Nomad Foods Limited

The call did not include quarterly revenue, EPS, or gross margin figures. Management said gross margin improvement is being driven by pricing and is “fully going to plan,” with only a few million of phasing in A&P and overheads and about EUR 1 million to EUR 2 million of technical recipe-related variances. For the market backdrop, management said the frozen category in its markets was up 3.4% in value and 1.6% in volume year-to-date, and up 2.8% in value and 1.1% in volume over the last 3 months. Forward-looking commentary centered on better share performance in Q3 and Q4, continued pricing opportunities, and a continued focus on deleveraging; detailed numeric guidance was not provided in the Q&A.

Dominic Brisby struck an upbeat but measured tone. He said the retail disruptions that hurt first-half share are now behind the business, private label pricing is improving the backdrop, and Nomad has “very compelling plans” to get back to market-share neutrality over time. He also emphasized that the company has the best brands in a strong category, but needs to become more competitive through broad changes in organization, marketing, innovation, and execution, which will be laid out at the October Analyst Day.

Ruben Baldew said the EUR 200 million productivity program is on track and is helping offset inflation so the company can avoid the more aggressive pricing used in 2022 and 2023. He pointed to a return to gross margin growth driven by pricing, with only modest phasing effects from A&P and overheads plus EUR 1 million to EUR 2 million of recipe-related variance. On capital allocation, he said buybacks were suspended last quarter, dividends continue, and the company is now prioritizing deleveraging to reduce interest expense, while declining to give a target leverage ratio.

Analysts pressed on how quickly share could recover, whether market-share neutrality could return by year-end or early next year, and what price elasticity looks like after recent increases. Management said share should improve in Q3 and Q4, but getting back to neutrality will take more time and they would not give a specific timing; they also said elasticity is too early to judge because private label price increases are only now flowing through. Another topic was the retailer disruptions in Germany and France, which management said are now fully resolved, and capital allocation, where the CFO confirmed buybacks are paused in favor of deleveraging.