Nomad Foods(US:NOMD)2020-05-10 03:46Financial Data and Key Metrics Changes - Organic revenue growth of 7.7% driven by a 6.3% increase in volume and mix and a 1.4% increase in price [10] - Gross margin at 29.1%, down 180 basis points year-over-year, in line with expectations [41] - Adjusted EBITDA of €120 million, representing a 2% decline versus the prior year [42] - Adjusted EPS of €0.33 for the quarter [43] - Revenue increased 10.5% to €683 million, benefiting from a trading day effect of 3.2% [40] Business Line Data and Key Metrics Changes - Branded retail business represents 90% of sales, with private label and foodservice each accounting for roughly 5% [14] - Market share increased by 1 percentage point in March, a notable improvement compared to the previous 52-week period [20] Market Data and Key Metrics Changes - Strong demand observed since March, with elevated growth continuing into April [26] - The company noted a significant shift to at-home consumption, leading to an influx of new consumers into the frozen food category [19] Company Strategy and Development Direction - Focus on maintaining supply chain efficiency and employee safety during the COVID-19 crisis [9][22] - Plans to navigate the medium-term with merchandising, innovation, and promotions as restrictions ease [28] - Long-term strategy includes capitalizing on increased e-commerce and consumer habits towards frozen food [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding full-year guidance due to strong first-quarter results and elevated sales growth expectations [11] - The company is preparing for a range of scenarios, including potential recession impacts, while expecting resilience in the frozen food category [30] Other Important Information - The company has a strong balance sheet with €828 million in cash and short-term investments, and total liquidity of nearly €1 billion [46] - A share repurchase program of €300 million was announced, with €91 million deployed towards buybacks [45] Q&A Session Summary Question: Confidence in providing full-year guidance amidst uncertainty - Management highlighted the unique positioning of the portfolio, with a focus on frozen food and retail channels, allowing for more accurate forecasting [58][60] Question: New household penetration and comparison to normal circumstances - Management noted that it is too early to quantify new household penetration but observed a significant influx of new consumers [64][75] Question: Strategic initiatives for stabilizing the Sweden business and Aunt Bessie's - Management discussed the establishment of a new management team in Sweden and the recovery of distribution for Aunt Bessie's [81][83] Question: Green Cuisine media timing and strategy - Management confirmed that the media timing for Green Cuisine has shifted but remains positive about the product's performance and market trends [95][96] Question: Gross margin expectations for the year - Management expects gross margin to improve in the second half of the year as inflation moderates [101] Question: Competitors' ability to respond to demand spikes - Management emphasized early and decisive actions taken in the supply chain, which helped maintain market share during the crisis [107][111] Question: Consumer behavior towards brands versus private labels - Management observed a short-term gravitation towards brands, with expectations of potential shifts towards private labels in a recessionary environment [118][120]