Greetings and welcome to the Nomad Foods second quarter 2025 question and answer session. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Jason English, Head of Investor Relations. Thank you. You may now begin. Good morning, everyone, and thank you for joining us today. I hope everyone has had the chance to read our press release and listen to our prerecorded management remarks, both of which are available on our website. In addition, we have posted a transcript of the prerecorded remarks and the accompanying presentation. At the conclusion of today's live Q&A session, we'll also post an audio replay of this call. Please note that during today's Q&A session, we may make forward-looking statements that are based on our view of the company's prospects, expectations, and intentions at this time. Actual results may differ due to risk and uncertainties, which are discussed in our press release, our filings for the SEC, and in our investor presentation, which includes cautionary language. We will also discuss non-IFRS financial measures during the call today. These non-IFRS financial measures should not be considered a replacement for and should be read together with IFRS results. Users can find the IFRS to non-IFRS reconciliations within our earnings release and the appendices at the end of the slide presentation available on our website. Please note that certain financial information within this presentation represents adjusted figures. All adjusted figures have been adjusted primarily for, when applicable, share-based payment expenses and related employer payroll taxes, exceptional items, and foreign currency translation charges or gains. Unless otherwise noted, comments from here will refer to those adjusted numbers. Joining me today are Nomad Foods CEO Stéfan Descheemaeker and CFO Ruben Baldew. Now, let's get started with our first question. Operator. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Andrew Lazar with Barclays. Please go ahead. Great, thanks so much. Thanks again to you guys for putting out the published prepared remarks. That's actually very helpful to us in sort of getting through the results pretty quickly. Maybe Stéfan, just as a starting point, I guess what gives you the confidence and sort of the visibility that you've finally called the full-year guidance low enough, given the pattern more recently of missing and guiding lower over the past year? Thanks for that, Andrew. It's a great question. Obviously, it's a very important question for us. Let me stand back for just a second. You know, I've been with the company for 10 years since we started. Quite frankly, to your point, I don't think we've been accustomed to this. It's really something that we need to take into consideration, the guidance. The second point is, at the same time, over the last 10 years, with all the disruptions we've been through, I think we've been very good at learning from all these events. Let me first start with what I think is self-inflicted, and I'm really taking this on me. I think we were too optimistic with our ERP implementation. That's the first piece. The second level, we also had an excess inventory in Q1 that, quite frankly, we did a poor job at anticipating it. Quite frankly, I'm taking these two points with me. I think the lessons, though, is in terms of our ERP, we're slowing down the program just to make sure that we're taking the right level in terms of risk digestion of all the things we're doing, which is absolutely fundamental. I'm very pleased with what the team is doing at this stage. In terms of excess inventory and all these things between selling and sell-out, quite frankly, what I've seen is the team is doing a much, much, much better job at reading the visibility between both and the dynamics between both, especially during these volatile times. That's the first piece, which is really, quite frankly, I would call self-inflicted. The second piece is, especially in Q2, is the weather. For your information, June in Western Europe was the hottest June on record in the region. Some differences, obviously, Nordics was a bit milder. If you take countries like France, the UK, Belgium, the numbers, especially between mid-June to mid-July, you have numbers around - 5%, - 6%, - 7% for the market as such, where quite frankly we would have expected to be in the region of 1.5%- 2%. At the same time, we've been able to regain market, to gain market share, especially in volume, which is good. Despite the fact that our categories are, especially fish and vegetables, under trading, especially during the hot weather. That's not enough. For us, also, the learning here is, okay, what can we do to make sure that we have a better summer assortment? Because basically, we don't know whether it's going to be a pattern for the future, but we need to be ready and to hedge our bets for the future for 2023 to 2026 and beyond. We have the teams preparing things in terms of potatoes, in terms of, let's say, natural fish, and other things that we mentioned later. I have to make sure that basically we have either, obviously, an additional opportunity for the future, which we always did, and obviously also how to hedge our bets versus what can happen in the future. We don't know that piece. Now, obviously, with all these things and with all this volatility, yes, we have decided to take a wider range to take into account what potential risk, obviously, may mostly be around additional continuing heatwave. We haven't seen it yet. Let's face it, it's interesting to see that the first part of July was very hot, and we've seen the numbers immediately in terms of sell-out. The second half was better, was better from our standpoint, obviously, which means milder, milder weather. We've seen immediately the correlation between the two. This is why we're taking this range. Obviously, if there is no additional heatwave or something similar, obviously, we're not going to touch the lower end. That's why we took a wider range. I think it was not an easy decision. We understand that. At the same time, I definitely believe it's the right decision. Right. Okay. Thanks for that. Maybe as a follow-up, the midpoint of organic growth guidance for the year would point to about 50 basis points of organic sales growth in the second half. If 3Q ultimately returns to some growth, as I think you hope it does, that would suggest, I guess, not a whole lot of improvement between 3Q and 4Q. Am I thinking about that the right way? I would think maybe some of the sell-out demand kind of builds sequentially as you go through the year. I'm just curious on your thoughts there. Thank you so much. Yeah, thanks, Andrew. Let me take that. You're right. Let me also, for the sake of the benefit for the whole group, our range between 0 and -2 assumes an H2 between a +2.5 and a -1.5. Indeed, the midpoint is +0.5. You're right that normally speaking, we should see growth in quarter three, but also to be clear on what Stéfan just said, and I know the optics of the weather, just some data points. We've seen the market in quarter two in volume -1. With Easter, we expect that to be +1, +1.5, including the Easter fest. We don't have all the sell-out data yet for all markets, but for the market for which we have it, from mid-June to mid-July, we've seen market at -5.5. We've seen that, to Stéfan's point, immediately reflected also in our sales, especially in Northwest Europe and big countries for us like the U.K. That will have a drag on quarter three. We're not committing to growth in quarter three. It depends on what Stéfan just said, what are we seeing through the course of the quarter. Yes. If there's growth in quarter three, your mathematics are right, and the midpoint assumes a bit more of a cooling assumption for quarter four. We're also very conscious that we've now lowered the guidance two times, and we will avoid that happening again. Great. Thanks so much. Our next question comes from Steve Powers with Deutsche Bank. Please go ahead. Great. Thank you very much. Ruben, just to confirm, on your 3Q commentary, you fully understand the marketplace trends into the quarter and the dynamics, but you are lapping the ERP supply disruption of a year ago. I think that was about a 2.5 point negative to last year's sales versus consumption. Just want to clarify that and make sure that comparison still factors into your outlook. Yeah, that's correct. We did indeed have the ERP lag, which was last year in August and September, and that was 2.5%. The numbers I just quoted, the 2.5% on the top end of the range and the -1.5% on the bottom end of the range, actually underlying are a bit worse. You roughly talk about the top end around 1.5% and the bottom end around -2.5%. We'll have the favorable comparator. Although, again, I have to repeat that what we've seen in July so far was a weak start, especially in the U.K. Okay. Understood. Thank you. The broader question I had, maybe you could talk a little bit more about the inflationary pressures you've seen build of late and how those are likely to flow through 2025 and then carry over into 2026. I know it's very early, but just any kind of round numbers in terms of the magnitude of pricing that you would be considering in 2026 at this point, assuming the trends hold. Thank you. Yeah, thank you for asking that question. It's an important question. We started the year, and we set it also up for quite long remarks with an inflation assumption of around 2.5%. We saw that going into 4% last quarter. This quarter, we're looking at a full-year inflation of around 4.5%. The additional increase we've seen from 4%- 4.5% is, again, and I know the optics, but if you look at the weather, to Stéfan's point, it has been the hottest summer in Western Europe since ever. The last one was 2003. It's not only the temperature, it's also the dry and the lack of rain. The U.K. has seen 70% more sunshine, which means we've had the worst crop for some one piece. That is the main reason why our inflation assumption has moved from 4%- 4.5%. That's also the main reason why you also see the gross margin drop in quarter two. Now, going forward, as we said last time, we will take some price where we are able to do that. For example, we will take some price in the U.K. If you take a step back, we have annual negotiation cycles, which are mainly in quarter one. We don't see this as a reason to go off cycle. A lot of the recovery of inflation we have seen coming through in this year, and as before, we talked about chicken, and now we see some of the crops will have to be taken into pricing for next year. Your question is, what then about next year? Let's be clear. Our commitment now is, and our focus now is making sure we deliver our commitments for 2025. We set the right foundation and fundament for 2026. Yes, we will take pricing to recover in 2026, but there are also some other boots and tapes, like for example, also some bonus releases, which we had this year, which will be a bit of a headwind next year. Okay, thank you very much. I'll pass it on. Appreciate it. Our next question comes from Scott Marks with Jefferies. Please go ahead. Hey, good morning. Thanks so much for taking our questions. First thing I wanted to ask you about, you've made some comments in the prepared remarks just about some of the SG&A savings and, you know, targeted overhead expense reductions. Maybe just wondering if you can kind of share any more details around some of those initiatives and how we should be thinking about those for the remainder of this year and then into next year. Yeah, thank you. We have indeed seen, and you've seen it also in a presentation, reduction in SG&A. Let's also be clear that is driven predominantly by overhead, so not by A&P, but by overhead. Yes, there is an impact of some bonus releases, and I don't want to go into detail of how much is what, but there's a substantial saving also because of our focus on cost competitiveness and our focus on bringing interest down after inflation, so compensating for inflation. That also links to the previous question in terms of pricing and recovery. Yes, we will be taking pricing, but we're also conscious that we need to be cost competitive and don't want to have overpricing debts versus our competition. Some of the savings we have been driving, like reductions in some of our support functions, some synergies we saw in some go-to-market organizations, will continue into 2026 as well. Understood. Thanks for that. Next question I wanted to ask about is just around some of the innovations. There was some commentary around, you know, in 2024, I think you said about 10% of sales were from innovation and renovation. This year, that's expected to nearly double. Just wondering if you can kind of share some thoughts around the innovation pipeline, and kind of how you see that shaping up for the rest of this year as well as next year. Thanks. To your point, let me split it between these two pieces. This year, obviously, it's going to be higher than that in a combination of renovation and innovation. Both are equally important for us because renovation is absolutely fundamental in terms of making sure that we keep, we increase our security vis-à-vis our main competitors, i.e., private label. That's a key piece. We have a very, very aggressive program in terms of making sure that, obviously, in terms, you know, that we would be superior or equal, but definitely superior in terms of our muscle battle. That's the first piece. That program is going to get more to come, obviously, in the coming quarters. In terms of innovation, yes, the number, little by little, is increasing. We win the reason of now 6.5%, which is a big difference compared to where we were, you know, in 2022, 2023, which had gone down big time, especially during that time where price was the only thing that mattered for the retailers and the consumers. In terms of innovation, you've seen that the series of things that we're doing in terms of chicken, for example, in terms of fish, a lot of innovation in terms of snacking, which is a new area for us. We were very much focused on family meal time. I think there is a great opportunity for us in frozen food to go with the snacking. We're really starting this, especially in Italy with fish strips and other things like that the same way. A lot of things, quite frankly, at this stage, protein bowls is great as well. It's something that we're going to launch now in the next few weeks in the U.K., in the Netherlands, in Belgium. The countries are very excited by that. If it's successful, and we think it's going to be successful, obviously, more to come in the coming years because, obviously, also something we're doing well and better and better is the move from one country to another through a lease and launch. If it's successful in one country, obviously, we can go to other countries. That program, it took a bit of time. I think it was a bit of, we were so focused on the muscle battle that basically, where the rigor was not probably great in terms of innovation, it has changed. It is changing. We have the muscle battle. We have the growth platforms in the new countries. That is making a difference. Understood. We'll pass it on. Thanks so much. Our next question comes from John Baumgartner with Mizuho. Please go ahead. Good morning. Thanks for the question. First off, Ruben, just coming back to the comments on productivity, I'm wondering if you can discuss some of the newer initiatives. I think that this supply chain optimization program and the facility closure in Sweden, can you elaborate a bit on this plan? What else is involved in the program, and how should we think about the structural benefits? Yes. Thank you for asking this question. What we need now is a closure in a small factory in the Nordics. We've discussed some other ones and another discussion for our overall network. We actually see a program on a couple of axes. One is procurement, where I think we've already made great steps, but there's more to come, which we can also drive in the future years. The second bit is on network, where we have to look at our total complexity of our network, the number of sites as well within a site, what we can do to optimize there. I've not been personally here in the role. As you've also heard in our prepared remarks, together with Stéfan, together with our exec, with our Chief Supply Chain Officer, we're embarking on a program to drive more cost competitive out of those programs. We're keen to share more with you in the second half of the year. Okay. Coming back to innovation, can you walk through the Future Foods Lab you've established? What categories are you focusing on there? Do you plan on taking ownership interest in any of the partners? Is it just more of a commercialization relationship? Any more detail that would be helpful. Thank you. Yeah, it's very interesting. It's obviously early in the game for us, but we've indeed, we're learning how to partner with, actually, I would put it that way. We were very much focused on ourselves for many years. I think we have evolved and we're learning now how to deal with new guys as a startup. We have some more to come in food service in the coming months. We have a first example. I will spare you the details as I said because it feels very, very highly confidential. Definitely, it's the kind of things we've learned a lot with the startup. We're going to start with them in some countries where food service is present for us. You know that food service is big for us in Southeastern Europe, in Switzerland, in the Nordics, and also in Spain and Portugal. We're going to start with that, more to come in others. I don't want to come with a name right now because it's still confidential. Definitely, it's going to come in the coming months. More to come with others, we're also developing, by the way, pilot plans, which also is going to help us and our partners to move faster in terms of innovation. I think the speed at which innovation is taking place is absolutely critical. With this kind of steps, we also can move faster and then more obviously be closer to the market. There will be other things. This portal is very interesting. We've received a lot of attention from a lot of people. Now we're in the process, obviously, of selecting the guys with whom we want to work. It's very promising. Thank you. Again, if you have a question, please press star then one. Our next question comes from Jon Tanwanteng with CJS Securities. Please go ahead. Hi, good morning. Thank you for taking my questions. I was wondering if you could talk about the portfolio and maybe this is a longer-term question, just how you might be dealing with hotter weather on average, structurally versus the true outliers like you saw in Q2. We've seen more heatwaves in recent years, and if that's something you need to prepare for, either in the portfolio, I don't know if it's moving ice cream out of the Adriatics or doing something with your crops and supply chain to position for that. Just help us understand the long-term positioning and how you might be dealing with that, if at all. Thank you. You know, John, I think it's not only how to move up to these are the challenges we experienced this year. It's also the fact that year in, year out, even with "the normal weather," structurally, frozen food is lower in the summer than in the spring or winter, obviously, or later in the year. I think this combination of lower, plus obviously the heatwave, it's something that we want to tackle more seriously. The difference compared to many years ago when I think the teams here at the time tried something, we have a, I mean, the portfolio is so much wider that we have chicken. We didn't have chicken in the past, you know. Chicken does very well, obviously, with barbecues, marinated chicken, that kind of thing. That's one thing. We also still have red meat, by the way, that we also can experience much further with the retailers. Let's say something like natural fish. Natural fish exists in many very, very well-developing countries like Italy, for example. It's not developed at all or not enough in a country like the U.K., where it's mostly coated fish. I can tell you when it's 30 degrees you don't necessarily want to eat a fish finger or fish stick. Marinated fish or natural fish work very well. Potatoes, in terms of together with barbecue, is also something we develop a lot. I'm not even talking about the ice cream, which is something new for us. We have obviously a very strong bowl in the Adriatics with Serbia, Croatia, and Bosnia. A bit accidentally somehow, we started to develop something in Austria, which is doing well because we had very strong people. In Vienna, we had a lot of people coming from Croatia, and it did well. We're starting to develop these kind of things. Does that mean that we're going to do it with ice cream and others? Not necessarily, but at least we have the assortment today that is available. The first thing we're doing now is we're talking to other countries to see what they see. Also, very importantly, we're also starting the conversation with the trade because it has to be incremental. It can be incremental, but it requires also agility, how to move faster from one season to another. A lot of things, a lot of opportunities, but definitely frozen food can do well with the hotter weather, with the summer, and more specifically with the weekly heatwaves. Great. That's very helpful, Stéfan. Second, just any update on the capital allocation priorities? You know, with the stock indicating down, you've done repurchases, or maybe there's a preference for debt repayment here. Any thoughts there? Yes. Thank you for that. We have done quite a bit of share buybacks in H1, EUR 100 million for the year before less than EUR 20 million. We just announced a dividend. I think from kind of capital allocation, we've done a lot with buybacks and with dividends. We want to keep our flexibility. In the past, we've shown to be good at M&A and quite able to acquire good companies. At this moment, with our current evaluation and also what's out there in the market, it's not that in the short term, there's an M&A pipeline. Whether we're now committing to buyback, that also depends a bit on our overall flexibility. Great. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Stéfan Descheemaeker for any closing remarks. Thank you, operator. While I'm disappointed by our first half performance, I remain not less confident in the future that lies ahead of us. We have a great portfolio. We have a strategy that is working, and we have a talented team of people well equipped related to the plans we have in front of us. We have successfully stabilized our market share and have compelling plans to increase our competitiveness in the back half of the year. We are well positioned to delivering accelerating growth when the weather disruption subsides. I look forward to demonstrating that with results when we update you again next quarter. Thank you for your time and interest in Nomad Foods. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.