Nomad Foods (NOMD) Q2 2024 earnings summary

Executive summary

• Achieved positive volume growth of 1.6% in Q2 2024, marking the first increase since Q3 2021 and supporting the eighth consecutive quarter of organic sales growth.

• Net sales increased 1.1% year-over-year to €753 million, with organic growth of 0.5% and a 0.6% benefit from Forex.

• Gross margin expanded by 270 basis points to 30.9%, driven by supply chain productivity and favorable product mix.

• Adjusted EBITDA grew 5.3% to €139 million and adjusted EPS rose 10% to €0.44, despite a 15% increase in operating expenses due to higher A&P investment.

• Full-year 2024 guidance for revenue growth of 3%-4%, adjusted EBITDA growth of 4%-6%, and adjusted EPS of €1.75-€1.80 was reiterated.

Financial highlights

• Q2 2024 gross profit increased nearly 11% to €233 million, with gross margin up to 30.9% and margin gains funding a 30% year-on-year increase in A&P spend.

• Adjusted net income up 5% year-over-year; adjusted free cash flow at €42 million year-to-date, down due to higher working capital and cash interest.

• Adjusted operating expenses rose 15.4% to €117 million due to higher A&P and capability investments.

• Returned €64 million to shareholders year-to-date, including €45 million via newly established dividend.

• For H1 2024, revenue grew 1.1% to €1,537 million, gross profit rose 2.2% to €444 million, and adjusted EBITDA declined 6.1% to €262 million.

Outlook and guidance

• Reiterated full-year guidance: organic net revenue growth of 3%-4%, adjusted EBITDA growth of 4%-6%, and adjusted EPS of €1.75-€1.80 per share (or $1.89-$1.94), implying 9%-12% year-over-year growth.

• H2 expected to accelerate, cycling easier comps and benefiting from increased investment in innovation and distribution.

• On track for 90%-95% adjusted free cash flow conversion for the year.