Kerry Group Interim Management Report 2022

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Kerry Group 'A' Shares (CDI) (KYGA)

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LEI: 635400TLVVBNXLFHWC59 Date: 29 July 2022
KERRY GROUP
INTERIM MANAGEMENT REPORT 2022
Strong growth across a dynamic marketplace
OVERVIEW

> Group revenue of €4.1bn representing 15.2%* organic growth > Group volumes +6.8% (Q2: +8.0%) - Taste & Nutrition +8.6% (Q2: +10.3%) - Dairy Ireland +1.2% (Q2: +1.9%) > Group pricing +8.3% (Q2: +10.4%) > Group EBITDA of €518m with margin % maintained > Adjusted EPS of 176.4 cent; +9.0% on a constant currency basis (16.1% reported currency growth) > Basic EPS of 128.4 cent (H1 2021: 128.2 cent) > Free cash flow of €226m reflecting 72% cash conversion > Interim dividend per share of 31.4 cent (H1 2021: 28.5 cent) > Divestment of Russian subsidiary completed post the period end > Full year EPS guidance reaffirmed ^* Comprises volume growth of 6.8%, positive pricing of 8.3% and a favourable transaction currency impact of 0.1%.

Edmond Scanlon, Chief Executive Officer
"We are pleased with our overall performance and business momentum across the first half of the year despite inflationary challenges and geopolitical volatility in places, in what remains a highly dynamic marketplace. Volume growth was very strong in both retail and foodservice channels, driven by an increased level of innovation activity. This growth was broad-based across our regions, led by excellent performances in Beverage, Meat and Bakery end use markets in particular. We continued to make good progress in actively managing the unprecedented inflationary environment in conjunction with our customers, as we support them in developing their offerings to meet the rapidly evolving marketplace. We also made good strategic progress by expanding our footprint and completing a number of strategic acquisitions in the period. While recognising the marketplace is facing into a period of heightened uncertainty and volatility, this also presents significant opportunities. We remain confident in our outlook and are reaffirming our full year earnings guidance."
Performance
Group reported revenue in the period increased by 13.3% to €4.1 billion, reflecting a volume increase of 6.8%, increased pricing of 8.3%, a favourable transaction currency impact of 0.1%, a favourable translation currency impact of 5.8% and contribution from acquisitions of 4.7%, partially offset by the dilutive impact of the disposal of the Consumer Foods Meats and Meals business of 12.4%. Group EBITDA increased by 13.1% to €518 million with EBITDA margin maintained at 12.8%, primarily driven by the benefits from operating leverage, mix, efficiencies and portfolio development, offset by the impact of passing through raw material cost inflation. Constant currency adjusted earnings per share increased by 9.0% to 176.4 cent (H1 2021: +24.1%), which represented an increase of 16.1% in reported currency (H1 2021: +15.1%). Basic earnings per share of 128.4 cent (H1 2021: 128.2 cent) reflects the growth in the period offset by the impairment of the Group's Russia and Belarus assets and the charges related to the previously announced Accelerate Operational Excellence programme. Free cash flow was €226m (H1 2021: €222m) representing cash conversion of 72%, with an increased investment in working capital in the period partially offset by lower net capital expenditure due to the timing of projects. The interim dividend of 31.4 cent per share reflects an increase of 10.2% from the prior year interim dividend.
Markets
The overall demand environment was positive through the period. As preferences continue to evolve with heightened demand for new food and beverage experiences, the importance of value options has increased for consumers, while sustainability remains an important consideration. The resilience of supply chains remains a key focus across the industry due to geopolitical volatility and inflationary pressures. Despite these challenges, the level of customer innovation remains strong, and the level of innovation support needs continues to expand, with customers continuing to evaluate the relevance and uniqueness of their product ranges, and their readiness to adapt to further changes in the consumer landscape.

Business Reviews
Taste & Nutrition
Strong business volume growth across regions, channels and end use markets
	H1 2022		Performance¹


Revenue	€3,445m		+8.6%²
EBITDA	€515m		+24.9%
EBITDA margin	15.0%		-30bps
¹ performance of re-presented segmental structure \| ² volume growth
> Overall volume growth of 8.6% with an excellent Q2 performance of 10.3% > Growth was led by Beverage and Food EUMs of Meat and Bakery > Retail channel achieved excellent growth with continued strong double-digit growth in foodservice > Pricing of 5.9% reflective of raw material cost inflation > Margin development from operating leverage, mix, efficiencies and portfolio evolution more than offset by the impact of passing through raw material cost inflation
Taste & Nutrition reported revenue increased by 27.5% to €3,445m in the period driven by volume growth, positive pricing, favourable foreign currency impacts and a positive contribution from acquisitions net of disposals. Strong business volume development was achieved through the period, with growth led by the Beverage, Meat and Bakery markets in particular. The retail channel achieved excellent growth due to customers' increased requirements for innovation support. The foodservice channel delivered strong double-digit growth across all regions, supported by increased seasonal menu offerings, innovations to reduce operational complexity and solutions designed to improve their overall sustainability impact. Overall growth across the Group's key growth platforms was strong, led by increased demand for Kerry's range of food waste solutions, with good growth across authentic taste and plant-based, while health and bio-pharma performed in line with expectations. The recently acquired Niacet³ business continued to deliver strong growth and business development. Business volumes in emerging markets increased by 10.7% in the period, as very strong growth in the Middle East, Southeast Asia and LATAM were partially offset by challenging conditions in China due to localised restrictions in place, and in Russia and Eastern Europe due to the ongoing war in the region. Since the end of the period, the divestment of 100% of the share capital of Kerry's subsidiary in Russia to local management was completed and agreement has been reached for the sale of Kerry's subsidiary in Belarus to a third party.
Americas Region
> Volume growth of 9.1% with Q2 performance of 11.4% > Growth was led by Beverage, Meat and Bakery EUMs > Excellent growth achieved across both retail and foodservice channels > LATAM delivered strong growth led by Brazil and Mexico
Reported revenue in the Americas region increased by 29.1% to €1,934m in the period driven by volume growth, positive pricing, favourable foreign currency impacts and contribution from acquisitions. Growth in North America continued its strong momentum through the period, with high levels of activity across both the retail and foodservice channels. This was led by the Beverage EUM, which delivered particularly strong growth through innovations across refreshing beverages, functional beverages and the tea and coffee categories incorporating Kerry's authentic natural taste, Tastesense™ sugar reduction and proactive nutrition technologies. Performance in Meat and Meat Alternatives was strong across food preservation, culinary taste and texture coating systems, supported by the Group's expanded manufacturing facility in Rome, Georgia. Bakery delivered strong growth with customer launches in food protection and preservation and through increased LTO activity within the foodservice channel. Within LATAM, Brazil and Mexico delivered strong growth. Volume growth in Brazil was driven by performance in Meals and Meat, while volumes in Mexico were led by growth in Beverage and Snacks with regional leaders. Within the global Pharma EUM, good volume growth was achieved driven by strong performance in cell nutrition.
Europe Region
> Volume growth of 7.1% with Q2 performance of 5.9% > Growth driven by foodservice which saw increased consumption and innovation activity > Beverage, Dairy and Snacks markets delivered strongest growth
Reported revenue in the Europe region increased by 27.5% to €729m in the period driven by volume growth, positive pricing, favourable foreign currency impacts and a positive contribution from acquisitions net of disposals. Europe achieved strong overall growth in the foodservice channel through the period. This was driven by strong menu development activity, an increased level of seasonal products and softer prior year comparatives. Growth in Beverage was led by refreshing beverage, tea and coffee, and low/no alcohol with launches featuring Kerry's natural extracts, Tastesense™ sugar reduction technologies and enzymes. Dairy delivered strong growth with new innovations across dairy alternatives, ice cream and desserts within the foodservice channel. Good growth was achieved in Snacks driven by increased customer focus on enhancing their products' nutritional profiles in light of the evolving regulatory requirements within the region. This resulted in a number of launches incorporating Kerry's Tastesense™ salt reduction, taste modulation and bio-processing technologies. Growth in the Europe region was led by Central and Southern Europe driven by a particularly strong performance in the foodservice channel, while performance in Russia and Eastern Europe was impacted by the ongoing war in the region. In the period, the Group completed the acquisition of c-LEcta³, which is a leading biotechnology innovation company based in Leipzig, Germany.
APMEA Region
> Volume growth of 9.1% with Q2 performance of 12.1% > Growth was led by Meat, Snacks and Bakery EUMs > Foodservice achieved strong overall growth and retail performed very well
Reported revenue in the APMEA region increased by 26.1% to €768m in the period driven by volume growth, positive pricing, favourable foreign currency impacts and contribution from acquisitions. Growth in the region was primarily driven by excellent performances in the Middle East and across Southeast Asia, partially offset by challenges resulting from the localised restrictions in China. The strong growth achieved in the second quarter reflected good business development across both the foodservice and retail channels. Growth in Meat and Meat Alternatives was driven by increased demand across global, regional and local leaders for Kerry's range of local authentic taste and texture systems. Snacks achieved excellent growth in savoury applications across the Middle East and Southeast Asia in particular, while Bakery delivered a strong performance through new launch activity and increased demand for functional systems across the region. The Group continued to enhance its local presence in APMEA through the acquisition of Almer³, and its continued footprint expansion in the Middle East, which has become an important contributor to growth in the region. ³ In September 2021 Kerry acquired 100% of the issued share capital of Hare Topco, Inc. (trading as Niacet Corp.) - 'Niacet'. In March 2022 Kerry acquired 93% of the issued share capital of the company c-LEcta GmbH - 'c-LEcta'. In March 2022 Kerry acquired 100% of the issued share capital of the company Almer Malaysia Sdn. Bhd. - 'Almer'.
Dairy Ireland
Solid growth as business saw significant price inflation across the period

	H1 2022	Pro-forma⁴	Reported


Revenue	€695m	+2.2%⁵	+1.2%⁵
EBITDA	€38m	+4.6%⁶	-52.0%
EBITDA margin	5.5%	-140bps	-280bps

> Overall volume growth of 2.2%⁴ with Q2 performance of 3.3%⁴ > Growth driven by the Dairy Ingredients business > Pricing of 27.8%⁴ reflected significant increases across dairy prices and other raw material costs > Margin reduction driven by the impact of passing through raw material cost inflation
Dairy Ireland delivered solid overall volume growth through the period, while managing the heightened inflationary cost environment, which resulted in significant price increases across the business. Within Dairy Consumer Products, most categories saw significant price increases, which led to overall volumes being more challenged. Within the spreads category, good performance was achieved across our customer-branded ranges. Volumes in the period in cheese snacking were impacted by reduced promotional activity and operational issues, while a new plant-based range of Dairygold products was launched at the end of the period. Dairy Ingredients achieved good volume growth, while prices were significantly higher as a result of constrained global supply dynamics. ⁴ Performance of re-presented segmental structure on a pro-forma basis excluding the Consumer Foods Meat and Meals business disposal. ⁵ Volume growth. ⁶ Comparable H1 2021 pro-forma EBITDA was €36.7m.

Financial Review

					Growth %				H1 2022 €'m				H1 2021 €'m

Revenue					+13.3%				4,057.8				3,582.1


EBITDA					+13.1%				517.7				457.9

EBITDA margin									12.8%				12.8%


Trading profit									409.6				357.1
Computer software amortisation									(18.9)				(16.8)
Finance costs (net)									(34.1)				(34.2)
Share of joint ventures profit after taxation									1.1				-

Adjusted earnings before taxation					+16.9%				357.7				306.1
Income taxes (excluding non-trading items)									(44.9)				(36.9)

Adjusted earnings after taxation									312.8				269.2
Brand related intangible asset amortisation									(23.1)				(22.4)
Non-trading items (net of related tax)									(62.1)				(19.8)

Profit after taxation									227.6				227.0

									EPS cent				EPS cent


Basic EPS						+0.2%			128.4				128.2
Brand related intangible asset amortisation									13.0				12.6
Non-trading items (net of related tax)									35.0				11.2

Adjusted* EPS						+16.1%			176.4				152.0
Impact of exchange rate translation						(7.1%)

Adjusted* EPS growth in constant currency						+9.0%							+24.1%

*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 provides the revenue growth components for the updated business segments effective 1 January 2022, reflecting the new Dairy Ireland business post the disposal of the Consumer Foods Meats and Meals business. The H1 2021 table is also provided for comparable purposes.
Revenue Growth Components	Volume	Price	Transaction currency					Translation currency		Acquisitions / Disposals			Reported Growth		H1 2022
Taste & Nutrition	8.6%	5.9%	0.2%					7.0%		5.8%			27.5%		€3.4bn
Dairy Ireland¹	2.2%	27.8%	0.2%					1.0%		-			31.2%		€0.7bn
Group¹	7.8%	9.3%	0.2%					6.1%		5.3%			28.7%
Meats and Meals business²	-	-	-					-		(46.1%)			(46.1%)
Group (Reported)	6.8%	8.3%	0.1%					5.8%		(7.7%)			13.3%		€4.1bn
¹ Pro-forma growth excludes the sale of the Consumer Foods Meats and Meals business. ² The disposal of Kerry's Consumer Foods Meats and Meals business was completed in September 2021.
Revenue Growth Components	Volume	Price		Transaction currency				Translation currency			Acquisitions / Disposals		Reported Growth		H1 2021
Taste & Nutrition	10.7%	0.3%		(0.1%)				(6.9%)			1.2%		5.2%		€2.7bn
Dairy Ireland¹	1.0%	1.6%		-				(0.4%)			-		2.2%		€0.5bn
Group¹	8.9%	0.6%		-				(6.0%)			1.0%		4.5%
Meats and Meals business²	9.4%	(0.3%)		(0.2%)				(0.8%)			-		8.1%		€0.4bn
Group (Reported)	9.0%	0.5%		(0.1%)				(5.4%)			0.9%		4.9%		€3.6bn

EBITDA & Margin Group EBITDA increased by 13.1% to €517.7m (H1 2021: €457.9m). EBITDA margin percentage was maintained at 12.8%, primarily driven by the benefits from operating leverage, mix, efficiencies and portfolio development, offset by the impact of passing through raw material cost inflation. The EBITDA margin by business segment was 15.0% in Taste & Nutrition and 5.5% in Dairy Ireland in the period. Finance Costs (net) Finance costs (net) were €34.1m similar to the prior period (H1 2021: €34.2m). Taxation The tax charge for the period before non-trading items was €44.9m (H1 2021: €36.9m) which represents an effective tax rate of 13.4% (H1 2021: 13.0%). Acquisitions During the period, the Group completed the acquisition of Almer Malaysia Sdn. Bhd., c-LEcta GmbH and Natreon, Inc. for a total consideration of €267.4m . Non-Trading Items The Group incurred a non-trading item charge of €62.1m (H1 2021: €19.8m) net of tax in the period. This primarily related to the impairment of the Group's Russia and Belarus assets and the previously announced Accelerate Operational Excellence programme. Adjusted EPS in Constant Currency Adjusted EPS in constant currency increased by 9.0% to 176.4 cent in the period (H1 2021: 24.1%), which represented an increase of 16.1% in reported currency (H1 2021: +15.1%). Basic EPS Basic EPS increased by 0.2% to 128.4 cent in the period (H1 2021: 128.2 cent) and reflects the growth in the period offset by the impairment of the Group's Russia and Belarus assets and the charges related to the operational excellence programme.
Free Cash Flow
Group free cash flow was €226.0m in the period (H1 2021: €222.3m) reflecting 72% cash conversion, with an increased investment in working capital in the period partially offset by lower net capital expenditure due to the timing of projects.

Free Cash Flow							H1 2022 €'m							H1 2021 €'m

EBITDA							517.7							457.9
Movement in average working capital							(164.2)							(27.5)
Pension contributions paid less pension expense												(7.0)		(6.0)
Finance costs paid (net)							(14.6)							(21.5)
Income taxes paid							(31.9)							(32.1)
Purchase of non-current assets							(74.0)							(148.5)

Free cash flow							226.0							222.3
Cash conversion¹							72%							83%

¹ Cash conversion represents free cash flow expressed as a percentage of adjusted earnings after taxation.

Balance Sheet
A summary balance sheet as at 30 June 2022 is provided below:

			H1 2022 €'m		H1 2021 €'m		FY 2021 €'m

Property, plant and equipment			2,161.1		1,918.8		2,091.3
Intangible assets			5,968.9		4,443.8		5,580.7
Other non-current assets			372.4		213.7		264.5
Current assets			3,855.7		3,227.0		3,458.9


Total assets			12,358.1		9,803.3		11,395.4


Current liabilities			3,049.1		1,918.7		1,995.4
Non-current liabilities			3,218.6		2,921.5		3,798.8


Total liabilities			6,267.7		4,840.2		5,794.2


Net assets			6,090.4		4,963.1		5,601.2


Total equity			6,090.4		4,963.1		5,601.2

Property, Plant and Equipment Property, plant and equipment increased since year end by €69.8m to €2,161.1m (Dec 2021: €2,091.3m, H1 2021: €1,918.8m) predominantly due to depreciation charge partially offset by foreign exchange translation and additions. Intangible Assets Intangible assets increased by €388.2m since year end to €5,968.9m (Dec 2021: €5,580.7m, H1 2021: €4,443.8m) predominantly due to acquisitions and the impact of foreign exchange translation, partially offset by the amortisation and impairment charges. Current Assets Current assets increased by €396.8m since year end to €3,855.7m (Dec 2021: €3,458.9m, H1 2021: €3,227.0m) primarily due to the impact of foreign exchange translation on the assets, acquisitions and working capital investment. Retirement Benefits At the balance sheet date, the net surplus for all defined benefit schemes (after deferred tax) was €164.1m (Dec 2021: €56.3m net surplus, H1 2021: €43.2m net surplus), see note 8 for details. The improvement in the funding position before deferred tax of €135.6m was driven predominantly by favourable movements in actuarial assumptions, primarily higher discount rates, which were partially offset by reduced asset values. Net Debt At 30 June 2022, net debt was €2,456.3m. This increase of €332.2m relative to the December 2021 net debt of €2,124.1m reflected acquisition investment and dividends, partially offset by net cash generated in the period. Return on Average Capital Employed (ROACE) Group ROACE at period end was 10.2% (Dec 2021: 10.5%, H1 2021: 10.7%) reflective of recent portfolio developments.
Liquidity Analysis The Group's balance sheet is in a healthy position. With a Net debt to EBITDA* ratio of 2.1 times, the organisation has sufficient headroom to support future growth plans. The Group has no financial arrangements that carry financial covenants.
			H1 2022 Times		H1 2021 Times		FY 2021 Times

Net debt: EBITDA*			2.1		1.9		2.0
EBITDA: Net interest*			16.0		14.6		14.9

*Calculated on a pro-forma basis as outlined in the Financial Definitions section.
Related Party Transactions There were no changes in related party transactions from the 2021 Annual Report that could have a material effect on the financial position or performance of the Group in the first half of the year. Exchange Rates Group results are impacted by fluctuations in exchange rates year ‐ on ‐ year versus the euro. The average rates below are the principal rates used for the translation of results. The closing rates below are used to translate assets and liabilities at the period end.

	Average Rates			Closing Rates
	H1 2022	H1 2021		H1 2022		H1 2021	FY 2021
Australian Dollar	1.52	1.56		1.52		1.58	1.56
Brazilian Real	5.55	6.51		5.41		5.91	6.32
British Pound Sterling	0.84	0.87		0.86		0.86	0.84
Chinese Yu an Renminbi	7.11	7.85		7.06		7.72	7.22
Malaysian Ringgit	4.69	4.94		4.64		4.97	4.73
Mexican Peso	22.30	24.31		21.09		24.17	23.30
South African Rand	16.89	17.60		16.85		16.98	18.06
US Dollar	1.10	1.21		1.05		1.19	1.13
Principal Risks and Uncertainties Details of the principal risks and uncertainties facing the Group can be found in the 2021 Annual Report on pages 78 to 84 and continue to be the principal risks and uncertainties facing the Group for the remaining six months of the financial year. These risks include but are not limited to; portfolio management, geopolitical/emerging markets, business acquisition and divestiture, climate change and environmental, people, business ethics and social responsibility, food safety, quality and regulatory, health & safety, margin management, information systems and cybersecurity, operational and supply chain continuity, intellectual property, taxation and treasury. The Group continues to manage the interdependency of these risks, some of which has been heightened by the war in Ukraine, global supply chain challenges and the continued inflationary environment. The Group actively manages all risks through its control and risk management process. Dividend In line with our dividend strategy, the Board has declared an interim dividend of 31.4 cent per share, compared to the prior year interim dividend of 28.5 cent, payable on 11 November 2022 to shareholders registered on the record date 14 October 2022.
Future Prospects
Kerry remains strongly positioned for growth in a highly dynamic marketplace with a good innovation pipeline. The Group is confident in its ability to continue to manage through the current inflationary cycle with its well-established pricing model and cost initiatives. Kerry will continue to strategically evolve its portfolio and invest capital aligned to its strategic priorities and key growth platforms. While overall market conditions remain uncertain, the Group expects to achieve adjusted earnings per share growth* in 2022 of 5% to 9% on a constant currency basis. *Earnings guidance includes estimated net dilution from portfolio changes of c. 2.5% in the full year comprising the previously announced portfolio changes of c. 1.5% and the impact of the divestiture of the Russia and Belarus businesses of c. 1%. Note: Based on prevailing exchange rates, foreign currency is expected to be a tailwind of 8% to adjusted earnings per share.

Responsibility Statement
The Directors are responsible for preparing the Half Yearly Financial Report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 as amended ('the Regulations'), the Central Bank (Investment Market Conduct) Rules 2019, the Disclosure Guidance and Transparency Rules of the UK's Financial Conduct Authority and with IAS 34 'Interim Financial Reporting' as adopted by the European Union. The Directors confirm that to the best of their knowledge: • the Group Condensed Consolidated Interim Financial Statements for the half year ended 30 June 2022 have been prepared in accordance with the international accounting standard applicable to interim financial reporting adopted pursuant to the procedure provided for under Article 6 of the Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002; • the Interim Management Report includes a fair review of the important events that have occurred during the first six months of the financial year, and their impact on the Group Condensed Consolidated Interim Financial Statements for the half year ended 30 June 2022, and a description of the principal risks and uncertainties for the remaining six months; and • the Interim Management Report includes a fair review of the related party transactions that have occurred during the first six months of the current financial year and that have materially affected the financial position or the performance of the Group during that period, and any changes in the related parties' transactions described in the last Annual Report that could have a material effect on the financial position or performance of the Group in the first six months of the current financial year.
On behalf of the Board
Edmond Scanlon	Marguerite Larkin
Chief Executive Officer	Chief Financial Officer
28 July 2022

	CONTACT INFORMATION

	Investor Relations
	Marguerite Larkin , Chief Financial Officer
	+353 66 7182292 \| investorrelations@kerry.ie

	William Lynch , Head of Investor Relations
	+353 66 7182292 \| investorrelations@kerry.ie

	Media
	Catherine Keogh , Chief Corporate Affairs & Brand Officer
	+353 45 930188 \| corpaffairs@kerry.com

	Website
	www.kerry.com

Disclaimer: Forward Looking Statements
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.

RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2022
Kerry Group plc
Condensed Consolidated Income Statement
for the half year ended 30 June 2022

		Before				Year
		Non-Trading	Non-Trading	Half year	Half year	ended
		Items	Items	ended	ended	31 Dec.
		30 June 2022	30 June 2022	30 June 2022	30 June 2021	2021
		Unaudited	Unaudited	Unaudited	Unaudited	Audited
	Notes	€'m	€'m	€'m	€'m	€'m


Continuing operations
Revenue	2	4,057.8	-	4,057.8	3,582.1	7,350.6


Earnings before interest, tax, depreciation and amortisation	2	517.7	-	517.7	457.9	1,077.0

Depreciation and intangible asset amortisation	2	(150.1)	-	(150.1)	(140.0)	(282.3)
Non-trading items	3	-	(69.5)	(69.5)	(20.8)	91.5


Operating profit		367.6	(69.5)	298.1	297.1	886.2

Finance income	4	0.8	-	0.8	0.1	0.3
Finance costs	4	(34.9)	-	(34.9)	(34.3)	(70.2)
Share of joint ventures profit after taxation		1.1	-	1.1	-	-


Profit before taxation		334.6	(69.5)	265.1	262.9	816.3

Income taxes		(44.9)	7.4	(37.5)	(35.9)	(53.3)


Profit after taxation		289.7	(62.1)	227.6	227.0	763.0



Attributable to:
Equity holders of the parent				227.6	227.0	763.0
Non-controlling interests				-	-	-


				227.6	227.0	763.0




Earnings per A ordinary share				Cent	Cent	Cent
- basic	5			128.4	128.2	430.6
- diluted	5			128.2	128.0	429.9

Condensed Consolidated Statement of Comprehensive Income
for the half year ended 30 June 2022

	Half year	Half year	Year
	ended	ended	ended
	30 June 2022	30 June 2021	31 Dec. 2021
	Unaudited	Unaudited	Audited
	€'m	€'m	€'m


Profit after taxation	227.6	227.0	763.0


Other comprehensive income:


Items that are or may be reclassified subsequently to profit or loss:
Fair value movements on cash flow hedges	(0.3)	(0.7)	(0.3)
Cash flow hedges - reclassified to profit or loss from equity	(1.4)	(1.1)	(0.9)
Net change in cost of hedging	0.2	0.3	-
Deferred tax effect of fair value movements on cash flow hedges	-	-	0.1
Exchange difference on translation of foreign operations	265.3	98.7	217.7
Cumulative exchange difference on translation recycled on disposal	-	-	16.2

Items that will not be reclassified subsequently to profit or loss:
Re-measurement on retirement benefits obligation	130.3	101.6	110.2
Deferred tax effect of re-measurement on retirement benefits obligation	(27.7)	(19.1)	(20.0)


Net income recognised directly in total other comprehensive income	366.4	179.7	323.0


Total comprehensive income	594.0	406.7	1,086.0


Attributable to:
Equity holders of the parent	594.0	406.7	1,086.0
Non-controlling interests	-	-	-


	594.0	406.7	1,086.0

Condensed Consolidated Balance Sheet
as at 30 June 2022

		30 June 2022	30 June 2021	31 Dec. 2021
		Unaudited	Unaudited	Audited
	Notes	€'m	€'m	€'m


Non-current assets
Property, plant and equipment		2,161.1	1,918.8	2,091.3
Intangible assets		5,968.9	4,443.8	5,580.7
Financial asset investments		53.1	45.9	49.9
Investment in joint ventures		22.9	18.6	21.7
Other non-current financial instruments		2.7	37.6	34.8
Retirement benefits asset	8	221.6	75.8	90.3
Deferred tax assets		72.1	35.8	67.8


		8,502.4	6,576.3	7,936.5


Current assets
Inventories		1,496.1	1,117.6	1,204.2
Trade and other receivables		1,471.7	1,182.8	1,181.7
Cash at bank and in hand	9	757.2	395.0	1,039.1
Other current financial instruments		108.3	8.2	15.2
Assets classified as held for sale	7	22.4	523.4	18.7


		3,855.7	3,227.0	3,458.9


Total assets		12,358.1	9,803.3	11,395.4


Current liabilities
Trade and other payables		2,047.9	1,731.9	1,791.5
Borrowings and overdrafts	9	724.2	3.3	5.6
Other current financial instruments		108.6	17.8	40.1
Tax liabilities		148.5	133.6	141.6
Provisions		16.6	7.7	13.6
Deferred income		3.3	2.2	3.0
Liabilities directly associated with assets classified as held for sale	7	-	22.2	-


		3,049.1	1,918.7	1,995.4


Non-current liabilities
Borrowings	9	2,441.7	2,342.3	3,118.0
Other non-current financial instruments		16.8	-	0.5
Retirement benefits obligation	8	19.8	24.5	24.1
Other non-current liabilities		148.3	128.4	153.9
Deferred tax liabilities		533.1	360.6	447.3
Provisions		42.2	47.0	37.1
Deferred income		16.7	18.7	17.9


		3,218.6	2,921.5	3,798.8


Total liabilities		6,267.7	4,840.2	5,794.2


Net assets		6,090.4	4,963.1	5,601.2


Equity
Share capital	11	22.1	22.1	22.1
Share premium		398.7	398.7	398.7
Other reserves		145.7	(274.3)	(129.6)
Retained earnings		5,522.2	4,816.6	5,310.0
Equity attributable to equity holders of the parent		6,088.7	4,963.1	5,601.2
Non-controlling interests		1.7	-	-


Total equity		6,090.4	4,963.1	5,601.2


Condensed Consolidated Statement of Changes in Equity
for the half year ended 30 June 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


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

Profit after taxation			-		-	-	227.0		227.0		-		227.0
Other comprehensive income			-		-	97.2	82.5		179.7		-		179.7


Total comprehensive income			-		-	97.2	309.5		406.7		-		406.7

Dividends paid		6	-		-	-	(107.1)		(107.1)		-		(107.1)
Share-based payment expense			-		-	8.0	-		8.0		-		8.0


At 30 June 2021 - unaudited			22.1		398.7	(274.3)	4,816.6		4,963.1		-		4,963.1

Profit after taxation			-		-	-	536.0		536.0		-		536.0
Other comprehensive income			-		-	135.5	7.8		143.3		-		143.3


Total comprehensive income			-		-	135.5	543.8		679.3		-		679.3

Dividends paid		6	-		-	-	(50.4)		(50.4)		-		(50.4)
Share-based payment expense			-		-	9.2	-		9.2		-		9.2


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

Profit after taxation			-		-	-	227.6		227.6		-		227.6
Other comprehensive income			-		-	263.8	102.6		366.4		-		366.4


Total comprehensive income			-		-	263.8	330.2		594.0		-		594.0

Dividends paid		6	-		-	-	(118.0)		(118.0)		-		(118.0)
Share-based payment expense			-		-	11.5	-		11.5		-		11.5
Non-controlling interests arising on acquisition			-		-	-	-		-		1.7		1.7


At 30 June 2022 - unaudited			22.1		398.7	145.7	5,522.2		6,088.7		1.7		6,090.4




Other Reserves comprise the following:

	Capital			Other		Share-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)	-			-		-		98.7		(1.8)		0.3	97.2
Share-based payment expense	-			-		8.0		-		-		-	8.0


At 30 June 2021 - unaudited	1.7			0.3		98.2		(373.3)		0.8		(2.0)	(274.3)

Other comprehensive income/(expense)	-			-		-		135.2		0.6		(0.3)	135.5
Share-based payment expense	-			-		9.2		-		-		-	9.2


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

Other comprehensive income/(expense)	-			-		-		265.3		(1.7)		0.2	263.8
Share-based payment expense	-			-		11.5		-		-		-	11.5


At 30 June 2022 - unaudited	1.7			0.3		118.9		27.2		(0.3)		(2.1)	145.7

Condensed Consolidated Statement of Cash Flows
for the half year ended 30 June 2022

			Half year	Half year	Year
			ended	ended	ended
			30 June 2022	30 June 2021	31 Dec. 2021
			Unaudited	Unaudited	Audited
		Notes	€'m	€'m	€'m


Cash flows from operating activities
Profit before taxation			265.1	262.9	816.3
Adjustments for:
Depreciation (net)			108.1	100.8	201.5
Intangible asset amortisation			42.0	39.2	80.8
Share of profit from joint ventures			(1.1)	(0.7)	(3.9)
Non-trading items income statement charge/(income)		3	69.5	20.8	(91.5)
Finance costs (net)		4	34.1	34.2	69.9
Change in working capital			(278.0)	(142.9)	(184.3)
Pension contributions paid less pension expense			(7.0)	(6.0)	(14.7)
Payments on non-trading items			(36.1)	(7.2)	(76.1)
Exchange translation adjustment			(17.9)	0.4	(0.7)


Cash generated from operations			178.7	301.5	797.3
Income taxes paid			(31.9)	(32.1)	(72.0)
Finance income received			0.8	0.1	0.4
Finance costs paid			(15.4)	(21.6)	(71.7)


Net cash from operating activities			132.2	247.9	654.0


Investing activities
Purchase of assets (net)			(61.3)	(136.3)	(300.4)
Proceeds from the sale of assets (net of disposal expenses)			3.2	3.6	4.0
Capital grants received			-	-	0.7
Purchase of businesses (net of cash acquired)		10	(244.6)	(24.6)	(1,084.9)
Receipts/(payments) relating to previous acquisitions			1.7	(10.8)	(18.9)
Purchase of investments			(4.8)	(4.2)	(4.4)
Disposal of businesses (net of disposal expenses)			-	-	775.2


Net cash used in investing activities			(305.8)	(172.3)	(628.7)


Financing activities
Dividends paid		6	(118.0)	(107.1)	(157.5)
Payment of lease liabilities			(15.9)	(15.8)	(34.9)
Issue of share capital		11	-	-	-
Repayment of borrowings (net of swaps)			-	(134.4)	(1,093.3)
Increase in borrowings			0.1	-	1,705.0


Net cash movement due to financing activities			(133.8)	(257.3)	419.3


Net (decrease)/increase in cash and cash equivalents			(307.4)	(181.7)	444.6
Cash and cash equivalents at beginning of the period			1,033.8	560.3	560.3
Exchange translation adjustment on cash and cash equivalents			17.8	13.1	28.9


Cash and cash equivalents at end of the period		9	744.2	391.7	1,033.8


Reconciliation of Net Cash Flow to Movement in Net Debt
Net (decrease)/increase in cash and cash equivalents			(307.4)	(181.7)	444.6
Cash flow from debt financing			(0.1)	134.4	(611.7)


Changes in net debt resulting from cash flows			(307.5)	(47.3)	(167.1)
Fair value movement on interest rate swaps (net of adjustment to borrowings)			(2.3)	0.9	(0.1)
Exchange translation adjustment on net debt			(28.4)	(3.0)	(19.1)


Movement in the period			(338.2)	(49.4)	(186.3)
At beginning of the period			(2,049.9)	(1,863.6)	(1,863.6)


Net debt at end of the period - pre lease liabilities			(2,388.1)	(1,913.0)	(2,049.9)
Lease liabilities			(68.2)	(67.6)	(74.2)


Net debt at end of the period		9	(2,456.3)	(1,980.6)	(2,124.1)

Prior period, 30 June 2021, has been re-presented to align with current presentation.


Notes to the Condensed Consolidated Interim Financial Statements
for the half year ended 30 June 2022

1. Accounting policies
These Condensed Consolidated Interim Financial Statements for the half year ended 30 June 2022 have been prepared in accordance with International Financial Reporting Standards ('IFRS'), the International Financial Reporting Interpretations Committee ('IFRIC') and in accordance with IAS 34 'Interim Financial Reporting'. The Group 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 refer to IFRS adopted by the EU. The accounting policies applied by the Group in these Condensed Consolidated Interim Financial Statements are the same as those detailed in the 2021 Annual Report except for changes in accounting policies in respect of a new non-controlling interests policy and an updated segmental analysis policy as outlined below for the half year ended 30 June 2022. From 1 January 2022, the Group has moved from trading profit to earnings before interest, tax, depreciation and amortisation (EBITDA) as the key measure utilised in assessing the performance of the Group. This has been reflected in the presentation of the Group's Condensed Consolidated Income Statement and note 2 'Analysis of results', as permitted under IAS 1 'Presentation of Financial Statements'. In these Condensed Consolidated Interim Financial Statements for the half year ended 30 June 2022, the Group has re-presented corresponding 2021 balances to align with current year presentation in the Condensed Consolidated Income Statement, Condensed Consolidated Statement of Cash Flows, note 2 'Analysis of results' and note 4 'Finance income and costs'. Non-controlling interests Non-controlling interests represent the portion of the equity of a subsidiary not attributable either directly or indirectly to the Parent Company and are presented separately in the Condensed Consolidated Income Statement and within equity in the Condensed Consolidated Balance Sheet, distinguished from Parent Company 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. Segmental analysis Operating segments are reported in a manner consistent with the internal management structure of the Group and the internal financial information provided to the Group's Chief Operating Decision Maker (the Executive Directors) who is responsible for making strategic decisions, allocating resources, monitoring and assessing the performance of each segment. EBITDA as reported internally by segment is the key measure utilised in assessing the performance of operating segments within the Group. Other Corporate activities, such as the cost of corporate stewardship, are reported along with the elimination of inter-group activities under the heading 'Group Eliminations and Unallocated'. Depreciation, intangible asset amortisation, non-trading items, net finance costs, share of joint ventures profit after taxation and income taxes are managed on a centralised basis and therefore, these items are not allocated between operating segments and are not reported per segment in note 2. The Group has determined it has two reportable segments: Taste & Nutrition and Dairy Ireland. The Taste & Nutrition segment is a world leading taste and nutrition partner for the food, beverage and pharmaceutical markets. Kerry innovates with its customers to create great tasting products, with improved nutrition and functionality, whilst ensuring better impact for the planet. The Taste & Nutrition segment supplies industries across Ireland, 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. Critical accounting estimates and judgements The preparation of the Group Condensed Consolidated Interim 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 preparing the Group Condensed Consolidated Interim Financial Statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the Consolidated Financial Statements for the year ended 31 December 2021 except for the new judgement in respect of 'Russian and associated markets costs' for the half year ended 30 June 2022 outlined below. Russian and associated markets costs As previously announced on 4 April 2022, the Group is sspending its operations in Russia and Belarus. This suspension is being managed in an orderly manner, during which the Group is continuing to pay employees and fulfil our legal obligations and a decision has been made to classify these businesses as held for sale. The assets of these businesses have been impaired to their fair value less costs to sell resulting in a charge of €37.9m to the Condensed Consolidated Income Statement (see notes 3 and 7 to the Condensed Consolidated Interim Financial Statements). 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. Going concern The Group Condensed Consolidated Interim 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 regarding Russian and associated markets divestment. The Group performed an impairment assessment of the impacted businesses regarding the Russian and associated markets which has led to the assets of the businesses in Russia, Belarus and Ukraine being impaired to their fair value less costs to sell resulting in a charge of €41.2m being recognised in the Condensed Consolidated Income Statement during the period. The viability of the Group was also assessed by considering the potential impact of climate related risks on profitability and liquidity, accelerating inflationary cost pressures, disruption of global supply chains and the challenges presented in China with localised restrictions during the period. Following these assessments the Directors have concluded there are no material uncertainties that cast a 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 these financial statements. The Directors report that they have satisfied themselves that the Group is a going concern, having adequate resources to continue in operational existence for the foreseeable future. In forming this view, the Directors have reviewed the Group's forecast for a period not less than 12 months, the medium term plan and its cashflow implications have been taken into account including proposed capital expenditure, and compared these with the Group's committed borrowing facilities and projected gearing ratios.

The following Standards and Interpretations are effective for the Group from 1 January 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

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 taste and nutrition partner for the food, beverage and pharmaceutical markets. Kerry innovates with its customers to create great tasting products, with improved nutrition and functionality, whilst ensuring better impact for the planet. The Taste & Nutrition segment supplies industries across Ireland, 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.


	Half year ended 30 June 2022 - Unaudited				Half year ended 30 June 2021 - Unaudited				Year ended 31 December 2021 - Audited
			Group				Group				Group
			Eliminations				Eliminations				Eliminations
	Taste &	Dairy	and		Taste &	Dairy	and		Taste &	Dairy	and
	Nutrition	Ireland	Unallocated	Total	Nutrition	Ireland	Unallocated	Total	Nutrition	Ireland	Unallocated	Total
	€'m	€'m	€'m	€'m	€'m	€'m	€'m	€'m	€'m	€'m	€'m	€'m


External revenue	3,431.2	626.6	-	4,057.8	2,679.0	903.1	-	3,582.1	5,689.3	1,661.3	-	7,350.6
Inter-segment revenue	13.7	68.8	(82.5)	-	23.4	56.7	(80.1)	-	40.1	116.3	(156.4)	-


Revenue	3,444.9	695.4	(82.5)	4,057.8	2,702.4	959.8	(80.1)	3,582.1	5,729.4	1,777.6	(156.4)	7,350.6


EBITDA*	515.4	38.4	(36.1)	517.7	412.7	80.1	(34.9)	457.9	1,013.5	136.0	(72.5)	1,077.0


Depreciation				(108.1)				(100.8)				(201.5)
Intangible asset amortisation				(42.0)				(39.2)				(80.8)
Non-trading items				(69.5)				(20.8)				91.5


Operating profit				298.1				297.1				886.2

Finance income				0.8				0.1				0.3
Finance costs				(34.9)				(34.3)				(70.2)
Share of joint ventures profit after taxation				1.1				-				-


Profit before taxation				265.1				262.9				816.3
Income taxes				(37.5)				(35.9)				(53.3)


Profit after taxation				227.6				227.0				763.0


Attributable to:
Equity holders of the parent				227.6				227.0				763.0
Non-controlling interests				-				-				-


				227.6				227.0				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 profit after taxation.

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 and within the primary geographic markets which affect the nature, amount, timing and uncertainty of revenue and cash flows are similar.
Analysis by EUM

	Half year ended 30 June 2022 - Unaudited				Half year ended 30 June 2021 - Unaudited				Year ended 31 December 2021 - Audited
		Taste &	Dairy			Taste &	Dairy			Taste &	Dairy
		Nutrition	Ireland	Total		Nutrition	Ireland	Total		Nutrition	Ireland	Total
		€'m	€'m	€'m		€'m	€'m	€'m		€'m	€'m	€'m


Food		2,271.0	578.0	2,849.0		1,814.7	866.1	2,680.8		3,837.5	1,587.4	5,424.9
Beverage		920.5	48.6	969.1		720.1	37.0	757.1		1,515.2	73.9	1,589.1
Pharma		239.7	-	239.7		144.2	-	144.2		336.6	-	336.6


External revenue		3,431.2	626.6	4,057.8		2,679.0	903.1	3,582.1		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:

	Half year ended 30 June 2022 - Unaudited				Half year ended 30 June 2021 - Unaudited				Year ended 31 December 2021 - Audited
		Taste &	Dairy			Taste &	Dairy			Taste &	Dairy
		Nutrition	Ireland	Total		Nutrition	Ireland	Total		Nutrition	Ireland	Total
		€'m	€'m	€'m		€'m	€'m	€'m		€'m	€'m	€'m


Republic of Ireland		40.6	241.6	282.2		31.2	212.6	243.8		64.1	394.6	458.7
Rest of Europe		688.6	303.3	991.9		540.9	609.5	1,150.4		1,168.7	1,089.6	2,258.3
Americas		1,933.8	46.8	1,980.6		1,497.5	44.5	1,542.0		3,137.5	97.7	3,235.2
APMEA		768.2	34.9	803.1		609.4	36.5	645.9		1,319.0	79.4	1,398.4


External revenue		3,431.2	626.6	4,057.8		2,679.0	903.1	3,582.1		5,689.3	1,661.3	7,350.6


The accounting policies of the reportable segments are the same as those detailed in the Statement of accounting policies in the 2021 Annual Report. Under IFRS 15 'Revenue from Contracts with Customers' revenue is primarily recognised at a point in time. Revenue recorded over time during the period was not material to the Group. Prior periods 30 June 2021 and 31 December 2021 have been re-presented to reflect the changes in our reporting segments as at 1 January 2022. Within Taste & Nutrition, the dairy processing activities in Ireland have been realigned with the dairy activities in the Consumer Foods business, comprising the new Group reporting segment of Dairy Ireland. Included within the Dairy Ireland 30 June 2021 and 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.

4. Finance income and costs

	Half year	Half year	Year
	ended	ended	ended
	30 June 2022	30 June 2021	31 Dec. 2021
	Unaudited	Unaudited	Audited
	€'m	€'m	€'m


Finance income:
Interest income on deposits	0.8	0.1	0.3


Finance costs:
Interest payable	(33.7)	(32.8)	(66.7)
Interest on lease liabilities	(1.9)	(2.4)	(4.4)
Interest rate derivative	0.1	1.3	1.6


	(35.5)	(33.9)	(69.5)

Net interest income/(cost) on retirement benefits obligation	0.6	(0.4)	(0.7)


Finance costs	(34.9)	(34.3)	(70.2)

5. Earnings per A ordinary share

	Half year		Half year		Year
	ended		ended		ended
	30 June 2022		30 June 2021		31 Dec. 2021
	Unaudited		Unaudited		Audited
	EPS cent	€'m	EPS cent	€'m	EPS cent	€'m


Basic earnings per share
Profit after taxation attributable to equity holders of the parent	128.4	227.6	128.2	227.0	430.6	763.0


Diluted earnings per share
Profit after taxation attributable to equity holders of the parent	128.2	227.6	128.0	227.0	429.9	763.0



	30 June 2022		30 June 2021		31 Dec. 2021
	Unaudited		Unaudited		Audited
Number of Shares	m's		m's			m's


Basic weighted average number of shares		177.3		177.1		177.2
Impact of share options outstanding		0.2		0.3		0.3


Diluted weighted average number of shares		177.5		177.4		177.5

6. Dividends

	Half year	Half year	Year
	ended	ended	ended
	30 June 2022	30 June 2021	31 Dec. 2021
	Unaudited €'m	Unaudited €'m	Audited €'m


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

Interim 2021 dividend of 28.50 cent per A ordinary share paid 12 November 2021	-	-	50.4


	118.0	-	157.5

8. Retirement benefits obligation
The net surplus/(deficit) recognised in the Condensed Consolidated Balance Sheet for the Group's defined benefit post-retirement schemes was as follows:
	Schemes	Schemes
	in Surplus	in Deficit	Total
	Half year	Half year	Half year
	ended	ended	ended
	30 June 2022	30 June 2022	30 June 2022
	Unaudited	Unaudited	Unaudited
	€'m	€'m	€'m


Net recognised surplus/(deficit) in plans before deferred tax	221.6	(19.8)	201.8
Net related deferred tax (liability)/asset	(42.8)	5.1	(37.7)


Net recognised surplus/(deficit) in plans after deferred tax	178.8	(14.7)	164.1


At 30 June 2022, the net surplus before deferred tax for defined benefit post-retirement schemes was €201.8m (30 June 2021: €51.3m; 31 December 2021: €66.2m). This was calculated by rolling forward the defined benefit post-retirement schemes' liabilities at 31 December 2021 to reflect material movements in underlying assumptions over the period while the defined benefit post-retirement schemes' assets at 30 June 2022 are measured at market value. The improvement in the funding position before deferred tax of €135.6m was driven by favourable movements in actuarial assumptions, primarily higher discount rates, which were partially offset by reduced asset values. The surplus at 30 June 2022 relates to the Irish and UK schemes and has been recognised in accordance with IFRIC 14 'The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction' as it has been determined that the Group has an unconditional right to a refund of the surplus.

	Schemes	Schemes
	in Surplus	in Deficit	Total
	Half year	Half year	Half year
	ended	ended	ended
	30 June 2021	30 June 2021	30 June 2021
	Unaudited	Unaudited	Unaudited
	€'m	€'m	€'m


Net recognised surplus/(deficit) in plans before deferred tax	75.8	(24.5)	51.3
Net related deferred tax (liability)/asset	(13.0)	4.9	(8.1)


Net recognised surplus/(deficit) in plans after deferred tax	62.8	(19.6)	43.2




	Schemes	Schemes
	in Surplus	in Deficit	Total
	Year	Year	Year
	ended	ended	ended
	31 Dec. 2021	31 Dec. 2021	31 Dec. 2021
	Audited	Audited	Audited
	€'m	€'m	€'m


Net recognised surplus/(deficit) in plans before deferred tax	90.3	(24.1)	66.2
Net related deferred tax (liability)/asset	(14.8)	4.9	(9.9)


Net recognised surplus/(deficit) in plans after deferred tax	75.5	(19.2)	56.3

9. Financial instruments
i) The following table outlines the financial assets and liabilities in relation to net debt held by the Group at the balance sheet date:

		Liabilities	Derivatives
	Financial	at Fair Value	Designated as	Assets/
	Assets/(Liabilities)	through Profit	Hedging	(Liabilities) at
	at Amortised Cost	or Loss	Instruments	FVOCI	Total
	€'m	€'m	€'m	€'m	€'m


Assets:
Interest rate swaps	-	-	38.0	-	38.0
Cash at bank and in hand	757.2	-	-	-	757.2


	757.2	-	38.0	-	795.2


Liabilities:
Interest rate swaps	-	-	(17.4)	-	(17.4)


Bank overdrafts	(13.0)	-	-	-	(13.0)
Bank loans	(2.7)	-	-	-	(2.7)
Senior notes	(3,154.6)	4.4	-	-	(3,150.2)


Borrowings and overdrafts	(3,170.3)	4.4	-	-	(3,165.9)


Net debt - pre lease liabilities	(2,413.1)	4.4	20.6	-	(2,388.1)
Lease liabilities	(68.2)	-	-	-	(68.2)


Net debt at 30 June 2022 - unaudited	(2,481.3)	4.4	20.6	-	(2,456.3)


Assets:
Interest rate swaps	-	-	37.6	-	37.6
Cash at bank and in hand	395.0	-	-	-	395.0


	395.0	-	37.6	-	432.6


Liabilities:
Interest rate swaps	-	-	-	-	-


Bank overdrafts	(3.3)	-	-	-	(3.3)
Bank loans	-	-	-	-	-
Senior notes	(2,326.5)	(15.8)	-	-	(2,342.3)


Borrowings and overdrafts	(2,329.8)	(15.8)	-	-	(2,345.6)


Net debt - pre lease liabilities	(1,934.8)	(15.8)	37.6	-	(1,913.0)
Lease liabilities	(67.6)	-	-	-	(67.6)


Net debt at 30 June 2021 - unaudited	(2,002.4)	(15.8)	37.6	-	(1,980.6)


Assets:
Interest rate swaps	-	-	34.6	-	34.6
Cash at bank and in hand	1,039.1	-	-	-	1,039.1


	1,039.1	-	34.6	-	1,073.7


Liabilities:
Interest rate swaps	-	-	-	-	-


Bank overdrafts	(5.3)	-	-	-	(5.3)
Bank loans	(2.9)	-	-	-	(2.9)
Senior notes	(3,104.5)	(10.9)	-	-	(3,115.4)


Borrowings and overdrafts	(3,112.7)	(10.9)	-	-	(3,123.6)


Net debt - pre lease liabilities	(2,073.6)	(10.9)	34.6	-	(2,049.9)
Lease liabilities	(74.2)	-	-	-	(74.2)


Net debt at 31 December 2021 - audited	(2,147.8)	(10.9)	34.6	-	(2,124.1)


All Group borrowings and overdrafts and interest rate swaps are guaranteed by Kerry Group plc. No assets of the Group have been pledged to secure these items. As at 30 June 2022, the Group's debt portfolio included: - US$750m of senior notes issued in 2013, maturing in 2023 (the 2023 senior notes). At the time of issuance, US$250m were swapped, using cross currency swaps, to euro; - €750m of senior notes issued in 2015 and €200m issued in April 2020 as a tap onto the original issuance (the 2025 senior notes). €175m of the issuance in 2015 were swapped, using cross currency swaps, to US dollar; - €750m of senior notes issued in 2019 (the 2029 senior notes); and - €750m of euro sustainability-linked bond notes issued in 2021 (the 2031 SLB senior notes). No interest rate derivatives were entered into for the 2029 senior notes and 2031 SLB senior notes issuances. The adjustment to senior notes classified under liabilities at fair value through profit or loss of €4.4m debit (30 June 2021: €15.8m credit; 31 December 2021: €10.9m credit) represents the part adjustment to the carrying value of debt from applying fair value hedge accounting for interest rate risk. This amount is primarily offset by the fair value adjustment on the corresponding hedge items being the underlying cross currency interest rate swaps.

ii) The Group's exposure to interest rates on financial assets and liabilities are detailed in the table below including the impact of cross currency swaps (CCS) on the currency profile of net debt:
	Total pre CCS Half year ended 30 June 2022 Unaudited €'m	Impact of CCS Half year ended 30 June 2022 Unaudited €'m	Total after CCS Half year ended 30 June 2022 Unaudited €'m	Half year ended 30 June 2021 Unaudited €'m	Year ended 31 Dec. 2021 Audited €'m


Euro	(2,308.9)	(62.6)	(2,371.5)	(1,683.0)	(1,860.4)
Sterling	65.8	-	65.8	109.3	74.5
US Dollar	(316.7)	62.6	(254.1)	(466.2)	(460.5)
Other	103.5	-	103.5	59.3	122.3


	(2,456.3)	-	(2,456.3)	(1,980.6)	(2,124.1)

iii) The following table details the maturity profile of the Group's net debt:

	On demand & up to 1 year €'m	Up to 2 years €'m	2 - 5 years €'m	> 5 years €'m	Total €'m


Cash at bank and in hand	757.2	-	-	-	757.2
Interest rate swaps	36.3	-	(15.7)	-	20.6
Bank overdrafts	(13.0)	-	-	-	(13.0)
Bank loans	(0.1)	(2.6)	-	-	(2.7)
Senior notes	(711.1)	-	(952.8)	(1,486.3)	(3,150.2)


Net debt - pre lease liabilities	69.3	(2.6)	(968.5)	(1,486.3)	(2,388.1)
Lease liabilities (discounted)	(25.7)	(18.3)	(19.7)	(4.5)	(68.2)


At 30 June 2022 - unaudited	43.6	(20.9)	(988.2)	(1,490.8)	(2,456.3)


Cash at bank and in hand	395.0	-	-	-	395.0
Interest rate swaps	-	19.8	17.8	-	37.6
Bank overdrafts	(3.3)	-	-	-	(3.3)
Bank loans	-	-	-	-	-
Senior notes	-	(634.7)	(967.1)	(740.5)	(2,342.3)


Net debt - pre lease liabilities	391.7	(614.9)	(949.3)	(740.5)	(1,913.0)
Lease liabilities (discounted)	(28.9)	(14.8)	(18.5)	(5.4)	(67.6)


At 30 June 2021 - unaudited	362.8	(629.7)	(967.8)	(745.9)	(1,980.6)


Cash at bank and in hand	1,039.1	-	-	-	1,039.1
Interest rate swaps	-	27.6	7.0	-	34.6
Bank overdrafts	(5.6)	-	-	-	(5.6)
Bank loans	-	-	-	-	-
Senior notes	-	(669.0)	(963.5)	(1,485.5)	(3,118.0)


Net debt - pre lease liabilities	1,033.5	(641.4)	(956.5)	(1,485.5)	(2,049.9)
Lease liabilities (discounted)	(28.0)	(19.7)	(20.9)	(5.6)	(74.2)


At 31 December 2021 - audited	1,005.5	(661.1)	(977.4)	(1,491.1)	(2,124.1)

At 30 June 2022, the Group had cash on hand of €757.2m. At the period end, the Group had undrawn committed Syndicate revolving credit facility of €1,100m. Cash at bank and in hand includes an amount of €199.8m held on short-term deposit of which €104.7m was held under a Sustainable Deposits programme. The amount of cash and cash equivalent balances that are not available for use by the Group is €0.3m due to the Russian and associated markets divestment.

iv) Fair value of financial instruments a) Fair value of financial instruments carried at fair value Financial instruments recognised at fair value are analysed between those based on:
- - - -	quoted prices in active markets for identical assets or liabilities (Level 1); those involving inputs other than quoted prices included in Level 1 that are observable for the assets or liabilities, either directly (as prices) or indirectly (derived from prices) (Level 2); and those involving inputs for the assets or liabilities that are not based on observable market data (unobservable inputs) (Level 3).
The following table sets out the fair value of financial instruments carried at fair value:

			Fair Value	30 June 2022	30 June 2021	31 Dec. 2021
			Hierarchy	Unaudited	Unaudited	Audited
				€'m	€'m	€'m


Financial assets
Interest rate swaps:		Non-current	Level 2	-	37.6	34.6
		Current	Level 2	38.0	-	-
Forward foreign exchange contracts:		Non-current	Level 2	2.7	-	0.2
		Current	Level 2	70.3	8.2	15.2
Financial asset investments:		Fair value through profit or loss	Level 1	43.1	41.7	45.5
		Fair value through other comprehensive income	Level 3	9.3	4.2	4.4

Financial liabilities
Interest rate swaps:		Non-current	Level 2	(15.7)	-	-
		Current	Level 2	(1.7)	-	-
Forward foreign exchange contracts:		Non-current	Level 2	(1.1)	-	(0.5)
		Current	Level 2	(106.9)	(17.8)	(40.1)


There have been no transfers between levels during the current or prior financial period.

b) Fair value of financial instruments carried at amortised cost
Except as defined in the following table, it is considered that the carrying amounts of financial assets and financial liabilities recognised at amortised cost in the Condensed Consolidated Interim Financial Statements approximate their fair values.

		Carrying	Fair	Carrying	Fair	Carrying	Fair
		Amount	Value	Amount	Value	Amount	Value
		30 June	30 June	30 June	30 June	31 Dec.	31 Dec.
	Fair Value	2022	2022	2021	2021	2021	2021
	Hierarchy	Unaudited	Unaudited	Unaudited	Unaudited	Audited	Audited
		€'m	€'m	€'m	€'m	€'m	€'m


Financial liabilities
Senior notes - Public	Level 2	(3,154.6)	(2,829.5)	(2,326.5)	(2,431.9)	(3,104.5)	(3,174.7)


c) Valuation principles The fair value of financial assets and liabilities are determined as follows:
- assets and liabilities with standard terms and conditions which are traded on active liquid markets are determined with reference to quoted market prices. This includes equity investments; - other financial assets and liabilities (excluding derivatives) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. This includes interest rate swaps and forward foreign exchange contracts which are determined by discounting the estimated future cash flows; - the fair values of financial instruments that are not based on observable market data (unobservable inputs) requires entity specific valuation techniques; and - derivative financial instruments are calculated using quoted prices. Where such prices are not available, a discounted cash flow analysis is performed using the applicable yield curve for the duration of the instruments. Forward foreign exchange contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest rates adjusted for counterparty credit risk, which is calculated based on credit default swaps of the respective counterparties. Interest rate swaps are measured at the present value of future cash flows estimated and discounted based on the applicable yield curves derived from quoted interest rates adjusted for counterparty credit risk, which is calculated based on credit default swaps of the respective counterparties.

Net debt reconciliation


	Cash at bank and in hand €'m	Interest Rate Swaps €'m	Overdrafts due within 1 year* €'m	Borrowings due within 1 year* €'m	Borrowings due after 1 year* €'m	Net Debt - pre lease liabilities €'m	Lease liabilities* €'m	Net Debt €'m


At 31 December 2020 - audited	563.1	81.9	(2.8)	-	(2,505.8)	(1,863.6)	(81.5)	(1,945.1)

Cash flows	(181.2)	(39.3)	(0.5)	-	173.7	(47.3)	15.8	(31.5)
Foreign exchange adjustments	13.1	3.4	-	-	(19.5)	(3.0)	(2.4)	(5.4)
Other non-cash movements	-	(8.4)	-	-	9.3	0.9	0.5	1.4


At 30 June 2021 - unaudited	395.0	37.6	(3.3)	-	(2,342.3)	(1,913.0)	(67.6)	(1,980.6)


Cash flows	628.2	-	(1.9)	(0.3)	(745.8)	(119.8)	19.1	(100.7)
Foreign exchange adjustments	15.9	4.4	(0.1)	-	(36.3)	(16.1)	(2.7)	(18.8)
Other non-cash movements	-	(7.4)	-	-	6.4	(1.0)	(23.0)	(24.0)


At 31 December 2021 - audited	1,039.1	34.6	(5.3)	(0.3)	(3,118.0)	(2,049.9)	(74.2)	(2,124.1)


Cash flows	(300.0)	-	(7.4)	(0.1)	-	(307.5)	15.9	(291.6)
Foreign exchange adjustments	18.1	4.4	(0.3)	(50.2)	(0.4)	(28.4)	(4.1)	(32.5)
Other non-cash movements	-	(18.4)	-	(660.6)	676.7	(2.3)	(5.8)	(8.1)


At 30 June 2022 - unaudited	757.2	20.6	(13.0)	(711.2)	(2,441.7)	(2,388.1)	(68.2)	(2,456.3)

*Liabilities from financing activities.

12. Events after the balance sheet date
Since the period end, the Group has:
- - -	declared an interim dividend of 31.40 cent per A ordinary share (see note 6); reached agreement to sell 100% of the share capital of Unitary Manufacturing Enterprise "Vitella", a Taste & Nutrition subsidiary based in Belarus; and reached agreement to divest 100% of the share capital of its Russian subsidiary, Kerry Limited Liability Company, to local management.

There have been no other significant events, outside of the ordinary course of business, affecting the Group since 30 June 2022.

Kerry Group Interim Management Report 2022

KERRY GROUP

Disclaimer: Forward Looking Statements

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Latest directors dealings

13. General information
These unaudited Condensed Consolidated Interim Financial Statements for the half year ended 30 June 2022 are not full financial statements and were not reviewed or audited by the Group's auditors, PricewaterhouseCoopers (PwC). These Condensed Consolidated Interim Financial Statements were approved by the Board of Directors and authorised for issue on 28 July 2022. The figures disclosed relating to 31 December 2021 have been derived from the consolidated financial statements which were audited, received an unqualified audit report and have been filed with the Registrar of Companies. This report should be read in conjunction with the 2021 Annual Report which was 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 refer to IFRS adopted by the EU. The accounting policies applied by the Group in these Condensed Consolidated Interim Financial Statements are the same as those detailed in the 2021 Annual Report except for changes in accounting policies in respect of a new non-controlling interests policy and an updated segmental analysis policy as outlined in note 1 'Accounting policies'. These unaudited Condensed Consolidated Interim Financial Statements have been prepared on the going concern basis of accounting as set out in note 1. The Directors report that they have satisfied themselves that the Group is a going concern, having adequate resources to continue in operational existence for the foreseeable future. In forming this view, the Directors have reviewed the Group's budget for a period not less than 12 months, the five year medium term plan and have taken into account the cash flow implications of the plans, including proposed capital expenditure, and compared these with the Group's committed borrowing facilities and projected gearing ratios. Intangible assets increased by €388.2m to €5,968.9m (31 December 2021: €5,580.7m; 30 June 2021: €4,443.8m) predominantly due to acquisitions during the period and the impact of foreign exchange translation, partially offset by the amortisation charge. In relation to seasonality, EBITDA is lower in the first half of the year due to the nature of the food business and stronger trading in the fourth quarter. While revenue is relatively evenly spread, margin has traditionally been higher in the second half of the year due to product mix and the timing of promotional activity. There is also a material change to the levels of working capital between December and June mainly due to the seasonal nature of the dairy and crop-based businesses. As permitted by the Transparency (Directive 2004/109/EC) Regulations 2007 this Interim Report is available on www.kerry.com. However, if a physical copy is required, please contact the Corporate Affairs department.
FINANCIAL DEFINITIONS
1. Revenue
Volume performance This represents the sales performance period-on-period, excluding pass-through pricing on raw material costs, currency impacts, acquisitions (net of disposals) and rationalisation volumes. Volume performance is an important metric as it is seen as the key driver of top-line business improvement. This is used as the key revenue metric, as Kerry operates a pass-through pricing model with its customers to cater for raw material price fluctuations. Pricing therefore impacts like-for-like revenue performance positively or negatively depending on whether raw material prices move up or down. A full reconciliation to reported revenue performance is detailed in the revenue reconciliation below.
Revenue Reconciliation
H1 2022	Volume performance	Price	Transaction currency	Acquisitions/ Disposals	Translation currency	Reported revenue performance

Taste & Nutrition	8.6%	5.9%	0.2%	5.8%	7.0%	27.5%
Dairy Ireland	1.2%	15.4%	0.1%	(46.1%)	1.9%	(27.5%)


Group	6.8%	8.3%	0.1%	(7.7%)	5.8%	13.3%

H1 2021

Taste & Nutrition	10.7%	0.3%	(0.1%)	1.2%	(6.9%)	5.2%
Dairy Ireland*	4.6%	0.8%	(0.1%)	-	(0.5%)	4.8%


Group	9.0%	0.5%	(0.1%)	0.9%	(5.4%)	4.9%

*Prior period, 30 June 2021 has been re-presented to reflect the changes in our reporting segments from 1 January 2022. Within Taste & Nutrition, the dairy processing activities in Ireland have been realigned with the dairy activities in the Consumer Foods business, comprising the new Group reporting segment of Dairy Ireland.

Like-for-like¹Revenue Reconciliation
H1 2022	Volume performance	Price	Transaction currency	Acquisitions/ Disposals	Translation currency	Like-for-like revenue performance

Taste & Nutrition	8.6%	5.9%	0.2%	5.8%	7.0%	27.5%
Dairy Ireland	2.2%	27.8%	0.2%	-	1.0%	31.2%


Group	7.8%	9.3%	0.2%	5.3%	6.1%	28.7%

H1 2021

Taste & Nutrition	10.7%	0.3%	(0.1%)	1.2%	(6.9%)	5.2%
Dairy Ireland	1.0%	1.6%	-	-	(0.4%)	2.2%


Group	8.9%	0.6%	-	1.0%	(6.0%)	4.5%

¹ Like-for-like (LFL) growth rates reflect the exclusion of the Consumer Foods Meats and Meals contribution from 2021 comparative calculations, being €0.4bn of revenue in the H1 2021 comparatives.

2. EBITDA
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 profit after taxation. EBITDA represents operating profit before specific items that are not reflective of underlying trading performance and therefore hinder comparison of the trading performance of the Group's businesses, either period-on-period or with other businesses.
				H1 2022 €'m			H1 2021 €'m


Profit after taxation attributable to equity holders of the parent				227.6			227.0

Share of joint ventures profit after taxation				(1.1)			-
Finance income				(0.8)			(0.1)
Finance costs				34.9			34.3
Income taxes				37.5			35.9
Non-trading items				69.5			20.8
Intangible asset amortisation				42.0			39.2
Depreciation (net of capital grant amortisation)				108.1			100.8


EBITDA				517.7			457.9

3. EBITDA Margin
EBITDA margin represents EBITDA expressed as a percentage of revenue.
	H1 2022 €'m	H1 2021 €'m


EBITDA	517.7	457.9
Revenue	4,057.8	3,582.1


EBITDA margin	12.8%	12.8%

4. Trading Profit
Trading profit refers to EBITDA less depreciation (net of capital grant amortisation). Trading profit represents operating profit before specific items that are not reflective of underlying trading performance and therefore hinder comparison of the trading performance of the Group's businesses, either period-on-period or with other businesses.
	H1 2022 €'m	H1 2021 €'m


EBITDA	517.7	457.9
Depreciation (net of capital grant amortisation)	(108.1)	(100.8)


Trading profit	409.6	357.1

5. Operating Profit
Operating profit is profit before income taxes, finance income, finance costs and share of joint ventures profit after taxation.
	H1 2022 €'m	H1 2021 €'m


Profit before taxation	265.1	262.9

Finance income	(0.8)	(0.1)
Finance costs	34.9	34.3
Share of joint ventures profit after taxation	(1.1)	-


Operating profit	298.1	297.1

6. Adjusted Earnings Per Share and Growth in Adjusted Earnings Per Share on a Constant Currency Basis
The growth 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 period-on-period. The growth in adjusted earnings per share on a constant currency basis is calculated by comparing current period adjusted earnings per share to the prior period adjusted earnings per share retranslated at current period average exchange rates.
	H1 2022 EPS cent	Growth %	H1 2021 EPS cent	Growth %


Basic earnings per share	128.4	0.2%	128.2	6.5%
Brand related intangible asset amortisation	13.0	-	12.6	-
Non-trading items (net of related tax)	35.0	-	11.2	-


Adjusted earnings per share	176.4	16.1%	152.0	15.1%
Impact of retranslating prior period adjusted earnings per share at current period average exchange rates*		(7.1%)		9.0%

Growth in adjusted earnings per share on a constant currency basis		9.0%		24.1%

*Impact of H1 2022 translation was (10.8)/152.0 cent = (7.1%) (H1 2021: 9.0%).

7. Free Cash Flow
Free cash flow is EBITDA plus movement in average working capital, capital expenditure, payment of lease liabilities, 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 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 period 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 adjusted for the impact of acquisitions and disposals over 12 months. Below is a reconciliation of free cash flow to the nearest IFRS measure, which is 'Net cash from operating activities'.
	H1 2022 €'m	H1 2021 €'m


Net cash from operating activities	132.2	247.9

Difference between movement in monthly average working capital and movement in the period end working capital	113.8	115.4
Share of joint ventures profit after taxation	-	0.7
Payments on non-trading items	36.1	7.2
Purchase of assets (net)	(61.3)	(136.3)
Payment of lease liabilities	(15.9)	(15.8)
Proceeds from the sale of property, plant and equipment	3.2	3.6
Capital grants received	-	-
Exchange translation adjustment	17.9	(0.4)


Free cash flow	226.0	222.3

8. Cash Conversion
Cash conversion is defined as free cash flow, expressed as a percentage of adjusted earnings after taxation.
	H1 2022 €'m	H1 2021 €'m


Free cash flow	226.0	222.3

Profit after taxation attributable to equity holders of the parent	227.6	227.0
Brand related intangible asset amortisation	23.1	22.4
Non-trading items (net of related tax)	62.1	19.8


Adjusted earnings after taxation	312.8	269.2


Cash conversion	72%	83%

9. 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.
	H1 2022 Times	H1 2021 Times


Net debt: EBITDA	2.1	1.9
EBITDA: Net interest	16.0	14.6

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


Equity attributable to equity holders of the parent		6,088.7		5,601.2	4,963.1		4,655.5		4,508.5
Net debt	2,456.3			2,124.1	1,980.6		1,945.1		2,085.0


Total capital employed	8,545.0			7,725.3	6,943.7		6,600.6		6,593.5


Average capital employed	7,738.0			7,089.9	6,712.6

Total capital employed definition has been updated to reflect lease liabilities in 'Net debt' and 'Equity attributable to equity holders of the parent' as reported on the Condensed Consolidated Balance Sheet. The calculation no longer adds back 'Goodwill amortised (pre conversion to IFRS)' to 'Equity attributable to equity holders of the parent'.
11. 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.
			12 months to H1 2022 €'m			12 months to H1 2021 €'m		FY 2021 €'m


Profit after taxation attributable to equity holders of the parent			763.6			568.0		763.0
Non-trading items (net of related tax)			(92.1)			35.3		(134.4)
Brand related intangible asset amortisation			46.9			43.5		46.2
Net finance costs			69.8			69.3		69.9


Adjusted profit			788.2			716.1		744.7


Average capital employed		7,738.0				6,712.6		7,089.9


Return on average capital employed		10.2%				10.7%		10.5%


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