What Kerry Group (KYGA) Said on Its Q3 Earnings Call

Key Points

• Volume growth accelerated to 4.1% in the third quarter, up from 3.6% for the first nine months, led by innovation, product renovation and foodservice demand across all regions. Kerry maintained its full-year adjusted EPS growth guidance of 6% to 10% in constant currency.
• Accelerate 2.0 helped deliver 50 basis points of EBITDA margin expansion in the first nine months, and Kerry remains on track for a similar improvement for the full year. The company expects further margin expansion in 2027 and is progressing toward its 2030 margin target of 20% to 21%.
• Kerry plans to complete its current share buyback before year-end and launch a new program of up to €300 million, while continuing to pursue bolt-on acquisitions. Currency translation remains an earnings headwind, and the company expects slightly inflationary input costs in 2027.

Kerry Group LON: KYGA reported accelerating volume growth in the third quarter of 2026, supported by innovation and product renovation activity across its Americas, Europe and Asia-Pacific, Middle East and Africa operations.

Group CEO Edmond Scanlon said third-quarter volume growth reached 4.1%, compared with 3.6% for the first nine months of the year. The company said it expects a similar volume-growth performance in the fourth quarter, while maintaining its full-year adjusted earnings-per-share guidance for constant-currency growth of 6% to 10%.

“We are pleased to report a strong performance in the period, reflecting a further step-up in volume growth across all three regions in the third quarter, combined with continued strong margin expansion,” Scanlon said.

Margins Expand as Accelerate 2.0 Continues

Group CFO Marguerite Larkin said Kerry delivered 50 basis points of EBITDA margin expansion in the first nine months. The improvement reflected the company’s Accelerate 2.0 program, operating leverage, product mix, net pricing and the impact of portfolio disposals, partly offset by increased research and development investment and adverse currency translation.

Kerry said it remains on track for approximately 50 basis points of margin expansion for the full year. It has previously outlined a 2030 EBITDA margin target of 20% to 21%, after reporting 200 basis points of margin expansion over the past two years.

Larkin said the company was making progress on footprint optimization in North America and Europe and was “a little bit ahead of plan” in that part of the Accelerate 2.0 initiative. Digital-excellence initiatives are also contributing to the program, she said.

Looking ahead, Larkin said Kerry expects 2027 to be another year of “good margin expansion,” with Accelerate 2.0 expected to remain the primary contributor in the earlier years of the company’s plan.

Foodservice, Renovation Drive Growth

Kerry said foodservice volumes increased 5% during the first nine months, driven by signature taste menu innovations, seasonal launches and products designed to address operational complexity in restaurant kitchens. Retail growth was supported by product renovation and innovation across global, regional and local customers.

The company highlighted demand for savory taste systems, salt and sugar reduction technologies, botanicals, natural extracts, protein-masking solutions, preservation systems and enzymes. Scanlon said renovation activity—particularly efforts to make food and beverage products healthier, cleaner-label and better tasting—has become an important source of growth.

“What has been really satisfying for us is the impact that renovation is having on the retail channel,” Scanlon said during the question-and-answer session. He added that more than half of Kerry’s North American pipeline relates to renovation opportunities.

Scanlon said the company has not seen a notable change in underlying consumer demand or the cadence of business through the quarter despite broader cost pressures and macroeconomic uncertainty. He said Kerry continues to see renovation activity increasing in North America and beginning to gain momentum in APMEA.

Regional Performance Improves

In the Americas, volume growth was 4% for the first nine months and 4.6% in the third quarter. North American growth was led by snacks, supported by savory taste and salt-reduction capabilities, while beverage and meat also advanced. Foodservice growth came from both established restaurant chains and emerging operators.

Latin America delivered strong growth in Mexico, particularly in snacks and beverages. Scanlon said the company did not identify a major impact from World Cup-related demand and said regulatory changes, including sugar taxes in certain markets, have been features of the region for some time.

European volumes rose 0.7% for the first nine months and 1.3% in the third quarter. Beverage, snacks and dairy drove growth, while meals and bakery remained challenged. Scanlon said foodservice led the regional improvement and cited investments in application centers in Barcelona and Germany, as well as increased customer engagement, as reasons for confidence in continued progression into 2027.

APMEA volume growth reached 5.2% for the first nine months and 5.7% in the third quarter. The region benefited from strong growth in the Middle East and Africa, solid performance in South Asia Pacific and growth in China. In China, Scanlon said Kerry continues to expect modest growth for the year, led by the retail channel.

Pricing, Currency and Capital Allocation

Pricing declined 0.6% in the first nine months as input-cost deflation in the first half outweighed a return to modest inflation in the third quarter, when pricing rose 0.2%. Larkin said the company expects full-year input costs to remain slightly deflationary, although it currently expects 2027 to be inflationary.

Dairy-based ingredients, spices and natural oils are among the areas where Kerry is seeing inflationary pressure, according to Larkin. She said the company expects to manage those costs with customers through its technology capabilities and other commercial levers.

Currency translation reduced reported revenue growth by 2.5% in the first nine months due to U.S. dollar movements against the euro, although Kerry expects translation to be favorable in the fourth quarter. Based on prevailing exchange rates, the company forecasts a currency translation headwind of about 1% to full-year earnings per share.

Net debt stood at €2.4 billion at the end of the period, reflecting cash generation, the share-buyback program and increased capital investment. Kerry expects to complete its current buyback before year-end and intends to begin a new program of up to €300 million afterward. Scanlon said the company remains active in bolt-on mergers and acquisitions and that the additional buyback does not signal a change in its capital-allocation strategy.

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.

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