Q1 2020 Earnings Call

<unk> for us financial measures during the call today. These non I FRS financial measures should that be considered a replacement for and should be read together with I FRS results.

Users may find the I FRS to non I FRS reconciliations within our earnings release and then the appendices at the end of the slide presentation available on our website.

Please note that certain financial information within this presentation represents adjusted figures for 2019 and 2020.

All adjusted figures have been adjusted for exceptional items acquisition related share based payment and related expenses as well as noncash foreign exchange gains or losses.

All comments from here on will refer to those adjusted numbers.

That I will hand, the call over to Stefan.

Thank you that bush and thank you all for joining us on the closed today.

On behalf of well inside the organization.

I'd like to extend ourselves to do it was affected by Cobiz 19.

And the whole that's you and you will suddenly dusting safe.

No My foods, we had be working hard to ensure the continuous supply of frozen food to consumers across Europe.

During this time of need.

From day one.

No. This was the wet the health and safety all play employees, although top protiviti.

I'm extremely proud of the Kentucky that foods oriented organization has made to walk as quickly and decisively.

I speak for all of Us when I see it up we assembled we have spoken many these navigate these kweisi.

Turning though first quarter results.

Which came into well ahead of expectations do do and then precedent that level of consumers demand beginning in early March.

Highlights phone from the first schools are way as follows.

Organic revenue growth of 7.7 cents.

Likely driven by finds Freeloading <unk>.

We have experience of continued elevated label of demand 12 April.

Which we believe reflects growth of you know consumption.

You will notice addicted to big 16, which was depressed you <unk> Easter phasing.

When triangulating disallowed data with all five week, Oh, Fuck should cute to Sam's results.

It's clear that performance continues to train the head of plan.

And why we expect these snake on T.V. for at least the next few weeks.

It's very difficult to project the future trajectory was accuracy.

Turning to slide five I'd like to provide some more color on each one.

As you recall the origins expectations poke you one was that organic revenue growth wouldn't be ritzy flat versus just last year.

We were suddenly on pasted delivered against these plans as of late February.

However.

The man increased meaningfully throughout the month of March with organic review growth for the month. When you refused 20 percentage points I had to poke plan.

In terms of insights, it's clear that early on the growth Spike.

Of consumers stuffing up.

However, I started last Boston people have remained relatively confined to their homes.

All research is showing that people are opening they freezes and consuming oh products.

Another inside that we are seeing I mean flux of you consumers into that category.

<unk> by the significance shift to whom consumption.

Natural roles that door, leading and trust and Brian's play in Southern family Me.

And finally, o'brien's have observed the disproportionate seeking market share.

This has been evident.

Broadly at both country and category 11 across our business.

During the months of much Oh.

Well market share was one percentage point noticeable improvement Bush is being refused flat over the preceding 52 week periods.

We believe increases market share <unk> parameter reading being driven by the fact.

Consumer tend to buy brands they trust in Mormons up uncertainty.

Disease, particularly the case for new consumers entering the <unk>.

In all these progression isn't Buddy invasion of the power and awareness that's all brands of in the local markets.

This brings me to all supply chain, which has done some incredible job in not only keeping up with demands been doing it in a way that that's protected health and safety of for for like three employees.

We took a number of decisive action at the onset of these crises.

Sure that we can deliver it against all ghouls.

He needs to any way one of the first companies to use demographic tend to rise at the factory and expenses.

Yeah, I didn't realize we noticed you lazy Chinese particular Pollock procurement team quickly in Queens are covered position.

Countries to ensure they quit <unk> sucks.

These examples there's many more I've allowed us to maintain the high so it'd be sled or throw the crises.

Despite our best efforts to keep up with demands.

He is that there is a significant amount of pressure on those supply chain.

Such we'd have reduced needs are marketing and promotion plans with the go to a free activating these programs in the back half of the year.

There has been a lot of coverage Lacey your role in the whole Kobe 19 may impact agricultural supplies, even farmer dependence on migrant workers and potential labor shortages.

This is a race because we have been monitoring for some time and the one that we do not expect really fucked or business for two important reason.

First domain crops. These innocent potatoes, I picked using machinery and I'm not labor intensive like certain oh, the fruits and vegetables cross.

Seconds, we have strong relationship with all farmers, many which I've spent multiple generations.

These farmers tend to have seeker labor forces and as a result.

As dependent on the immigrant labor.

Recap than you term.

Absurd swung demand since March with elevated both remaining into April.

Oh factories are older operational and not working at full capacity to maximize throughput.

Let's no shift to a hallway preparing for the medium term all it looked over the next separate month.

Restrictions east and all those whom consumption begins to normalize.

You can imagine that a lot of unknowns the progression will be dictated by global and local helps to throw Ricky.

So the European countries have recently announced plans to gradually reopen schools in restaurants.

Where's that said, it's probably fair to say that this next phase.

Likely be prolonged.

We will not be gave to these next few months with a strong setup plans include merchandising innovation promotions in traditional support.

It would have sustained demands.

Another consideration is the macroeconomic back drop that they expect to see once restrictions begins to east.

Even the number of puts and takes yeah preparing for a range of scenarios.

Looting, the probably to a recession.

As we've seen through all these crisis.

Frozen food needs are resilient <unk> swarmed with consumer value proposition.

These studies show that drink beers nothing economic uncertainty.

Consumer straight down into frozen wide also being more price consent conscious.

Taking these factors into consideration we expect.

Business, we've proved resilience in the recession or environment.

As it has.

Because he's 19 project.

Finally, the long term implications.

Why the current focus she's a minor things to <unk> D.T.D. <unk>.

We also planning and acting to ensure that all business <unk>, the headset foundation and what <unk>.

There will be some permanent changes that we we lead into.

These include the stepped changing E. commerce, well category and all brands I've structure to you how you at market share.

In other words, the fact that freezer kept passing he has increased the consumer level.

We also recognize there has been an influx of new shoppers into the frozen food you have to go read.

Whereas many of them trying frozen food for the first time years.

Well some of the eating occasion are likely to return to do all the pool my schools work in restaurants gradually reopened.

We do believe there'd be snowboards and you can do convert you frozen food eating a beach into permanent repeats consumption.

We know that frozen food has a lot to offer not only inquiries time, good <unk> everyday life.

And we'd country that that that consumers eat more frozen foods and then we recognize the many benefits whether they be nutrition.

Unions quality improvements or you know me three solutions.

Speaking of me three I'd like to provide you will update them Green cuisine on you meet free sub brand that we are launching across Europe.

Cagney back in February we know so intention to develop this into it needs to wonder who would you you will be missed by 2022.

As we sit here two months later.

I'm pleased to see that we remain on trucks and deliver on me and long term targets.

Some timing shaped.

Resulting from the 19 prizes.

Oh original plan wants to have distribution of brief Regina Cross at least eight markets by me yeah.

This is still the plan on base with somebody vacations, given the general deep fried he's they shouldn't on innovation.

Retailers and suppliers focus on the highest volume schemes.

Yeah. So we have loans green cuisine in Germany, France, Netherlands entity in Spain.

Benjamin those three or will soon followed.

Why not just meant that we haven't had to make it run green cuisine.

Timing of media, which was originally scheduled to go live this spring.

We know take place during the second half of the year.

The performance of Green cuisine in U.K., where we first launch a year ago.

Don't get used to be very strong and encouraging.

Saves that's fucking ahead of land.

Market share continues to grow.

Further we are driving so these incrementally keeping the category who the recruitment of you consumers.

You know all Green cuisine remains keys for T.V. <unk>.

And why no plans off shift the the big this year, we are exceeding all need some scenes expectations and remain on pace to deliberate Oh 2022 targets.

In summary, we report a strong first quarter and no expect upside to originally guidance.

Oh business has demonstrated extreme resilient throughout the cookies 19 crisis.

Did you being driven by so did the execution and the fact adult boats for you is highly concentrating frozen food stored in western Europe.

Further or exposure to food service is only 5% about reviews.

Regaining you consumers it and I've seen grocery market share and no supply chain is working hard to keep up we swung demands.

Finally, oh swung button sheet and liquidity profile created a unique up on your t.

<unk> shares during the first quarter.

It's the evaluation dislocation you know shed price.

The place to be in a position to deployed casting shareholders.

Value in the <unk>.

Oh companies will positions not only navigate the current prizes, but emerging the structurally strong a place.

Without that we'll have the going over to send me to be skipped the financials and guidance seem more these days.

I mean.

Thank you Stephane and think your for your puppy.

And today.

<unk>, just like seven or we provide more detail and I'll keep close call cooperating metrics beginning me the revenues, which increased 10.5% for 683 million Euro.

Even by 7.7% organic when when you go.

Revenue growth also benefited he 3.2% from a training day benefit.

Including annex quite they used to leap here.

Please change <unk>, all T.V.'s point upset when you go <unk>.

No organ comes when you're both exceeded all expectations. You know most every company you can be a farmington factor rename people copied 19.

<unk>, 29.1% down 180, <unk> and you along with all expectations.

The you're on your decline, what's driven by the timing of inflation relative to price increases.

Moving down for the rest of the piano.

I, just think appointing expensive increased <unk> you're over here, we flaky phasing ships, which you have time for.

Well, you know point too expensive and he and directs both increase double digits.

I just think he'd be dog was 120 million euro.

You know, 2% decline versus the probably a year.

Was better than how prior expectations, which calling for I don't think you'd be doctor detailing double digit.

Upside was probably driven by increasing sales.

Just T.V.P.S. what could you three euro cents for the costs are.

<unk>.

Has 4.7 million shares which had the liberty to effect on the first call throw away T. Dot Rencheck count as a programmer comments made in the corridor.

32 cats from flight eight.

We generate 74 million Euro I, just see three tasks throwing a quarter as compared to 93 million euro in the same per year to year ago.

Factors contributing towards 53 cats smoke performance include it.

He'd be dollars for 120 million Euro a two person you're on your decrease.

But working capital inflow of 1 million.

<unk>, so 10 million reprinting, 1.5% of sales.

Cast axes of 19 million.

Castle Trust another of 18 million you probably already to your over your impact oftentimes flux.

When converting the 110% of I.C.D.B. doll, and 12 53 cats, though.

During the first quarter, we and also 300 million say a report says program, which they can see that to be unique and that could make use of Capitol you to them you know casing now sale price.

Things that the Nonsmoking mouth and so.

We have they probably 91 he can use that all Pepe don't talk buybacks acquiring approximately 3% of our friends often outstanding at the weighted average price up 16.7 dogs.

Looking for the our profit Capitola location remains consistent and changed.

Continued to prioritize excess cash for things like when you <unk> <unk> well unique opportunities like the one we saw him off.

<unk>.

Finally abandoned sheep remain strong we leverage you know me today.

828 million Euro in cash and short term investments and totally could you care of nearly one B.B.N. euro when factoring all their own drawn lines of credit.

Well that lets does this like nine doing your twin keep 20 guidance, which is based on a plane chains rights I, though made a thief twentytwenty.

Oh, the four year Twentytwenty, well, yeah, raising our guidance and now expect to achieve I, just think he'd be dot approximately 450, proponents 60 million euros and that's a C.D.P.S. of one point 24 to one point 27 euros.

Put your guidance now assumes that <unk>.

I mean single digits or something right.

Given the wide range of potential outcomes for the remaining of Twentytwenty, we have made affording assumption.

Guidance.

First the guidance assumes and then they see level, okay sales growth in Q. too when you already have five weeks <unk> when you go behind us.

You to the inherent challenging <unk> accurately modeling the future coming back from comic 19 or guidance continue assumes <unk>. There are no single digit twins in the back half of the year.

In terms of course any phasing given song says performance in H., One Cup only the the name of marketing and promotion, but the second half of the year. We now expect that just then you'd be that to be more buttons.

The first half and the second half of the year. That's this up prior guidance me twogs queue for weighted.

Finally guidance now assumes a weighty dollar check count up 200 million for the year down from our prior expectation of torn in 4 million <unk> like the share repurchase activities conducted seems to me March and does not thinking about T.V.T.L. future potential it's Harry purchase it into consideration.

<unk>.

<unk>. Thank you appointed back to you.

<unk> well now again the question <unk>.

If you're not question here you May press start 10 wine on your telephone keypad.

<unk> acknowledging question.

Do you I, usually get speaker phone you. Please pick up your hand check the five pricing any case.

Try your question please press start.

Yeah.

<unk>.

Fresh question comes from Andrea lifestyle, which by Queens. Please go ahead.

Great. Thank you like the morning, everybody.

Morning, Andrew.

Morning.

First off I guess, you know, obviously nomad chose to provide.

For your guidance on the above you know initial expectations and I guess the question is what gave it to the I guess the competence to be able to do this way and really the vast majority of peers have you know either withdrawn guidance for the for a year or perhaps only reaffirmed you know for your guidance in a any more vague sense that would be my first question.

Thanks, Thanks, Andrew and it's it's it's a very good question [laughter] says you know.

Forecasting, whereas with accuracy, and especially right no will be still be 19.

It's it's so difficult exercise.

At the same time, Oh portfolio is is really uniquely positions.

These that'd be you know when we compare with many are full of the company P. is so.

Simple, it's the simplicity is one category, which is frozen.

He's one channel which is retail.

Equal to at home consumption.

It's a one joke refu, which is Europe.

And it's leadership with <unk> end up the same time you know we we we have you know as we said very few exposure in terms of food service. It's one it's 5%.

So with that again, it's it's difficult to predict exactly Oh, the trajectory will play old throughout the rest of the year.

This is why we we've taken the position of low single digit dog unequivocally grossing h. do as a baseline as as a a semi mention so that that's why but the game to your point. It's a it's it's unusual which is which is great.

Right.

For that yeah.

Oh P.C.'s keep the game going thank you for that the second one would be.

You know, it's gonna be fascinating to track how for the industry. Many of these new users, which are clearly getting a lot of a given a stay at home restrictions ultimately convert into let's say you know ongoing repeat purchasers and such you talked about.

Some of the numbers around the magnitude of new you the incremental volume and how many of those are new users to the brand. If you will and I'm curious how how does this compare maybe to the type of new users that you would see the brand under more normal circumstances in other words, there's a there's always some churn.

For all brands like these.

The new users and lapsed users in in a more normal environment.

This is the level either you're over the years or even well beyond that was more normal sort of churn numbers and then.

It's early so we may not have a great read on this at all but.

What would be even if there's any anecdotal evidence around it maybe one some portion of consumers have suggested they might do in terms of repeating when things normalized that's a tougher when I realized.

That's one is a is it'd be tough for but the the game I think it's it's really extraordinary times and ER Timbuktu, you'll you'll you'll you'll miss the baseline the penetration needs to Ricky has been refused flats.

And and to your bones. Once we see no is is it up to the can you consume was coming by the way from different backgrounds.

Right.

Very much.

My next question concerns Steve Stricker line <unk>, Yes. Please go ahead.

Good morning.

Just actually can you back off of Anders question, Stephane do you or the broader team had any numerical data to just wrap range, what how new house what penetration is right now maybe for seven days keep products relative to maybe how it was just a few months prior and how does that change that we've seen just reach.

Gently compared to maybe what we've seen in like the passports to actually I know Oh, you know nine is probably the database not clean yesterday, but any type of historical context might be might be useful I think you also said something about.

Tumors, having additional freezer capacity relative to the past your friend a few articles on that but any elaboration would be helpful. Thank you.

[noise] [noise].

Kind of stage I think we may have lost Stephane.

Okay.

See patients and Sammy Sammy are you still there yeah.

So yeah, what are we why don't we try to reconnect stuff on yeah.

Yeah.

Oh.

Hello.

Can you hear me.

Oh.

Yes.

Okay, sorry, okay excellent. Thank you. Thank you very much so see the the question about the news hold them, though obviously do you the new consumers.

[noise] too early to say.

The same time I like those are Ya Gotta tell you what what we've seen in terms of <unk>.

<unk> very impressed by the.

The the new frozen. So people were you know expecting something which was all about convenience and then what about twice as for the B.D.T. in that scene, something which is the tuition taste you trends sustainability. So that's that's absolutely fantastic and they're looking to see something with as we've.

Much focused on that'd be stage, so that that's one thing the freezer kept bus eaten all finished Steve it's too early to say, we we know that these <unk> those fees is I'm not going away, but we don't we don't know exactly by how many new freezers. So the point <unk> I was always being to get more consumers to open the freezer.

More frequently and and that's exactly what we expecting to to see.

Especially with the new way off consuming so that's that's the way we <unk> too early to stay in terms of the <unk>, but it's going to come very very soon and they'd get imagine that's oh inside the apartment is is Oh is really 40 busy with this is what we've seen so far <unk> very very very goods and at this.

Same time, what we also she is is these people.

Not to leave any time soon because.

We also.

You don't need.

No d. confinement, we'll stick.

<unk> Oh products. We also have seen is it but these people are more we don't want to.

Cook mall from home and that's what.

Oh, so <unk>, Oh sort of G. very good for us.

Right and then have a quick follow up before I pass it along Stephane you know I know Wayne has been in charge of this we didn't business more recently and he did phenomenal work with me you know on repairing the U.K. business. A few years back can you help us understand <unk> strategically, what's maybe now going into place right now to stabilize for affects the Sweden business.

And the same commentary for on Bastards, you you'd mentioned that cagney that I feel very near shit and swore to get back on shall starting in around April timeframe I'm. Just wondering if the busy now say you're seeing right along with.

Tobin related demand does that shift the time window for and that's just getting some than new distribution back until the summer. Thank you how past so.

So let let me start with all this sheet. So it's quite simple you men or Steve We had the we had an issue in 19 actually we love distribution with one of the the the the the top four guys in in the U.K.

And and we very pleased to see that's a full must have been bottle, which is the key piece, which is rolls dealer.

We buy construct with a with <unk> one, though when you stop Guy actually I think it started back in <unk>, obviously, it's a bit too early to see the results, but <unk>. So that's a very good news and we also know that we're going to increase all all distribution with another too. So again 2019 was a bit more difficult.

With with <unk>, but but what really matters, which is almost impossible, which is <unk>.

The again, but we said and it's it's happening actually more difficult to read across all these things, which could be 19, but that's a really tea. So that's a that's very good in terms of Sweden Night, then you know what the first thing that's Oh Wayne has done is to put in place.

Management team I think it's a very strong one was very very good team. The second P.C. is really about it's about repairing the relationship with the trade and as you know Wayne is very very strong gets really I mean, it's fantastic you know doing these things. It takes time, it's really takes your.

The time to create a joint business plan together with these guys.

That's exactly what should we do it he's doing adding more presents you know obviously know screen presence video <unk> with these guys, which probably something but we didn't have enough you know into biased and though is just supplying the the mustard bottles framework. That's proven so successful with U.K., Italy, Germany, and and and lately with Spain, Spain.

The last you know <unk> 18 was was difficult locked off the focus new team as well we studied them 2019, and we've seen the results. So we know it's going to take time, it's only representing at this stage, 2.5% avoid beat up but they can't leave for a c., we think it's an important country and.

We hope that we going to see improve performance later this year and obviously a good moments I mean 2021. So that's the I.D. for for for Sweden enter your points, we I'm very confident when his name to do a great job.

Great. Thank you.

Hi next question country Rock Dickerson.

Please go ahead.

Oh, great. Thank you so much.

Hopefully everyone I know that is doing well thanks say.

So I guess you know just just a quick question on Green, you're you're too by the way road.

Oh, Yeah, no I'm I'm I'm doing my best where okay <unk>, thank god that exercise.

In terms of Green cuisine, you know I know you had mentioned you know shift immediate timing of it sounds like obviously A.M.P.A. shifting a little bit more to the back half of the year overall, but specific tigrean cuisine, you know I guess, you know on the media timing piece.

Is it strategy, they're basically you know we have it it sounds like you're most countries right sounds like the innovations. There I think you you caught up maybe Belgian then what other market, where it's don't need to enter the trial I would assume is you know is much more elevated than probably traditionally would've been which is you know.

Obviously, they should be you know a great driver of repeat potentially so you know I guess the question is do you shift that mediates then later to try to flip the switch once you have trial to increase the possibility or probability of sustained consumption of the new brand or was it basically yeah, Hey, we just don't need to spend it.

Now, let's wait til later and the brand seems to be doing okay. So I'm just kinda brawley trying to understand you know has there been any shift in the way you're thinking about green cuisine at the phase it through the year and then and then the potential you know carry over effects it out of that shift as <unk>.

Emerge from Yep from this from.

From the pandemic.

Effect I also asked because you know a company like beyond meet this week actually if I didn't seek rubbing his grow that much because they have food service exposure. The margins are a little bit better the stocks up you know almost 90 per cent a month.

So to to to start with Rob that we we know try and changing all short expectations. So we we very pleased with what we seem to to to to Sammy spoiling. The the recipe, which one is expected snowball by the way we <unk> much from the retailers.

And and so in some countries like Benjamin for example, we move you know the the the the the back to the shelves what they say starting with on the shelf from week 18 to wait 23. That's an example, but then again you're not going to you know, it's going to and the other part time. So just the shift it is just.

The shift in terms of <unk>. That's what we see is is that 50 more than ever meet free and and back to what to see you mean, oh. So you'll need said, it's it's some trends, it's going to only et cetera rates with what we've seen what no and that's exactly what we experiments seeing with a with with <unk>.

<unk> so.

In this year, you know to your bones, we helping you P.L. in Germany, France, Madeleine you'd city in Spain, Belgium is coming Austria's coming and and they're listening to each other countries will also be coming and the cost of this year. So it's it's it's you know it's definitely a fantastic from <unk> great friends. So.

Only positive.

[laughter], there's a a couple of.

The the <unk> when you have to ride table of distribution as what I mean, rather needs to go for US and you know context like the one we are going to walk with distribution is geared towards with the T.V. So the consumer seven weekend.

And so we're trying to buy them if youre when when do we have the appropriate given up distribution to react to that I grew up then he went to support you want to kick off so I think what's me vocal parts when we see.

Cleaning up the following <unk> clearly I mean, good Shepherd, who probably you.

Okay Super and then just very quickly I, suppose and simplistically on the cost side.

So gross margin Preschel button to one that was expected I know there were some cost inflation that came through you know probably you know all the fish die I think the production before some pepperoni, there's currency as we think through the year you know in the queue to than the back cash is is the expectations still for.

That gross margin catering to improve a quarter to quarter. That's all thanks.

Yeah, we we expect inflation activity to to moderate huh.

The Oh, it sounds <unk> for the rest of the year, yes, actually a good movie D. down lesson Q. too and we are looking for a small group to improve on to the second half of the overall.

Okay Super Thanks, so much.

Uh huh.

My next question concerning <unk> <unk> yeah.

Right now please go ahead.

[noise] Corning thanks for the question.

<unk> <unk> <unk> How're you doing I wanted to come back I'm trying to comments about the broader invite I wanted to come back to the comments about the broader environment. Here you what are your understanding about your competitors, both branded and private label suppliers <unk> sponsored demand spike.

Shares were were you know ups highly across the board here and you want your same type of market shares can be sustained either through you know supplied some advantages are marketplace execution, how do you think about around with their predicts manner.

Oh I think it's a combination of two elements done one is is English on the Schultz in the short term no. The the we we after the very early and besides it you know and supply chain from the <unk>. For example, we could see that there would be some some some issues in terms of.

Fish for example, and we've we've been able very early on to Cook to come with something that teach that's one thing and second <unk>.

Again, the the factories you obsession was over you stick to keep all 13 factories opened and that's what we've been able to do through a combination of the obviously have many initiatives own centered around the the husband the safety of both people and so they they they've responded fantastic you will and so we we we very very very piece with that.

The same time, but that's the off for the older demand side, it's very clear that the consumers are moving to brands <unk> was the beginning of my <unk>. All brands are eight Bryant, the leading brands and and it's very reassuring will be seen cause it's time to.

Going back to these brand so.

So piece is well, it's 40% these fish 20 per cent these batch and so.

You know would see these these two categories again.

Shivering and doing extremely will you wouldn't you mean, just get together. So so that's that's again, helping us easily see two it's 90% Brent and and the and everything is about you know retain and.

When you go back to you consumers I'm not talking about the existing ones. The first thing they want to do is okay. Let's try with the runs we know.

And the birds I <unk> that they starting points. It's so job have you seen though to make sure that thing you're going to see you know what what does improved over the last excuse which is in terms of nutrition in terms of <unk> in terms of of innovation and we have so much do offer.

So so that's at this stage you know that's what we've seen movie you've seen and it's all W.W. cease to keep you keep me you know most of these consumers.

Going to be the big job, that's all focused for I mean weeks and months.

And then I get to build on that like when you think about the promotional environment as well, yeah, I think given especially in frozen fish, because you're promoted price points tend to be fairly deeper than both grants in your in private label, you know to normalize conditions and you mentioned in the portfolio a brand. So I mean do you think there's an opportunity to use. This this market just location can be.

Migrate adept over your deals higher and more permanent basis coming out of this in conjunction with the net revenue management or do you think there's a need to you know compete promoting the way you do for competitive reasons and you're trying to retain somebody you consumers you know coming into the portfolio.

So I mean, he wants to take that.

Yeah. So <unk>, yeah, I I think can we we can equal chromosomal with t. vector wanting to drive the business <unk> framework and that's <unk> <unk> <unk> you Miss warming up promotion, that's part of the total price per position.

Position to the consumer.

To competition. So we both team then I'll be staying she'll funky make a fundamental change to that I think what we want to do you still make sure that talking about cooking with the country any team excuse me promoting way mean media and making sure that we have a runner.

The price index no country you shouldn't.

<unk>.

<unk>.

Yeah fucking enough for the for the consumer.

Okay. Thank you.

My next question concern size that we got your bank. Please go ahead.

Yeah, Hi, Thank you. So I wanted you pick out the on that privately about point, Okay. Now and you know I was wondering if you had some data and we went to sort of this crisis. Starting from you know the event you know stocking up phenomenon and then more recently have you kind of.

You can feel nice continue to gravitate to watch band or bands or have you seen you know as recessionary pressuring Donald have you seen consumers are kind of go more to watch private label.

So to your funds in the soul to and what we've seen his his people every day two words rents and you know preferably a brands like like like US and that's why you know, we we gaining shit.

Long term to your boys over longer time, I wouldn't leave that way, we we know that the delay the <unk> and he's very high and it's going to have two bucks one is.

The fact that people are going to stay more at home. So yes. There we go back to work, but the the same time full recession reasons and other reasons by the way people. We we use we stay more at home and we'll have dinner at home. So that's the good news because for us because yeah again in terms of skeptical, but we we know that frozen when you're doing <unk>.

You will doing doing you know the recession times the same time to your buttons you know private label is always something that's we focused on so that wouldn't be Bryce question and that's all job of your seat you make sure that's a wee wee offering the lights no value value of price evaluation. So that's that's done.

But nothing you from from that standpoint, and you're going to come at some stage and probably what's going to happen to come on top is there <unk> there might be some some skew restaurant <unk>, which then you know probably will in fact, b. and c. brands and and probably will lead to very interesting.

<unk>, whereas with the retailers goes as long as we've coming with with the with the right. The Branson's button innovation. We believed that you know it's going to be a small and plus four is done anything else.

Okay, Okay make sense I did talk and wanted to ask about <unk> costs and constant station specifically around Spanish. So you know we've been hearing about you know meat packing and I'll buy it there and then you know you know virus Grad down there and then sort of supply.

Constraints.

Can you talk a little bit about the fish supply chain and if you see any any interest so there as many as we go out to the values that they are.

I I.

We we have <unk> from the from fish and the taken in D.C. shoes. It.

You have to be U.S. specific when we haven't seen anything happening with that so a few minutes in Europe and we we entered the two I would say 2020 with the second you know claymation, but we saw <unk>, we all the skin as well to be fairly active in the market.

Make sure that you're thinking at that stage of opposition to get some of all event, though you at the very effective cost like Joan.

Thank you.

Hi next question concerning brine hauling 58, David <unk> priests go ahead.

But thanks, good morning concerned it can you tell me what a consumption was in the quarter I I guess my my context here is obviously very strong Q1 on the shipment side, but I I would have some some of that on the show consumption were drawn down on your trade real retail inventory I'm. Just wondering was we go into.

Cute too is we're still take consumption very strong you know for sure should that should that if I'm right and and consumption was faster than shipments in Q1 does that reverse in Q.Q. or or do we have more more room there.

Okay.

<unk> Hi, Brian So <unk>, you know some up here and Brian. So remember the the 20 per cent folk few one which is the the sit load the way you have seen it but obviously it gives you just you know part of the explanation. Once you have to take off is is you M-, we mentioned in Steve mentioned <unk> and.

On best season, it's represent something like a 5%.

Hertz, then food service.

The only 5% of a business.

That's you know, we we being declining by 15% Q1, which is which is like mother rates are in this represents another one per cent. You remember there was also that we have the ship them in question between two full Q1, similar phasing which is another 1%.

2% of leap year. So we we left with 11% to do because there was a 7.7 and <unk>. There's a than it is really you know sellouts, leading selling which is the answer to your to your question. There is a bit of interesting no no it's interesting upside.

Ahead of us.

Okay. That's helpful deep detail. Thank you and then.

<unk> Yeah, you have any insight on this <unk> what is the state of the consumer pantry right now at home, obviously, we have a demand search but unlike in a typical you know pantry looked situation that might be driven by a storm what have you where folks are behind access of how long they're actually.

And to be home or or the impact of the store and something like this.

You know folks don't have auctions or other thing to eat at home so they aren't working through what they're buying.

One of the thoughts here was when we come out at their people would still have a lot of favorite <unk> as you're pointing out here. This is the mantra search their consume in the product as consumer but those are the improves just wondering what your senses as to how much inventory is working out at home or pretty except that we might have a normal second half as opposed to.

<unk> lack here with people drawing down on that.

Thank you.

So so when you see the numbers again, we have the an extraordinary spike in the middle of for much.

But then he seems then you know obviously you know people have I've come back to a new normal and so we see we stayed in the region enough 20% plus.

So that's that's dots.

The same time, you know freezes in Europe are smaller than the U.S., you'll still have by the way if you were storms.

So the the boundary loading is much less of the number of physical some send them in in the rubber then you do the U.S.

So what we know is is by definition again, Brian people like going swimming frozen more because.

25 in Europe, 25% of food is normal time or at least three cool beat 19 time.

As was eaten away from home 50 per cents worth 25 per cent schools and the rest is restaurant.

And so that's not happening and so that by definition people are eating more at home, which is exactly what the on markets is so so yes. The the reason for <unk> to be given the sitting <unk> governments or do something to do your points.

And the the the key question for us in the coming weeks and months is <unk>.

<unk>.

When they say the confinement pro says she's going to play into play all between school work and restaurant.

What we see is schools.

<unk>, it's starting to the gun fine, but it's going to be limited you know until September.

Very limited.

I can see that you know my my wife is the effect of the school <unk> be something like 10, 20%.

<unk> again, I'm going to respect social dispensing.

So again, it's getting to be very limited end to end or work and although about you, but you can see you in the we've known about is is we're going to be very very very cautious.

And the same time long term, what we see is people Oh My God you know it's working these working from home. So it doesn't mean that it should be replaced fully you know the office, but definitely is getting to be more importance, which means more consumption that tool, which means then more consumption of frozen food. So that's a bit where we see so we see the.

Let me too I mean, it's going to be hard to to money to this <unk> no movement to and you know.

When is he going to be a normal we don't know five bucks on buys like since I'm, probably that'd be all these new in normal that we'd be in you you patterns coming in which we believe are going to play out you know you know favorite.

Did you answer your question right.

Yeah, that's excellent color appreciate it best thoughts on them.

Hi next question comes comes from John kind of wanting what C.G.S. security. Please go ahead.

Good morning, gentlemen, thank you protect my questions and congrats on navigating through just as an extraordinary unprecedented crisis.

My first question or maybe maybe for drugs and survey, but do you still get your share as attractive compared to eliminate at this point and then maybe as a follow up you know discuss the status an acquisition pipeline.

<unk> diligence and proceeded deals in this environment.

Well the the fact is we're not going to come into such on on on the money.

I I'll, let you know.

Send me comments on the repurchase which is I think the right thing to do and are the same time you know, it's it's fantastic we have the the we'd have the button and she'd the way. The what did you know which is which is great. So let you commented maybe a bit more on the on the share repurchase maybe a a sunny.

Yeah, I think you know as you have mentioned that would call for.

Shall we purchase has been Oh can you think we've <unk>.

5.4 million shares I I can never ends of 16 point 78, <unk> and <unk>.

<unk> I'll see if I would say my my only come it's like he's just a week anyway. The flag that we we have a very strong balance sheet does he have team or we have cash on hand, and we can mobilize I mean up to about 2 billion. So I think we we see l., if Kelly that we all ready to Fuck you jump on the right.

Had to write on him for the funding has been the L.A.L. <unk> shall we purchase.

Okay, great. Thank you and then I was just wondering your comment on your relative position in in your supply chains, and the strength or versus it gets food in general maybe on getting it are you going to benefit from you know impacts in the global supply change that to meet them harvest fish and all that.

You know that that are being caught by the pandemic are you in a position to say that you were supplied secure for the rest of your four year demand expectations and maybe does that give you an advantage.

When when you know packing plants are closing down or harvests.

Are not getting enough labor and you know issues such a time.

Yeah, I I would think that.

Typically to give you know what points to that we highlight with a T.V. <unk> overall to think you off I couldn't even all people I mean, making sure that we had the right.

<unk> to allow people to come we'll continue to work you know before school, producing David Lynch customers and consumers and <unk>. So we have a a wee he'd have already a very good covered with an evil.

<unk> and can say that you have a very good <unk> today I mean, a novel I tell you well we had you see on the you shouldn't be seen the U.S. These that the <unk> <unk> seem to be occurring in the new.

And I love the harvest the I would say that the the biggest issue I'll read the we'd let this food. So I went south very much neighbor within seen enough that <unk> our own corpus he's for her hawick from point that puts you want us to make people and we fairly got anywhere.

From that standpoint than hot all of them out there and we need to ensure the supply for now or something here.

God. Thank you and then finally just started they they'd be to build on a part question about inventories coming out of the pandemic maybe from eight mark more psychological perspective do do you think it's possible to consumers. Just date, you know zero away from frozen foods after having come out of you know isolation for so long and and maybe back towards you know fresh.

Or or shoulder or something that you know that they haven't had in awhile, maybe even going out to the extent that's possible I'm I'm wondering if you've been able to to think about those possibilities and how much. It could impact you. If if that's you know something them I can cards.

But you know that so it's it's you know what you always have to to think about doing a range of plus C.D.'s, but we we do you think that's what we have no but she is more important to use anything else. We we always know that the freezer you know opening the freezer as as always being an obsession of followers and you know it's <unk>.

To live in the fridge, either it's the difference is huge and once we get into money to the receiving is obviously, if we see that it's changing over time. So that's one thing. The second thing is we've seen a lot of people. We we money. During these people we are all the buttons.

<unk> reading money chewing when they think about the product and and it's what's happened is really when you think about it a lot of people left.

<unk> with these I.D. that you know it's about convenience it for the B.D.C., but what they discovering right noise Oh My God. You know, it's you know it's it's great taste nutritionist fantastic you know meet <unk> frozen food sustained it'd be D.C. with wastes all the things that you know what I'm bored.

By the way for the new generations and beyond that's what kind of thing that they didn't know so that's why it's our job to to make to make you know and end or whether we like it or not you know what the cigarette situation you know that these people discovered frozen foods and we'd definitely believe that's going to help so I I see much more.

<unk> anything else in the in your head office.

The the the point that would that probably the fact that but we have seen what you have <unk>, let's say something <unk> <unk>, yeah coming back to vote, who didn't look smaller get all day, she's having a weekly they were going and buying some frozen food and then put you didn't dare. Please wait <unk> and then.

Highlighting.

It's very important for us to make sure that they open up the door on the pleaser.

Thing right now is it actually that they're using for the equivalent look smaller get obviously, they're coming back so what's happening again and again, that's extremely encouraging for US now the question whether that button, we stay but given the part of the time doing Wednesday, we that does that part, though it's very likely that they picked these bills changes remain for quite some.

I'm fine I mean.

Usually I mean changed for about three to four most though so I think it's quite think raising went outside.

One one additional points it on as as you probably have seen.

And it's not limited to us that the online has literally exploded should really be stolen and and again, if you're going to stay. So some people <unk> you know even said you know it's been a 10 years in in in three months or so it's big and it goes to all that gets the release of people by the way and what we're also very.

Is that frozen is is overindexing or with with the with the online. So it's another reason why we believe these combinations he's going to have this.

Got it. Thank you very much their so called and good luck out there.

Thanks.

Right next question constrained L. Chapel <unk>. Please go ahead.

Hi, This is Becky I'm for bill Thanks for taking the question just kinda falling want me to last question.

They're a world where you know you mentioned that consumers are [noise].

In the body old way of looking at closing food versus a new way of looking at frozen food is there a possibility where retailers maybe you can increase shelf space or maybe he survived more sports with the category if that takes place. Thank you.

Well the the simple answer is is yes, it's it's actually it's a very good <unk> for the retailers. It's it's a good margin for them.

<unk> under should use a <unk>, you're both <unk> that comes with with with frozen. So that's that's what's going to happen, it's not going to happen overnight at least in terms of.

Filters pictures, but you can't imagine that they could equipped you know we sickens replacements in terms of freezers and we believe it <unk> <unk>, we can make its work, but it's kind of.

We thought of Oh fold your own business, then with all these guys, but definitely some of the agenda.

God. Thank you.

Yeah.

<unk> the question answer session.

I'd like to turn the conference back already scheme Tastemaker training Cringing Mikes.

Thank you very much <unk>. So thank you all for participating on all first born to any school.

The past two months have been an unprecedented moments of time for many of US Oh and tie organization has adopted to a new way of working while you're working hard.

To ensure that we can continue to supply or below breads grocery stores across Europe.

Protecting the safety of for employees.

Done like these we I have all to be serving or communities with nutritious food.

Oh business, he's proving to be very ready to get through all these features that certainty.

Any sports to emerge on an even stronger foundation.

Thank you for your time.

They say if I look forward to updating you where do we do next with bullets cute you earnings in August.

<unk> today's conference call.

He may disconnect three lines and keep her participating we have that president k.

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Yeah.

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Yeah.