Consumer Staples

Report by Iron Blue Financials

Iron Blue initiates coverage on KYGA with a score of 28/60, which is top quartile and fertile grounds for shorting. Accounting concerns highlighted include: 1) A significant increase in stripped out restructuring expense over the past three years. 2) FY23 PPE capex exceeded depreciation by 9% of PBT adj. 3) 12.6% tax rate is lower than suggested by the geographic profit split and could see risk from Pillar Two. 4) Discount rates for pension liabilities and the goodwill impairment test both seem less conservative than average. Re. governance, they note a 21-year average KYGA career within the leadership team, a nationality mismatch with the group’s geographic mix and a CFO who previously was lead auditor on KYGA.

Against the background of a growing world population, our food system is considered unfit for purpose as it entails unsustainable or socially unacceptable environmental, animal and health costs. Agriculture and the food industry are responsible for about a quarter of global greenhouse gas emissions, largely because of animal farming. What is more, diets are biased towards animal fats, which have potentially detrimental health effects. Piers Nestler looks at the possible implications for the industry as he tries to identify beneficiaries from a transition to alternative proteins. Companies discussed BASF, Bayer, Biotalys, Danone, GEA, Kerry Group, KWS Saat and Vilmorin.