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Nomad Foods' Q2 2025 Financial Results Overview

Nomad Foods Limited (NYSE: NOMD), a leading player in the frozen food industry, announced its financial results for the second quarter of 2025, covering the period that ended on June 30, 2025. The performance of the company has drawn considerable attention due to several challenges affecting sales and operational efficiencies.

Financial Performance Highlights

The company's revenue saw a slight decline of 0.8%, amounting to €747 million compared to the same quarter in 2024. Organic revenue also fell by 1.1%, attributed mainly to a 1.0% decrease in sales volume. Additionally, Nomad Foods experienced a contraction in its adjusted gross margin, which decreased by 310 basis points to 27.8%.

Adjusted EBITDA for the quarter was reported at €129 million, reflecting a decrease of 7.2% year-over-year. Further, the adjusted earnings per share (EPS) dropped by 9.1% to €0.40. These figures highlight a challenging financial landscape for the company.

Management Insights

CEO Stéfan Descheemaeker noted the impact of extraordinary warm weather conditions across various markets in Western Europe, which altered consumer purchasing behavior. This volatility not only adjusted retailers' merchandising strategies but also negatively influenced the sales of savory frozen products, a key segment for Nomad Foods. Despite these setbacks, Descheemaeker expressed optimism regarding the company’s innovation and renovation initiatives, which are beginning to show promising results.

As the company strives to regain traction, it noted an improvement in its market share and a 1% growth in retail sell-out through mid-June. This upward trend reflects the strength of Nomad Foods' commercial initiatives.

Adjusted Financial Metrics Comparison

• - Revenue: Decreased from €753.1 million in Q2 2024 to €746.9 million in Q2 2025.
• - Adjusted Gross Profit: Decreased 10.8% to €208 million from €232.8 million.
• - Adjusted Operating Expenses: Reduced by 11.4% to €103 million, attributed to a significant cutback in overhead costs.

These adjustments indicate that while there were challenges in the first half of the year, the company has been proactive in managing its costs.

Outlook and Guidance

As a result of the underperformance in the first half of 2025, Nomad Foods has revised its full-year guidance. The company now anticipates organic revenue to remain flat to a decrease of 2%, compared to earlier expectations of a 0%-2% increase. Additionally, the adjusted EBITDA outlook now projects a decline of 3% to 7%. Adjusted EPS is also expected to be lower, with a revised range of €1.64 to €1.76.

Despite these adjustments, the company maintains its expectations for free cash flow conversion at 90% or greater, indicating a strong cash-generating capability amidst challenges.

Conclusion

The journey ahead for Nomad Foods is poised with both hurdles and opportunities. As noted by Co-Chairman Noam Gottesman, the underlying health of the organization remains robust, and the strategic growth initiatives currently in place are anticipated to yield positive results moving forward. Addressing the outlined challenges and sustaining innovation efforts are critical as the company navigates through the dynamic market landscape. Stakeholders and investors will closely watch the company’s actions in the coming quarters and its adaptability to the ever-changing consumer preferences and external market conditions.