Nomad Foods Limited

Good day, ladies and gentlemen, and welcome to Nomad Food's second quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. To give everyone the opportunity to participate, please limit yourselves to one question and one follow-up. Please note that this conference is being recorded. I would now like to turn the conference over to Jason English. Please go ahead.

Hello, folks, and welcome to Nomad Food's second quarter 2024 earnings call. I'm Jason English, interim head of investor relations, and I'm joined on the call by Stephan Doshmaker, our CEO, and Ruben Baldu, our CFO. By now, everyone should have access to the earnings release for the period ending June 31, 2024, that was published at approximately 6.45 a.m. Eastern Time. The press release and investor presentation are available on Nomad Foods' website at nomadfoods.com. This call is being webcast, and a replay will be available on the company's website. 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. Actual results may differ due to risk and uncertainties, which are discussed in our press release, our filings with the SEC, and our investor presentation, which includes cautionary language. We'll 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 our presentation represents adjusted figures for 2023 and 2024. All adjusted figures have been adjusted primarily for share-based payment expenses and related employer payroll taxes, non-operating M&A-related costs, acquisition purchase price adjustments, exceptional items, and foreign currency translation charges or gains. Unless otherwise noted, comments from here refer to those adjusted numbers. With that, let me hand over to Stéphane.

Thank you, Jason. Nomad Food delivered another quarter of solid top and bottom line performance. I'm pleased to report that the volume inflection we previously forecasted has come to fruition, with volume growth of 1.6% this quarter. This is the first period of volume growth since quarter 3, 2021, but certainly not the last. Net sales increased by 1.1%, including a 0.6% benefit from Forex, As the positive volume growth was only partially mitigated by the surgical price investment we made to drive profitable growth. This marked our eighth consecutive quarter of positive organic sales growth. And we are pleased that we have been able to amplify that top-line growth throughout our P&L. Gross margin expanded by a robust 270 basis points on two primary drivers. our team's continued success driving supply chain productivity savings, and our favorable mix as we are winning our mushroom battles. This gross margin expansion is funding our reinvestment into driving category growth with a material increase in A&P this year. But despite this reinvestment, we were still able to deliver 5% adjusted EBITDA growth per quarter and a 10% increase in adjusted EPS. And while the top-line improvement seen this quarter has been a bit slower and more gradual to materialize than we first expected at the start of the year, the evidence that the inflection has now begun, that our investments are generating increasing returns, bolsters our confidence in our ability to achieve the profitable volume growth acceleration that our second half outlook is based on. Let me elaborate a bit more on what gives us this confidence. First, while the European consumer remains pressured, the headwinds from the cost of living crisis that they were under have begun to ease. Consumer confidence is inching up, and price sensitivity appears to be lessening, as evidenced by the modest shift we are beginning to see towards premium products. The environment is still challenging, but a bit less challenging than we have seen in recent years. And while this is happening, we are reminded that we play in a great category. As we illustrate on slide four, while growth can vary period to period, volume growth for frozen food has generally outpaced total food for the last 18 months. And that relative outperformance has only grown of late with frozen food posting a robust 6% volume increase in the most recent period. The early read in July suggests that the momentum has continued. And while we do not show it on this slide for simplicity's sake, the story of relative outperformance is the same through a value lens. We are leaning in to drive this growth with our retail partners, and on slide five, we illustrate a few of these investments. Our A&P spent rose 30% year-on-year this quarter, as we supported our mushroom battles and growth platforms. An example of this is in our chicken portfolio, where we have been executing behind a full 360-degree campaign in the UK, and we will be bringing compelling innovation under the Bird's Eye Chicken Shop grant in quarter three, with the launch of new loaded burgers, chicken wings, and buttermilk tenders. This is resulting in strong and accelerating growth in this mushroom battle. And in Germany and Italy, where chicken is an early development growth platform for us, we have a fully integrated advertising, promotion, and merchandising plan that have been supported by innovations such as the quarter one launch of chicken burgers under the fitness brand in Italy and the upcoming quarter three launch of Iglo-branded saffron mixed chicken nuggets in Germany. We love this subcategory. It is large, profitable, and we have a clear right to win. Our brands, which have legacy heritage in breaded fish, have proven that they can extend into breaded chicken and we like the competitive dynamics. We are the only manufacturer investing with this level of advertising and innovation, and the actions we are taking to modernize and premiumize the category are driving revenue and margin growth for both us and our retail partners. Volume for overall chicken platform is up double digits year to date, and gross profit growth for the platform is outpacing volume and revenue as our premium innovation mixes our margin higher. This is one of many examples we have of our investments bearing fruit, and we are excited about the innovation and distribution expansion plans that we have secured in the second half. It is because of this that we are confident that the positive volume inflection and improving market share performance in this quarter is just the beginning. We will deliver further acceleration and expect our exit rate this year to be especially strong, given the timing of our initiatives. We are confident in our ability to deliver on our reiterated guidance and excited about the momentum that we will build into 2025. With that, let me turn it to the new CFO, Ruben Badiou, to walk through our quarterly results and outlook in more detail. But before I do so, I want to thank Samy Zeykout for all the accomplishments he achieved in getting our company to this point during his tenure as our CFO. And I also want to thank him for generously committing his time and energy to ensure a smooth hands-off in recent months. This has helped Ruben hit the ground running, and I'm pleased to see Ruben already making a positive impact on the business. Ruben?