Nomad Foods (NYSE:NOMD) maintained its outlook as it prepares for higher fish costs and a second off-cycle price increase in the fourth quarter, executives said during the company’s third-quarter earnings question-and-answer session.
Chief Financial Officer Ruben Baldew said the range of potential fourth-quarter outcomes depends largely on how customers respond to the price increase and how that response affects shipment patterns. An analyst noted during the call that the company had returned to organic growth in the third quarter, though executives did not provide a growth rate during the session.
Baldew also reiterated the company’s assumptions for 2027, including approximately 7% gross inflation and savings of about 3%, leaving net inflation of around 4%. The company plans to address those costs through a mix of pricing and volume initiatives, depending on market opportunities.
Fourth-quarter pricing and costs
Baldew identified additional inflation, primarily in fish, as the main factor weighing on fourth-quarter EBITDA. Despite those costs, he said the company was pleased to maintain its EBITDA guidance.
“The main driver of the range in the fourth quarter is the customer response to our second off-cycle price increase and the associated variability in our shipment patterns,” Baldew said.
He added that any upside relative to the company’s plan would be reinvested in areas including incentive compensation, the business and long-term growth. Baldew said those factors appeared to be reflected in market expectations and that the company did not see a need to change its outlook.
For 2027, Baldew said Nomad’s approach to inflation would be “quite surgical,” with price increases in some cases and a greater emphasis on volume where opportunities arise. He also reaffirmed the company’s EBITDA guidance and its plans to improve cash flow by reducing non-recurring costs.
Retail cyberattacks and discounter talks
Chief Executive Officer Dominic Brisby said cyberattacks affecting supermarket freezer systems in France on Oct. 11 and 12, followed by incidents involving smaller retailers in Belgium and other European markets, temporarily reduced frozen-food availability and retail sales.
Brisby said subsequent replenishment orders more than offset the immediate disruption. The overall effect on Nomad’s business was modest and slightly positive, but not material, he said.
The company has not experienced a cyber incident in its own operations or supply chain to date, Brisby said. Nomad is working with retail partners, logistics providers and suppliers to strengthen resilience, while using its manufacturing and supply network to help restore product availability.
Asked about efforts to expand into European discounters, Brisby said discussions were continuing and that the company was reasonably positive about their progress. He did not announce additional customer wins.
Marketing and cost reductions
Brisby said Nomad had reduced advertising and promotional spending on “non-working” activities that consumers do not see, while maintaining a healthy level of consumer-facing spending during the year and the quarter. He also said the company had worked to make its prices competitive, adding that marketing has limited impact when prices are wrong.
Baldew said indirect costs declined after accounting for the year-over-year effect of bonus and bonus-rebuild expenses. Savings initiatives include changes to central overhead, local organizations and marketing, he said.
The CFO also pointed to a small factory closure as part of the company’s efforts to reduce costs beyond indirect spending. Non-recurring costs were less than €4 million in the quarter, he said, although he estimated an underlying level of approximately €6.5 million to €7 million after an unspecified benefit.
About Nomad Foods (NYSE:NOMD)
Nomad Foods is a frozen-food company focused on the European market. The company sells branded frozen meals and ingredients, including frozen fish, vegetables, poultry, potato products, pizza and plant-based foods. Its products are distributed through grocery retailers and other food channels across multiple European countries.
Nomad Foods’ portfolio includes well-known brands such as Birds Eye, Findus, iglo, Goodfella’s, Aunt Bessie’s and Green Cuisine. The brands offer products ranging from fish fingers, frozen vegetables and ready meals to frozen pizza, potato specialties and meat-free alternatives.
The company was formed in 2014 following the acquisition of the Iglo Group and expanded through subsequent acquisitions, including Findus operations in several European markets, Goodfella’s in 2018 and Aunt Bessie’s in 2020.
