Kerry Group Reports Better-Than-Expected Volume Growth, Reaffirms 2026 Outlook

Kerry Group reported second-quarter volume growth that outpaced market expectations, signaling resilient demand for its taste and nutrition products. The company reaffirmed its full-year earnings forecast, even as first-half free cash flow fell short of consensus due to timing-related issues in working capital and capital expenditures.

First-Half Financials

Kerry's volume growth for the second quarter of 2026 reached 3.5%, ahead of analyst estimates which ranged from 3.0% to 3.1%. For the first half of the year, the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at €558 million, matching consensus expectations.

Key financial highlights for the first half of 2026 include:

• EBITDA Margin: Expanded by 60 basis points year-over-year to 16.7%.
• Adjusted EPS: Grew 7.9% in constant currency.
• Full-Year Guidance: The company maintained its forecast for constant currency adjusted EPS growth of 6% to 10%, compared to analyst estimates of 8.3%. A 3% foreign exchange headwind is anticipated for the full year.

Cash Flow and Regional Performance

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While earnings met expectations, first-half free cash flow was €262 million, a 29% shortfall compared to the consensus estimate of €371 million. The company attributed this to an €81 million movement in working capital tied to seasonality and receivable timing, as well as a €24 million increase in capital expenditure versus the prior year.

Regionally, the Americas led with 3.9% volume growth in the second quarter, driven by strong performance in snacks, meat, and beverages. The Asia Pacific, Middle East & Africa (APMEA) region was the fastest-growing, posting 5.2% volume growth, while Europe recorded a more modest 0.6% growth.

Balance Sheet and Dividend

Kerry's financial position remains solid, with net debt standing at €2,370 million. This represents a leverage ratio of 2.0 times net debt to adjusted EBITDA. In a sign of confidence, the company declared an interim dividend of €0.462 per share.