Nomad Foods at 2025 dbAccess Conference: Strategic Focus Amid Challenges

On Wednesday, 04 June 2025, Nomad Foods (NYSE:NOMD) presented at the 2025 dbAccess Global Consumer Conference, highlighting its strategic position in the European frozen food market. Despite a decade marked by challenges in the food and beverage industry, the company has shown resilience with consistent growth in sales, EBITDA, and EPS, except for a minor setback due to interest rate changes two years ago. The company is navigating market share fluctuations due to pricing strategies during high inflation periods but is optimistic about recovery.

Key Takeaways

• Nomad Foods is focusing on market share recovery through strategic resource allocation and A&P investments.
• The company expects organic revenue growth between 0-2% and adjusted EPS growth of 2-6%.
• Over €2 billion in adjusted free cash flow was generated between 2017 and 2024.
• Innovation in chicken and potato products is a priority, with a new Goodfellas pizza launch planned.
• M&A strategy remains disciplined, focusing on synergies and shareholder returns.

Financial Results

• Revenue Growth: Projected organic revenue growth is between 0-2%.
• EPS Growth: Adjusted EPS is expected to grow by 2-6%, translating to €1.82 to €1.89 ($2.07 to $2.15).
• Cash Flow Conversion: Targeting an adjusted cash flow conversion rate of 90% or higher.
• Free Cash Flow: Generated over €2 billion from 2017 to 2024, with annual averages of €275-€300 million. Future projections aim for approximately €850 million.
• Gross Margin: Temporary suppression due to delayed pricing actions and a slow start to the ice cream season, offset by overhead savings.

Operational Updates

• Market Share: Recovering from market share losses due to prior pricing strategies, with stabilization in volume and value share.
• Category Growth: The frozen food category is growing at 2% in value and 1% in volume year-to-date, outperforming the total food category over the last decade.
• Innovation: Plans for a new Goodfellas pizza launch in week 36, focusing on improved taste.
• Inventory: Previous inventory destocking issues have been resolved.

Future Outlook

• Growth Drivers: Emphasis on innovation and renovation, with strategic A&P investments aimed at 6.5% of sales.
• Must-Win Battles: Focus on innovation, renovation, and value to enhance success rates.
• M&A Strategy: Disciplined approach, seeking opportunities with strong synergies and reasonable valuations.
• Capital Allocation: Prioritizing share buybacks, while remaining open to strategic M&A opportunities.
• Category Potential: Significant growth potential in frozen food, especially in countries like France, Italy, and the UK.

Q&A Highlights

• Competitive Response: Competitors, especially private labels, expected to react to innovations within 2-3 years.
• Inventory Destocking: Issues resolved, with retailers returning to normal service levels.
• Quarterly Volatility: Benefits anticipated from Easter in Q2, with easier comparisons expected in Q3.
• M&A Appetite: Focus on synergies and valuations, with share buybacks prioritized for cash use.
• Strategic Priorities: Enhancing category growth through better communication and increased innovation.

For more detailed insights, readers are encouraged to refer to the full transcript.

Full transcript - 2025 dbAccess Global Consumer Conference:

Unidentified speaker: Okay. Welcome, everyone. Welcome back. I am thrilled to welcome Nomad Foods back to the consumer conference. I’m especially thrilled to welcome back both Stephane Beschermacher, chief executive officer, and Ruben Baldeau, chief financial officer.

Together, Stephane and Ruben are gonna run us through a presentation probably for the first twenty or so minutes of the session, and then we’ll use the balance of time I get for some q and a. And with that, I’m gonna turn over

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: to Stefan. Thank you, Steve. Well, I’ll I’ll try to go to go fast and do this together with this damn thing. So let let me start with, I think, the key messages. Messages are quite simple.

I think we have a category advantage. That’s one thing. And when you think, you know, we had this series of conversation today about, you know, Europe versus US. Well well, U is is not a bad place to be right now. I think let’s say the consumers are still a bit, you know, there or there about, but let’s say I think it’s moving the right way.

So that’s one thing. And and, overall, by the way, frozen food, when you take a longer distance, you know, it’s something that has been doing extremely well over the last ten years. Outpaste, you know, food overall. So and we intended to keep it that way as a as a leader. Second is portfolio.

We have a portfolio advantage when you think about it when you we are in all the categories that matter in frozen food between, obviously, fish, vegetable, chicken, but also things that are more indulgent. You know? We’re also adding ice cream. We’re adding pizza. We are also in in in potatoes, so we have a lot.

But two third of our business, and I’ll come back on that later, is definitely is protein, and then it’s a is vegetable. So which is a good starting point if you think that the the food is going to be increasingly be polarized between, let’s say, health and the and the rest of it. However, taste is a big thing. The strategy is working. I think we put this this together, you know, years ago.

It’s a strategy of resource allocation. We we passionately believe that, you know, market share matters in everything we do, and then that’s where we put our money behind the must win battles, what we call must win battles, and increasingly so also new categories, very selected, you know, country by country, and that that’s working. It’s been a bit obviously, you know, the back back from crisis ’20 ’2, ’20 ’3, ’20 ’4 is a bit choppy, but we’re making, you know, progress. Sometimes it’s a bit down, but overall, the direction is moving the right way. That one is is well, must have been, you know, bit just a bit of ego.

Just a second. It’s one I like. It’s and every year, you know, I can we can add, you know, another year. So which is well, it’s been, you know, a probably the worst decade of food and beverage. And despite this, you know, over the last nine years, we’ve been able to increase every year sales EBITDA and with a little exception of EPS two years ago with the change of in terms of interest rate EPS as well.

And so you’ve seen the number 6%, seven %, ten %. So that’s what we’ve been delivering despite all, obviously, the crisis we’ve been through. Next one is I’m not going to spend to spend too much time. I think it’s all it’s all about, let’s say, market share and where we are. We are a pure play.

We like it. We don’t we didn’t like the idea of being a some sort of food conglomerate. So being focused is one of our values, and, I think it’s working. Next one is a bit of a journey. You know, well, from the start, nobody was here at that time.

Obviously, when when, let’s say, frozen food was invented, We really started in 2015. We put together, you know, the big brands like eag Birds Eye in The UK, Iglow in many other countries, Findus in in countries like like this country, for example, Spain or The Nordics. And then, you know, after three two, three years, we added, you know, some other things which was very much, you know, non shiny objects, but very much, you know, focused on frozen food and great add ons. And we did, you know, Goodfellas. We good did own besties in The UK, which basically we took the brand, we put them together with Birds Eye, and obviously, we’re coming with a bit with a better solution for the for the retailers.

We added at some stage Finders, and then we did also something that you you probably don’t know the brands, but these are fantastic brand in the country, Serbia, Croatia, and and Bosnia. And it’s a combination of frozen food, by the way, and ice cream and probably our best deal. Quickly, again, great brands, leading market share. As we said, you know, we love this concept of what we call the mushroom battles. So let’s say market share is not only something in terms of frozen food, but also in every category where we are.

We’ve seen it. It’s very clear in food food and beverage. Market share matters if you want to to obviously grab, you know, the the highest part of the of the of the margin pool. And that’s exactly what we’re doing. So 46% is the way that an average market share we have for the most the 25 machine battles, which represent around 37% and probably 45% in terms of net sales.

You see the the difference in terms of of compared to the others and then in terms of brand awareness. So, definitely, we love our brands, and we intend to keep it that way and be investing behind the brands as well. This one is is again a reminder of what frozen food is. As we said, you know, it’s a it’s a good category. Don’t expect something like a high single digit, you know, year after year.

It has been a good category for the last ten years, and we we think that facts are proving themselves it’s going to be to remain that way. So convenience, obviously, value is very affordable. Sustainability is one, but I think the biggest piece is is taste. It’s starting with taste. You know, all our products are very tasty, and, food has to be made at the at the end of the day quite simple.

It’s about it’s about it’s about taste. It’s about health increasingly so. But also, it’s about value and well, we’re ticking all the boxes with with frozen food. One example is a fryer as well. I think it does extremely well with with with frozen food.

So, definitely, you will know it’s a it’s a it’s a category. It’s something we want to further leverage, and we’re going to do this. So we don’t we don’t think it’s something that is going to lead to disappear at some stage. You can see that it’s not only people are buying air fryers, but they’re using air fryers, and it’s the combination with the with the frozen food is in terms of quality, in terms of convenience is is really it’s it’s a it’s a perfect match. So it’s really something that we’ve I believe that we haven’t fully leveraged yet, and it’s something that’s going to come in the coming the coming months and and years.

The next one is is just back to to category. So frozen food, that’s something like a bit more than, what, ten years ago, ten years of of trends. You can see that overall, you know, we we’re doing slightly better than food. Nothing, you know, extravagant, but overall, you know, it’s whether it’s crisis or no crisis, obviously, you can see that we’re doing better. And it hasn’t changed, we don’t think it’s going to change anytime soon.

Quite the contrary, we believe that frozen food plus what we have, which is two third of healthy food and also a bit of indulgence, which is which makes sense, by the way, we’re going to it’s going to going going to go to the right way. Because we we believe that there is still, you know, some, let’s say, wrong ideas around, you know, frozen food, and it’s our job, by the way, as category leader to to explain the difference. And we’re doing this, but not enough probably. Some something that we I think we have a lot of opportunities. Long run runway of growth, and we could just comparing, you know, let’s say, per per capita between The US and all the countries or most of the countries where we where we are, and you see that, you know, it’s a it’s a lot of runway ahead of us, not only in countries like Bosnia, you can see, but also in, let’s say, in countries like France, like Italy, UK is halfway.

So a lot a lot of ahead of us, which obviously also makes a bit of a difference with the with what the the category is all about in The US. Portfolio now, the second piece, well, as I said, you know, 42 more than 40% is protein. Fish has always been a big thing for us. We can see that poultry now is really moving the right way, which is, by the way, not not by chance. We see that whether it’s it’s a chilled or or fresh or it’s frozen, basically, poultry is on on the way up, and we intend we have all the intent to go that way.

That’s exactly what’s what’s happening right now. You’re adding another 25% vegetables, so two third of our business is is really about, let’s say, vegetables and protein. Then we have a bit of meals, and then you have others. And what we have in others? Simple.

It’s things that people like, by the way. It’s pizza. It’s it’s about ice cream in in some countries, and it’s about, obviously, also potatoes. And that’s growing as well. So in other words, yes, we like the idea that, you know, frozen food is is healthy food and all the things, but at the same time, we are pragmatic and taste and, obviously, what consumers think and the want to consume is obviously paramount paramount for us.

A and P, I think we know we we’ve always been very, very, very clear we want to feed our brands. The the concept of Muslim battles, which is really where we invest all our money together with the growth platform, which is the new categories, it’s it’s at the it’s the the A and P is in the middle of this. So we obviously have as anybody else, we have limited resources, but I think what makes us different is the rigor at which, you know, we apply, you know, A and P. So A and P is really behind our mission battles. It’s behind our growth profit growth platforms.

And the rest, quite frankly, we don’t invest, and that’s absolutely acceptable because we see that we see the growth profile is very different. The margin is very different. So that’s the kind of things we’re doing. At some stage, you know, back in ’22, we reduced a bit like anybody like everybody else, by the way, A and P, and I think we’re on the way back right now. We think that 4% is probably a good number.

It might be might be more at some stage, but 4% is a is a good starting point for us. And at the meantime, we’re also making sure that, you know, the the return on investment is going to increase and is increasing year after year after year. So of in the team, in terms of mix, we also having changed like anybody else, by the way. It was it was five years, six years ago, it was 80% TV. Now it’s going to be something like around 50%.

Then you’re talking about product, which is really the key piece compared to our competitors like like the private label. Well, innovation is a big thing. This year, we’re going probably going to be in the region of 6.5% of innovation, and it’s really about, you know, different different pieces. I think what makes us different compared to other people is we have a huge, very rich assortment across all the countries. And then when we know that something is working well in a country, we believe that, you know, that that it has the potential to go to be an innovation in another country.

And the best example is is is chicken. Chicken is a really fantastic category for us in The UK, and we started from there to build the foundations of chicken in Italy and Germany. So we’ll we’ll we’ll show you some examples. But that’s obviously what what we like is at the end of the day, it’s innovation in the in the country, but it’s also lower risk innovation because we know it’s working in other countries. So we’re not starting from scratch.

We have other examples, and we come with other examples, but that’s PC, which is really lift and launch, is a big thing for us. That one is I I would put it that way. I like it and I hate it. I hate that the fact that, you know, in 2023, we only you know, we we have a very rigorous process with the key brands or key products to see where we stand in terms of superiority with the other the other guys. In terms of it’s a blind test, and it’s also a test with second test with with the with the with the brands in mind.

And, we need to be superior is the one that, that deliver on both. The rest is parity. So 2023, we only had 36%. Must have been that probably during the crisis, we didn’t go a little, and we’re not very proud of that. But then, you know, we decide, okay.

We need to get them to to something like 80 in in 2027, and we are on our way. We’re going to get there. Pizza is a good example. I think some of our pizzas were quite frankly, there’s the you know, quest to have something very healthy, non high in in fat, salt, and sugar. Well, we probably the the taste was not good enough, and we’ve changed in this.

And when it’s going to be launched, the new Goodfellas in The UK is going to be launched week week ’36. And quite frankly, the taste is fantastic. And, again, I think as we we don’t need to in over intellectualize food. Food is starting with with good food and with with taste, and that’s that’s fits the bill absolutely. So that’s that’s what we have.

We have other examples. We need to see in in some countries, we need also to raise the bar with fish finger, which is a big thing for us. We need to all consumers are telling us need to be a bit more crispy. Color needs to be a bit bit less less pale. So we’re working on this.

Seems to be obvious, but, you know, you need to make sure that you’re doing this without obviously changing the bit you know, what what fish fish fish thing is all about. So it’s going to come probably in 2026, but it’s a never ending process for us right now. We’re thinking in term in terms of innovation and renovation. So the combination of the two, overall, you know, we’re the region of 17% of which, you know, you know, renovation is the bigger part. And that’s absolutely fundamental if we want to keep, you know, the the the, let’s say, the gap between us and private label.

The last thing you want to do with private label is to underestimate these guys. They’re doing well. They’re doing a they’re they’re doing a good job, and we as brands, we need to come with productivity superior. That’s absolutely fundamental for us. So where are we going to invest?

Like, as I said, most important is one thing growth platforms, which is 10% of our business right now, but growing faster is the second piece. So that’s where we’re focusing our A and P. That’s where we’re focusing on innovation. That’s where we’re focusing our renovation. An example, as I said, is is is is chicken starting from from scratch in Italy.

So in other words, Italy is all about chilled chicken, but nothing in terms of almost nothing in frozen food, you know, frozen frozen chicken. And we started. We adapted some some of the the the the recipes coming from The UK. We came with a local player of this, which is this chameleon, which is extremely popular in the in in Italy. And quite frankly, it’s it’s on fire.

It’s really on fire in in in Italy. It’s on fire also in Germany, different business model. Business model it’s a very big, let’s say, category in the in the in Germany, but it’s a category which is today owned by by by private label. And we believe that we have a superior product, and we’ll come with that, and we’ll demonstrate to the market. Yes.

You can come with some premium. Even in Germany, it’s been proven in other categories, so we’re going to make it work. And we we’re very impressed by what’s happening right now. And it’s by the way, the the the idea is the concept is also to come with something which is margin accretive. Another one is potatoes, which is which is obvious for us when you think about it.

You know? We have the we have the fish finger. We have the fish, and we have the chips, and then we have we can put we can come up with the fish fish and chips. And so that’s definitely kind of lift and launch that we we’re doing right now. One example.

We have many other example, but, again, it’s a category that is doing well. It’s a category you can see, for example, in Belgium, which is where a big a big market in terms of French fries, as you say, and they they say Belgian fries there. It’s it’s the category leader, so we overtook, you know, we it’s not that we’re only dealing with private label. We were dealing also with people like McCain, and we’ve taken the the number one position. So it can be done.

We insisted on the, obviously, the local part of the the the the the Belgian fries, and it’s really working. But definitely, it’s the kind of things where we want to facilitate, you know, best practice from one country to another as opposed to go to come with with new new innovation. We have, some new innovations. One example is it’s a natural for us. It’s basically high protein.

It’s it’s there. You know, we see this, you know, we don’t nobody knows yet exactly whether it’s going to be long term trend or it’s something which is more fat, but we want to be there because we have all the the facts behind us. So that’s going to be, let’s say, in the market in The UK, something like, I think week 37. And, well, you know, it’s it’s great in terms of taste. It’s great in terms of number of grams.

It’s also great in terms of number of ingredients compared to competition. So it’s the kind of things that we think is going to work. It’s new, so it’s not like a lift and launch. But if it’s working well, obviously, then we’re going to make it work with with other countries. Fish, as you may remember, is a big thing for us.

It’s something like around more than 1,000,000,000 overall across the board, And and then we have three different things. One is we I mentioned renovation of Fish Fingers. That’s one thing, which is a big thing. Fish Fingers is around 400,000,000 for us. Then we’re coming also with improved taste.

So that’s an example. Again, a study I mean, it’s it’s it’s available right now in the market. It’s it’s doing well so far. Too early to say, but at least, you know, it’s a new varieties, a bit more obviously flavor, and it’s well, it’s it’s based on what the the things we know we know we how to do best. So that’s one the second piece of innovation.

The third one is is about, this, which is basically, an interesting point, which is people believe that, you know, let’s say snacking is it doesn’t work with fish. And, yeah, it does. It does. We just never never done it, you know, in this the the way. We are probably very I mean, we are overwhelmingly in the middle of the the family mealtime, but we believe that, you know, that can work.

So this is nothing new, by the way. All these products are not new at all. They’re just we put them together to create a new category in Italy, and it’s doing extremely well. And interestingly enough, it also comes with new consumers, younger, which is exactly what we need to be able to go to go with snacking and new generation and also higher disposable income, so high margin as well. So that’s a good example, and I I can tell you some of the countries that are looking at the detail in example and want to go the same way.

One example is well, I think I need But that’s example of what we’re doing in Italy. So My patient. So it’s very simple, by the way, but very different from a fish finger, which is about, you know, children and all the rest of it. And that’s so we we demonstrated kind of work, obviously, above and beyond chicken. In chicken, obviously, we we are there as well.

Another example, again, chicken. So we’re talking about a lot about innovation at this stage is is the chick is is in The UK. UK, it’s the biggest category for us. So it has, you know, it was half the size of what it is today, but it has done extremely well. And what we’re doing is we’re just copying the QSR guys.

We’re checking what they do, and we have we’re very unapologetic about it. And we believe, you know, it’s it’s it is working already very nicely. And, it’s probably going to be at in when at some stage, one or two years from the down the road, some some good, you know, lift and launch for other countries. So doing extremely well.

Unidentified speaker: That’s another example.

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: Oh, not winning at Friday night, are we? You bring that bird’s eye.

Ruben Baldeau, Chief Financial Officer, Nomad Foods: Wow. Legend.

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: Now get a load of this. The chicken bursting with flavor. Try our new loaded burgers. The chicken shop from Birds Eye. So, again, very different kind of consumers for us, and that’s definitely the kind of thing, challenge and the opportunity for us is to obviously go to more, you know, this kind of of consumers as opposed to older people or more, you know, children.

Well, we never mentioned, you know, ice cream. I don’t know why, by the way, but ice cream is really a great category for us in in the the Serbia, Croatia, and and Bosnia. So it’s first, it’s it’s as I said, it’s a great acquisition. I think the combination of frozen food and ice cream works well. It’s basically, you have the the same the same freezers.

So in a nutshell, you know, we own the freezers during during the winter with frozen food, and then we own the freezers during summertime with with ice cream, and that’s exactly what it’s all about. Team is doing an extremely good job, you know, in in these countries with with new concepts, and so we have a great market share not only in the, you know, in convenience, but definitely in this kind of, you know, categories which is more family driven. Here, it’s a new innovation. The team is coming with something around 11%, let’s say, innovation per year. They’re doing extremely well, a nice margin.

So it’s a it’s a very good it’s a very good example. Again, a new ad. As I can see that it’s it’s coming from Serbia because it’s free come. Otherwise, I would have been absolutely capable of saying whether it’s Croatian or Serbian. So that’s a that’s a bit, you know, what we’re doing.

So as I said, you know, it’s it’s back to to the category. It’s back to the portfolio. It’s back to the strategy, and it’s working. And we we’re going to make it work, you know, but, you know, crisis time or no crisis time in the future. And with this, you know, I’m leaving you with the with the Ruben.

He’s going to start with the market share.

Ruben Baldeau, Chief Financial Officer, Nomad Foods: Thank you, Stephane. Let me indeed turn it over to the market share. What you can see here is our market share over the last, let’s say, sixteen, eighteen months. And let us recall what we did in 2223. We had to price ahead of the markets for the heavy inflation, And we did that to protect the margin.

But with that pricing ahead of the mark, we saw the impact of market shares, and you see the carryover of that in the first half of twenty twenty four. But by protecting the margin, we have also been able to reinvest in our brands, to reinvest in our products, to reinvest in shop floor activities. And you see that happening in the second half of twenty twenty four where actually the MAT of the twelve week share loss became smaller, and we saw on a monthly base share gains. You’ve then seen in the first quarter this year a bit of a decline. There’s some phasing of seasonal timings in p one and p p 13, but overall, it’s mainly because of phasing of activities.

We do see, however, the recovery of market share in the last period. So you see p four shares are going up again, and we have the first read of p five where we are also recovering our shares. And if you now would look at p five the last twelve months, we’re roughly stable in volume share, and we’re stabilizing our value share. And actually stable share in this category is not a bad thing. On the left, you see the category growth.

And you see in the beginning of twenty four still the aftermath of pricing, so you see value and volume and higher value because of the carryover of pricing, and that is coming closer to each other from the second half in ’24. If we now look year to date, p four, the category is growing 2%. Within then, volume is growing 1%. There’s a bit of a dip in p four. And also if we look at p five, and we don’t see that as a structural dip.

We see a bit of softness in The UK and a big part of that, and we don’t like to talk about excuses. But a big part of that is a bit of slowness because people were barbecuing. It was good weather and a bit less of frozen food consumption, but we don’t see that as a structural issue. And, again, year to date, category is 2%. And it’s also when you look and compare the last twelve months versus the other categories, frozen is growing 1.5%, food is growing at half percent, which links to what Stefan showed.

If you look at the last ten years, frozen food has outpaced the total food category by 70 basis points. So this is a good category to play in. And if you then look at our numbers, and these are the year on year reported volume growth numbers, you see 23 in the first quarter of twenty four, we were struggling in volume. That also links to the share losses, and we have been able to recover share in quarter two twenty four, quarter ’3, quarter ’4 ’20 ’4. We knew quarter one would be more tricky, some phasing because of the seasonal effect with Easter, some activities, and we saw the destocking.

But if you take the four quarters, last four quarters in aggregate, we’ve been growing 1% in volume. And if you then look at the guidance, I spoke about the category which is growing 2% year to date in value, which is growing 1% in volume. You’ve seen on the long term the category growth. You’ve seen that we are growing over the last four quarters one percent in volume. And that also links to the mid midpoint of our organic revenue growth, which is between 02%.

The absolute EBITDA growth this year, our guidance between 02% growth and the two elements there. We expect this year a suppression of the gross margin, I’ll come back to that, compensated versus prior year by savings and overheads. The dampening and the suppression of the gross margin is not a structural issue. We see this year basically two effects. One is in the course of quarter one, we saw more inflation coming up mainly in protein, so mainly around chicken.

It’s not as big as we’ve seen in 2223 that you would open all your contracts with retailers and take in your pricing. So we’ve made a conscious choice not to reopen the negotiations, so there’s a timing lag. There are one or two markets where we will do the pricing but not across, and that therefore has a temporary lag and an impact on the gross margin. Secondly, we’ve seen a bit of a slower start of the ice cream season. Ice cream runs at higher margin, and that also has a temporary negative mix effect.

Now looking at that EBITDA growth and you then look at the other lines of the P and L up until net profit, we expect 2% to 6% growth in adjusted EPS. So in euro amount, €1.82 to €1.89, and at the latest exchange rate, $2.07 to $22 15, and adjusted cash flow conversion, 90% and more. And we know and you know that this company has been able to deliver cash, and this is the cash we’ve delivered between 2017 and 2024, so more than 2,000,000,000 of adjusted free cash flow. You see in 2122, it has been a bit lower, and that has been a conscious consequence of a decision to take a bit more inventory because there was more kind of supply constraint elements there. But the last two years, our adjusted free cash flow has been between 275 and 300,000,000.

And if you would also look at the years ahead and you look at our growth targets, that would imply roughly €850,000,000 of adjusted free cash flow, which is around one third of our market cap. How will we deploy that cash? What is our capital deployment? If you look at 2018, ’20 ’20 ’1, you’ve seen that this company has done m and a and quite has been quite diligently in m and a. So you see the m and a’s in 2015 and the one in Switzerland in 2020 and the one more recently, and Stefan just showed some of the advertising of the business, the one in the Southeastern Europe, which is doing very well for us.

So that’s something we have been doing. If you look more recently, you look up also take a closer look at our valuation. We’ve chosen to do a bit more cash allocation in terms of buybacks. You see that in 2023. And last, we choose an element of a bit of buyback and a bit of also cash return in total almost generating €200,000,000 of cash for shareholders.

So we will continue to drive right shareholder return. And with that, I would like to close and open up for questions. Many thanks.

Unidentified speaker: Great. Thanks for that. Think the presentation was helpful. It’s great to see the innovation, you know, in in person and and also some of the advertising. So thank you for that.

I guess first question is sort of the the the early returns on some of the the the commercial investments you’ve been making. When you talk about or think about your your must win battles today, what percentage of them are we winning today, and what’s the what what what are what kind of near term milestones have you set as targets?

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: Well, I think the milestone is we want to make sure that they’re going to they’re going all to go to going to win. Mhmm. I think, you know, in the last two years, it’s been a bit of a on the you know, it was a bit of a on the the back burner. Mhmm. But I think on the penetration, we’re more than 50% are growing right now, and we we have every every intent, obviously, to make sure that it’s going to increase.

And it’s going to increase basically with simple. It’s back to innovation. It’s back to to to renovation. I think ’22 let’s say definitely ’23, ’20 ’4 were really price years which were great obviously for private label because it was all about, you know, price as opposed to anything else. But it’s all game now starting with basically in the second half of of twenty four, and now, obviously, more and more, second part will be very important, obviously, to come back with something which is more than price, which is value, which is obviously taste, which is all the things that the brand should deliver.

Mhmm. And starting obviously with, with our mushroom battles. Okay.

Unidentified speaker: How have competitors responded to your accelerated investments? Where you’re competing with private label, the responses are more limited arguably. But as you you you you know, you highlighted the the, you know, the fish and chips. Yeah. As you move into, you know, other branded territory, what has been the competitive response?

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: Well, I think, you know, you you you should never underestimate the private labels. That’s the first thing. So and then we we not.

Unidentified speaker: K.

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: So when we come in with a new something new, well, you could say that two year two, three years down the road, they’re going to come with something. But that’s been the the the that’s been the game for the last whatever number of years. If you stop you forget that, you know, obviously, you have a bigger issue. But it’s mostly, you know, that’s I think that’s well, when we think about us, you know, we all competitors are private label, and then here and there’s some some brand, you know, in some region or with some categories. So we just focus more on the on the private label.

But, well, it’s it’s been I think during the crisis, the price crisis, they came late with price, probably a bit later than we thought it would, but now, obviously, it has stabilized. And the game is back to what it what it what it should be.

Unidentified speaker: Okay. Ruben, I think last quarter, you saw some inventory destocking in in results. Apologies if I missed it. I don’t think you talked about it in the presentation. Where are we on that today?

Is that carried over into February, or is that now behind us?

Ruben Baldeau, Chief Financial Officer, Nomad Foods: Yeah. That’s that is now behind us. So we had, indeed, your point, seen inventory destocking at retail. We saw throughout 2024 a gradual increase. So I also wanna be clear.

It’s not that we had big debates with retailers that there’s some seen something like a a different consumer sentiment. You’re probably at a level where they say, look. Service levels are now at a better level, so we can actually allow to take a bit of a step back. Some of that was expected. Let’s be clear.

We always said there would be a bit of phasing between quarter four and quarter one, but we’ve seen a bit more in quarter one. The fast demand is now behind us. Like we said at the time as well, there’s still a little bit in UK, but not not material.

Unidentified speaker: Okay. And you one thing you did talk about in the presentation, but I wanna I wanna expand on it, is just the the quarter to quarter volatility. There’s a lot going on as we go through the year. You know, two q benefits from Easter Yeah. But also specific challenges related to year ago comparisons.

And then you the three q comparisons ease as you lap last year’s ERP related disruptions. So just maybe walk us through the puts and takes of year to go.

Ruben Baldeau, Chief Financial Officer, Nomad Foods: No. I get that. I mean, the end is, you know, what is our underlying growth rate and also, you know, are we competitive? So I think, first of all, if you take a step back and and, again, p five and by the way, we say p five with period you know, period May, but it’s not fully till the May. We have most of the shares coming in, and we see a further recovery of shares.

So if you take a step back and you say, okay. Let’s look at the last twelve months. We’re kind of flat in volume share. Are we satisfied? No.

Can we do more? Yes. But is that a kind of stabilization? Yeah. We’re seeing that.

So we’re happy with that and a category which is now in that period around one and a half, maybe towards 2%. So that’s not bad. Within that, in in quarter two specifically, to your question, we do have the advantage of Easter because we had to shift from Easter kind of quarter one to quarter two, so that will help us. Having having said that, the start so far of of ice cream has been a bit disappointing with bad weather, and we’ve seen in UK a bit more softness because it was warm weather there. Now Yep.

We’re not a weather company. Right? So but that has not helped. It’s that the structure should not at all. Then to your point, EUP last year quarter three was around 25, 30 million impact.

That’s 1% on the full year. That’s 2% on the h two, and that’s where we see the recovery of growth.

Unidentified speaker: Okay. Move ice cream to The UK is what you

Ruben Baldeau, Chief Financial Officer, Nomad Foods: Yeah.

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: Well, maybe. But right now, the the good the good thing is, you know, it’s it’s the the weather is bad in the right countries, and the right the weather is good in the right countries.

Unidentified speaker: So normal. Yeah. Okay. Maybe, you know, maybe both of your perspectives on this. You you closed your session or your slides with cap allocation, but, you know, m and a has been a big part of the the nomad story from the inception.

Yeah. So, you know, I don’t think things have structurally changed, fundamentally changed, but maybe update us, Stephane, kind of how you see the landscape today and your appetite and the opportunity set for M and A, and then, Stephane, the kind of the the financing opportunities.

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: Well, I have a very nonemotional view of m and a.

Ruben Baldeau, Chief Financial Officer, Nomad Foods: Mhmm.

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: That might be my background as well in m and a potentially. I think for the first three years, we didn’t do any m and a because quite frankly, we we didn’t have anything to offer. I think you need to the the worst thing is when the model is not working well is to go to m and a and thinking it’s going to help you because m and a is only working if you come in with a superior model that’s going to obviously and you have to demonstrate that you are the right investor. So we didn’t do anything. And then we started things are starting really big 17, 18 started really to go the right way.

Then we started with obvious things. First, we we we said no to a lot of nonfrozen food. We like this focus. It’s really part of our values, by the way. And, while it came to two deals, you can plan, obviously, but that’s a that’s a big lesson.

You cannot plan. It’s coming. And it came with two two additional brands in The UK, and it was a no brainer because we could add them and it’s the synergy level was very high. Then we came with other deals. So the the the period of M and A was actually really focused on between ’28 2018 and 2021.

Yeah. Then you have the the crisis. Quite frankly, the last thing I had in mind was, let’s go to M and A. And by the way, all the private guys, you know, thought that the the the multiple was still the the multiple they had because they’re not confronted every day with the multiple. That’s easy, obviously, whether you’re thinking it’s 14, it’s 14 because you don’t have something you don’t see the the screen every day, and it’s obviously something you don’t like to, to accept.

It’s the same thing in real estate, by the way, when you have to to buy or sell your house, you don’t like this kind of bad news. So we didn’t do anything that was no no time no time lost. Things now are starting to get to get back, but we will be rigorous anyway. We’re not going to go to the shiny object. We like the idea of going to new categories that we can expand in in the the countries.

We we’re taking the whole the whole organization. We need two or three people, maybe a bit little bit more some sometimes. And then, obviously, we’re going to to to to present this to all to all retailers, and they will love it. And that’s the kind of deals well, not a high multiple, a lot of synergies. And, by the way, with the multiple of around even less than than eight, well, I’m not going to buy something at 12 times.

I can tell you. I mean, it’s, not crazy. Yeah. So unless there is something fantastic that come with a huge level of synergy, but the math do not work. But that’s that’s the kind of things.

Are they still in your targets? Absolutely. Can I tell you that we’re going to buy something? Absolutely not. Mhmm.

Because you need to obviously to be disciplined and make sure that the other guys are going to be reasoned as well.

Unidentified speaker: Yep. So for you, best use of cash is your own shares.

Ruben Baldeau, Chief Financial Officer, Nomad Foods: Yeah. And and then look. It’s bit

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: of M and A. Yeah?

Ruben Baldeau, Chief Financial Officer, Nomad Foods: Mhmm. That’s not a bad M and A at all. And we we’ve had a leverage year end around ’3, quarter ’1, ’3 point ’2. Look at cash every day. It’s pretty stable cash flow, so that allows us to indeed buy our shares.

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: Okay. You don’t you don’t need due diligence, by the way.

Unidentified speaker: Right. A couple minutes left. I guess, Stefan, you you’d early on your presentation, you showed the the long term financial. So, obviously, a good long term, you know, phasing and trajectory. As you think back, Nomad’s about ten years old as a public company.

I guess more strategically, what would you say the biggest successes are? And then in terms of as you look forward over the next five, ten years, what are the most what are the biggest opportunities?

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: Well, I think the the strategic logic of of focusing behind the best and brightest categories, the best and brightest products was was huge, then obviously focusing not spreading your money everywhere and all your people. Well, that was I think I think we distilled some sort of rigor and be behind with the within this this company, which is not only financial result, but also in terms of culture. Yeah. I’m I’m quite quite proud of what we’ve been achieved. It’s a company where people are delivering in the without with or without crisis.

So nine years in a row, It’s not bad. So people are are proud of that. I think people are also proud of, we’ve built a real company of of something which was a combination of financial constructs, and, and, also, we’ve built a real portfolio in a in a category. I think we can do better. Back to your point, we can do better with the with the category.

Mhmm. We haven’t spent enough time behind, you know, delivering, explaining what the what what grade is with with frozen food. So I think, you know, we we were talking about 1.5%. Can it go for more? I don’t know, but definitely, you know, there is potential with this.

Unidentified speaker: That’s the aspiration.

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: I think that’s the big aspiration. I think we also need to increase our level of innovation renovation. You’ve seen the numbers, you know, in 2023. I don’t like this number. I’m not proud of this number.

So we’re going to keep that well, and we’re going to make sure that it’s not going to happen again. So we are the guardian of the quality and the and the the the quality and the brands we have, and we we expect we intend to to go that way. And then let’s say, m and a will come, but but, again, I think it’s a we’re not going to to to have a strategy of m and a per se. Mhmm. And, you know, if there is a great combination at some stage might happen.

You know, there are some interesting combination, but we’re not going to go to something big for the sake of going some to something big. We’re not we’re not we’re not obsessed by that.

Unidentified speaker: Very clear. And with that, we’re right at time. Yeah. So, Stephane

Stephane Beschermacher, Chief Executive Officer, Nomad Foods: Thank you. Ruben, thank you.

Ruben Baldeau, Chief Financial Officer, Nomad Foods: You’re welcome.

Unidentified speaker: Thank you all for joining us, and look forward to seeing you again. For having us.

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