Nomad Foods(US:NOMD)2020-11-08 08:42Financial Data and Key Metrics Changes - The company reported organic revenue growth of 5.4%, driven by a 4.2% increase in volume and mix, and a 1.2% increase in price [9][24] - Gross margin expanded by 90 basis points to 30.4% [10][25] - Adjusted EBITDA grew by 13% to approximately $109 million, and adjusted EPS increased by 20% to approximately $0.30 per share [10][26] - Revenues increased by 6.7% to approximately $576 million, with branded retail business growing just over 7% [24] Business Line Data and Key Metrics Changes - The branded retail business, which represents 90% of sales, grew over 7%, while food service and private label declined by 23% and 5% respectively [24] - The Green Cuisine brand achieved a record market share of 7% in the frozen plant-protein category in the U.K. [14] Market Data and Key Metrics Changes - The company entered three new markets: Portugal, Sweden, and Finland, expanding Green Cuisine's availability to 12 European markets [15] - The company noted a moderation of growth in packaged food and frozen savory relative to the extraordinary growth in Q2, but still outperformed in total frozen savory and packaged foods [10][11] Company Strategy and Development Direction - The company aims to engage new consumers through increased advertising and promotion (A&P) investments [12] - The focus remains on organic growth and complementary acquisitions within the European frozen food sector [17] - Sustainability commitments are being prioritized, including joining the 10x20x30 initiative to halve food loss and waste by 2030 [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving organic revenue, adjusted EBITDA, and adjusted EPS growth in 2021 compared to 2020 consensus [22] - The company is preparing for potential impacts from COVID-19 restrictions and is monitoring consumption growth closely [11][21] - Management noted that consumer behavior has stabilized, with less panic buying observed during the second lockdown [57] Other Important Information - The company returned $467 million of capital to shareholders during Q3, with approximately $600 million repurchased year-to-date, representing a 14% reduction in share count [17] - The company achieved the SAI Platform, Farm Sustainability Assessment Gold Level for pea farm management, marking a significant milestone in sustainability efforts [19] Q&A Session Summary Question: Clarification on 2021 growth expectations - Management clarified that they expect organic revenue growth, adjusted EBITDA growth, and adjusted EPS growth in 2021 compared to 2020 consensus, but noted the uncertainty due to COVID-19 [36] Question: Supply chain contingency plans for Brexit - Management indicated that they have prepared well for Brexit and have rebuilt safety stock to manage demand fluctuations [42][44] Question: Impact of sustainability efforts on costs and revenue - Management emphasized that sustainability initiatives are critical for business and can lead to cost reductions and revenue growth [46][47] Question: M&A opportunities in the current environment - Management stated that they are focused on frozen food consolidation in Europe and are prepared to act when opportunities arise [51][52] Question: Changes in consumer purchasing habits - Management noted that they are tracking repeat purchase rates and are pleased with the current trends, indicating some changes may be more permanent [91] Question: Competitive landscape for plant-based products - Management highlighted that Green Cuisine is positioned well in the market, achieving significant growth and market share [80][81]