Kerry Group (LON:KYGA) reported first-half 2026 volume growth of 3.3%, margin expansion and high-single-digit constant-currency earnings-per-share growth, while maintaining its full-year earnings guidance and setting new financial and operational targets through 2030.
Chief Executive Officer Edmond Scanlon said volume growth accelerated from 3.1% in the first quarter to 3.5% in the second quarter, representing broad-based improvement across the company’s three regions as well as its retail and food-service channels. Food-service growth was supported by menu innovation, seasonal launches and cost-reduction solutions, while retail growth reflected product renovation and innovation activity in higher-growth categories.
The company retained its 2026 guidance for constant-currency EPS growth of 6% to 10%, though Scanlon said Kerry now expects a “modest increase” in its EPS outlook within that range as volume expectations improve. The company now expects full-year volume growth to be closer to 3.5%, compared with an earlier expectation of about 3%.
2030 framework emphasizes volume, margins and cash conversion
Kerry set a target for 3% to 5% annual volume growth through 2030, alongside an EBITDA margin target of 20% to 21% by 2030. The company also outlined an objective of consistent high-single-digit-plus EPS growth, cash conversion above 85%, and returns of 12% to 13% by the end of the period.
Scanlon said Kerry had delivered average volume growth of 3.8% over the past four years despite relatively flat end markets. The company’s 2030 volume-growth target does not assume a broad improvement in market growth, he said.
- Americas: Kerry expects volume growth to remain in a 3% to 5% range.
- Europe: The company is targeting approximately 1% to 2% volume growth, following a period of softer market conditions.
- APMEA: Kerry is targeting 5% to 9% volume growth, with the Middle East and Africa expected to be key contributors and Southeast Asia another growth driver.
Scanlon said food service, emerging markets and product renovation are the principal drivers underpinning the medium-term volume plan. Kerry aims for mid-single-digit-plus food-service volume growth and said its food-service business has grown 70% since 2017. The company’s share of the addressable food-service market remains in the low teens, according to Scanlon.
In the second quarter, Kerry’s food-service volumes grew 5%, even as food-service traffic remained “flat-ish” year over year, Scanlon said. He attributed the company’s position in the channel to long-standing customer innovation partnerships, a broad technology portfolio and a dedicated food-service business model.
Renovation pipeline expands
Product renovation represented about 40% of Kerry’s current pipeline, up from roughly one-third of business-development activity several years ago, Scanlon said. Such projects include work on sodium reduction, protein masking, clean-label formulations and removing artificial ingredients.
Renovation activity is particularly elevated in North America, where it accounts for about 60% of the pipeline. Scanlon said the trend is being driven by consumer expectations, supply-chain issues, regulatory developments and customers’ efforts to improve nutritional profiles while preserving product quality and taste.
He said Kerry expects renovation to remain around its current share of the pipeline or become slightly larger in coming years. While the timing of U.S. front-of-pack labeling requirements remains uncertain, Scanlon described the broader consumer-led shift toward reformulation as a matter of “when, not if.”
Renovation projects can offer more certainty around their potential scale than entirely new product introductions because they generally involve established products already in the market, he added. However, Scanlon cautioned that the current market backdrop still limits the ability to predict future outcomes with precision.
Margins, investment and capital allocation
Chief Financial Officer Marguerite Larkin said Kerry has factored some inflation into its margin planning, while citing its record of more than 300 basis points of margin expansion in recent years. She said efficiencies are expected to make a greater contribution to margin gains during the earlier stage of the 2030 plan, with operating leverage and mix becoming more significant after 2028.
Kerry expects margin progression across all regions, with greater progression in APMEA and Europe than in the Americas. However, Larkin said Americas margins are expected to remain higher because of the region’s scale, strategic positioning and the complexity of customer requirements.
The company plans to increase research and development spending to 5% to 6% of revenue, from its current 4% to 5% range. Larkin said Kerry’s higher cash-conversion target reflects expected profit growth and margin expansion, while continuing to allow for working-capital investment and capital expenditure of 4% to 5%.
For 2026, Kerry expects cash conversion of more than 80%. The company reported average cash conversion of roughly 88% over the past four years.
On acquisitions, Scanlon said Kerry expects to focus on bolt-on transactions, potentially in the range of €100 million to €200 million annually. Areas of interest include emerging markets and biotechnology-related capabilities, particularly biotics and bioactives, enzymes, and food protection and preservation.
For the remainder of 2026, Larkin said Kerry expects input costs to shift from deflation in the first half to limited inflation in the second half. The company plans to host an investor event on Oct. 8 at its U.S. Technology and Innovation Center in Beloit, Wisconsin.
About Kerry Group (LON:KYGA)
Kerry Group plc, together with its subsidiaries, provides taste and nutrition solutions. The company operates in two segments, Taste & Nutrition, and Dairy Ireland. The Taste & Nutrition segment offers taste and nutrition solutions for the food, beverage, and pharmaceutical markets. The Dairy Ireland segment provides value-add dairy ingredients and consumer products, including functional proteins and nutritional bases. It operates in Ireland, rest of Europe, the Americas, the Asia Pacific, the Middle East, and Africa.
