Nomad Foods Ltd. ((NOMD)) has held its Q4 earnings call. Read on for the main highlights of the call.
Nomad Foods Ltd. recently held an earnings call that painted a positive picture of the company’s performance and future prospects. The sentiment was upbeat, highlighting a strong finish to 2024 with notable growth in organic sales, market share, and investments in innovation. Despite facing challenges with price/mix and ERP disruptions, the company remains optimistic about its strategic focus on growth platforms and efficiency improvements, setting a promising tone for 2025.
Strong Finish to 2024
Nomad Foods reported impressive volume-driven organic sales growth and robust margin expansion, marking its ninth consecutive year of sales and adjusted EBITDA growth. This strong performance underscores the company’s resilience and ability to sustain growth over the long term.
Market Share and Volume Growth
The company achieved market share growth in the last two quarters of 2024, with three consecutive quarters of volume growth. This positive trend line indicates that Nomad Foods is effectively capturing market demand and expanding its footprint in the industry.
Innovation and Renovation Investment
Investment in innovation increased from 4.2% in 2023 to 4.8% in 2024, with expectations to exceed 5% in 2025. The renewal rate of sales from new or refreshed products is projected to double in 2025, highlighting the company’s commitment to staying ahead in product development.
Growth Platforms Success
Organic sales for growth platforms grew by 16% in 2024 and 40% in Q4, with significant growth in the poultry and potatoes segments. This success demonstrates the effectiveness of Nomad Foods’ strategic focus on key growth areas.
Financial Performance
Adjusted EPS rose 31% to EUR0.42 in Q4, with a full-year EPS near the high end of guidance. The company’s free cash flow conversion of 101% exceeded expectations, showcasing strong financial health and operational efficiency.
Price/Mix Challenges
Price/mix posed a negative 1.6% offset to volume growth in Q4 as the company reinvested some of its margin upsides. This challenge reflects the balancing act between maintaining competitive pricing and achieving growth.
ERP System Disruption
ERP disruption in the UK affected Q3 2024 performance, prompting plans to slow down the ERP process to avoid future disruptions. This cautious approach aims to ensure smoother operations moving forward.
Forward-Looking Guidance
During the earnings call, CEO Stefan Descheemaeker outlined strategic plans for 2025, anticipating 1% to 3% organic sales growth and 2% to 4% adjusted EBITDA growth. The company raised its adjusted EPS guidance to EUR1.85 to EUR1.89 and plans to continue investing in advertising and product innovation. Nomad Foods expects to achieve a free cash flow conversion of at least 90%, focusing on shareholder value through dividends and potential share repurchases.
In summary, Nomad Foods Ltd.’s earnings call conveyed an optimistic outlook, with strong performance metrics and strategic initiatives setting the stage for continued success. The company’s focus on innovation, market share growth, and financial health positions it well for the future, despite some operational challenges.