Annual Report and Accounts
Kerry Group PLC
25 February 2003
Press Announcement
25 February 2003
Kerry Group plc Annual Results 2002
Kerry, the global ingredients, flavours and consumer foods group, reports
preliminary results for the year ended 31 December 2002.
Financial Highlights
• Sales increased by 25% to €3.8 billion
• Like-for-like sales growth of 6%
• EBITDA increased by 18% to €390m
• Operating profit* increased by 17% to €305m
• Adjusted profit after tax* up 22% to €189m
• Adjusted earnings per share* increased by 15.8% to 101.8 cent
• Final dividend per share up 16.3% to 7.85 cent
• €273m acquisition programme
• Free cash flow €232m.
*before goodwill and exceptionals
Kerry Group Managing Director, Hugh Friel said:
'The strong performance of the Group in 2002 is most encouraging and was
achieved across all businesses and territories. Like-for-like sales grew by 6%
reflecting the Group's focus and response to changing market dynamics and
consumer trends. Free cash flow exceeded €200m for the first time and the Group
again demonstrated its capability to speedily and efficiently integrate the
acquired businesses. Based on our core strengths and global service
capabilities, we view the prospects of the Group with confidence'.
For further information please contact:
Frank Hayes
Director of Corporate Affairs Tel no +353 66 7182304
Fax no +353 66 7182972
Kerry Web Site: www.kerrygroup.com
Kerry Group plc
Preliminary Statement
Results for the year ended 31 December 2002
Kerry made excellent progress in 2002 achieving record sales, profitability and
cash flow. The Group's strong performance again underlines the breadth of its
geographic and technical base in ingredients markets and its reputation for
innovative products and service to all major food manufacturing and foodservice
companies. Equally, in chilled foods markets, Kerry's performance in 2002
further consolidates its position as the leading added value chilled food
supplier to the UK and Irish markets, underpinned by above average industry
growth in the Group's key branded categories. In addition the Group maintained
momentum in providing a strong platform for future growth by successfully
completing and integrating a range of acquisitions in flavour, culinary and
nutritional growth sectors and in convenience lifestyle chilled food market
segments.
Results
Group turnover increased by 25% to €3.8 billion. Like-for-like sales growth was
6% when account is taken of acquisitions, divestitures and foreign exchange
fluctuations. This performance was broad based across all geographic markets
and core business areas. Operating profit before goodwill and exceptionals
increased by 17 % to €305.4m, again reflecting solid business development in all
Group operations and good progress through integration of 2001 acquisitions. As
signalled at year-end 2001, due to the profile and phase of development of
acquisitions completed during that year, the Group operating margin was 8.1% in
2002, compared to the prior year level of 8.7%. On a like-for-like basis the
operating margin increased by 30 basis points.
Adjusted profit after tax increased by 22% to €189m. Adjusted earnings per
share increased by 15.8% to 101.8 cent. Earnings per share after allowing for
goodwill and exceptionals was 26% lower than 2001 at 56.1 cent.
The Group continued to invest in strategic acquisitions and in research and
development. Expenditure on acquisitions during the year amounted to €273.4m
and expenditure on research and development programmes amounted to €78.5m.
Operations Reviews
Ireland and Rest of Europe
Sales originating from Irish based operations increased by 56% to €1.4 billion
reflecting a full years contribution from the former Golden Vale businesses and
underlying growth of 4% year-on-year. Operating profit increased by 39% to
€62.6m.
European operations (excluding Ireland) increased sales by 9% to €1.3 billion,
recording 6% like-for-like growth. Operating profits in the region increased by
11% to €109.6m.
In Europe Kerry Ingredients recorded a strong performance, despite lower
economic growth in the main consumer markets. The Aromont and Voyager
businesses acquired in 2001 performed well, broadening Kerry's offering
particularly to the dynamic prepared meals sector. While the food coatings
sector proved difficult in the first half of 2002, Kerry nevertheless achieved
solid growth overall in the sector through its ability to support its customer
base across the spectrum of trading conditions from its multi-site facilities
across Europe. Kerry again made satisfactory progress in the snack sector, in
line with market growth levels. The division's expanded ingredients range also
contributed to further gains in the quick-serve-restaurant sector. Eastern
European markets again exhibited good growth. Kerry commissioned a new factory
in Budapest to enhance its ingredients manufacturing capability and service in
the region.
Kerry's sweet and fruit ingredients business across Europe benefited from
stronger consumer demand for convenient, indulgent products in the dairy,
bakery, cereal, confectionery and snack sectors.
In the UK and Irish consumer food markets, continued buoyancy in snacking and
convenience sectors provided good growth opportunities for Kerry Foods,
consolidating its position as the leading supplier of added value chilled foods.
The Richmond, Walls and Denny brands continue to gain market share across
sausage, rasher, sandwich fillings and premium sliced meats lines. In March,
Kerry further broadened its position in the UK sausage sector with the addition
of the Bowyers and Porkinsons brands as part of the acquisition of the Northern
Foods van sales operation. The acquisition makes 'Kerry Foods Direct to Store'
the unrivalled leader in servicing the chilled cabinet requirements of customers
in the independent and convenience retail sectors. Kerry Foods also recorded
excellent progress through its prepared meals offerings, chilled and frozen, in
Ireland through the Denny brand and through customer brands in the UK markets.
The UK chilled ready meals market, valued at Stg£1.1 billion, grew by 14% in
value terms year-on-year.
In Ireland integration of the former Golden Vale businesses proved very
successful. The Bailieboro and Artigarvan dairy processing operations were sold
and processing across the Listowel and Charleville sites was streamlined.
Difficulties in international dairy markets impacted on margins in the Irish
milk processing sector, with change in input pricing during the year lagging
reduced output prices.
Kerry Foods achieved good growth through its cheese brands and Cheestrings
successfully broadened its offering in the children's snacking sector. Cheese
slices grew satisfactorily in the European quick-serve-restaurant sector.
Considerable resources were applied in advancing the Group's global flavour
business development strategy in 2002. 'Mastertaste', the Group's new flavour
division was launched in June, to spearhead development across the Group's
European, American and Asia-Pacific flavour businesses. Building on its 2001
and 2002 acquisitions, Mastertaste has streamlined the constituent flavour
businesses and focused technical development across sweet, savoury and cheese
and dairy flavour capabilities for the food and beverage industries.
R & D investment in Mastertaste in 2002 was focused on the development of
natural flavours for both savoury and sweet applications and to extension of the
division's line of functional flavours. Mastertaste Italy (SGF), which has a
strong heritage in botanical and herbal extracts - developed originally for the
Italian beverage sector, made good progress through development of a wide range
of natural extracts.
Further development in European markets in 2002 included the acquisition of;
(a) Ingredients Business
EBI Foods Ltd, based in Abingdon, Oxfordshire, UK, - a leading provider of food
coatings and blended ingredients to food manufacturers, supplying the
foodservice sector across European, Middle Eastern and Far Eastern markets.
(b) Consumer Foods
Deli Products (Ireland) to further develop Kerry Foods' snack and convenience
offering to the foodservice sector including sandwich bars and the hot and cold
serve-over counter trade.
Northern Foods (Van Sales Service) extending Kerry Foods Direct to Store chilled
foods distribution service to independent retail and convenience stores in the
UK.
Freshways Limited, based in Dublin, - the leading manufacturer and distributor
of pre-packed sandwiches to the Irish market. The acquired business supplies
major retail groups, the fast growing travel sector and major foodservice
outlets including healthcare and educational establishments.
Americas
Sales in American markets again grew satisfactorily by 18% to €945m reflecting
the contribution from 2001/2002 acquisitions and like-for-like growth of 7%
year-on-year. Operating profits increased by 14% to €120.5m.
In the USA, development across Kerry's seasonings, foodservice, coatings, sweet
ingredients, speciality ingredients and 'Nutriant' nutritional ingredients
businesses was again in line with expectations. Seasonings saw increased new
product activity in the second half of 2002, with good progress in both salty
snack and meat seasonings markets. In the speciality ingredients sectors, Kerry
again grew in line with overall industry demand through dairy, cheese and
speciality lipid ingredients. Business development through 'wet systems'
targeted at the fast growing ready-to-use sauce category proved successful with
both foodservice product manufacturers and retail branded sectors. Margins in
the food coatings sector were weaker due to higher wheat flour and energy costs.
Cereal prices remained firm in the second half of 2002, but were part
compensated by some price improvement in coatings markets. In the foodservice
sector, Kerry's brands - in particular Golden Dipt, performed well through
focused marketing programmes with key distributors and chains.
Commencing with the acquisition of Shade Foods in 2000, Kerry has established a
substantial, fast growing industry leading sweet ingredients business, serving
the cereal, snack foods, ice cream, bakery and nutritional sectors with
customised confectionery products and speciality extrusion technology. Having
successfully integrated the SPI Foods acquisition, acquired in 2001, the
division continued to lead development in the dynamic breakfast cereal and
nutrition bar markets. Building on the Group's mission to become a leading
supplier of nutritional ingredients through products and technologies that
provide specific health benefits; 'Nutriant', combining the Solnuts and Iowa Soy
businesses, launched mid-year, has already made excellent progress through its
specialist non-chemically processed soy concentrates and isolates, organic
lines, nut replacements and vegetarian products.
Kerry Canada continued to grow satisfactorily through export oriented food
manufacturers. In Mexico and Latin America good growth was achieved,
particularly in snack and bakery categories. Notwithstanding the economic
crisis in Argentina and currency depreciation in Brazil, Kerry again advanced
its business development in South America from its Brazilian based facilities.
Apart from on-going development through meat seasonings, functional dairy
ingredients and speciality lipids, Kerry's sweet ingredients business recorded
strong growth through chocolate compound coatings, variegates and inclusions -
Brazil being one of the leading consumers of sweet products in the global
marketplace. The Siber and Nutrir businesses, acquired in 2001, were integrated
and production of Nutrir products was transferred to the Tres Coracoes site.
In American markets, Mastertaste successfully integrated the Geneva and Hickory
flavour businesses acquired in 2001. A new divisional headquarters was
established in Rosemont, Chicago. Drawing on synergies throughout the flavour
division, a functional flavours development unit was established in the USA.
Focused on traditional snacks, prepared meals and dairy growth sectors including
dairy based beverages, Mastertaste North America also made good progress through
its cheese and dairy flavour unit and through synergies derived by combining
Kerry's culturing technologies and Mastertaste flavours.
The Group's focus on the continued development of its ingredients and flavour
businesses in American markets led to the following strategic acquisitions in
2002;
(a) Ingredients Businesses
Industrial Deshidratadora, S.A. de C.V. (IDSA), operating from manufacturing
facilities in San Juan del Rio and Mexico City is the largest producer of
convenience blends in Mexico. The acquisition of IDSA expands Kerry's
capability to supply ingredients for application in instant beverages,
ready-to-eat cereals, cereal bars and mueslis. In addition IDSA has a well
established retail branded franchise, including Benedik Coffee and Lautrec
Coffee Creamer.
Ringger Foods, located in Gridley, Illinois extending Kerry's market leadership
position in North American speciality extruded food ingredients for application
in cereals, confectionery products and nutrition bars.
Roskam Cereal & Agglomerates, based in Grand Rapids, Michigan, adding to Kerry's
manufacturing capacity in the fast growing sweet ingredients sector.
Stearns & Lehman Inc., a leading manufacturer of coffeehouse chain, foodservice
and branded Italian-style flavoured syrups, beverage flavourings and toppings
for the speciality coffee and beverage industries - adding to Kerry's product
offering in the foodservice sector.
Building on the launch of 'Nutriant', the Group's U.S. based dedicated
nutritional ingredients business, a modern manufacturing facility in Turtle
Lake, Wisconsin was acquired to support the manufacture of organic soy isolates
and soy concentrates for the nutrition bar and nutritional beverage markets.
Rector Foods, based in Brampton, Ontario, Canada, a leading producer of
seasoning blends and marinades for the meat industry, processed food and
foodservice sectors.
The Original International Food Ingredients (IFI), located in Irving, Texas,
specialising in the development and manufacture of sauce seasonings, meat
seasonings, marinades and soup seasonings for the foodservice sector.
(b) Flavour Businesses
St. Louis Flavors, based in Fenton, Missouri was acquired by Mastertaste to
enhance the flavour division's technical base in sweet flavours and strengthen
its service within the U.S. bakery, beverage and confectionery sectors.
Metarom, located in Granby, Quebec acquired prior to year-end, is the largest
private flavour business in Canada. With strong technical capability in the
sweet flavour sector, the business is focused on the beverage, dairy and
confectionery industries - complementing Mastertaste's U.S. based sweet flavour
development facilities.
Asia Pacific
Economic conditions in Kerry's Asia Pacific markets improved in 2002, and the
Group recorded a 7% increase in turnover in the region to €143m, with
like-for-like sales increased by 5%. Operating profit grew by 10% to €12.7m.
In South East Asia excellent progress was achieved through food coatings and
meat seasonings, particularly in Malaysia and Thailand. To meet market growth
requirements, prior to year-end, Kerry acquired a major seasonings and marinade
manufacturing facility near Bangkok to service the requirements of the meat and
seafood industries in the region.
In North Asia, Kerry's speciality ingredients business achieved solid growth in
Taiwan, Japan and China, primarily through nutritional bases, cheese powders and
speciality lipids. The Group's North Asia regional office in Hong Kong has
assisted in building Kerry's customer relationships in this important
marketplace.
In the Australian ingredients sector Kerry again made good progress in all
sectors with strong advances in meat and poultry segments and the
quick-serve-restaurant sector. Excellent growth was also achieved through snack
seasonings and food coatings in New Zealand.
Kerry Pinnacle continued to benefit from the growth of in-store bakery chains
and franchise shop chains in Australia.
Post Balance Sheet Events
Since year-end, the Group has completed the acquisition of SunPure, a leading
manufacturer of natural citrus flavours and ingredients. Located at the centre
of the North American citrus industry in Lakeland, Florida, SunPure is also a
significant producer of apple essence and beverage flavours and bases. The
business, acquired for a total consideration of US$68m, operates from state of
the art manufacturing facilities servicing the requirements of a strong customer
base in the USA and Japan - including leading flavour houses, branded beverage
companies and private label beverage producers. The company has a strong growth
record, capitalising on the growth of citrus flavour usage and beverage
flavours. Flavoured beverage markets have exhibited strong growth in recent
years, fuelled by consumer interest in natural, ethnic and healthier beverage
options with more pronounced flavour levels.
In combining SunPure with the Group's existing flavour businesses and
technologies, Mastertaste will focus on the significant growth opportunities in
wider flavour and beverage growth markets across Europe, Latin America and Asia,
as well as its established markets in the U.S. and Japan.
Finance
Operating cash flow (EBITDA) increased by 18% to €390.4m. Allowing for a
working capital reduction of €46m, net cash expenditure on capital projects of
€92m, interest payments of €50m, tax of €43.6m and dividends of €19m, free cash
flow available to the Group was a record €232m.
The total consideration, including debt, arising from Group acquisitions in 2002
amounted to €273m. Net debt at year-end amounted to €763.8m compared to the
prior year-end level of €818.9m. Debt to EBITDA stood at a comfortable 2.1
times. Interest charges increased slightly to €50.2m, with EBITDA to interest
covered 7.8 times (2001: 6.9 times).
FRS 19 - 'Deferred Tax' and the transitional provisions of FRS 17 'Retirement
Benefits' have been adopted in the Group's 2002 Financial Statements. The
adoption of FRS 17 has had no effect on either the results for the current year
or on results reported in prior periods. The disclosures under the FRS 17 mark
to market calculations indicate a net pension deficit of €90m at year-end. The
company is reviewing measures to address this deficit which represents less than
5% of current market capitalisation.
FRS 19 requires deferred tax to be accounted for on a full provision basis on
all timing differences that have originated but not reversed by the balance
sheet date, except as otherwise required by the standard. Accordingly, results
for prior periods have been restated in line with the new standard. In summary,
the current taxation charge in each of the periods under review was
approximately 25% of normal trading profits. The FRS 19 restatement has had the
effect of adding a further 6% charge against profits for the year but has no
cash impact.
As announced at year-end 2001, the Board approved an integration plan for
businesses connected with 2001 acquisitions principally Golden Vale. The
programme at a cost of €56.6m in 2002 is now nearing completion. The Group is
confident that the benefits of this programme in terms of business development
and efficiencies will be significant.
The basic weighted average number of ordinary shares in issue for the year was
185,363,778 (2001: 175,674,473). The total number of shares in issue at
year-end was 185,613,945 (2001: 184,998,845).
Dividend
The Board has declared a final dividend of 7.85 cent per share, an increase of
16.3% on 2001. Together with the interim dividend of 3.65 cent per share, this
raises the total dividend payment for the year to 11.5 cent per share, an
increase of 15% on the 2001 dividend. The final dividend will be paid on 30 May
2003 to shareholders registered on the record date 2 May 2003.
Board Changes
Mr. Denis Brosnan has signalled his intention to retire as Chairman later this
year and the Board has decided to appoint Mr. Denis Buckley, currently Vice
Chairman, as Chairman Designate to succeed Mr. Brosnan. Mr. Buckley is Chairman
of Kerry Co-operative Creameries Limited and a Director of IAWS Group plc.
Mr. James L. Brosnan and Mr. Michael Harty retired from the Board on
1 November 2002. Mr. Patrick Anthony Barrett, Mr. Patrick Minogue and
Mr. Denis Wallis were co-opted to the Board on 29 January 2003.
Annual Report and Annual General Meeting
The Group's Annual Report will be published at the beginning of May and the
Annual General Meeting will be held in Tralee on 27 May 2003.
Future Prospects
Kerry is well focused on fast growing sectors of the global food industry
through its strong geographical base in ingredients and flavours markets. The
Group has demonstrated its ability to service the requirements of global food
companies through a network of locally based international development and
manufacturing operations, achieving preferred supplier status to major
multinational food companies.
In the Irish and UK consumer foods markets, Kerry will continue to enhance its
position as the leading added value chilled foods supplier.
The Group's strong pipeline of development and acquisition opportunities
continues. With a strong balance sheet and record free cash generation, coupled
with Kerry's successful track record of speedily integrating a range of
acquisitions, the Group is well placed to capitalise on such opportunities.
Notwithstanding currency fluctuations, the trading outlook for the current year
is good and the Group is confident of meeting market expectations.
Kerry Group plc
Consolidated Profit and Loss Account
for the year ended 31 December 2002
Pre
Exceptional Exceptional
Items Items Total
2002 2002 2002 2001
Notes €'000 €'000 €'000 €'000
(Restated)*
Turnover
Continuing operations 1 3,754,808 - 3,754,808 3,002,781
Operating profit - continuing operations
Before goodwill amortisation and exceptional 1 305,410 - 305,410 260,445
items
Goodwill amortisation 41,401 - 41,401 23,367
Exceptional restructuring costs 4 - 56,602 56,602 8,097
Operating profit 1 264,009 (56,602) 207,407 228,981
Profit on sale of businesses 4 - 1,744 1,744 6,205
Profit on sale of fixed assets 4 - 279 279 2,187
Interest payable and similar charges 50,238 - 50,238 47,644
Profit before taxation 213,771 (54,579) 159,192 189,729
Taxation - current tax 52,721 (6,116) 46,605 47,204
- deferred tax 13,744 (5,060) 8,684 9,391
Profit after taxation and attributable
to ordinary shareholders 147,306 (43,403) 103,903 133,134
Dividends - paid 6,806 - 6,806 6,004
- proposed 14,571 - 14,571 12,487
21,377 - 21,377 18,491
Retained profit for the year 125,929 (43,403) 82,526 114,643
Earnings per ordinary share (cent)
- basic before goodwill 5 101.8 87.9
amortisation and exceptional
items
- basic after goodwill 5 56.1 75.8
amortisation and exceptional
items
- fully diluted after goodwill 5 55.7 75.3
amortisation and exceptional
items
* Comparative figures have been restated to reflect the adoption of FRS 19
'Deferred Tax'.
The financial statements were approved by the Board of Directors on 24 February
2003 and signed on its behalf by:
Denis Brosnan, Chairman
Hugh Friel, Managing Director
Kerry Group plc
Consolidated Balance Sheet
as at 31 December 2002
2002 2001
€'000 €'000
(Restated)*
Fixed assets
Tangible assets 870,406 885,773
Intangible assets 765,384 685,941
1,635,790 1,571,714
Current assets
Stocks 363,545 362,173
Debtors 500,606 515,063
Cash at bank and in hand 46,584 19,794
910,735 897,030
Creditors: Amounts falling due within one year (821,823) (775,579)
Net current assets 88,912 121,451
Total assets less current liabilities 1,724,702 1,693,165
Creditors: Amounts falling due after more than one year (824,134) (857,674)
Provisions for liabilities and charges (64,571) (41,143)
835,997 794,348
Capital and reserves
Called-up equity share capital 23,202 23,125
Capital conversion reserve fund 340 340
Share premium account 362,974 357,873
Profit and loss account 418,012 376,208
804,528 757,546
Deferred income 31,469 36,802
835,997 794,348
* Comparative figures have been restated to reflect the adoption of FRS 19
'Deferred Tax'.
The financial statements were approved by the Board of Directors on 24
February 2003 and signed on its behalf by:
Denis Brosnan, Chairman
Hugh Friel, Managing Director
Kerry Group plc
Consolidated Cash Flow Statement
for the year ended 31 December 2002
2002 2001
€'000 €'000
Operating profit before goodwill amortisation and exceptional 305,410 260,445
items
Depreciation (net) 84,952 70,438
Change in working capital 48,786 (34,473)
Exchange translation adjustment (2,691) 453
Net cash inflow from operating activities 436,457 296,863
Returns on investments and servicing of finance
Interest received 1,751 1,882
Interest paid (51,583) (47,614)
Taxation (43,612) (44,298)
Capital expenditure
Purchase of fixed assets (96,183) (95,647)
Proceeds on the sale of fixed assets 3,584 5,641
Development grants received 398 993
Acquisitions and disposals
Purchase of subsidiary undertakings (237,539) (599,422)
Proceeds on the sale of businesses 33,199 22,049
Deferred creditors paid (8,883) (30)
Exceptional restructuring costs (33,717) (8,097)
Consideration adjustment on previous acquisitions (393) 475
Equity dividends paid (19,293) (16,574)
Cash outflow before the use of liquid resources and financing (15,814) (483,779)
Financing
Issue of share capital 5,178 165,794
Increase in debt due within one year 81,677 36,590
(Decrease) / increase in debt due after one year (44,251) 273,194
Increase / (decrease) in cash in the year 26,790 (8,201)
Reconciliation of Net Cash Flow to Movement in Net Debt
for the year ended 31 December 2002
Increase / (decrease) in cash in the year 26,790 (8,201)
Cash flow from debt financing (37,426) (309,784)
Change in net debt resulting from cash flows (10,636) (317,985)
Exchange translation adjustment 65,756 (22,592)
Movement in net debt in the year 55,120 (340,577)
Net debt at beginning of year (818,924) (478,347)
Net debt at end of year (763,804) (818,924)
Kerry Group plc
Statement of Total Recognised Gains and Losses
for the year ended 31 December 2002
2002 2001
€'000 €'000
(Restated)*
Profit attributable to the Group 103,903 133,134
Exchange translation adjustment on foreign currency net investments (40,722) (3,309)
63,181 129,825
Prior year adjustment - deferred tax (36,063) -
Total recognised gains and losses relating to the year 27,118 129,825
* Comparative figures have been restated to reflect the adoption of FRS 19
'Deferred Tax'.
Reconciliation of movements in share capital and reserves
for the year ended 31 December 2002
Capital Profit & Loss
Share Capital Conversion Account Total
and Premium Reserve Fund (Restated) (Restated)
€'000 €'000 €'000 €'000
At beginning of year 380,998 340 412,271 793,609
Prior year adjustment - deferred tax - - (36,063) (36,063)
380,998 340 376,208 757,546
Retained profit - - 82,526 82,526
Shares issued during year 5,213 - - 5,213
Share issue costs (35) - - (35)
Exchange translation adjustment - - (40,722) (40,722)
At end of year 386,176 340 418,012 804,528
The Profit & Loss Account figures comprise the following:
Retained Profit & Loss
Intangible Assets Profits Account
Written Off (Restated) (Restated)
€'000 €'000 €'000
At beginning of year (438,298) 850,569 412,271
Prior year adjustment - deferred tax - (36,063) (36,063)
(438,298) 814,506 376,208
Retained profit (41,401) 123,927 82,526
Exchange translation adjustment - (40,722) (40,722)
At end of year (479,699) 897,711 418,012
The exchange translation adjustment arises on the retranslation of the Group's
opening net investment in its overseas subsidiaries.
Kerry Group plc
Notes to the Financial Statements
for the year ended 31 December 2002
1. Analysis of results by region
2002 2001
Operating Net Operating Net
Turnover Profit Assets Turnover Profit Assets
€'000 €'000 €'000 €'000 €'000 €'000
(Restated)
By geographical market of origin:
Ireland 1,373,681 62,637 463,743 883,267 45,075 490,532
Rest of Europe 1,293,154 109,586 635,040 1,183,774 98,524 634,286
Americas 944,767 120,473 437,909 801,728 105,324 416,532
Asia Pacific 143,206 12,714 63,109 134,012 11,522 71,922
3,754,808 305,410 1,599,801 3,002,781 260,445 1,613,272
Goodwill amortisation - (41,401) - - (23,367) -
Exceptional restructuring costs - (56,602) - - (8,097) -
Group net debt - - (763,804) - - (818,924)
3,754,808 207,407 835,997 3,002,781 228,981 794,348
2002 2001
Turnover Turnover
€'000 €'000
By destination:
Ireland 766,027 520,707
Rest of Europe 1,788,914 1,422,996
Americas 1,002,942 873,436
Asia Pacific 196,925 185,642
3,754,808 3,002,781
Turnover, operating profit and net assets as presented above are stated net of
intra Group transactions and balances.
2. Accounting policies
These accounts have been prepared using the same accounting policies as detailed
in the 2001 annual financial statements with the exception of FRS 19 'Deferred
Tax' which is applicable to the Group for the first time in the year ended 31
December 2002.
FRS 19 requires deferred tax to be accounted for on a full provision basis on
all timing differences that have originated but not reversed by the balance
sheet date, except as otherwise required by the standard. Deferred tax assets
are recognised to the extent that it is regarded as more likely than not that
they will be recovered. Deferred tax assets and liabilities are discounted.
The implementation of FRS 19 has decreased the profit for the year ended 31
December 2001 by euro10.3m to euro133.1m and decreased net assets as at 31
December 2001 by euro36.1m to euro794.3m.
3. Basis of preparation and reporting currency
The financial information set out in this document does not constitute full
statutory accounts for the years ended 31 December 2002 or 2001 but is derived
from same. The 2002 and 2001 accounts have been audited and received unqualified
audit reports. The 2002 financial statements were approved by the Board of
Directors on 24 February 2003.
The financial statements are prepared under the historical cost convention.
4. Exceptional items 2002 2001
€'000 €'000
(Restated)
Exceptional restructuring costs (56,602) (8,097)
Profit on sale of businesses 1,744 6,205
Profit on sale of fixed assets 279 2,187
(54,579) 295
Tax on exceptional items 11,176 1,735
(43,403) 2,030
The exceptional restructuring costs relate to the rationalisation of new and
existing businesses arising from the integration of acquisitions made in the
current and previous year. These costs can be analysed as follows:
2002 2001
€'000 €'000
Redundancies and contract compensation 27,058 4,010
Plant closure / relocation 18,510 3,405
Plant and other assets written off 5,889 -
Standardisation of information systems 3,597 682
Other 1,548 -
56,602 8,097
During the year the Group disposed of a number of businesses in Ireland and the
UK. These included the Baileboro and Artigarvan milk processing businesses,
which were acquired in 2001 as part of the Golden Vale Group, and the fried
products business based in Poole, UK.
The profit on sale of businesses in 2001 relates to the sale of a number of
businesses including SPP bakery ingredients in the UK.
5. Earnings per share
EPS 2002 EPS 2001
Notes cent €'000 cent €'000
(Restated) (Restated)
Adjusted earnings before FRS 19** 109.2 202,451 94.6 166,260
Deferred tax - FRS 19 7.4 13,744 6.7 11,789
Adjusted earnings* 101.8 188,707 87.9 154,471
Goodwill amortisation 22.3 41,401 13.2 23,367
Exceptional items (net) 4 23.4 43,403 (1.1) (2,030)
Profit after taxation, goodwill amortisation and 56.1 103,903 75.8 133,134
exceptional items
Share option dilution 0.4 - 0.5 -
55.7 103,903 75.3 133,134
The basic weighted average number of ordinary shares in issue for the year was
185,363,778 (2001: 175,674,473). The diluted weighted average number of
ordinary shares in issue for the year was 186,389,840 (2001: 176,870,079). The
dilution arises in respect of executive share options outstanding.
In addition to the basic and diluted earnings per share, an earnings per share
before goodwill amortisation and exceptional items calculation is also
provided, as it more accurately reflects the Group's underlying trading
performance.
* Adjusted earnings per share is calculated as profit after taxation, before
goodwill amortisation and exceptional items divided by the weighted average
number of ordinary shares.
** Adjusted earnings per share before FRS 19 is adjusted earnings as defined
above before the adoption of FRS 19 (i.e. as previously reported). This
measure is given to show the impact of adopting the new deferred tax standard.
This information is provided by RNS
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