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- Revenue: Reported net revenues increased by 0.8% to 770 million EUR.
- Organic Growth: 0.3%, marking the ninth consecutive quarter of organic growth.
- Gross Margin: Increased by 390 basis points year over year to 32.3%.
- Adjusted EBITDA: Rose 19% year over year.
- Adjusted EPS: Increased 28% year over year to 55 Eurocents.
- Volume Growth: Positive for the second consecutive quarter, rising 0.7%.
- Adjusted Free Cash Flow: Year-to-date was EUR105 million.
- Dividend and Share Repurchase: EUR110 million returned to investors year-to-date, including EUR67 million through dividends and EUR43 million through share repurchase.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nomad Foods Ltd (NYSE:NOMD) reported its ninth consecutive quarter of organic sales growth and second consecutive quarter of volume growth.
- The company achieved a gross margin increase of 390 basis points year over year, reaching a new quarterly high of 32.3%.
- Adjusted EBITDA rose 19% year over year, and adjusted EPS increased by 28% to 55 Eurocents.
- Nomad Foods Ltd (NYSE:NOMD) has returned to market share growth, driven by investments in marketing and innovation.
- The company is seeing improved momentum in the market, with volume sales and share growth accelerating further in the fourth quarter.
- Nomad Foods Ltd (NYSE:NOMD) faced temporary headwinds related to ERP implementation, which affected service levels and required a reduction in market support.
- The company had to lower its full-year revenue outlook due to the impact of the ERP transition.
- There was a modest reduction in the full-year profit outlook as the company maintained its investment levels despite lower revenue growth.
- The ERP transition caused a 2.5% headwind to organic growth in the third quarter.
- Nomad Foods Ltd (NYSE:NOMD) anticipates a sequential step down in profit margin in the fourth quarter due to seasonal factors and reversal of promotional timing benefits.
A: Stefan Descheemaeker, CEO, stated that while he will refrain from giving guidance, the frozen food category in Europe is strong, with consistent growth over the years. He noted that Nomad Foods has been regaining market share and is optimistic about the future, but will not provide specific guidance for 2025.
Q: Is the ERP implementation issue truly transitory, or has it altered Nomad Foods' future plans?
A: Ruben Baldew, CFO, confirmed that the ERP issues are being resolved and have not altered future plans. The company is learning from the experience to improve future implementations, and future waves of ERP rollout will be smaller and better managed.
Q: How does Nomad Foods view the current consumer environment in Europe, and is there a shift towards more premium products?
A: Stefan Descheemaeker noted that the European consumer environment is improving, with private label market share declining. The company is seeing positive trends in premium product sales, supported by innovation and increased A&P investments.
Q: What is the outlook for pricing and input costs heading into next year, especially with currency movements?
A: Stefan Descheemaeker mentioned that while negotiations with retailers are ongoing, the focus is shifting from price to innovation and A&P. Ruben Baldew added that Nomad Foods is sufficiently hedged against currency impacts, particularly concerning fish, and does not expect short-term bottom-line impacts.
Q: How is Nomad Foods planning to manage A&P investments moving forward?
A: Stefan Descheemaeker emphasized the importance of A&P as a core component of their strategy. The company plans to maintain or increase A&P investments to support innovation and market leadership, ensuring continued growth and competitiveness.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.