Good day, and welcome to the Nomad Foods Fourth Quarter and Full Year 2017 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Taposh Bari, Head of Investor Relations. Please go ahead sir.

Great, thank you. And thank you for joining us to review our fourth quarter 2017 earnings results. With me on the call today are Stefan Descheemaeker, our CEO, and Jason Ashton, our Interim CFO. Before we begin, I would like to draw your attention to the disclaimer here on slide two of our presentation. This conference call may make forward-looking statements that are based on our view of the company's prospects at this time. Actual results may differ to due to risks and uncertainties which are discussed in our press release, our filings with SEC, and this slide in our Investor Presentation, which does include 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 as well as in the appendices at the end of this slide presentation that is available on our website. Finally, please note that certain financial information within this presentation does represent adjusted figures for both 2016, and 2017. All adjusted figures have been adjusted for exceptional items, restructuring, and transaction-related items, and that all comments from here on will refer to those adjusted figures. And with that, I will hand the call over to Stefan.

Thank you Taposh, and thank you, everyone, for joining us on the call today. 2017 was an outstanding year for the company, highlighted by organic revenue growth of 4%, 100 basis points of gross margin expansion and €237 million of adjusted free cash flow. These results which exceeded the guidance that we set at the start of the year reflects the strength of our iconic brands, relentless execution throughout the organization as well as our strategy. We ended the year on a high note with fourth quarter organic revenue growth of 5.6%, gross margin expansion of 350 basis points and adjusted EBITDA growth of 31%. Importantly, Q4 marked the fourth consecutive quarter of positive organic revenue growth and market share expansion for the company. Fourth quarter organic revenue growth was in line with the business expectations as we recently provided in January when we announced the acquisition of Goodfellas, but ahead of our initial guidance of 3% back in November. Upside versus the initial 3% outlook was driven by a combination of two factors; first, we experienced better than expected growth in December where the category accelerated to 4% and the U.K. and Germany performed at a very high level. And second, we had some shipments moving to December out of January in Germany due to the timing of some promotions versus a year ago. In Q4, we gained 0.2 percentage points of market share against low single digit category growth resulting in approximately 3.5% sellout growth for branded business. So 2017 was a pivotal year for Nomad Foods. In only the second full year as a pivot company, we achieved a number of our goals, which I’d like to spend a moment reviewing with you. First, we returned to the business to sustain our growth trajectory, driven by market…

Thank you, Stefan. And thank you all for joining us on the call today. Fourth quarter reported revenue increased 4.7% with organic revenue growth up 5.6%. Organic revenue growth was driven by volume and mix growth of 3%, and pricing growth of 2.6%. Reported revenue growth was offset by approximately 90 basis points of FX translation. Slide Four illustrates the quarterly progression of our organic revenue growth showing positive momentum throughout 2017. As Stefan mentioned, we expect another year of organic revenue growth in 2018 with Q1 expected to be up approximately 3%, in line with our full year guidance of low single digit growth. On Slide Five, we show fourth quarter organic revenue trends across our three largest markets; the U.K., Italy, and Germany, as well as the remaining countries in our portfolio. There are a few call outs on this slide beginning with the U.K. We delivered a strong 9% growth rate in Q4 reflecting solid execution within the core favorable category growth and price increases. Germany posted another quarter of impressive growth, up 16% in Q4 with a three percentage points of growth validating from a shift into December onto January. After adjusting for this as well as some distribution gains from favorable year ago comps, Germany’s underlying growth remains among the strongest across the group and reflective of the teams impressive execution against the mature and competitive market. Turning to Slide Six, Q4 gross margins expanded 360 basis points, to 31.5% with mix, price, and promotions and cost of goods favorability contributing factors. Price and promotion which contributed to 170 basis points of gross margin expansion was primarily driven by net revenue management initiatives. Cost of good favorability which held gross margins 130 basis points was driven by the anniversary of operational issues in Sweden and…

Thank you sir. [Operator Instructions] Our first question today comes from Steve Strycula of UBS. Please go ahead.

Hi, good morning guys. Two quick questions from me. The first would be a point of clarification on the EBITDA guidance, so I want to make sure I heard it right. For the Goodfella's was that €10 million contribution for this year, will that be on a full annualized run rate instead of the eight months that you guys are going to have in the books this year?

The €10 million is for the transition all year as we close our [Indiscernible] in Q2.

We got to work in terms of full year.

Okay, got you. Thank you for that. And that as you released the organic sales, I know Stefan you called out that there was a little bit of a cease or sell in shipment benefit in the fourth quarter from Germany and that you guided for the first quarter to be roughly 2% but there was a shift, so extra ship is that right around 3% that would be my question and then can you give us a little bit of color commentary as to why the U.K. did so well in the quarter and then conversely speak to the slowdown that we saw in Italy? Thank you.

So let me step back for a second on the Q1 2%. Overall, we have really been, it’s a really great outcome. You have to think that obviously it’s on the back of a flat market, so you know the words, we are gaining market share, so it’s pretty much you know the same kind of trajectory as Q4, the only difference is obviously in on Q4, the industry was much higher for variety of reasons, one of them being obviously the shift in Germany. Then let's say back to the shift in Germany, you just have to think that at the end of the day, the 2% is a correct number including both the phasing and obviously Easter impact, I think one of the other to make it simple. And the 2% back to our bonus is very much in line with algorithm we have. Then if you go to the U.K. its very interesting, because indeed its really – when you see trajectory, Steve, you see that you know, its started with Italy and Germany, and Germany still in some sort of emerging market of trajectory at this stage. And U.K. took a bit more time. And you remember we said, yes, these are reason for this. One is we had the level of the ratio, the proportion of core category divided by total business is lower, and so the impact is very high per core category, but obviously on the global basis it takes more time. So that’s one thing. And second, we have for relative reasons, and obviously form [ph] being one is that we have to digest and the Jason explained this. We have to digest quite series of price increase which by definition takes a bit more time in terms of volume and value expansion. But overall it’s a great situation. And when you see behind the numbers, that’s very important, you see in definitely U.K. is the brand equity is doing well in the three countries. So the three countries obviously is -- the growth engines for the whole organization and we’re very pleased to see that the U.K. is now joining the other two. Did that answer your questions, Steve?

Yes. That was helpful. And do you comment on Italy in terms of like just to put there a little bit, I know you guys have had really strong comps there for a while, but I’ll pass it on after that? Thanks.

Yes. Italy, you know the categories as such especially in January and its coming back now. January was – the category was declining, so in negative territory, but one thing that hasn’t change is we keep obviously over time is we keep getting market share. So it’s doing well. So at the beginning of the year of the quarter was a bit difficult and now we’re getting back on track, very pleased.

Thanks. Great quarter.

Thank you.

Thanks, Steve.

We will now take a question from Brian Holland of Consumer Edge Research.

Thanks. Good morning, gentlemen. First question, I guess I following up on Steve’s with respect to guidance and he probed Q1, but as I look to the balance of the year Q1 is obviously your easiest comp if you will, you know, as we go through the year they get progressively more challenging. So, if you could just you know whatever the highlights you’d like to point to where we can think about whether that’s innovation, whether that’s distribution gains, as we move through the balance of the year that's going to allow you to comp progressively or sequentially tougher numbers and still hit that low single digit organic growth?

Thanks, Brian. Indeed it’s obviously the whole story in 2018 is obviously growth and growth, that’s very simple. And we’re starting indeed with 20 with the few ones. When you think about it, it's really – this focus behind the core business, behind the core categories country by country, this is exactly what’s we been doing in 2017. And we’re not going deviate. I can tell you we have one of the success – one of the reasons of the success is its a some sort of let’s say obsessive very, very well aggressive [ph], very discipline implementation by the whole organization. The thing we’re going do now obviously we’re going to evolved, improved obviously the strategy behind obviously net revenue management moving to the next step, making sure that all three of the countries are moving to next step. You remember also that these were the first piece of the trajectory we really focus behind renovation. They will be starting to move back to innovation, big bets behind key categories and behind key trends and the frozen food category works well with the key trend, so – and that’s going to come, obviously in Q2, Q3, Q4, so this is kind of programs we’re going to activate further in the second part of the year, but obviously starting already in Q2. So yes, to your point it’s obviously they will come, are getting obviously more demand, which is the name of the game, but we look forward to making it work.

Thanks. That’s helpful. If I move down to the EBITDA guidance that you provided for the year, I guess if you back out Goodfella’s, you’re kind of implying something close at the midpoint to about 5% EBITDA growth. Clearly in hindsight guiding a little bit conservatively on 2017 served you well and I think it make sense to guide appropriately, use appropriate conservatism as you guide going forward. But you know, I’m just asking within the context of mid-single digit EBITDA growth because if I think about 2016 to 2017 you’re obviously reinstated the bonus scheme in 2017, so that was a drag. So, if just back out Goodfella’s, is there anything else kind of important that would -- because I think you still have a lot of low hanging fruit to attack here, whether that’s the last of the Findus synergies, whether that's your network management initiatives, revenue management etcetera, is there anything in 2018 that would weigh on the margin on an organic basis that we should be thinking of that that would you know may be mid-single digits organic instead of high single digits?

No. I think you’re right, but let say, let me again pause and come back to what we said one month’s ago, less then one month’s ago in CAGNY. We said the model in frozen food which is a great category. The model for us to consolidate that the frozen food in Europe is very simple. It’s starting with low single-digit digit organic revenue growth, which is based on something like 1% plus natural trajectory of the category as such, plus market share increase. So that’s one piece. And from there obviously we’re going to make in the provision leverage work and that should lead us to the mid-single digit deductible. Then obviously on top of that the things like for example obviously but starting in 2019, obviously, but it gives not just any revenue synergies as we’re going to start to kick-in things like Findus for the improve the whole, but that’s the algorithm which is low single-digits more organic revenue growth translated into something like a mid single-digits organic revenue growth. I think there is nothing conservative, it’s just pragmatic and practical and realistic. And again back to our guidance, as we said, off to a good start, but also very early in the year.

And last one from me. Forgive me if you address this in your prepared remarks and I missed it, but is there any guidance for 2018 free cash flow generation and then the extent to which restructuring and nonrecurring winds down it if there's a way to think about that? Thank you.

Yes. Sure. That’s – as you can see we didn’t give free cash flow guidance. And I guess, just stepping back our guidance practice is evolving to conform with that can you see that for the first time we are guiding to EPS. That’s said, we are expecting another strong year of free cash flow in 2018 with parameters that are very consistent with what we saw in 2017, starting with the goal, our strategic goal of free cash flow conversation of 90%. And also as you pointed out we’re expecting a meaningful decline in non-recurring cash charges in 2018 and we’re expecting in the region of 65 million of nonrecurring cost which includes integration from Goodfella's and remaining Findus’s integration cost. Did that answer your questions, Brian?

Yes. That’s helpful. Thank you.

We now take a question from Bill Chappell of SunTrust. Please go ahead.

Thanks. Good morning.

Good morning.

I just want to follow-up on Goodfella's in the kind of commentary. Do you expect both on the gross margin, EBITDA you to get closer to company averages as we move this year. Is that really more of a 2019? And in longer term, is it the belief, I think you said, the gross margins were below but EBITDA margins weren’t that different. Is it a thought that the pizza category and Goodfella's in particular can be higher than corporate average? Or do you need to spend more money back in kind of marketing, advertising to kind of keep it going?

First of all, Goodfella's has a lower gross margin profile as we said in the remarks. Goodfella's is a strong brand, but has had a high level of promotional intensity over the last two years. And we very much believe applying the Iglo, the Nomad growth model and investments in media that we can drive our gross margins more to the legacy business. And in fact what we did in the U.K. with the margin profile there. It’s also fair to say, there is a percentage of that business which is an very efficient private label business which has a lower gross margin profile and lower SG&A. So the difference that EBITDA is much lower than the legacy business because of the lower SG&A cost, so it’s a fraction of the EBITDA margin than it is for gross margin.

But back to your point we’re going to do exactly what we did with the rest of the business, we’re going to apply old playbook. We going to reinvest behind the brands and then obviously you know then we’ll be in the position to play really the net revenue management program that we have in place. There’s obviously on the stronger brand. That’s the playbook we’ve played I think quite successfully in all the countries and we believe that’s Goodfella’s [Indiscernible].

I guess the last playbook took us about three years. I assume this is more of a 12 months type playbook?

We said two years starting from closing. Yes, two years.

Got it. So we shouldn’t expect any…

The first part is the reinvestments which is normal. And the second part is really then preparation is obviously net revenue management and gross margin expansion. But obviously we first need to make sure that the brand is strong enough and that’s what we’re doing, but its not three years.

Okay. And just in terms of a commodity outlook as we start the year and kind of where you stand and what type of headwind and tailwind that plays into your numbers?

Well, at this stage we are reasonably confident. We mean, overall in terms of commodities we’re reasonably confident absolutely, we don’t see – obviously there are some headwinds, tailwinds, but overall we have a pretty good view of where we stand.

So, nothing on fish and vegetables that we should worry about at this point?

No. It’s part of our program. That’s our job.

Got it. Thanks so much.

You’re welcome.

We will now come to a question from Rob Dickerson with Deutsche Bank.

Great. Thank you. So back to the free cash flow for the year, there are no – as you said, you’re not giving official guidance, but at same time there's meaningful decline in restructuring costs. I know you had legacy tax, cash contribution this year, the refi, right, and kind of part of the largest story is going to been that the ability for that cash flow kind of uptick in 2018. So while I understand there maybe some upfront investment requirements in Goodfella’s? I’m also just curious on 2019 could there be other events such that you would allocate incremental cash, you have excess cash to not only just M&A but its a potential share repurchase activity as we saw in 2018? Thanks.

So, let me just – you’re right, and as I think we also – improve our supply chain, so that’s the one thing. And then in terms of obviously we’re proving in 2017 that we are doing the right thing in terms of value creation can be a share repurchase. That’s fine. And at the same time we also contemplating, we’re considering the different options to improve a footprint M&A wise. So it’s going to be -- as usual you know these are the right balance between both. We proving 2017 whether we can do it and we going to obviously, we’re going to be very mindful of value of shareholders, value creation between both share repurchase and obviously M&A.

Okay, great. And then in terms of Goodfella’s, I think you everyone follows the company understands that frozen pizzas are is an incremental category for you. There seems to be this good opportunity for you to improve the overall profitability of the business with revenue management, and incremental upfront investments. But just kind of more generally do you see this is very clear path to share opportunity and I just say just in the U.K and Ireland because you don’t see innovation coming from competition or I think you spoke it before about this larger frozen pizza companies in Western Europe who maybe not haven’t allocated the right amount of attention or capital or A&P or what have to the category. So I guess, first assuming you can deploy your revenue management capability and skills you build up over all the years, is there other part that you really think leads this great opportunity in share gain? And then also category growth kind of in line with what you’re seeing in the rest of your portfolio? Then I’ll just past it on. Thanks.

Let me start this last part of your question, pizza actually is growing even faster than the rest of frozen food, so that’s pretty good. So it’s obviously a very good category from that’s standpoint. Back to your first part of the question, I would summarize by saying one thing, we are today, we are frozen food -- we have frozen food and we definitely believe that this company is going to better served, I mean, Goodfella’s being part of Nomad Foods, because we live and we think in terms of frozen food. And then on top of that Goodfella’s is going to obviously to be leverage, further leverage with obviously the footprint of BirdsEye, so the combination is really great and that’s kind of thing that you need to have in mind on top of this things like net revenue management and the rest of it. So think of number one, it’s a great category that is growing faster than the others. That’s one thing. Second, let’s say, Goodfella’s was part of the larger organization and not necessarily strategic and goal, definitely its goal for us, that’s a second piece. The third piece is no, it’s going to benefit of the large infrastructure of BirdsEye. And number four, yes we have demonstrated in the last two years with programs like net revenue management and brands building that we can obviously accelerate the top line. I think these are the key things we have to keep in mind when you think about Goodfella’s and the rest of the organization.

Thank you, Stephan.

Our next question today comes from Adam Mizrahi of Berenberg. Please go ahead.

Hi, guys. Quick question firstly. What possible delay you expect at closing date for the Goodfella’s acquisition?

Okay. It’s very simple. Its number one, it’s a carve-out [ph], so as usual with carve-out it’s obviously a bit more complex. In the meantime the business is doing pretty well. So for us you know it doesn’t make any difference. We’re actively working with the sellers to make sure that the carve-out is going to be fine and as we go into in the original to oversee a good company, so nothing to worry about to make it simple.

But our teams are working very hard to finish that carve-out.

Great. And then you’ve talked already about Germany and Italy performance at the start of 2018. I’ll be interested to hear how you see the drivers of gross margin expansion different this year relative to last year as a geographic mix tailwind to gross margin from growth of these two countries in 2018?

As you quite rightly said, parts of the shareholder value algorithm is gross margin expansion and we expect gross margin expansion in 2018, but below 2017 and as you know in 2017, mix was a big tailwind, so we have these three legacy and Iglo markets growing very strongly and the activation of the Must Win Battles, and that growth will not be a strong in 2018 as we more normalized to low single digits.

Okay. And then if I could finish with the more thematic question. Are there any improvements you can make to own business to accelerate top line growth beyond low single digits? Or do you see that level of growth is conditional and across board improvements in the underlying savory frozen foods market?

When you think about the current algorithm to your point, Adam, if you starting from – low single digit revenue growth starting from 1% plus category as such, there is obviously so much you can do -- lot we can do in terms of market share improvement in terms of mix, but overall long term, yes, definitely we believe that there is something that more that we can do with the category. But as I said we haven’t change our message starting with CAGNY and even before, that’s a kind of thing that’s going to take a bit more time, because you have to change the consumer perception, but that’s our job. So you can imagine that so far that’s exactly our algorithm. And at some stage with the brand development, with the category development and by CSR, and we’re going to spend quite some – we’re going to invest behind these things. We’re going to be serious about it and it’s not going to be serious for one quarter or two quarters. Once we decided to do this, to improve the perception of a category you have to do that seriously, quarter after quarter after quarter. But definitely we believe that over time it’s going to really help the category to move to a higher level. And then we will talk at it later. We will talk. At this stage its low single digit organic revenue growth and if we do the job correct in the future nothing is excluded.

Right. That’s it from me. Thank you.

Ladies and gentlemen, we have time for one more question. That question will come from Jon Tanwanteng of CJS Securities.

Good morning, gentlemen, how are doing.

Hi, Jon.

How should we think of Goodfella’s from a strategic viewpoint? It sounds like it only has modest synergies with existing seafood business? Should we expected to be the only the first step of a bigger portion to the piece of category either on in organic or in-organic basis, just thoughts on that?

Let’s think of it in that way. The first, when you think about Goodfella’s, the first thing in the pragmatic way that you have to make it work. It’s a very strong number two player in U.K. a strong number player in Ireland. And we’re going to improve that part of the equation. That’s the first thing we have in mind. And that’s the part of our business plan. Then obviously and you obviously you have noticed as we mentioned that overall in Europe it’s a very interesting categories. It’s a number two category after seafood. And so, we’re going to learn a lot. I think there is a natural proximity between pizza and other frozen savory category like seafood, like vegetable then we will examine other things. But the first thing obviously let’s make it work, let’s learn a lot and then obviously there is a natural progression that will build that way.

Okay, great. And just a broader M&A question. Why you are closing Goodfella’s? Have you paused looking at other acquisitions and if you haven’t what is the landscape look like out there from a valuation number of opportunities endpoint?

The answer is we haven’t paused. And the second part of the answer is obviously we not mentioned what that is by definition, but it’s very much in line with our criteria and obviously combined with our role as category leader.

Got it. Would you use something in pizza more attractive relatively at this point or something more on your core seafood categories?

Everything is core, right, so let’s say frozen food is core.

Great. Thank you very much.

You’re welcome.

That will conclude today question and answer session. I would now like to turn the call back to Mr. Stefan Descheemaeker for any additional or closing remarks.

Thank you, operator. Yes, we very pleased to have delivered, as I said a stellar year of performance in 2017 capped by this very strong foundation with another year of growth in 2018. We are off to a strong start in Q1 and look forward to updating you on our progress on our next call in May.

This concludes today’s call. Thank you for your participation, you may now disconnect.