Nomad Foods Limited Price & Performance (NOMD)

These non IFRS financial measures should not be considered replacement for and should be read together with IFRS results. Users can find the IFRS and non IFRS reconciliations within our earnings release and in 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 2023 and 2024. All these adjusted figures have been adjusted primarily for share based payment expenses and related employer payroll taxes, non operating M and A related costs, acquisition purchase price adjustments, exceptional items and foreign currency translation charges or gains. Unless otherwise noted, comments from here will refer to those adjusted numbers. With that, I'll hand over to Bob. Thank you, Jason. I'm happy to report Novartis Foods at a strong finish to 2024 with impressive volume driven organic sales growth and robust margin expansion, Before I go too deep into results, I want to step back in the second where we are in our journey. As you can see on Slide three, we have now delivered nine consecutive years of sales and adjusted EBITDA growth. While this growth has been aided by M and A, organic growth has also been a strong and consistent contributor to this growth over time.

In fact, in 2016, we have grown our organic sales at a nearly 3% target with growth in every year older than 2021. And we'll have the COVID-nineteen spike. We are now entering our tenth year as a public company and are well positioned to continue to deliver sustainable growth including a longer year of organic growth in 2025 while generating considerable [indiscernible] We have created an enviable company since embarking on this journey in 2015. We have assembled a portfolio of iconic brands the superior equity and strong market share positions, And we have accomplished this while remaining focused building a pure play product food business that now spans both developed and developing markets across Europe. And we have access with purpose. Creating a portfolio of high quality great tasting, convenient food that is good value and good for you. Roughly two third of our portfolio is comprised of vegetables fish and poultry, and 93% of our UK and Western European revenue is generated from products deemed a healthy mix by the UK government. And we've done this in a responsible way. I'm happy to share that Nomad Foods has been included in the annual Norwegian Sustainability Europe Index for the fourth and while receiving a maximum score of 100 in the health and nutrition for the sixth consecutive year, We are well positioned for the trend that will be shaping this industry.

We have a clear portfolio advantage and we also have a deeper advantage. In recent years, we have reshaped the organization We have rewired how we work to improve efficiency agility and ID sharing. And we are the greatest of all time by selectively hiring Xperity to fill knowledge and capability gaps where necessary. This has helped us own [indiscernible] and improve our execution, And lastly, we've enabled to lean in an RMO team with the fuel tank needs to further strategy and initiatives. Our supply chain organization has delivered meaningful productivity over the past two years, While our strategic focus on driving growth in our profitable [indiscernible] and growth platforms is delivering margin mix benefits that have allowed us to increase investing in our products or advertising [indiscernible] while building capabilities in areas such as revenue growth management, and cyber security among others. Even more of this I feel great about how we positioned as we enter our tenth year as a public company. And I'm confident we will deliver our tenth consecutive year of top and bottom line growth in 2025. Recent results only and more than my confidence in this. It became clear to us in 2023 the period of outsized inflation induced revenue growth was nearing an end.

Unit growth will become more dependent on growing gains market share expansion and effective revenue growth management initiatives It was then as we introduced our new commercial flywheel innovation framework while beginning to increase our investment in our products advertising and the third party.

OE and P spend increased by 40% in 2023 and then again by high single digits last year to 4% of net sales. This places us in the top [indiscernible] and we expect A and E growth to once again all business And I'm excited share some of our new creative with you later this year. It is some of the best I have ever seen from Novartis Food. Our innovation meanwhile jumped 4.2% in 2023 to 4.8% in 2024, and we expect it to easily exceed 5% in 2025. And when we combine innovation with innovation, we expect our renewal rate or percentage of sales were products are new or refreshed to double from high single digits in 2024 to mid to high teens in 2025. We are upgrading our food and packaging to a [indiscernible] an increasingly large percentage of our business. All of this is helping our commercial flag with to spin faster and faster while delivering solid returns. As you can see, on Slide five, we have now delivered three consecutive quarters of volume growth Growth and move around point to quarter. With the trend line is cleaning in the right direction. And why it helps that our European frozen food category is hefty and they are controlling much of our own destiny although investments are supporting category growth while driving share growth, As you can see on Slide six, we have now achieved market share growth in mid to the last two quarters.

And impressively, we accomplished this by expanding our gross margin. In fact, our gross margin in the last nine months of 2024 modestly exceeded the pre COVID level achieved in 2019. Focus has been a key contributor to our success and focus continue to define how we go to market in the future. We continue to concentrate on this proportion amount of our time energy and investments [indiscernible] these are the four categories of three combinations. That are critically important to our success. Our margin accretive in a way we have a clear right to win. The top 25 machine backlogs recorded for more than half of our sales last year and an even larger share of gross profit. And grew net sales by 2.7% for the year and 3.5% in the quarter. While our focus remains on our Recently, we have been strategically investing behind select growth platforms. These are primarily areas where we see opportunities to leverage the capability in one market with extend our presence in another market. With a lift and launch of growth. Our organic sales for growth platforms by 16% in 2024, and 40% in the fourth quarter. Over the past year, we have been highlighting Portugal as one example.

We have more than doubled or quarterly sales in The UK over the past five years and it has gone from a growth platform to a merchant battle for us given the success [indiscernible] is to make all of our growth platforms [indiscernible] Italy and Germany are two more recent markets where we have made bolusry into a growth platform. Seeking to replicate our success in The UK. The further prepared poultry segment is underdeveloped in Italy and we began to invest in developing the segment there in early twenty twenty four. I'm happy to say that it is working. In the fourth quarter, our retail sales property at Port Street in Italy rose 98% year on year with our market share growing from 8% in Q4 twenty twenty three to 15% in Q4 twenty twenty four. The category meanwhile is now growing 6% in Italy with Nomad growing for more than 100% of the category growth. It is a great story. Us and the retail partners. In the back half of twenty twenty four, we turn our attention to Germany, where the frozen prepared poultry market is large and well developed. We're dominated by private label. A strategy is to create a [indiscernible] I'm happy to say that we're finding such It is early, but in the fourth quarter, our retail sales for Prepaid O3 rose 35% year on year in Germany.

We reached 2.7% market share in the fourth quarter and is 17 basis points higher than the previous prior year and illustrates how long the runway could be for us in this market. The other growth platform we highlighted last As a leading for the digital, but it's only proper as will be a leading frozen chip company as well. Nubesium we already have a strong market share position in potatoes, but we are leaning into make it even stronger and grew our market share by four twenty basis points year on year in 2024. And we're happy to report we became the second of Maligne and Denjour last year climbing from number two to number one in value share, In France, Orchard grew five fifty basis points to 16.1% in the quarter. In The U. K. Where the market is very large, our share grew 70 basis points year on year, to 8.9%. A great accomplishment. Even if it's not keeping pace with a fantastic result, in France and Belgium. Turning to 2025. Our playbook will not look meaningfully different. Our strategy is working [indiscernible] We will continue to focus on our and targeted growth platforms. [indiscernible] more innovation, more innovation, and more revenue growth management initiatives Ongoing profitability realization from allowing us to deliver uninstock and bottom line growth.

And as has always been the case with Nomai Foods, we will deploy capital in ways that create value for shareholders and goes above and beyond organic growth. I'm excited to celebrate Rotent as a public company with you in 2025. With that, let me turn it over to Ruben to tell you more about what we expect and provide some more details on what we received last quarter. [indiscernible] Thank you, Stefan. Good morning, everyone. I've been with the company now for roughly eight months, and I I'm increasingly confident in the opportunities that lie ahead of us. We have an amazing portfolio in a great category with top tier talent and nutritional tailwinds and RBACs. Our playbook is working.

And the innovation, renovation and marketing plans we have to drive sustainable growth in 2025 and beyond are compelling.

Turning to results. As you can see on Slide seven and nine, for the fourth quarter, reported net revenues increased by 4.3% to seven ninety Organic growth was 3.1%, which marked our tenth consecutive quarter of organic growth. Oil and growth remained positive for the third consecutive quarter rising by an impressive 4.7% while pricemix was a negative 1.6% offset to volume growth, we reinvested some of our margin upside to drive impactful merchandise [indiscernible] The net price investment was an 80 basis point headwind to gross margin was more than overcome by 40 basis points of favorable mix and on a 60 basis points of productivity, thanks to efficiency gains. This quarter, robust gross margin and healthy revenue growth delivered a 9% increase in gross profit which was amplified by 2.6% year on year decrease in SG and A expense to result in a 17.6% increase in adjusted EBITDA. The lower SG and A expense was driven by lower A and P expenses as we led the sharp increase in prior year investment and benefited from a more even investment cadence throughout the year.

A and P investment rose high single digits for the year on top of double digit increase in 2023. Indirect investment growth slowed to low single digits in the quarter as we began to cycle the capability investment that began in late 'twenty three and carried through to 'twenty four. Adjusted profit rose 28% year on year while adjusted EPS rose 31% to EUR 42 as our diluted share count rose 3% year on year.

For the full year, we delivered our ninth consecutive year of sales and adjusted EBITDA growth. As you can see on Slide eight and ten, full year revenue grew 1.8% with organic sales rising 1% as volume returned to growth came 1.3% year over year. Gross margin rose 140 basis points for the year to 29.6 nearly reaching the 30% pre COVID gross margin we achieved in 2019. Investment in price and promotion was a 70 basis point year on year headwind to our full year gross margin, which was more than offset 110 basis points of favorable margin mix and 100 basis points of net productivity realized by our supply chain teams. Our teams have a robust pipeline of productivity initiatives and I expect these benefits to continue funding our growth investments going forward. Our SG and A expenses grew 7.4% for the full year we increased our A and P and indirect investments each by high single digits. The higher A and P was a continuation of the reinvestment plans that we started in 02/2003 and continued in 2024. We expect even more reinvestment in 2025. The higher indirect expense was due to a combination of underlying inflation and capability investments in areas such as cybersecurity, revenue growth management.

With these investments now behind us, we expect much more moderate growth in indirect expenses going forward. Despite these investments made in 2024, we were still able to grow our adjusted EBITDA by 5.6% for the year delivering near the high end of our initial 46% EBITDA growth guidance range that we gave this time last year. Our full year EPS of 1.78 was also near the high end of our initial €1.75 to €1.8 range. Turning to cash flow now.

Strong fourth quarter results helped us over deliver on our full year cash flow guidance with free cash flow conversion of 101% coming in well above our initial 90% to 95% conversion guidance. We saw nice working capital inflows in the fourth quarter due to the normal seasonal timing of inventory balances and an unwind of the higher receivable balances that were ahead in the third quarter due to timing dynamics.

The strong free cash flow allowed to return $2.00 €8,000,000 to shareholders in 2024 versus €171,000,000 will return to shareholders in 2023. Therefore more than a 20% increase.

Last year, we returned the cash in the form of a 64% share annual dividend and share repurchases. We finished the year with 156,100,000.0 basic shares outstanding a 4% reduction from where we finished 2023. Over the past two years, we've now repurchased €290,000,000 of our shares. Turning to our guidance for '25 on Slide 12. We are pleased with the progress our commercial team has made improving the market results and restoring our market share to growth. And we are happy to see our supply chain team delivering healthy productivity savings.

This gives us strong momentum into 2025, which will be our tenth year as public company and is also expected to be our tenth year of post revenue and adjusted EBITDA growth.

We continue to expect organic sales growth of 1% to 3% for the year and adjusted EBITDA growth of 2% to 4%. We had a stronger than expected finish to 2024. Which means we now expect a higher absolute level of this than EBITDA And as a result, we have raised our full year adjusted EPS range to €1.85 to 1.89 from the initial €1.81 to 1.85 As recent exchange rates this translates into U. S. Dollar denominated EPS of $1.94 to $1.98 And lastly, we continue to expect full year adjusted free cash flow conversion of at least $0.9 We expect to use this cash flow to create incremental value for shareholders that goes above and beyond our organic growth. Still relatively new dividend integrated tumbled with As you may have seen at our announcement last month, our Board of Directors has approved 13% increase in the first quarter twenty five ish dividend to $0.7 per share from the $0.15 what we payout in 2024. As we think about the shape of the year, we expect growth to be somewhat choppy quarter to quarter and in the phasing of investments, higher year comparisons and some seasonal movements. Nonetheless, we expect underlying trend line of improvement to work throughout the year in totality.

While our advertising investment growth will be meaningful in late quarter one, Our new innovation fuel distribution gains and associated merchandising is expected to be more phased into quarter two and quarter three this year. It is combination with Easter falling into quarter two this year, versus quarter one last year, will lead to revenue headwinds in the first At this moment, we therefore expect organic sales to modest decline in quarter one. These are just timing dynamics and not a reflection of the underlying health of the business. In fact, our shipments are moving around We are happy to see our retail sales growing in 1% to 2% range over the past despite the later phasing of our active Overall, I'm pleased with the progress we are making We returned additions to profitable volume and market share driven growth last year We are confident that we can keep the momentum going in 2025. [indiscernible] with that, I will now turn the call back to the operator to open the line for questions. Our first question comes from Andrew Lazar with Barclays. Please go ahead.

Great. Thanks so much. And good morning, good afternoon, everybody. Good morning, Andrew.

Stephane, maybe to start off, what is what is your 1% to 3% organic sales growth forecast for full year 2025 predicated on with respect to your expectations for category growth and market share performance?

Well, as you may have seen, we again, the low inflation environment and we've come up with with the 1% category growth as the first piece, And the second piece is ourselves, obviously. It's overall, as we said, it's growing. But also very interestingly, our portfolio has is really two thirds poultry fish vegetables, which are growing very nicely. The commercial flywheel is working nicely. Innovation, as we said, is around 5%. So the rest of the 1% to 3% is coming from from this market share and mix and a bit of some net ERP, I would put it that way, Andrew. Remember that in Q3, we suffered of an ERP disruption in The UK, which is the biggest business for us. So obviously, we keep going with ERP, which is the right thing to do. But this year, as we said, we decided to slow down the process come up with with the lower the smaller part of the business and also all the lessons. So that's why I'm using the word net ERP. So there be some disruption Maybe much, much, much more limited than in 1% to 3% is coming from. Great. No, that's helpful. And then you mentioned in the fourth quarter you reinvested some of the upside.

In some of the sort of promotional activity getting sort of distribution and some retail work and whatnot. And that obviously benefited volume pretty nicely. As you move through the first quarter, I realize there's some impact on volume as you talked about due to a later Easter and such.

Would you expect sort of the pricemix piece to come in now that you're two months through the first quarter.

Would it be consistent on a year over year basis as an impact with what you saw in 4Q or more modest do you again on the pricemix side? Yes. Let me answer that, Andrew.

And hopefully, you appreciate that we cannot and will not give guidance outlook between separate line items of the P and L and price points. But let me do try to give you some context. So you're absolutely right. If you look at the last three quarters, you've seen positive volume.

Especially in quarter four, where we almost had 5% positive volume growth. And volume will remain important to us. It's important for a consumer perspective, retailer perspective, but also how it drives leverage in our factories. So we're not all overnight going to change that strategy where we drive efficiencies and reinvest that in volume. So that's one thing. To the point of Stafford, so we've seen in the last two, three months lower inflation, and maybe that's also a separate question. If we look at kind of the full year and we're not fully hedged yet, but we might see a bit more inflation. Into this year. How that exactly plays out is still to be seen. But then we would need to take some pricing back And again, if we see inflation on cost base, be absolutely clear, first of all, it's really to be cost competitive. So we'll continue all our efforts we've done in terms of saving programs on procurement, continue to drive efficiencies in our factories, but also to drive efficiencies in indirects. There might be that a latter is a remainder, which we need to do with price. Now how and when that price comes through is still to be seen.

So Nomad this moment, and we've only had one month of actuals, we still see volume and a bit of pressure on price. Throughout the year, it could be that price comes back. So I think that is the main context we can give you at this point. Thank you very much.

And the next question comes from Powers with Deutsche Bank. Please go ahead.

Great. Thank you.

Good morning, good afternoon, everybody.

Stefan, the stepped up innovation and renovation activity that you mentioned in your prepared remarks, I curious as to how much of that you expect to be focused on existing must win battles as opposed to some of the new and emerging growth platforms that you talked about in 2025?

And just how you think about striking that balance?

Well, the thing is, to your point, it's going to be mostly gross let's say, machine battles in growth platforms. But let's say, let's put it that way, the mushroom battles are still very much the biggest piece of our business. So it's around 50% of our business and that's where the bulk of innovation is going to go. This being said, at the same time, growth platform, which is let's say, north of €100,000,000 at this stage is growing very nicely very fast. There's going to be a lot of list and launch, which is great.

So it's going to be probably to take proportionally a bigger part but obviously applied on the smaller part of the business. But that's where the but let's say innovation is going to go. First and foremost, Rusty Battles, obviously growth platforms.

Okay, very good. And then you would also you talked About the organizational changes and the rewiring efforts that you've done to improve overall execution and agility, etcetera. To what extent do you feel that mission is Yes. Sort of accomplished versus there being more work to do And what would be the priorities in 2025 on that front?

Well, let me start with the well, my statement, it is never finished.

That's the first piece.

Never finished because Well, you may know me as I'm never fully satisfied anyway. So that's that's you'll never hear me something like fantastic and all these things because these words doesn't do anything exist in my Pardon me, ladies and gentlemen. Please standby while we reconnect the speaker line. Hi, this is the operator. We have now brought in the speaker line. And we can proceed.

Thank you very much.

So Steve, sorry for the interruption. [indiscernible] your passion was so great. Yes, I'm not with what's happened right now. I can tell you. [indiscernible] So my point is, no, it's never finished. But this being said, I mean, we have really simplified the organization big time last year. So you remember that we had at some stage 22 countries and they're reporting between or it was a bit. I wouldn't say it was optimal. Now we have all these guys reporting to one person six clusters, and I think it's a big, big change.

And in the meantime, we have overseen invested heavily in things like like revenue growth management innovation as well. In service of of focusing these clusters. Supply chain is really it's a never ending process anyway. Restructuring improvements, making sure that these savings are going to come back and then be in a position to invest behind behind A and P and gross margin ultimately. So my point is, it's never finished, but let's say what we have accomplished this year last year was really meaningful. Obviously, we also have to remain very, very cost conscious because basically what I want to do to achieve is to put most of our let's say, savings behind A and P and innovation then obviously in service of short term and long term EBITDA But that's how we want to be. So lean in terms of indirect, after having restructured and clarified the whole structure, then making sure that obviously top line will be served the right way.

Very good. I appreciate all that. I'll pass it on. Thank you.

Thank you.

And the next question comes from Rob Dickerson with Jefferies.

Please go ahead. Great. Thanks so much. [indiscernible] I think about a year or so ago, kind of the idea was you can gradually get back right, to the the 30% gross margin range or somewhere around there really based on volume recovery, also combined with with all the productivity initiatives and the the mix benefits. As you think through kind of '25 relative to '24, your first question is it seems like you're kind of already there, right? Like as finished the full year 2024, you're pretty close already.

Is there any change to the thinking in terms of like what the real gross margin benefit from here could be on the business just given really the focus on must win battles, given the volumes starting to recover given the productivity in the ships? That's just the first question. Thanks.

Yes. Let me answer that. Thanks for the question. Again, our strategy will continue in the same way and no change to that. We will continue and that's our commitment to drive efficiencies in supply chain You've seen that in quarter four and both the full year.

Had full year around 110 basis points of supply chain efficiencies. Quarter four, we had supply chain efficiencies. We will continue to drive that. Right? And what we then said, we will reinvest those efficiencies together our continued effort of driving mix into our brands and products. Now most of that will be an investment in A and P, into the product, but it could also be that we do some investments in price as you have seen over the last three quarters. So that is our commitment. Renault at this moment going to say this is our guidance for gross margin in 2025, whether that will be 30%. We're very happy that you see the recovery in 2024. We will continue to drive the drives. As I said also, there will be a bit of inflation Again, we need to be cost competitive. We have to take some prices. That will lead and we'll see how we then end with the gross margin. On the long term, I think we will continue to drive a further gross margin recovery. How that plays out in 2025 is still to be seen.

Okay, great. Perfect. And then maybe just a bigger question for you, Stefan, just around kind of strategic opportunities inorganic strategic opportunities and kind of where you sit now kind of for a long time Nomad was clearly acquiring a lot more actively lots occurred over the past three, four years. That made that maybe a little bit more complicated, maybe valuations even a little lower, I'm just curious like kind of where you sit today Are you kind of more actively thinking about acquisition potential, like if there were something that were to to come up that were attractive would you still consider that? Or are you maybe in a period right now such that the focus on the core portfolio really is primary number one initiative.

And you really kind of think Nomad some point we'll get back there. But right now we're really not thinking about acquisition potential at this point. That's all. Thanks so much.

Well, thanks, Rob. Well, the point is with or without acquisitions, Rob, the focus has always been been the existing portfolio. That's the first piece.

We never deviated even when we did the Switzerland alliance or [indiscernible] deviated. That's the key piece. And that's the key piece because I don't think you can be a good acquirer if you're not doing the right job with your core business because the business model behind acquisitions are always predicated on a very solid model organic model. And that's why we never did any acquisitions between 2015, 2016, 2017. Because we had nothing to offer. We had first to clean up the whole thing. And then we started. So now obviously since since basically 2022, we stopped. To your point because basically first, we need to focus on on the business as such even more. That's one thing.

And second, because there was a big difference between sellers and buyers. So I think this this is reducing. The GAAP is is reducing a bit.

In the meantime, no regrets We keep buying back shares which is the best acquisitions we can do. But also at the same time, I think what we also see is there are some maybe under the greater screen things not shiny object, that we could consider in our category new subcategories in some countries where we have a lot of synergies And that's the kind of things more and more we are considering. Nothing done yet, but obviously, I'm not in the business of disclosing any names. That would be not that would be the smart thing to do. No guarantee to do anything. Rob, because if you guarantee it is something as the best way to make mistakes, by the way, But definitely, we believe that we have something to offer. Which is not necessarily the big names in Europe, but others add ons ons, deals and I think by doing so, we could create a nice pipeline of M and A as we're also creating a pipeline of innovation.

And maybe just to build on that, and I can give credits to Stefan, I wasn't there, but since 2016, end of twenty sixteen, this business has deployed roughly SEK $1,200,000,000 for M and A, while shrinking the share count by 30%.

To 13.13. And this combined then with our organic growth has allowed us to increase our EBITDA by share per share by 97% almost 100% nearly double 2016 to 2024. And we were doing this while you've seen the dividends and lowering our net debt to EBITDA leverage. So think that also tells you something in my humble opinion.

Yes, of course. Thank you so much. Very impressive. Thank you, Rob.

And the next question comes from John Baumgartner with Mizuho. Good morning. Thanks for the question. Hi, John. Hey, Stefan. Good morning.

Good afternoon.

Maybe first question, I wanted to come back to the enterprise wide transformation.

The charges taken for that program in the quarter were fairly sizable. How far along are you in terms of taking these charge at this point, implementing the program? And then on the other side of that, how do we think about the ramp and the related efficiency benefit? I know it's not something you normally discuss in detail, but should that ramp in efficiencies begin in 2025? Is it more 2026? Just any thoughts there? Yes. No, let me answer that. It's a good question, John. So points.

You've seen that there's a bit of a push on the line. If Yes, maybe you can go [indiscernible] So the direct in terms of cost was around $5,000,000 both in the quarter as well as if you look at the last year. What we said before some interaction is we will bring that down, but clearly we're not all sudden going to have that. But can we bring that down these run rates with 20%, 25%? That is clearly the aim and we are working towards that.

That's one part. [indiscernible] The other point is what Stefan just said in terms of not having disruptions again. We will go slower smaller and simpler. And slower means one of the lessons is you need proper time to test it to onboard our teams and our people and our suppliers. That's one point. We will go smaller. So what we're going to put live the end of this year, the current plan is that what we went live last year was around a third of our business. What we're going to put live this year is not even 15% of our business. So will go smaller. And the third bit is where we can, we're going to simplify.

So that's the second point I want to bring in. The third point is, the efficiency ramp up there are elements related to the fact that you need a whole new enterprise system. And that will help us. But the big efficiency gains in terms of what Stefan spoke about simply [indiscernible] at a factory as well as on a macro level, in terms of supplier rationalization. Nothing is stopping us to do that already in the next quarter and the next one or two years.

Okay. Okay, great. Thanks for that. And then then a follow-up on the commentary on price. I'm curious as you sort of see the waves of material inflation having passed, as you look back and assess how the volumes are evolving, have to be rebasing to these higher price levels for the category. Do you think about everyday value for your frozen categories at this point? And do you sense that anything is changed in terms of maybe frothy elasticity as relative to fresh or shelf stable options for consumers in the categories?

Well, I think vis a vis, let's say, the center store and the obviously fresh, it's a bit more difficult to see. Only thing we've seen is during this crisis, as expected, we as category leader, we led the price increases and the other guys have been a bit slower to react including the private label. It's been a great time for private label in terms of market share. As expected by the way, but we have no regret because that was the right thing to do. I by far prefer back to Rob's question, where do we stand with gross margin? I can tell you, we wouldn't have this would not talk about when are you going to go back to 30% that we would have been very far from that. Now what we see is at least in the category, John, I would put in the category I think what we see is [indiscernible] We are obviously we're gaining market share. It's a bit choppy. Still, but we're gaining market share, which is probably lower, which is good because the market, let's say the price has stabilized, which is a good news as well. Now back to your question and correct me if I'm wrong.

How are we doing versus other categories like fresh, or center store. Well, I think overall, I think it's a it's more than ever frozen has proven to be a very resilient and good category. And I would say with all the things we have ahead of us, in terms of long term trends, in terms of good food, and obviously also waste and all these things. I think it's going to only amplify the future.

Thank you. Welcome, John.

And the next question comes from John Tanwanteng with CJS.

Securities. Please go ahead.

Hi, good morning. Thank you for taking my questions and congrats on a nice quarter.

First, just a small one for Ruben. Are there any repurchases assumed in the in the EPS guidance for the year. Or are the capital allocation No. We have not assumed that only to the what we have assumed is that our share count will stay flat. So there's always a bit of shares issued for share program we have internally. And for that, we assume some buyback. For the rest, it is assumed flat. So additional share buyback could be a tailwind. On the other hand, you also know that in EPS, there might be a bit of headwind. Depending what the floating interest rate will do on all of that. So that's the assumption.

Got it. And then second, have you thought about the potential for tariffs from The U. S. And how that might impact European markets and the ability to procure seafood that's denominated in U. S. Dollars and what the knock on impacts might and how you might change your strategy to mitigate anything that might Yes. So just because I heard you saying denominated in U. S. Dollars also to be clear, potential U. S. Dollar moves.

Our hedging strategy is such that we don't see a big impact in into this year of the strengthening of the dollar. Which we've seen over the last one or two months. So just to make that point clear. Secondly, and just to be clear, we don't export into The U. S. And if you look at our buy side outside fish, which I will come to, we don't import ingredients from The U. S. So we don't see overall big impact on tariffs. Now if you do look at fish, maybe The U. S. Russian fish, there's an executive order that Russian fish is not allowed into The U. S. We think if you look at also a bit the population base, from a U. S. Perspective where a lot of that is in Alaska, we don't think that will change. But again, no one knows in these times. We then see there is a tariff in Europe and UK. On that one, for U. K, we're importing U. S. Fish. So not an impact for us. Could be that there's additional tariffs also in Europe, but this month we're not foreseeing that also because you have to look at the overall fish supply.

Where we would run out of fish, there would go up too much or sanction would go up too much. So actually, we don't see that as a major risk. That doesn't mean we're complacent about it. So I think there's is a more strategic work which we've done looking at therefore the diversification of our fish sourcing that we are sure that in five to ten years we have the right fish sourcing So I think that's one element. The impact which the element which could have an impact, but again, this is also a bit hypothetical or no one knows what will happen is an impact on the gas prices. But again, that's not the biggest spend of the item in our P and L where we free stuff instead of heating stuff, but that could have an impact. You've seen what happened today with the gas prices. But again, both senses the main point is we don't see a major impact of litigation in terms of tariffs.

Great. Thank you.

And the next question comes from Peter Saleh with BTIG.

Great. Thanks for taking the question and congrats on a nice quarter.

I just wanted to ask if you guys could provide a little bit more color on the overall consumer environment in Western Europe. Just given the inflation that you're seeing, the incremental, have you seen any change in behavior at all in some of your core markets given that you're starting to see a little bit more inflation, has that flow through to the consumer already or are we a little early on that front?

Well, I would put it that way. I think it's easy Little by little, it's improving, but it remains it's it's not where it was before the crisis. But little by little, I think I would, but because when the Ruben is talking about increased inflation, It's nothing comparable to what we had in 2022. So it's it's a bit of a price increase, but nothing nothing major So yes, I think overall, it's it remains as I said, slightly improving, but takes a bit of time. What we also see which is good is private label is losing a bit of market share, which says something about obviously people coming back to to brands and what they perceive rightly so, by the way, in terms of quality So that's good. [indiscernible] I think that's where we see it and which is fully reflected in our guidance by the way.

Thank you very much.

You're welcome. This concludes our question and answer session. I would like to turn the conference back over to [indiscernible] For any closing remarks.

Thank you very much.

So I'm proud of the progress our company has made over the past year. And confident in our growth outlook going forward. Our strategy is working and our teams are executing our plans well. We have compelling innovation, renovation and advertising and merchandising plans. Slated for 2025 when combined with our ongoing productivity programs give us good visibility to another year of top and bottom line growth. We expect to keep our top and bottom line growth streak going again in 2025 extending the streak to ten years as we mark our ten year anniversary as a corporate company. Thank you to all our employees, investors who have joined us on this journey. The best is yet to come.

The conference has now concluded. May now disconnect.