Nomad Foods Maps Growth Reset, Cash Flow Push at Investor Day

Key Points

• Nomad Foods outlined a three-year growth reset focused on restoring organic growth, strengthening its frozen fish and vegetable businesses, expanding into chicken, meals, potatoes, pizza and ice cream, and entering new markets and channels.
• Management targets organic revenue growth of 2% to 3% in 2028 and 2029, alongside adjusted EBITDA growth at least matching revenue growth, after forecasting broadly flat-to-low-single-digit growth in 2027.
• Cash flow and efficiency are central to the plan: Nomad expects EUR 200 million to EUR 225 million in cumulative savings through 2029 and about EUR 550 million of adjusted free cash flow from 2027 to 2029, while maintaining its quarterly dividend and reducing leverage.

Nomad Foods NYSE: NOMD used an investor presentation to outline a three-year plan centered on restoring organic growth, expanding into adjacent categories and channels, improving supply-chain utilization and generating more free cash flow while maintaining its dividend.

Co-Founder and Co-Chairman Sir Martin E. Franklin said the company had “lost its way a bit” for a period, but argued that changes in leadership, talent, processes and strategy have positioned the business for a stronger future. Franklin said he and co-founder Noam Gottesman recently increased their personal investments in the company, citing what he characterized as a disconnect between Nomad’s equity valuation and its business prospects.

Franklin said taking Nomad private remains an available option if credit markets are open, but called it a “last resort” because doing so now could deny shareholders potential upside from the company’s outlook.

Growth plan targets core categories and new markets

Chief Executive Officer Dominic Brisby said Nomad returned to organic revenue growth in the third quarter after facing transitory headwinds earlier in the year. The company raised its full-year 2026 organic revenue outlook to a decline of 2% to 3%, compared with its previous outlook for a 2% to 5% decline. CFO Ruben Baldew said third-quarter organic growth exceeded 1%.

For 2027, Nomad expects organic revenue and adjusted EBITDA growth of 0% to 2%. For 2028 and 2029, it is targeting organic revenue growth of 2% to 3%, with adjusted EBITDA growth expected to meet or exceed revenue growth.

Brisby said the company’s strategy rests on three priorities:

• Protecting and strengthening its core frozen fish and vegetable businesses;
• Expanding in adjacencies including chicken, meals and frozen potatoes; and
• Entering new territories through categories, channels and markets where it has limited participation today.

The company said its broader approach increases its addressable market to roughly four times the size of the opportunity it had historically pursued. Nomad operates 17 factories, 94 warehouses and approximately 80,000 delivery points across Europe, Brisby said.

Nomad described its fish and seafood category as its largest, representing about one-third of revenue. President of Central Europe Dior Decupper said the company has renovated its fish-finger range and introduced what it calls its “crunchiest fish finger ever.” She also said Nomad plans to launch a pangasius-based value tier early next year as rising fish costs put pressure on affordability.

Vegetables account for approximately 25% of revenue, according to Decupper. She highlighted a high-protein creamed spinach with kale product that is tracking at more than twice the company’s initial sales plan, as well as plans to expand the Steamfresh premium vegetable platform to multiple markets in 2027.

Adjacencies include chicken, meals, potatoes, pizza and ice cream

Nomad said its chicken business has grown into a EUR 300 million platform, led by the U.K., where it holds the No. 1 branded position. The company plans to introduce an eight-SKU range of whole-muscle chicken products in the first quarter and expand its Chicken Shop platform into additional markets after gaining a 5% share of frozen chicken pieces, grills and burgers in the Nordics over the past 12 weeks.

The company also identified frozen meals as an underdeveloped opportunity. Decupper said replicating Nomad’s 7% meals share in France across Germany and the U.K. would represent roughly EUR 115 million of incremental net sales. Nomad recently took 60 days to move a microwaveable frozen-meal bowl concept from identification to launch in Germany and Austria, she said.

President of Southern Europe Jon Fernandez de Barrena described pizza and ice cream as major white-space opportunities. Nomad said a 5% pizza share in key markets including Germany, France and Italy could generate about EUR 140 million to EUR 148 million of incremental revenue. In Belgium, the company said its recently launched pizza brand had reached more than 2% total frozen pizza share and nearly 18% of the premium American pizza segment with 31% weighted distribution.

In ice cream, Nomad said capturing 1% share across the four largest European markets could produce more than EUR 70 million in incremental net sales. Fernandez de Barrena also said the company sees hard discount and food service as meaningful channel opportunities, estimating potential incremental sales of about EUR 150 million and EUR 200 million, respectively, if it improves its participation.

Supply chain savings and cash-flow plans

Chief Supply Chain Officer Eduardo Bachiega said Nomad’s manufacturing network is operating at less than two-thirds capacity utilization. The company aims to increase utilization from approximately 63% to more than 70% by 2029, partly through bringing more third-party production in-house and closing two facilities.

Nomad expects external production volume to decline from 22% currently to below 18% by the end of 2028. It also expects EUR 180 million to EUR 200 million in cumulative cost-of-goods-sold savings from 2027 through 2029, including procurement, manufacturing efficiency and logistics initiatives. Including overhead programs, total targeted savings are EUR 200 million to EUR 225 million.

Baldew said Nomad expects to generate around EUR 550 million of adjusted free cash flow during 2027 through 2029, while maintaining its quarterly dividend of $0.70 per share. The company expects net debt to EBITDA to decline toward 3.4 times by the end of 2029. Baldew said Nomad has no debt maturities until 2032, about 70% of its debt is fixed and its average borrowing cost is approximately 5.2%.

Management said it plans to take a more measured pricing approach than it did during the 2022-2023 inflationary period, when aggressive price increases contributed to volume, distribution and market-share losses. The company expects high-single-digit inflation in 2027, driven largely by fish costs, but said productivity, pricing analytics and alternative fish sourcing will help mitigate the impact.

About Nomad Foods (NYSE:NOMD)

Nomad Foods Ltd. is a European food company focused on frozen foods. Its portfolio includes frozen fish, vegetables, poultry, potato products, meals, and desserts sold through grocery retailers and other food channels.

The company markets products under several established brands, including Birds Eye in the United Kingdom and Ireland, iglo in Germany and other European markets, Findus in parts of continental Europe, Aunt Bessie's in the United Kingdom, and Goodfella's frozen pizza in selected markets.

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