Nomad Foods Limited

Good day and welcome to Nomads Foods' fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Today's conference is being recorded. At this time, I'd like to turn the call over to Tipoche Barry, Head of Investor Relations. Please go ahead.

Thank you for joining us to review our fourth quarter 2020 earnings results. With me on the call today are Chief Executive Officer Stefan Descheemaeker and Chief Financial Officer Sami Zaykowt. Before we begin, I would like to draw your attention to the disclaimer on slide two of our presentation. This conference call may make forward-looking statements that are based on our view of the company's prospects, expectations, and intentions at this time, including consideration related to the impacts of COVID-19. Actual results may differ due to risks and uncertainties which are discussed in our press release, our filings with the SEC, and this slide in our investor 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 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 for 2019 and 2020. All adjusted figures have been adjusted for exceptional items, acquisition-related share-based payment and related expenses, as well as non-cash foreign exchange gains or losses. In all comments from here on, we'll refer to those adjusted numbers. But with that, I will hand the call over to Stefan.

Thank you, Tafosh, and thank you all for your participation on the call today. I hope you and your loved ones continue to stay safe during these unprecedented times. It has been nearly a full year since our lives changed following the onset of the COVID-19 pandemic. At Nomad, our entire organization has risen to the challenge of supplying Europe with our iconic brands while ensuring the health and safety of our employees. As you may have seen, we reported our fourth quarter and full year 2020 results this morning. Consistent with our announcement at Cagney last week, we ended the year on a very strong note, with Q4 results ahead of our prior expectations across all key metrics. Here are the headlines for the fourth quarter. Organic revenue growth of 9.5%, driven by an 8.6% increase in volume and mix, and a 0.9% increase in price. We achieved 160 basis points of gross margin expansion to 31.5%, marking our strongest quality gross margin rate in over two years. Adjusted EBITDA of €119 million and adjusted EPS growth of 19% to €0.38 per share. Here you see the financial highlights for the full year 2020. For illustrative purposes, we're showing these figures in both The currency in which our stock trades. Overall, an incredible year of performance as we completed our fourth consecutive year of organic revenue, adjusted EBITDA, and adjusted EPS growth. Turning now to the highlights of the quarter and the year. As I mentioned, organic revenues grew 9.5% year before, ahead of our recently updated guidance of high single-digit growth. We were pleased to end the year on a strong note as demand for frozen food began to accelerate in late October. That momentum built throughout the quarter and has carried over into 2021. We continue to see broad-based strength across our portfolio with fish fingers, coated fish, poultry and plant protein among the strongest performing subcategories. We've managed the business by focusing on both long and short-term priorities throughout 2020. A great example is our strategic decision to allocate 10 million euros of investments behind green cuisine or core and new consumer retention. Most of these investments was deployed during the fourth quarter, resulting in a 30% increase in NA&P spent year on year. Near term, we dedicated a lot of our energy in chasing demand and fulfilling orders to the best of our ability and converting strong profits into free cash. And as you see in our results, I'm pleased to say that we generated €345 million of adjusted free cash flow in 2020, an all-time record and nearly €120 million higher versus the prior year. Our strong patient performance in 2020 was complemented by a series of capital allocation actions. We initiated a $300 million share buyback program in March 2020 at the onset of COVID-19 and were quick to repurchase a significant amount of our stock under $17 per share. We followed that up by tendering nearly 500 million of our stock in September. In aggregate, we repurchased over 600 million euros of our stock, resulting in a significant reduction in our share count as we enter 2021. We have also been active on the M&A front. At the time of our tender of our announcement in August, we clearly articulated our focus and priority on the European frozen food acquisitions, where we believe we have a strategic advantage. Since then, we successfully completed the acquisition of Kinder Switzerland, which further expands our European geographic footprint. And just last month, we entered into exclusive discussions with the Fortinova Group to acquire their frozen food portfolio. This is a business with strong brand positioning and a significant operational footprint across the Balkan region. We're making good progress in the Fortinova process and look forward to updating you in the coming weeks. So that was the past, an unprecedented 2020 that many of us will never forget. And for us at Nomad, and many more. As Sami will outline in his remarks, we have a strong set of plans that will underpin our ability to achieve what will be another exciting year for Nomad Foods. Before I conclude, I'd like to remind you why we are as excited as ever in the growth perspective of our company in both the near and long term. Here you see our three pillars of growth. First, our core portfolio, which is anchored in frozen fish and vegetables. COVID or not, these are growth categories that are aligned with a more nutritious diet and a more sustainable food system. Demand for these categories has been growing for years. COVID, which introduced millions of new consumers into our portfolio last year, has only accelerated that movement. We have brands that are local jewels across Europe, and thanks to the support of our R&D and marketing teams, remain as relevant as ever with today's consumers. Second is a commitment to breakthrough innovation with green cuisine. This is a business that we have taken from 0 to 30 million euros in less than two years. and we won't stop there. We have planned to grow revenues to over 100 million by the end of next year. As we presented at Cagney last week, green cuisine is now in all of our markets and was Europe's fastest growing frozen meat free brand in 2020. We're developing fantastic new products across a variety of meat states and seeing strong response from retailers and consumers. and third, our efforts around M&A as we complemented our core with strategic acquisitions into new geographies, categories and channels. Putting it all together, we have the wide space opportunities to continue to generate top-tier performance in the packaged food space in 2021 and beyond. And with that, I will hand it over to Sami to discuss the results in more detail and outline our guidance for the coming year. Sami?