Q2 2026 Nomad Foods Ltd Earnings Call - (Pre-Recorded) Transcript
Key Points
- Successfully executed pricing and productivity initiatives, driving a 3% contribution to organic revenue growth from price/mix and a 110 basis points improvement in adjusted gross margin.
- Resolved retailer disputes in Germany and France, with shelves replenished, promotional plans restored, and market share trends already improving.
- Strengthened the organization by finalizing executive team appointments and restructuring the marketing function to reduce nonworking A&P spend and increase local market accountability.
- Benefited from strong European frozen food category growth, with retail value sales up 2.9% and volume up 1.2% in the most recent 12-week period.
- Maintained strong cash generation with adjusted free cash flow conversion improving to 49% in the first half, supporting dividend payments and debt reduction.
- Refinanced EUR800 million of notes to extend debt maturity profile to 2032, enhancing financial flexibility and reducing near-term refinancing risk.
- Organic revenue declined 2.9% in the quarter, with volume down 5.9% due to retailer disruptions and consumer elasticity pressures.
- Market share declined, with value share down 90 basis points and volume share down 75 basis points in the most recent 12-week period.
- Adjusted EBITDA declined 4.3% in the quarter, impacted by a more than 7% headwind from bonus normalization.
- Adjusted EPS outlook was reduced to EUR1.38-EUR1.53 from EUR1.47-EUR1.62 due to higher interest expense from refinancing and variable rates.
- Inflation is expected to finish towards the higher end of the mid-single-digit range, with most impact in Q4 where hedge coverage is lower.
- Near-term volume trends remain uncertain as competitors respond to pricing actions, with the full benefit of additional pricing expected only in 2027.
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 AM 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.
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