Good morning, and thank you for joining our webcast. Today, we're excited to share with you our 2030 targets, which represent a continuation and a build on the business updates we've made over the past number of years. To give you an overview of what Marguerite and I will present today, I'll start with our strong track record of growth and business development. Kerry is the top-of-mind partner for the food and beverage industry when it comes to solving its most complex challenges. Challenges are greater, customers need to move faster to make their products better, or they're going to lose market share. That is the reality, that is a significant opportunity for Kerry. Our differentiation is our ability to deliver value for our customers at pace through our deep, layered taste and biotechnology capability, leveraging our global innovation ecosystem across our broad customer and channel access.
This provides us with the inbuilt business resilience, which is critical in today's market landscape, where dynamics continue to evolve. Our strategy is growth led, we'll talk to each of our three key growth drivers, food service, emerging markets, and the renovation opportunity. We frame this in the context of our overall financial model. Beginning with our track record, our growth algorithm is straightforward. Consistent, strong volume growth ahead of our markets, combined with continued margin expansion, delivering high- single-digit plus EPS growth. Our markets have experienced significant challenges in recent years. However, we have delivered on our algo in eight out of the last 10 years, despite all disruption. Firstly, on volume growth. When we set our target at our Capital Markets Day in 2021, it was based on a market outperformance of 200 basis points.
Market growth in this timeframe has been limited at best, we've delivered average volume growth of 3.8%, significantly outperforming our end- markets and our peer set. On EBITDA margins, we delivered 320 basis points of margin expansion over the past four years. On EPS, we've delivered high- single-digit constant currency EPS growth in three of the last four years, and we're on course to do so again in 2026. On cash, we've stepped up our free cash flow with almost EUR 3 billion generated in the past four years, representing 88% cash conversion. On returns, we've been making good progress in recent years. We've delivered strong performance across this timeframe, while also making significant strategic progress, which I'll touch on now. The strategic developments we've made have been centered around making our business fit for future.
Strategically and systematically evolving our portfolio to be that top-of-mind partner for the food and beverage industry to enable it to meet the needs of a more health-conscious consumer. We completed our portfolio transformation, becoming a pure play taste and nutrition company. We built out our biotechnology capability, including our new center in Leipzig, Germany. We expanded our global footprint, entering a number of new emerging markets. We developed new and next- generation technologies, including our TasteSense salt and sugar reduction, KerryXperience our fermentation-based natural taste enhancement system, new enzymes, pre and postbiotics, and a range of natural food protection and preservation technologies. We've significantly developed our food service business while building out our retailer brands' go-to-market capability. We also successfully completed our Accelerate Operational Excellence program and initiated Accelerate 2.0, focused on optimizing our global footprint and rolling out digital excellence throughout our organization.
For Kerry, our model is about consistent, strong financial performance combined with continued strategic business development. When setting our new targets, I think it's important to frame the current market landscape dynamics for the food and beverage sector. Significant challenges and even greater opportunities, I want to give you Kerry's perspective. Firstly, the focus on health and wellness has moved to another level with consumers and plays perfectly into what we do, which is making everyday food and beverage better. Next, consumer affordability challenges. With the recent inflation dampening end- market demand, we do view this as temporary, but difficult to predict exactly when we cycle through it and when end- markets return to a more normalized level of over 1% growth.
On this basis, we're factoring in flat end- market growth as our base assumption for the new plan, we feel good about the sustainability of our level of continued market outperformance of 300 basis points plus. On GLP-1, which is a net positive for Kerry. In the U.S., GLP-1 adoption has gone from niche to mainstream over the past couple of years. When first introduced, we were questioned if it would have an adverse impact on our U.S. business and more specifically in the snacks category. Our volume growth answers that question. During this timeframe, we've delivered market leading volume growth in North America, and in snacks, we've delivered 17% volume growth. The key driver of this outperformance has been renovation, as customers are looking to provide products with enhanced taste, reduced sugar, salt, fat, or calories.
Our capability across taste and biotechnology, underpinned by biofermentation, puts us at the forefront of making the snacks category healthier. On digital and AI, these are key enablers for our business, which I'll touch on later. On regulatory, the momentum is clear. Regardless of regulatory changes, consumers want healthier, more nutritious products with fewer and cleaner labels that taste great. These dynamics, along with many others like supply chain challenges, are leading to innovation and renovation opportunities, which are going to significantly increase our addressable market in the coming years. You'll recall we sized our addressable markets and introduced the penetration opportunity tied to renovation at our Investor Day in 2024. This market opportunity remains as strong as ever, I'd like to outline the key drivers of future market development and growth. Firstly, on innovation.
We highlighted some of the high-growth areas at CAGNY earlier in the year, such as poultry, protein, coffee, refreshing beverage, and supplements. We're very well represented across these categories with differentiated capabilities and deep customer relationships. Another driver of market growth, along with price, will be renovation and reformulation, which we highlighted as a significant opportunity a couple of years ago at our Investor Day. I'll go into more detail on renovation shortly, as we feel it will be a key driver of growth for Kerry in the coming years. Our addressable markets contain significant opportunity, we expect them to increase to over EUR 100 billion in size within the coming decade. We've built a unique capability set at Kerry, customer orientated and based on three elements. Firstly, our expertise at the intersection of taste and biotechnology.
This allows us to create value through new solutions for today and tomorrow's market challenges. These integrated technologies are empowered by our deep process technology expertise, including biofermentation and biotransformation. Secondly, our end-to-end food and beverage innovation capability. A network we've scaled up globally and deployed locally, aligned to our end-use markets, channels, and customers. This unrivaled global ecosystem includes over 1,300 scientists, 60 technology and innovation centers, and is underpinned by a cumulative investment of over EUR 3 billion in science and technology in recent years. Thirdly, the industry's broadest channel and market access, meaning we have the ability and access to pivot resources, delivering value for our customers, and ensuring we can grow where the growth is. As I mentioned earlier, the complexity and level of challenges our customers are facing has significantly increased in recent years and will continue to expand.
These include delivering authentic natural taste, cleaner labels, nutritional benefits, next level sodium and sugar reduction, supply chain resilience, shelf life extension, cost mitigation. The list continues to increase. From a Kerry perspective, the key point is that it's not just the breadth of our technology stack across taste and biotechnology that helps us deliver on these challenges. What truly sets us apart when it comes to product innovation and renovation is seeing how our application experts tailor and layer these technologies to deliver solutions that our customers previously thought were not possible. This is why we believe we have the food and beverage industry's most relevant technology portfolio. With all this context in mind, I'd now like to outline our 2030 targets, beginning with growth.
On volumes, we've set a target range of 3%-5%, and our range is set in the context of current market conditions and does not include an assumption of an uptick in future market growth. I believe we will see market growth in the coming years, but we're taking a pragmatic approach and not factoring in something that's outside of our control. We've just reported Q2 volume growth of 3.5%, and our pipeline of innovation and renovation opportunities is as strong as ever. On EBITDA margins, we're looking to be in the 20%-21% range by 2030, and Marguerite will give more detail on the building blocks. On EPS, our algo is about delivering consistent high- single- digit plus EPS growth, supported by agile capital deployment aligned to value creation opportunities. We're also looking for continued strong cash flow and returns progression aligned to our growth.
I'm going to present the volume growth dynamics and key building blocks before handing over to Marguerite to take you through the other key financial metrics. Looking at the building blocks of our 3%-5% target through the context of our regions. First, the Americas, which is our largest region and a powerhouse for Kerry, and where we see phenomenal market opportunity. We've delivered strong volume growth in recent years and are looking for growth to remain in that 3%-5% window. Next, in Europe, given the market backdrop, we're looking for growth of around 1%-2%. And in APMEA, we delivered volume growth of around 6%, and we're looking for growth in that 5%-9% range. We have three key volume growth drivers which will underpin our performance.
In food service, we're looking at mid-single- digit plus volumes, and we see significant runway for growth in that market. In emerging markets, we've a strong track record of high- single-digit growth and renovation. This continues to grow as a percentage of our pipeline. It's around 40% today, and each renovation opportunity is providing a catalyst for organic growth and margin expansion as we incorporate deeper layers of technology into new products. Taking each of these growth drivers in turn, starting with food service, which for Kerry is a structural tailwind. We've grown our food service business by 70% since 2017, and there remains significant market opportunity. Given we currently hold a low teens percentage share of the addressable market.
Our competitive advantage is based on the deeply embedded innovation partnerships we have with our customers across every segment of the channel, from the fastest growing emerging chains to the largest players in the channel. Next, our broad technology portfolio. Which means our customers can work with Kerry to innovate right across their menu, solving a range of different challenges. Finally, our dedicated business model, which we've significantly invested in, where we have dedicated expert teams aligned to customers within the sub-channel. What's underappreciated is the significant level of change within the channel and the scale of the opportunity. For example, high- growth menu areas like refreshing beverage, where LTOs are up 15% in the last 12 months, with operators seeing a 30% spike in chilled afternoon daypart beverage orders.
There's huge opportunity across the segment, not just in terms of scaling with emerging chains, many of whom are growing at 10x the level of the channel, but also with large leading chains where LTOs are 50% higher than 2021. Back-of-house operational efficiency needs continue to evolve, which we've spoken about many times in the past. Next, on emerging markets, where we have a strong track record of high- single-digit volume growth and a large global presence, with over EUR 2.2 billion revenue spanning LatAm, the Middle East, Africa, Southeast Asia, and North Asia. Across our emerging markets, we have over 9,000 people, 500 scientists, and 40 manufacturing facilities.
Key growth drivers from a consumer perspective will be increased health and wellness innovation, regulatory developments across different geographies, out of home, and convenience food and beverage spend with more middle class consumers, an increasing number of snacking and beverage consumption occasions. The investments we've made in building out our extensive local footprint and in market capabilities gives us a proximity to our customers, which means we can provide locally relevant solutions and de-risk their supply chains, giving us an advantage and positioning us to outperform across the medium- to long- term. Moving to product renovation, which we believe represents a structural market shift, primarily driven by increased consumer expectations, supply chain challenges, and increasing regulations across various markets around the world. Key customer focus areas for renovation are, firstly, taste. From enhanced taste profiles that transition to natural from artificial to creating indulgent experiences. Nutrition and wellness.
Given heightened consumer expectations, renovation to add nutrition and wellness characteristics continues to increase. Cleaner labels. Given circa 40% of new food and beverage launches in North America carry a clean label claim. Across supply chains, customers are proactively looking at their formulas given climate-driven challenges in crops such as citrus, vanilla, and spices. Customers are solving for cost spikes like cocoa or olive oil, or surges in demand in areas like protein. Sustainability is important for companies, not just in supply chains, but for regulatory compliance, cost effectiveness, consumer trust, and brand equity. Our leadership in sustainable nutrition means we engage at a completely different level. When customers come to Kerry to solve one of these challenges, they often end up with additional, tangible, measurable sustainability benefits for their brand. All these renovation areas present significant opportunities for Kerry.
The multi-layered technology solutions we're providing our customers are leading to deeper relationships, increasing growth and margin expansion opportunities. To give you a sense of this, I'd like to share some key renovation areas for us right now. Firstly, salt reduction. One of the most significant renovation opportunities in food today is sodium reduction. Globally, consumers are consuming more than twice the WHO's recommended intake. This is placing the burden of improvement on food manufacturers, our customers, and creates a large recurring reformulation opportunity. What makes this opportunity different today is the complexity of the challenge. Historically, reducing sodium was often a standalone nutrition objective. Today, customers want to reduce sodium while at the same time removing artificial ingredients, supporting clean label initiatives, improving nutritional profiles, managing cost pressures, and maintaining consumer preferred taste.
We're seeing this across snacks, soups, sauces, condiments, processed meats, prepared meals, and food service applications right throughout our pipeline. These customers are no longer looking for a single sodium reduction ingredient. They need integrated solutions that layer taste modulation, fermentation, flavor systems, functionality, and applications expertise together. This is where Kerry's biofermentation capabilities and TasteSense salt toolbox create value. By combining multiple technologies and capabilities, we enable customers to achieve meaningful sodium reduction while preserving flavor, mouthfeel, and the overall sensory experience consumers expect. In today's marketplace, solving sodium reduction requires far more than reducing salt. It requires rebuilding the entire eating experience. Next, protein and masking. Protein is another example of how food and beverage challenges are becoming more complex. Almost 60% of global consumers are actively incorporating more protein into their diets. In the U.S., beverage launches with protein claims grew 69% in 2025 alone.
Simply adding protein is no longer enough. Today, consumers expect protein products to deliver nutrition, convenience, clean labels, and an enjoyable sensory experience simultaneously. In many cases, protein levels are exceeding 40 g per serving, more than double historical norms, creating significant taste and texture challenges. As protein complexity has increased, so has the need for broader solution sets. Customers increasingly need help solving bitterness, metallic notes, astringency, mouthfeel, sweetness balance, flavor release, and ingredient interactions all at once. This trend is visible throughout our pipeline, from global nutrition brands and dairy companies to RTD beverage manufacturers, coffee brands, supplement companies, and emerging GLP-1-focused products. Kerry's TasteSense masking platform combines flavor science, sensory expertise, applications capability, and technology-led taste solutions to solve these multiple challenges.
We'll be hosting an Investor Event on October 8th, where we'll give you more detail and insight on our business at our innovation center in Beloit, Wisconsin, and we look forward to seeing some of you there. Finally, before I hand you over to Marguerite, I'd like to outline how digital is enabling us to deliver on our strategy, providing tangible, scalable benefits for our organization. We're very practical when it comes to digital. For us, it's about two things. Firstly, being better, faster, and more efficient, and secondly, delivering new sources of value with new business models, doing things differently. Over the past number of years, we have established our foundations, leveraging our proprietary data, deploying technology, developing new processes while upskilling and enabling our people. Now we're building an enterprise-wide connected ecosystem aligned to five key focus areas.
Commercial is all about delivering for our customers speed, service, personalized experience through our KerryNow portal. On our DNA, leveraging our knowledge and our IP globally, delivering innovation at speed, and improving our team's experience and effectiveness. On supply chain, this is about utilizing decision intelligence to improve quality, speed, service, and sustainability. On manufacturing operations, digitizing our business processes, moving to paperless operations, delivering efficiency and effectiveness, digital twins enabling process technology, capacity and yield, and cost effectiveness. On business functions, it's about process excellence, simplification, and automation. How we think about digital value creation is every initiative needs to solve a real business problem and deliver on both organizational effectiveness and our financial metrics. In summary, we're excited about the future, how AI and digital is enabling our business strategy.
We've a well-oiled transformation capability. Our business leaders are working together with our digital experts to overcome challenges, capitalize on opportunities, and deliver on our commitments.
Thanks, Edmond. I will now take you through our 2030 targets under our balanced performance framework and how our capital allocation strategy aligns to these targets. Our balanced framework is a combination of growth, returns, and sustainability. We have clear targets under each of these pillars. Under growth, we have a volume target of 3%-5%, EBITDA margin expansion of 20%-21% by 2030. High- single-digit plus constant currency adjusted earnings per share growth, which are the key drivers of our growth-led algorithm. On returns, we have increased our cash conversion target to 85%, and we are increasing our return on capital employed target to 12%-13% by 2030. Under sustainability, we updated our 2030 targets last year, as we look to build on the significant progress we made in achieving our 2025 targets.
Over the coming slides, I will take each of our financial metrics in turn. Beginning with an overview of our revenue growth. Over the past 10 years, we have delivered 3.7% volume growth and price of 0.8%. Our volume growth highlights the strength and relevance of our business over time in supporting customers as they adapt to address changing consumer and market needs. Our volume growth target is based on the assumption of minimal end- market volume growth. Moving forward, we expect to deliver continued strong end- market outperformance of 300 basis points plus. We are expecting our addressable market volumes to grow at 1%-2%, primarily driven by renovation, as Edmond referenced. Importantly, our three key volume growth drivers of food service, emerging markets, and renovation will continue to drive strong growth and market outperformance, given our differentiated capability in these areas.
Now turning to EBITDA margin expansion and our increased target of 20%-21% by 2030. We have delivered strong progress over the past four years, with 320 basis points of margin expansion, and we are well on track to achieve our 2028 target range of 19%-20%, based on the plans we have in place. The key drivers of margin expansion up to 2030 will be operating leverage, product mix, and further efficiency initiatives, building on the progress we have made to- date. The margin expansion target is based on our gross margin of 38% in 2025, moving to 39% + by 2030. We will continue to balance delivering margin expansion with reinvesting for growth in our business, including R&D, as we increase our expenditure ahead of sales growth over the coming years in the 5%-6% range.
Our current R&D investment of over EUR 300 million for food and beverage end- markets is leading in our industry, and the increased investment will be focused on new innovations for these end- markets, deploying our extensive taste and biotechnology capabilities. Overall, as a business, we will continue to balance our margin expansion plans with our business growth ambitions. Now looking at the three key drivers of our margin expansion in the coming years. Accelerate 2.0, which runs until 2028, comprises the first two elements. Under footprint optimization, we have already made significant progress. When we initiated this program last year, we outlined our plans to reduce our manufacturing footprint by a low- double-digit figure. Having completed seven in 2025, we have completed two more so far in 2026, with plans for the remainder over the coming 18 months.
The second element is our digital excellence program, which is well underway, and we are making good progress in driving efficiency and margin expansion. As Edmond referenced, we have a number of digital initiatives across manufacturing operations and supply chain, commercial enablement, and global business services. These include agentic AI for automated decision intelligence, leveraging predictive maintenance and digital manufacturing twins, increased robotic process automation at our GBS centers, and an enhanced customer experience in KerryNow, our 24/7 customer access portal. The strong progress we have made to- date in enabling digital excellence across our organization gives us confidence of further opportunities ahead in this area. Moving to operational leverage. As we continue to grow the business, we will leverage our asset footprint and overall business structures to generate further incremental margin expansion, particularly in our key growth areas of food service and emerging markets.
Similarly, we plan further margin expansion from product mix through solving more complex customer challenges with solutions that require greater depth of technology and more extensive innovation and renovation support. The combination of these key drivers will support our continued EBITDA margin expansion to 20%-21% in 2030. On returns, firstly on cash. We have delivered strong free cash flow of EUR 2.8 billion over the past four years, consistently achieving our cash conversion target. Recognizing this performance, we have increased our target to 85%. We are looking to generate EUR 3.5 billion over the four years from 2027 to 2030. Going forward, to support external comparability, our free cash flow metrics will move from using average working capital movement, which will continue as an internal measure, to using end-balance sheet date movement. On return on capital employed, we have made good progress in recent years.
Building on this, our increased target range of 12%-13% by 2030 is aligned to our business growth ambitions while providing flexibility for some bolt-on M&A activity under our capital allocation priority framework. Moving now to capital allocation, where there is no change to our capital allocation priority framework, which is well-balanced between reinvestment in our business and capital returns. Our first priority is capital investment, which we will strategically invest 4%-5% of our revenues to support our growth-led approach. Secondly, on dividends, we will maintain our track record of double-digit growth. Thirdly, we will continue to evaluate M&A investment opportunities aligned to our strategy that enhance our technology portfolio, strategic positioning, or market access. Finally, we will continue to balance M&A investment opportunities with returning capital to shareholders through share buybacks.
Our objective is to have an efficient balance sheet while retaining the agility and flexibility to allocate capital to where we believe we can generate the greatest value. Finally, to recap on our updated medium-term financial targets. Volume growth of 3%-5%, representing continued strong end- market outperformance, EBITDA margins of 20%-21%, and high- single-digit plus constant currency adjusted earnings per share growth, combined with strong cash conversion of 85% plus and return on capital employed of 12%-13%. With that, I'll hand you back to Edmond.
Thanks, Marguerite. I'd like to close with my key takeaways. We have a strong track record of growth and business development. The market we're operating in is highly dynamic, and we're the best in our industry when it comes to solving customers' complex challenges. We have created clear layers of differentiation through our deep taste and biotechnology capability, our global innovation ecosystem across our broad customer and channel access. We have a clear growth-led strategy supported by our key growth drivers within our well-balanced overall financial model. Thank you.