Q3 2025 Nomad Foods Ltd Earnings Call - Pre-Recorded

Jason English: At Nomad Foods.com. I'm Jason English, Head of Investor Relations, and I'm joined by Stéphane Descheemaeker, our CEO, Ruben Baldew, our CFO, Dominic Brisby, our Group Executive President and CEO-elect, and Sir Martin E. Franklin, our Co-founder and Co-chairman. In addition to these remarks, we'll host an analyst Q&A session today at 8:30 AM Eastern. Stéphane, Ruben, and Martin will join this session. A replay of this webcast and our subsequent Q&A session will be available on the investor relations section of our website. These prepared remarks will include forward-looking statements that are based on our view of the company's prospects, expectations, and intentions at this time. Actual results may differ due to risks and uncertainties, which are discussed in our press release, our filings with the SEC, and in our investor presentation, which includes cautionary language. We'll also discuss non-IFRS financial measures during the call today.

<unk> of Investor Relations and I'm joined by Stefan <unk>, Our CEO Ruben Bell do our CFO Domenic, Brisbane, Our group executive President and CEO elect and Sir Martin Franklin, Our cofounder and co Chairman. In addition to these remarks, we will host an analyst Q&A session. Today at 830, a M eastern define Rubin and Martin will join this session a REIT.

This webcast and our subsequent Q&A session, we will be available on the Investor Relations section of our website. These prepared remarks will include forward looking statements that are based on our view of the company's prospects expectations and intentions. At this time actual results may differ due to risks and uncertainties, which are discussed in our press release, our filings with the SEC and in our Investor presentation.

Which includes cautionary language, we will also discuss non <unk> financial measures during the call. Today. These non <unk> financial measures should not be considered a replacement for and should be read together with <unk> results users can find the <unk> to non ifr's reconciliations within our earnings release and in the appendices at the end of the slide presentation available on our website. Please.

Jason English: These non-IFRS financial measures should not be considered a replacement for and should be read together with IFRS results. Users can find the IFRS to non-IFRS reconciliations within our earnings release and in 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. All adjusted figures have been adjusted primarily for, when applicable, share-based payment expenses and related employer payroll taxes, exceptional items, and foreign currency valuation charges or gains. Unless otherwise noted, comments from here will refer to those adjusted numbers. With that, let me hand it over to Stéphane.

Note that certain financial information within this presentation represents adjusted figures for all adjusted figures have been adjusted primarily for when applicable share based payment expenses and related employer payroll taxes exceptional items in foreign currency valuation charges or gains unless otherwise noted comments from here will refer to those adjusted numbers with that let me hand, it over to Stephane.

Thank you Jayson.

Third quarter results were in line with our recent expectations.

Stéfan Descheemaeker: Thank you, Jason. Third quarter results were in line with our recent expectations. Even though we're not reaching our full potential right now, we did have numerous areas of strength in the quarter. We had a soft start to the quarter with unfavorable weather depressing category growth in Western Europe in July. We faced a few disruptions to our high margin immediate consumption ice cream business in Southeastern Europe. On top of that, as we have previously discussed with you, our commercial plans in some of our Must Win Battles, especially in the UK, have not been as robust as we would like. As a result, organic sales declined 1.6% this quarter. The organic sales decline was compounded by a lower gross margin, which contributed to lower adjusted EBITDA.

And even though we not reaching our full potential right. No. We did have numerous areas of strength in the quarter.

We had a soft start to the quarter with unfavorable weather depressing category growth in Western Europe in July.

And we faced a few disruptions to all high margin, even music consumption ice cream business.

Eastern Europe on <unk>.

Some of that as we have previously discussed with you our commercial plans in some of our must win battles, especially in the U K I have not been as robust as we would like.

As a result.

Organic sales declined one 6% this quarter.

The organic sales decline was compounded by a lower gross margin, which contributed to lower adjusted EBITDA.

As a reminder, we have elevated input cost this year and they have chosen to wait until fiscal 2026.

Stéfan Descheemaeker: As a reminder, we have elevated input costs this year and have chosen to wait until fiscal 2026 to enact most of our price increases. This has created a temporary margin pressure that we experienced in the Q3, and last year, high margin comparison did not help. We have and will continue to take several steps to build upon our strong foundation for improved results going forward. In September, we announced increased efficiency goals to be realized from 2026 to 2028, and I am happy to report that this initiative remains on track. This will give the company the fuel and flexibility it needs to invest in the business and drive steady and predictable bottom-line growth.

Most of our price increases.

This has created a temporary margin pressure that we experienced in the third quarter.

And lastly, a highest margin comparison did not help.

We have and will continue to take several steps to build upon the strong foundation for improved results going forward.

In September we announced increased efficiency goes to be realized from 'twenty to 'twenty six to <unk> 2028.

And I'm happy to report that.

This initiative remains on track.

This will give the company just fuel and flexibility needs to invest in the business and drive steady and predictable bottom line growth.

And while medium term targets focus on delivering EBITDA and free cash flow growth.

Stéfan Descheemaeker: While medium-term targets focus on delivering EBITDA and free cash flow growth, the team recognized that they will need to deliver healthy and consistent organic sales growth to achieve those goals. Organic sales growth has been challenged this year to date, there are many reasons to believe that the company's performance will be better going forward. First, Nomad continues to benefit from an advantage category. Frozen food in Europe has consistently grown in the low single-digit range and remains supported by the trends of taste, nutrition, convenience, value, and sustainability. While category growth slowed due to unfavorable weather earlier this year, as you can see on slide 4, our category footprint has returned to 2% growth. It is much easier for the company to achieve organic sales growth when it has category tailwinds at its back.

The team recognized that they will need to deliver healthy and consistent organic sales growth to achieve those goals.

Organic sales growth has been challenged this year to date.

But there are many reasons to believe that the company's performance will be better going forward.

First no math continues to benefit from an advantaged category.

Frozen food in Europe as consistently grown in the low single digit range and remote remains supported by the strength of taste.

Christian convenience value and sustainability.

And while category growth slowed due to unfavorable weather earlier. This year as you can see on slide four or category footprint as we turn to 2% growth.

It is much easier for the company to achieve organic sales growth when you TUSK at the Greek theatre wind at its back.

Of course, the team aims to grow in line or ahead of the category over time and there is more work to do.

Stéfan Descheemaeker: Of course, the team aims to grow in line or ahead of the category over time. There is more work to do. Progress is being made. As you can see from slide 5, our market share has been range-bound over the past 12 months. We're pleased to have held volume share this past quarter. We can do better from a value share perspective. The softer value share performance has been driven by the softer result in our Must Win Battles. Much of this has been concentrated in the UK. Our UK sales have declined by 6% year to date and declined 7% this quarter. UK has accounted for roughly 80% of our net sales decline year to date and nearly 90% this quarter. This has been driven by several factors.

But progress is being made.

As you can see from slide five well market. She has been range bound over the past 12 months.

We're pleased to have helped volume share this past quarter.

But we can do better from a value share perspective.

The software value share performance has been driven by the softer results you know must win battles.

Much of this has been concentrated in the U K.

Our U K sales have declined by 6% year to date and declined 7% this quarter.

You'll get hows, it going it for roughly 80% of our niche is decline year to date.

Nearly 90% this quarter.

It has been driven by several factors.

As you can see from slide six.

Stéfan Descheemaeker: As you can see from slide 6, we achieved very robust volume sale through in measured retail channels in the UK throughout 2024. This was largely driven by promotional activity that we and many of our branded competitors participated in. The collective investment expanded the category. Late last year, we and our retail partners began to pull back on promotions given rising costs. Reduction in promotion support pressured our volume growth as well as the growth of our category while fueling some recent trade downs to private label in the market. That headwind was magnified this past summer by the unfavorable weather. This has been a large headwind for us this year. The good news is these are cyclical headwinds and not structural. We are already seeing improvement as we cycle them.

We achieved very robust volume sell through in measured retail channels in the U K throughout 'twenty 'twenty four.

This was largely driven by promotional activity that we and many of our branded competitors participated in.

The collective investments expanded the category.

Late last year, we and our retail partners began to pull back on promotions given rising cost.

The reduction in promotional support pressure or volume growth as well as the growth of our category.

While fueling some recent trade down to private label in the market.

That headwind was magnified as possible by the unfavorable weather.

This has been a lot of headwind for us this year, but the good news is these are cyclical headwinds and not structural.

We are already seeing improvements as we cycle them.

You can see from slide six our UK retail volume and value sell through has successfully stabilize in the most recent periods easy.

Stéfan Descheemaeker: You can see from slide 6, our UK retail volume and value sell through have successfully stabilized in the most recent periods. Easing comparison are helping. So too is our new master brand advertising campaign that was launched in August. Early performance indicators are encouraging. This serves as a great example of how the company can make our A&P investment work harder by supporting multiple product lines with an umbrella campaign. Our new advertising is being accompanied by new product news. In fact, innovation and renovation remains on track to reach approximately 17% of sales this year. The current plan is for this to go even higher next year. Much of these efforts will support our Must Win Battles, including new news behind our Fish Finger portfolio starting in Q1 of next year. We also continue to innovate behind our growth platforms.

Easing comparison higher helping.

So too is our new Master brand advertising campaign that was launched in August.

Early performance indicators are encouraging and this serves as a great example of how the company can make all A&P investment work harder by.

By supporting multiple product lines with an umbrella campaign.

On your advertising is being up accompanied by new product news.

In fact, you know.

They shouldn't and renovation remains on track to reach approximately 17% of sales this year.

And the current plan is for this to go even higher next year.

Much of these efforts will support our must win battles.

Using new news behind or coffee shrinking portfolio, starting in the first quarter of next year.

We also continue to innovate behind our growth platforms.

Highlighted on slide seven you can see the great progress being made in diversifying nomads portfolio.

Stéfan Descheemaeker: Highlighted on slide 7, you can see the great progress being made in diversifying Nomad's portfolio. Growth platforms achieved net sales growth of 34% this quarter and are up 39% year to date. The company has built its chicken portfolio into a large and profitable Must Win Battle in the UK, and last year began to leverage the learnings in that market to expand its chicken portfolio in Italy and Germany. I'm happy to say that it is working. We continue to achieve fantastic growth with our chicken portfolio in both Germany and Italy, and we're having similar success in prepared meals, which is another important growth platform in many markets. For example, our retail sales of meals have doubled in Germany year to date, and our protein bowls recently began to hit shelves in the UK and will roll out more broadly next year.

Ross platforms achieved net sales growth of 34% this quarter and are up 39% yeah.

Year to date.

The company has built a chicken portfolio into a large and profitable must win battle in the U K.

And lastly, I began to leverage the learnings in that market to expand its chicken portfolio in Italy and Germany.

I'm happy to say that it is working.

We continue to achieve fantastic growth with all chicken portfolio in both Germany and Italy.

And we are having similar success in prepared meals, which is another important growth platform in many markets.

For example, our retail sales of means.

The bold in Germany year to date, and our protein bowls. The recently began to each subs in the U K and we'll roll out more broadly next year.

Even these initiatives recent category acceleration and the stabilization of retail sales in the U K.

Stéfan Descheemaeker: Given these initiatives, recent category acceleration, and our stabilization of retail sales in the UK, I'm confident the company will demonstrate improved results in Q4. With that, let me turn it over to Ruben to take you through our results and outlook in more detail. Ruben?

I'm confident the company will demonstrate improved results in the fourth quarter.

With that let me turn it over to Ruben to take you through well results and outlook in more detail.

Rubin.

Thank you Stefan and good morning, everyone. Let me get right into the results as you can see on slides eight and nine for the third quarter reported net revenues decreased by two 2% to 752 million Euro organic sales declined one 6% with volume declining one 5% while price mix was minus 1.1.

Ruben Baldew: Thank you, Stéphane, good morning, everyone. Let me get right into the results. As you can see on slide 8 and 9, for Q3, reported net revenues decreased by 2.2% to EUR 752 million. Organic sales declined 1.6%, with volume declining 0.5%, while price mix was -1.1%, driven by unfavorable mix. As Stéphane mentioned, we had a soft start to the quarter as the negative weather impact we saw last quarter carried over into July. Our ice cream business in Southeastern Europe declined by 7.5% this quarter due primarily to less favorable weather than last year and unrest in Serbia.

Driven by unfavorable mix.

As Stefan mentioned, we had a soft start to the quarter as the negative weather impact we saw last quarter carried over into July.

Also our ice cream business in South Eastern Europe declined by seven 5% this quarter due primarily to less favorable weather than last year and interest in Serbia.

We were happy to see our overall category growth improved as the quarter progress and pleased that we returned to net sales growth in September, albeit aided by an easy comparison as our sales were depressed late in the quarter last year following our ERP transition.

Ruben Baldew: We were happy, though, to see our overall category growth improved as the quarter progressed and pleased that we returned to net sales growth in September, albeit aided by an easy comparison as our sales were depressed late in the quarter last year following our ERP transition. Moving down to P&L. Our adjusted gross margin was modestly higher than Q2, but compressed by 420 basis points year on year. The largest headwind to our gross margin has been inflation, which more than offset our productivity gains and RGM benefit. As a reminder, we have seen several input costs move higher year to date, with poultry prices among the most notable increases. Most of our price increases, however, have yet to take effect as we decided early in the year to wait for the annual negotiation cycle with retailers to address this.

Moving down the P&L, our adjusted gross margin was modestly higher than quarter, two but compressed by 420 basis points year on year, the largest headwind to our gross margin has been inflation, which more than offset our productivity gains in our G M benefit.

As a reminder, we have seen several input costs move higher year to date with poultry prices among the most notable increases.

Most of our price increases I'll ever have yet to take effect as we decided early in the year to wait for the annual negotiation cycle with retailers to address this last month, we began to announce price increases to the trade.

Ruben Baldew: Last month, we began to announce our price increases to the trade. These will take effect in early 2026 and when combined with our productivity plans, will position us better to offset inflation next year. Moving down to P&L. Adjusted operating expenses declined by 12% year on year in Q3. A&P expenses were down double digits in the quarter, largely due to quarterly phasing. Recall that A&P was up double digits in Q1. Year to date, our A&P is flat year on year as a % of sales. Overhead expenses shrank by 9% year on year in the quarter as productivity offset underlying inflation and reduced our bonus accrual giving year to date results. Adjusted EBITDA decreased 14% year on year to EUR 143 million, while adjusted EPS fell 11% to EUR 0.49.

These will take effect in early 'twenty, six and when combined with our productivity plans will position us better to offset inflation next year.

Moving down the P&L adjusted operating expenses declined by 12% year on year in the third quarter.

H B A&P expenses were down double digits in the quarter largely due to quarterly Stacey.

Recall that A&P was up double digits in the first quarter and year to date, our E&P A&P is flat year on year as a percent of sales.

Overhead expenses shrank by 9% year on year in the quarter as productivity offset underlying inflation and we reduced our bonus accruals given year to date results.

Adjusted EBITDA decreased 14% year on year to 143 million Euro while adjusted EPS fell 11% to 49 year old sense, our diluted shares outstanding were 8% lower year on year in the quarter, which when combined with lower year on year interest expense helps us minimize the EPS decline.

Ruben Baldew: Our diluted shares outstanding were 8% lower year-on-year in the quarter, which when combined with lower year-on-year interest expense, helped us minimize the EPS decline. Turning to cash flow on slide 10. Our adjusted free cash flow conversion ratio was 35% through the first nine months of the year versus 47% in the same period as last year, due to lower adjusted EBITDA and different phasing of cash taxes. As a reminder, it's common to see our cash delivery in this range at this time of the year due to seasonal factors. Turning to use of cash, we continue to return cash to shareholders. Through the first nine months of this year, we have repurchased EUR 51 million of shares and paid out EUR 70 million of dividends.

Turning to cash flow on slide 10 are just free cash flow conversion ratio was 35% through the first nine months of the year versus 47% in the same period as last late last year.

Two lower adjusted EBITDA and different phasing of cash taxes.

As a reminder, it's common to see our cash delivery in this range at this time of the year due to seasonal factors.

Turning to use of cash we continue to return cash to shareholders through the first nine months of this year, we have repurchased almost 51 million euro of shares and paid out $70 million of dividends.

This collective return of cash to shareholders through the first nine months of this year is 100% increase compared to the first nine months of last year.

Ruben Baldew: This collective return of cash to shareholders through the first nine months of this year is a 100% increase compared to the first nine months of last year. I would also note that I personally purchased roughly $1 million of shares in September, which you will see when we file our annual 20-F early next year. Last week, we declared a quarterly dividend of $0.17, which is 13% higher than the same dividend last year. We also recently completed the refinancing of much of our debt. The offering was met with high demand by the credit markets, which we view as a testament to our healthy and consistent cash flow. We were able to lock in attractive rates while extending our maturity schedule and increase capital allocation flexibility. We also expect our earnings to benefit from lower financing costs each quarter going forward.

I'd also note that I personally purchased roughly a million dollars of shares in September which you will see when we file our annual 20-F early next year and last week, we declared a quarterly dividend of $17, which is 13% higher than the same dividend last year. We also recently completed the refinancing of much of our debt.

The offering was met with high demand by the credit markets, which we view as a testament to our healthy and consistent cash flow, we were able to lock in attractive rates, while extending our maturity schedule and increase capital allocation flexibility. We also expect our earnings to benefit from lower financing costs each quarter going forward.

Yeah.

Turning to our guidance for 25 on slide 11.

Ruben Baldew: Turning to our guidance for 2025 on slide 11. We are tracking toward the low end of our existing organic sales growth, adjusted EBITDA, and adjusted EPS ranges, given year-to-date margin pressure and our desire to establish a clean base for 2026. We expect full year organic sales to be near the low end of our flat to -2% range, which implies modest improvement in Q4 relative to our year-to-date performance. We expect our adjusted EBITDA to be near the low end of our existing -3% to -7% outlook, implying a low single-digit decline in Q4. We expect adjusted EPS to be near the low end of our EUR 1.64 to EUR 1.76, implying comparable year-on-year EPS in Q4.

We are tracking towards the low end of our existing organic sales growth adjusted EBITDA and adjusted EPS ranges given year to date margin pressure and our desire to establish a clean base for 'twenty six we expect full year organic sales to be near the low end of a flat to minus two range, which implies modest improvement in fourth quarter.

Relative to our year to date performance, we expect our adjusted EBITDA to be near the low end of our existing minus three to minus seven outlook, implying a low single digit decline in the fourth quarter.

And we expect adjusted EPS to be near the low end of our one year of 64 to one euro 76, implying comparable year on year EPS in the fourth quarter at recent exchange rates, our revised adjusted EPS guidance range for the full year translates into approximately $1 89 to $2.

Ruben Baldew: At recent exchange rates, our revised adjusted EPS guidance range for the full year translates into approximately $1.89 to $2.02. Turning to adjusted free cash flow, we continue to expect a conversion ratio of 90% or greater for the full year. This guidance excludes any impact of our refinancing, where at this moment we are finalizing the details of cash interest payments and the potential positive benefit on EPS and timing impact to cash flow, if any. We do not expect these effects to be material, though. In conclusion, while this was a challenging quarter for certain areas of our business, we feel good about the underlying health of our overall business. Our category is healthy, our retail sales are stable, our pricing actions are in flight, and our product-productivity momentum is building.

And two cents.

Turning to adjusted free cash flow, we continue to expect a conversion ratio of 90% or greater for the full year. This guidance excludes any impact of our refinancing where at this moment. We are finalizing the details of cash interest payments and the potential positive benefit on EPS and timing impact to cash flow if any we.

Do not expect these effects to be material, though.

In conclusion, while this was a challenging quarter for certain areas of our business. We feel good about the underlying health of our overall business our categories healthy our retail sales are stable our pricing actions are in flight and our productivity momentum is building we remain focused on controlling what we can control to drive profits.

Ruben Baldew: We remain focused on controlling what we can control to drive profitable sales growth and improve free cash flow conversion. With that, let me turn the call back to Stéfan.

<unk> sales growth and improve free cash flow conversion.

With that let me turn the call back to Stefan Thank.

Thank you Ruben.

First I wanted to say thank you to all our fantastic employees. We have made no matter the great place to work and had built into a leading company over the past 10 years.

Stéfan Descheemaeker: Thank you, Ruben. First, I want to say thank you to all our fantastic employees who have made Nomad a great place to work and helped build into a leading company over the past 10 years. As most of you know, this will be my last public conference call with the company as I am transitioning from CEO to board member beginning in January. I'm proud of what we've built over the last decade. We have been strategic and deliberate in our portfolio choices and have built Nomad into the pure play scale leader in the European frozen food market. We have the best brands in one of the best food categories in the industry and have built a team of top-tier talent and armed them with the resources to win. We have accomplished a lot over the past decade.

As most of you know this will be my last public conference call with the company as I am transitioning from CEO to board member beginning in January.

I'm proud of what we've built over the last decades.

We have been strategic and deliberate portfolio choices.

And I have no money into the pure play skilled leader in the European Savory food market, we have the best brands in one of the best food categories in the industry.

And I've built a team of top tier talent and arm them with the resources to win.

We have accomplished a lot over the past decades.

We achieved nine consecutive years of uninterrupted sales and adjusted EBITDA growth through 2024.

Stéfan Descheemaeker: We achieved 9 consecutive years of uninterrupted sales and adjusted EBITDA growth through 2024. Are on track to have roughly doubled our EPS over the past decade. This is a track record that all of us at Nomad can be proud of. Looking forward, I'm excited about the company's growth potential over the next 10 years. We have built a very strong foundation by being a successful buyer and builder of businesses over the past decade. We now need to accelerate organic growth as we move forward. With that in mind, I believe now is the right time to transition our leadership to someone whose skill set is ideally suited for our next chapter of growth. Because of this, I began to work with Martin and Noam to explore a CEO succession process earlier this year. After months of review, I'm confident we found the right person.

And now instruct you have roughly doubled or EPS over the past decade.

This is a track record that all of us at no one can be proud off.

Looking forwards.

I'm excited about the company's growth potential over the next 10 years.

We have built a very strong foundation by being a successful buyer and builder of B.

This is over the past decades.

No need to accelerate the organic growth as we move forward.

With that in mind.

I believe no is the right time to transitional leadership someone whose skill set is ideally suited for our next chapter of growth.

Because of this I began to work with marketing to know we explore CEO succession process earlier this year.

After months of review I'm confident we found the right person.

I'm excited to introduce you to know Maths next to you Dominik Bruce B.

Stéfan Descheemaeker: I'm excited to introduce you to Nomad Foods' next CEO, Dominic Brisby, who has joined us as our Group Executive President and will become our next CEO on 1 January. He brings a growth-oriented mindset and track record of delivering results. I'm excited to watch him unlock new opportunities at Nomad Foods. Dominic, over to you.

Who has joined US as our group executive President and it will become or next year or in January the first.

He brings a growth oriented mindset and track record of delivering results.

Excited to watch them unlock new opportunities at Nomad Dominik.

To you.

Thank you Stefan and Hello, everyone.

Dominic Brisby: Thank you, Stéphane, and hello, everyone. I'm now officially three days into the job and will not be taking questions just yet. My priority over the next few months is to meet my new colleagues throughout Europe and immerse myself in the business. There is a lot I must learn, but there is also a lot I know about the company which attracted me to this opportunity. First, I love these brands. Like all Europeans, I grew up with Nomad brands. They are iconic with unparalleled equity in their categories. They're exceptionally valuable with fantastic growth potential. Second, I love the category. I've worked across several businesses in both Europe and North America, and I'm excited to be stepping into a category with so many tailwinds at its back. Secular trends are reshaping the industry, and this company sits at the intersection of several big themes.

I am now officially three days into the job and will not be taking questions. Just yet my priority over the next few months is to meet my new colleagues throughout Europe, and it must myself in the business. There was a lot of other Muslim but there was also a loss I know about the company, which attracted me to this opportunity.

First I love these brands.

Like all Europeans I grew up with Nomad brands.

They were iconix with unparalleled equity in that categories are exceptionally valuable with fantastic growth potential.

Seconds.

The category.

I've worked across several businesses in both Europe, and North America, and I'm excited to be stepping into a category with so many tailwind that it's back.

Secular trends are reshaping the industry and this company sits at the intersection of several big themes.

When does it all back with evolving nutrition sustainability and value trends.

Dominic Brisby: The wind is at our back with evolving nutrition, sustainability, and value trends, and I'm excited to harness these tailwinds. Third, I'm excited about the timing of this opportunity. I see the hard work that the organization has done to accelerate its innovation and renovation, strengthen its marketing muscle, and build a robust efficiency pipeline. A strong foundation to build upon has been laid, yet the opportunity for improvement is not being valued by the market. I see underappreciated growth potential. I'm excited to unlock that potential and create tremendous value for our shareholders in the years to come. I hope that many of you listening to the call today will join me on this journey.

And I'm excited to harness these tailwind.

First I'm excited about the timing of this opportunity.

I see the hard work that the organization has done to accelerate innovation and renovation strengthen its marketing muscle and build a robust efficiency pipeline.

Our strong foundation to build upon has been late get the opportunity for improvement is not being valued by the market I.

I see underappreciated growth potential.

I'm excited to unlock that potential and create tremendous value for our shareholders in the years to come.

I hope that many of you listening to the call today will join me on this journey.

I'm confident that it's going to be a fun ride.

Dominic Brisby: I'm confident it is going to be a fun ride, and I want to personally thank Stéphane for agreeing to work with me as we transition over the next two months, and then continuing as an engaged board member beyond the transition. This company achieved nearly a decade of uninterrupted growth under Stéphane's leadership, a truly exceptional accomplishment. I'm fortunate that I will have his advice and counsel as we turn our attention to accelerating growth in the decade that lies ahead. I look forward to sharing more with you in the new year and meeting many of you in person. With that, let me pass it to our co-founder and co-chairman, Martin, for closing remarks.

I want to personally thank stephane for agreeing to work with me as we transition over the next two months and then continuing as an engaged board member beyond the transition.

This company achieved nearly a decade of uninterrupted growth under Stephane leadership.

Truly exceptional accomplishments.

I'm fortunate that I will have his advice and counsel as we turn our attention to accelerating growth in the decade that lies ahead and.

I look forward to sharing more with you in the new year and meeting many of you in person.

With that let me pass it to our co founder and co Chairman Martin for closing remarks.

Thank you Dominic and Hello to all the investors and Nomad employees, who have joined us on the call today.

Martin E. Franklin: Thank you, Dominic, and hello to all the investors and Nomad employees who have joined us on the call today. I'm joining today to provide some perspective and expectations that I and my fellow board members share. First, I want to say thank you to Stéphane for all that he has accomplished since the founding of Nomad Foods. He has helped us build this company into what it is today. It is time for change as we lean in to accelerate our organic growth, and I would like to welcome Dominic Brisby as our new CEO-elect. As Stéphane noted, we've been working together to find his successor since this past summer. The search was extensive as we canvassed both our internal and external options. We met Dominic early in the process, and while we continued our search out of due diligence, we kept being drawn back to him.

I'm joined today to provide some perspective and expectations that I and my fellow board members chat.

First I want to say, thank you to Stephane for all that he has accomplished since the founding of Nomad foods.

He has helped US build this company into what it is today.

It is time to change as we lean into accelerating our organic growth.

And I would like to welcome Dominic Presby as our new CEO elect.

As the fund noted we've been working together to find his successor since this past summer.

The search with extensive as we canvas, both our internal and external options.

We met Dominic early in the process.

While we continued our search out of due diligence, we kept being drawn back to him.

We were attracted to his growth oriented mindset and impressive track record of delivering results.

Martin E. Franklin: We were attracted to his growth-oriented mindset and impressive track record of delivering results. Maybe even more importantly, we were impressed by how strong the external feedback loop was for him. People who worked either with him or for him in the past had great things to say, with many highlighting his ability to energize an organization and unlock new opportunities for growth. That's the type of energy we need today because I'm confident that Nomad has substantial untapped growth. Clearly, there is a disconnect that exists between what the equity markets believe Nomad is capable of and what we believe the company can accomplish. There is even a disconnect between the equity and credit markets, as affected by the contrast in our successful refinancing compared to our depressed equity valuation. The majority of our debt maturities are now extended out to 2032 at attractive rates.

And maybe even more importantly.

We were impressed by how strong the external feedback loop was for him.

People with either with him or for him in the past had great things to say with many highlighting his ability to energize and organization and unlock new opportunities for growth.

That's the type of energy, we need today, because I am confident that nomad has substantial untapped growth.

Clearly there was a disconnect that exists between what the equity markets believe nomad is capable of and what we believe the company can accomplish.

There was even a disconnect between the equity and credit market is affected by the contrast in our successful refinancing compared to what depressed equity valuation.

The majority of our debt Cherokees are now extended out to 2032 at attractive rates.

At recent foreign exchange rates, we expect the company's cumulative free cash flow to exceed our current market cap before any of that new debt comes due.

Martin E. Franklin: At recent foreign exchange rates, we expect the company's cumulative free cash flow to exceed our current market cap before any of that new debt comes due. Credit markets see that, yet our equity value is dislocated from this. Equity markets are valuing Nomad as if it is in secular decline. Let's step back and objectively look at a few facts. The reality is that Nomad has important tailwinds that give it an advantage relative to other food companies. First, and importantly, Nomad is in a growing category. You can see the data in our slides. The category has consistently grown low single digits. It once again is growing low single digits. You heard Stéfan and Dominic talk about the secular tailwinds. You see it translating into real growth. Second, the company has healthy brands.

Credit markets see that get our equity value is dislocated from this.

Equity markets are valuing nomad is if it is in secular decline, but lets step back and objectively look at a few facts.

The reality is that no Matt has important tailwind that given an advantage relative to other food companies.

First and importantly, nomad is in a growing category.

You can see the data in our slides.

The category has consistently grown low single digits and once again is growing low single digits.

You heard Stephane and Domenic talk about the secular tailwind and you see it translating into real growth.

Second.

The company has healthy brands.

Brands are the number one leading brand equity in our categories and 13 of our 15 markets.

Martin E. Franklin: Our brands have the number 1 leading brand equity in our categories in 13 of our 15 markets. We are the strong number 2 in the other 2 markets. They are strong. They have been nourished. Our A&P investment ratio as a percentage of sales is 4%, which places us in the top tier of food companies. This is translating into market share. As you see in the data, while there have been ups and downs, the company has been able to stabilize its market share. The company's volume share is roughly flat over the past 3 months and 12-month periods. Retail value sales are growing in both of those periods. It can be better. This is not a bad starting point for Dominic. Third, we have robust productivity plans and pricing power. The biggest issue this year has been our gross margin.

We are a strong number two in the other two markets.

They are strong and they had been nourished.

Our A&P investment ratio as a percentage of sales was 4%.

Which places us in the top tier of a food company.

And this is translating into market share.

As you see in the data.

While there have been ups and downs the company has been able to stabilize its market share.

The company's volume share is roughly flat over the past three months and 12 months periods and retail value sales are growing and both of those periods.

It can be better, but this is not a bad starting point for Dominic.

But we have robust productivity plans and pricing power.

The biggest issue this year has been our gross margin.

The company is absorbing 19 billion euros of inflation pressure this year.

Martin E. Franklin: The company is absorbing EUR 90 million of inflation pressure this year. That's a huge headwind to EBITDA growth. Productivity has offset some of that. The lack of pricing has created a headwind. Our price index to private label is now at a 3-year low. Our sales team is landing new price increases now. This will be a game changer for next year. As a reminder, the company has established a EUR 200 million efficiency goal over the next 3 years. The board stands by this commitment. This will give the company a lot of flexibility to offset some of the inflation and reinvest where needed. Given all of this, I can confidently say that I expect our financial results to be better next year. Dominic and his team have work to do. The foundation is there. We believe accelerated growth will follow.

A huge headwind to EBITDA growth.

Productivity has offset some of that but the lack of pricing has created a headwind.

Our price index. The private label is now at a three year low and our sales team is landing new price increases now.

This will be a game changer for next year and as a reminder, the company has established a 200 million euro efficiency goal over the next three years and the board stands by this commitment.

This will give the company a lot of flexibility to offset some of the inflation and reinvest when needed.

Given all of this I can confidently say that I expect our financial results to be better next year.

Dominic and his team have what to do but the foundation is there and we believe accelerated growth will follow.

Our valuation however tells me that the equity markets to not believed us.

Martin E. Franklin: Our valuation, however, tells me that the equity markets do not believe this. What do we do? First, Noam and I, who collectively own almost 16% of the outstanding shares, either directly or indirectly, remain steadfast owners. We hold the vast majority of our original shareholdings and have fully shared in the declining value of our equity. We have lived through ups and downs and have every intention of working to drive the company to recapture the value from past highs and beyond. I personally have chaired a company through such a cycle, and today it is stronger than ever, trading at or around all-time highs. Secondly, because of this dislocation, we've been prioritizing share repurchases as the primary use of Nomad's cash flow after dividends are paid. This will remain our priority for capital allocation as long as our stock remains so undervalued.

So what do we do.

First domino, who collectively own almost 16% of the outstanding shares either directly or indirectly remains steadfast owners.

We hold the vast majority of our original shareholdings and have fully shed and the declining value of our equity.

We have lived through ups and downs.

And have every intention of working to drive the company to recapture the value from past highs and beyond.

I personally have Chad our company through such a cycle and today it is stronger than ever.

Trading at or around all time highs.

Secondly, because of this dislocation we've been prioritizing share repurchases as the primary use of nomads cash flow after dividends are paid.

This will remain a priority for capital allocation as long as our stock remains undervalued.

Lastly, it is our core mission to have the equity markets. Appreciate the strength of this company as much as the credit markets too.

Martin E. Franklin: Lastly, it is our core mission to have the equity markets appreciate the strength of this company as much as the credit markets do. We expect to earn that appreciation by delivering better results starting next quarter. I will leave it there. In closing, we have built a tremendous foundation. I truly believe now is a great time to be an investor in Nomad Foods. There is enormous upside from here. Noam and I plan to work with Dominic to ensure that that opportunity is realized. Thank you everybody.

And we expect that depreciation by delivering better results starting next quarter.

I will leave it that and clothing, we have built a tremendous foundation and I truly believe that was a great time to be an investor in Nomad foods.

There is enormous upside from here and Tom and I plan to walk the dominant to ensure that that opportunity is realized thank.

Thank you everybody.