Annual Report and Accounts
Kerry Group PLC
24 February 2004
Press Announcement
24 February 2004
Kerry Group plc Annual Results 2003
Kerry, the global ingredients, flavours and consumer foods group reports
preliminary results for the year ended 31 December 2003.
Financial Highlights
• Like-for-like sales growth of 4.6%
• Operating profit* on a like-for-like basis increased by 7.6%
• Operating margin* up from 8.1% to 8.4%
• Profit after tax* increased by 10.3%
• Earnings per share* increased by 10.1% to 112.1 cent
• Earnings* increased by 15% on a like-for-like basis
• Dividend per share up 10% to 12.65 cent
• Free cash flow €204m
*adjusted for goodwill and exceptionals
Kerry Group Chief Executive, Hugh Friel said:
'In a year marked by significant currency shifts, Kerry achieved an excellent
operational and financial performance. Like-for-like sales grew by 4.6% and the
Group operating margin increased by 30 basis points to 8.4%. All Kerry
businesses are well positioned to lead new product developments to meet consumer
nutrition and lifestyle requirements. Market development continues through a
strong pipeline of acquisition opportunities and, at current currency exchange
rates, we are confident of meeting market earnings expectations in 2004'.
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 2003
Kerry achieved an excellent operational and financial performance across all its
businesses in 2003. Against a background of exceptionally rapid currency
movement in the Group's major markets, this strong business performance was
realised through Kerry's capability to create and produce lifestyle and
nutritional foods, flavours and ingredients to meet consumer demands for
healthy, convenient, tasteful food and beverages. Awareness of dietary,
nutritional and health issues was pervasive across all major consumer markets in
2003 - providing a strong stimulus for innovation and new product development.
While continuing to invest for future growth through capital development
projects, research and development and ongoing strategic acquisition programmes,
the Group again delivered in excess of €200m free cash flow.
Results
The Group's principal foreign currency exposures relate to sterling and the US
dollar. Kerry minimises the impact of balance sheet translation exposure
primarily through matching net foreign currency investments with foreign
currency borrowings. While the Group may hedge foreign exchange transaction
exposure, it does not hedge profit translation exposure. Accordingly the 20%
depreciation of the US dollar exchange rate versus the euro and the 10%
depreciation of sterling versus the euro over the past year has significantly
impacted the translation of Group profits and sales in the Americas and the UK
markets. Notwithstanding such currency movement total Group turnover reported
at €3.7 billion was broadly similar to the prior year level. On a like-for-like
basis, adjusting for acquisitions, divestitures and the impact of foreign
exchange translation, total sales grew by 4.6% year-on-year.
Operating profit before goodwill in 2003 was reported at €308.5m. On a
like-for-like basis, this reflects an increase of 7.6% on the prior year level.
The Group focused considerable attention in 2003 on manufacturing synergies,
supply chain efficiencies and improvements in the product mix - replacing lower
margin lines with innovative products. As a result, the Group operating margin
increased by 30 basis points to 8.4%.
Adjusted profit after tax increased by 10.3% to €208m. Adjusted earnings per
share increased by 10.1% to 112.1 cent. On a like-for-like basis this result
reflects earnings growth of 15% year-on-year. Earnings per share after allowing
for goodwill and exceptionals increased from 56.1 cent in 2002 to 86.7 cent in
2003.
Net expenditure on capital projects at €92.8m was similar to the previous year's
level. Expenditure on the Group's 2003 acquisition programme amounted to €208m
and expenditure on research and development programmes increased by 12.6% to
€88.4m.
Operations Reviews
Ireland and Rest of Europe
Sales originating from Irish based operations reported at €1.33 billion reflect
a 3% reduction on the prior year level due to business disposals and impact of
currency. On a like-for-like basis, sales grew by 3% and operating profit
increased by 11% to €69m. The operating margin of Irish based operations
increased by 60 basis points year-on-year.
Reported turnover from European operations (excluding Ireland) at €1.27 billion
was also slightly reduced due primarily to the lower sterling to euro exchange
rate. This performance reflects underlying sales growth of 4.9% year-on-year.
Operating profits increased to €112m, reflecting like-for-like growth of 7.7%
and the operating margin grew by 30 basis points to 8.8%.
In European ingredients markets growth and market development was strongly
influenced by trends in consumer markets - in particular greater awareness of
health and food safety in addition to the increased demand for convenience. In
2003 food processor and foodservice markets benefited from the increased demand
for more appetising, varied, natural and convenient foods. In the savoury
ingredients sector Kerry recorded good growth through seasonings and protein
blends and through snack flavourings in particular in Eastern Europe and
Germany. Conditions in European food coatings markets again proved highly
competitive due to cereal raw material cost increases. However, due to its
continuing focus on manufacturing efficiencies throughout its pan-European
facilities and through product price increases, Kerry made satisfactory progress
in the sector - particularly in seafood applications. The UK based EBI
business, acquired in 2002, continued to record strong profitable growth in
added-value coatings applications in foodservice markets throughout Europe and
the Far East. In the fast growing European convenience food sector, the Aromont
and Voyager businesses, acquired in late 2001, again made excellent progress
particularly through culinary systems and sauces for the prepared meals sector.
In 2003 fruit participated as a key health ingredient in consumer products,
providing a good platform for growth in usage of fruit preparations in European
chilled and frozen dairy products, confectionery, bakery and biscuit markets.
Kerry's sweet ingredients business also made good progress in those sectors
through inclusions, particulates and coatings, while York Dragee also grew its
retail offering of functional and health confectionery products.
Demand for high-protein functional foods and low-carbohydrate lines also
provided good growth opportunities for Kerry's speciality dairy ingredients
business. Further progress was achieved through functional dairy applications
for nutritional beverages, sports beverages and infant formula.
Kerry's consumer foods business units in the UK and Ireland again grew
satisfactorily in 2003, further enhancing Kerry Foods reputation as the leading
added-value supplier of chilled foods in both markets. Through a continuing
focus on innovation, convenience and consumer choice, the division's portfolio
of brands all grew respective market positions. Denny remains market leader in
sausage, rasher and pre-packed cooked meats - leading innovation and development
of all category sub segments in the Irish market. Kerry Foods cheese and cheese
snack brands all achieved an excellent performance in 2003. Charleville,
Coleraine, and EasiSingles all grew market share with Charleville becoming the
leading natural cheese brand in Ireland. Cheese snacking again recorded
double-digit market growth in Ireland and the UK in 2003. Cheestrings remains
the fastest-growing brand in the cheese snacks market and Attack-a-Snak,
launched into the children's lunchbox market sector in late 2002, has already
established a strong market position. The €14m capital investment programme at
the Charleville plant, which will significantly increase production capacity
across the Cheestrings range, is well advanced with Stage 1 on target for
commissioning by mid-year 2004.
In the European foodservice sector, Kerry Foods consolidated its position as a
leading supplier of sliced cheese to quick-serve restaurants.
Freshways, the leading brand in the Irish pre-packed sandwich market, acquired
late in 2002, performed well. Construction of a new €14m manufacturing facility
in Dublin was completed prior to year-end. Convenient pre-packed on-the-go
salads were also added to the Freshways range. In a further development of
Kerry's foodservice operations in Ireland, 'Kerryfresh', a dedicated chilled
foodservice business designed to meet the needs of both retailers and food-to-go
outlets on a nationwide basis, was also launched in late 2003.
Saint Brendan's Cream Liqueur again grew volume and market share in 2003 but
margins were lower due to relative sterling/dollar exchange rates. The cream
liqueur direct to retail business in the UK performed well and prior to year-end
the business successfully launched Shannon's Irish Coffee - a market first in
terms of a microwaveable Irish Coffee product.
Kerry's dairy and low-fat spreads all made good progress in each market segment.
Omega 3 and 6 variants were added to the Low Low brand in 2003 and in the UK
the division launched the markets first low-fat probiotic spread.
Richmond and Wall's maintained strong number 1 and 2 positions in the UK sausage
market. Porkinsons and Bowyers 95% Fat Free also grew market shares. Wall's
innovation in the frozen segment of the market brought new customers to the
market segment through the launch of shaped meat products. Prior to year-end
the Mr Brain's branded pork meats business, formerly part of the Hibernia Foods
Group, was also added.
The UK chilled convenience foods market grew by 7% year-on-year. Kerry Foods
outperformed market growth rates in chilled ready meals, cooked meats and
savoury pastry. Rye Valley Foods also grew market share in the UK frozen ready
meals category. The acquisition of the former Hibernia Foods Group facility in
Hartlepool (UK) prior to year-end further consolidates its leading market
position in this sector. The business also acquired the former Hibernia chilled
patisserie facility in Birmingham, broadening the divisions' range of chilled
products to the UK retail sector.
Trading conditions in the Irish and UK poultry sectors proved challenging in
2003 due to the time lag in securing product price increases. A strong
Christmas trade provided some uplift but overall performance in the sector was
below the previous year's level.
Kerry Foods Direct to Store continued to develop its market leadership position
in the UK convenience and forecourt sectors. In its first full year following
the integration of the Northern Foods van sales business, the division enjoyed
strong growth particularly in the sandwich category and other related 'eat now'
product areas.
Globalisation of the flavour industry continued apace in 2003 due to growth in
demand for convenience foods, growth in natural flavour usage, flavour
technology advances, trends towards more exotic flavours and growth in
functional beverage markets. In Europe Mastertaste Italy significantly
outperformed market growth rates, benefiting from leading beverage developments
and new product launches in the beverage category. Driven by the increased
demand for natural flavours, Mastertaste UK also grew satisfactorily
particularly through advanced savoury applications with multinational customers.
Exploiting the newly acquired citrus technology arising from the Florida based
SunPure acquisition, the division also successfully extended its sweet and
beverage flavour applications through its pan-European customer base.
Mastertaste also made good progress in Eastern European markets.
Americas
As reported at the end of the first half of 2003, the significant shift in the
exchange rate of the US dollar versus euro impacted translation of sales and
profits in American markets. This adverse translation effect meant that sales
for the full year as reported at €939m are slightly reduced on the 2002 level.
However, on a like-for-like basis sales in 2003 increased by 6% and operating
profits reported at €113m reflect an increase of 5.5% on a like-for-like basis
relative to 2002. The operating margin was reduced by 70 basis points to 12.1%
due to the cumulative operational impact of the heavy acquisition programme over
the past three years, establishment costs associated with the Mastertaste
flavour division and decentralisation costs arising from the restructuring of
the food ingredients strategic business units in the USA.
The key driver of development in the North American food industry in 2003 was
the challenge to meet consumer nutrition and 'wellness' expectations through
food and beverage applications. All Kerry businesses were well positioned to
lead new product developments through the division's application specific
ingredients technologies. The Group's Nutriant division, launched in 2002, is
dedicated to development and commercialisation of ingredients and systems to
meet specific nutritional requirements. In particular, its soy protein and
nutritional platform has established a strong market position in pasta, cereal,
baked goods and nutrition bar categories. Delivering superior taste compared to
other soy alternatives, Nutriant soy ingredients were central to the successful
launch of new low-carbohydrate foods late in 2003. Production capacity at the
division's organically certified soy isolates plant, the only organically
certified plant of its kind, was significantly increased to meet market
requirements.
In speciality ingredients, sectoral growth areas included dry sauces for private
label markets and nutritional lipids for functional bar applications. In the
coatings sector, product price increases failed to match higher cereal raw
material prices and energy costs, resulting in lower margins. Management is
addressing improved business efficiencies and improvements in the product mix,
including introduction of highly flavoured systems and low-carbohydrate coatings
which have brought new opportunities in higher value-added products.
Kerry's sweet ingredients business also benefited from the increased focus on
nutritional products - supplying high protein crisp rice, high protein coatings
and caramels, no added sugar, and sugar free coatings.
Having consolidated the Group's various interests in foodservice across North
American markets, the new Kerry Foodservice division made good progress through
its customised and branded food and beverage solutions. The Kerry Innovation
Center in Dallas was established, incorporating a team of product development
and culinary specialists dedicated to the provision of unique menu offerings to
add value to foodservice chain customers' business. In 2003, sales of flavoured
syrups to the fast growing speciality coffee sector proved very successful.
Golden Dipt Coatings also had a good year in foodservice markets. Kerry
Seasonings continued to make good progress through meat seasoning and liquid
sauce sales to U.S. based meat and poultry processors. Rector Foods, Kerry's
meat seasonings business in Canada, also performed well. In the U.S. and Canada
good progress was achieved in snack seasonings through the launch of new premium
seasoning blends.
Weaker economic conditions in Mexico and Central America meant that business
development in the region was slower in 2003. A new processing plant for
production of ready-to-use sauce systems was commissioned and good progress was
achieved in regional foodservice markets.
Kerry made encouraging progress in South American markets in 2003, despite the
relatively slow pace of economic recovery in the region. The business was well
placed to benefit through import substitution in cheese and dairy, functional
dairy ingredients and speciality lipid applications. In Brazil, Kerry
consolidated its position as the number one supplier into the artisinal
ice-cream sector. Progress continued in the meat seasoning sector and through
the development of sweet ingredients for the growing cereal bar market in the
region.
Mastertaste North America performed in line with market trends in its savoury
and beverage business units. In sweet flavour applications, Mastertaste
outperformed market growth rates through provision of cost effective innovative
solutions. In 2003 Mastertaste established a new flavour research laboratory
and pilot plant facilities in Mexico City to service Mexican and Central
American markets.
In North American markets the following acquisitions were completed in 2003.
(a) Ingredients Businesses
Guernsey Bel, a leading innovator and provider of value-added ingredients and
inclusions technology for the premium ice-cream, breakfast cereal, bakery,
nutritional bar, frozen dessert and confectionery industries - operating from
two modern manufacturing facilities located in Chicago and in Hayward,
California.
Pacific Seasonings, a leading manufacturer of seasonings and spices for the
meat, prepared foods and snack food industries - operating from manufacturing
facilities in Seattle (organic certified) and Detroit.
Da Vinci Gourmet, based in Seattle, Washington - a leading manufacturer of
branded flavoured syrups, confectionery sauces and tea concentrates, serving
speciality coffee chains, speciality food and grocery stores and foodservice
outlets in more than forty countries.
(b) Flavour Businesses
SunPure, a leading producer of natural citrus flavours and ingredients - located
at the centre of the North American citrus industry in Lakeland, Florida. The
business, which is also a significant producer of apple essence and beverage
flavours and bases, is focused on meeting the requirements of leading flavour
houses, branded beverage companies and private label beverage producers.
Crystals International, a leading specialist manufacturer of natural fruit and
vegetable flavours for beverage, confectionery, dairy, nutraceutical and
pharmaceutical applications. Based in Plant City, Florida, the business is
recognised as a leading global provider of speciality all-natural fruit
flavours.
Asia Pacific
Kerry businesses reported an excellent performance across Asia Pacific markets
in 2003. Sales increased by 9.9% to €157m reflecting like-for-like sales growth
of 12.3%. Operating profits increased by 13.9% to €14.5m and by 11.9% on a
like-for-like basis year-on-year.
In Australia, 2003 was Kerry's most successful year to-date in terms of business
development and new product introductions. Gains were achieved in the meat and
poultry sectors, the quick-service restaurant sectors and in particular in the
foodservice beverage sector. The Pinnacle bakery division also made solid
progress.
In New Zealand strong growth was again achieved through coatings and marinades
for the added-value poultry sector, through snack seasoning applications
utilising Kerry global technology and through new product offerings to
quick-service restaurants.
In Asia speciality ingredients grew across the region. Kerry's investment in
Thailand in late 2002 has established a strong platform in the meat seasonings
sector and in coatings for seafood and meat applications. Sales were
particularly strong in South East Asia across all technologies but particularly
in speciality lipids, nutritional powders, cheese powders and food coating
systems. Trends in the beverage and snack industries in Asia are most
encouraging and Kerry is increasingly selected as the supplier of choice in this
dynamic marketplace. In North Asia, Kerry made good progress in the nutritional
sector which grew in excess of 10% year-on-year.
Building on the Group's recent acquisition of Da Vinci Gourmet and Pacific
Seasonings, prior to year-end Kerry established a new foodservice business unit
in Asian markets to capitalise on its enhanced product offering to gourmet
coffee houses and speciality chains across the region. Da Vinci Gourmet is
already the established leading branded flavoured syrups provider to Japan's
speciality coffee market.
Finance
The Group maintained its record of strong free cash flow generation in 2003.
After a working capital reduction of €8m, net cash expenditure on capital
projects of €93m, interest payments of €41m, tax of €40m and dividends of €22m,
free cash flow available to the Group was €204m. The total consideration,
including debt, arising from Group acquisitions in 2003 amounted to €208m. Net
debt at year-end amounted to €705m compared to the prior year-end level of
€764m. Debt to EBITDA stood at a comfortable 1.9 times.
The impact of the recent significant shift in dollar and sterling exchange rates
versus the euro was most pronounced at operating profit level. At net earnings
level the impact is reduced due to translation of dollar and sterling interest,
goodwill and tax charges. Interest charges were €37m compared to the 2002 level
of €50m, with EBITDA to interest covered 10.5 times (2002 : 7.8 times).
In 2003, the placement of US$650m Senior Notes with U.S. institutional investors
was successfully completed, lengthening the Group's debt maturity profile. The
average maturity of net debt at year-end stood at 7.8 years.
The total number of shares in issue at year-end was 185,874,145 (2002:
185,613,945).
Since 2001, the Group has pursued a sustained business expansion and technical
development programme through over twenty acquisitions in North American markets
- significantly enhancing Kerry's capabilities in all core ingredients and
flavour strategic markets. In 2004, this manufacturing base will be
restructured on a once-off basis to maximise operational efficiencies. Net of
tax, the exceptional charge arising from this restructuring programme is
expected to be offset through the sale of redundant or non-core assets.
Dividend
The Board has declared a final dividend of 8.6 cent per share, an increase of
9.6% on 2002. Together with the interim dividend of 4.05 cent per share, this
raises the total dividend payment for the year to 12.65 cent per share, an
increase of 10% on the 2002 dividend. The final dividend will be paid on 28 May
2004 to shareholders registered on the record date 30 April 2004.
Board and Management Changes
As previously announced, on 1 August 2003 Mr. Denis Brosnan retired as Chairman
and Director of the Group and was succeeded as Chairman by Mr. Denis Buckley,
Vice-Chairman of Kerry Group plc since March 1996.
Mr. Michael Griffin has today retired as an Executive Director of the Board and
will step down from his position as CEO of Kerry Foods, the Group's consumer
foods division, at the end of February. Mr. Griffin joined the Kerry
organisation in 1973 and was appointed General Manager of Kerry Foods (UK) in
1986. He joined the Board as an Executive Director in 1990 and was appointed
CEO of Kerry Foods in 1993.
Mr. Flor Healy, currently General Manager of Kerry Foods Ireland, has been
appointed to succeed Mr. Griffin as CEO of Kerry Foods and as an Executive
Director of Kerry Group plc. Mr. Healy joined Kerry's Graduate Recruitment
Programme in 1984 and served in a number of key positions across the Group's
foods businesses prior to his appointment in 1997 as General Manager of Kerry
Foods in Ireland.
The Board has today also co-opted Mr. Michael J. Sullivan as a non-executive
Director to the Board of the company. Mr. Sullivan served as United States
Ambassador to Ireland from January 1999 to June 2001 and as a Governor of the
State of Wyoming between 1987 and 1995. A member of the Bar, State of Wyoming,
Mr. Sullivan is also a non-executive Director of Allied Irish Banks plc, Sletten
Construction Inc., and Cimarex Energy Inc.
Annual Report and Annual General Meeting
The Group's Annual Report will be published at the end of April and the Annual
General Meeting will be held in Tralee on 25 May 2004.
Future Prospects
Group businesses are well positioned to continue to grow and develop in line
with increasing consumer demand for convenient, nutritional, lifestyle foods and
beverages. The trading outlook for the current year is good and, at current
currency exchange rates, the Group is confident of meeting market earnings
expectations in 2004.
Kerry Group plc
Consolidated Profit and Loss Account
for the year ended 31 December 2003
2003 2002
Notes €'000 €'000
Turnover
Continuing operations 1 3,693,410 3,754,808
Turnover _________________________
Operating profit - continuing operations
Before goodwill amortisation and exceptional items 1 308,519 305,410
Goodwill amortisation 48,103 41,401
Exceptional restructuring costs - 56,602
Turnover _________________________
Operating profit 1 260,416 207,407
Profit on sale of businesses - 1,744
Profit on sale of fixed assets 942 279
Interest payable and similar charges 37,356 50,238
Turnover _________________________
Profit before taxation 224,002 159,192
Taxation 63,025 55,289
Turnover _________________________
Profit after taxation and attributable to ordinary shareholders 160,977 103,903
Dividends - paid 7,625 6,806
- proposed 15,985 14,571
Turnover _________________________
23,610 21,377
Turnover _________________________
Retained profit for the year 137,367 82,526
Turnover _________________________
Earnings per ordinary share (cent)
- basic before goodwill amortisation and exceptional items 4 112.1 101.8
- basic after goodwill amortisation and exceptional items 4 86.7 56.1
- fully diluted after goodwill amortisation and exceptional 4 86.4 55.7
items
The financial statements were approved by the Board of Directors on 23 February 2004 and signed on its behalf
by:
Denis Buckley, Chairman
Hugh Friel, Chief Executive
Kerry Group plc
Consolidated Balance Sheet
as at 31 December 2003
2003 2002
€'000 €'000
Fixed assets
Tangible assets 844,701 870,406
Intangible assets 837,301 765,384
_________________________
1,682,002 1,635,790
Current assets
Stocks 383,899 363,545
Debtors 482,955 500,606
Cash at bank and in hand 56,862 46,584
_________________________
923,716 910,735
Creditors: Amounts falling due within one year (709,872) (821,823)
_________________________
Net current assets 213,844 88,912
_________________________
Total assets less current liabilities 1,895,846 1,724,702
Creditors: Amounts falling due after more than one year (899,024) (824,134)
Provisions for liabilities and charges (48,333) (64,571)
_________________________
948,489 835,997
_________________________
Capital and reserves
Called-up equity share capital 23,234 23,202
Capital conversion reserve fund 340 340
Share premium account 365,229 362,974
Profit and loss account 531,149 418,012
_________________________
919,952 804,528
Deferred income 28,537 31,469
_________________________
948,489 835,997
_________________________
The financial statements were approved by the Board of Directors on 23 February 2004 and signed on its behalf
by:
Denis Buckley, Chairman
Hugh Friel, Chief Executive
Kerry Group plc
Consolidated Cash Flow Statement
for the year ended 31 December 2003
2003 2002
€'000 €'000
Operating profit before goodwill amortisation and exceptional items 308,519 305,410
Depreciation (net) 83,827 84,952
Change in working capital 9,138 48,786
Exchange translation adjustment (1,176) (2,691)
________________________
Net cash inflow from operating activities 400,308 436,457
Returns on investments and servicing of finance
Interest received 943 1,751
Interest paid (41,717) (51,583)
Taxation (40,476) (43,612)
Capital expenditure
Purchase of fixed assets (101,632) (96,183)
Proceeds on the sale of fixed assets 7,683 3,584
Development grants received 1,194 398
Acquisitions and disposals
Purchase of subsidiary undertakings (207,376) (237,539)
Proceeds on the sale of businesses 1,264 33,199
Deferred creditors paid (5,532) (8,883)
Exceptional restructuring costs (16,575) (33,717)
Consideration adjustment on previous acquisitions (248) (393)
Equity dividends paid (22,196) (19,293)
________________________
Cash outflow before the use of liquid resources and financing (24,360) (15,814)
Financing
Issue of share capital 2,287 5,178
(Decrease) / increase in debt due within one year (123,860) 81,677
Increase / (decrease) in debt due after one year 156,211 (44,251)
________________________
Increase in cash in the year 10,278 26,790
________________________
Reconciliation of Net Cash Flow to Movement in Net Debt
for the year ended 31 December 2003
Increase in cash in the year 10,278 26,790
Cash flow from debt financing (32,351) (37,426)
________________________
Change in net debt resulting from cash flows (22,073) (10,636)
Exchange translation adjustment 80,677 65,756
________________________
Movement in net debt in the year 58,604 55,120
Net debt at beginning of year (763,804) (818,924)
________________________
Net debt at end of year (705,200) (763,804)
________________________
Kerry Group plc
Statement of Total Recognised Gains and Losses
for the year ended 31 December 2003
2003 2002
€'000 €'000
Profit attributable to the Group 160,977 103,903
Exchange translation adjustment on foreign currency net investments (24,230) (40,722)
_________________________
Total recognised gains and losses relating to the year 136,747 63,181
_________________________
Kerry Group plc
Reconciliation of movements in share capital and
reserves
for the year ended 31 December 2003
Capital
Share Capital Conversion Profit & Loss
and Premium Reserve Fund Account Total
€'000 €'000 €'000 €'000
At beginning of year 386,176 340 418,012 804,528
Retained profit - - 137,367 137,367
Shares issued during year 2,328 - - 2,328
Share issue costs (41) - - (41)
Exchange translation adjustment - - (24,230) (24,230)
__________________________________________________________
At end of year 388,463 340 531,149 919,952
__________________________________________________________
The Profit & Loss Account figures comprise the
following:
Intangible Assets Retained Profit & Loss
Written Off Profits Account
€'000 €'000 €'000
At beginning of year (479,699) 897,711 418,012
Retained profit (48,103) 185,470 137,367
Exchange translation adjustment - (24,230) (24,230)
___________________________________________
At end of year (527,802) 1,058,951 531,149
___________________________________________
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 2003
1. Analysis of results by region
2003 2002
Operating Net Operating Net
Turnover Profit Assets Turnover Profit Assets
€'000 €'000 €'000 €'000 €'000 €'000
By geographical market of origin:
Ireland 1,331,879 69,078 495,891 1,373,681 62,637 463,743
Rest of Europe 1,265,001 111,516 625,558 1,293,154 109,586 635,040
Americas 939,104 113,441 474,066 944,767 120,473 437,909
Asia Pacific 157,426 14,484 58,174 143,206 12,714 63,109
_____________________________________________________________________
3,693,410 308,519 1,653,689 3,754,808 305,410 1,599,801
Goodwill amortisation - (48,103) - - (41,401) -
Exceptional restructuring costs - - - - (56,602) -
Group borrowings (net) - - (705,200) - - (763,804)
_____________________________________________________________________
3,693,410 260,416 948,489 3,754,808 207,407 835,997
_____________________________________________________________________
2003 2002
Turnover Turnover
€'000 €'000
By destination:
Ireland 725,879 766,027
Rest of Europe 1,764,163 1,788,914
Americas 984,808 1,002,942
Asia Pacific 218,560 196,925
_________ _________
3,693,410 3,754,808
_________ _________
Turnover, operating profit and net assets as presented above are stated net of intra Group transactions and
balances.
Kerry Group plc
Notes to the Financial Statements
for the year ended 31 December 2003
2. Accounting Policies
These accounts have been prepared using the same accounting policies as detailed in the 2002 annual
financial statements.
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 2003 or 2002 but is derived from same. The 2003 and 2002 accounts have been
audited and received unqualified audit reports. The 2003 financial statements were approved by the Board
of Directors on 23 February 2004.
The financial statements are prepared under the historical cost convention and are presented
in Euro.
4. Earnings per share
EPS 2003 EPS 2002
cent €'000 cent €'000
Adjusted earnings* 112.1 208,183 101.8 188,707
Goodwill amortisation 25.9 48,103 22.3 41,401
Exceptional items (net) (0.5) (897) 23.4 43,403
__________________________________________
Profit after taxation, goodwill amortisation and 86.7 160,977 56.1 103,903
exceptional items
Share option dilution 0.3 - 0.4 -
__________________________________________
86.4 160,977 55.7 103,903
__________________________________________
The basic weighted average number of ordinary shares in issue for the year was 185,707,545 (2002:
185,363,778). The diluted weighted average number of ordinary shares in issue for the year was
186,418,117 (2002: 186,389,840). 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 net exceptional items calculation is also provided, as it more accurately reflects the
Group's underlying trading performance.
* Adjusted earnings is calculated as profit after taxation, before goodwill amortisation and net
exceptional items. Adjusted earnings per share is the adjusted earnings divided by the weighted average
number of ordinary shares.
This information is provided by RNS
The company news service from the London Stock Exchange
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