DAVY VIEW

We expect Kerry’s FY results (February 19th) to confirm achievement of its EPS guidance. For 2019, we anticipate continuing good volume momentum and margin expansion in Taste & Nutrition (T&N), bolstered by M&A activity. An improvement in group margin (+15bps) will be driven by operational leverage (portfolio evolution and mix) and efficiency programmes, partially offset by investments in recent M&A. Kerry enters year two of its five-year plan in rude health, with T&N volume growth continuing to outperform the market and ample balance sheet strength. Sector fundamentals remain favourable. We reiterate our ‘Outperform’ rating.