• Net Revenue: Increased by 4.3% to EUR793 million in Q4 2024.
• Organic Growth: Achieved 3.1% organic growth in Q4 2024.
• Volume Growth: Positive for the third consecutive quarter, rising by 4.7% in Q4 2024.
• Gross Margin: Increased by 9% in Q4 2024, with a gross margin of 29.6% for the full year.
• Adjusted EBITDA: Increased by 17.6% in Q4 2024.
• Adjusted EPS: Rose 31% to EUR0.42 in Q4 2024.
• SG&A Expenses: Decreased by 2.6% year-on-year in Q4 2024.
• Free Cash Flow Conversion: Achieved 101% for the full year 2024.
• Shareholder Returns: Returned EUR208 million to shareholders in 2024, a 20% increase from 2023.
• Guidance for 2025: Expected organic sales growth of 1% to 3% and adjusted EBITDA growth of 2% to 4%.
• Dividend Increase: Approved a 13% increase in the quarterly cash dividend to $0.70 per share for Q1 2025.

• Warning! GuruFocus has detected 5 Warning Signs with NOMD.

Release Date: March 03, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Nomad Foods Ltd (NYSE:NOMD) reported strong volume-driven organic sales growth and robust margin expansion in Q4 2024.
• The company has achieved nine consecutive years of sales and adjusted growth, with a focus on both M&A and organic growth.
• Nomad Foods Ltd (NYSE:NOMD) has been included in the Dow Jones Sustainability Europe Index for the fourth consecutive year, highlighting its commitment to sustainability.
• The company has successfully increased its market share in key markets such as Italy and Germany, particularly in the prepared poultry segment.
• Nomad Foods Ltd (NYSE:NOMD) has a strong pipeline of innovation and renovation, with expectations to exceed 5% innovation rate in 2025.

Negative Points

• The company faces challenges with inflation-induced revenue growth nearing an end, requiring a shift in focus to market share expansion and revenue growth management.
• Nomad Foods Ltd (NYSE:NOMD) experienced a negative price mix impact of 1.6% in Q4 2024 due to reinvestment in retail merchandising.
• There is uncertainty regarding the impact of potential tariffs and currency fluctuations on the company's procurement and pricing strategies.
• The company anticipates a modest decline in organic sales in Q1 2025 due to timing dynamics such as the later Easter holiday.
• Nomad Foods Ltd (NYSE:NOMD) continues to face competitive pressure from private labels, which gained market share during the inflationary period.

Q & A Highlights

Q: What is the basis for Nomad Foods' 1% to 3% organic sales growth forecast for 2025? A: Stefan Descheemaeker, CEO, explained that the forecast is based on a low inflation environment with 1% category growth. The company's portfolio, which is two-thirds poultry, fish, and vegetables, is growing well. The commercial flywheel and innovation are contributing to growth, and the company is addressing ERP disruptions experienced in the UK by slowing down the process and applying lessons learned.

Q: How is Nomad Foods managing price/mix dynamics in the first quarter of 2025? A: Ruben Baldew, CFO, stated that while they cannot provide specific guidance on price and volume, the company continues to focus on driving efficiencies and reinvesting in volume. Inflation is lower, and they are not fully hedged yet, but they might see some pricing adjustments if inflation impacts cost prices. The strategy remains to drive efficiencies and reinvest in volume.

Q: How is Nomad Foods balancing innovation and renovation between Must Win Battles and growth platforms? A: Stefan Descheemaeker, CEO, noted that most innovation will focus on Must Win Battles, which constitute about 50% of the business. Growth platforms, although smaller, are growing rapidly and will also receive significant innovation efforts.

Q: What is the status of Nomad Foods' organizational changes and execution improvements? A: Stefan Descheemaeker, CEO, emphasized that organizational improvements are ongoing. The company has simplified its structure significantly, reducing the number of reporting countries and investing in areas like revenue growth management and innovation. The focus is on maintaining cost consciousness to reinvest savings into A&P and innovation.

Q: What are Nomad Foods' strategic priorities regarding acquisitions? A: Stefan Descheemaeker, CEO, stated that the focus remains on the core portfolio, but the company is open to strategic acquisitions that offer synergies, particularly in new subcategories or countries. The gap between sellers and buyers is narrowing, and the company is considering under-the-radar opportunities rather than large, shiny acquisitions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.