges primarily refers to selling, general and administrative
expenses.
8. Other operating charges
Other operating charges primarily refers to manufacturing and warehousing
costs.
9. Adjusted Earnings Per Share
In addition to the basic and diluted earnings per share, an adjusted earnings
per share is also provided as it is considered more reflective of the Group's
underlying trading performance. Adjusted earnings is profit after taxation and
attributable to owners 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.
2015 2014
EPS EPS
cent cent
Basic earnings per share 298.7 273.0
Brand related intangible asset amortisation 10.6 8.2
Non-trading items (net of related tax) (7.4) (2.3)
________ ________
Adjusted earnings per share 301.9 278.9
________ ________
10. Free Cash Flow
Free Cash Flow is trading profit plus depreciation, movement in average
working capital, capital expenditure, pensions costs 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 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. Movement in average
working capital measures more accurately fluctuations caused by seasonality
and other timing factors. Below is a reconciliation of free cash flow to the
nearest IFRS measure, which is 'Net cash from operating activities'.
2015 2014
E'm E'm
Net cash from operating activities 721.3 469.0
Difference between movement in average working capital and movement in the financial year end working capital (66.4) 20.1
Expenditure on acquisition integration and restructuring costs 26.4 74.5
Purchase of assets (252.2) (274.1)
Proceeds from the sale of property, plant and equipment 12.7 15.9
Capital grants received 10.1 0.8
Exchange translation adjustment 0.7 (3.3)
________ ________
Free cash flow 452.6 302.9
________ ________
11. Financial Ratios
The Net debt: EBITDA and EBITDA: Net interest ratios disclosed are calculated
in accordance with lender's facility agreements 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. These ratios are calculated
in accordance with lender's facility agreements and these agreements
specifically exclude these items from the calculation.
12. Return on Average Equity (ROAE)
This measure is defined as profit after tax and attributable to owners of the
parent before non-trading items (net of tax) and brand related intangible
asset amortisation expressed as a percentage of average equity. Average equity
is calculated by taking the average shareholders' funds over a 12 month period
plus an additional E528m relating to goodwill written off to reserves pre
conversion to IFRS.
13. Return on Average Capital Employed (ROACE)
This measure is defined as profit after tax and attributable to owners of the
parent before non-trading items (net of tax), brand related intangible asset
amortisation and finance income and costs / Average Capital Employed. Average
capital employed is calculated by taking the average shareholders' funds and
net debt over a 12 month period plus an additional E528m relating to goodwill
written off to reserves pre conversion to IFRS.
14. Cash Flow Return on Investment (CFROI)
CFROI is calculated as free cash flow before finance costs (net) expressed as
a percentage of average capital employed. Average capital employed for the
CFROI calculation is the same as that used for ROACE.
15. Total Shareholder Return (TSR)
Total shareholder return (TSR) represents the change in the capital value of
Kerry Group shares plus dividends reinvested in the year.
16. Market Capitalisation
Market Capitalisation is calculated as the share price times the number of
shares issued.
17. Enterprise Value
Enterprise Value is calculated as per external market sources. It is market
capitalisation plus reported borrowings less total cash and cash equivalents.
This information is provided by RNS
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