Company Overview - Nomad Foods is a leader in the frozen food category in Europe, with well-known brands such as Birds Eye, iglo, and Findus, as well as regional brands like Ledo and Frikom in Serbia and Croatia, and Goodfella's pizza in the U.K. [2] Financial Performance - The company has achieved consistent growth over the past 9 years, increasing sales, EBITDA, and EPS annually, although it did not achieve this for the 10th consecutive year, which is a point of frustration for the management [3]

Nomad Foods (NOMD) FY 2025 Conference September 03, 2025 03:45 PM ET Company ParticipantsStéfan Descheemaeker - CEO & DirectorRuben Baldew - CFO & DirectorOperatorAll right. Good afternoon, everybody. Welcome back for our fireside chat with Nomad Foods. With us today are CEO, Stephane Deschmacher and CFO, Ruben Valdew. Stephane is going to start off with some comments, hand it over to Ruben, and then we'll sit down for some questions as well.Over to you, Stephane, and thanks, Steve, both for being Thank you ...

Nomad Foods (NOMD) FY 2025 Conference September 03, 2025 03:45 PM ET Speaker0All right. Good afternoon, everybody. Welcome back for our fireside chat with Nomad Foods. With us today are CEO, Stephane Deschmacher and CFO, Ruben Valdew. Stephane is going to start off with some comments, hand it over to Ruben, and then we'll sit down for some questions as well.Over to you, Stephane, and thanks, Steve, both for being Thank you very much.Speaker1Andrew? So let me start right off the bat with I think for those wh ...

September 2025 Barclays Global Staples Conference Disclaimer commitment whatsoever with respect to such securities or financial instruments, or (ii) any form of financial opinion, recommendation or investment advice with respect to any securities or financial instruments. This Presentation has been prepared and issued by Nomad Foods Limited (the "Company"). This Presentation has been provided solely for information and background. The information in this Presentation is provided as at the date of the Presen ...

Financial Data and Key Metrics Changes - The company has adjusted its full-year inflation assumption from 4% to 4.5% due to adverse weather conditions affecting crop yields, particularly in the UK [24][25] - The gross margin dropped in Q2, attributed to increased inflation and supply chain challenges [26] Business Line Data and Key Metrics Changes - The company reported a significant focus on cost competitiveness, leading to a reduction in SG&A expenses primarily driven by overheads rather than advertising and promotion [30][31] - Innovations and renovations are expected to contribute nearly double the sales compared to the previous year, with a focus on snacking and protein products [32][34] Market Data and Key Metrics Changes - The market in Q2 experienced a volume decline of approximately 5.5%, particularly in key regions like the UK, due to extreme weather conditions [16][22] - The company has gained market share in volume despite overall market underperformance in categories like fish and vegetables [9][10] Company Strategy and Development Direction - The company is adjusting its ERP implementation strategy to mitigate risks and improve inventory management [7][8] - There is a strong emphasis on innovation, with plans to enhance product offerings in response to changing consumer preferences and weather patterns [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current challenges and emphasized the importance of preparing for future weather-related impacts on sales [50][53] - The company is committed to maintaining flexibility in capital allocation, focusing on share buybacks and dividends while being cautious about M&A opportunities [55] Other Important Information - The company is exploring partnerships with startups to enhance its innovation pipeline and speed up product development [43][45] - There is a focus on optimizing the supply chain and reducing complexity within the operational network to improve cost efficiency [40][41] Q&A Session Summary Question: Confidence in full-year guidance - Management acknowledged past challenges with guidance and emphasized lessons learned from ERP implementation and inventory management [6][8] Question: Organic growth expectations for Q3 - Management indicated that while growth is expected in Q3, it is contingent on market conditions and weather patterns [17][19] Question: Inflationary pressures and pricing strategy - Management confirmed an increase in inflation assumptions and indicated plans to adjust pricing where feasible [24][26] Question: SG&A savings initiatives - Management detailed ongoing efforts to reduce overhead costs and improve cost competitiveness [30][31] Question: Innovation pipeline and future products - Management highlighted a significant increase in sales from innovation and renovation, with a focus on snacking and protein products [32][34] Question: Supply chain optimization and facility closures - Management discussed plans for supply chain optimization, including the closure of a smaller factory in the Nordics [40][41] Question: Long-term portfolio adjustments for climate change - Management addressed the need to adapt product offerings to changing weather patterns and consumer preferences [50][53] Question: Capital allocation priorities - Management confirmed ongoing share buybacks and dividends while maintaining flexibility for future opportunities [55]

Financial Data and Key Metrics Changes - The company has adjusted its full-year inflation assumption from 4% to 4.5% due to adverse weather conditions affecting crop yields, particularly in the UK [23][24] - There has been a noted drop in gross margin in Q2, attributed to increased inflation and weather-related challenges [24] Business Line Data and Key Metrics Changes - The company has seen a significant increase in innovation contributions to sales, with expectations for nearly double the previous year's contribution [32][34] - SG&A expenses have been reduced, primarily driven by overhead savings rather than advertising and promotion [30] Market Data and Key Metrics Changes - The market in Q2 experienced a volume decline of approximately 5.5%, particularly in key regions like the UK, which impacted sales [15][21] - The company has gained market share in volume despite overall market underperformance during the hot weather [9][10] Company Strategy and Development Direction - The company is focusing on enhancing its product assortment to better align with changing consumer preferences during hotter weather, including more natural and marinated fish options [51][54] - There is an emphasis on cost competitiveness and maintaining pricing strategies to recover from inflation while avoiding overpricing compared to competitors [30][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future despite disappointing first-half performance, citing a strong portfolio and effective strategy [60] - The company is preparing for potential future heat waves by adjusting product offerings and improving supply chain agility [54][51] Other Important Information - The company has conducted share buybacks amounting to €100 million in H1 and announced a dividend, indicating a commitment to returning value to shareholders [56] - The company is exploring partnerships with startups to enhance innovation and speed up product development [44][46] Q&A Session Summary Question: Confidence in full-year guidance after recent performance - Management acknowledged past optimism regarding ERP implementation and excess inventory issues, indicating a more cautious approach moving forward [5][6][8] Question: Organic growth expectations for Q3 and Q4 - Management clarified that while growth is expected in Q3, the overall guidance remains conservative due to market conditions [14][16] Question: Impact of ERP supply disruption on sales - Management confirmed that the ERP lag from the previous year will positively affect comparisons, but current market conditions remain challenging [19][20] Question: Inflationary pressures and pricing strategies for 2026 - Management indicated that pricing adjustments will be necessary to recover from inflation, with a focus on maintaining competitiveness [22][26] Question: SG&A savings and overhead expense reductions - Management detailed ongoing initiatives to reduce overhead costs while remaining competitive in pricing [30][31] Question: Innovation pipeline and future products - Management highlighted a significant increase in sales from innovation and renovation, with a focus on snacking and new product categories [32][34] Question: Supply chain optimization and facility closures - Management discussed plans for supply chain optimization, including the closure of a smaller factory in the Nordics [41][42] Question: Long-term strategies for dealing with climate change - Management emphasized the need for agility in product offerings to adapt to changing weather patterns and consumer preferences [49][54] Question: Capital allocation priorities - Management confirmed ongoing share buybacks and dividends while maintaining flexibility for future opportunities [56][57]

Financial Data and Key Metrics Changes - In the second quarter, reported net revenues decreased by 0.8% to €747 million, with organic sales declining by 1.1% and volume also declining by 1% [25][26] - Adjusted EBITDA decreased by 7% year on year to €129 million, while adjusted EPS fell by 9% to €0.40 [30] - Adjusted gross margin contracted by 310 basis points year on year due to higher cost inflation, which more than offset productivity gains [28] Business Line Data and Key Metrics Changes - The chicken portfolio retail sales grew by 52% in the last quarter, with market share reaching 18%, a five percentage point increase from the previous year [14] - Retail sales in the frozen potato category rose by 21% year over year in the UK, gaining 180 basis points of market share [15] - Growth platforms saw net sales increase by 47% in the second quarter and 43% in the first half of the fiscal year [13] Market Data and Key Metrics Changes - Organic sales in the category posted high single-digit volume declines in key markets such as the UK, France, and Belgium due to unusually warm weather [26] - The frozen food category outpaced overall food volume sales by 60 basis points despite unfavorable weather conditions [11] - Weather-related headwinds negatively impacted frozen food sales by approximately 1% in France and 2% in the top five markets [7][9] Company Strategy and Development Direction - The company aims to return to organic sales growth in the second half of the fiscal year, assuming normalization of weather conditions [5][22] - Continued investment in advertising, merchandising, and innovation is expected to support long-term growth [12][19] - The company plans to launch new products targeting health-conscious consumers and enhance its portfolio with improved offerings [16][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 is proving to be a more challenging year due to external headwinds affecting the industry [4] - The company expects full-year organic sales to be flat to minus 2%, a revision from the previous expectation of flat to plus 2% [33] - Despite the challenges, management remains confident in the underlying health of the business and the potential for recovery in the second half of the year [36] Other Important Information - The company has returned substantial cash to shareholders, repurchasing €100 million of shares and paying out over €48 million in dividends, marking a 132% increase compared to the first half of last year [21][31] - The company is focused on controlling costs and enhancing profitability through various self-help actions [24][20] Q&A Session Summary Question: What are the expectations for organic sales growth in the second half of the year? - Management expects organic sales to return to growth in the second half, assuming normal weather conditions [22] Question: How is the company addressing the impact of weather on sales? - The company plans to adjust merchandising and consumer communication to emphasize products that perform better in warm weather [23] Question: What is the outlook for adjusted EBITDA and EPS for the full year? - Adjusted EBITDA is expected to decline by 3% to 7% year on year, with adjusted EPS guidance revised to €1.64 to €1.76 [35]

Financial Data and Key Metrics Changes - For Q2 2025, reported net revenues decreased by 0.8% to €747 million, with organic sales declining by 1.1% and volume also down by 1% [24][25] - Adjusted EBITDA decreased by 7% year on year to €129 million, while adjusted EPS fell by 9% to €0.40 [28][29] - Year-to-date free cash flow grew by 70% year on year, with a conversion ratio of 43% [29][30] Business Line Data and Key Metrics Changes - The company's growth platforms saw net sales increase by 47% in Q2 and 43% in the first half of the fiscal year [12] - Retail sales for the chicken portfolio grew by 52% in the last quarter, with market share reaching 18%, a five percentage point increase from the previous year [13] - Frozen potato retail sales in the UK rose by 21% year over year, gaining 180 basis points of market share [14] Market Data and Key Metrics Changes - Organic sales in the category were down by 1% in Q2, with high single-digit volume declines observed in key markets like the UK, France, and Belgium [25][26] - The unusually warm weather negatively impacted consumer behavior, contributing to a 1.5% negative impact on the full-year outlook [26][32] - The frozen food category has outpaced overall food industry growth by nearly one percentage point over the past decade [10] Company Strategy and Development Direction - The company plans to return to organic sales growth in the second half of the year, assuming normal weather conditions [31][35] - Continued investment in advertising, merchandising, and innovation is expected to support long-term growth [11][18] - The company is focused on enhancing profitability through cost savings and productivity improvements [19][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 is a challenging year, with external headwinds affecting performance [4][5] - Despite the setbacks, management remains optimistic about long-term growth opportunities in the frozen food category [10][20] - The company expects to recover cost increases through pricing actions, although most will not take effect until 2026 [27][32] Other Important Information - The company has returned substantial cash to shareholders, repurchasing €100 million of shares and paying out over €48 million in dividends, marking a 132% increase compared to the first half of last year [20][30] - A new advertising campaign is set to launch in the UK, coinciding with product innovations aimed at younger, health-conscious consumers [18][15] Q&A Session Summary Question: What are the expectations for organic sales growth in the second half of the year? - Management expects organic sales to return to growth in the second half, assuming normal weather conditions [31] Question: How is the company addressing the impact of weather on sales? - The company plans to adjust merchandising and consumer communication to emphasize products that perform better in warm weather [22] Question: What are the expectations for adjusted EBITDA and EPS for the full year? - Adjusted EBITDA is expected to decline by 3% to 7% year on year, with adjusted EPS projected in the range of €1.64 to €1.76 [34]

Core Insights - Nomad Foods Limited reported a challenging second quarter in 2025, with unfavorable weather impacting consumer behavior and sales, leading to a decrease in revenue and profit metrics [2][5][7] - The company has lowered its full-year guidance for organic revenue and Adjusted EBITDA due to weaker-than-expected first half results, now expecting organic revenue to be flat to -2% and Adjusted EBITDA to decline by 3% to 7% year-on-year [5][8] Financial Performance - Revenue for the second quarter of 2025 decreased by 0.8% to €747 million compared to the same period in 2024, with organic revenue declining by 1.1% driven by a volume decline of 1.0% and a price/mix decline of 0.1% [7][8] - Adjusted EBITDA for the second quarter decreased by 7.2% to €129 million, while Adjusted EPS decreased by 9.1% to €0.40 [7][8] - For the first six months of 2025, revenue decreased by 1.9% to €1,507 million, with organic revenue down 2.4% due to a volume decline of 2.3% [8][23] Market Position and Strategy - Despite external challenges, Nomad Foods improved its market share in the quarter, with retail sell-out growth accelerating to +1% for the second quarter, bringing year-to-date growth to +0.7% [2][5] - The company is focusing on innovation and renovation initiatives to drive future growth, with expectations of organic sales returning to growth in the second half of the year, assuming normalized weather conditions [2][5] Guidance and Outlook - The revised full-year guidance includes an expected Adjusted EPS range of €1.64 to €1.76, down from the previous range of €1.82 to €1.89, translating to a USD range of $1.89 to $2.02 based on the July 30, 2025 exchange rate [5][8] - The company maintains its full-year adjusted free cash flow conversion guidance of 90% or greater, indicating a focus on cash generation despite the current challenges [5][8]

Financial Performance - Q2 2025 - Total Revenue was €747 million[19, 21], a decrease of 0.8% year-over-year[21] - Organic revenue declined by 1.1%[9, 19, 21] due to a 1% volume decline[9] - Adjusted Gross Margin contracted by 310 bps year-over-year to 27.8%[9, 19, 21] - Adjusted EBITDA decreased by 7% year-over-year to €129 million[9, 19, 21] - Adjusted EPS decreased by 9% year-over-year to €0.40[9, 19, 21] Cash Flow - YTD 2025 (6 Months Ended June 30) - Adjusted Free Cash Flow was €49 million[22] - Adjusted Free Cash Flow as a percentage of adjusted profit for the period was 43%[22] compared to 32% in the same period last year[22] Outlook - 2025 Guidance - Organic Revenue growth is expected to be between 0% and -2%[25] - Adjusted EBITDA is expected to decline by 3% to 7% year-over-year[25] - Adjusted EPS is projected to be in the range of €1.64 to €1.76[25] - Adjusted Free Cash Flow Conversion is expected to be 90%+[25]