Kerry Group plc

Good morning and thank you for standing by.

Thank you, operator. Good morning and welcome to Kerry's full year 2025 results call. I'm joined on the call by our CEO, Edmund Scanlon, and our CFO, Marguerite Larkin. Edmund and Marguerite will take you through today's presentation, and following this, we will open up the lines for your questions. Before we begin, please take note of our disclaimer regarding forward-looking statements. I will now hand over to Edmund.

Thanks, William. Good morning, everyone, and thank you for joining our call. Beginning with the overview of 2025 on slide four and starting with performance. We're pleased to report that we delivered another year of strong end market volume outperformance, margin expansion, and earnings per share growth. While overall market volumes remained relatively subdued through the year, we continue to demonstrate our ability to consistently outperform our end markets with volume growth of 3%, highlighting the strength and relevance of our business. This growth was driven by a strong performance in the Americas throughout the year, led by food service innovation and increased nutritional renovation across a broad range of customers. Given our positioning as a leader in sustainable nutrition, with customers looking to address nutrition, taste, cost, or sustainability aspects. We also delivered strong margin expansion of 80 basis points, with EBITDA margins just under 18%. and we're well on track to achieve our margin targets, which we will give you more color on later. Moving to earnings, we delivered constant currency EPS growth of 7.5% in 2025, which is stated after the dilution from the Dairy Ireland disposal in the prior year. This was on top of the 9.7% growth we delivered in 2024, and we're looking to achieve another year of high single digit EPS growth in 2026. Earnings compounding has always been an important part of Kerry's story, and we reaffirmed this with our high single digit plus EPS growth target out to 2028, when we refreshed our margin and EPS targets last year. From a strategic perspective, we continue to evolve our business through targeted capital investments and portfolio development activity, enhancing our technology capabilities, supporting new innovations, and delivering even more value for our customers. Just to touch on some of the key developments in the year. Firstly, on technology capabilities. These included the opening of our new state-of-the-art biotechnology center in Leipzig in Germany, and a number of other technology developments, which I'll outline later when we look at each of the regions. On innovations, key innovations in the year included our next generation of fermentation-derived TaySense sweet and salt reduction technology ranges, the launch of our new Plenibiotic postbiotic for digestive and skin health, a breakthrough enzyme system which delivers significantly more effective natural sweetness, new fermentation-based solutions under our Kerry Experience portfolio, and new natural cocoa replacement systems which replicate authentic cocoa taste using less than half the cocoa raw materials. And on footprint and customer access, we extended our apnea manufacturing presence into Egypt and within East Africa while expanding our capacity in the Middle East and Southeast Asia. And we strengthened our customer innovation network through new centers in Frankfurt, Indonesia, and Dubai. So to summarize, 2025 was another year of strong market outperformance combined with continued strategic development. Moving next to the business performance overview, we achieved group revenue of 6.8 billion and EBITDA of 1.2 billion. Volume growth was 3% for the full year and 2.8% in Q4, well ahead of food and beverage end markets. driven by good innovation activity and continued product renovation activity with our customers. Pricing was pretty flat in the year, with input costs turning deflationary in Q4. EBITDA margins were up 80 basis points, driven by accelerated efficiencies, portfolio developments, operating leverage, and mix. Across our technologies, we had good growth across savory taste, taste, scent, salt, and sugar reduction technologies, botanicals, natural extracts, proactive health ingredients, taste solutions for high protein applications, enzymes, and biofermented ingredients. From a channel perspective, food service achieved volume growth of 4.6%, supported by strong innovation activity, including new menu items and seasonal launches. Growth in the retail channel was supported by a step up in retailer brand innovation, and renovation activity to enhance the nutritional profile across a range of customers. And finally, growth in emerging markets of 5.3% was led by a strong performance in Southeast Asia and LATAM.

Moving next to our end-use market breakdown.

Starting with the food EUM, where all categories delivered volume growth. In snacks, we had good growth, driven by our savory taste and taste and salt reduction technologies. And in bakery, growth was driven by our enzymes preservation and taste systems. Moving to beverage, where growth was supported by the performance of our taste and sugar reduction technologies, natural extracts, and proactive health ingredients.

And we had good growth in pharma through our proactive health technologies into supplement applications.

Turning next to performance by region and starting with the Americas where we had continued strong performance across both North America and LATAM. Revenue for the region was 3.7 billion with full year volume growth of 3.8% and 4.4% in Q4. EBITDA margins increased by 60 basis points to 20.3%. In North America, growth was again led by SNACs, along with the dairy and bakery-induced markets, as we enabled our customers to innovate and renovate within categories. By channel, we had good growth in food service through strong innovation activity, despite soft traffic in places, and we had good growth in retail across global, challenger, and retailer brands, particularly around the area of improving nutritional profiles. Within LATAM, Strong growth was achieved in Brazil and Central America across the snacks and meals and markets in particular. And in business developments in the region included investment in enhancing our coffee taste extraction capabilities in Pennsylvania, which continues to be an area of innovation focus for our customers across many different food and beverage applications.

Moving to Europe where a soft finish to the year meant volumes were slightly back in 2025.

Revenue in the region was 1.4 billion with EBITDA margins increasing by 90 basis points. We had good volume growth in beverage across nutritional and refreshing beverages with our integrated taste technologies and proactive health ingredients. Volumes in the retail channel reflected subdued market conditions while food service achieved good overall growth despite a soft finish to the year. And business investments in the region included the expansion of our enzyme capacity in Ireland and our cocoa taste capabilities in grass in France.

Moving next to Anatmia, where we had a good overall performance given market disruption in places.

Revenue for the region was 1.6 billion, with volume growth of 4.2% and EBITDA margin expansion of 70 basis points. Growth was primarily driven by Southeast Asia, with solid growth in the Middle East and Africa, and volumes in China remaining challenged. Across our end markets, growth was led by bakery, through food protection and preservation systems, as well as reformulation activity in areas including cocoa. Growth in our channels was led by food service with leading regional coffee chains and quick service restaurants, while growth in retail was led by good performance and taste with regional leaders. Finally, business developments across the region included new manufacturing facilities in Egypt and Rwanda, combined with continued expansion of capacity in the Middle East and Southeast Asia. And with that, I'll hand you over to Marguerite for the financial review.

Thank you, Edmund, and good morning, everyone. Turning to slide 12 and beginning with our financial overview, we achieved group revenue of 6.8 billion in the year, reflecting volume growth of 3%, which represented a strong end market outperformance. EBITDA increased to 1.2 billion euro, reflecting 5.7% organic growth. We delivered strong EBITDA margin expansion, of 80 basis points. Adjusted earnings per share growth of 7.5% in constant currency and 3% in reported currency. Return on capital employed was 10.6% with underlying improvements being offset by a negative year-on-year currency effect of 20 basis points. And we achieved good free cash flow of 643 million representing 81% cash conversion. Turning next to our group revenue bridge on slide 13, volume growth was 3%, as I mentioned, with slightly lower pricing of 0.3% and a transaction currency benefit of 0.1%. Foreign currency translation was 3.9% adverse due to the significant movement in the U.S. dollar and emerging market currencies versus the euro in the year. And acquisitions net of disposals was a net decrease of 1.4% in the period, with disposals primarily relating to, firstly, the prior year revenue associated with the exit of a manufacturing agreement with Kerry Dairy Ireland, as previously communicated. And secondly, disposal of some non-core activities in Europe and North America, to enable the efficient execution of our Accelerate 2.0 footprint optimization strategy and the contribution from acquisitions primarily relating to the lactase enzyme business. Moving now to our group margin bridge on slide 14, we are pleased with the strong EBITDA margin expansion of 80 basis points in the year. Looking at the key moving parts, Firstly, on operating leverage and mix, we had a 20 basis points improvement with both operating leverage and mix contributing to the expansion. Our accelerate programs contributed 40 basis points. This was primarily attributable to accelerate operational excellence, which was successfully completed in the year, delivering annual recurring benefits ahead of expectations. We also initiated accelerate 2.0, with initial benefits coming through in the final quarter. Foreign currency was a headwind of 10 basis points, and acquisitions and disposals contributed to a net positive 30 basis points, with 10 basis points from acquisitions and 20 basis points from disposals, as mentioned. Overall, we are well on track to achieve our targeted margins of 19 to 20% by 2028. Next to free cash flow on slide 15. We generated good free cash flow of 643 million in the year, representing cash conversion of 81%. The main drivers were firstly our EBITDA increased year on year, as I just mentioned, noting that 2024 free cash flow comparatives include the contribution from Kerry Dairy Ireland. On average working capital, the increase was driven by lower trade payables, mainly attributable to sourcing alternatives implemented as part of our tariff mitigation strategy and new procurement initiatives with some strategic suppliers. Point-to-point working capital was higher due to exceptionally low working capital days at the prior year end and timing of other receivables at the year end. The increase in net finance cost paid is principally due to the timing of bond interest payments across 2024 and 2025. And our net capital investment aligned to our strategic growth areas was 300 million as we continue to invest to support our growth through the extension of our technology capabilities and capacities in all three regions as Edmund referenced. Now turning to our debt profile and credit metrics on slide 16. As you can see, the profile of our 2.2 billion net debt is good with a weighted average maturity of 6.5 years and no significant repayments until 2029. Our credit metrics are strong with a net debt to EBITDA ratio of 1.9 times. and we have a very strong balance sheet which will continue to support the further development of our business. Now to update you on Accelerate on slide 17. In 2025, we completed Kerry Accelerate operational excellence, which focused on delivering manufacturing and supply chain excellence and efficiencies. The program's successful completion is delivering recurring annual benefits ahead of projections and has established a strong foundation for Accelerate 2.0, which will run until 2028, driving continued margin expansion through footprint optimization and embedding digital excellence across the organization. We initiated Accelerate 2.0 as planned during the year with good progress in both North America and Europe with the commencement of footprint optimization, including the disposal of some related business activities. We have reduced our manufacturing footprint from 124 facilities in 2024 to 119 at the end of 2025. and we will continue to optimize this appropriately over the coming years. Our digital excellence program is well underway, and we are making good progress. Some of the digital initiatives we have advanced during the year include continued expansion of decision intelligence capability, utilizing agentic AI to automate a substantial volume of operational decisions in key areas of the business, including supply chain, new product development, and enablement functions. At our GBS centers, we increased the use of robotic process automation to improve efficiencies and unlock capacity. In our manufacturing operations under Connected Plant, we are rolling out a number of initiatives, including digital-enabled predictive maintenance to optimize efficiency related spend, and asset reliability. And we commenced the use of digital manufacturing twins to simulate and standardize execution, reduce variability, and increase production yields and throughput. From a commercial perspective, we are continuing to drive improved customer experience, leveraging our carry now customer portal, which provides our customers with real-time 24-7 access. These initiatives will improve our customers' and employees' experience, drive improved productivity and profitability, while supporting growth and business development. Our continued progress on digital automation and accelerating how we scale AI across the business, supported by our recognition as a Microsoft frontier firm, will be an important enabler of our margin expansion targets. We will continue to update you as we progress on Accelerate 2.0, which as a reminder is expected to deliver a projected recurring annual saving of circa 100 million by 2028 at a total net cost of circa 140 million. Now moving to slide 18 and other financial matters. Finance costs of 52 million in the year reflected good cash generation and interest income. Non-trading items were an overall net charge of 74 million, primarily relating to the progress we made under our accelerate programs with the balance relating to disposals and acquisition integration activity. On the input costs, there was deflation in the final quarter, leading to small overall deflation in the year. We are currently expecting limited overall deflation in 2026. For taxation, we had an effective tax rate of 14.1% and the current outlook is for a tax rate of 14 to 15% in 2026. Capital returns for the year included share buybacks of 500 million and dividends paid of 215 million. And we have announced we will be initiating a new 300 million share buyback program today. On currency, the translation headwind on earnings per share in 2025 was 4.5%. And based on prevailing exchange rates, we are forecasting a headwind of circa 4% on EPS in 2026. Finally, to summarize our financial performance for 2025, we are pleased with our overall performance where we delivered volume growth well ahead of our end markets, strong EBITDA margin progression, which supported continued good earnings per share growth. And with that, I'll pass you back to Edmund.

Thanks, Marguerite. Before we move to our outlook for 2026, we'd like to give a progress update on our key metrics and medium term targets on slide 20. Having just completed the fourth year of our plan, we've made good progress across each of the key pillars of growth, return and sustainability. Starting with volumes, we've averaged 3.8% growth in this timeframe, And while it's a little lower than where we'd like it to be, it's important to recognize that this represents a significant market outperformance of over 300 basis points. On EBITDA margins, we've delivered strong progress over the past number of years. We will achieve our 2026 target range in the year ahead, and we are well on track to achieve our 2028 target of 19 to 20%. You'll recall we reinstated EPS growth as a key measure last year with our targets of high single digit plus EPS growth up to 2028. Earnings compounding has been a key feature of Kerry's history and we're laser focused on delivering consistent high single digit plus earnings growth. On returns, we stepped up our cash generation with cash conversion above 80% and ROAC improvements in recent years. And on sustainability, we've made great progress against our targets, reducing carbon by 52%, food waste by 54%, and increasing our nutritional reach to almost 1.5 billion consumers globally. Finally, moving to the 2026 outlook, our continued strong end-market outperformance highlights the strength and relevance of our strategic positioning across our markets channels, and customer base. We will continue to further advance our strategic business development while supporting our customers as their innovation and renovation partner. We remain strongly positioned for volume growth and margin expansion with a good innovation pipeline despite the soft consumer demand environment. And we expect to deliver constant currency adjusted earnings per share growth of 6% to 10% in 2026. Before we move to Q&A, on behalf of the board and senior management team, I'd like to acknowledge our outgoing board chair, Tom Warren, who will be retiring following our AGM this year. Throughout his tenure as chair, Tom provided strong board leadership, particularly through the business transformation we undertook in recent years. We'd like to sincerely thank him for his value contribution to carry over his tenure and wish him the very best in the future. Fiona Dawson has been named chair designate. Fiona has been a non-executive board director since 2022 and brings deep industry experience given her executive career in the consumer food and beverage sector. A full announcement has been published this morning with further details. So with that, I'll hand you back to the operator and we look forward to taking your questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. At this time, I would like to remind everyone in order to ask a question, please press star followed by the number one on your telephone keypad. And if you would like to enjoy your questions, simply press star one again. Our first question comes from the line of Patrick Higgins with Good Buddy. Please go ahead.

Thanks. Morning, everyone. A couple of questions on top line kind of outlook, maybe one for Edmund and one for Marguerite, just in terms of volumes, Edmund, how should we think about, you know, volume growth for the year ahead? How are you, you know, viewing end markets versus the kind of flattish that you've been flagging in the past year? And maybe talk through the regional outlook. And then, Marguerite, on input cost inflation, you've flagged limited, so I assume that means limited pricing as well. And How should we think about pricing, but then also disposals, obviously disposals, a bit of a feature in 25, KDI now has been lapped. Should we expect more disposals associated with the Accelerate program? Thank you.

Thanks, Patrick, and I'll kick off here. So just in terms of the volume outlook, we're taking a similar approach in 2026 as how we approach 2025 at this time of the year. So currently we're seeing overall market volumes being similar to last year. Against the backdrop, we're looking at our volumes being in the same zone as we had in 2025. In terms of the outlook by region for 2026, As you can see, the Americas had a very good year in 2025 with volume growth of 3.8%, 4.4 in Q4. And we look to continue that strong market outperformance in 2026. I think then in Europe, let's say volumes are back overall in 2025, and we would expect to be in growth in 2026. And in the APMEA region, we're looking to make progress in 2026. you know, well into that mid single digit volume range and moving towards high single digit volume growth for the region over the next year or two. And maybe just I'll finish in terms of channel. We're looking at volumes in the food service channel to continue to outperform and to be ahead of retail in 2026 as well.

And Patrick, just on your two other points, firstly on input costs and pricing, for 2026, we currently expect some limited overall deflation in the year on input costs, and as you say, consequently, some limited deflationary pricing. In terms of the disposals and the outlook for 2026, We made very good progress as you'll have seen on our footprint optimization plan during 2025. And in terms of the impact of those in 2026, you should expect disposal revenues of circa 60 million or less than 1% of revenues from those divestments. Based on current plans, we expect limited further business disposals in connection with the footprint optimization.

Very clear. Thank you. Your next question comes from the line of Ed Hocken with JP Morgan. Please go ahead.

Hello, both. Thank you very much for taking my questions. My first one is on Europe that took a bit of a step back in volumes in Q4, whether you could elaborate a bit how you're expecting this region to perform going forward, especially now you've got the new president of the region, Marcelo. What is it you think he can be doing to try to stimulate volumes growth in the region, which has been flat to slightly negative for the past two years? And then my second question, please, is, Coming back on the channel mix, it looks as though food service accelerated a bit in Q4, and you say food service should be ahead of retail in 2026. Can you maybe give us an indication how you're seeing some of the KPIs of that? traffic and reformulations activities, limited time offerings, promotional intensity with your customers and how you'd expect some of those leading indicators, how they're looking now and expect them in 2026. Thank you.

Thanks, Ed, and good morning. The key change in Europe in the quarter was soft volumes in the food service channel towards the very end of the year. So year-to-date September, food service in Europe achieved mid-single-digit volume growth, and then volumes turned negative in Q4. And that was partly due to year-on-year performance of seasonal products and LTOs in the channel, as well as traffic in general. And retail volumes were slightly back in the quarter and in the full year as well. I think in terms of, let's say, our approach to Europe, I mean, obviously it's going to take a little bit of time. The dynamics in Europe versus North America are quite different. That said, we do expect 2026 to be better than 2025. We will be in positive territory in 2026. And look, let's see how the year progresses. Then maybe your question with regards to food service and let's say North America being a key driver of that. You know, despite flat to negative traffic in North America, we had very, very strong growth and we're very pleased with the overall performance in food service in the final quarter. And maybe just to give some details on that on the quarter itself, We did have significant launch activity in Q4. We had flagged that that level of activity was quite elevated. The second thing was the performance of LTOs was strong and likely ahead of expectations. The reality is that limited time offerings and seasonal offerings are actually at an all-time high in the food service channel. as players continue to strive to connect and reconnect with as many consumers as they possibly can and to try and bring as much excitement to the menu as they possibly can. And then the third point is we did see also an increased level of customer promotion activity as well also in the quarter. And that promotional activity for sure, you know, impacted, positively impacted our performance in Q4. In terms of, let's say the goal forward, you know, I think it's fair to say, look, we had an exceptional Q4 in food service. You know, we don't expect, you know, let's say every quarter to repeat, you know, what we saw in Q4, 2025. But that said, we do expect another strong year of performance in food service. And like we've said in the past, we believe we can deliver at least 400 basis points on average market outperformance in that channel, and our view hasn't changed. I think in terms of, let's say, the key underpins there, we have to wait and see. Will that level of promotional activity continue into 2026? You know, I think based on, let's say, what we saw at the end of 25, I think customers will be encouraged to continue on that promotional activity, and we don't see any let-up in LTOs. In terms of reformulation, specifically within the food service channel, reformulation there is more kind of around value offerings, and it's also about It's also about, let's say, trying to bring excitement to the menu. So probably less of a feature is nutritional reformulation within the food service channel. That's more so in the retail channel. And I would say reformulation food service is around cost and around bringing as much efficiency to that operator as possible.

And we don't see that changing as we look out into 2026. Thank you.

Our next question comes from the line of Alex Sloan with Barclays. Please go ahead.

Yeah, hi, morning all. A couple of questions from my side, if that's OK. Edmund, if I can just sort of dig in on Europe a little bit further. So obviously slightly weaker in the fourth quarter. You've explained that was kind of food service, but an outlook to be in growth for 26th. could you just talk to the kind of phasing there? I mean, you know, could we be expecting it, you know, in, in the first half to be in growth or is, is this more a kind of a second half, um, phasing to that, to, to that recovery? Um, and, and the second one for Marguerite, the, um, net debt was a bit higher than consensus, um, for the full year, free cashflow, a bit lower. Um, I wondered, is there any kind of one-offs or phasing impacts within that free cash flow delivery, perhaps on working capital, or is it just a case that consensus was in slightly the wrong place? Thank you.

Thanks, Alex, and good morning. I'll kick off here. I would say from an overall perspective, so from a total group perspective, we wouldn't be calling out any phasing as we look into 2026 across the quarters as we sit here today. But in Europe, we do see, let's say, that improvement of that progression basically happening over the course of the year, probably slightly second half weighted rather than first half. But at a corporate level, we wouldn't be calling out any kind of phasing H1, H2, but specifically in Europe, maybe slightly more H2 weighted.

And Alex, just on the free cash flow and working capital, yes, there are some timing impacts at the year end. Our working capital days are a little bit higher than we expected. And maybe just to give you a little bit of color and context, firstly, it's important to note that the 2024 year-end working capital days of 29 days were exceptionally low. And we said at the time, you might recall, that working capital days in the mid-30s was a more normalized level. Our working capital days at the year-end came in at about 41 days, which, as I referenced, is a little higher than we expected. A couple of drivers on the year-on-year increase, firstly, lower trade and other payable days, and two primary drivers within that, firstly, mainly due to business decisions taken on sourcing alternatives implemented primarily as part of our tariff mitigation strategy, and to also reflect some new procurement initiatives with certain strategic suppliers. The second component, more of a timing reduction year on year in relation to performance-related incentives. And then the second component on our working capital, we had higher trade receivables just given an organic revenue mix in the second half of the year, which was driven by the Americas and APMEA, and some timing on other receivables, which will reverse in 2026. In summary, I would say, Alex, we expect working capital days to move back to between circa 35 and 40 days in 2026. and we expect FY26 to be a year of good cash conversion of 80% plus and similar or better on a point-to-point basis. So hopefully that gives you some better context on the moving parts.

Yeah, that's really helpful. Thank you.

Our next question comes from the line of Silvio Casal with Berenberg. Please go ahead.

Yeah, no, thank you. I suppose most of my questions have been answered, but I was just going to ask a question on capital deployment, how your M&A pipeline is looking. Are you looking to potentially add any other technologies or businesses in some of the more strategic developing markets? If you can just add a bit of color on anything you see there. Thank you.

Yeah, thanks, Folvio, and good morning. In terms of M&A, we did make two small bolt-on acquisitions through the course of 2025, one in the area of coffee extraction that we talked about earlier in the year, and that helped us to increase both our capability and capacity for coffee extraction. A key I would say a growth area and focus for us now and into the future. And the second bolt-on was basically our first manufacturing footprint in Egypt. And Egypt is an important market in itself, but having a manufacturing footprint there not only gives us access to that market, but also gives us the opportunity to serve better the North African markets In terms of the pipeline going forward, basically we're calling out three areas. Firstly, we will continue to look at expanding our presence in emerging markets, similar to what I just described with that bolt-on in Egypt. The second area is around proactive health. We have had a very strong performance in the year in proactive health. We see supplements as a space that has been growing close to double digits, and we feel we have already a nice portfolio in our proactive health portfolio, but we are out there looking for technologies that have strong science and clinical foundations, and those opportunities are continuing to be evaluated And the third area then is around fermentation. Again, it's a space where we have invested in recent years. We continue to invest organically, but we continue to be out there also looking for opportunities to build out our capability and capacity in fermentation.

Thank you very much.

And again, as a reminder, if you would like to ask a question, please press star followed by the number one on your telephone keypad. Our next question comes from the line of Matthew Yates, Bank of America. Please go ahead.

Hey, good morning, everyone. Just a couple of small ones really around the Accelerate program. Just wondering on the European performance, is there any effect here from either the footprint rationalization or a more sort of proactive and conscious decision from the management there to sort of focus on the margin at the expense of volumes, or is this purely an illustration sort of in market conditions? And then just in terms of the 2026 guide, I think your bridge, your waterfall chart showed about 40 basis points of margin improvement last year from the Accelerate program. Are we talking a similar order of magnitude in 2026? and associated with that a similar order of magnitude in exceptional costs. I think it was 47 million last year. Thank you.

I might kick off there, Mathieu, and Marguerite might want to add. As we think about Europe, and bear in mind, when we think about Europe, it's a Western Europe geographic, let's say, footprint that we're talking about here. You know, our expectations for Europe at the best of times is that we expect volume growth to be in that 1% to 2% zone. Clearly, we're shy of that at the moment. And like I said previously, we do expect Europe to be in positive territory in 2026. In terms of margin development in Europe, despite the lower volumes, we had very strong performance in margin expansion in Europe, and that was down to the Accelerate program. We are running that program extremely well. The execution of that program is very, very strong. We closed and exited seven facilities throughout the course of the year. That was ahead of expectations, and a significant portion of that was in Europe. But like I said, the dynamics in Western Europe have been challenging. We believe we have the right team in place. We believe they're focused very hard on the right level of customer engagement, being super proactive with customers. and we expect all that work to start paying off here as we move towards 2026.

And maybe just to add on the contribution from Accelerate, so in the context of the cost that we expect in FY26, we expect circa 50 million in the year in relation to Accelerate 2.0. As Edmund has referenced, we're making very good progress on Accelerate 2.0. It will be the primary driver of expansion in 2026. And looking overall from a margin perspective, we're looking at another year of good margin expansion of 60 basis points or greater for 2026. And as I say, Accelerate 2.0 will be the primary driver of this expansion with some operational leverage mix and portfolio benefits coming through. So well on track in terms of that margin expansion delivery.

Thank you both.

Our last question comes from the line at Cathal Kenny with Davey. Please go ahead.

Good morning, and thanks for taking my questions. A quick follow-up on margin, Marguerite. Is it the expectation that all three regions will see a margin increase in 26, just in the context of that 60 basis points or greater? And one question on the regions, China. Just interested to know what the outlook for the Chinese business is for 26. Thank you.

Thanks, Cahill, and good morning. And I might kick off here. In terms of, I guess, maybe the APMEA region, when we look at the APMEA region, we kind of look at it in three portions. Middle East, Africa, you know, we continue to see solid performance there. Southeast Asia, quite strong performance. And China, while volumes were slightly back on the prior year, we did see some progression, H2 versus H1. but probably not the level of progression that we expected, so slightly short of expectations. We do feel that 2026 will be a year of progression in China. We feel that there's two areas in particular that we're really focusing on in terms of driving that progression. Number one is there is a shift in China with some of our key customers on the retail side that they're putting more of an emphasis on export markets. And we feel we're very well positioned to enable those customers to be successful in those export markets, whether it's into Southeast Asia or back into the Middle East and Africa. And the second area is that there's been, I would say, a very fast acceleration from a consumer perspective around clean label. and healthier products. And this is coming from some government guidelines around the three laws, meaning low salt, low sugar, and low saturated fat. And again, you know, you can see based on our performance in North America and America's especially around snack and bakery, we're exceptionally strong as it relates to reformulating. That has been driving growth in those end-use markets, and we expect to be deploying those types of technology solutions, both from a portfolio perspective and a capability perspective, to similar opportunities that we expect to see in China. So the market seems to be moving in our direction in China, which is a real positive. And we believe we have the portfolio and the capability to help on that reformulation drive. You know, and that has been a key underpin of growth for us in the Americas in 2025 and 2024 and expect that to continue into 2026.

And in terms of the margin expansion, no major call-outs by region. You should expect all regions to have good margin expansion in the year ahead.

Thank you.

Thank you. And at this time, we have no further questions. I will now turn the call back over to Kerry for closing remarks.

Thank you, everyone, for joining us on the call today. We just wanted to note that we are presenting at the CAGNI conference this Thursday, and hopefully you get the opportunity to join us or to listen in to that conference presentation. where we will give further insights in terms of the strategy and the execution thereof over the year ahead and the following years. Thank you.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect your lines. Have a blessed day.