Q4 2023 Nomad Foods Ltd Earnings Call

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Speaker Change: Greetings and welcome to the Nomad Foods fourth quarter of 2023 earnings call. At this time, all participants are in a listen only mode.

and welcome to the Nomad Foods fourth... The question and answer session will follow... If anyone should request a copy of this, please do so now, https://www.youtube.com.uk Andrew Lazar, Stefan Descheemaeker, Unknown Executive, Andrew Lazar, Stefan Descheemaeker, Unknown Executive, William Brinkley, I would now.

Speaker Change: Question and answer session will follow the formal presentation.

Speaker Change: If anyone should require operator assistance during the conference. Please press stars zero on your telephone keypad as a reminder, this conference is being recorded.

Speaker Change: I would now like to turn the conference over to your host Mister Amit Sharma head of Investor Relations for Nomad Foods thinking you may begin Hello, and welcome to Nomad Foods fourth quarter 2023 earnings call.

Amit Sharma: Head of Investor Relations. Hello, and welcome to Nomad Foods' fourth quarter 2023 earnings call. I'm Amit Sharma, Head of Industrial Relations, and I'm joined on the call today by Stfan Descheemaeker, our CEO, and Samy Zekhout, our CFO. By now, everyone should have access to the earnings release for the period ending December 31, 2023, that was published at approximately 6.45 a.m. Eastern Time. The press release and investor presentation are available on Nomad Foods' website at www.nomadfoods.com. This call is being webcast, and the replay will be available on the company's website.

Amit Sharma: Sharma head of Investor Relations.

Speaker Change: Join on the call today Bye she found a shoemaker R. C E O and send me the code.

Speaker Change: <unk>.

Amit Sharma: By now everyone should have access to the earnings release, what appeared ending December 31 2023.

Amit Sharma: Publish at approximately 645 am eastern time.

Amit Sharma: The press release, an investor presentation are available on Nomad foods website at Www Dot <unk> Dot com.

Amit Sharma: This call is being webcast replay there'll be available on the company's website.

Unknown Executive: This conference call will include forward-looking statements that are based on our view of the company's prospects, expectations, and intentions at this time. However, actual results may differ due to risk and uncertainties, which are discussed in our press release, our filings with the SEC, and in our investor relations presentation, which includes cautionary language. We will also discuss non-IFRS financial measures during the call today. These non-IFRS financial measures should not be considered a replacement and should be read together with IFRS results. You can find the IFRS to non-IFRS reconciliation within our earnings release and in the appendices at the end of the slide presentation available on our website.

Amit Sharma: This conference call with include forward looking statements that are based on our view of the company's prospects expectations and intentions at this time.

Amit Sharma: Actual results may differ due to risk and uncertainties, which are discussed in our press release, our findings with the S. C C and in our Investor Relations presentation, which includes cautionary language.

Amit Sharma: We will also discuss non I F. R S financial measures during the call today.

Amit Sharma: These non ifr S financial measures should not be considered a replacement and should be read together with I F. R. S results.

Amit Sharma: Users.

Amit Sharma: Can find the Ifr S. Two non I F. R. S. A conciliation within our next release and in the appendices at the end of the slide presentation available on our website.

Unknown Executive: Please note that certain financial information within this presentation represents adjusted figures for 2022 and 2023. All adjusted figures have been adjusted for exceptional items, acquisition-related costs, share-based compensation, and related expenses, as well as non-cash FX gains or losses. Unless otherwise noted, comments from here on will refer to these adjusted numbers.

Amit Sharma: Please note that certain financial information within this presentation represents adjusted figures for 2022 and 2023.

Amit Sharma: All logistic figures have been adjusted for exceptional items acquisition related costs sure based compensation and related expenses as well as non-cash affects gains or losses.

Amit Sharma: Unless otherwise noted.

Comments from here on will effort to these.

Amit Sharma: Just said numbers with that I will hand, you over to Stefan Thank.

Stfan Descheemaeker: Thank you, Amit. I would like to begin by offering a few highlights from our solid fourth quarter and full year results. I would then offer a few comments on our accelerated growth outlook and the health of the frozen categories before handing it over to Samy for a detailed review of our quarterly financial results and our initial 2024 guidance. Nomad Foods delivered another quarter of solid top and bottom line performance.

Stefan: Thank you I mean, I would like to begin by offering a few highlights for more solid fourth quarter and full year results.

Stefan: Sure sure comments or no accelerated growth outlook, the health of the Trojans categories.

Stefan: Before handing it over to send me for detailed review quarterly financial results.

Stefan: The initial 2024 guidance.

Stefan: Nobody's to deliberate and another quarter of solid top and bottom line performance.

Stfan Descheemaeker: Fourth quarter organic sales increased by 1.9%, or sixth consecutive quarter of positive organic growth, as our volume trend improved sequentially in each month of the quarter. Quarterly and full year gross margins improved substantially. And we continue to generate strong cash flows, enabling us to initiate a quarterly cash dividend. I'm proud of our team for enabling us to continue our uninterrupted track record of top-tier financial performance and finish 2023 with record high annual sales and a bit down. I'm even more excited about our building momentum as the key drivers of our long-term profitable growth begin to accelerate, despite the impact of the challenging macros we see. And we return to our typical operating cable.

Stefan: Fourthquarter organic sense increased by 1.9 per cent.

Stefan: Oh six consecutive quarter of positive organic growth.

Stefan: Ah so volume trench improve sequentially needs months of the culture.

Stefan: Quarterly and four year gross margin improved substantially.

Stefan: And we continue to generate shrunk cashflows.

Stefan: Being us to initiate a call to the cash dividends.

Stefan: I'm pro the pro team to enable us to continue or interrupted track records of top Chief financial performance and finished 2023 with direct with the high as you said and they'd be done.

Stefan: I'm, even more excited the ball or building momentum.

Stefan: The key drivers of a long term profitable growth begin to accelerates.

Stefan: As the impact of challenging macros receipts and.

Stefan: We return to a typical of preventing cadence.

Stfan Descheemaeker: We expect even stronger top and bottom line growth in 2024 and for many years to come. Specifically, we expect 2024 organic sales to increase by three to four percent, including positive volume and share. Adjusted EBITDA is expected to increase by 4% to 6%, to 556. The DPS is expected to be in the range of 1.75 to 1.80 euros, which implies 9-12% growth. We expect another year of strong Castro generation.

Stefan: We expect even stronger.

Stefan: And both of them black both.

Stefan: 24.

Stefan: And for many years to come.

Stefan: Especially thickly we expect 2024 organic saves to increased by 3% to 4%.

Including positive volume and <expletive>.

Just the TB dies expected to increase by 4% to 6% two five.

Stefan: 566.

Stefan: 567 million Euro.

Stefan: D. P. S is expected to be in the range of one point 75 U two 1.8 T. You wrote it.

Stefan: Implies 9% to 12% growth.

Stefan: We expect another year of Strunk Castro generation.

Stfan Descheemaeker: Cash flow converging the 90% to 95% rate. With that, let me provide a few highlights on our fourth quarter performance. Post-quarter net sales increased by 1.4%. The organic growth of 1.9% was modestly upset by unsavorable forage, volume mix declines improved subsequentially from the last quarter and moderated to the lowest levels in the third quarter of 2022.

Stefan: Cashflow conversion, the 90% to 95 per cent range.

Speaker Change: With that that'd be provide a few I nights on the fourth quarter performance.

Fourth quarter net sales increased by 1.4 per cent.

Speaker Change: Organic growth of 1.9 per cent, but modestly upset by unfavorable for Rex.

Speaker Change: A volume mixed declines improved sequentially from.

Speaker Change: From the last quarter.

Speaker Change: They raised it to the lowest levels she said.

Speaker Change: Third quarter of 2022.

Stfan Descheemaeker: Post-quota gross margins improved by more than 116 basis points due to disciplined pricing, optimized promotions, and continued focus on productivity. Full year gross margin also came in better than expected, even as we absorbed substantial COGS inflation, enabling us to continue to increase A&P investments behind our brand. I just bid up 117 million euros, and I just had EPS of 32 euros cents per share; both came in ahead of expectation. We generated nearly €174 million of free cash flow during the quarter and €300 million for the full year. A wonderful hire. Cash conversion ratio of 109%, well above all the targeted range.

Speaker Change: Fourth call the gross margins improve by more than 160 basis points.

Speaker Change: You too disciplined pricing optimize promotions and continued focus on productivity.

Speaker Change: A 40 year gross margin also came in better than expected.

Even as we absorbed substantially Cogs inflation.

Speaker Change: Enabling us to continue to increase ANP investments behind our branch.

Speaker Change: Just that they beat up 117 million zoo and not just the G. P. S 32 euro cents per share both skimming ahead of expectations.

Speaker Change: We generated nearly 174 million euro free cashflow during the quarter and 300 300 million euro for the full year.

Speaker Change: Wonderful highest.

Speaker Change: [noise] cash conversion ratio of 109% well.

Speaker Change: Well above all targeted range.

Stfan Descheemaeker: A long track record of consistently strong cash flows is at the foundation of our effective capital allocation to enhance shareholder value. To that effect, we initiated a quarterly cash dividend of $0.15 per share. Notable milestone for Nomad Foods and a testament to the quality and resilience of our business and our confidence in our ability to generate significant cash flows, in sustainable long-term growth, at the retail sales level, as reported by Nielsen IT, of value sales for the 12-week period ending December 31st increased by nearly 2%, including sequentially improving volume and market share trends. Our recent year-over-year volume growth, transcribed by https://otter.ai, giving us greater confidence in delivering positive volume growth in 2024. The frozen food segment in Europe remains healthy; underlying consumption in all core categories and key markets continues to grow with improving volume trends over the last few periods.

Speaker Change: A long track record of consistently strong castro's.

Speaker Change: Is that the foundation.

Speaker Change: If it keeps kept at the location when the.

Speaker Change: Hence shareholder value.

Speaker Change: That is correct, we initiated a call the cash dividend of 15 cents per share.

Notable milestone for Miramax foods and.

Speaker Change: A testament to the quality and residents of our business and our confidence in the ability to generate significant cashflows.

Speaker Change: And the sustainable long term growth.

Speaker Change: Ah the retail sales level as reported by Nielsen I Q.

Speaker Change: Why do you say this for the 12 week spirits ending December 31st.

Increase by nearly two per cent.

Speaker Change: Including sequentially, improving volume and market share twins.

Speaker Change: Oh recent year over year volume growth and search friends I've already done positive in many key markets.

Speaker Change: Giving us greater confidence in Delhi bring positive volume growth in 2024.

Speaker Change: The frozen food segment in Europe, we meant S T.

Speaker Change: Underlying consumption you know go get degrees in key markets.

Speaker Change: Continue to grow with improving voting trends over the last few periods.

Stfan Descheemaeker: Even with the unprecedented level of inflation-driven pricing in the last two years, frozen food remains highly relevant for most consumers. Frozen foods enjoy high outsourced penetration in key markets in the mid to high 80% range. And even more important, household penetration has remained largely stable, even with the extraordinary pricing in the last two years. And it's not that difficult to see why.

Speaker Change: Even with the interest at that level of inflation driven pricing in the last two years.

Speaker Change: Frozen food remains highly relevant for most consumers.

Speaker Change: Frozen food enjoy high also penetration and low key markets.

Speaker Change: Me too high 80% range.

Speaker Change: And even more importantly household penetration has remained largely stable even with the extraordinary pricing in the last two years.

Speaker Change: And it's not that difficult to see why.

Stfan Descheemaeker: Frozen food categories align perfectly with a number of secular consumer trends, including convenience, taste, nutrition, sustainability, and remain highly affordable. [inaudible] By using value packs in promotion, a family of five can enjoy a meal of fish fingers, waffles. Peace.

Speaker Change: Frozen food categories of lines perfectly with a number of particular consumer trends.

Speaker Change: Including convenience tastes nutrition sustainability and remain.

Speaker Change: [noise] affordable.

Speaker Change: For instance.

Speaker Change: Using a value packs and promotion.

Speaker Change: Samuel five can enjoy your meal of fish fingers waffles piece.

Stfan Descheemaeker: Highlighting the tremendous value proposition for products offering a key consideration for consumers in the current environment, we are positioning ourselves behind our biggest and most profitable report. All total advertising and promotion spending. Peter Saleh, Stefan Descheemaeker, Anthony Bucalo, Robert Dickerson, Stephen Powers, and a disproportionately large share of these investments were made against our top 20 Muslim countries.

Speaker Change: Peace for around $10 in many markets.

Speaker Change: Lighting, the tremendous value for position.

Speaker Change: Four projects offering.

Speaker Change: Key consideration for consumers in the current environment, we are positioning ourselves.

Speaker Change: Gotcha Gray the share of these gross by increasing or focus investments.

Speaker Change: Hi, or biggest and most profitable opportunities.

What goes with it but the <unk> promotions spending increased by nearly 30 per cent of the fourth quarter.

Speaker Change: And a disproportionately large share of these investments were made against the top 20 must be battles.

Stfan Descheemaeker: These high priority opportunities account for nearly half of retail sales and an even higher, bigger share of gross profit. Our recent strengths in many of these opportunities are very encouraging and give me greater confidence in our revised growth plans as we look to 2024. The significant ramp-up in our fourth quarter E&P investment. We continue with 2024. Specifically,

Speaker Change: These high protein opportunities account for nearly half for retail seeds, and even though you're a bigger share of gross profits.

Speaker Change: A recent trends.

Speaker Change: Many of these about G DS are very encouraging.

Speaker Change: And it gives me great confidence you know revised growth plans as we looked at 2024.

Speaker Change: The significance ramp up in the fourth quarter is b investment.

Speaker Change: Continue with 2024.

Speaker Change: Quickly.

Stfan Descheemaeker: We launched our master brand campaign to drive greater affinity for our brands in the first quarter, to build an emotional connection to a brand and to remind consumers of the most relevant and loved aspects of their relationship with our acolytes. Our messaging will also focus on highlighting the stronger health claims of our brands, to emphasize the naturalness and goodness of our products, given the increasing debate around obesity and the ultra-process. Along with driving the call,

Speaker Change: We launched or Master brand campaign to drive greater affinity to a branch in the first quarter.

Speaker Change: To build an emotional connection to a branch and to remind consumers of the most relevant and loved aspects of their relationship with alacrity brands.

Speaker Change: Or messaging will also focus on the highlighting the strongman health claims of our branch.

To emphasize the naturalness and goodness so for products.

Speaker Change: Given the increasing debate the round obesity and they'll drop processed foods.

Speaker Change: Along with driving the call.

Stfan Descheemaeker: IANP will also help reignite our innovation. Historically, new products have accounted for nearly 5% of our annual sales. And it fell below that level in 2023. We are committed to regaining our innovation momentum and have an exciting pipeline of new products to be launched... I mentioned two of these innovations last: Igloo Branded Mexican with Coated Fish Fillet in Germany and King's branded multi-layered premium ice cream for the home occasion yet affordable.

Speaker Change: N P will also help reignite or innovation engine.

Speaker Change: Easter weekly new projects has it gone for nearly 5% annual sales.

Speaker Change: And it fell below that Lebanon's when did you say three.

Speaker Change: We committed to regaining on you based on momentum and I've been exciting pipeline of new projects to be launched through the rest of the year.

Speaker Change: I mentioned to a decent location last week.

Speaker Change: He grew up branded Mexican cause it's fish fill in Germany.

Speaker Change: And Kings brand is multi layered premium ice cream for the whole vacation yet <unk>.

Stfan Descheemaeker: We have planned a full spectrum of marketing support and retail activation behind both these innovations, along with other new products in our pipeline. As expected, The majority of these, the difficult but necessary pricing discussions with a few of our retail partners, which I mentioned in our last call, have been well-resolved and successful. The retail environment remains dynamic, but we have successfully completed pricing conversations in the majority of our markets, and we remain on track to complete the rest over the next few months. At the same time, we are optimizing our promotion spending and reallocating resources where we see the largest potential impact, as I mentioned in my comments.

Speaker Change: We have plan to put spectrum of marketing support in retail activation behind both these innovation.

Speaker Change: Along with all the new products in the pipeline.

Speaker Change: As expected.

Speaker Change: The majority of these the difficult, but necessary pricing discussions with the fuel for retail partners, which I mentioned in the law school.

Speaker Change: Where it resolved successfully.

Speaker Change: Retail environment remains dynamic, but we have successfully completed pricing conversations majority of markets and we remain on track to complete the rest over the next few months.

Speaker Change: At the same time, we are optimizing or promotions spending in reality allocating resources way, we see the largest potential impact.

Stfan Descheemaeker: At the Cagney conference last week, we were investing in our growth capabilities, in our data, and in our analytics to position us for accelerated growth in 2024 and beyond. These investments are meaningfully upgrading our retail execution. We have better insights and a wider, more comprehensive revenue growth management toolkit to maximize our profitable volumes. These strategies are working, and I strongly believe that they position us to capture a greater share of the frozen food growth in our market. Further increasing investments to drive accelerated growth is underpinned by your productive agenda, particularly across our supply chain. The resilience and nimbleness of our supply chain during a period of unprecedented volatility is unmatched across the frozen food aisle. But I'm even more proud of the fact that we are accomplishing it while increasing our focus on driver grade efficiency. Crossover Network.

Speaker Change: As I mentioned in my comments.

Speaker Change: The conference last week, we are investing in the growth of the capabilities and the data you know analytics to position us for growth in 2024 and beyond.

Speaker Change: These investments are meaningfully upgrading or retail execution.

Speaker Change: We have better insights in the wider more comprehensive.

Speaker Change: Growth management tool kit.

Speaker Change: Maximize a profitable volumes. These strategies are working and I strongly believe that they pose he showed us to capture a greater share of the frozen food both you know markets.

Speaker Change: Oh, you're breathing investments to drive back to the growth is underpinned by your productivity agenda classically across or supply chain.

Speaker Change: The resilience nimbleness supposed supply chain during a period of unprecedented.

Speaker Change: Reality is unmatched.

Stfan Descheemaeker: We are optimizing manufacturing and logistics networks, reducing complexities and establishing strategic relationships with key suppliers to reduce supply risk and generate procurement savings. Supply Chain delivered strong cost savings and the High Cash Float in 2023, even as our service levels improved to over 98%. We expect a similar trajectory in 2024.

Speaker Change: The frozen food aisle.

Speaker Change: But I'm, even more proud of the fact that we are accomplishing it why decreasing or focus on drive a greater efficiencies crossover network.

Speaker Change: We are optimizing or manufacturing and logistic network.

Speaker Change: Reducing complexities and establishing strategic relationship with key suppliers.

Speaker Change: Reduce supply risks.

Speaker Change: Generate procurement savings.

Speaker Change: Of supply chain delivered strong cost savings and.

Stfan Descheemaeker: While on the topic of cash flow, as I mentioned earlier, we generated 300 million euros of free cash in 2023, or the second highest annual cash flow ever. Strong cash flows are a foundation of a value-enhancing capital allocation strategy. We bought back more than 6% of our shares outstanding in 2023, initiated quarterly cash dividends, and adopted a new $500 million share repurchase program, highlighting the strength and flexibility of our balance sheet as we continue to execute a balanced capital deployment strategy intended to maximize shareholder returns. In conclusion, we delivered record high sales and a bid down in 2023, with improving margins and strong cash. Our quarterly volume trends improved sequentially, positioning us to deliver positive volume and share growth in 2024. We are increasing our growth investments to unlock the full potential of our attractive frozen categories and iconic brands, positioning us to deliver sustained, attractive growth in 2024 and for many more years to come. I'm highly confident of delivering our revised long-term targets of 3-4% organic gravy growth.

Speaker Change: Hi, Castro's in 2023.

Speaker Change: Even though I was or service levels improved to over 98%.

Speaker Change: We expect familiar trajectory in 2024.

Speaker Change: Why do the topic of Castro as I mentioned earlier, we generated 300 million euros, a free cash in 2023.

Oh second highest under the cash flow ever.

Speaker Change: Strong cash flows are foundation of value enhancing exactly the location strategies.

Speaker Change: We bought my back more than 6% of all shares outstanding in 2023.

Speaker Change: Initiated the call to the cash dividends and that Dr. New fiber that million dollars a share repurchase program.

Speaker Change: Highlighting the strength and flexibility of a balance sheet as we continue to execute balance capital deployment strategy intended to maximize shareholder returns.

In conclusion, we delivered rigged with a high sales and they'd be down 2023.

Speaker Change: With improving margins and strung Castro's.

Speaker Change: A quarterly volume trench improve sequentially position.

Speaker Change: Positioning us to deliver positive volume.

Speaker Change: [noise] rules in 2024.

Speaker Change: We are increasing old growth investments to unlock the full potential for Iraqi frozen categories. It Nyquil Nick brands.

Speaker Change: Positioning us to deliver sustained attractive girls in 2024.

Stfan Descheemaeker: 5-7% adjusted EBITDA growth; 7% to 9% adjusted EB, EPS growth, and 90% to 95% cash conversion, which I believe, will deliver superior returns for our shareholders. With that, let me hand the call over to Samy to review our fourth-quarter results and our 2024 guidance in greater detail.

Speaker Change: For many more years to come.

Speaker Change: I'm highly confident of delivering of revised long term targets of 3% to 4% organic revenue growth.

Speaker Change: 5% to 7% adjusted EBITDA growth, 7% to 9% that just a D. B E. P. S growth and 90 to 95 per cent just been version.

Speaker Change: Which I believe.

Samy Rene Zekhout: Thank you, Stefan, and good morning everyone. I am pleased to present another quarter of solid performance at Nomad Foods. For the fourth quarter, reported net revenues increased by 1.4% to 761 million euros. Organic sales increased by 1.9%, while unfavorable effects impacted quarterly sales by 0.5%.

Speaker Change: Will deliver superior returns for shareholders.

Speaker Change: With that let me 100 going over to send me to reboot or fourth quarter results and no 2024 guidance in greater detail Sammy.

Sammy: [noise] used to find in good morning, everyone. I am pleased to prevent another quarter of solid performance abdomen foods.

Sammy: For the fourth quarter reported net revenues increased by 1.4% to 761 million Euro.

Samy Rene Zekhout: Our organic sales growth was driven primarily by pricing as we continue to benefit from pricing to cover inflation. Our volume mix was down 5.6% during the quarter, a marked improvement from the third quarter and our lowest volume mix decline since Q3 2022. Fourth quarter gross profit increased by 7.9% to €208 billion, while gross margin increased by over 160 basis points from the year-ago quarter to 27.3 due to better procurement and cost discipline, improving volume trends, and contribution from pricing and favorable RGM execution. Adjusted EBITDA increased by 3.2% to €117 million in the quarter, as higher gross profit was partially offset by higher operating expenses. Our adjusted operating expense increased by 14% from the year-ago quarter due to the step-up A&P investment as well as higher indirect expenses. Adjusted net income declined by 9.4% due to higher interest expense from our last year's refinancing, while adjusted earnings per share of 32 Eurocents declined by only 1 Eurocent from the year-ago quarter, as the impact from higher interest costs was partially offset by share buybacks.

Sammy: Or getting sales increase by 1.9%, while unfavorable effect impact quarterly sales by 0.5%.

Sammy: Oh Guinea sales growth was driven primarily by pricing as we continue to benefit from pricing to cover inflation.

Sammy: I believe it was down 5.6% during the quarter a marked improvement from the third quarter and our lowest decline quota 320 22.

Sammy: Poor school too gross profit increased by 7.9% to 280 million Euro Wild Goose Martin increased by over 160 basis points from the year ago quarter to 27.3, you two better procurement cause discipline, improving voting trends and could produce them from pricing.

Sammy: And suffer about Ah yummy execution.

Sammy: I just did you bizarre increased by 3.2% 170 million Euro in the water has a higher gross profits was partially offset by higher authority expenses.

I just see the operating expenses increased by 14% from the year ago quarter due to the step up and be investment as well as in hiring direct expenses.

Sammy: Adjusted net income declined by 9.4% due to higher interest expense from our last year's refinancing while I just eat earnings per share of 32 year old says declined by all you want and you said from the year ago quarter as impact from hiring towards Causeless, possibly upset by share buybacks.

Samy Rene Zekhout: At the current EURUSD spot rate, our Q4 adjusted EPS was US$35 per share. For the full year 2023, net sales increased by 3.6% to 3.04 billion euros, including 4.9% organic sales growth. Gross margin increased by nearly 50 basis points to 28.2%, while adjusted EBITDA increased by 2% to €535 million. Full year adjusted EPS of 1.61 or $1.74 declined due to higher interest expense from the refinancing of

Sammy: Occurrence you order a portrait a quarter for audio C. D. P. S was 35 U S dollars 10.

Sammy: 10 per se.

For the full year 2000, twenty-three net sales increased by 3.6% to 3.04 billion euro, including 4.9% organic sales goals.

Sammy: Gross margin increased by nearly 50 basis points to 28.2%, while I just need to be increased by two per cent to 535 million euro.

Samy Rene Zekhout: During 2023, we repurchased more than 11 million shares of our common stock for nearly $185 billion under our previous buyback authorizations. As Stefan mentioned, we now have a new $500 million share repurchase authorization. We delivered yet another year of strong cash flow in 2023, with full-year adjusted free cash flow of 300 million, driven by strong working capital improvement, higher EBITDA, and favorable timing on certain receivables. Full-year and four-quarter cash flows came in well ahead of our expectations as we continue to be highly focused on effective inventory management and cash collection to improve our working capital performance. Specifically, full-year working capital decreased by nearly €155 million, more than offsetting a nearly €40 million increase in cash interest.

Sammy: Who you are just C. G. P S 161, or $1.74 declined to higher interest expense from the refunding to think about that.

Sammy: During 2023, we report says more than 11 million shares of common stock for nearly 185 B M dot all under our previous buyback authorization.

Sammy: I stiffened mention we now have a new 500 million dollar a share repurchase authorization.

Sammy: We delivered yet another year of strong cast put in 2023 with food you adjusted free cash flow of 300 million driven by sort of working capital improvement, how you're already bitter and favorable dining in certain receivables.

Sammy: Who you're in full quarter Cashflows Kimmy, well ahead of our expectation as we continue to be highly focused on effective inventory management.

Samy Rene Zekhout: 2023 CAPEX of 82 million euros increased modestly from last year, as we remain highly disciplined on supporting long-term strategic investment. Given the strong Q4 cash performance, full year cash conversion came in at 109%, well ahead of our targeted 90% to 95%. Maintaining a high level of cash conversion is paramount to ensuring the strength of our balance sheet and to continue to execute our effective capital allocation to deliver enhanced shareholder returns. We paid our first quarterly cash dividend of $0.15 per share earlier this week, reinforcing our ability to generate strong, consistent cash flows and our attractive long-term growth.

Sammy: Connection to improve our working capital performance.

Sammy: Specifically for your working capital decreased by nearly 155 billion euro more than love sitting nearly 40 million euro increase in kasson twists.

Sammy: 2023, Capex of 82 million Euro increase modestly from last year.

Sammy: Highly disciplined on supporting long term strategic investment.

Given the strong Q4 cats performance for your cats convertible came in at 109% well ahead of our targeted 90 to 95 per cent.

Sammy: Maintaining a high level of cats conversing is paramount to ensuring the strength of a balance sheet and to continue to exist, Utah effective capital allocation to deliver enhance shareholder returns we paid our first quarterly cash dividend of 18 cents per share earlier this week reinforcing our ability to generate stronger conceived.

Samy Rene Zekhout: Turning to our guidance for 2024, we are pleased with our building top-line momentum as we enter 2024. We expect to deliver net revenue growth of 3% to 4%, adjusted EBITDA growth of 4% to 6%, and adjusted EPS of €1.75 to €1.80 per share. We continue to expect strong cash flow, with cash conversion in the range of 90% to 95%. Our three to four percent organic growth in 2024 is expected to be relatively balanced between price and volume mix, including positive volume growth for the full year. Volume trends are already beginning to inflect positively in many of our key markets. We expect continuous sequential improvement in the first half and consolidated volume to turn positive in the second half. We expect our gross margin trends to continue to improve in 2024 as we benefit from improving volumes, a greater focus on productivity initiatives, and favorable costs. Digging into inflation more specifically, we expect relatively flat inflation for the full year, with lower fish and protein costs offset by headwinds in some of our other cost buckets, including vegetables.

Sammy: Some cash flows and you know attractive long term goals turn into our guidance for 2024, we are pleased with our building topline momentum as we enter 2024.

Sammy: We expect to deliver network and you'll go to 3% to 4%.

Sammy: It just seems to be the growth of four to six per cent and then C. D. P. S. A one year old 75 to one year old 80 per se.

Sammy: We continue to expect strong cashflow with gas conversant in the range of 90 to 95 per cent range.

Sammy: 3% to 4% or getting girl teen 2024 is expected to be relatively balance between price and voting mix.

Sammy: Positive volume growth for the full year.

Sammy: Voting twins are already beginning to inflict to prosecute go in many of our key markets. We expect continuous sequence of improvement in the first half and consolidated log into the positive in the second half.

Sammy: We expect our gross margin twins to continue to improve in 2024.

Sammy: Feed from improving volume greater focus on productivity any cities in February will cost you.

Sammy: Digging into inflation more specifically, we expect relatively flat space for the full year with Louis decent putting cause upset by a headwind in some other cause book, including vegetables.

Samy Rene Zekhout: As Stefan mentioned, we remain committed to investing behind our brand. Overall, ANP spending increased by nearly 13% in 2023, and we have planned for an even greater increase in 2024, particularly in the first half as we drive strong volume and share performance in 2024. At US dollar-euro exchange rates as of February 2017, our adjusted EPS guidance translates into $1.89 to $1.95 earnings per share and implies 9% to 12% year-over-year growth as we impact from higher interest costs in 2023 and continue to benefit from lower share counts.

Sammy: Ah Stefan mentioned, we remain committed to investing behind our brands.

Sammy: Overall N P spending increased by nearly 13% in 2023, and we have planned to an even greater increase in 2024, particularly in the first half as we drive strong very mature performance in 2024.

Sammy: She was still a euro exchange rates as of February 17th I, Just C. D. P as guidance Prince taken to $1.89 to $1.95 earnings per share and implies nine to 12 per cent. Your over your goals as we laughed impact from how you into a skunk in 2023 and continued to benefit from la.

Sammy: Sure counts.

Samy Rene Zekhout: In terms of quarterly cadence, the top line is likely to be largely in line with historical patterns. However, the second half will account for a disproportionately higher share of our profits and earnings, given the timing of costs flow through due to the balance sheet re-measurements and the timing of our NP investment, particularly in the first quarter. Absent any strategic acquisition and given our strong cash flow, we remain committed to returning capital to shareholders through the recently instituted dividend and opportunistic share repurchase. We have a proven track record of top-tier financial results and are even more excited by the opportunities we have ahead of us. We are confident of delivering attractive growth at or near the top tier of our food peers in 2024 and for many years to come. I will now turn the call over to the operator for your questions. Thank you. Thank you. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Sammy: In terms of quarterly Kaden. After plan is likely to be largely in line with historical pattern. However, the second half will account for a disproportionately high yourself or profit and learning given the timing of course prove who you to the balance he trailers women and the timing of R. M. P investment particular.

Sammy: In the first quarter.

Sammy: Absent of any strategic acquisition and given a full cash flow, we remain committed to returning capital to shareholders to the recently instituted giving them an opportunistic share repurchases.

Sammy: We have a proven track record of top tier financial results and now even more excited by the opportunities. We have ahead of us.

Sammy: We have confidence of did he bring attracted go at or near the top tier of put tears in 2024 and for many years to come.

Speaker Change: We now turn the call over to the operator for your question. Thank you.

Speaker Change: [noise] thinking at this time will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Information to authenticate your line isn't the question can you May press start too if you'd like to remove your question family Kim for participants using speaker equipment. It may be necessary to pick up your handset before pressing the stocky.

Operator: You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. In the interest of time, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of John Baumgartner with Missouha Securities. Please proceed with your question. Good morning. Thanks for the question. Good morning.

Speaker Change: It's just tough time, we ask that you need to keep to one question and one follow up thank you.

Speaker Change: Our first question comes from the line I've done Tom Gardner, whereas magenta of Securities. Please proceed with your question.

Tom Gardner: Thanks for the question.

Tom Gardner: I wanted to take in.

John Joseph Baumgartner: I wanted to dig into Q4 gross margin, which I think was a bit better than expected. And I understand you've got pricing inflation sort of matching better relative to the last couple of quarters. Can you walk through what drove that upside and how much of that was underlying cost efficiencies coming through? How much of it was cost inflation moderation relative to that price range?

The morning, Uhm I want anything into the queue for gross margin, which I think was better than than expected and I understand you've got you know so pricing inflation sort of mashing better relative to last couple of quarters can you walk through what drove that upside and how much of that was underlying cost efficiencies coming through how much of it was you know cost inflation moderate.

Tom Gardner: Asian relative to that pricing.

Samy Rene Zekhout: Yeah, thank you, John. Actually, effectively, we had a good performance in our gross margin of nearly 160 basis points from a quarter year ago. But I would say the main drivers were, frankly, pretty much the same.

Yeah. Thank you Jordan actually affects here, we have a good performance you know gross margin of nearly 160 basis points from your call to a year ago.

Tom Gardner: I would say the the main driver where frankly pretty much the same I mean, even though.

Samy Rene Zekhout: I mean, even though the spread was changed, when you look at the effective spread at the beginning of the year and the end of the year, because effectively we saw the pricing impact starting to effectively fade down as we had prior pricing in the base. So a lot of it was coming from good discipline and better procurement. So we clearly continued to benefit from the fact that there were some clearly stepped-up improvements in that area. We had a higher focus as well overall on productivity and efficiency. And at that same moment, we had an improving volume trend. If you recall, we implemented at the same time a sharpened RGM strategy to define effectiveness and promotional intervention. But also, effectively, there were some specific steps up, if you want, in advertising that really boosted the volume, which effectively reduced the impact that we had versus a year ago. So the volume element had a component, I mean, into that.

Tom Gardner: What changed when you look at the.

Tom Gardner: The beginning of the end of the year, because they're picky, we saw the pricing in fact, it's starting to affect you say down as we had prior pricing and debase. So a lot of it was coming from good disciplinary better procurement. So we tell you continue to benefit from the fact that there were some are clearly set up in implementing that down here, we have a higher focus on.

Tom Gardner: Well over on productivity and efficiency and at that at that same moment, we are improving voting trends. If you recall, we had implemented at the same time the shopping audience strategy with two defining 50, some promotion intervention, but also effectively there were some specific stepped up if you want to know is.

Tom Gardner: <unk>, that's what he boosted the volume which affects your reviews the impact that we address so devoted many men have a component of it into into that program.

Stfan Descheemaeker: Okay, thanks for that. And as a follow-up, I'm looking at the volume. I think that came in a little bit lighter than we were looking for in the quarter. I think you mentioned some one-time drags there, but bigger picture, can you walk through the non-measured channels, what we can't see in Nielsen, what you're seeing in the Nordics, what you're seeing in the Adriatic, and how that sort of evolves in 2024?

Speaker Change: Okay. Thanks for that and you know as a follow up looking at the the <unk> mix I think that came out a little bit lighter than we were looking for in the quarter Uhm I think he mentioned some some one time dragged there, but you know a bigger picture can you walk through the Nonmeasured channels, but we can't see Nielsen you know what you are seeing in the northern X, what you're seeing the Adrian.

And how that sort of evolved in 2024.

Stfan Descheemaeker: Thank you. Well, I think to your point, John, actually, Nielsen is only capturing part of our businesses, so it doesn't include, to your point, Nordics, Swiss, Adriatics, Ireland, and it doesn't include some brands, by the way, like OwnBase. And this doesn't include, either, you know, for example, food service. And we have, as you know, a bit of private labor. So when you see, let's say, quarter four in value, but value and volume are getting very close to each other now, actually. What you see is, well, Nordics hasn't made any change to the whole picture, so it's very much in line with the rest of our numbers. Adriatic was definitely a weather help.

But I think to your to your points John actually you know.

Speaker Change: April.

Speaker Change: It is only capturing fond of all of our businesses. So it doesn't include your your boys nowadays.

Speaker Change: <unk> on it and it doesn't include some branch by the way like on bases.

Speaker Change: It doesn't include either you know for example, you know food service and we have assumed it would be the private label. So when you see let's say cause a fall in value of evaluating volume are getting very close to each other no actually.

Speaker Change: What you see is when Nordics us I haven't made any change.

Speaker Change: The whole picture. So it's very much in line with the rest of the numbers are drastic was it was it has definitely so we're doing fine.

Stfan Descheemaeker: So we're doing fine. You may remember Adriatic in Q4 is more of a frozen food business as opposed to ice cream, and it was a business that was probably less strong than ice cream, but we're making a lot of progress. And so those are basically the main differences. So the athletics is a plus, I would put it that way.

Speaker Change: You May remember, we're fixing to four is mostly frozen food as opposed to ice cream.

Speaker Change: And it was a it was a business that was for business from the ice cream between making a lot of progress.

Speaker Change: And so that's that's basically the main difference is those are so that that's what I think she's a place that would be that way and then into Florida. We also have a lot of let's say movement between citizens alone.

Stfan Descheemaeker: And then in Q4, we also have a lot of, let's say, movement between sell-in and sell-out. So most of the time, you know, selling at the end of the year is lower than sell-out. And then on top of that, you know, you have a food service, for example, which contributes nicely to us. So overall, let's say, interestingly enough, when we... quote-unquote, I think between, or let's say, Nielsen numbers and the final numbers in terms of selling, they're quite similar, but with a series of Delta being Adriatic in terms of selling and food service. And if you want to have, you know, this, let's say, on a monthly basis, same thing in January, but the other way around.

Speaker Change: So most of the time in those selling at the end of the year is lower than fill out and then on top of that you know you have the food service. For example, this contributes nicely to us. So overall [laughter], let's say interestingly enough when we see cause before I think between Oh, let's <unk>.

Speaker Change: The numbers and the final numbers in terms of selling.

They quite similar but the foot with a with a series of Delta being a <unk> city and and food service and if you want to have you know this.

Speaker Change: Monthly Bill is the same thing in January, but here's where you're wrong to some extent.

Samy Rene Zekhout: John, remember, it's about two-thirds of our business that's covered in Houston, so there's always a little bit of a dislocation, but I think, rationally, that's the right way to look at it. Thanks, everyone. Thank you, John. Thank you. Our next question comes from the line of Steve Powers with Deutsche Bank. Please proceed with your question.

Speaker Change: I'm trying to remember if I can kind of a business that's covered in Houston. So they didn't all there is a little bit of a dislocation, but I think that accidentally and it's basically look at it.

Speaker Change: Thanks, everyone.

Speaker Change: Like a job.

Speaker Change: Thinking our next question comes from the line as these powers. Please proceed with your question.

Stephen Robert R. Powers: Hey, good morning, everybody. Thank you.

Stephen Robert R. Powers: Thank you. You know, there's a quote in the press release, and the tone of your prepared remarks talks about playing offense in 2024. And I guess maybe just a little bit more detail, if you could, on the cadence of spending as you do that, and then also how quickly you expect to see returns on that spending, maybe in terms of the pacing of volume versus price as we go through the year. Any perspective on that would be great.

Stephen Robert R. Powers: There.

Speaker Change: There's a a quote in the press release and sort of the the tone of of your prepared remarks talks about playing offense in 2024, and I guess, maybe just a little bit more detail. If if you could on the the cadence of of spending as you do that and then also how quickly you expect to see returns on <unk>.

Speaker Change: Spending.

Speaker Change: Maybe in terms of the the the pacing of volume versus prices. We go through the year or any any perspective on that would be great.

Stfan Descheemaeker: Well, to your point, I think we already started, by the way. We started at the end of Q3, where we started to re-increase our O&P. Q4 was really double-digit growth, and we have all the intent to keep going that way in the course of this year, even faster. So, overall, by the way, we think that A&P is going to grow even faster than our sales, which makes total sense. And, well, interestingly enough, it was absolutely crucial for us to be able to keep our gross margin so that we would be able to invest in, reinvest in the brand. So that's starting, together with other things. Again, A&P is one component, but we have more and more for all our must-win battles.

Speaker Change: When two boys I think we we we already started by the way we saw the end of two three were really started to re re inquiries R. O N D.

Speaker Change: <unk> was it really a double digit growth.

Speaker Change: We have all the intend to keep going that way in the course of this year Eva even faster so overawed by the way we think that these guys who go even faster than those safe, which makes the total sense as well interestingly enough. You know it was it was absolutely crucial for us too.

Speaker Change: To be able to keep our gross margin so that we wouldn't be able to invest reinvested behind the price. So that's starting together with other things because again N b as one component, Steve, but we have more and more for all of them missing bottles. We have an integrated view once we go to a flywheel.

Stfan Descheemaeker: We have an integrated view, what we call our flywheel, which is really basically A&P. It's also, obviously, revenue growth management, so where do we need to invest in pricing or in promotion? Well, how do we need to do this?

Speaker Change: Which is way is basically it's ANP. It's also Ah Ah Ah. It's I, it's revenue growth management, so where do we need to invest in pricing oil promotion wait how do we need to do this innovation also a pipeline is starting to bed for the bedroom up to two years, which way more proof theory more subdued.

Stfan Descheemaeker: Innovation also, the pipeline is starting to be better after two years, which were probably a bit more subdued. So we expect to see the gradual improvement turning to positive volume growth by the second half of the year. But it's not going to be linear, guys. It's going to be steady, but it's not going to be linear.

Speaker Change: So we see really to expect to see the gradually improvement journey into positive volume growth by second half of the year.

Speaker Change: But it's not going to be linear guys [laughter].

Speaker Change: City, but it's not going to be linear so but overall what we see is if we are very confident that divorce for victory is there to say, but again combination of a good category two very good category.

Stephen Robert R. Powers: But overall, what we see is that we are very confident that the growth trajectory is there to stay. But again, the combination of a good category to a very good category, we're also lapping, obviously, very strong pricing and then all our own initiatives together with our brand. Very good. Yeah, it makes perfect sense. And Samy, you talked about openness to M&A but, at the same time, the extent that M&A doesn't present itself, you know, continue leaning towards cash return to shareholders. Is there a way to think about the parameters around that in terms of, you know, how much dry powder, so to speak, you want to preserve versus, you know, how much is too much and what's the trigger for cash return or share Is there a level of cash on the balance sheet that is excessive? Is there, you know, a leverage ratio that's too low?

Speaker Change: Sort of like being obviously very strong pricing than the odor on initiatives together with a breath.

Speaker Change: Very good yeah, it makes perfect sense.

Speaker Change: Uhm.

Speaker Change: You know you talked about you know.

Speaker Change: Openness to M&A, but at the same time extent that doesn't present itself you know.

Speaker Change: Okay, you're leaning towards cats return to shareholders is there a way to think about.

Speaker Change: The the the parameters around that in terms of you know how much how much dry powder. So to speak you you want to preserve vs. How.

Speaker Change: How much is too much and what's the trigger to catch return or Sir is there a level of cash on the balance sheet.

Speaker Change: Cause excessive is there you know.

Speaker Change: A leverage ratio that's that's that's too low how how do we think about the balance of kind of waiting for the opportunity opportunity cause that south versus being proactive and capital return.

Samy Rene Zekhout: How do we think about the balance of kind of waiting for the M&A opportunity to present itself versus being proactive in capital? Yeah, I think we're really guided through driving shareholder return, I mean, from that perspective, and we've been using, frankly, fairly actively, I mean, a good arsenal of, let's say, variables, I mean, there from a capital allocation standpoint, we focused, I mean, historically on M&A, we've done, we've effectively moved forward on buyback, as you have seen us doing it last year. We are institutionalizing a dividend now. And we are clearly looking at all of these variables together.

Speaker Change: Yes, I think I mean really guide Steven.

Speaker Change: Driving shareholder return I mean from their perspective, and and we've been using Frankie.

Speaker Change: Activity I mean, good afternoon.

Speaker Change: Valuable and I mean, they're from it kept you going on vacation standpoint, I mean, we focused I mean eastern recording on Eminem, we've done that we've expected you move for awhile back cause you have seen us.

<unk>, we are institutionalizing D V done and we are clearly looking at all of these these violent together and to be fair now that we have and to come back on to your first question that we are activating it affect you got a number of the <unk> that we know we do not all go rhythm are contributing to strong Google balance between.

Samy Rene Zekhout: And to be fair, now that we have, and to come back onto your first question, we are activating effectively a number of the levers that we know within our algorithm are contributing to stronger growth and a balance between volume and price. I mean, that's going to enable us to continue to fuel further cash, and pending effectively a proper balance between the buyback and the dividend, we will be effectively looking at opportunities in terms of M&A for sure. I mean, at this very stage, what we would want to do is to make sure that we maintain our leverage within the band, the operating band, which we mentioned during the CACME presentation, which is our target range of between 2.5x and 3.5x. And within that, we will try to effectively use our cash to make the maximum return from that perspective. So M&A is still on the map, I want to be very clear, but we have clear opportunities, I mean, in the area of buyback.

Speaker Change: Volume and price I mean, that's going to enable us to continue to fuel further cash and spending effectively a proper balance between buyback really be done we'd be effective you're looking at 240 D. T. In terms of in terms of them in there for sure I mean that is very strange, but you would want to do is to make sure that we maintain our level.

Speaker Change: Within the advantage of writing bandwidth you have mentioned them in doing the checking your presentation, which is our target trends between 2.5, aches and 3.5 X and within that we were trying to effectively use our cast me maximum return them from that so I mean, a seat on the ninth I Wanna be very clear, but we have clearly opportunities I mean, India right out of.

Speaker Change: By back and we as well I mean heavy you should see that even there well it.

Samy Rene Zekhout: And we as well, I mean, have initiated a dividend. Well, just complementing one or two points to Samy, everything, obviously, would not be possible without, you know, our free cash flow, which is extremely strong, as you know. So that gives us the whole thing, gives us all the opportunities that are available.

Speaker Change: <unk> complementing when those were blessed with 222 70, everything obviously nothing would be possible without you know Oh free cash flow, which is extremely strong as you know so that gives us the whole thing.

Speaker Change: What would you put it is available and quite frankly, when you see the different 40 at each of the between dividends My back I think we've been very disciplined of that then M&A disintegration quite frankly, it's also something where all other traditions have been very successful. So we have all of the spectrum of what is available but based on a very very strong cast.

Stfan Descheemaeker: And quite frankly, when you see the different opportunities, you know, between dividends, buybacks, I think we've been very disciplined at that, and then M&A, plus integration, quite frankly, it's also something where all of our positions have been very successful. So we have the full spectrum of what is available, but based on very, very strong cash flow. Very good. Thank you so much.

Speaker Change: So.

Speaker Change: Mmm very good thank you so much.

Stephen Robert R. Powers: Thank you, Steve. Thank you. Our next question comes from the line of Rob Dickerson with Jefferies. Please proceed with your question. Good morning. Good morning.

Speaker Change: I can say.

Speaker Change: Thank you. Our next question comes from the line wrapped Decker Sandwich. Please proceed with your question.

Decker Sandwich: Alright, great Panic you know.

Robert Frederick Dickerson: Hello. You know, look, we touched on this a little bit last week at Cagney, which is a great presentation. I think there was a lot in there. It also seems like there's kind of a lot of ongoing and forthcoming change occurring at Nomad, kind of relative to history. It almost seems like it's time to step into the next phase with respect to productivity and then the reinvestment cycle. But I just wanted to kind of give you another opportunity to talk about your overall conviction in that top line growth target. Because the 3 to 4 percent, frankly, is not kind of what we would consider a normalized category growth target relative to history. And I think, you know, historically, you've spoken kind of more about low single-digit or two to three. So it clearly seems as if there's a lot more confidence and conviction for a little bit faster growth. And Nomad, as we think forward, just probably over the next five years. That's all I have. Thanks so much.

Decker Sandwich: Hello.

Decker Sandwich: Yeah. It looks like we touched on this a little bit last week of Cagney, which is a great presentation I think there's a lot in there. It also seems like there's a lot of kind of ongoing and forthcoming change occurring at nomad 10, a relative of history like it almost seems like.

Decker Sandwich: The second.

Decker Sandwich: Time to step into the next phase with.

Decker Sandwich: With respect to productivity and then the reinvestment cycle, but I just wanted to kind of give you another opportunity to kind of talk about you know that like your overall conviction on the top line growth target.

Decker Sandwich: Because the 3% to 4% frankly, you know is not kind of what we would consider like a normalized category gross.

Decker Sandwich: Target relative to history, and I think you know historically, you've spoken kind of more to low single digit or two or three so.

Decker Sandwich: Clearly seems as if there's a lot more confidence and conviction for a little bit faster drug and no bad as we take forward just probably over the next five years and that's all I have thank so much.

Stfan Descheemaeker: Thank you, Rob. And you're right, by the way. I think, you know, it's a slightly different algo to start with the top line. I think it's based on a series of elements.

Speaker Change: Thank you Robin and you're right by the way I think you know it's a it's a slightly decent I'll go to start with the with the line I think it's based on the series of elements. First is this is by later, we see that this category, which is a great category frozen food is really starting to develop I think people who.

Stfan Descheemaeker: First of all, little by little, we see that this category, which is a great category, frozen food, is really starting to develop. I think people can more and more see that, you know, the category as such is healthy. It's convenient. It's also sustainable. It's nutritious. So you have, it ticks all the boxes.

Decker Sandwich: One milk and see that you know discussing the research is healthy it's convenient it's also sustainable.

Decker Sandwich: It's suspicious so it <unk> it takes all the boxes and and quite frankly people are starting to see this so that that helps a lot.

Stfan Descheemaeker: And quite frankly, people are starting to see this. So that helps a lot. That's the first.

Decker Sandwich: The first piece.

Stfan Descheemaeker: The second piece is, well, you know, after two years of, let's say, Let's say a lot of pricing and also with volume impact, we can see obviously that we are in a position to recoup part of the lost volumes. We will also be very selective, we don't want to regain all the volumes, but frankly that's why we have this concept of Muslim battle that you are well aware of, which has the best categories with the best margins, so we are going to be selective from that standpoint on top of increasing the algorithm, to your point. And the third piece is yes, we are increasing our A&P, back to normal first, and then last but not least, our pipeline of innovation last two years was a bit subdued, a lot of reasons, people were focused on cost of living, obviously we were also trying to really tackle the whole, it was more defensive, now definitely for the next years, and you know that innovation takes more time, but we have the ambition to really create a best in class pipeline of new products, as category leader, and that's something probably we didn't do enough in the past, and that's what we are going to do really absolutely with an obsession in the coming years.

Decker Sandwich: The second piece is well you know after two years of let's see let's.

Decker Sandwich: <unk> a lot of pricing and also will go to the wedding, but we can see it obviously that we want we in a position to recoup part of the last volume suite. We will also be very seductive, we don't want to regain ordered ordered volumes.

Decker Sandwich: <unk>. That's why we have this concept of Mr battles that you're well aware of which are the best the best the best categories with the best margin. So we were going to be selected from the standpoint on top of increasing the article recently so your point.

Decker Sandwich: The third piece is yes, we increasing oh ANP back to normal first and then last but not least you know all pipeline of innovation last two years was a bit subdued lots of reasons. You know people were focused on cost of living obviously, we will also trying to really tackle the whole it was more.

Decker Sandwich: Pensive no definitely for the next year and you know that's innovation takes more time, but we we have the ambition to recreate the best in class pipeline of of your products.

Decker Sandwich: <unk> and that's something program, we didn't do enough in the Boston definitely going to do really absolutely with a with an obsession in the coming years. So that's a combination of these elements by definition that we did pluses and minuses rub that that's that's the reason why we think you know, we can increase or or I'll go through you're going from 252 by.

Stfan Descheemaeker: So that's a combination of these elements, by definition, there will be pluses and minuses, Rob, but that's the reason why we think we can increase our algorithm from 2% to 1%, and let's do it. Rob, if I may, the one thing I'd like to emphasize that we talked about last week was the fact that the big difference is, and I think Stfan used the word, the integrated flywheel.

Decker Sandwich: By one per cent, let's make it let's make it clear.

Decker Sandwich: Rubbish, if I made the the one thing I'd like to emphasize that'd be two classes last week was the fact that the big difference is really stiff and you do what these fees are integrated flywheel really activating it.

Samy Rene Zekhout: We are really activating most of the parts of the flywheel together in a synchronized way with the mindset of driving better return. ENP is one; the proper price level is another one with RGM and PROMO. At the same time, we're increasing our presence and our strategy in-store. The combination of all of that is clearly working, and it worked in Q4, so we have evidence, and it shows in the improvement that we have seen in Q4. And that's exactly what we're going to continue with the step-up investments we're making. So this element of focus, integration, and making sure that we're activating all of the parts of the flywheel together, which will enable us, together with productivity that is now finally implemented across the board, enable us to deliver a good top line that's going to effectively flow through into a bottom line and strong EPS growth moving forward. All right, that'll be super.

Decker Sandwich: Most of the files of the flywheel together in a synchronized with the mindset of driving better return <unk>. The proper price level is another one without him and promo at the same time with increasing our prisons in our strategy install the combination of all of that is clearly working and you said.

Decker Sandwich: <unk>. So we have you done any shows an improvement that we are seeing two four and that's exactly what you're going to continue with the stepped up investments, we're making some sentiment the focus integration and making sure that we activating all of the parts of the flywheel together, which we just enabled us together with the C V T <unk>.

Decker Sandwich: Frankly implemented across the board enabled us to do the Magenta line, that's what I think Heathrow, who into both online and a strong U P. S. Most movie for awhile.

Speaker Change: Sorry, it's super Thank you, but I really appreciate it.

Robert Frederick Dickerson: Thank you both. I really appreciate it. Thank you, Rob. Thank you. As a reminder, if you'd like to join the question queue, please press star 1 on your telephone keyboard. Our next question comes from the line of John Tanwanteng with CGS Securities. Please proceed with your question.

Speaker Change: Thank you <unk>.

John Joseph Baumgartner: [noise] thinking as a reminder, if you'd like to join a question can you. Please press star one on your telephone keypad. Our next question comes from the line at John Mccain, Let's see jazz Securities. Please proceed with your question.

John Joseph Baumgartner: Hi, Good morning, Thank you for taking my questions and congrats on the nighttime improvements you are sitting there I was wondering if you could first address the competitive environment and how you see that evolved in the last quarter and and through Q1 are you seeing any response to your to your new strategy at all either from branded or private level of competition and have you seen the price down.

Jonathan E. Tanwanteng: Thank you for taking my questions and congratulations on the night. I was wondering if you could first address the competitive environment and how you see that evolving in the last quarter and then through Q1. Are you seeing any response to your new strategy, branded or privately?

Stfan Descheemaeker: Have you seen the? I think it's a great question, John. I think the company has remained about the same. I think we're first and foremost very pleased to have closed most of the negotiations with the customers, which was, as you know, a bit of a drag in Q4, so that's helping a lot, and it's going to help us, you know, gradually in some of our countries. So what we, the private label... price gap is still a bit wider than the historical level, which is normal. So we're not surprised by that.

John Joseph Baumgartner: Continued to close with the with a private little thing.

Speaker Change: I think that's a great question, John I think the company's <unk> remained about the same I think reinforced very pleased to have clothes. Most of negotiations with the customers, which was as you know a bit of a dragon Q4. So that's helping a lot that is going to help US you know gradually in some of our country.

Speaker Change: <unk>, so what we private label.

Speaker Change: <unk> beach wider than historical level, which is normal so we're not surprised by that and that's why.

Stfan Descheemaeker: And that's why, you know, instead of going down, let's say, drastically, we're more in terms of, we're going more to surgical promotion intervention. We've learned a lot with revenue growth management. We've invested a lot, and quite frankly, the level of science that we've put together is a real plus. We mentioned an example last week in Italy of fish, and it's a great example, and we see the results.

Speaker Change: Of going down drastically.

Speaker Change: Drastically you know we we more.

Speaker Change: Tons of where you're going small to surgical promotion intervention, we've learned a lot with a with a renewed growth management, we've invested a lot and quite frankly the level of the science that we put together is a real real plus we mentioned those example, last week and need to easily and fish and it's a great example.

Stfan Descheemaeker: So it's a great investment. The price gaps remain important, but I think it goes just beyond that. We really focus now on highlighting why our brand is premium. We haven't done that enough in the last couple of years.

Speaker Change: See the results. So it's a great investment so the the prize golfs remain important but it's I think it's cause just beyond that managing these gaps we really focused now on highlighting while branches of a premium. So we haven't done that enough in the last couple of years, and we know that and the Norwegian.

Stfan Descheemaeker: And now we're going to be ramping up our ASPC, which is a big thing, obviously something that is a great answer to the private label, and more long-term, obviously, innovation, which is what's expected from a category leader like us. Thank you.

Speaker Change: Two we ramping up or is the expense, which is a big thing obviously something that is a great answer to the private label and more long term of the seed innovation, which is what to expect this from a from a from a from a <unk> really don't like us.

Speaker Change: Got it. Thank you and then I I don't know if you dress. This earlier I I apologize if I missed it but did you mentioned how much capital allocation built into your ETS guidance for the year and what what the balances waited more towards it if if it is included.

Jonathan E. Tanwanteng: Did you mention how much capital allocation is built into your EPS guidance for the year at hand? What was the balance weighted more towards? We have not mentioned any of that.

Speaker Change: We we haven't mentioned any of that I think we just provide guidance as I mentioned I mean in the in the guidance.

Samy Rene Zekhout: I think we just provided the guidance as mentioned, I mean, in the guidance. Yeah, John, they spent $82 million in 2020. Thank you. Our next question is a follow-up from the line of John Baumgartner with Mizuho Securities. Hey, good morning.

Speaker Change: And John maybe Friday due to a million dollars may 20th like senior Non-catholics.

Speaker Change: Thinking our next question is how often in the line of John I'm Gardner with Mister Her security. Please proceed with your question.

John Joseph Baumgartner: Thanks for the follow-up. Just wanted to ask a bigger picture question. Stefan, at Cagney, you mentioned kind of whittling down some of your focus brands or geographies in the Moss Wind Battles relative to a couple of years ago. And I'm curious, what sort of went into that? How did you decide how to whittle?

John Gardner: Hey, Thanks for the follow up just wanted to ask a bigger picture question.

John: Okay. You you mention kind of whittling down some of your focus brands are geographies and the last win battles relative to a couple of years ago and I'm curious what what sort of went into that how did you decide how to whittle is it certain categories certain brands alright have returns changed over the last couple of years, So I'm curious to.

Stfan Descheemaeker: Is it certain categories, certain brands, or have returns changed over the last couple of years? So I'm curious to hear more about that. And then related, you also talked about geographic expansions and cross-selling opportunities in markets where the brands are live, but not just in all the categories. I'm curious, as you pursue more of that cross-selling going forward, how do we think about the incremental resource investment required? Because these aren't new brands, but I imagine you already have leverage with the local sales force and distribution. Thank you. Okay, let's try to be, well, I'll spend a bit more time on that one because it's a kind of topic I love, which is mushroom battles.

John: Hear more about that and then related you also talked about geographic expansion, some cross selling opportunities in markets, where the brands are alive, but not just in all the categories. I'm curious as you pursue more of that cross selling going forward. How do we think about the incremental resource investment required because he'd aren't aren't new brands.

John: I imagine you already have leverage with local salesforce and and distributions. Thank you.

Okay.

Speaker Change: Right to be well I was kind of equal time on that one because I I.

Speaker Change: It's got off topic, I love, which is the Muslim battles you know you remember John It's really starting 2016 way we came to conclusion that the company was not focused at all it was time to focus behind the ticket taker is book country and so because we didn't necessarily have the all the money to to go to behind Wonder if the centre Jose.

Stfan Descheemaeker: You know, you remember, John, we started in 2016, and we came to the conclusion that the company was not focused at all, and it was absolutely time to focus on the key categories per country. And so, because we didn't necessarily have all the money to go behind 100% of our sales. And by the way, strategy is about deciding where you're going to allocate your resources. It's exactly what we did with the Muslim Battles, and we decided to focus on A&P, or innovation money, or in-store activation, you know, all five wheels, actually, behind two-thirds of categories based on, basically, growth potential. Gross margin and market share, to make it simple. And as a result, you know, I think these two-thirds received, obviously, almost everything, and, unsurprisingly, they grew much faster than the rest. Something like around 5%, the rest went to zero, and sometimes even declined, which is absolutely acceptable.

Speaker Change: And by the way so disease about deciding where you'll go into full yoga with your resources is exactly what you did with us in bottles and we we decided to focus all all N b or innovation money oyster activation, all sideways actually beehive to sort of four categories.

Speaker Change: On basically.

Speaker Change: Most potential.

Speaker Change: Gross margin and and market share to make it simple and as a result, you know I think these days is two thirds received you obviously almost everything and unsurprisingly. It grew much faster than the rest something like around five per cent of the risks when two zero and sometimes even declined which is absolutely acceptable.

Stfan Descheemaeker: You know, we like the idea that we were very selective. Unsurprisingly, after a few years, these two-thirds became 90%. And so then we are back to square one, which is basically, where are we going to reallocate our money? And that's why we decided, OK, now we're going to be even more selective behind the best and brightest. I must be mottled.

Speaker Change: We liked the idea that we were very selective.

Speaker Change: Unsurprisingly after a few years you know these 230 came 90%.

Speaker Change: And so on and then we all went back to the display one which is basically where are we going to reallocate the money and.

Speaker Change: That's why we decided okay. So now we've got to be even more seductive beyond the best and brightest.

Speaker Change: [noise] must be muscles, and so we've decided to then deemphasize the wrong 25 per cent of them nothing muscles to really focus on the best and brightest, especially in terms of offer gross margin and then gross profit gross profit potential. So that's what we're doing right now just for information 20.

Stfan Descheemaeker: And so we've decided to then de-emphasize around 25% of our mastering battles to really focus on the best and brightest, especially in terms of gross margin and then gross profit potential. So that's what we're doing right now. Just as for information, 20 of our mastering battles represent around 50% of our sales and more in terms of gross profit. There's 20 out of around 80, so that gives you a bit of an idea of what we're doing right now. So, we remain very logical and consistent with what we did in the past, but again, with more resources. At the same time, as you know, we're investing more in NP.

Speaker Change: 24, 24 months and both of those represent around 50 per cent of course is that much more and more in terms of gross profit. There's 20 Alt of around 80. So that gives you a bit of the idea what what we're doing right now so it's a bit.

Speaker Change: Which you know very very we remain very logical and the consequent with what we did in the past, but the game with more resource at the same time as you know investing more in so you can imagine these brands are really going to receive more more money because first we go out we know selected and on top of that you know we increase.

Stfan Descheemaeker: So, you can imagine, these brands are really going to receive more money because, first, we're more selective, and on top of that, we're increasing NP. So, that's a big boost for these categories. The second piece about your concept of pollination, which is basically, we have something which is unique in frozen food. We have a unique assortment when you think about all the different ranges of products we have across all different countries, 22 countries in Europe.

Speaker Change: So that's a big boost for these categories. The second piece about your concept of pollination, which is basically we have.

We have something which is unique in the frozen foods we have.

Speaker Change: Nick Assortments when you think about all the different range of products, we have across all different countries 22 countries in Europe and at the same time, we were so unique to be present in all these countries.

Stfan Descheemaeker: And at the same time, we are so unique to be present in all this. So this combination allows us to see, OK, fine. We have a fantastic product, for example, we have a fantastic product of, let's say, fish and chips in the UK. And we think, And obviously, consumers prove this. We think it can work in France.

Speaker Change: So this combination there's always us to see okay fine we got fantastic. For example, we have a fantastic product of let's say they said efficient shifting the okay.

Speaker Change: And we think and obviously consumers prove this we think he's got working in France, So with very little money, we started something like five six years ago and it has moved from five to 14 million six years, but frankly with very little empty, which shows you know the strength of the product overseas presented the right way. So that's.

Stfan Descheemaeker: So with very little money, we started something like five, six years ago, and it has moved from 5 to 40 million in six years, quite frankly, with very little A&P, which shows, you know, the strength of the product obviously presented the right way. So that's a great example of what the thing we can do, and there are many more. So just focusing on this example of fish and chips, we're going to do it in Switzerland, we're going to do it in the Adriatic because people have demonstrated that the concept can work. And so it's definitely what I would classify as some sort of, let's say, very low-risk...

Speaker Change: The Best example of what the thing we can do and there are many more so just focusing on or this example efficiencies we're going to do it.

Speaker Change: And we're going to Sweden naturally I fixed because people demonstrated that is that the process can work and so it's definitely what I would qualify some sort of let's say very low risk.

Stfan Descheemaeker: Innovation, when you think about it, because we're taking a product that exists in a country that is very, very successful, and we're testing it with other countries, adjacent or not, and we can move. So you remove the innovation process, which unavoidably comes with, let's say, a certain level of failure. Unavoidable, it's normal. I think we substantially reduce this failure rate with this approach, and as we Fantastic assortment and an amazing number of them. Then you can see what the extent of this lift and shift can represent for us.

Speaker Change: Innovation when you think about it because we're taking a product that exist in the country that is very.

Speaker Change: Very successful and we testing with the other the other countries adjacent or not and we can move. So you you remove ah of the innovation process, which unavoidably comes with Ah, let's say a certain level of failure and avoidable a snowball I think we subsist.

Speaker Change: [noise] substantially reducing this this this failure rate with this approach and as we said think about it.

Speaker Change: Fantastic assortment and an amazing number of countries and then you can see what what do you accept the extent of his recent shift shift can can represent for us.

Stfan Descheemaeker: Thanks, Stefan. Thank you, John. Thank you, John.

Speaker Change: Thanks to <unk>.

Speaker Change: And your job and kitchen.

Stfan Descheemaeker: Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Descheemaeker for any final comments.

Speaker Change: Thank you, ladies and gentlemen that concludes our question and answer session I'm trying to fly back to Mister desk maker for any final comments.

Stfan Descheemaeker: Thank you very much, operators. So thank you for your participation on today's call. 2023 was a good year.

Desk Maker: [noise]. Thank you very much operators. So thank you for your participation onto the school.

Desk Maker: 2023 was a good year.

Stfan Descheemaeker: And I'm even more pleased with our good momentum as we enter 2024. The Nomad Foods team has shown incredible nimbleness and agility in the last two to three years, and I believe that we are now well prepared to deliver accelerated growth. A revised long-term growth algo puts us among the top tier of our food peers, which, combined with a very attractive valuation position, delivers superior returns for our shareholders.

Speaker Change: And I'm, even more pleased with all good momentum as we anticipated 24.

No matter, which team has shown incredible nemo's ness, and agility and the last 2323 years and.

Speaker Change: I believe that we are no we're prepared to deliver actually this growth.

Speaker Change: Oh revise long term growth I'll go puts us amongst the top tier of repairs.

Speaker Change: Which combined with a very attractive valuations positions us.

Speaker Change: To deliver superior returns for our shareholders.

Operator: Thank you very much. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: Thank you very much operator.

Speaker Change: [noise]. Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.