Nomad Foods (NOMD) 2025 Conference Transcript

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.