Nomad Foods Ltd. Aktie

Ladies and gentlemen, greetings, and welcome to the Nomad Foods Second Quarter 2026 Earnings Q&A Session. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to your host, Jason English, Head of Corporate Strategy and Investor Relations. Thank you. You may begin.

Thanks, Max. Hello, and welcome to Nomad Foods Second Quarter 2026 Earnings question-and-answer session. We've posted the associated press release, prepared remarks and investor presentation on Nomad Foods website at nomadfoods.com. I hope you all had a chance to review them.

I'm Jason English, Head of Investor Relations and Corporate Strategy, and I'm joined by Dominic Brisby, our CEO; and Ruben Baldew, our CFO.

During this call, we will make forward-looking statements about performance 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 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. All adjusted figures have been adjusted primarily for, when applicable, share-based payment expenses, related employer payroll taxes, exceptional items, foreign currency translation charges or gains and hedge ineffectiveness. Unless otherwise noted, comments from here will refer to those adjusted numbers.

With that, Matt, let's open the line to questions.

[Operator Instructions] Our first question is from Andrew Lazar with Barclays.

Maybe to start, Dominic, I guess, as you think through the back part of the year and the cadence of how you expect sort of market share to unfold because I guess that's the one area where as you note in your prepared remarks that some of the disruptions and whatnot in the first half led market share not to be where you wanted despite the category obviously accelerating nicely.

So I guess, is it unreasonable to expect market share to be more neutral by year-end? Or is there something else that would prevent this now that much of the retail disruption is behind you, competitors are also sort of starting to take price. I'm really just trying to get a sense of whether there is something more structural regarding the ability to hold or gain share as you go forward.

So Andrew, thanks for the question. So the retail disruptions were a meaningful headwind to our share in the quarter. And we certainly expect our performance to improve in the second half. As you pointed out, those disruptions are now behind us. And we're also encouraged to see the recent pricing actions of private label. That said, we still have more work to do to improve our competitiveness. We're making significant progress.

We expect to deliver better sales and market share performance in the third and fourth quarter, but it's probably going to take more time to get back to market share neutrality. I don't, however, see any reason that we cannot get there over time. In fact, we've developed what we think are very compelling plans that are designed to achieve just that. And we're looking forward to sharing those plans with you at our Analyst Day in October.

Got it. And then what sort of elasticity are you seeing thus far on your sort of more recent pricing actions? And just how do those compare relative to maybe historical levels?

So it's a little early to talk about where price elasticity is. Of course, in most cases, private label have only just increased prices, although we are starting to see quite meaningful price increases coming through. For example, in the U.K., certain retailers increasing 20% or 30% mid-July, Carrefour increasing on certain SKUs in France by 32%. In Germany, Aldi, Edeka and Rewe all raised prices by about 20% in most of the fish categories. However, we're still analyzing what the real sell-out data is. So at this point, it's a little too early to draw any meaningful conclusion.

But it sounds like you're being at least, correct me if I'm wrong, prudent with respect to elasticity assumptions in the way that you sort of guided to for the full year around organic sales.

Thank you.

Our next question is from Steve Powers with Deutsche Bank.

Going back to the retailer disruptions in Germany and France. I guess in the prepared remarks, you talked about them as being behind you being resolved as you did in response to Andrew's question, but then you also used language that alluded to like largely resolved. So I guess the question is just can you be a little bit more specific on exactly where we are today versus full resolution? And if not fully resolved, how much allowance that you've made for carryover disruption in the third quarter and second half?

So I think with the exception of certain tiny retailers and tiny markets, these are fully resolved. So certainly, in the case of Germany and France, we're now in good shape. So I think you can consider these as resolved.

Okay. Very good. Maybe you could also just talk a little bit about the ongoing productivity work that is going on within the business. As I think about the early earnings bridge into '27, I guess, I'm trying to get a sense of the biggest contributors to profit growth. And just, I guess, the ability of you to drive incremental productivity as part of that bridge, just how you're thinking about that and how your plans are evolving on that front?

No. Thanks, Steve. It's a good question. And let me also make the link to the question Andrew just made. So we are on track with our EUR 200 million productivity program. Also, if you look what we post in terms of our nonrecurring spend, you see, by the way, that, that has gone down. But what we are spending, we're spending on programs linked to productivity. We announced a restructuring in some of our marketing function.

You have seen that in quarter 2, we announced a factory closure. So we are moving ahead, and it is in line with the planning. And I think the other point to make is also linked to the elasticity is we're not pricing as much as what we used to do like '22, '23. We're using our productivity program to have competitive pricing to make sure that our price index doesn't go up further. We actually have seen our price index going down a bit, and that is because of that productivity program. So I think the overall message is we will continue to drive it, and it is on track, and we'll use it to be competitive in terms of pricing, and we're seeing the first results of that in the market.

Our next question is from Scott Marks with Jefferies.

First thing I wanted to ask about, in the prepared remarks, you called out some of the things that helped support your margin expansion in the quarter, and you actually spoke to some, I think, one-time benefits or phasing benefits that might reverse that later this year. So wondering if you can help us understand maybe what those are, what the magnitude is? And how should we think about timing for those to reverse?

Yes. I think -- thanks, Scott. I think the main message is you see a return to gross margin growth. That is driven by pricing kicking in. That's what we also said after our quarter 1 results. So that's fully going to plan. That's it. There's a bit of phasing. So we see a couple of million of phasing in our phasing of A&P and overheads, and we had a bit of variances on some technical stuff related to variances to your recipes, which is also EUR 1 million or EUR 2 million. But overall, I think the gross margin improvement is coming through to pricing, and there's nothing of a phasing effect there.

Okay. Understood. Appreciate the thoughts there. And then regarding the pricing actions, I think there were some comments in the prepared remarks about your team feeling confident in being able to take incremental pricing as we get to Q4 and into next year, just given what competitors have been doing, what you're seeing on the inflationary front. So just wondering if you can help us understand maybe have you started having those conversations yet? And if so, what's been the response from retailers?

Yes. So we have started having those conversations. And of course, it's worth saying that most of the inflation that we're seeing, so hence, most of the pricing is centered around fish. As I pointed out, we've started to see private label increase already over the past few weeks in a number of countries. And we've used some of this opportunity to allow our own price index to go down slightly. So the price increases we're talking about are cost-justified price increases. And so we feel fairly confident in our ability to take these successfully towards the end of this year.

Understood. And then maybe if I could just sneak in one more just on capital allocation. You noted a suspension of share buybacks to pay down debt. What leverage ratio do you believe is appropriate in the current environment? And do you have a time line to get there?

Yes. So we're not putting out a leverage ratio. As Dominic said also, when you go look ahead of the next years, we'll come back with our Analyst and Investor Day, which will be this fall. So allow me not to answer that fully. But I just want to be clear also what we made in our prepared remarks that we haven't done buybacks in the last quarter. We continue to do the dividends. We just announced that again, and we made it clear that we now will focus on deleveraging also to bring the interest payments and the interest cost down.

Our next question is from Jon Tanwanteng with CJS Securities.

I was wondering if you could go a little bit more into detail on your market share expectations. I think you said it might take a while to get back to neutral in terms of market share. I was wondering when you -- if you have any more specificity on when you expect to get there? Is it Q1 of next year? And is it in your plan at some point to start retaking market share and have growth above market?

So it's absolutely in our plan ultimately to start taking market share. We also -- and we'll be talking through those plans as we come to our Analyst and Investor Day in October. But as I said before, whilst we're making good progress and we certainly expect to be able to deliver better share performance in the third and fourth quarter, it's going to take a little more time to get back to market share neutrality. Of course, that's against the backdrop of very strong category growth as well.

So it is also worth pointing out that if you look at the category, the frozen category in our markets year-to-date, it's up 3.4% in value terms and up 1.6% in volume terms. Even in the last 3 months, by the way, up 2.8% in value and 1.1% in volume. So once we do get to that point that we're holding share or indeed growing share, it can have a significant impact. What we're not doing today is giving clarity about when that will be.

Okay. Fair enough. And then I was wondering if you could talk about any potential impacts from things like weather or other external issues like water shortages and how that might be impacting supply or demand in the current quarter, if that's anything more than you normally see.

I think Dominic just said it that the last 3 months, we've seen actually the category roughly in line where it is year-to-date. I think 3.4% versus maybe now the last 3 months, 2.8%. So it has come down a bit, but I wouldn't say it's a big difference. So that is one category remains strong. Second point is water shortages, we're not seeing that directly. We're having the harvest now. It's to be seen what that will mean. And again, I need to also come back to the point. The additional inflation we're seeing this year is some fish. If you also look at our cost of goods, a big part is there is related to proteins, which is basically chicken and fish, and that is less related to kind of water shortages.

[Operator Instructions] Our next question is from Peter Saleh with BTIG.

Great. Dominic, I wanted to ask, you've been in the seat for a couple of quarters now progressing through this turnaround. What, if anything, has surprised you as you progressed? And maybe how has your thinking changed on the turnaround over the past couple of quarters? Anything you can share would be helpful.

Yes, happy to. I think a couple of things which I was aware of before, but have really been clear over the past couple of quarters. Firstly, the robust health of the category is in. So the fact that the category is in very decent levels of both value and volume growth. I think I was aware of it to some extent before I came, but actually, the fact that this has continued through all the geopolitical uncertainty that we had, the consumer uncertainty we've had and so on, that's been something which has been a very positive thing, which has come through.

Secondly, of course, during this time, I've had the chance to get to know the brands well. I've always known the brand as the consumer, but getting to see the real data behind the brand, the strength of the brand equity versus our competitor brands versus our private label brands has also been a very positive. So essentially, we're in a very strong category, and we have the best brands in the category. So those things are great.

It's also been clear to me though that within Nomad, to make ourselves a much more competitive company and a much more successful company, there have been significant changes which have had to come through. And you'll have seen, particularly in terms of the changes I've made to the leadership team and the executive team of the business. There was a need to bring in some very strong new talent whilst keeping the existing very strong talent that we had. And that's meant making a number of quite significant changes to the top of the organization. And that will also have corresponding changes to the culture that we bring about in the organization. But overall, I've been pretty happy with what I've seen, great category, the best brands in the category and now starting to get the organization to where we need to get to, so we can be really competitive in the market in a way that perhaps we haven't been so much historically.

Yes. And then just -- my second question, the retail disruptions appear to be behind you. You've implemented some more price. You've changed some of the leadership. I guess, over the next couple of quarters, what's the next area of focus for you? Is it more around innovation, the marketing side? Just help us understand where you'll be focusing your attention over the next 6 months or so.

So we've now produced what we think is a pretty compelling value creation plan for Nomad for the following years. And that includes really every aspect of the business from innovation to how we manage our marketing approach, how we drive our sales organizations across the business, how we improve our productivity and so on. As you can imagine, there's been an enormous amount of very, very intense work that we've put into this over the past 6 months.

And I think we've got to a point where we consider the plan we've got is a very good one, a plan that we're excited about and makes us quite excited about the future of the business. And that's what we're going to be presenting when we have our Analyst Day in October. But this will cover really every aspect of the business. So it's not the fact that we've had some things to cover for the moment, then we're going to cover others. This will cover the entire spectrum of what we're doing, and we hope that you'll be as excited about it as we are.

We have reached the end of the question-and-answer session. I would like to turn the floor back over to Dominic Brisby for closing comments.

Thank you all for joining us today and for your interest in Nomad Foods. I look forward to speaking with many of you in the days and weeks ahead and then seeing many of you at our Analyst Day this October.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Hello, and welcome to the prerecorded discussion of Nomad Foods Second Quarter 2026 Earnings Results. We have posted the accompanying press release and investor presentation on Nomad Foods website at nomadfoods.com. I'm Jason English, Head of Investor Relations and Corporate Strategy, and I'm joined by Dominic Brisby, our CEO; and Ruben Baldew, our CFO. In addition to these remarks, we'll host an analyst Q&A-only session today at 8:30 a.m. Eastern. 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 the 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-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 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, foreign currency translation charges or gains and hedge ineffectiveness. Unless otherwise noted, comments from here on will refer to these adjusted numbers. With that, I'll hand it over to Dominic.

Thank you, Jason, and good morning, everyone. As we preannounced last month, I am pleased with our second quarter results, which came in modestly ahead of our expectations. The quarter was an important one for Nomad Foods. We made meaningful progress on our operational priorities, resolved key commercial disruptions, strengthened our leadership team and continued to benefit from the attractive fundamentals of the frozen food category.

Let me highlight 4 key takeaways from the quarter. First, we successfully executed our pricing and productivity initiatives. Our recently implemented price increases drove a positive inflection in price/mix, contributing 3% to organic revenue growth during the quarter. At the same time, our productivity programs continued to offset a significant portion of input cost inflation as we advance towards our EUR 200 million 3-year cost savings target. Together, these actions contributed to a 110 basis point improvement in adjusted gross margin, demonstrating our ability to protect profitability while continuing to invest in the business.

Second, we resolved the retailer disputes that weighed on our performance earlier this year. As we discussed last quarter, these disruptions created a significant headwind to both revenue and earnings, resulting in out-of-stocks and reduced promotional activity across key customers for much of the quarter. Importantly, those issues were largely behind us by quarter end. Shelves have been replenished, promotional plans are being restored, and we have already begun to see improvements in market share trends. We expect that recovery to continue through the second half of the year.

Third, we continue to strengthen our organization and position the company for future success. During the quarter, we finalized the appointments in the executive team with half of my direct leadership team now new to the organization. They bring fresh perspectives, deep industry expertise and a shared commitment to building a high-performance culture focused on growth, execution and accountability. We also completed the restructuring of our marketing organization. As I noted previously, the function has become overly complex and inefficient. We have streamlined the organization, reducing nonworking A&P spend and shifted greater accountability closer to local markets. This will allow us to deploy more resources directly behind consumers, brands and growth opportunities.

Finally, we continue to benefit from strong category growth across Europe. Frozen food remains exceptionally well positioned as consumers increasingly value convenience, affordability, nutrition and great taste. Retail value sales for our category increased 2.9% during the most recent 12-week period with volume growth of 1.2%, while year-to-date value growth reached 3.4% and volume growth 1.6%. Growth has been broad-based across both categories and geographies. Frozen fish and vegetables are growing roughly 3% year-to-date across our footprint, while meals and poultry have grown approximately 7% and pizza 5%. Geographically, savory frozen food sales are growing across our major markets, including the U.K., Italy and Germany.

Simply put, we operate in an attractive and growing category, supported by some of the strongest frozen food brands in Europe. That said, we are not performing at our full potential. As shown on Slide 5, our value and volume share declined 90 and 75 basis points, respectively, during the most recent 12-week period, while retail value sell-out decreased 3.2%. Much of this underperformance was driven by the commercial disruptions in Germany and France that we discussed previously. Those disruptions are now largely resolved, but we still have more work to do to achieve the growth potential we believe our brands and categories can deliver.

While 2026 has been a year of rebuilding our foundation, we are already taking actions to improve competitiveness and accelerate growth. We are increasing investments in both renovation and innovation across our portfolio. For example, we have upgraded the coating on our fish fingers across multiple markets to deliver our crunchiest product ever. Consumer research consistently shows that crunchiness is a key driver of preference and testing indicates the renovated product significantly outperforms our previous offering. This is exactly the type of superiority-led renovation that strengthens brand equity while providing compelling news to take to consumers.

We also have a robust pipeline of innovation launching across Europe, including high-protein spinach products in Germany, expanded chicken offerings in the U.K., new seafood and meal innovations across multiple markets, further development of our ice cream portfolio and continued expansion of our pizza portfolio into additional countries. The specific products are important. More importantly, they reflect a broader shift towards innovation, stronger consumer relevance and a more growth-oriented mindset across the organization. As you can see, significant work is underway to improve our end market performance and unlock the full potential of our business.

At the same time, over the past several months, we have developed a comprehensive multiyear value creation plan. Nomad Foods possesses a unique combination of assets: iconic brands, a scaled pan-European supply chain, deep customer relationships and increasingly strong commercial capabilities. These are tremendous competitive advantages operating within a category with attractive long-term growth fundamentals. Our opportunity now is to fully leverage those strengths. We see meaningful opportunity to drive growth across categories, channels, geographies and consumers, and we have a clear plan to capture them. I look forward to sharing that plan and much more at our Analyst and Investor Day in New York this fall. With that, let me turn the call over to Ruben to review our second quarter results and outlook in greater detail. Ruben?

Thank you, Dominic, and good morning, everyone. Second quarter results show that pricing and productivity are working. Retail disruptions are normalizing and cash generation remains strong. Turning to Slide 6 and 7. Organic revenue declined 2.9% in the quarter, broadly in line with retail sellout trends. As expected, the inventory destocking and quarter end order timing impacts that affected first quarter results have now largely normalized.

Volume declined 5.9%, primarily reflecting the retailer disruptions we discussed previously. Importantly, we believe those headwinds are now largely behind us. Shelves have been replenished, promotional activity is resuming, and we expect the impact on volume trends to moderate as we move through the second half. Price/mix contributed 3% to growth during the quarter, reflecting the successful implementation of our planned price increases and a modestly favorable mix. Moving down to P&L. Gross margin increased 110 basis points, marking a return to year-on-year expansion. Pricing and productivity more than offset inflation, demonstrating the effectiveness of our cost management programs, while there was also some phasing benefits that will reverse later this year. Year-to-date productivity initiatives have offset more than 60% of inflation, keeping us firmly on track towards our EUR 200 million savings target.

Importantly, our approach to pricing today is very different from what it was during the peak inflation period. In 2022 and '23, we priced ahead of inflation to protect margin. This year, our aggregate pricing remains below inflation with productivity funding the difference. We believe this approach strikes a better balance between protecting profitability and maintaining competitiveness in the marketplace. While we continue to expect some near-term elasticity pressure following recent pricing actions, we remain encouraged by the competitive response we've seen thus far.

Turning to SG&A. Advertising and promotion spending was essentially unchanged year-on-year, while indirect expenses increased by just over EUR 8 million. Most of that increase reflects the normalization of incentive compensation. As a reminder, during the second quarter of last year, bonus accruals were reversed, making compensation a source of income in the period and creating a difficult year-on-year comparison this year. Excluding the bonus impact, overhead expenses were approximately flat versus prior year as productivity savings largely offset inflation and targeted reinvestment while we also saw a timing benefit. Adjusted EBITDA declined 4.3% in the quarter. Please note that the bonus normalization represented a headwind of more than 7% to adjusted EBITDA across both COGS and SG&A. Adjusted EPS was EUR 0.39, down EUR 0.01 versus the prior year period.

Turning to cash flow on Slide 8. Our adjusted free cash flow conversion ratio improved to 49% in the first half of the year compared to 43% in the prior year period. Our strong cash generation supported EUR 20 million of dividend payments during the quarter, bringing year-to-date dividends paid to EUR 41 million. As announced, our Board has also declared a quarterly dividend of $0.17 per share payable on August 27. During the quarter, we suspended share repurchases and shifted our capital allocation priority towards reducing net debt and leverage. While our balance sheet remains healthy and our leverage is well within our comfort range, we believe a lower leverage profile will enhance our financial flexibility, broaden our potential investor base and reduce interest expense over time.

In July, we further strengthened our capital structure by refinancing EUR 800 million of notes through the issuance of new long-term dated debt. The transaction was leverage neutral and allowed us to extend our maturity profile while also increasing the size of our revolver credit facility. We now have no meaningful debt due until 2032. Turning to Slide 9 and our '26 outlook. We continue to expect full year results to be in line with the guidance we provided last quarter. Specifically, we continue to expect organic revenue to decline between 2% and 5% and constant currency adjusted EBITDA to decline between 5% and 10%.

While our year-to-date performance has been encouraging, we remain mindful of the uncertainty associated with consumer elasticity following our recent pricing actions. We have begun to see competitors respond to our pricing, which is consistent with historical patterns. Although this is good news, it remains too early to determine the ultimate impact of those responses on volumes and market dynamics. In addition, while our inflation outlook remains in the mid-single-digit range, we expect inflation to finish towards the higher end of that range. Most of the increase is expected in the fourth quarter, where our hedge coverage was lower entering the year. We will address this inflation through pricing, and we are confident that we will be able to secure any incremental pricing that we may need to take while remain competitive.

As I noted earlier, we are pricing through much less of the inflation and relying more heavily on our robust productivity program. We intend to continue that approach in '27 and beyond. This is allowing us to better manage our relative price premium. In the recent weeks, we have seen competition taking additional pricing actions in the market, and this gives us further confidence to also take additional pricing actions starting by the end of this year. However, given the timing of these actions, we expect the main benefit of that will come through in 2027.

And we're not only focused on price, but also the quality of the price-value spectrum. We are in a better position than in '23 from this perspective as well. Our product superiority was approximately 40% in 2023 and it's now closer to 60% and our innovation moved from approximately 4% of net sales in '23 to 6% this year. Turning to adjusted EPS. We have updated our outlook to reflect the impact of our recent refinancing transaction and higher variable rates. We now expect adjusted EPS to be in the range of EUR 1.38 to EUR 1.53 compared to our prior range of EUR 1.47 to EUR 1.62. This revision is entirely attributable to higher interest expense and does not reflect any change in our operating outlook.

Over time, we expect to offset much of this impact through continued debt reduction and lower leverage. In closing, we are encouraged by our first half performance and the progress we are making across the business. We have strengthened our foundation, improved execution and begun to shift our focus towards accelerating commercial performance. With leading brands, favorable category dynamics, significant productivity opportunities and a clear value creation agenda, we remain confident in our ability to unlock substantial long-term value for shareholders. We look forward to sharing more of that at our Analyst and Investor Day this fall.

Thanks, everybody, for joining us. Happy to welcome back Nomad Foods. So at least one new face. Chief Executive Officer, Dominic Brisby, thanks for joining us.

Thanks for having us.

As well as welcome back, Ruben Baldew, Chief Financial Officer.

Thank you.

Thank you, guys. Let's dive in. I guess you have now been CEO for almost 6 months or you've been with the company for almost 6 months as well. I guess let's just start very high level with kind of first -- not so first impressions, but big takeaways at this point and big priorities that you've set for the company.

So I mean, the first impressions are, when you look at Nomad, what you have is a company which operates in a category which has many things going for it.

So the categories have been in growth year after year after year by 2% or 3% first quarter of this year, by the way, by 3.8%. So the category is in very good health. If you look at the brands, our brands in frozen are significantly stronger than any of our competitors when you look at the brand equity.

We're also of a significantly bigger size than our competitors. And so there's an awful lot that's good about the company, and there's an awful lot to love about the company. However, it's also clear to say that Nomad has absolutely not performed in line with its potential. So everything I've been working on with Ruben and with the rest of the team is to get it back to its full potential.

And there have been a few areas which I've been focusing on since I joined. The first is to get a very strong team in place. And so you'll be aware that I've made a number of changes to the executive team, particularly in the commercial areas. So 3 new regional presidents, who have a much stronger, much more aggressive commercial stance than probably was the case before.

If you look at the marketing capability of Nomad previously, a lot of the campaigns were a slightly old-fashioned in their media, but also lacking certain cut-through in their execution. So I brought in a very high-caliber new Chief Marketing Officer.

Interestingly, he was previously CMO of Publicis, but also who's a genuine expert on AI who's come into the business. So strengthening the team has been very important. Secondly, making sure that we're looking at the business in the right way. And that means changing certain things quite quickly, which had happened previously, certain bad behaviors which needed to be eradicated.

So for example, putting stock into the market at the quarter end. That's something which is extremely unhelpful from a commercial point of view. But it takes a bit of pain to get out of it. We chose to take the pain in Q1 this year. So we've chosen to eradicate those bad behaviors and clean up the mess related to them, which, of course, had an impact, but it puts us in a much better shape going forward.

And then making sure that we have a plan for the coming years, which we'll be presenting in our Investor Day in New York City in October about how we can grow our business to a much greater extent than has been the case before. Of course, we're in a category which is already in growth, which is not that common in our sector right now, but the category is very healthy. But Nomad has been losing share within that category.

And turning that around means having the right innovation -- it means going into the right new geographies. If you look at Nomad, we're strong kind of in Germany and everywhere to the west of Germany and to the south of Germany, but not much to the East. Making sure we have the right retailer partnerships. This has been something where Nomad has been quite weak historically.

And then finally, making sure that we drive the right culture. Now the Nomad culture has been a very friendly culture, very collaborative and very inclusive. So there are good things about it. What it hasn't been is a culture that's really driven performance. And now this is not something which I want to claim will change overnight because it won't.

There's an awful lot of work to do on this, but we've made big steps on this. And when I look at where I hoped to be in the changes we're making in Nomad in the middle of this year, we're more or less exactly where I hoped we would be. And certainly, as we go into the remainder of the year, we're very confident in terms of what we'll deliver.

Got it. Great. On the team aspect, on the team changeovers you made, are you done? Or do you have more work to do to round out your leadership?

So at the kind of executive team level, so among my direct reports, we're done or largely done. There'll be -- I mean, so we've announced the existence of a new Regional President for Central Europe. That person will be announced during the course of this month and will start in July. There'll be a new Chief People Officer starting in October.

But then at the top level, those changes will be done. Of course, we're working out how to get the best talent and the best structures further down the organization, but at the top level, we're done.

Great. So I guess, what are the milestones to watch for between now and Investor Day and year-end? And you obviously have fiscal '26 guidance in place. But what does success look like exiting '26? Like what are your mile markers?

So as we exit '26, there are very clear things that we need to have done. We need the right people in the right jobs, doing the right things. We need to have made meaningful inroads in terms of changing the culture. We need a very solid and coherent ambitious multiyear plan, which is what we'll be presenting at the end of this year. We need to reset some of the retailer relationships, and we can talk a bit more about that, if that's helpful.

We need to have eradicated all the bad behaviors and cleaned up the bad behaviors, which is in the case -- in the example I gave is largely done. And as a result of that, we need to enter the new year gaining a level of -- a significant level of top and bottom line growth. And of course, in the meantime, the other thing which we need to do is Nomad is a business which has historically shown a remarkable ability to disappoint, and we want to delight not disappoint in the meantime. So that's also something which is very important and which we'll be focusing on.

Yes. Okay. So maybe in that context, I'll put a pin in the retailer because I do want to come back to that. But Ruben, on -- there's been a lot of questions post 1Q just on the timing dynamics through the year, sell-in versus sell-out dynamics and the disconnects there.

Maybe just ground us in what we should expect through the year in terms of normalization of those trends just so that we don't have unintentional disappointments.

No, I fully, fully understand the question. So maybe take a step back and it links to what Dominic was just saying. If you look at Nomad, maybe at the end of '23 over '24, there were the sales incentives at the end of the quarter and actually increasing stock levels of trade.

And last year, you've seen that we actually started to destock. That's also clearly no victory lap because we need to improve our competitiveness. But last year, our sell-out was flat. Our sell-in was minus 2%. And the difference of that majority was destocking. Now what Dominic just said in quarter 1 is the quarter where we actually stopped those sales incentives.

And what you then see in quarter 1, in December '25, there was still a bit of ordering of retailers ahead of price increase. So you have then the dip in January. In March, we didn't do sales incentives. So you have that dip. So the quarter 1 is where we took our medicine. So a big part of that decline we saw minus 5.3% was of that.

Again, sellout in quarter 1 and [indiscernible] lapse was flat. There's a bit of phasing in there. But underlying, we're taking our medicine. We also had a bit of a retaliation because actually, we said, look, in this negotiation, we want to also send a signal to the retail that we're holding our back and we're taking the pricing seriously, and we want that to come through. That's now behind us.

So in the first weeks of May, all the pricing has now landed. Orders are fully back from retailers. Then if I can combine that question a little bit what to watch for in the remaining of the year. So quarter 1, we took our medicine. We stopped the kind of retaliation. We stopped the sales incentive.

In quarter 2, you see that coming now back fully from the first week of May. Then in quarter 3, what you will then see is pricing fully coming through. You remember last year, we had a bit of a disappointing out-of-home ice cream, a bit of weather, a bit of unrest. So on mix, you should see an improvement. So that will also, therefore, help kind of a step-up in absolute profit.

Good. Yes. Okay. And on the -- I mean, the other big question in the here and now, I think, is the pricing that you've put in place relative to consumer demand and concerns about volume, concerns about share loss, concerns about private label reaction in the market. How are you -- what's your base case? And what have you seen so far to hopefully validate that base case?

Yes. Before we go to that, I want to make one point quite clear and also with new leadership of Dominic and with hindsight, everyone has knowledge. But if you look how Nomad priced in '22, '23, you can actually see that our gross profit per kilogram went up after inflation.

So with Heinz, you could say we overpriced. We've seen always private label following. It can be time like 3 months, 6 months, 7 months, but they didn't follow to the same extent because they didn't have to. And I want to be absolutely clear, now we will not overprice.

And this is also why we're so passionate around our savings program where, for example, in March, we announced that a lot of our marketing where we saw duplication, we see savings opportunities there. You might have seen as a post balance sheet event that we announced the closure of a factory.

So we're passionate in terms of driving savings in order not to overprice. Now it's too early to see when private label follow. We see now our price in the first weeks of May coming through to retailers. It's then at their discretion to increase pricing. We do think that the inflation we're seeing and the pricing we're taking is generic inflation.

So it will hit private label at least to the same extent. It's a bit too early to see when that will come. But I also want to make clear that in terms of our guidance, we've taken kind of sufficient buffer to cope with that.

Okay. Very good. Very good. Dominic, let's go back to retailer relationships and evolving them from, I think, what has been more of a transaction relationship to now one where you're looking to, I think, for lack of a better word, become more partners with those retailers, joint business planning, more ingrained with retailer strategy. I guess how does that play out from an execution standpoint?

What are you doing to make that evolution? And where is it going to show up in terms of in-market change that's going to benefit the brands?

Yes. So like -- I mean, like any relationship, if one only looks at it from one own perspective, it may not end well. And I think talking to retailers, and I've been spending an awful lot of my time going around speaking to different retailers across Europe. One of the consistent pieces of feedback I'm getting is that historically, Nomad would come to the retailer looking at things very much from their point of view, I need to increase prices, I need to launch this brand, but wouldn't necessarily look at things from the retailer's point of view.

And of course, in that transactional relationship, when things are tough or when things really need to develop together, you're not going to be the first person the retailer comes to. And so what -- and by the way, this isn't going to happen overnight. But what we're now saying to retailers is we want to work with them to grow the category together with them, but also to bring innovation and excitement to the category.

If you look at the frozen food aisle in Europe, it's not that different to how it was when I was a kid. It's many similar products, even the merchandising is not that sophisticated. If you look at it in the U.S., if you go to a Walmart or particularly through a Trader Joe's or someone like this, it's a genuinely exciting place to go shopping. It's got wonderful innovation, wonderful different types of products.

And so we need to work with the retailer to make the category more exciting to help them grow the category, but also where they have other objectives, whether it's ESG objectives or other objectives to help them achieve those. Now once we do that with retailers, and this has worked very well in the previous company I was in as well.

Once we do that with retailers, then, a, things start from a position much more of trust than of transaction. Secondly, we have the depth of insight that we can really use to help them grow things. And thirdly, nobody really can do this except us in terms of frozen because we're the absolute undisputed leader in frozen in Europe. And when we started raising this with retailers that we're very keen to work with them on this, we found we're really pushing against an open door. So there's a great thirst for retailers to have the expertise of Nomad to help drive this and to help behave in a different way. And this will certainly help the retailer, but it will certainly help Nomad at the same time.

Yes. Is it -- where are the gaps to get there? Is it getting the right information to have that conversation with the retailer? Is it the ability to execute on the innovation that is demanded by that information? What -- where are the gaps?

So it starts with a deep understanding of what the retailer actually wants. So how they see the role of the frozen category within their business. Secondly, using the benefit of our data, which is probably second to none within this category and our deep consumer insights, which we certainly have in Nomad to help see where there can be scope for cooperation.

Thirdly, being willing not to take a one-size-fits-all approach. Now of course, a very small retailer, we might need to do that. But where there's a very significant retailer, either very significant in one country or very significant across Europe, we have to have the willingness, which we now do, to invest in both people and teams support at the point of sale, making sure that we may give them exclusivity in certain products for periods of time and to move that relationship forward in that way. So making sure that we hit Nomad's objectives, but also making sure we're very clear about what the retailers' objectives are and how we carry them out.

Yes. It sounds like you have the capabilities. You just need to build the trust and understanding with the retailers to be able to enact plans that have a benefit for both of you.

So we certainly have the data. We certainly have the insight. I think we're now bringing in people who have deep capabilities. So for example, Simon Ball is running the U.K. business now. He spent his entire career in food. He spent a big chunk of his career as a retailer himself and has literally grown up with the retailers. So to have that level of depth of understanding, I think, will help us.

And it's interesting that the strength of retail varies somewhat within the Nomad markets. In the U.K., we've got a long way to go. In Germany, we've got a long way to go. So we're making sure we put particular investments in those areas.

Got it. On the marketing front, you mentioned some changes already from a personnel standpoint. There seems to be just a lot of simplification that you're trying to achieve in marketing. Maybe walk us through what you're changing. And I guess, what does better marketing look like for Nomad?

Yes, quite right. So if you look at where Nomad has come from in marketing, Nomad has a good set of cards to play. So if you look at brand equity, if you look at awareness, if you look at the level of household penetration, we're way, way above in the frozen categories, any of our branded competitors. However, it's also the case that Nomad has taken a pretty old-fashioned approach to marketing, a lot of TV commercials rather than doing things properly on digital via influencers.

And actually, if you look at the communication, I spent a lot of time when I was looking at this job myself, looking at the quality of the communication. And I came to view that if I was not personally very interested in Nomad Foods, it's likely I would have not remembered a great deal of it. And so there clearly needed to be changed.

Now there was also added to that the fact that there have been enormous numbers of people in marketing across Nomad with very dissipated authority and trying to focus on numerous different brands at the same time. So all people with good intentions working hard and trying to do the best. But what it meant is that the budgets were split, dissipated among enormous numbers of places instead of focusing on the things that really make the difference.

Now if you look at our A&P as a percentage of net revenue, it's about 4%, which is -- it's not a dramatically high number, but it's a perfectly reasonable number for a business of this type. However, then when I came and looked beneath the surface of this, about 40% of this was spent on what we call nonworking A&P.

So sort of research projects, management consultants, agencies, all of this kind of thing. So one of the first steps has been to reduce that nonworking A&P, put it towards working. The next step is to make sure that we have real cut through in what we're doing. We're using the right media to target the right consumers effectively.

And concurrently with that, we've also heavily reduced the total number of employees in marketing. mainly because we want people to be forced to focus on the things that matter and be forced to defocus on the things that don't matter.

So almost 50% in the past kind of month or so, almost 50% of the people who were working in marketing, we've now exited the business. That's also helped as a cost-saving measure, but the greater measure is it will force us to be focused.

Yes. What about when you dug into the marketing and you looked at it by geography, by brand, is the spending proportional? Or is that also work that has to be done?

No. So that's also been reallocated, and we've taken immediate steps to reallocate that this year, so we get more bang for our buck.

Now as we go into next year, one of the things we're focusing on, which won't come -- and obviously, we'll talk about at our Invest Day, but it won't come as a surprise. We're looking at how we can expand our total addressable market, which are the categories which really need big support which are the categories which might be lower margin and need less support.

And also, the other thing which I'm very keen on is you'd expect Nomad as an international food company or even any kind of international consumer goods company that we'd have a fairly similar portfolio from market to market and a fairly similar set of brand propositions, and we don't.

So if you look at the U.K., we cover most spaces in terms of frozen food. If you look at Germany, almost 90% of the business is fish and vegetables. But people in Germany also eat chicken and they also eat pizzas. So before we need to -- before we start doing anything really clever, there's also the ability just to lift and shift existing successful products and brand concepts that we've got from one market to another.

Yes. To some extent, that's been talked about before. It's not a new concept for Nomad, but it hasn't maybe happened at the pace that it could have. What have been the constraints and how quickly do you think you can actually make good on that, those things?

So I'm certain we can make good on it quickly. And you'll see for me and my team, a force of well in doing that. There have, however, been some constraints in terms of how Nomad's operated. I mean one of them, which I've spoken about previously is the sort of presentation of Nomad as a kind of health food company.

Now I should also stress that that's not completely wrong. So I think we're very fortunate in Nomad that particularly when we're looking at some of these big consumer trends, about 70% of our net sales comes from lean protein and vegetables.

And as we look at the impact of GLP-1, as we look at the fact people need to eat more protein, that's a very good position to be in. However, even if you eat a lot of protein and vegetables every day, it may still be that on Friday night, you'd like to have a slice of pizza.

And when we're selling pizza, it needs to be pizza that taste good and people don't tend to eat pizza because of its health benefits. So we're very happy to be selling very healthy products, and we think it's a great source of competitive advantage. But within that, we also see room for indulgence and for people to have the occasional treat within that. And so we're kind of unshackling the business in terms of some of our guidelines there.

Is there a now versus future state health versus indulgence split of the portfolio that you see? And how big is that expanded addressable market if you were to make it on it?

Well, so my view is it's our job to give the consumers what they want rather than to tell them what they ought to eat. And I consider we have a right to play in every frozen category, certainly in every savory frozen category, ice cream, you may question, but certainly in every savory frozen category. So where the business is now and where we anticipate it will be, you'll see us pushing into more categories than we are in now and doing that in a fairly ambitious way.

Okay. Is there a -- from a just ramping up, if you were to put pizza in Germany, at what point do you have to build capacity in Germany or find partners in Germany to produce? Or can you ship and you have enough capacity in other places to supply?

I think it's one of the things with Nomad is we're not short of -- one thing we're not short of is capacity because if you look at the business over the past few years, volumes have gone down. The number of factories have stayed fairly similar. And so actually, we have a very good amount of capacity in all the categories where we operate. So that's not an issue.

And one thing that we've -- I mean, literally from this year, been rather more forceful on is the willingness to close factories where they're not operating at capacity. And still, if you look at the size of our business and the number of factories we have, certainly, Ruben and I and the Chief Supply Chain Officer see further scope for efficiencies there.

Okay. And to the extent that it grows, it obviously almost helps pay for itself because your fixed cost utilization goes. Very good.

Ruben, kind of on topic of margins, can we talk a little bit about the cost inflation outlook that you're seeing and how it's evolving given dynamics in the Middle East and direct and indirect impacts of that. I guess what is your latest cost outlook and how that impacts maybe to some extent, the second half, but then also how it impacts how you're plotting for '27?

Yes. So cost outlook is mid-single digit. That was -- at the start of the year, we said around mid-single digit. Maybe that's gone up by 1% or so, but we're still around that mid-single digit.

Also I want to be clear, a couple of things. One is where we are now, we're 80% to 90% covered. So if anything, if it hits us, it's kind of second half quarter 4. So it's not a -- we got it covered for this year. The other point I would say is -- if you look at our cost base and especially if you look at raw materials and packaging, a lot of our cost base is actually protein fish.

And Alaska Pollock comes from the ocean between Russia and U.S., nothing to do with the Strait of Hormuz. So I'm not saying there's 0 impact, but actually, what we're seeing on our commodities, proteins, fish, also harvest-related crop, it's not a big impact for this year. And where we are seeing inflation, it's more on fish. And then to the point, we will make sure we drive cost savings.

We'll make sure that we also have alternatives like we see opportunities to do savings projects potentially on our fish that we won't price more than private label. And honestly, I think, Steve, for 2027, it's just too early because the scenarios on how long this conflict will go through, how it relates to our bill of material, again, a lot of our spend is actually in things outside things relate to the Strait of Hormuz, it's just too early to tell.

But I guess, I mean, I would -- I don't -- to the extent that costs do build in snowball, it doesn't strike me that you -- any of your exposure would necessarily put you at a disadvantage relative to your company, if anything, maybe the opposite.

Exactly because there's also -- where we see currently a bit of more inflation is on fish, and we actually think we might be hit less than private label because we know some of the private label sourced from a different kind of supply base where energy is actually more impacted, and we might have a bit of coverage on the dollar exchange rate.

So we'll keep a close eye on what we're seeing in private label, but we should not have more inflation than private label.

Okay. Cash discipline, not new to Nomad.

Not at all.

And strong free cash flow conversion has been a hallmark. I guess as we're thinking through the transition of this year and the growth initiatives that Dominic has conceptualized for the future, I guess how are we thinking about cash generation?

I guess, what should we anchor on as just the drivers of free cash flow durability, both to fund shareholder returns, but also fund these growth initiatives?

Yes. So as you said, this company has had a good cash delivery, good cash conversion. We have a guidance out there for 90%, which we're driving hard, and we're committed to. So that's one. If you look underlying on some of those drivers, we're happy with the progress on working capital.

We see improvement also what Dominic just said on the basics in place, better commercial teams in terms of forecasting and how that helps on inventory. But I think the big driver, and it's also something we said at the end of last year is outside the cash conversion, which is on adjusted profit. actually, we see a big opportunity to lower the cash expenditures related to nonrecurring.

And we used to spend almost EUR 80 million, 8-0 in nonrecurring, and we said we can half that. And maybe this year, it's not exactly half, might be going down from EUR 80 million to EUR 45 million. And we're delivering on that. So it's not only talk. If you look at our quarter 1 nonrecurring, it was EUR 9.9 million.

And actually, within that, because I'm quite passionate that we don't use that as a parking lot just to put expenses in, EUR 5.5 million, EUR 6 million was related to what Dominic just mentioned, this marketing organization where we saw duplication. That will give us a saving almost of more than EUR 11 million, but also leads to that speed of decision-making and all of that. So we see also going forward for next year, the opportunity to lower our nonrecurring, and we're happy with our cash delivery.

Okay. Are there -- we've talked in the past about different muscles that have been revenue growth management. Dominic referenced strong data foundation for consumer insights.

Are there investments that you need to be made, maybe not in the very immediate term, but that you see on the horizon in order to build capabilities where you think there's a tremendously unappreciated ROI or areas where you feel like you're just behind the curve?

So if you talk about investment like fits and all of that, actually, one of the drives why I said we can go down from a kind of EUR 80 million to EUR 40 million in nonrecurring is we're quite passionate that if we talk about transformation project, it's about processes first, data that follows after that and then systems.

And we want our own teams to run that instead of a team of consultants and external people. And we're executing on that. So I'll give you an example. In our finance processes, actually the team themselves are looking at invoices which are being processed touchless, where you lose -- AI is a big buzzword and you use technology like OCR and the invoices get recognized and it's touchless processing. That leads to savings.

But it's actually run by the local finance team, and they make those initiatives themselves. How we do journal entries. We have a CMO who has huge experience in terms of AI, how you mimic consumer cohort. And we don't think we need huge, huge investments on that base. We need our local teams, our own functional teams to be curious to use what we have there in terms of data and then use existing tools on AI, which are out there for not huge price tax.

Dominic, with the cash that's generated right now, it doesn't make sense for a lot of reasons to be focused on inorganic opportunities. But as you think of the 3- to 5-year outlook, how much of what you see on the table can be accomplished organically and versus rounding up the portfolio potentially with inorganic initiatives?

So, as you said, right now, until we prove ourselves, we're quite clear, we don't have the license for inorganic growth. And also, we're going to be highly disciplined on anything we do. And of course, while we're so cheap, are less cheap, it's not going to happen.

As we look to the future, of course, we're building up a plan. And we believe there's enormous scope to grow organically. But as we get valued higher and the business begins to perform and the market sees this, there are many opportunities that we could see. But right here right now, our focus is on running the business properly and delivering organic growth as we go forward.

Yes. Given that, I mean, the historical focus from an inorganic perspective of Nomad has been either bolting on adjacent geographies or bolting on adjacent categories within the existing geographies. Any reason to think differently than that in terms of when the time is right for that to be the focus of the company?

I mean I think those are the lowest risk forms of M&A, the forms of M&A, which are likely to have the most synergies. So the answer is probably not. However, once everyone can see what Nomad can do, I wouldn't take other things off the table either, but not in any immediate sense.

And in the near term, prioritization for excess cash, I would assume, is -- I mean, after reinvestments in these organic initiatives is to buy back the existing stock. I mean, other than the dividend?

So we have been doing buybacks. Last year, we did a bit of buybacks in quarter 1 because the stock is cheap. By the way, it's not only the company is buying stock, also Dominic and myself put money where our mouth is, and we bought shares ourselves. So that's always something we're going to look at, but we also have to be cognizant of the fact that the leverage was in quarter 1 around 3.9. So we're going to thoughtfully balance that with our leverage and make sure we're not overleveraged.

Okay. Remind me, do we have -- any maturities coming due? Or is the maturity schedule?

So we did a refinancing H2 last year on the term loan. So they are now refinanced, I would say, pretty good terms. Our bonds will come up for maturity in June 28. Now clearly, we're not going to wait like 6 or 12 months before. So we're looking at that.

That is a bond of EUR 800 million with a coupon of 2.5%. With the refinancing last year, we had a bit of excess liquidity. Our cash flow is pretty good. So we have to look, will it be a ticket size of EUR 800 million or potentially less. And we're looking at that, and we're not going to be penny-wise pun fully to try to save the last million of interest versus maybe missing the market.

Okay. I didn't mention this I didn't go here earlier, and maybe I should have it would have flowed better. But on the -- you've reaffirmed your EUR 200 million cost efficiency goals, and I think you've said those are on track. I guess, as you as you go further into the program and as you make additional changes, I mean, are there -- I guess, what are the biggest remaining cost pools within that program? And is there upside potential?

Yes. So look, if you look at the EUR 200 million, and again, we'll come back in autumn with a more extensive communication on our next 3 to 4 years program and the drives within that, including the savings project.

But if you look at what we communicated last time, EUR 200 million, within that overhead was 20 million to 35 million. We're on track. And I think we're more tracking towards kind of the higher end of the range than the lower end of the range. The remainder of that was clearly supply chain. And within that, you had EUR 100 million of procurement, and I think that's roughly equally phased. I think again, and it comes a bit back and you asked -- you had the question, okay, how do we avoid that not everyone has an opinion.

Well, what Dominic just said with the executive team, they are executive members. And we actually run the business with the 2 of us, 3 presidents in the region, CMO and supply chain. And there, we make the decision. So there, we're going to have a trade-off.

Look, we have an opportunity to do an harmonization of a coating project because we use different coatings because in the past, there was a lot of local initiatives that could generate X million of savings or with some potential fish inflation, we could do something with Pangasius and launch a snacking range.

By the way, you also make sure it's not a one-dimensional price discussion. You actually help the retailer. So we're going to drive all of that. So I think in that program, the procurement savings, we have been delivering. We will continue to deliver by making the right trade-offs in terms of price, value and quality. And then there's all the factory bid.

And what Dominic just said, if there's one thing we don't have an issue with is capacity. So we're looking at in-sourcing. We're looking at closing factories. This company has not been closing factories. Now in the last 12 months, we announced 2 closures. We'll look at more closures. Third bit is we're going to look at rightsizing the bigger ones.

And maybe the last bit, and that comes back to our strategy. There are certain channels like food service or maybe we go for branded hard discount a bit harder to make sure we fill factories because to your point, it's a fixed cost base we can leverage. And actually, by leveraging that, we become more competitive in our branded retail. So yes, we're going to do that.

Okay. Just a couple of minutes left. Then I want to go back to essentially culture and the changes you're trying to make. Nomad has been a business that's been through a lot. I mean, a lot of businesses have been through a lot in the last half a decade plus, but Nomad seems to have -- we've seen lots of change.

And what we're talking about now is a lot more change. How has the organization responded? What is the energy behind the changes? And how are you positioning the future directions to energize rather than alienate the employee base?

It's a very good point. And you're right. I mean, Nomad had plenty of change before I took over and it's had even more now. What we're seeing is, of course, in any organization where change takes place, that can be quite difficult. And it can be difficult on a personal level, particularly if there have been restructurings going on. And I think that's been no exception in Nomad.

The other thing is, and I said this publicly in Nomad the other day, there may be some very, very fine people and superb human beings who decide that being in a more aggressive, more commercially agile business may just not be for them.

And it's not a reflection of them as people, but that's an absolutely fine outcome. However, what we are seeing increasingly now is that as the team start to see the changes we're making, start to see the caliber of the people we're bringing in, start to pick up the first snippets of the strategy because, of course, we haven't either internally or externally publicly gone through it. They started to see that this is going to be a very exciting place to work.

And also that from a kind of personal value creation perspective, but also as a kind of exciting place to be, this is going to be a very fun journey for the next few years. And the one thing I would say is when you look at least in market share terms or if you look at it in household penetration terms or if you look at it in share price terms, Nomad hasn't been a winning team over the past few years.

And there's nothing more fun than being part of a winning team. So everything we're doing is to turn Nomad into a winning team. We're convinced that we will do. And actually, what we're seeing internally is that the right people are getting very excited about this and very energized by it.

Very good. So now we really have a couple of minutes left. Maybe it sounds like we're going to pick up a lot of these threads in October. But I guess what would you leave investors with as kind of the key to be continues to think about as they think about Nomad as an investment opportunity from here?

So it's pretty simple. So frozen food in Europe is a superb category, growing year after year, quarter after quarter by 2% or 3% a year, in fact, a bit more than that recently. Nomad has the best brands in the category by far. We have the best products in the category by far.

And yet Nomad has lost share over the past few years. Everything we're doing now is to regain and rebuild that market share. Even if you believe that we can only hold market share in this growing category, this still will be transformative for the share price. And if you believe, which I hope people will start to believe as we prove it that we can do more, this can be very, very exciting indeed. The measure of how exciting it is, is how much the insiders have invested.

And you can see its public knowledge, the 2 Chairman have invested, Nonexecutive directors have invested, Ruben has invested, I have invested. And to me, this is much more powerful than any narrative we can give. We're very excited about the future of Nomad. We believe it trades heavily below its intrinsic value, and we believe there's a lot of upside.

It's a perfect way to end it, and we're right on time. So thank you very much.

Thank you so much.

Thanks.

Ladies and gentlemen, greetings, and welcome to the Nomad Foods First Quarter 2026 Earnings Q&A Session. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Jason English, Head of Investor Relations. Thank you. You may begin.

Hello. Good morning, folks, and welcome to Nomad Foods First Quarter 2026 Earnings question-and-answer session. We've posted the associated press release, prepared remarks and investor presentation on Nomad Foods website at noomadfoods.com. I hope you've all had a chance to review them. I'm Jason English, Head of Investor Relations and Corporate Strategy, and I'm joined by Dominic Brisby, our CEO; and Ruben Baldew, our CFO.

During this call, we will make forward-looking statements about performance 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-IFRS financial measures during this 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. All adjusted figures have been adjusted primarily for, when applicable, share-based payment expenses and related employer payroll taxes, exceptional items, foreign currency, translation charges, gains on hedges and hedge ineffectiveness. Unless otherwise noted, comments from here will refer to those adjusted numbers. With that, Ryan, back to you. Let's open the line to questions.

[Operator Instructions] We take the first question from the line of Scott Marks from Jefferies.

I wanted to start just to ask about the quarter itself. It seems like some of the disruption tied to price negotiations came in a little bit better than feared. I know you called out some strong growth in markets outside of U.K., France and Germany. So just wondering if you could help us understand to what you attribute the better performance? And how should we be thinking about that level of potential disruption for Q2 and beyond?

Thank you for the question. This is Dominic. So the quarter did come in slightly more better than we were expecting in terms of category growth. So it came in at 3.8%, which was stronger than we'd expected. And as a result of that, our top line performance was slightly better than we've been planning for and drove upside through the P&L. Going forward, we continue to anchor to a category growth of roughly 2%, which is consistent with what we saw last year.

We're encouraged by our strength year-to-date. But as I mentioned in the prepared remarks, some of that is likely due to various factors such as an earlier Easter this year, some A&P phasing and so on. And of course, the broader economic and consumer backdrop remains pretty dynamic. So we don't believe now is the right time to start embedding more optimistic planning assumptions.

If you look in terms of what's been happening with retailers, so we told you last quarter that we were planning for some disruptions as we implemented our price increases given that this is a fairly normal occurrence in many European markets. And those planning assumptions that we made ended up being prudent as we did experience some disruptions, primarily in France and Germany. And they weighed in on both our sell-in and more recently our sell-out performance.

Now a couple of retailers temporarily suspended orders for some of our products and canceled some promotions. And this resulted in some out of stocks when combined with low -- which when combined with low promotions negatively impacted our market share in March, which also continued through April, weighing on shipments in that month. And you also see that in Nielsen when the next batch of Nielsen data is released. The good news is that those issues are now behind us and were anticipated already in our full year guidance. We've now secured our planned pricing. Our shelves are being restocked, and we have robust promotional plans in all our markets for the remainder of the year.

Understood. I appreciate the context there. Maybe next one, you made a comment in your prepared remarks about previously operating with a more narrow portfolio focus, but now kind of removing some of those obstacles. Wondering if you can share a bit more context about this strategy and what exactly you mean by that?

So we'll be able to be much more expansive on precisely what that means and when -- when we have our Analyst and Investor Day in the fall. But to give you a rough view of where our thinking is heading, previously, Nomad had quite a strong focus on products which in one way or another could be described as healthy. And some of those worked very well.

However, we consider our ability is to be a real champion of frozen food. And of course, some frozen food is very healthy, but sometimes as part of a very good and very balanced diet, you may choose to have the occasional treat or the occasional product or brand that is less healthy. So we're going to give ourselves more flexibility in doing what is commercially successful rather than simply driving a health agenda. So we'll give you much more details of that later in the year.

Understood. And then maybe if I could just squeeze in one more. Obviously, there's been a lot of volatility, especially around energy costs and inflationary pressures tied to the Middle East conflict. Wondering if you can just help us understand how you see that impacting your business, whether for this year or beyond.

Yes. Very, very happy to. And you can imagine this is something we've been giving a lot of thought to and a lot of focus on. And really, when we're looking at the situation in the Middle East, we're looking at it through three lenses. So firstly, supply chain disruptions. Secondly, impact on consumer demand; and thirdly, cost inflation.

And if I may, I'll deal with those three topics in order. So first of all, supply chain disruption. So on that, we've seen no impact on our business. Our products are produced locally. And whilst our procurement is diverse geographically, none of it's been adversely affected by the Middle East situation at this point in time. If you look at it from the lens of consumer demand, so we're watching the situation very closely, but we have not yet seen any evidence of consumer demand for our categories being impacted.

In fact, as I said now, the growth has been rather greater than we were anticipating in both volume and in value growth. So this isn't a large area of concern for us going forward. Our categories deliver strongly on value for money, which has historically at least made us relatively insulated from economic volatility versus some other food companies. So as you can imagine, the focus and our focus is on the third point, which is cost inflation.

And as you know very well, the cost of fuel, the cost of fertilizers, the cost of resins have all moved higher. And the situation is very fluid. But as of today, our direct and indirect exposure to these costs is manageable, and we've got good coverage through most of 2026. As a result, our overall COGS inflation rate for this year has picked up by less than 1% and remains within our mid-single-digit outlook. However, we do expect to see that incremental inflation will start to roll through our P&L in the fourth quarter and into fiscal 2027 if current conditions carry on.

However, as we're demonstrating this year, we have the ability to pull various price levers and various revenue growth management levers to manage commodity cost inflation. We've also got a very robust productivity pipeline that will further generate substantial cost savings next year. So as a result, as we look at it at this point in time, although it's very fluid, we see it as an eminently manageable situation for Nomad.

We take the next question from the line of John Baumgartner from Mizuho Securities.

Maybe first off, thinking through the downside risks to 2026. I'm wondering if you can speak maybe first off to the expectations for the Adriatics here in Q2, Q3, given maybe some of the more local economic disruptions in that area? And then B, thinking about the U.K. and Europe more broadly, I'm curious, Ruben, I think during past periods of economic dislocation, we've actually seen that benefit frozen food demand.

And so I'm curious with your pricing in place now, where you're seeing price gaps, how are you thinking, generally speaking, about the competitive environment this year? Do you anticipate other branded competitors probably able to raise prices following you? Just broader thoughts on just consumer sensitive pricing here.

Ruben, do you want to do Adriatic and I'll do private label, would that work?

Yes, yes, sure. So in Adriatic, at this moment, we're not seeing macroeconomical or geopolitical issues hampering our business. The execution and results are fully in line with our plan. So that's, I think, one important point. The second point is also if you look at our full year guidance and a bit of step-up, we expect the step-up in H2 in terms of profitability to come.

And one of the elements is also in H2 and especially in quarter 3, we expect a positive margin mix because last year, the summer was slightly disappointing. Now we're not planning for an excellent summer, but all other things equal and normal, we do expect then that Adriatics can deliver value for us in quarter 3, thanks to an improved sell-out and sell-in of our out-of-home ice cream business.

And then if we look at your point on private label, so of course, it's early days and a lot of our price increases have only just hit shelves or just beginning to hit shelves. So in certain markets, we've begun to see private label move already. In others, we're still waiting to see what happens. But we've embedded the risk of delays in our guidance.

And the likelihood is actually, when you look at it in real depth is that the private label players are experiencing as much as, if not more cost inflation than we are. So for example, in fish, many private label producers source double frozen fish from China. And the cost of that has risen far more than it has for other sources of fish. So we do tend to believe it's a question of when and not if they will raise prices. So that's roughly how we're seeing things.

Okay. And then I'm curious, Dominic, as you dig deeper into the business, and I know you're making changes to marketing, and I think there's been some discussion as well about improving joint business plans and some of the point-of-sale engagement. I'm curious how retailers look at this category, frozen food right now? Because it feels that some of the retailers, they focus more on the fresh business.

When you think about frozen and engagement, I mean, to what extent are you seeing, I guess, the balance of benefits for you being multi-category exposure relative to certain categories that stand out where you can drill deeper. I guess how are you thinking about those joint business plans with retailers from here?

So it's still fairly early days. But in all the discussions that I've been having with retailers and that the team have been having with retailers, we're seeing a great thirst from them to work closer with us as the clear undisputed leader in frozen food in Europe to work with them how to grow the category and not how to grow the category, how to grow the category more.

I mean 3.8% category growth in the quarter is pretty impressive in itself. But one of the things that came across with Nomad historically was that the relations sometimes with retailers have been a little transactional, whereas what we really need to do is to work out with the retailers how to grow the business and how to grow the category with them. And interestingly, you'll have seen we've made certain new appointments. And we've consciously chosen people who are very good at that and who have a clear record of doing that.

So for example, in the U.K., and of course, the U.K., as you know, it's by far our biggest individual market. So the person we put in as President of the U.K., who's reporting directly to me, someone called Simon Ball, has spent pretty much his whole life in food in the U.K., but on both the manufacturer side and the retailer side. So he has a much deeper understanding of how retailers think what they want and how they operate versus what many people in that position would have.

So we're seeing great desire from retailers to work with us. I think a certain sense of positivity that we're very keen to work with them. And so the early indications are positive. And it's worth saying even without this, even without the full force of the Nomad muscle and the Nomad Intellect, which we're bringing in, the category is still growing by itself. So the retailers are pretty excited.

We take the next question from the line of John Tanwanteng from CJS Securities.

Nice job on the quarter. I was wondering if you could talk about trends in Q2 so far, what you're seeing from a consumer's perspective? And then on top of that, when would you expect your sell-in to start to track the sell-out and how that progresses through the year?

Yes. So maybe let me answer that. And maybe just first macro and it links to what Dominic just said on trends in the consumer. we see a category which is healthy year-to-date, 3.8% growth, also growth in volume, plus 1.5%. So that is strong. Clearly, as Dominic said, we're monitoring the situation in terms of potential uncertainty on inflation on what is happening geopolitically.

But at this moment, we don't have any data suggesting that the consumer would trade down or would lead to a decrease in the category in itself. So that's one point. Then if you zoom in a bit more specifically at our numbers, both sell-in and sell-out, as Dominic said, we have executed and implemented the price increase in line with our plan and in line with guidance. But as is normal in certain regions, we did see disruption. And that disruption will flow into quarter 2, specifically in the month of April.

But the good thing is we have now closed our negotiations. So from May, we now see the shipments fully back on. But that will weigh on the quarter for itself. That could be a couple of basis points. That's one. A bit minor overall, we see a bit of shipments in Easter, but it's not that big, it could be 0.5%. So those are a bit the trends for us specifically. And then the other big point, which we already said for the full year and also reflected in our guidance, we see generic inflation.

And as Dominic said, specifically, for example, in fish, we see quite a bit of inflation. So it's not a matter if private label will follow, but when. However, what we've seen in the past, there's often a bit of a time lag. Now our products will now with the price increase, the consumer prices will go up. That's clearly at the discretion of the retailer. We expect private label to follow, but there will be some time lag and that elasticity impact will weigh in quarter 2.

Got it. And I have a follow-up, if I could. I was wondering if you could talk maybe a little bit more about the risk in your supply chain from inflation and financial pressure. I understand that you secure a lot of your costs ahead of time. But I'm just wondering if you thought about yields or material financial constraints and how those might flow through and if there's a risk to your ability to secure supply even if you have contracts in place.

Yes. So look, we've looked clearly in depth at our contracts and which contracts have the ability to reopen. I think in our business, and you have to understand a lot of our commodity spend is linked to agricultural livestock, fish, which is much more linked to season than really linked to input costs. So we see a bit less of exposure there. I think the big point where not only us, but more companies are looking at, okay, what would be the indirect impact of this.

And that, again, as Dominic said, is not a big impact for '26, but how could this flow into '27 with the cost of fertilizers, with the cost of petrol and fuel with potential impact of labor inflation and how that will go into the cost price of our products into '27. And we're monitoring that, but I think it's just too early and too fluid to give an element of numbers there. we do expect it to be elevated versus what we're seeing in 2026.

Ryan, we think we lost you. You still there?

Am I audible, sir?

Yes. Now I hear you, yes.

[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to Dominic Brisby for his closing comments.

Thank you all for joining us today and your interest in Nomad Foods. I look forward to speaking with many of you in the days and weeks ahead and then seeing many of you at our Analyst Day this fall. Thank you.

Thank you. Ladies and gentlemen, the conference of Nomad Foods has now concluded. Thank you for your participation. You may now disconnect your lines.

Hello, and welcome to the pre-recorded discussion of Nomad Foods First Quarter 2026 Earnings Results. We have posted the accompanying press release and investor presentation on Nomad Foods website at noomadfoods.com. I'm Jason English, Head of Investor Relations and Corporate Strategy, and I'm joined by Dominic Brisby, our CEO; and Ruben Baldew, our CFO.

In addition to these remarks, we'll host an analyst Q&A session today at 8:30 a.m. Eastern. 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. 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, foreign currency translation charges or gains and hedge ineffectiveness. Unless otherwise noted, comments from here will refer to those adjusted numbers.

With that, I'll hand it over to Dominic.

Thank you, Jason, and hello, everyone. I'm happy to join you here today for my second quarterly earnings call as Nomad's new CEO. I'm eager to share what my team and I have accomplished since my start as CEO on January the 1st. But first, let's review the quarterly results. First quarter results were slightly above our internal expectations, and we remain confident in our ability to deliver on the full year organic sales and adjusted EBITDA guidance we provided last quarter. As we noted in this morning's press release, we now see a slightly higher range of adjusted EPS outcomes given our share repurchase activity in the quarter.

As previously discussed, two mechanical factors shaped first quarter results. First, some retailers built inventory in December ahead of our price increase, which created a headwind in early Q1. Second, we ended our historical practice of shipping ahead of consumption late in the quarter to better align sell-in with sell-out. Whilst this resulted in a sharp year-on-year decline in shipments at quarter end, we believe it is a healthier and more efficient operating model.

As a result of these dynamics, organic sales declined 5.3% in the quarter, while retail sellout was flat. We believe retail sellout is a better indicator of underlying demand. Pricing benefit was limited in Q1 due to the timing of our price increases. And when combined with ongoing cost inflation, this led to a lower gross margin compared to prior year and a 23% decline in our adjusted EBITDA. While clearly not where we want to be, these results were modestly better than we initially expected and leave us runway to demonstrate the earning power or momentum of the business as we move forward. As you can see on Slide 4, our overall category remains very strong at 3.8% this quarter. This is an acceleration from the 2% growth, we saw last quarter with a stronger growth driven by volume.

An early Easter likely inflated March volumes, but category growth was tracking at 3% before March. Our category remains very healthy. Turning to our performance, as you can see on Slide 5, we experienced a temporary market share setback this quarter with our value share contracting by 60 basis points year-on-year and our volume share falling 20 basis points. This was the result of select retailers pausing orders and promotions to pressure price negotiations.

Our initial guidance for the year had already contemplated the risk of disruption, but this has come as no surprise to us. Cost inflation remains real and industry-wide. We therefore, maintained our resolve to secure pricing consistent with our long-term track record. And I'm happy to say that we've now successfully secured the price increases assumed in our plans and therefore believe this temporary and anticipated disruption is now behind us.

Our end market performance has varied by market. We underperformed in Germany and France this quarter, due largely to price negotiation disruptions. And while the U.K. remains soft, trends improved meaningfully versus last year. Elsewhere, we saw low single-digit growth in Italy, Austria, Portugal, Sweden and Switzerland, mid-single-digit growth in Serbia, high single-digit growth in Norway and mid-teens growth in Croatia.

I also want to highlight the strength of our cash generation. Adjusted free cash flow conversion increased year-on-year, reflecting our progress on cash discipline. This enabled us to repurchase EUR 24 million worth of shares, fund our dividend, currently yielding approximately 7% on an annualized basis, and still end the quarter with EUR 283 million of cash. The incremental share repurchase activity also enabled us to increase our EPS guidance for the year. Beyond the numbers, we are moving decisively to strengthen the company's foundation. During the quarter, I made significant changes to the leadership team and advanced key external hires. We announced two new Regional Presidents reporting directly to me, and earlier today, we announced our new Chief Marketing Officer. Later this summer, we intend to name a third regional President.

Once complete, half of my direct reports will be new to the organization, bringing fresh thinking and deep industry expertise. We have also begun restructuring our marketing organization, which have become overly complex and inefficient. By the end of summer, the marketing organization will be approximately half its prior size with greater accountability pushed into the local markets. This will reduce nonworking A&P and will allow us to reinvest more directly behind consumers and brands. Collectively, these actions are about simplifying the business, accelerating decision-making, and reallocating resources towards growth. They are also contributing to our ongoing progress against the EUR 200 million three-year cost efficiency goal that we announced last September. Over the past several months, we have conducted a deep assessment of our growth potential, and I'm increasingly excited by what we found.

We see various opportunities across channels, countries and segments for incremental growth. Nomad Foods has a strong pan-European footprint with a broad range of categories and capabilities. But in many of our markets our portfolio has remained very narrow, given a strong focus on our core. And there were similar constraints within our existing categories, where we held ourselves to exacting nutrition standards, even in categories like pizza, where consumers craved indulgence rather than health. We are removing some of these obstacles. It is liberating and will unlock new avenues for growth as Nomad begins its next chapter in its second decade as a public company. I'm eager to share all of this and more with you in detail at an Analyst and Investor Day in New York this fall.

I believe you will find our plans and potential compelling, and I believe you will agree that this growth potential is not being appreciated by the market today. We intend to change the perception that our business is declining over the long term, and plan to create meaningful shareholder value by delivering improved results in the quarters and years ahead. As a testament to my confidence, this past quarter, I purchased 377,000 shares of Nomad Foods in the open market, while Ruben bought 72,000, adding to the open market purchase he made last September. This was in addition to the 500,000 shares that each of our co-founders purchased during the quarter.

Also, as indicated earlier, we're implementing new incentive compensation plans. Our aim is to ensure that employees within our markets are rewarded for the results they can control. And at the executive level, we are incentivizing more share ownership to ensure alignment with shareholder interests and foster a culture of ownership. This has also allowed us to recruit top-tier talent. I'm eager to share more at our Analyst Day later this year. But for now, let me hand it to Ruben to take you through the quarterly results and outlook in more detail. Ruben?

Thank you, Dominic, and good morning, everyone. As Dominic mentioned, we delivered first quarter results that were modestly better than our expectations.

As you can see on Slide 6 and 7, our organic revenue declined by 5.3%, lagging retail sell-out that was flat year-on-year in the quarter. The difference between sell-in and sell-out was due to the two dynamics that Dominic discussed. First, an inventory destocking by some retailers in January. This followed the December buy-in ahead of our price increases. This impact was amplified by the price negotiation disruption at a select few retailers. Second, a realignment of order patterns at the end of the quarter. As we discussed in February, when we reported fiscal '25 results, this is the first quarter when we began to reduce end-of-quarter sales incentives to better align orders and shipments. This negatively impacted results this quarter but is not expected to have a material impact on quarterly results going forward.

Moving down the P&L. Our gross margin declined by 210 basis points this quarter, as we experienced only a partial benefit of a price increase while continuing to see meaningful cost pressure. We expect the cost pressure to continue, but both price and productivity are expected to have a more positive contribution to gross margin for the remainder of the year. The combination of the organic sales decline, gross margin compression and a modest A&P timing benefit as investment shifted from the first quarter to the second quarter led to an adjusted EBITDA decline of 23% year-on-year. Adjusted EPS was EUR 0.23, EUR 0.12 lower than the prior year.

Turning to cash flow on Slide 8, our adjusted free cash flow conversion ratio was 36% for the quarter, a healthy increase from the 24% conversion ratio in the first quarter of '25. Some of that was driven by different phasing of our interest payments. However, we are also seeing underlying improvements on working capital coming through. The improved conversion ratio allowed us to fund EUR 20 million of dividend payments, EUR 24 million of share buybacks, equating to 2.7 million shares while building to EUR 283 million of cash on our balance sheet. Our balance sheet and cash flow profile remain healthy, and as a reminder, we have no debt maturities until 2028.

And last week, we announced that our Board of Directors declared another cash dividend of $0.70 per share payable on May 28, 2026, to shareholders. Turning to our guidance for 2026 on Slide 9. We continue to expect to deliver organic sales and adjusted EBITDA results in line with the initial guidance we issued last quarter. As a reminder, we expect full year organic revenue to decline by 2% to 5%. Constant currency adjusted EBITDA to decline by 5% to 10%. We have increased our adjusted EPS guidance range to EUR 1.47 to EUR 1.62 from EUR 1.45 to EUR 1.60 due to the incremental share repurchase activity completed in the quarter. At recent exchange rates, our revised adjusted EPS guidance range for the full year translated into $1.72 to $1.90.

Turning to adjusted free cash flow. We continue to expect a conversion ratio of 90% or greater for the full year. We expect organic sales and adjusted EBITDA growth rate to be below our full year target in the second quarter, driven by the rephasing of A&P activities in quarter two and some residual impact from the price negotiation disruptions early in the quarter. This remains consistent with the expectations we had coming into the year. We look forward to delivering more robust results in the second half of the year.

And I now look forward to sharing our strategy plan and multiyear growth targets at our Analyst and Investor Day this fall. This remains a growth advantage business with great products, strong brands, and category tailwinds. We are excited to share our plans to harness this full potential and unlock meaningful value creation for our stakeholders. Thank you for your time.

Greetings, everyone, and welcome to the Nomad Foods' Fourth Quarter of 2025 Q&A Conference Call. Please be aware that today's event is being recorded.

I'd now like to turn the floor over to your host, Jason English, Head of Investor Relations. Please go ahead.

Thank you. Hello, and welcome to Nomad Foods' Fourth Quarter 2025 Earnings Question-and-answer Session. We have posted the associated press release, prepared remarks and investor presentation on Nomad Foods website at nomadfoods.com. I hope you've all had a chance to review that.

I'm Jason English, Head of Investor Relations and Corporate Strategy. I'm joined by Dominic Brisby, our CEO; and Ruben Baldew, our CFO.

During this call, we will make forward-looking statements about the performance 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 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. All adjusted figures have been adjusted primarily for, when applicable, share-based payment expenses and related employer payroll taxes, exceptional items and foreign currency translation charges and/or gains. Unless otherwise noted, today's comments from here will refer to those adjusted numbers. There it is, the fun part is out of the way.

With that, operator, let's open the line to questions.

[Operator Instructions] And our first question comes from Jon Tanwanteng from CJS Securities.

The first one I would ask, if you could, is what are the underlying components of volume and price in your guidance? And if you could go beyond that, perhaps what's your thoughts on net pricing versus inflation after the year?

Yes. So we have a guidance. Thanks for the question, first of all, Ruben speaking here. So our overall guidance is a net sales guidance. We're not breaking it down in terms of volumes and in terms of price, but I can give you a bit more context.

As you've heard this morning also in our prepared remarks, we are guiding for a negative decline. And the main reason for that is the following. Firstly, we're in the midst of our negotiations, our annual negotiation. And this is normal with -- as it is normal with negotiation, we're seeing some delay and disruption and retaliation. We think that's temporary, but that will have an impact on our guidance. Second bit is that big part of our inflation actually is in Fish. We're seeing cost inflation in Fish. So we will be taking pricing on Fish. We expect competition to follow. But as we've seen in the past, there might be a time lag, and that's actually the biggest contributor to our negative guidance. And thirdly, as Dominic shared, this will be a year where we will be driving change, change to make Nomad the better company in terms of driving opportunities, but with change does come disruption.

Now the first 2 points links to your question on volume and price. We do expect price to be a contributor. But also when we talk about price, there's mix in there. We will be continuing to drive potatoes growth. So that will be a bit of an offset there. But we also expect negative volume because of the reasons I mentioned, especially on taking price in Fish and the price lag of our competition.

Understood. Looking beyond '26, how should we expect normalized growth to look like, especially relative to the long-term targets you put out last year, especially if you take all these initiatives to improve your operating structure and efficiency?

So this is Dominic. Thanks for the question. So first of all, to be clear, I fully expect us to return to growth in 2027 and 2028, and I see tremendous growth potential for this business. What I'm not going to do right now is to commit to specific numbers or ranges currently. We're currently in the process of putting together multiyear plans in terms of what we're going to deliver and how we're going to deliver them. And I'm excited to have the chance to share these with you at our Analyst Day later this year. At that time, we'll be much more specific in terms of what we're going to do, what our building blocks are and what our multiyear targets are.

But just to put this in context, a measure of how much I believe in this business and how much Ruben believes in this business is the fact that over the coming weeks, we're both going to be making substantial share purchases in the company. So 2026 is a transition year. It's a year in which we're enacting a lot of change, but the long-term future in our mind looks very positive.

And our next question comes from John Baumgartner from Mizuho.

I wanted to ask, Dominic, in the prepared remarks, there was a reference to, I think, strengthening relationships with retailers and doing better at the point of purchase. And I'm curious, some of the commentary over the past 6 to 9 months from some of the larger retailers in Europe, it seems that they're focusing quite a bit more on fresh food. It seems as though they're focusing more on investing in private label quality as opposed to just, I guess, competing on price. How do you think about -- I guess, how do you see the retail environment changing? Are you seeing retailers managing these categories differently? And how do you think about the reinvestment required to get people back to that fresh food case -- the frozen food case, excuse me?

Yes. So first of all, thanks for the question. So I think the overall behavior of European retailers hasn't changed dramatically over recent months or even the past couple of years. What we do see, though, is a continuation of an existing trend. There's nothing new about retailers wanting to make sure their private label offerings are high quality.

And the focus on fresh has been quite a big theme in Europe as well. Now some of this is retailer driven. Some of this is driven by us as well as a clear leader in frozen. And certainly, we see a few opportunities, a, to strengthen our position at the point of sale and to strengthen our position with retailers, but also to make sure that we're creating excitement and animation at the point of sale. That means making sure that we roll out some of our great innovations, for example, Chicken Shop, which is working well in the U.K. There's no reason why that can't work well across Europe, creating more animation and more excitement.

Secondly, making sure we have more disruptive and exciting positions at the point of sale to drive people into the frozen aisle, but also to make sure when they're there, they have something exciting to look at and focus on. And in terms of investments, there are some areas where this will require investment, and we've factored significant investment within our plan for this year to drive greater strength at the point of sale. But there's some where it won't require great investment. They'll just require more smartness from our side. For example, making sure that our packaging is not only much better than private label, but much better than the competitors as well and much better than we've been before.

And particularly when you're walking through the frozen food aisle, because of the nature of packaging because it's generally not transparent, we have an opportunity to communicate much more on the packaging than would be the case in other categories. So we see a chance to be much more aggressive there than we have been before. This is something we're working on significantly. But in terms of retailer behavior, we're not seeing any dramatic shift versus where retailer behavior has been over recent years.

John, this is Jason. I would just add a comment about the opportunity to shift growth back out of fresh into frozen, at least that was my interpretation. I would just note that the frozen category is actually delivering very robust growth for our retailers. Throughout last year, it grew 2.4% across our overall footprint, which continues to track above overall food. So there are still healthy category tailwinds and step into some markets like Italy category growth of 3%; Germany, 4.5%. So we are fortunate to be in a category that is delivering growth for retail partners and that obviously affords us opportunities.

Okay. Okay. Great. And then just a follow-up on the supply chain side on the fish business. We've seen some reports in Europe about some, I guess, disruptions on the IT platform and some digital systems on illegal fishing catches. Are you seeing any disruptions on the inflow of trade at the ports in Europe at this point? Or is that a nonevent for Nomad?

No, that's not an event for us. If you look at our ingredients and main items, we don't see that for our supply.

There was disruption, John, as you noted, it was reported in the Financial Times. And the programs, the policies that were being put in place that caused those disruptions have been temporarily suspended until they can be resolved. So the disruption was short term in nature and not long enough to impact our business or frankly, we don't believe it impacted the category or any of our competitors either.

Our next question is a follow-up from John Tanwanteng from CJS Securities.

I was just wondering if you could provide more detail on the pricing negotiations and when you expect them to conclude? Number one. And what the -- if that's going to be a rolling thing through the next few quarters or if it's going to be all over before Q2?

So in the case of most European retailers, the price negotiations are happening right now. There are certain exceptions in certain markets and with certain customers. But for the most part -- there are a few exceptions, but for the most part, we expect most of that to be included -- to be concluded during the course of Q1.

Got it. And as a follow-on to that, assuming your competitors do follow you, how do you expect share to change throughout the year? Is there a point where you expect volume or value share to start coming back to you guys as the year progresses?

I mean, obviously, we have no idea what our competitors are doing in terms of pricing, although we monitor it carefully. The key point from our side, of course, we have a fairly meaningful differential in price versus private label. The key point from our side is to make sure we give consumers strong reasons to pay. There are a few ways that we do that. First is through making sure our products are superior. Our products always have been superior, but actually during the course of this year, they're going to be even more superior, for example, with the new coating on fish fingers, which we're rolling out. Secondly, to make sure that our brands are stronger. Again, our brands have always been stronger if you look at our brand equity metrics, but we see opportunities to be much more effective in terms of how we spend our A&P.

And thirdly, it comes back to the point I made a second ago, making sure that at the point of sale, we're noticeably stronger, noticeably more noticeable and noticeably more disruptive than anyone else. And this is what we're going to be focusing on.

Okay. Great. And then last of all, it's good to see you committing to open share repurchases, but I was wondering if there's any change to the corporate capital allocation plan and if repurchases remain the priority for you guys?

So our top priority is to invest in the business to maximize our organic growth potential. And so we're very clear about that. Beyond that, our priority is going to depend on the circumstances. So as you know, buybacks have been a priority for us as we believe that our shares are trading well below their intrinsic value. And we continue to have an appetite to repurchase shares at current prices, but we're going to balance that carefully against our leverage ratio and our broader liquidity needs.

We're also looking forward, M&A could potentially reemerge in the future if various conditions change, for example, if we're less cheap and deals are less expensive. The one thing I can assure you of and the one thing I want to be very clear about is that either way, we and the Board are absolutely intent on allocating capital in ways that we believe maximizes shareholder returns.

[Operator Instructions] And it's showing no additional questions at this time, I would like to turn the floor back over to Dominic Brisby for any closing comments.

So thank you all for joining us today and for your interest in Nomad Foods. I very much look forward to meeting many of you in the days and weeks ahead. Thank you.

And with that, we'll conclude today's question-and-answer session. We do thank you for joining. You may now disconnect your lines.

Greetings, and welcome to the Nomad Foods Third Quarter of 2025 Conference Call. [Operator Instructions] Also, please be aware that today's call is being recorded. I would now like to turn the call over to your host, Jason English, Head of Investor Relations. Please go ahead.

Hello, and welcome to Nomad Foods Third Quarter 2025 Earnings question-and-answer session. We've posted the associated press release, prepared remarks and investor presentation on Nomad Foods website at noomadfoods.com. I hope you've all had a chance to review them. I'm Jason English, Head of Investor Relations and I'm joined by Stefan Descheemaeker, our CEO; Ruben Baldew, our CFO; and sir Martin E. Franklin, our Co-Founder and Co-Chairman.

During this call, we'll make forward-looking statements about performance 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 discussed in our press release, our filings with the SEC and 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 not 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 the 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, foreign currency translation charges, or gains. Unless otherwise noted, today's comments from here will refer to those adjusted numbers.

With that, operator, let's open the line to questions.

[Operator Instructions] Our first question here will come from Andrew Lazar with Barclays.

Welcome to Dominic. Maybe to start, one for you, Martin. Nomad discussed quite a bit at our September conference about medium-term goals, productivity and even said the company expected to deliver positive EBITDA growth in '26. Obviously, since then, Nomad has changed CEOs. And investors, I think, are rightfully asking whether those commitments sort of are still relevant, as oftentimes a new CEO appointment can signal the need for some form of a profit reset. So I guess my question is whether Nomad still stands by those recent comments at this stage.

Thank you for your question. I would say a few things. First of all, these commitments and if you like, internal commitments and goals are ones that are approved and studied by our entire Board, not just our CEO. We made a few commitments that I think are important that are consistent and what we've talked about already in our prepared remarks. Our EUR 200 million multiyear efficiency target, obviously, it still stands and is still actively being worked on, I think, quite successfully. The second, our medium-term goals to compound EBITDA in low single digits. Those goals continue to be in place and you have to excuse me.

And third, accelerating free cash flow growth by delivering EBITDA and also -- and importantly, while reducing exceptional items. So I think all of these goals are in place. Obviously, when we bring in a new CEO, it's our CEO's prerogative to evaluate everything in fairness to Dominic, he's in the company for 3 days. He doesn't take over as CEO until the year-end, but we brought in Dominic because of his growth orientation and in the business. So I'm excited to have him and only see this as being a positive in terms of our metrics of performance.

All right. And then maybe as a follow-up, I know I think private label trends tends to lag branded price increases when Nomad's led with them. And sometimes that's led to some temporary market share weakness in the past. I guess how is Nomad balancing sort of the pricing that you're going to be taking next year with keeping share momentum? And maybe can your higher level of productivity help offset some of the inflation such that maybe more modest pricing can be enacted than otherwise that might have had to have been the case?

Yes. Thank you, Andrew. Let me take that question. So first, the kind of price lag and dynamics. If we look at the last 3 months, last 6 months, last 9 months, we've seen our price index versus competition and our competition is mainly private label slightly go down, so 2%, 3%, which is helpful in the context that we have to take pricing. I do have to say that's the average of an average. So of course, you always have to go a bit more in the detail per country and the specific product, but there has been a bit of catching up of private label. So that's one thing.

I think more importantly, and you were already given half of the answer, is what are we seeing for next year. And we've been clear that the inflation we're seeing most of the pricing we're going to take in quarter 1, '26. Now a couple of things there. The inflation in total is not the same level of inflation. We said it before like 2 years ago. We're looking around cost price inflation of around single digit. And that's probably at this moment what we're looking at.

Second point, also when you compare, and that's also probably the question behind your question on competitiveness and not going too aggressive in terms of pricing and losing share, our RGM capabilities versus 2, 3 years are in a better place, and we said it before, we will do this very surgically. Third point is what you alluded to. We've launched this cost competitiveness program, and Martin also mentioned of EUR 200 million, and we still passionately stand behind it. And by the way, this is not only a forward-looking program. You also heard in our remarks that in quarter 3, but also in quarter 2, we are delivering lower overheads, compensating for inflation even when you correct for the bonus release. So that cost competitiveness program, we will drive forward, and that will help for us to make the right trade-offs in how much should you price versus where actually do we have some offset in savings.

We will also look at pricing, how that links with the renovation. So if we're looking at some renovation with different superiority, different product quality, we try to link that to pricing. So there's also new news both for retailers as well as consumers. And the last remark, just to be clear, I think it's just too early days to really see what the effects are. We are sending out the price as we speak. We have already sent to certain customers in certain countries. There's a bit of difference overall. And we can come back more on that when we release our quarter 4 results in the new year.

And our next question will come from Scott Marks with Jefferies.

I just wanted to follow up on a question that Andrew asked about reiterating some of the medium-term targets. I think as we think about '26, with pricing coming in, Dominic taking over and some of the other dynamics that you've laid out. Just wondering how we should be thinking about '26 preliminarily in terms of maybe cadence of the year or when we should be thinking about some of these newer initiatives kind of that are kicking in.

Ruben, do you want me to take that?

Well, I can do. I build on -- let me just build on what Martin already said. So I think what Martin just said, and it's also your question, Scott, we launched a program strategy in September, which is not only the program of Stefan or of a CEO, it's something endorsed by the entire Board and our whole internal program. What Martin just said, look, we will passionately drive a EUR 200 million competitiveness program. We will see the benefits of cash flow. But it would also be unfair to make a lot of additional comments concretely on '26 with Dominic just coming into the role. But there is a clear focus on the top line recovery and some of the effects we're seeing this year will help also for next year. And overall, we expect results to be better next year than this year. How much that will be completely is more for when we announce our full year results in early next year.

Okay. Appreciate the answer. And then second question from me would be, you called out, obviously, some challenging dynamics in the U.K. with the expectation for some of those to stabilize. As we think towards the Q4 and low end into the guide, if results were to come in, let's say, below what you're anticipating or above what you're anticipating, maybe what would be the reasons for that? How should we be thinking about kind of like the risks and the potential upside risks as well?

Yes. So we've said today, we're confirming, reiterating the guidance, albeit at the low end of the guidance. The low end of the guidance on the top line implies a quarter 4 between minus 1.5% and minus 2%. And let's just take a step back. If we look at our sell-out, our sell-out year-to-date is plus 0.2% -- if you look at our sellout -- and by the way, that's plus 0.2% in a year where we're not happy. It's a year where we've seen the impact of the weather, both as well in our savory business, savory frozen food in Northwestern Europe as well, we're not so happy with the ice cream performance more in quarter 3.

Despite that, our sellout is plus 0.2%. We also said part of that is transitory, and we see the market recovering and also our own sell-out numbers. If you look at the last 3 months, value is plus 0.5%. Our last 3 months volume growth is plus 0.7%. So our sellout is not where we want it to be, but it is positive and actually it's slightly improving. And that you have to see then to an implied guidance of minus 1.5%, minus 2%. Now, what gives us confidence that we're able to hit that. If you look at our difficulty plan, and you've also seen that some of it in the prepared remarks, we improved the product quality of our pizza business in the U.K. That's one.

We started around September with our new campaign in the U.K. It's a bit too early to tell, but the first positive, the first signals are positive. We see distribution increases in Italy, but also in France. So we're now 1/3 of the quarter is now behind us. To your question, what needs to go well, wrong, what could change it. There's a bit where you could look at pricing. We've increased the prices of our chicken range in the U.K. because we said a lot of the pricing will be taken next year. It's a bit depending what competition will do, so that could go up or down a bit, but I think those are probably the big ones.

And our next question will come from John Baumgartner with Mizuho.

I'd like to stick with private label, but I'm curious more about the competitive aspects because market share has always been high, but it hasn't really increased in your categories for the better part of the decade prior to the cost of living crisis. And even now it seems to have sustained momentum even as price inflation has moderated. So I'm curious, what are you seeing from retailers? Is private label competing differently aside from price? Is the innovation more refined? Is the quality improving? Are there differences in non-price factors that you're seeing over the past 24, 36 months? Because it does seem that maybe there's an evolution here from store brands.

Thanks for the question, John. I think it's... When you think about this category, frozen food, it's a very good category. Category is growing nicely year after year. But definitely, private label is a big thing. And I think the learning from my 10 years is basically, you have to be -- I mean, every day, you have to be non-complacent. And you have to make sure that you have the right value equation, which is partly price and partly obviously, renovation, A&P and all the rest of it.

And when you think about, let's say, this year in the U.K., for example, we lost it a bit. And I think exactly what Ruben mentioned in terms of renovation of fish fingers, in terms of renovation of pizza, in terms of some renovations of packaging in peas, for example, that's exactly what we're doing right now, which is to come back with the right value equation. That together obviously with to Ruben's point, which is pricing-wise, we are slightly better compared to where we were a few months ago, a few quarters ago. I think that's where we think we can do a better job.

But definitely, to your point, it's not only pricing, it's the non-pricing peas. And that peas is when I compare '26 with '25, starting now actually, I mean, our program is much better. And let's face it, I think we can be hard with ourselves. I think '25, I don't think we've been good enough in terms of value equation. And that's why we're doing all these renovation in pizza, for example. And what we can see is in the U.K., well, even we've compare ourselves with premium, we are superior with the takeaways. We intend to do the same with the second part, which is thin. We intend to come with the renovation, a superior fish finger, which is a big thing for us.

The fish finger is around 40% of our fish business. which is really big. And it's going to hit the market together with the sizing in Q1. So that's the kind of things we're doing. We're doing things. We're renovating the packaging in peas. Peas we have -- definitely, we have a superior product. But definitely, I don't think it can do better in terms of packaging. So it's -- philosophically, it's very simple. I think our job as branded people, we need to bring additional value compared to private label. And if we don't do that, obviously, we lost our relevance. And that's, I think the program for '25, '26, second half of '25 and definitely '26 is going to be much better than what we have.

Our next question will come from John Tanwanteng with CJS Securities.

I was wondering if you could talk about the decision to keep the majority of your repricing to next year. You've previously demonstrated the ability to go to your retailers and make adjustments ahead of that annual negotiation. Maybe first, what drove that decision this year not to do so? And second, does that give you any incremental leverage or ability to make up a portion of that inflation that you ate in '25 as you talk to your retail next year and within, obviously, the context of end demand elasticity?

Well, let me contextualize a bit this decision. Put yourself back in 2022, where between March and June, every month, we had another $50 million additional COGS. And so whilst all the negotiations, the prenegotiations with all the retailers in Europe were behind us. Well, it was simple. It was force majeure, and we decided to reopen everything. And by the way, we not only reopened it once, but sometimes twice, even 3 times. And we did it, and it worked overall even in countries that are probably a bit more difficult like France and Germany. This time, it's very different. It's not force majeure. It's just an additional COGS that came in the middle of the year and the negotiations were behind us. And quite frankly, we took the commercial decision not to take it this year. I think it would have been a mistake to reopen the negotiation for something which was not considered as a hyperinflation. So that's why we did it. But definitely now, obviously, we need to take a more holistic approach for next year, how much we need to price, also combine also with the renovation program and the whole 360 approach. That's obviously for next year.

Okay. Great. And then second, could you talk a little bit more about some of the cost saving items over the next quarter and year and how they phase in and possibly net out between your cost restructure, the resumption of bonus accruals and then how that nets out with also the savings realizations as well?

Yes. So it links a bit to our overall $200 million program. That $200 million program, vast majority of that sits in supply chain, around $170 million invested in overheads. Overheads, you already see some savings coming through this year, which is really about making the organization simpler. We've done restructuring in some of our functional support areas. We're also looking at non-people costs where we also now started with the indirect procurement team and getting savings out of that one. So that's the first part.

Then if you look at supply chain, we actually have already been delivering quite a bit. It's a step-up in supply chain from EUR 145 million to kind of EUR 180 million, EUR 175 million. The big step-up there is procurement. And it's not that in procurement, we're all tomorrow going to have huge consolidation in the fish supply base. But if we look at elements like ingredients, like packaging, some other ingredient base, we think we can further consolidate our supplier base, and that's the big driver of the savings there. The other part is in our factory footprint, we've lost volumes. So there, we're going to do 3 things. 22% of our volume still sits at CoCopac, and we think we can in-source that. So we'll do that.

Secondly, we see some of our bigger factories where we have an opportunity to rightsize both cost and asset base. And thirdly, and again, it's not only promising. You've seen in our year-to-date results that we announced a closure in one of our smaller factories, which not only helps from a profit perspective, but also from a cash perspective. So we're doing that, and we will continue to do that. How we allocate that to the P&L is exactly linked to the question of Andrew, we're going to be surgical where we think that saving needs to be used not to price for the last piece of inflation and dampen some of the supply chain impact or we say, look, in areas like, for example, peas, where we know we have good quality, we're going to invest more in communication or like what Stefan mentioned, we see in fish thing is that we have an opportunity to improve quality, and we're going to use those savings to improve product quality.

And our next question will come from Steve Powers with Deutsche Bank.

So you've spoken a little bit about this indirectly, but the implied fourth quarter guidance does contemplate an acceleration on a 2-year basis. And I guess you've spoken a little bit about where your confidence comes from that. But I guess just a little bit more clarity or a little bit more color as to how you think you're protected against downside just because the comparison is a bit more difficult.

I understand the question. Maybe it's also good to understand '24 comparator, and it's how far back do you want to go versus '23 comparator because we had the same discussion, I think, last year when we delivered a 3% growth in quarter 4, which is the background of your question. If you look at the year before, actually H1, the year before was minus 2%, and in H2, we had a minus 8%. So you also have to look at the comparator of the comparator, which sounds a bit as we're going back very many years. But in the end, it's looking at run rates, and we knew that the comparison run rate wasn't the strongest.

The second point, which for me is a crucial point, we are not happy with this year. We know we had the destocking. We had not the greatest ice cream season, but our sellout is plus 0.2%. If you look at the last 3 months, it's a plus 0.5% growth in volume plus 0.7%. That is vis-a-vis a guidance implied of minus 1.5%, minus 2%. So there's some call it buffer, but some difference there. And secondly, if you then look at our activity program for the fourth quarter, there is a lot with additional distribution. There's a lot where we're stepping up quality in pizza. There is the mass brand in the U.K., U.K. specifically because we're not happy with the U.K. performance, and that's not something which will be solved in 4 to 12 weeks, but we see stabilization of shares, which also gives confidence. I think, yes, that's probably all the context and color I can give at this moment.

Perfect. Okay. That makes a ton of sense and it's confirming. I guess the other question I wanted to ask about was just around capital allocation priorities. I think your comments over the course of time, especially recently have been pretty consistent about how you plan to deploy capital, obviously, supporting the dividend and prioritizing share repurchases. It seemed like in the prepared remarks that there was even more emphasis on that capital allocation prioritization. And I do note that in the recent refinancing that you executed, I think there was an extra $150 million or so raised with that. So should we infer that, that will be deployed towards buybacks? Or are there other uses of that extra capital?

I'll take this one. It's Martin. I don't know how many companies you're able to buy at 6.5 PE, but I think while we're in that ZIP code, we're going to be buying back our own stock. We see obviously a far higher intrinsic value of the company than the equity markets give us credit for. I think we said that in our prepared remarks. And obviously, the credit markets really do recognize the strength of the company and its cash flow. So we will be continuing to be bought by stock in the past. We're going to continue to buy back stock until we feel that the markets are fairly valuing the company. And obviously, the extra $150 million of cash that we have gives us more liquidity to do so.

And with no remaining questions, I'd like to turn the call back over to Stefan Descheemaeker for...

Well, thank you all for joining us today. This has been my 40th earnings call with the company, and it will be my last. The past 10 years have been dynamic with the good, but also challenging times, but the company has persevered through it all, emerging from each challenge stronger than before. It held true during Brexit, Russia's invasion of Ukraine, the more recent period of hyperinflation, and it will be true again this year. This year was more challenging than we initially expected, but I'm already seeing the companies begin to bounce back. The foundation for improvement has been laid, and I'm excited to see Dominic build upon it as the next CEO. The best is still ahead for Nomad Foods. And with that, thank you, and goodbye.

Hello, and welcome to the prerecorded discussion of Nomad Foods Third Quarter 2025 Earnings Results. We have posted the accompanying press release and investor presentation on Nomad Foods website at nomadfoods.com. I'm Jason English, Head of Investor Relations and I'm joined by Stefan 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 will host an analyst Q&A session today at 8:30 a.m. Eastern. Stefan, 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 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 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 Stefan.

Thank you, Jason. Third quarter results were in line with our recent expectations. And 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, and 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 U.K., have not been as robust as we would like. As a result, our organic sales declined 1.6% 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 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 third quarter 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'm happy to report that this initiative remains on track. This will give the company the 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, 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, Nomad continues to benefit from an advantaged 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.

And 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. Of course, the team aims to grow in line or ahead of the category over time, and there is more work to do, but 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, but we can do better from a value share perspective. The softer value share performance has been driven by the softer results in our 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. U.K. 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.

As you can see from Slide 6, we achieved very robust volume sell-through in measured retail channels in the U.K. 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. The 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, but the good news is these are cyclical headwinds and not structural, and we are already seeing improvement as we cycle them.

You can see from Slide 6, our U.K. retail volume and value sell-through have successfully stabilized in the most recent period. Easing comparison are helping, but 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 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, and the current plan is for this to go even higher next year. Much of these efforts will support our Must Win Battles, including news behind our core fish finger portfolio starting in the first quarter of next year. We also continue to innovate behind our growth platforms.

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 U.K. 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 U.K. and will roll out more broadly next year.

Given these initiatives, recent category acceleration and our stabilization of retail sales in the U.K., 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 our results and outlook in more detail. Ruben?

Thank you, Stefan, and good morning, everyone. Let me get right into the results. As you can see on Slide 8 and 9 for the third quarter, 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 minus 1.1%, 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 Southeastern Europe declined by 7.5% this quarter due primarily to less favorable weather than last year and unrest in Serbia. 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 the P&L. Our adjusted gross margin was modestly higher than quarter 2, 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.

Last month, we began to announce our price increases to the trade. These will take effect in early '26 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. A&P expenses were down double digit in the quarter, largely due to quarterly phasing. Recall that A&P was up double digit in the first quarter and year-to-date, our 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 accrual given year-to-date results. Adjusted EBITDA decreased 14% year-on-year to EUR 143 million, while adjusted EPS fell 11% to EUR 0.49. 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 9 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 9 months of this year, we have repurchased EUR 151 million of shares and paid out EUR 70 million of dividends. This collective return of cash to shareholders through the first 9 months of this year is a 100% increase compared to the first 9 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.

And 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.

Turning to our guidance for '25 on Slide 11. 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 '26. We expect full year organic sales to be near the low end of our flat to minus 2% 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 3% to minus 7% outlook, implying a low single-digit decline in the fourth quarter. And 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 the fourth quarter. 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 productivity momentum is building. 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 Stefan.

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 help 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 savory 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 arm them with the resources to win. We have accomplished a lot over the past decade. We achieved 9 consecutive years of uninterrupted sales and adjusted EBITDA growth through 2024 and now 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. I'm excited to introduce you to Nomad's next CEO, Dominic Brisby, who has joined us as our Group Executive President and will become our next CEO on January 1. He brings a growth-oriented mindset and track record of delivering results. I'm excited to watch him unlock new opportunities at Nomad. Dominic, over to you.

Thank you, Stefan, and hello, everyone. I'm now officially 3 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 are 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. 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. I'm confident that it's going to be a fun ride. And I want to personally thank Stefan for agreeing to work with me as we transition over the next 2 months and then continuing as an engaged Board member beyond the transition.

This company achieved nearly a decade of uninterrupted growth under Stefan'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.

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 Stefan 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 into accelerate our organic growth, and I would like to welcome Dominic Brisby as our new CEO-elect.

As Stefan 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. We were attracted to his growth-oriented mindset and impressive track record of delivering results. And 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 reflected 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. 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, but 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, and it once again is growing low single digits.

You heard Stefan and Dominic talk about the secular tailwinds, and you see it translating into real growth. Second, the company has healthy brands. Our brands have the #1 leading brand equity in our categories in 13 of our 15 markets, and we are the strong #2 in the other two markets. They are strong, and 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. 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 3 months and 12-month periods, and retail value sales are growing in both of those periods. It can be better, but 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. 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, but the lack of pricing has created a headwind. Our price index to private label is now at a 3-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 EUR 200 million efficiency goal over the next 3 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 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, but the foundation is there, and we believe accelerated growth will follow. Our valuation, however, tells me that the equity markets do not believe this. So 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.

And lastly, it is our core mission to have the equity markets appreciate the strength of this company as much as the credit markets do, and 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, and I truly believe now is a great time to be an investor in Nomad Foods. There is enormous upside from here, and Noam and I plan to work with Dominic to ensure that opportunity is realized. Thank you everybody.

All right. Good afternoon, everybody. Welcome back for our fireside chat with Nomad Foods. With us today are CEO, Stefan Descheemaeker; and CFO, Ruben Baldew. Stefan is going to start off with some comments, hand it over to Ruben and then we'll sit down for some questions as well. Over to you, Stefan, and thanks to you both for being here.

Thank you very much, Andrew. So let me start right off the bat with -- I think for those who don't know us, I think, that's what we are. We are the leader in a very good category, which is frozen food in Europe. So we have, let's say, a leading position, great brands. You know some of them, obviously -- like, obviously, Birds Eye, but iglo or Findus are very, very important as well. Then you have probably some brands that you don't know like Ledo, Frikom, which are great brands in countries like Serbia and Croatia. Then we have additional brands like pizza in Goodfella's which is in the U.K.

So that's our position. I will go fast behind it, brand awareness, preference, brand equity. I think we're ticking all the boxes. So that's our position. And again, let me highlight it, it's in a very healthy category.

This is a slide that I loved a lot for 9 years because for 9 years, we've been able to increase sales, EBITDA, EPS every year. So 9 years, but not 10 years. I -- well, as you can imagine, it's frustrating. At the same time, I think we need to go beyond the frustration to understand what it really means.

So let me first start with the first 9 years. It doesn't mean that the first 9 years have been easy. They have not been easy. I think we have to start with a totally strategic change back in 2015. Then we went to Brexit, all the distraction that came up with. Then we had COVID, which definitely challenged our supply chain. Then you had obviously a wall of inflation back in 2022 with the Ukraine war. We priced a lot and all these things. And then also, we had question marks around our supply chain, especially in fish at that time.

So we went through all these things. And I think every time whether it was macro-driven or self-inflicted, which can happen as well, I think we came up with the learnings and then what we can do to be stronger. And so that's why we came, for example, with the Must Win Battles, which is how to make sure that we're not going to be distracted by way too many subcategories where we have no right to win. But definitely, per country, where we think we have this 20%, 30%, 40%, 50% market share, where we can make the difference. That's one of the things.

Second, for example, we've learned through Brexit that we can diversify, obviously, our supply chain. Then in terms of the Ukraine war, well, we've been able to price. But beyond pricing also, we have developed a new muscle, which is the revenue growth management, which now allow us to be much more granular.

And then in terms of supply chain, again, in terms of protein and fish finger and fish, we've been able to move not only from wild fish, but to farm fish as well. So a lot of things we've been able to do during this year and all during these 9 years, which have been 9 years of growth.

This being said, I cannot be satisfied with this year. Yes, we are stabilizing our volume market share. Yes, we've been able to take the right decision in terms of what we should price and what we should not price in terms of COGS. And yes, weather played a big role between the unprecedented heat wave, and Ruben is going to talk about it. And we thought that frozen food would be insulated from that, and it was not. Coming back on that later. And also paradoxically, a poor summer in the Adriatic region compared to 2024. And at the same time, very poor harvest.

But I think that would be wrong and probably not helpful to attribute our disappointing performance this year with the weather only. And I think it would be the wrong learning for the future.

So I think what we've been good at over the last 9 years is every time to take the learnings and then to become stronger. So the learnings from us are very simple, 2 big learnings. One is weather, okay, fine, heat wave was big. We think we can come up for next year with a better assortment, more adapted to heat wave because we have something that can work very well with barbecue or definitely also with for example, let's say, chicken, marinated chicken and all these things. That's something that exists in our assortment that we probably haven't emphasized well enough at this stage because we didn't see it coming with such a magnitude.

At the same time, as I said, we've not been very good. We've been a bit slow this year at accelerating the renovation of some of our key categories like fish fingers, which is EUR 400 million, or pizza. And this next year, definitely it's something that we're going to do much faster. For example, fish finger, the idea was to come up with something like Q3. We're accelerating in the big countries like U.K., Germany, Italy to Q1, which is a big difference. And that's the kind of things we're learning. I think making sure that we are paranoid enough to think, okay, what's happening in the market at the same time.

So that's -- these are the key learnings for us. So again, disappointing year, not 10 years, but 9 years plus this year, but again, a lot of learnings for us for the future, starting in 2026. And with that, we think we're going to be stronger and stronger at the end of the day, as I said, and I started with that with the category that is doing well. That's the performance of the category over the last 10 years, and it's been -- compared to food, it's going to be -- it has been good. And I think our view is how can we be even stronger as a leader in a very healthy category.

Because why is it strong and why is it healthy? Well, for obvious reasons. First, frozen food is convenient. At the same time, it's value for money. Sustainability, however, I doubt that consumers do attribute so much value at this stage. But more importantly, and that's very much in line with our superiority program, it's very good food, it's very tasty food. All our renovations, which is around 10% per annum are going the same way, which how can we make sure we're coming up with something which is tasty, which is really appreciated by the consumers. And the renovation of fish fingers, for example, goes very much in that direction.

Another reason we think this category has a great future is when you compare with the U.S., penetration is still very low. U.K. is halfway as always. But you see a lot of countries where basically it's 60% or even 50% of what the consumption is in the U.S. And as we see -- as we've seen, we have a lot of strong fundamentals going that way. So not going to even Bosnia, but even Italy or something like that, we can see that there is a long runway of potential growth with this category, which is quite different from some of the regions.

At the same time, and again, I think it's something that on top of tasty, nutrition is becoming increasingly important, health is becoming increasingly important. Well, 2/3 of our revenues are coming from basically fish, protein and vegetables, as simple as that. At the same time, and I hate this acronym of non HFSS, which is not high in fat, salt and sugar. Well, something like close to 90% of our food is -- belongs to that category. So we have -- the only difference is probably pizza and ice cream, and that's it. The rest is really healthy, very, very healthy food. And I think in these times, I think it's becoming increasingly important. So a lot of potential tailwinds for us in the category as category leader.

So let me then quickly go through the new Masterbrand advertising campaign, which is something which we're doing right now, which is on air in the U.K. What it does is basically, it's very versatile. It's something that we can use in many other countries with many different categories. We're advertising. We're emphasizing different products depending on obviously, the country. But the idea is obviously how to maximize, obviously, our media money so that we can go faster, but also at a decent price.

[Presentation]

Well, in other countries, you're changing the Birds Eye by Findus or by iglo, you're changing some of the projects by spinach or something, and it's there. And it's available. It's available right now in the U.K. It's going to be the tubes, by the way. It's going to be digital. So there are many different ways to use this. And we think it's a very efficient way to obviously use our media money.

Next one is innovation. Well, I talked a lot about renovation. Renovation is part of what we're doing right now. Basically, it's around 10% of the portfolio is renovated each year. So very much in line with how can we make sure that we're going to have superiority vis-a-vis private label mostly, sometimes brands. But first and foremost, let's face it, in private label is the -- let's say, there, the competition is competition. So that's one thing, so renovation.

But on top of that, innovation is really starting to ramp up. We're starting in 2023 with 4.2%, even lower than '22 quite frankly. And then moving to '24 to something like 5%, we're going to be close to 6% this year and even further.

I think on top of the numbers, what's important as well is we also have -- a huge part of that is coming from what we call lift and launch. In other words, when we have a great category like U.K., in chicken, well, we know that we can develop this chicken in other countries like Italy or Germany. And that's obviously a recipe for lower failure because innovation always comes with a certain proportion of failure. And by doing this, we know that we have a proven success in our country. By adapting, obviously, the recipe here and there, we know that we're going to increase the success rate. That's exactly what we do. It's probably less spectacular, but at the same time, I think it's much more effective.

It doesn't mean that we cannot come up with some really new innovation, very much in line with what the consumers, especially young generation is expecting. So these new projects in terms of ready meals, chicken-based, 30 grams, 35 grams of proteins, the right ingredients, much better than any competition. We're launching it right now in the U.K. It's a new category for us. We're reasonably small in ready meals in the U.K. but we're quite big in countries like Netherlands or Belgium, and that's going to be part of the Must Win Battles. So more to come, but it's really something that we're really proud of. So it's starting basically in September. And then we'll -- obviously, we'll keep you informed of what we are.

The next one is something which is already existing in the U.K., it's Chicken Shop. Basically, it's some sort of fakeaway of basically takeaways and what's existing in the chicken category. We're already very big in the U.K. It's something like EUR 200 million of sales. So it's one of the big categories, but that is making a big difference in terms of subcategories in the U.K. As I said, it's replicating what QSR is doing, but obviously at a fraction of the price, which obviously is something that was really appreciated.

And as I said, chicken, we started from the U.K., and then we saw some countries like Italy, which is our #2 country with great margin, by the way. And we have seen that frozen chicken was very small. And quite frankly, it's quite sleepy. And we've taken this category by, let's say, very quickly. And in 2 years, we've been able to move something like the 7% market share, even less -- we doubled the market share. So we're really taking the market, let's say, the category, which is really what our role is as category leader and brand builders.

So we're doing this. We're using obviously the products coming from the U.K. We're adapting them. And then obviously, we're creating the category, which is what the trade is like, obviously, because it comes with higher margin. We're doing the same in Germany, slightly different because the category is there, but it's very much in the hands of private label. Then we're coming with something which is obviously in terms of quality, it's definitely superior. So a lot of things are happening in chicken. Definitely, we believe that chicken is, I wouldn't say the protein, but it definitely is a protein of the future, and we're well positioned to get it.

Then you know something we haven't talked a lot in the past, which is food service. Food service for us is around 8% of our business. It's doing well. It's mostly in countries like the Nordics. A bit, obviously, also in the Adriatic, Serbia, Croatia, we have a great route to market and a bit of Spain and Portugal as well.

And so we have developed over time a great relationship, especially in Norway with McDonald's. And we've come up with a product which is basically a plant protein nugget. And believe me, I've been through a lot of tasting session in terms of plant protein. I think plant protein, the issue of a lot of time was basically the product is not as good as the "real stuff." This one is great. This one is really great. I'm trying not to be biased. I don't think I am. I think it's a great product.

Starting now in the Nordics. We'll see obviously how it's working with McDonald's. And we also believe that if it's successful with McDonald's in these countries, it will spread to other countries. And at some stage, we may use it, obviously, for own as a retail brand further and further again.

So that's the kind of things we're doing. We also believe that foodservice should grow faster in the future. We have some great plans in some countries like in Southern Europe and in Adriatic, as we said, where we have fantastic route to market that is unparalleled and something that is unique and that I think we should leverage further.

So a lot of things are happening at this stage despite obviously this difficult year, but definitely, it's something that we are building for the future, for '26 and beyond, so that basically this year is going to be a year of learning and then learning to get stronger.

But with that, I will give the word to Ruben that obviously is going to go into more details behind what we mentioned this morning and obviously, more numbers to come.

More numbers. Thank you, Stefan. Let me go into a bit of the market share numbers. As Stefan said, we've been leaning into investing behind our brands, growth platforms, rolling those out across Europe, and the strategy so far is working.

If you take a step back, this company took pricing ahead of the market in '22, '23, and that led to pressure on our market shares. And you see the impact of that and the aftermath of that also in '24, especially in the first of '24. But that pricing did enable us to maintain our gross margin and to allow us to do those investments. And you see the recovery of both value and volume share in H2 '24. And after the decrease in quarter 1 '25, you see that we, in quarter 2, have stabilized value share and are growing volume share. And that is growing volume share in a category which is growing.

Our category has been growing, if you look at the last 10 years, in a positive way. It grew last year. It grew up until P4, so the first 4 months of the year. And then we saw a decline of the growth numbers in the category and decline in P5, in P6 and in P7. We think that it's transitory that's linked to the unusual hot weather and dry weather we've seen especially in Northwestern Europe. And you see some of the evidence of that back in P8, we see the category back in growth. Also I want to be clear that, that P8 number is only for a selected number of regions because we don't have all the market data yet. So that's mainly our Northwestern European business where we see the category recovering.

If we look at our ice cream business for which we don't have market data yet, we do see that in July and August, our own numbers, our own sellout has been slow. And a big part of that is also due to the unrest we've seen on the streets in Serbia with lower sellout in out-of-home. So that gives you a bit of context of where we are today.

We're also reiterating the guidance which we shared with our last earnings. Let's now pivot a little bit more towards the future and forward-looking. Today, we have announced a new set of medium-term targets, and they're centered around 2 elements. The first element is around our EBITDA where in the next 3 years, we target to have 1% to 3% EBITDA CAGR over that whole period. Now that number can vary year-over-year. For example, next year, we're going to have our bonus rebuild. So that could be then on the low end of the range or even slightly below the range. But over the full period, we'll have 1% to 3% CAGR of EBITDA. And clearly, every year, we will target to have positive EBITDA accretion.

Now the second target, and it links to that, combination of EBITDA growth will go in combination with better quality of earnings, us focusing very much on exceptional items, bringing those exceptional items down. And that also in combination with continued strong working capital and CapEx will lead to 15% more free cash flow in the next 3 years compared to '23 to 2025.

Now how are we going to do that? Today, we announced that we will step up our productivity program with around 25%. So a EUR 200 million program for the next 3 years, mainly in supply chain, but also in overheads, and I'll come to speak about that. We're going to use those savings to reinvest in our brands in product quality, in renovation and innovation, in communication, but also in shop floor activities. And by that, we should be able to have competitive positions in our healthy category and have growth.

Now if we go a bit more into those supply chain savings. So as said, we're accelerating those. Over the last 3 years, we've done EUR 145 million to EUR 150 million. In the next 3 years, we're going to do EUR 180 million, and you see the buildup and the big increases in procurement.

And on the next slide, you see the breakdown of the procurement drivers. So we're going to double our procurement savings. And you see the biggest increase there is strategic purchasing. So we clearly already had a centralized procurement organization. But in the next 3 years, we're going to work further on supply reduction, supply rationalization and having more leverage there.

You also see that in the past, we had 4 drivers. Now our total savings project -- program is much more broad-based. So we're also looking at savings, for example, in the customs area.

Second bit is a continuation of the logistics savings. We have been putting savings forward in logistics already. We will continue to do that. One of the elements will be the reduction of the numbers of depots, which we were going to have, 22%, which, by the way, will also help from a cash perspective.

The third last pillar in supply chain is our factories' conversion cost. So on the right, you see the utilization. Our utilization on average is 66%. Some factories are almost at 90%. Some factories are at 25%.

And we're going to do 3 things. Firstly, if you look on the left, at this moment, there is around 20%, 22% of our volume done by co-packers. Some of that co-packed volume, we're going to bring in-house in our own factories and that will give us leverage and cost per unit benefits. The second bit is mainly for the big factories we're going to do cost optimization to make sure we have the right capacity and cost level for the right volume.

And on the right side of the graph of the table, you will see that we will look at network studies. And you've seen, for example, in quarter 2 that we announced the closure of a smaller factory in the Nordic region. So that's the supply chain piece.

Next to that, we will also look at overheads. On the left, you see our overhead evolution. So our overhead up until '24 has gone up 8% every year. But if you take out M&A, it has gone up 5% every year. Now clearly, there was inflation. Clearly, we have been investing in capabilities like revenue growth management and cyber. But in '25, you see that's the year where we actually bring in the absolute amount down, thanks to EUR 20 million of savings, and those savings are actually centered around 2 things.

One is the simplification of the organization. And secondly, it's a rigid approach on all the discretionary spend and having a zero-based budgeting approach. And we will continue to drive that also in the next 3 years. So on the low end, we expect to have around EUR 20 million of savings. On the high end, EUR 35 million saving, and you see it's more front-faced as well.

Now all those savings, we're going to reinvest, as I said, behind product quality, renovation, innovation, but also behind our brands and our communication. And you see that our A&P has gone up in the recent years. We're now around 4% of net sales. But also on the A&P level, we're going to look for efficiency. So in quarter 2 this year, we started with indirect procurement to look at all the nonworking spend in media and to see how we can become more efficient there.

Stefan shared the Masterbrand campaign, which will give us leverage, which allow us to roll out growth platforms and leverage our brands. We're also going to work to make our spend work harder in terms of a centralized media buying with one central partner, and we continue to work on marketing mix modeling.

Now this focus on ROI, this focus on efficiencies, not only from a P&L perspective, it's also from a cash perspective and a quality of earnings perspective. So on the left side, you see the exceptional items we've been booking in the last 3 years, which has been around EUR 70 million on average every year. Going forward, we will halve that by around EUR 35 million. And a big driver of that is a rigid approach and governance on our exceptional items. And clearly, a big driver there is by lowering the spend on our ERP transformation, where we've said before, we will go slower smaller and simpler, focusing on process and data first and then systems to follow. And we think that is a big driver to lower the exceptional items here.

So if you were to sum it all up, we will drive 15% more free cash flow in the next 3 years. One of the driver is the 1% to 3% CAGR over the next 3 years, driven by the step-up in productivity program, which we will reinvest in our brands and the products and therefore, leveraging the healthy category we're in. We will continue to have a disciplined approach around CapEx and working capital by benchmarking, forecast optimization. And I just spoke about halving our exceptional items, have an ROI focus and a slower and smaller transformation program.

And with that, I would like to thank you for your attention and hand it over to questions.

Perfect. All right. You both are so far away.

Yes, you can sit here.

Perfect. All right. Good. We got a couple of minutes for some questions here. Maybe to start off, less than 2 years ago, you established long-term targets, calling for 3% to 4% revenue growth, 5% to 7% EBITDA growth, and 7% to 9% EPS growth. You're now walking away from the revenue and EPS growth and meaningfully lowering your EBITDA growth targets. I guess what's changed to cause this?

Well, it's a great question. I think what we've seen is we were a bit too tight definitely during a very volatile environment. I think since 2022, I think the market has differed and probably you have heard that from many different food and beverage companies.

So I think the cornerstone of our guidance is centered around 2 things. One is we're coming with a bigger savings program and at the same time, lower EBITDA guidance. And you may say it's paradoxical, and we don't think so. We just think that it's creating the space for us to be able, when needed, to reinvest more in the business. I think we've been through a lot of price increases. We're still in a very volatile environment in terms of COGS.

And at the same time, we think -- some here and there, we might need some more advertising intervention and all these things. And that's between these 2 elements, more savings, lower EBITDA guidance. We think we're going to do the right -- we're going to make the right decisions for the business in the long term. And that obviously, at the same time, as we said, in a great category. So what we think is going to help also our top line at some stage. And even if we don't need coming to the guidance, back to our point, I think we're doing the right things for obviously the long-term top line development of this company.

At the same time, we're also coming with free cash flow, an increase -- I mean, quite a substantial increase in terms of free cash flow, which should help also the investors to understand what we're doing. But the cornerstone is really how can we create the space in a very -- in still a volatile environment in a very healthy category so that we're doing the right -- we're taking the right decisions for the business, whether it's sometimes not to take the whole price, sometimes it's more advertising or sometimes it's already going back to the P&L.

Great. Should we view your prior 3% to 4% long-term organic sales growth target as no longer achievable?

No, it doesn't mean that. I think it just means that at this stage, we think it's -- well, first, we're not being very pleased with missing our targets. And so I think what we want to do is also to create, obviously, the right level, so the right expectation so that people are less anxious from that standpoint. But at the same time, we know that is volatile. Sometimes it might go up faster. Sometimes it might be a bit lower. And that's why we want to create obviously the -- let's say, the space to get to obviously the right business model.

Our objective in the long term is -- well, not long term, but midterm is to make sure that for each and every category, in each and every country, we have the right, let's say, model in terms of value, so superiority and also price level vis-a-vis private label. And so the combination of these 2 elements, also with the right investment in terms of A&P, is what we want to go for. And I think with that, we will have, I wouldn't say, never the perfect business because perfection doesn't exist, but it's definitely something that it's going to be the right decision for the long term.

EUR 200 million of cost savings equates to about 35% to 40% of your EBITDA. You're targeting only 1% to 3% EBITDA growth over the next 3 years. So I guess the question is, are these savings real? And if so, where are they going?

Yes. No, it's a fair question. Let's be clear, we said in the presentation that in the past, we've already been delivering savings. So the EUR 200 million is not an incremental number on top. We have been having around EUR 160 million of savings. So if you look at that over the next 3 years, it's a cumulative increase of EUR 40 million, which is a bit less than EUR 15 million per annum. So that's one thing.

We also have to be clear that our competition is not doing anything either, right? So they will also drive savings program. So for us, it's very clear, we have today announced a target on EBITDA and cash, but this is about being competitive. And this is about reinvesting those savings back into product quality to make sure we have the best fish fingers in terms of tastiness, in terms of communication that we have the best pizza out there in terms of renovation and innovation. So it will go back into investment of our business.

You reaffirmed your '25 guidance. But can you maybe shed some light on how you expect the phasing between the third quarter and the fourth quarter to sort of shape out?

Yes. So look, we have a couple of pros and cons in quarter 3. We know we're lapping the disruption we had last year with the ERP transformation, especially clearly in the UKI. So that's helpful. But what we also said very clearly after our quarter 2, and you saw also today that P7 in terms of our savory business, our frozen food business, especially in Northwestern Europe, has been disappointing.

Now I think it would be too easy to say it's all weather, but weather had a big impact, and we're humble enough to say, okay, how can we react on that going forward to how we play better into the weather but that has impacted our sales specifically on our bigger frozen food business in P7.

And then what I said is bit of a -- you can call it a perfect storm, but we have had July and August, which were disappointing so far for our ice cream business in Adriatic for several reasons. There's a bit of unrest on the streets in Serbia, so people don't go out. So that won't help. Now we're not going to give a guidance on quarter 3. We think in quarter 4, we have a strong plan. And overall, we're still in line with that.

To your point, we are reaffirming the guidance.

And I guess on that basis, what gives you the confidence in sort of the visibility that you maybe finally called the full year guidance low enough, given the pattern more recently of sort of missing and guiding lower over the past year.

So look, if you look at this guidance and also taking into account a bit of these pros and cons with the ERP transformation, it's kind of between a plus 1.5% in H2 versus a minus 3%, minus 2.5%. The category year-to-date is despite all the weather and other disruption a 2% category. Our sellout year-to-date is around plus 1.5%. So if you look actually what we're doing underlying, despite all these issues, the guidance is broad enough to make sure we will deliver that.

Company spoke about taking some price actions to cover recent cost inflation. As the brand leader, typically means Nomad leads on price. We saw a couple of years ago, the type of market disruption that in the market, ultimately that some of the share -- that caused some share losses. I guess how do you ensure that you're able to take price this time around while minimizing the impact on elasticity and share? In the vein of being conservative, I guess, would you expect to see the market share losses for some period of time as the pricing gets implemented and private label and others typically sort of lag a bit in catching up?

Well, let me start with -- because I was there basically in '22. We were literally facing a new wall of inflation. And I think we had to take the decisions right away on what do we want to protect. And we decided, we want to protect, obviously, the gross profit and gross margin, so we would be in a position to reinvest. And we took -- basically, we took some sort of wholesale approach. We didn't have the time to elaborate too much. And we didn't have yet at that time, the muscles, the revenue growth management muscle to be able to be more granular.

So that's what we did. We were successful in doing this.

But at some stage, as I said, I think with some of the categories probably might have been maxed out. In the meantime, we have developed this revenue growth management tool, which allows us category by category, country by country, to know, okay, fine, here we can price or here, we can do this or here basically, we will need something like renovation plus price or maybe here basically, I don't think it would be smart to come with additional price or maybe half of the price that would be expected.

And that's why, again, I'm coming back -- circling back to the guidance. That's exactly what we're doing right now, which is to give us the space between, let's say, savings and less demanding, let's say, EBITDA margin to give us the capability by country, by category, to make the right business decisions. And if we don't -- if we can't price everything in some categories or some countries, so be it, but that will be the right business decision.

Maybe lastly on capital allocation. Nomad has delivered really strong free cash flow over the years and has been pretty smart about how you allocate that capital. How do you think about that going forward given the visibility of the free cash flow generation that you've talked about today?

So look, we have been, if you look at H1, doing quite a bit of buybacks, around USD 110 million. We did also 30 million in July. And then on top of that, we have the dividend. Look, we're not committing ourselves to a certain capital allocation, but let's also be clear that with the current valuation, that is probably something we will continue to look at.

Okay. Good. All right. I think that's a great time to cut it off. Please join us over in the breakout session. Thank you, Stefan and Ruben, for being here.