Core Insights - Nomad Foods (NOMD) is focusing on innovation to recover from a decline in total revenues, organic sales, and volume in Q1 2025, which fell by 3%, 3.6%, and 3.7% respectively [1][9] - The company is particularly enhancing its fish portfolio, which accounts for about one-third of total revenues, by renovating existing products and launching new lines [2][9] - Nomad Foods is targeting new consumption occasions, especially snacking, to reposition frozen fish products, with early success indicated by a 9% year-over-year increase in fish retail sales in Italy during Q1 [3][9] Innovation Strategy - The company plans to increase the percentage of sales from innovation in 2025 while maintaining investment levels despite macroeconomic challenges [4] - Management will monitor the performance of innovation initiatives and apply insights across markets to support volume trends and enhance product relevance over time [4] Industry Context - Other companies in the industry, such as Conagra Brands and Lamb Weston, are also focusing on innovation to drive growth, with Conagra reporting a 6.3% revenue decline in Q3 2025 and Lamb Weston achieving a 9% volume growth despite challenges [5][6][7] Financial Performance - Nomad Foods' shares have decreased by approximately 1.8% over the past month, contrasting with the industry's growth of 2.3% [8] - The company trades at a forward price-to-earnings ratio of 8.04X, significantly lower than the industry average of 15.97X [11] - The Zacks Consensus Estimate indicates a projected year-over-year sales growth of 4.6% and earnings per share growth of 7.3% for the current financial year [12] Sales and Earnings Estimates - Current quarter sales are estimated at $857.70 million, with a year-over-year growth estimate of 5.80% [14] - The earnings per share for the current year is projected at $2.07, reflecting a year-over-year growth estimate of 7.25% [15]

Core Insights - Nomad Foods Limited (NOMD) and Lamb Weston Holdings Inc. (LW) are key players in the global frozen foods market, employing different growth strategies and operational focuses [2][3] - NOMD leads in the European frozen food sector with a health-oriented product portfolio, while LW specializes in frozen potato products primarily for North American foodservice [2][3] Company Performance - NOMD's revenue is significantly derived from health-centric products, with 94% of its U.K. and Western Europe sales classified as healthy meals [4] - In Q1 2025, NOMD experienced a 3.6% organic sales decline but achieved retail sell-through growth and improved gross margins due to operational efficiencies [5] - NOMD reported a 36% year-over-year sales increase in innovation-led categories, particularly in chicken and frozen chips, with notable market share gains in Germany and the U.K. [6] - LW posted 9% volume growth and 4% sales growth in Q3 2025, but faced a 5% decline in price/mix due to competitive pricing pressures [10] Strategic Initiatives - NOMD is focused on brand equity and innovation, integrating marketing and merchandising to adapt to consumer preferences, which has led to a 9% sales growth in its Fish Bar sub-brand in Italy [7][8] - LW is undergoing a company-wide transformation targeting $55 million in pretax savings for fiscal 2025 and $85 million for fiscal 2026, with over 30 projects aimed at improving efficiency [11] - LW has introduced new products to align with consumer trends, but continues to face margin pressures from high inventory costs and unfavorable pricing dynamics [12] Financial Metrics - The Zacks Consensus Estimate for NOMD's EPS in 2025 is projected at $2.07, indicating a 7.3% year-over-year growth [14] - In contrast, LW's EPS estimate for fiscal 2025 is $3.14, reflecting a significant projected decline of 38.2% compared to the previous year [14] - NOMD trades at a forward P/E ratio of 8.05x, below the industry average of 15.83x, while LW trades at a higher multiple of 15.59x, suggesting NOMD is the more value-oriented option [17] Market Performance - Over the past six months, NOMD has gained 5.9%, while LW has declined by 13.9%, indicating NOMD's stronger market performance [19] - NOMD's consistent execution and diversified product portfolio position it favorably in the evolving frozen foods industry [21] - Investors seeking value and stability may find NOMD a more compelling investment choice in the current market environment [22]

Core Insights - Nomad Foods Limited (NOMD) is facing increasing input cost pressures, particularly in protein categories such as chicken and red meat, due to heightened demand and disruptions related to Asian flu in Europe [1][7] - The company's management indicated that pricing actions are being implemented but will likely lag behind cost inflation in the near term, leading to a revised lower adjusted EBITDA growth guidance for 2025 [2][3] Financial Performance - In Q1 2025, Nomad Foods reported a gross margin increase of 90 basis points year-over-year to 27.8%, but adjusted EBITDA declined by 1.8%, indicating early signs of margin pressure [2][7] - The updated guidance for adjusted EBITDA growth for 2025 has been revised downward to a range of 0% to 2%, from a previous range of 2% to 4% [2] Market Position and Strategy - Nomad Foods has a history of pricing to recover cost increases, but prolonged inflation in protein inputs may challenge consumer elasticity, particularly in value-seeking markets like the UK [3] - The company must balance cost recovery with demand retention while maintaining brand strength to offset margin pressure in the upcoming quarters [3] Peer Comparison - Conagra Brands (CAG) is also facing elevated protein and input costs, resulting in a 389-basis-point adjusted gross margin decline in Q3 fiscal 2025, and is focusing on portfolio restructuring [4] - Lamb Weston reported 9% global volume growth in Q3 fiscal 2025 and is executing over 30 strategic projects, despite a 5% decline in price/mix due to strategic pricing adjustments [5] Valuation Metrics - Nomad Foods shares have decreased approximately 5.5% in the past month, compared to a 1.7% decline in the industry [6] - The company trades at a forward price-to-earnings ratio of 7.89X, significantly lower than the industry average of 15.77X [9] Earnings Estimates - The Zacks Consensus Estimate for Nomad Foods' current financial-year sales and earnings per share implies year-over-year growth of 4.6% and 7.3%, respectively [11] - For Q2 2025, the consensus estimate for sales is $892.71 million, reflecting a year-over-year growth estimate of 5.54% [12]

Core Insights - Nomad Foods Limited (NOMD) is trading at a forward 12-month price-to-earnings (P/E) ratio of 8.12, significantly lower than the industry average of 16.02, indicating a compelling investment opportunity for value-focused investors [1][4] - The company has a Value Score of A, reflecting strong fundamentals and positioning within the market [1] - Recent stock performance shows NOMD shares have declined by 9.4% over the past three months, underperforming both the industry and broader market indices [5] Valuation Comparison - NOMD's forward P/E ratio of 8.12 is notably lower than major competitors such as Mondelez International (21.18), The Hershey Company (27.42), and McCormick & Company (23.78) [4] - The stock is currently priced at $17.43, approximately 16.2% below its 52-week high of $20.81 [9] Growth Strategy - The company reported a 36% year-over-year sales growth in its Growth Platforms during Q1 2025, with notable performance in chicken and prepared meals [12] - NOMD is investing in innovation, launching new product lines and brand relaunches to enhance consumer engagement, particularly in the fish category [11][10] - Retail sales of NOMD's fish products in Italy increased by 9% year-over-year, showcasing the effectiveness of its revitalization strategy [13] Earnings Estimates - The Zacks Consensus Estimate for NOMD's earnings per share (EPS) has seen upward revisions, with the current fiscal year estimate rising by 8 cents to $2.07 and next fiscal year by 11 cents to $2.25 [14] - Projected year-over-year EPS growth is expected to be 7.3% this year and 8.7% next year [14] Market Challenges - The company is facing inventory destocking across European markets, leading to a gap of nearly 4 percentage points between sell-in and retail sell-through in Q1 2025 [15] - Rising input costs, particularly in chicken and red meat, are expected to pressure profitability in the near term due to inflationary pressures and supply disruptions [17]

Core Insights - Frozen foods are experiencing rapid growth due to convenience, durability, and healthier options, with Nomad Foods Limited (NOMD) leading the savory frozen food market [1][2] - The company is focused on acquiring a leadership position in the frozen food sector through product launches, market expansion, sustainability efforts, and strategic acquisitions [2][3] Company Strategy - Innovation is central to NOMD's strategy, enhancing its product offerings and market presence through acquisitions like Fortenova Group's Frozen Food Business Group, Findus Switzerland, Goodfella's, and Aunt Bessie's Limited [3][10] - The management highlighted that the frozen food category has outpaced the overall food industry by nearly one percentage point over the last decade, driven by trends in convenience, sustainability, value, and taste [4] Market Position and Competition - NOMD is strategically positioned to leverage evolving market trends and meet consumers' nutritional needs, with major competitors including Conagra Brands, Inc. and Tyson Foods, Inc. [5][6] - Conagra reported net sales of $1.1 billion in its Refrigerated & Frozen segment for the third quarter of fiscal 2025, emphasizing innovation and supply-chain modernization [7] - Tyson Foods' Prepared Foods segment generated $2.4 billion in sales in the second quarter of fiscal 2025, focusing on a broad range of frozen and refrigerated products [8] Financial Performance - NOMD's shares have increased by 5.5% year-to-date, outperforming the industry's decline of 2.2% [9] - The company trades at a forward price-to-earnings ratio of 8.11X, significantly lower than the industry average of 15.98X [11] - The Zacks Consensus Estimate indicates year-over-year EPS growth of 7.3% for 2025 and 8.7% for 2026, although estimates have been revised downward in the past 30 days [12]

Key Takeaways NOMD's Q1 gross margin grew 90 bps to 27.8% despite retailer destocking and modest sales. Product innovation like Fish Bar is boosting category growth and appeal. NOMD is increasing ad spend and upgrading to keep margins strong as input costs begin to rise.Innovation lies at the heart of Nomad Foods Limited’s (NOMD) management strategy, driving long-term growth and competitive advantage. In the first quarter of 2025, despite retailer inventory destocking and modest sales, NOMD grew its gross ...

Summary of Nomad Foods Conference Call Company Overview - **Company**: Nomad Foods - **Industry**: Frozen Food Key Messages - **Category Advantage**: Nomad Foods believes it has a competitive edge in the frozen food category, which has shown strong performance over the last decade, outperforming overall food trends [3][4][19] - **Portfolio Strength**: The company has a diverse portfolio in frozen food, including fish, vegetables, chicken, ice cream, and pizza, with two-thirds of its business focused on protein and vegetables [5][6][21][23] - **Market Share Focus**: Nomad Foods emphasizes the importance of market share, stating that it has maintained an average market share of 46% in its key categories, which represent about 37% of net sales [14][24] Financial Performance - **Sales Growth**: The company has consistently increased sales and EBITDA over the past nine years, with growth rates of 6%, 7%, and 10% in recent years despite market challenges [8][9] - **EBITDA Guidance**: For the current year, Nomad Foods expects EBITDA growth between 2% and 6%, with adjusted EPS projected between €1.82 and €1.89 [66][69] - **Free Cash Flow**: The company has generated over €2 billion in adjusted free cash flow from 2017 to 2024, with expectations of around €850 million in the coming years [69][70] Market Dynamics - **Category Growth**: The frozen food category is projected to grow at 2% in value and 1% in volume, with Nomad Foods stabilizing its market share despite some seasonal fluctuations [61][63][65] - **Competitive Landscape**: The company acknowledges the competitive pressure from private labels but remains focused on innovation and brand strength to maintain its market position [76][80] Innovation and Product Development - **Innovation Strategy**: Nomad Foods aims to increase its innovation rate, targeting 6.5% of its product offerings to be new innovations, leveraging successful products from one market to introduce in others [27][28][34] - **Product Renovation**: The company is committed to improving existing products, with a goal to enhance taste and quality, particularly in categories like pizza and fish fingers [31][33][34] Challenges and Opportunities - **Inflation Impact**: The company faced inflationary pressures, particularly in protein costs, which affected gross margins. However, it has chosen not to reopen negotiations with retailers to adjust pricing immediately [66][67] - **M&A Strategy**: Nomad Foods remains open to M&A opportunities but emphasizes a disciplined approach, focusing on synergies and avoiding high multiples [100][102] Future Outlook - **Long-term Growth Potential**: The company sees significant growth potential in frozen food, particularly in markets like Italy and Germany, where it plans to expand its product offerings [20][36][38] - **Consumer Trends**: Nomad Foods is adapting to changing consumer preferences, including a focus on health and convenience, which aligns with the growing popularity of air fryers and healthier frozen options [18][20][17] Conclusion - Nomad Foods is positioned well within the frozen food industry, leveraging its strong portfolio and market share while focusing on innovation and strategic growth opportunities. The company is navigating current challenges with a clear strategy aimed at long-term success.

June 2025 dbAccess Global Consumer Conference 1 Disclaimer not constitute or form part of, and should not be construed as: (i) an offer, solicitation or invitation to subscribe for, sell or issue, underwrite or otherwise acquire any securities or financial instruments, nor shall it, or the fact of its communication, form the basis of, or be relied upon in connection with, or act as any inducement to enter into any contract or commitment whatsoever with respect to such securities or financial instruments, or ...

Core Insights - The analyst has a strong background in equity research and investment analysis, with a focus on the U.S. equity market and consumer staples sector, indicating a belief in the resilience of defensive stocks for long-term investment opportunities [1]. Group 1: Analyst Background - The analyst holds certifications as FMVA and FPWMP, which provide skills for analyzing financial statements and building valuation models [1]. - Participation in the CFA Research Challenge has equipped the analyst with practical experience in equity analysis and industry research [1]. - The analyst graduated with a CGPA of 3.6 in Finance from Alexandria University in 2024, showcasing a solid academic foundation [1]. Group 2: Professional Experience - The analyst has worked with a confidential client, preparing investment reports across various sectors, including healthcare, consumer staples, and industrials, enhancing the ability to evaluate companies across diverse industries [1]. - In 2023, the analyst joined AIESEC, further developing leadership, communication, and teamwork skills through global exchange and project collaboration [1].

Market Overview - Volatility has returned to Wall Street, driven by tariff fears and high inflation impacting consumer sentiment [1][2] - Consumer sentiment index dropped to 50.8 in May, a 2.7% decline from April, marking one of the lowest points in 75 years [5] - Since January, consumer sentiment has decreased by nearly 30%, with short-term inflation expectations rising to 7.3% in May from 6.5% [6] Federal Reserve and Inflation - The Federal Reserve is unlikely to implement interest rate cuts in the near term, maintaining a cautious stance despite signs of easing inflation [8] - The consumer price index rose by only 0.2% in April, with a year-over-year increase of 2.3%, the smallest since February 2021 [7] Tariff Impact - President Trump's announcement of sweeping tariffs raised concerns about a potential global trade war, leading to market sell-offs [9][11] - A recent 90-day trade truce with China has temporarily calmed the situation, delaying additional tariffs [10] Investment Opportunities - Recommended focus on safe-haven stocks, particularly low-beta consumer staples with high dividend yields [3][4] - Philip Morris International Inc. (PM) has an expected earnings growth rate of 13.7% for the current year and a dividend yield of 3.09% [14] - Nomad Foods Limited (NOMD) has an expected earnings growth rate of 7.3% and a dividend yield of 3.80% [16] - Zevia PBC (ZVIA) shows a significant expected earnings growth rate of 38.7% for the current year [17]