“we’re Going To Be Stronger” – Nomad Foods Sets Out Stall After Choppy 2025

The European frozen-foods group believes it tin put “learnings” from a challenging fewer months to bully use.

Birds Eye stiff breaded haddock connected waste successful Pontypridd, Wales, 30 September 2024. Credit: Badger Castle/Shutterstock.com

Nomad Foods is location to Captain Birdseye, 1 of nan astir celebrated advertizing characters successful UK food. For years, nan European frozen-foods group down brands for illustration Birds Eye and Iglo has enjoyed immoderate beautiful soft sailing, pinch income and net increasing annually since its statement successful mid-2015.

However, 2025 has thrown up immoderate choppy waters and, speaking astatine an investor convention successful nan US this week, Nomad Foods’ elder guidance group retired really they scheme to get nan business connected a much moreover keel.

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“For 9 years, we’ve been capable to summation sales, EBITDA, EPS each year,” Nomad Foods CEO Stéfan Descheemaeker told nan Barclays Global Consumer Staples convention successful Boston connected Wednesday (3 September). “But not 10 years. As you tin imagine, it’s frustrating.”

As Descheemaeker sought to underline to nan assemblage successful Boston, nan first 9 years of Nomad Foods’ beingness haven’t been “easy” (he listed immoderate of nan macro challenges that person beset nan business and, successful immoderate ways, nan full assemblage successful Europe: Brexit, Covid-19, supply-chain upheaval, ostentation sparked by Russia’s penetration of Ukraine).

But nan first motion that Nomad Foods mightiness this twelvemonth extremity its grounds of income and net maturation came successful May erstwhile nan Findus shaper lowered its forecasts for yearly gross and adjusted EBITDA. Announcing its first-quarter results, nan institution cautioned its gross and adjusted EBITDA mightiness now travel successful level year-on-year.

In August, Nomad Foods cut its gross and adjusted EBITDA forecasts for 2025 again. The fish-fingers and stiff chickenhearted shaper warned gross whitethorn beryllium level but could autumn 2%. The business was much definite connected its adjusted EBITDA, guiding to a diminution of 3-7%.

“This twelvemonth is proving to beryllium much challenging than expected,” Descheemaeker said astatine nan time. “Record-setting lukewarm upwind crossed galore occidental European markets has disrupted user behaviour, starring to changes successful retailer merchandising strategies and contributing to measurement declines, peculiarly wrong our savoury stiff categories.”

In Boston this week, nan Nomad Foods main again noted nan upwind had deed parts of nan frozen-foods class successful Europe and nan company’s sales. But, rightly, he added: “I think that it would beryllium incorrect and astir apt not adjuvant to property our disappointing capacity this twelvemonth pinch nan upwind only.”

Descheemaeker and CFO Ruben Baldew ran done really nan group plans to boost income and bolster earnings. Nomad Foods will prime up its efforts connected innovation, Descheemaeker said. The company’s “renovation” of products – improving recipes – takes successful astir 10% of its portfolio each twelvemonth but nan institution wants to do much connected merchandise launches. “Innovation is really starting to ramp up,” Descheemaeker said.

Nomad Foods, which operates crossed Europe, will look to return products that person had occurrence successful 1 marketplace into caller territories, he added, pointing to nan frozen-chicken products nan institution sells successful nan UK.

“We cognize that we tin create this chickenhearted successful different countries for illustration Italy aliases Germany. That’s evidently a look for little nonaccomplishment because invention ever comes pinch a definite proportionality of failure,” he said. “By doing this, we cognize that we person a proven occurrence successful a state [and] by adapting, obviously, nan look present and there, we cognize that we’re going to summation nan occurrence rate.”

Nomad Foods generates nan bulk of its income done market retail, pinch much than 90% of its business via that channel. Descheemaeker said he saw opportunities successful nan foodservice market, citing nan caller motorboat of a plant-based nugget pinch McDonald’s successful Nordic markets.

“We besides judge that, if it’s successful pinch McDonald’s successful these countries, it will dispersed to different countries,” he said. “We besides judge that foodservice should turn faster successful nan future. We person immoderate awesome plans successful immoderate countries, for illustration successful confederate Europe and successful nan Adriatics, wherever we person a awesome way to marketplace that is unparalleled and thing that is unsocial and that we I deliberation we should leverage further.”

Nomad Foods looks to nett much savings

The push connected invention will beryllium successful portion funded by intensified efforts connected costs. Ahead of nan Barclays conference, nan institution group retired plans for “accelerated ratio savings” from 2026 to 2028. Nomad Foods pinned nan fig astatine €200m and said it was eyeing savings successful procurement, logistics and overheads.

Baldew underlined nan institution wasn’t looking for €200m of “incremental” savings, noting it had already recovered €160m successful caller years. “If you look astatine that complete nan adjacent 3 years, it’s a cumulative summation of €40m, which is simply a spot little than €15m per annum,” he said.

Nonetheless, Baldew said Nomad Foods’ moves connected costs were “about being competitive” and would thief nan institution re-invest successful different areas of nan business.

“We’re going to usage those savings to reinvest successful our brands, successful merchandise quality, successful renovation, successful innovation, successful connection but besides successful shop-floor activities,” he said. “By [doing] that, we should beryllium capable to person competitory positions successful our patient class and person growth.”

Of peculiar liking to suppliers will beryllium Nomad Foods plans to double its savings from procurement. “We already had nan centralised procurement organisation but, successful nan adjacent 3 years, we’re going to activity further connected supplier reduction, supplier rationalisation and having much leverage there,” Baldew added.

The company’s manufacturing web will besides beryllium a focus. Nomad Foods unopen a mill successful nan Nordic regions successful nan 2nd 4th and, while Baldew didn’t specify if much closures were successful nan offing, it was clear nan group is scrutinising its accumulation footprint, including weighing up each its plants.

“Mainly for nan large factories, we’re going to do costs optimisation to make judge we person nan correct capacity and costs level for nan correct volume,” Baldew said.

He besides noted that astir a 5th of Nomad Foods’ output is from co-packers. The institution wants to bring immoderate of that in-house to make amended usage of its ain sites.

Overheads, meanwhile, will beryllium examined. Up to 2024, Nomad Foods’ overheads roseate 8% a twelvemonth (and by 5% excluding M&A). This year, overheads person started to travel down, though really Nomad Foods has achieved that whitethorn raise eyebrows. “Those savings are really centred astir 2 things,” Baldew said. One is simply a simplification of nan organisation and, secondly, it’s a rigid attack connected each nan discretionary walk and having a zero-based budgeting approach. We will proceed to thrust that besides successful nan adjacent 3 years.”

Changes to medium-term targets

Alongside nan announcement connected savings, Nomad Foods besides said it is now targeting “compound yearly adjusted EBITDA growth” of 1-3% complete nan 2026 to 2028 period. Two years ago, nan institution had group a medium-term target for yearly adjusted EBITDA maturation of 5-7%.

The group made nary mention of caller medium-term targets for gross and EPS. Previously, they had been group astatine 3-4% for gross and 7-9% for adjusted EPS.

Descheemaeker was asked if investors should position nan 3-4% gross nonsubjective arsenic nary longer achievable.

“No, it doesn’t mean that,” Descheemaeker said. “I deliberation it conscionable intends that astatine this stage, first, we’re not very pleased pinch missing our targets. What we want to do is besides to create, obviously, nan correct anticipation truthful that group are little anxious from that standpoint.

“But, astatine nan aforesaid time, we cognize that it’s volatile. Sometimes it mightiness spell up faster. Sometimes it mightiness beryllium a spot lower. That’s why we want to create, obviously, nan – let’s opportunity – abstraction to get to evidently nan correct business model.”

It’s clear Nomad Foods is moving difficult to do that.