McCormick & Company, Incorporated (MKC) Earnings Call Transcript & Summary

[Audio Gap] McCormick would like to remind you that today's discussion will refer to certain non-GAAP financial measures. The nature of those non-GAAP financial measures and the related reconciliations to the GAAP results are included in the company's materials. Additionally, today's presentation contains projections and other forward-looking statements. Actual results could differ materially from those projected. The company undertakes no obligation to update or revise publicly any forward-looking statements whether because of new information, future events or other factors.

Great. Good afternoon, everybody, and we're thrilled to have the management from McCormick with us here today. Just a reminder, this is our last presentation of the day. So if everyone can remember please take all their belonging. This room will be locked up because we've got a lot of rehearsals and things like that going on after this ends. Also, first join me in thanking McCormick for generously sponsoring the reception following this presentation where I think you had lots of flavor creativity throughout all the offerings. McCormick management will join us now at the reception in lieu of a formal breakout so please bear in mind. McCormick is one of the 2 large cap packaged food companies who deliver consistent volume growth in a very challenging broader packaged environment. McCormick's Chairman, President and CEO, Brendan Foley likes to say former does not -- favors them. We look forward to hearing more about plans for this fiscal year and some additional pricing rolls through, more innovation kicks in, and McCormick funds additional A&P and acceleration of ERP spending. Joining Brendan today as CFO, Marcos Gabriel. Welcome, gentlemen, and over to you, Brendan.

Thank you, Andrew, and good afternoon, everyone. We appreciate the opportunity to be here, and it's a pleasure to be back in... McCormick is the global leader in the labor. Our long -- understanding tradition of excellence and innovation sets us apart and today, I'm excited to share how we're advancing this differentiation and driving meaningful value creation. The last 2 years have been defining for the demonstrated the strength of resilience and differentiation of our business. We delivered volume-led organic growth, expanded our operating margins and continue to invest in our brands, capabilities and... Our performance reflects the power of our balanced portfolio, our leadership in flavor and the agility of our teams in the world. We are executing with focus and discipline on what we can control, and we remain well positioned to deliver sustainable profitability. Today, we look -- we are driving our global flavor leadership, accelerating innovation and origination and strengthening profitability. Importantly, we are updating our near-term expectations to be affirming our long-term objectives. With our strategy of best-in-class leadership, we are well positioned to continue to drive shareholder value. At McCormick, we create and deliver flavors that enhanced base of food and beverages -- 35 years, we've been focused on our -- to make -- more flavor. Guided by our vision to be the most trusted source of flavor across food and beverage. Our portfolio includes leading brands in the flavor industry, household names that consumers trust their quality and taste, and they are trusted by our customers. Quarterly return by year -- people every single day. This is -- of our brands, the flavor they deliver, our capabilities, reach and growth potential. We serve a broad range of customers and operate across the channel, traditional brick-and-mortar, e-commerce, food service to [ CPG ] customers. The operating rate categories across both of our segments and we continue to project the strong growth. In our consumer segment, we offer products at every price -- premium to value to meet all needs. Our brands have been part of CPG families for generations and we continue to innovate. We are winning over younger consumers who are shaping new -- base and many aligned with health and wellness -- for flavor solutions, we lever some of the world's iconic brands as well fast growing emerging brands and making those part of the innovation that guides the food industry. Our 2 segments complement each other and this reinforces what makes it -- the scales insights and technologies that are leveraged from both are meaningful and uniquely position us to cater to the entire flavor market came in future direction. Given this position, we are differentiated among food investor peers and let me explain how. Others can compete for categories every day -- while many peer companies compete across multiple categories every day, very intentional focus on flavor, enabling us to be present in every consumption opportunity. Our differentiation is and where and how we compete as preferences in all and salary shift, the demand for flavor continues to grow, and McCormick is uniquely positioned to capture that growth. We see the world of food and beverage through the lens of -- and we deliver it more broadly and more deeply than anyone else. Putting all these things together, flavor remains an enduring trend. It's essential to food and beverage. 2 years ago, you heard me lay out our robust plans to reinvigorate on growth, and we deliver. We achieved strong and sustainable volume growth, and we expect this momentum to continue into 2026. This top line performance, our growth to see focused plans to confidence in our near-term and long-term objectives. Before I go to -- grow, let's look at why flavor is the heart of everything we do. [Presentation]

As you can see the global demand for flavor remains strong, is projected to grow 5% to 7%. Within our current geographic footprint, the market growth is projected to be 35%, positioning us for sustained best-class organic top line performance. This highlights the runway for growth in current and new markets. Labor remains the top purchase driver across every dish trend and occasion. It transcends age, culture, diets, income and income. Consumers, especially lower to middle income households are shopping more often finding fewer items on the trend and using more flavor each time. Stretching their meals further and finding more ways to cook at home, particularly as health and wellness trends continue to gain momentum. These habits reinforce the central role of flavor every day and cooking with herbs and spices -- growth. Also, convenience and labor exploration remain areas where consumers are willing to spend on e-commerce and social commerce are reshaping how they discover and buy new products. Conversions of these trends underscores our advantaged position. Our consumer portfolio means growing -- the working in healthier meals. While our -- solutions business partners with customers to use innovation and reformulation align on these very same needs. We are winning across the industry, all emerging brands to large established players, and our success is not one segment or product category. When I stepped in the CEO role, I introduced a set of priorities to McCormick. What that number cited on our goals, our progress, rapid case and the rapid pace of the industry. With that perspective, our refined position to deliver on our end. First, we continue to strengthen our leadership in -- category with added on geographic expansion, our recent acquisition. Second, it's advancing our position as the go-to flavor expert. The Flavor Solutions segment potential to our growth and our expertise sets us apart. We are emphasizing this in building on our flavor lease -- stronger globally. Third, we're even more focused on strengthening our competitive edge and innovation. It drives -- and new products, better ways of working, and we're continually -- that keep us ahead. We remain focused on accelerating our digital trend and drive profitability. And finally, we are focused on developing a future-ready workforce, which I will address shortly. Moving to digital -- launching the power of data and AI to transform how we innovate, operate and -- data responsible way of practices and future-ready workforce and an ERP foundation. We are building a stronger, smarter and more resilient -- over the past 3 years, we've taken a proactive approach to establish AI -- number site, scaling pilots across the business, developing our own internal AI tax platform, leveraging best-of-breed capabilities from the industry. Digital transformation is a driver of our growth and performance across our business. The strength is our system of competitive... Our business is supported by a unique set of advantages that drive industry-leading growth. Our broad portfolio, global portfolio, a leading brand -- platform set us apart in the marketplace. The complementary nature of our segment strengthens our insights. Combining learnings from -- solutions with consumer insights on innovation and today on trend. With global sourcing and quality expertise extends to the ease of experience sourcing -- open over [ 16,000 ] ingredients across -- we maintain an approach to acquisitions proven record of successful and our power of people culture is at our foundation. We remain focused on strengthening this foundation and the strong culture values that always refine McCormick. Our employees drive their success. That's why the priority and a key area of investment is training our workforce -- supply in a revenue evolving environment. Digital tools in AI are -- we plan, elaborate and deliver results. We are investing in the skills and -- people need to accelerate innovation and improve productivity and enhance decision-making. We are reinventing some of our key work process -- leading end-to-end planning, streamlining these and reducing manual. Ultimately, we're investing in digital enablement for -- is top line growth and advanced profitability position us for future success. All these elements together reinforce our conviction reaffirming our long-term objectives, which remain unchanged. Later in this presentation, Marcos will -- the detailed financial building blocks that outline how we will achieve these objectives beyond 2026. Now let's turn to the plans that will bring those objectives to life across consumer and... Starting with consumers. Our growth levers remain position. And through these levers, we stay at the -- labor effectively responding -- in reference including increased demand for health and wellness, elevate culinary experiences and value -- choices. We are strengthening our next -- with younger consumers. The generation shaping the future of food by engaging them from one for innovation -- first brand experiences, the commitment -- and quality. It all starts weight brands, loved by consumers. We hold the #1 brand position -- penetration globally across -- and mustard. And we have a strong portfolio of leading regional brands in our competitive differentiation. This transfer is -- benefit to retailers as they prioritize our brands and implement our category management recommendations. With this in perspective, 2/3 of household across our core markets and nearly every U.S. to have a -- branded product entry. Let's turn now to our planned category. Starting with spice and seasonings where we have a leading position. We are building on this world-class brand marketing, ongoing brand renovation, advancing category management and insight-driven innovation. Together, these strategic levers are accelerating our growth and reinforcing our leadership. Starting with brand market. Our goal is to inspire every generation. We are seeing strong momentum across young consumers, millennials intend to driving volume growth and household penetration. Demonstrating enduring and expanding brand relevance. Our latest campaign builds on McCormick's iconic plate -- ironing heritage and driving relevance with today's -- the longtime brand advocate new households are engaging with McCormick and fresh new ways that reinforce our leadership and fuel continued category growth. Let's take a look. [Presentation]

We continue to elevate the category with continuous presentation, starting with red cap packaging for our growth portfolio, most recently -- McCormick highlighted by its countertop worthy packaging is now on shelf. And we transitioned the vast majority of the portfolio. Velocity so far has exceeded our expectations, and we anticipate the benefit from this renovation in 2026. In addition, this year, we are renovating all of our seasoning blends with a modernized cohesive packaging. Including optimized price pack architecture to enhance the value and drive the impact of -- to purchase. We are leading the category everywhere -- accelerating distribution, particularly in spices and seasonings, which are leading distribution growth in the U.S. For the past decade, revenue management has been a key capability and where we have invested -- in technology. We were one of the first to invest in price in late 2023. These volume and improvement. We have done this through a targeted approach -- by leveraging advances -- and talent. Looking ahead, we are strategically building on our capabilities to execute precise data-driven pricing partnership with our customers. Ultimately, all of our efforts are leading to volume growth and share gains in spices and seasonings both in the revenue and our core margins. We expect this performance to be sustained as we continue to execute on this proven strategy. Moving to -- we're positioned to win here with our leading brands, strong ability and sustained relevance for consumers. It's pretty incredible that in the U.S., Gen Z and millennial spend more on hot costs than on catch-up. We use more hot sauce than any other figuration, acting on -- months of 2025 has risen significantly compared to the prior year. Our brand's strong loyalty and repeat -- and Frank's RedHot has the highest household penetration in the cat. In hotpot, we have returned to unit growth and share gains and continue on our growth terms. We are -- granting in [ Cholula ] further driving brand love with passionate consumers. And we continue to innovate with items like what we saw at Cholula sauce. We are focused on growing share in hot sauce, we expand around the world. brands are leading the way in social products. We launched on TikTok shop and have seen a great response. 72% of TikTokers are Gen Z and millennial and our targeted marketing is strengthening engagement and driving incremental growth in retail. We have robust plans in -- with other brands. Moving to -- for the U.S., our largest prices -- we are focused on -- brand market opened in strong unit growth and share gains. This year, we are launching modernized packaging, enhancing our revenue growth management -- and our flavors and forms, including honey and maple. Outside of the U.S., we continue to see strong performance in brand and with growing share in -- a high growth attractive category. We recently strengthened our position in this category -- our long-standing joint venture was predominant footprint anchored by its leadership -- mix. Our plans is to accelerate McCormick in Mexico by driving household penetration through new flavors, formats and meeting the case. For example, the launch in a series of limited edition -- glass jars, featuring FIFA World Cup -- as part of our sponsorship of the Mexican stock -- also known as... The power of the brand combined with our liabilities supports our growth ambitions in Mexico as well as in -- in the U.S. -- has performed well. Our plan is to continue to leverage the best-in-class marketing assets from our leading -- to further drive growth through order distribution and stronger for activation. We are continuing to grow this... Let's move to innovation across our portfolio. Over -- in the last 2 years, we have doubled our innovation delivering new products faster in evolving -- these launches in the second half of 2025 continue to build traction and will contribute to performance in 2026. We're further building on this momentum by expanding the success of our finished sugars platform with high-impact partnerships like Bridgerton and... Our Q2 flavor of the year, Black Card, is launching in both retail and food service. In addition to our 2025 flavor year -- in a hot sauce format this year. We're also launching our month [indiscernible] as well as new season plans in chili garlic and order -- focus on brand marketing, driving higher returns through precision using the same data and algorithms to identify the right at the right time with the my message and product. It is enabling us to vitalize content at scale. Giving relevant engagement experiences that -- we are leveraging AI agents to mine data to refined personalization and enhance targeting to reach the highest propensity of consumers at the lowest cost. Generative AI is accelerating our ability to develop, test and optimize new creation. We're expanding into emerging high-growth channels like social commerce and preparing for agentic AI. By ensuring our data stack is ready to interact with and influence company. Importantly, we remain at the forefront of evolving -- moving flavor value and convenience and our campaigns bring this to life every day. Now I want to show you how we're holding in Frank's Red Hot, we've had a very successful [indiscernible] last few years. Leveraging difference -- they all love Frank's. This year, we started with Ludicrous, and this activation is a -- previous contains capturing $2.6 billion in price. We're going to share with you. [Presentation]

This is a great example of how our brands, Frank's in particular, are resonating and creating opportunities in consumer and branded new service. The highly successful promotion to take Diablo Crispy. This was on menu at over 7,600 locations, and we had significant media coverage with 11.5 billion impressions. This is a great example of the complementary nature of our segments. Speaking of that, now moving over to Flavor Solutions. Let me start by covering our core product categories within place, starting with flavors. This is roughly 60% of the segment. We flavor products in a wide range of end market applications and in every aisle in the grocery store. Branded -- conserve 20% of the segment. These are our brands use back to house by chefs. They're sitting on table costs. Since 2018, we custom in advancing the portfolio to these 2 high-margin categories. We are different from other -- houses. We're the only major player with 100% focus on flavor. We have a deep culinary and natural food foundation and expertise in natural ingredients. We focus on 4 case competencies. Savory, heat, naturally sweet -- we are growth global brand leader, and we know it takes to -- by brand equity. We have more consumer touch points spanning all channels leading to the -- this big positioning sets us apart from the industry. We partner with -- across food, beverage and consumer health. We develop flavors for a wide range of -- nonalcoholic beverages to better-for-you snacks to up -- we have present cost channels, both in out-of-home, and we have a low customer base. In the fibers market, we have a significant growth mobility across various customer types. Regional leaders and high-growth innovators represent a significant ultimate -- of the opportunity in growing higher rates. In terms of our customers, we have a strong exposure to global consumer packaged goods companies and regionally. Where we are partnering with them to be formally -- by eliminating our additional ingredients -- sodium and improving affordability. Across high categories such as protein -- beverages. We have a growing exposure with high-growth data, helping them to scale and move into adjacent categories. Recently, we partnered with nutritional bars brand to enter the high protein -- category, even our expertise and seasonings. Lastly, we're increasing our engagement from private label customers help them meet the need for wellness and affordability from that -- we recently partnered with a major national retailer to launch a new line of affordable premium beverages. We see growth and share opportunities across all customers, and we are focused on diversifying the cost segments to remain resilient against market fluctuations to help growth. While growth remains soft, our capabilities to reach enable us to grow with our customers with an attractive high-growth end market applications. In food, various categories, particularly better for you ones, which include snacking, continue to have -- growth, and we are focused on flavoring. Health and wellness is a key focus for our consumers, and we have a long history with 135-year heritage -- and notables and extracts, complemented by the McCormick searing this year, 2 decades, supporting scientific research on the health benefit -- culinary versus... Into healthy lifestyles by flavoring healthy category, these supplements, protein shakes and nonalcohol beverages. We enable that in nutrition by removing ingredients such as sugar and we're adding high-demand nutrients like protein and fiber -- not sacrificing test, we partner with customers to bring design products, leveraging our in-night and technologies. Let me bring this live strategic sets. In this example, we partnered with a high innovative customer to create a superior -- the gummy is nutrient at low carb and high-end fiber with ingredients, but with an appealing fruity flavor. As our -- technology masks off notes from a high concentration of green ingredients. And the other example, we partnered with the global CPT group and we're formulating their range of deal replacements to optimize a new vegan consumer base. The mask off and developed for natural flavors, including vanilla and chocolate. We were formulated a dozen SKUs in -- abilities to deliver speed value taste. By combining, our -- insights since my reference -- we are able to be investment patients. Let me focus on first flavor, which is our trend-led flavor identification model that can pinpoint us before they reach mainstream awareness. We talked about this at Investor Day and we've been leveraging AI aggregate and analyze data -- which thousands of search trend data on minutes. Compressing hours of manual effort into the near automated process. We are turning these data points to action and innovation, delivering measurable growth across both segments. Moving to branded Foodservice. We continue to drive growth despite a challenging environment by increasing innovation -- diversify our channel presence. Starting with -- we are partnering with operators with limited time offers to attract and increase their traffic. We relaunched the McCormick product line to expand our reach and performance has been strong. Our new Frank's RedHot -- which is the brand on -- menu items across 1,500 restaurants. The engagement has been strong. And in terms of channels, we see strong growth in noncommercial sectors as well as partners as we expand our reach to smaller offering. In summary, our branded foodservice business has been successful as consumers want to find the brands and flavors that they are eating when they are eating away from. Now let me hand it over to Marcos.

Thanks, Brendan, and good afternoon, everyone. Today, I'll focus on our performance and how we are executing with discipline on what we can control while staying agile as we not get external challenges. Our strategy continues to position McCormick sustainable long-term value creation. I'll start by covering our historical performance, which highlights the resilience in our business plan -- momentum and improved profitability. Then I'll discuss our capital allocation strategy and growth with an update on -- redeem goals and reaffirm our long-term objectives. Our priority remains to drive differentiated -- legales growth, consistent with our historic performance. We operate in great and advantaged categories and are intentionally focused on investing to sustain volumes and drive long-term growth. Looking back from 2015 to 2025, we delivered organic sales growth and our successful M&A contributed 2%. In total, we achieved a 6% compounded annual growth rate in line with the high end of our long-term objectives. Historically, our organic growth was volume and after -- upward of hyperinflation, we returned to the first quarter over quarter in [indiscernible] the continued momentum with sequential improvement from '24 and volume growth for the year. Performance was driven by our own group level including brand marketing, innovation and packaging renovation, category management and our proprietary technology. Turning to operating -- our disciplined cost management -- have supported our operating growth margin -- for the past 3 years. We have the track record of investing for long-term growth, leveraging -- flywheel of margin expansion on investments and continue to drive strong quarter results. This is foundational to McCormick and has enabled us to deliver long-term -- and we remain confident the continued trajectory of our operating margin experience. Turning to the 2026 outlook recently discussed on this call and remain consistent. Let's focus on the top line -- volume growth driven by new products, packing renovation and -- marketing. We label solutions, we anticipate volumes to recover from prior year as we exited on an innovative line across our diverse customer base. Across both segments, we're leveraging revenue growth management capabilities part of that inflationary price pricing to contribute to organic sales growth this year. Lastly, we anticipate strong -- contribution -- from a borrowing perspective, we anticipate incremental cost at inflation, including -- as well as the -- of incentive comp notably related to our refined ERP plan and impact on increased -- marginal offsetting pressures with productivity statement of our -- program, including SG&A streamlining and surgical price -- anticipated accretion from the McCormick the -- acquisition. In summary, 2025 underlying base performance and growth acquisitions. Let's review our digital strategy, starting with our top ERP plan. Our implementation so far has been going very well. our rated approach, which reflects continued collaboration between the business and technology that enable us to execute the successful one with minimal business impact. If you give us to impress the waves of our upcoming deployment, which minimizes risk. It shortens the period of full operations due to legacy and new systems, minimizing data aviation and interface business. Overall, program costs remain unchanged. However, this refined execution plan -- more expensive into 2026 than originally planned. We're pleased with our progress. Our ERP foundation enables cybersecurity, AI-ready data and tech modernization, allowing to capture value to increase efficiency. And this becomes a springboard for advancing our existing initiatives. Our -- transformation with the strategic growth an and driver of our savings. Consumer coat the center of everything we do and to better serve them, and we're leveraging data and AI to improve consumer experience by delivering personalized content, many consumers where they are across channels at a lower costs. To accelerate property innovation while leveraging our proprietary growth, combined consumer insights restricted way to fuel faster or created new product development, collaborative customers -- enhancing revenue management with digital -- delivering effective pricing, improved execution and volume growth. And -- using predictive optimized sourcing risk and improved forecasting. And insights across the business. We are unleashing faster decision making, deeper -- trending and more agile -- across our global footprint. In terms of our cost savings initiatives, our efforts will be enabled by -- processes and digital capabilities with growth aspirations and -- in Q2 growth that matches our aspirations, we remain in driving the top line and projecting the initiatives of all lines of the P&L. Our CCL program has a well-established track record of success, and we're leveraging its business to drive -- the site also includes our SG&A streamlining effort, and we are making great progress there. We -- our global business solutions organization which delivers a scalable, efficient and industry enabled services across key business options. By standardizing processes, leveraging automaker and driving continuous improvement -- operational and enables our team globally to focus on strategic growth and value creation. We are stepping total cost savings, about 10% relative to the prior year -- growth offset the increased cost headwinds and contributed to profit realization. Overall, savings are -- to be driven by procure -- operational efficiency in processes, reduce our indirect spend and reinventing our ways of working. Importantly, this is all reflected in our planning outcomes and long-term objectives. Turning to capital allocation. Our priorities remain consistent. We expect to drive shareholder value through strong cash flow generation and a balanced use of cash. This means -- investments to drive growth -- to our shareholders, maintaining a strong and flexible balance sheet. Returning cash to shareholders includes our dividend policy share repurchases. They remain a key component in our tool kit. Our balance sheet is in a position -- and give us the flexibility to continue to invest in the business organically and organically for our growth. As we think about ROIC, we have achieved an average return over the past 3 years of 10% and we're expecting to do 10% to 12% range in the near-term. We continue to generate strong operating cash flow and expect robust cash generation to continue finals. Growth will be driven by higher net income, fueled by revenue gains, margin expansion and sustained working capital improvement. Lastly, we continue to expect that on average, approximately 95% of net income to be converted to free cash flow. We expect April investments to represent 3% to 4% of net sales. Roughly 3/4 of this spend will support capacity, capabilities and efficiencies with the remaining quarters focused on IT and digital transformation. We remain committed to returning cash to our shareholders in the form of dividend payments or share repurchases. We are proud to be a dividend -- and over the long term, we anticipate dividend growth to be in line with earnings per cycle. We have made excellent progress in paying down debt, enabling us to maintain strong flexibility to make future investments. And as always, we remain committed to a strong investment-grade rating. Moving to acquisition which will remain a penal driver of our long-term objectives and are expected to contribute 2% growth. Note we have a proven track record of relining acquisitions rooted in our teller strategies and financial discipline. Our commitment to this strategy is evident in our transactions, including -- Fona and most recently, our joint -- we closed the [indiscernible]. Today, we reaffirm our outlook for 2026. It remains the same as we have provided on the fourth quarter earnings call in. Let me recap the components of our outlook. And comment on the first quarter tax rate. Our outlook reflects a strong underlying business performance and growth from acquisitions that is favored by cost headwinds as well as a high rate. While we are maintaining our full year guidance of tax rate of 24%, we're not expect the first quarter to exceed this number due to the timing of expected next forming, we remain on track to sustain our momentum and drive strong timeline and bottom line growth. We're confident in our ability to deliver on our 2026 outlook in achieving our long-term objectives for time. Before we look ahead, it is important to reflect on the past couple of years and how -- second ground have changed. The environment has been more challenging than anticipated, yet our base business remains strong. We continue to drive growth in the -- segment and despite industry softness in flavor solutions growth with high growth in later [indiscernible]. We continue to realize cases from our CCI and SG&A stream in renew utilities. [indiscernible] are gaining momentum, sustaining top line opportunities. Cost pressures from rates, increased -- in interest created headwinds the acquisition of employees take former vehicle has provided both top and bottom line value. After lifting these variables, including our 2025 results and our outlook for 2026. We anticipate achieving performance in line with our long-term objective after 2026 -- the platform from 2026 to achieve growth or -- our lowest. From a top line perspective, organic sales expectations remain at 3% to 4%. Our consumer business is strong and heard today, the plan we have in place to continue this trajectory. In addition, we'll also benefit from the McCormick and management. While Flavor Solutions growth has been tempered by softness in the industry, expect improvement for the beginning 2026 and to strengthen over time. Operating income margin will be achieved through operating leverage or cost saving programs attrition from McCormick enaction as well as the ERP tailwinds we expect in 2028 -- in our long-term executive of approximately 50 basis points per year. Finally, we anticipate the bank -- operating income to -- earnings are, including the accretion of the -- transaction from repurchases in the absence of acquisitions. Ultimately, leading to high single-digit earnings share growth over this period. The leverage from operating income towards -- 2027 will be impacted by the elimination of the 25% minority formation. This mechanical impact is near term. Since we met for a full year -- 2028, we don't expect it to expense leverage from operating income to earnings per share. solution operating margin, we will be committed continued improvement, we have -- to 2030. This will come to volume growth, we expect operating leverage to contribute to margin expansion -- migration and margin category revenue growth and cost savings and efficiencies. We continue to drive margin expansion while asking for growth. We're reaffirming our long-term objectives. Net sales growth of 6%, operating income of 7% to 9% and earnings per share -- and we're confident in our ability to deliver on this objective. I will now turn the presentation back to Brendan.

Thanks, Marcos -- our presentation of valuable insight into how we are driving our global conditions -- tolerating innovation and -- profitability. We are energized by the opportunities ahead and remain committed to creating loan value for our -- we're also excited by the actions, which will highlight our flavor forecast. No one knows flavor like McCormick and our flavor forecast -- trends -- and many of our predictions have testified [indiscernible]. We would love for you to join us in the -- we invite you to experience the flavor of McCormick and a much dependent time -- but I'll let Andrew be the judge for that.

Yes. I think we're out of time here, but McCormick management will be out in the reception. And please again, thank McCormick for being here and sponsoring the reception.