Nomad Foods Limited (NOMD) Earnings Call Transcript & Summary

We'll kick off our next fireside chat with Nomad Foods. So welcome back, everybody, to our fireside chat with Nomad. With me today are CEO, Stefan Descheemaeker; and CFO of Samy Zekhout. Welcome, gentlemen. Truly great to hear you back [indiscernible].

Thank you, Andrew.

Thank you, Andrew.

Integral place to kick off is Nomad this morning reaffirmed [ 2-year ] guidance on both the topline, EBITDA, EPS and cash flow and gave some sort of preliminary guidance for 3Q as well; 3Q on both the topline and EPS, and EBITDA [indiscernible] where The Street is currently placed. How much of that is just the [indiscernible] maybe was there any change to your back half perspective and the cadence of [indiscernible] in the back half or is it just that The Street is remodeling it and you're not seeing a lot of change relative to what you had anticipated initially?

Well, let me start with EBITDA [indiscernible] nothing has changed. No, but thing like 4 weeks ago, we came up -- you may remember with about the same guidance, mid-single-digit sales growth EPS and cash flow, we increased EPS. We're increasing EPS for 2 reasons. One is operations are on track -- are on track. And in the meantime, we went through a buyback program, 3 million shares and mathematically it gives us the EPS increase. So that was it. With that, we clearly had in mind that it would be a difference within H2 between Q3 and Q4. The reason being, well, first challenging comps, as was really the first quarter where we increased price significantly. So sales grew by 8% solely from price. Second, we said very clearly last few months ago that we're going to increase significantly [indiscernible] -- significantly is really significant something like 50% on an H2 basis. The reality is nothing has changed, but we've decided to put this money starting -- start, by the way, in -- by starting in, let's say, by mid-August, which is the best way to use your money, simple as that. When you have that in mind and you're thinking about A&P, well, and impact in terms of sales would not start at best before Q4. It's not going to impact the first 6 weeks of the quarter. But the cost obviously does. Promotion, we said we've talked about promotion. We're starting promotion almost as we speak, actually, something like a week ago, promotions coming faster by the very definition of promotion, but it's only one month. So from that standpoint, we said, yes, very clearly, there would be a reality between both. So back now, operationally, things are on track. Nothing has changed so not changing the guidance. We're not changing anything. And we just said, given the discrepancy we started and also with Barclays coming, it would be the most appropriate thing, the most appropriate thing to [indiscernible] to make sure that the numbers would be in line. But nothing has changed. I cannot be clearer than that.

And I know that the timing of a return to A&P and some promotional spending is timed -- correct me if I'm wrong with back-to-school timeframes when people are sort of back from maybe summer holiday and travel [indiscernible] when you can have the biggest impact on consumption and volume. Do I have that right? And is there going to be more to it?

No, it is absolutely the case. And I think, frankly, what we've been doing over the first half was to hold it until effectively, we had the confirmation that all of the actions we are taking were delivering. And that led us as well to hold a bit on A&P as well at the moment in time. But as effectively, we looked at the second half of the year where we had all of the budgeted money carved out. We wanted to restart it at the time effective people were starting to make some choices, refilling the freezer after returning from vacation and so on and making sure that, effectively, whenever they were comparing the different prices in terms of, let's say, various type of product that is type of protein, our product as really going to make it sure as a prefer choice as we went through. So combining promo-efficiency in-store presence and retail at the same time, let's say, stepping up our advertising was effectively a good combination for us. So will give us the maximum chance to ignite effectively the momentum we wanted to get to.

I realize consumption or takeaway is the ultimate sort of arbiter of all this and we'll see how that plays out as the year unfolds. But you probably obviously, at this point, are very good visibility at least into the arrangement -- the merchandising arrangements you have with key customers, the collaboration that you're looking for in the back half with all this A&P. Maybe if you could talk a little bit about what you're seeing vis-a-vis your largest customers as you ramp up the timing around A&P and promotional spend.

Well, I have to separately they're very appreciative from the fact that reinvesting in the category is a clear sign from them on our commitment after a moment where we have, let's say, step down a bit our investment, bringing back, if you want winning [ copies ] like the Captain [ copies ], going back at a very specific claims being more present in promo at very specific price point coming out of all of the work we've done in some instances with them through RGM as well. I mean, it gives them, frankly, the confirmation of our commitment to the business as a category of getting consumers back to the isle. It's a very profitable category for them as well, I mean very clearly. And for them having more momentum there is effective good sign for them on the recovery at the moment where people are on the huge strength from a portfolio standpoint. So clearly, there, of course, there is tension on pricing. Of course, there's always a debate on which product to put on promo, what the pricing they want to have on their own brand and so on and so forth. And it's [indiscernible] discussion indeed. But at the same time, seeing us back on the investment side and on the fact that we want to be competitive on promo is giving them a very good sign that we want to reinvest and reignite the category growth in that sector.

Maybe that's a good segue into price gaps. I guess where are price gaps currently with respect to Nomad's brand, the Birds Eye brand and others with private label? And I guess when do you anticipate that returning to what we call more typical or normalized levels?

I have to say, frankly, that there's always, I mean, 2 elements in there. I control, we control one, which is Nomad and we're going to control the other. But the reality is that what we have seen since actually the beginning of the year is the increase of price gap, which has gone up as high as 10% has gradually gone down to now in the range of about 5%. 5% versus the historical level, which we feel is about frankly manageable as we step up, if you want, our investment from an A&P standpoint, at the same time and as we get more competitive from a promo standpoint. So are we satisfied with where we are probably not yet completing. But as we are taking the surgical intervention on the pricing category combination basis, we're expecting if you want that some of our category will start to regulate growth, honestly, giving them as some [indiscernible] for them effective to reignite their own profitability of the category where we operate, and so that they can as well invest in other parts of the business, I mean, from a retail standpoint. But very clearly there, there is now a convergence point. It may well be that effective they may decide whether to promote even more, but we don't expect -- certainly we haven't seen such signs given what we have been observing over the past months.

And especially knowing that the cost of living was a big thing. And what we see is COGS going, let's say, going milder. As a result, price will be milder by definition. And at the same time, labor costs starting to come back at the right level. So with that, we think, and we've seen this really is in the survey that the cost of living little by little is starting to become less of an issue. And with that in mind, especially for 2024, this surgical intervention in terms of promo plus, obviously, A&P back to where it was not limited to Q3, by the way, is the right timing.

And as you said, you've spoken about sort of setting this up for a return to volume growth in '24. I guess what would be the drivers of volume growth in '24? How much of that is due to recovering volume lost from elevated price gaps versus sort of more organic volume growth, if you will?

Well, let me start with the category. It's a good category. It's doing well, and it has proven again that it's on top of many food categories, by the way. So we believe that with this new environment, the category as such is going to grow. As in the past, nothing spectacular, but something like 1%, 1.5% with us growing a bit further with the A&P program with obviously the R&D program is the model of the past. And that model, the algorithm delivered a lot. So what we know on top of that we [ observe ] the supply chain savings that will help us to reinvest. And that doesn't take into account yet how much volume we can regain of what we've lost so far. But definitely, the intent is to regain part of that. It would be obviously a bonus compared to even the previous category we had in the past.

How do you view sort of current levels of sort of promotional spend in your categories? Are competitors back to '19 levels and Nomad just needs to sort of catch up or is promotional intensity greater than maybe it's been in the past, given the more sensitive consumer environment, particularly in a lot of your key European markets?

We have been [indiscernible] a concept of effectively trying to differentiate the price from promo versus shelf. We have been on a journey since year 2017 to 2019 of declining the overall promo cost, by the way, not just us, I think, from a category standpoint. Plus COVID effectively started from a low base and now as we ramp up back the number of promotions and the depth of the promotion, the percentage of the reduction, we're about back to the historical level that we have in this category. Fair to say that, frankly, this is a category that is resonating a lot with middle class consumers, which is frankly our prime prospect in many ways. And therefore, they are very sensitive to promo where we call in our jargon, promo hunters, and we really have to make sure that we are competitive in the context where they operate, depending on the channel where they are in front. So promo investment is really an important element for us. So we drive the consumption and get us to where we want to be.

First of all, you've seen or some of the larger sort of U.S.-based packaging companies. As these companies are lapping pricing, volume recovery has been somewhat slower than I think most of the companies would have anticipated at this point. And we've heard lots of different reasons for it. It seems to be still a bit of a puzzle to a lot of the companies. Some say it's consumers hunkering down a little bit, zealously guarding against waste, maybe it's summer travel and just not cooking as many meals at home. But if it's not as though they're trading down to private label and mass, we haven't seen that. It's not as they're trading into away-from-home eating and mass. We haven't seen that. So I'm just curious maybe your own sort of personal take on maybe why that volume growth recovery and more generally in the space has been a little bit slower. I don't know if you're seeing the same thing in a lot of the core categories in Europe as well.

I'm going back again to what we said one month ago and today. Well, it hasn't changed our perspective for the end of the year, it hasn't unchanged. We don't think that we will at zero at the end of the year so to [indiscernible] definitely, our intent is to come back to positive territory in, let's say, in Q1, that's the idea. So it hasn't changed. We haven't seen something like it's going quite slower than expected. We always knew that it will take a bit of time because we have -- we see -- the first good news is the category as such is doing well. And then from there, with the mild price, we think promo and A&P will play a role, and we know the models, how it's working. So from that standpoint, and I'm not surprised. I think it's also going to take a bit of time for the consumers to digest the cost of living. And with that, we see also the order negotiations in terms of labor that are coming a bit later. So all these things, well, whoever thought that it would come fast, well, it's proven wrong, and we never were in that category? We always thought that if we take a bit of time.

Nomad put through and led as the branded leader in frozen in Europe, a number of price increases over the last sort of yea-and-a-half. And your thoughts where we need to, as the branded leader protect our margin structure, so we don't come out of this inflationary environment with a structurally weaker margin structure. Take whatever upfront potential initial weakness may come from price gaps or consumer behavior, knowing that, that will work itself through, and you did that very successfully. I mean, I don't think anyone would have given you credit for taking multiple price increases in the European theater, where it's hard enough to get one through. And I know they were justified obviously, but I'm curious what your learnings were by going through that process. And if you come out of this with retailer relationships that are in a very similar place or better even or were -- going through this and maybe where you were before this inflationary supercycle started.

Well, let me start maybe then this will -- you have much more [ inside ]. But to your point, I think we were all in this mindset last year, something like about April, May, we could see our COGS going up a lot, much more than expected. And then Oh, My God, what are we going to do? There is this [indiscernible] kind of thinking process that you only can increase price once a year in Europe, and it's behind us. So what are we going to do? Are we going to just [indiscernible] or not, and we decided to change the model? Has it been easy? No. By definition, the retailers didn't like to hear this. They would have preferred by far taking the same margin. But we've seen this. They've seen the margin, they've seen the price reality. Has it been easy? No. Has it, to some extent, in some situations, antagonize a bit of the things? Yes. Are we coming with the right things in terms of A&P, in terms of promotion intensity, in terms of R&D next year? Absolutely, because that's the role of the market leader that has to bring value to the market, starting with the retailers. Our relationship with the retailers is absolutely fundamental. And what we want is, and I think the model and what we see is the evolution is going that way is price little by little is going to become less important. It's going to take time because obviously we see in some categories, there is some decrease some of the it is decreasing, but -- and it's our job to make sure that it's not going to be limited to -- for the sake of both and the consumers. It's not going to be knitted to price. And we have what it takes in place.

The one point I would add is the fact that if you rewind the day back [indiscernible] of last year, when we started to see the acceleration of inflation and we said we will probably have the price end of the year. I remember the conversation with people this is impossible. This is Europe. And I think that this ammunition to change the [indiscernible] in terms of business modeling and [indiscernible] pricing in order to maintain the attractiveness of the business so that we could reinvest. It is not about, frankly, to grow margin, it was to preserve to reinvest. So that determination that's important, but how to transparency -- and to be very honest, that was about the [indiscernible] retailers. I mean we have to bring in the back reversibly have to talk with them in terms of what we are experiencing that has enabled us to go through. And effectively, in that context, as effectively the situation is starting to soften down. There is an expectation that -- coming up with more promo in order to be more competitive and more consistent with where the market is as well at the same time. So it goes there, but that element of challenging the [indiscernible], but at the same time, changing the way we operate was absolutely critical for us with no blip in the context.

Capital allocation, obviously, is crucial to Nomad's EPS growth algorithm, return to share buyback this quarter. Do you expect to keep this going for the back half of the year? And what are sort of M&A and accelerating your balance sheet deleveraging plan or even the possibility of a dividend?

Well, as you know, Andrew, we love -- we like, not love, like stronger M&A. I'm very [indiscernible]. I've done a lot of -- many, many in my life, but it was always an emotional. And I think, quite frankly, the combination of being focused and very disciplined leader behind M&A. I think we have the excellent [indiscernible] in terms of value creation. So that being said, while I would just take a number today, 8.5x EBITDA. So I'm not sure that we're going to find a lot of M&A targets, even post synergy with that kind of multiple for something that doesn't require too much due diligence, by the way, hopefully. So buyback is definitely with the right answer. So at this stage, it can change at this stage is the right thing. People initially, we had to explain to you on this, why didn't you work to buy back in the first quarter for a very simple reason, the leverage, we have to start the leverage first to make sure that we will be on the right level. We were at the right level in Q2. We had the right level in Q3. So that's the kind of things we're going to do with that.

So I think the point is the focus is effectively continuing to generate cash and some profit into cash, which we are now back on doing effectively after the challenge of last year, after the investment we have made behind inventory. Now that we have the cash generation plus the cash base that is not insignificant. We have the means to frankly decide and of course, buyback is a prevalent option I mean from that standpoint. But we're looking at other opportunity with the mindset of deleverage and the mines of other options to clearly optimize the return on cash flow in that perspective.

When the time is ultimately right, perhaps for some -- from additional M&A, are there still opportunities in your core frozen space in your core European theater to do more? Maybe it's more Eastern Europe, what have you. But are those some of those -- those opportunities still there or do you have to move further afield from the core?

The answer is clearly, yes, you still have opportunities in that category. To your point geographically, Central, Eastern Europe is one example, but also pie category. So for example, today in the UK, we're covering almost everything. You remember, we went to pizza. We went to something which is very specific to the UK. I'd have to learn myself with is Yorkshire bidding. But today, we have everything. We have pizza, we have this. We have obviously poultry. It's very big for us. We have fish, we have veg. So we can come to the trade with the whole spectrum of possibility, which is exactly what is expected from the category leader. In other countries, we are less -- we're not there yet. There are some opportunities as well. Sometimes organically, that's why we start because we see a white space like in France or like in Spain, in terms of pizza and sometimes it can be achieved high by M&A. We're not obsessed by size for the size only. I think we're obsessed by value creation. And I think that's what we've been doing with M&A.

In your Q2 remarks, you mentioned that you've kept some of your raw material buying open to take advantage of moderating cost. I guess what input specifically -- could there still be some opportunity? And how is this evolving? And how do you see that progressing into '24?

Yes. So far, I think by the time we made the announcement in Q2, we're at about 90% of our total material covered been roughly in terms of supply. By now, we have moved to about 94%, 95%. So we are still leaving the position open when we see effective that some of the materials are going down. So we're trying to be honest, to capture some of these opportunities in order for us. If you recall, we still had, let's say, roughly between $5 million and $10 million of pricing to execute. And the context being what it is, the idea would be to kind of almost narrow that down to its bare minimum, hopefully, it's nothing. And so that would be done by expecting those opportunities. So the idea is by the end of Q3 we'll be at 100% and have more or less, if you want negating this, we call it, the pricing by that point in time. As we look forward, we'll probably have a less aggressive position when it comes to effectively taking longer-term commitment because of the trend is in the market. So if last year, by the end of the year, we covered at about 55%, very likely we'll be covered by [ next ] at this time, trying to secure the first half for sure. And effectively more up in the second half that would be the idea as we move forward in material.

Makes sense. The Fortenova deal certainly has been a success thus far. The Adriatic region had extraordinary performance last summer. First, how is the business performing against those very difficult comps? And second, I guess, what kind of long-term learnings have you taken from the Fortenova deal that might help inform future opportunities in that part of the world.

Well, so the first answer is very simple, very well. So they're doing extremely well and versus last year and versus the budget. So that's very good. We also learned a lot of interesting things. For example, last year, yes, the weather was great so ice-cream was, I mean, we're selling it very extremely well. And we have some out of stocks. And we learned, okay, fine, we need to prepare ourselves. We need to obviously prepare the season so that the stock will be higher, and we've learned from this. And from that standpoint, we're doing extremely well. So that's the big piece, but it's not limited to ice-cream. I think it's a way that people have embraced on this integration. So I think we brought this integration to a high level, and that's definitely our new normal for any new acquisition. And we've seen this unit. The beauty also has been in one category as -- still making some mistakes by definition but fewer and fewer, not always the same, but by the nation as well. And also, you're improving your game every time. And so that's what -- and then with Fortenova, we invested a lot, but we're very pleased in terms of price, but in terms of integration, and we're very pleased with the outcome. Very pleased.

You've talked a lot recently also about your focused approach on revenue growth management this year. Can you give us some concrete examples maybe of how this has impacted your business?

Absolutely. We've clearly now elevated that to a substantial element of investment in our capability from an organization standpoint and clearly our coverage of the market by now. We have a centralized team that is leveraging [indiscernible] state-of-the-art technology, I mean, from that, in particular, in data analysis. So what does that do? Effectively, we're going market-by-market and looking at the areas where we have some challenges in terms of either loss of consumers, lack of competitiveness, loss of in-store presence and so on and looking at how to resume those situation, whether they come from clearly managing the inflation execution in the market, the product offering in terms of price back, the mix leverage as well. How does the retailer and ourselves if you operate on a given category. An example could be a down count. Effectively, we have a product that has let's say [indiscernible] count we make sure we have taken inflation on to this pricing on to this product, I mean, ongoing, and it gets to a point where frankly we see the offtake now going down. So the question effectively is whether we make a change in terms of the pricing or whether we need to change the count in order for us to attain the competitiveness. So we go really market-by-market, whether it is potato in France or fish in Italy or fish in the UK or fish in Germany. And so on, and we look at what does it take to reignite growth in an area where effectively competitors are reacting the way they've been reacting. We intend to bring consumer back either to the category and or to our brands that would say from that perspective. It covers almost all of the muscular battle that we want to do. So we are doing it probably at this stage for 60% of them, but we are planning to frankly cover them on that. It's a lot of data analytics itself, but with a very practical view as to what does that mean from a product realization in the store. It goes on promo. It goes on price pack. It goes as well on the terms with the retailers in terms of effective -- for instance, joint promotion. If you want to do at the same time, let's say, [indiscernible] fish coming together buy one and buy the other one in terms of the discounted price. It's not something that's resonated the consumer, starting with consumer insights what's really mattering to them up to the point of what the ultimate ending profitability for us and for the retail. It's something we cannot do in isolation. We have to do it with a retailer and hence, a very detailed approach market-by-market.

Maybe you can give us some insight into the newest strategy on using alternative [indiscernible] and some of this was out of necessity or risk sort of risk management. I guess how is the consumer reaction to the product? How much runway do you think you have on this sort of new fish sourcing? And what impact does it have potentially one way or the other on margins going forward?

Well, to start with the consumer because that's the most important. The consumer is reacting extremely well. So that's a big plus. I think it's also -- when I'm standing back a bit, we are thinking about the crisis and what it will be terrible not to learn anything from the crisis. So we talked about the pipeline. We saw that in the past, there would only be one window per annum with the retailers. And to some extent, I think this crisis forced us a bit to think, okay, we need to diversify away from one single source of fish and other prime by the way. And that's what this crisis has come up with because things may happen again. I think this concept of going with [indiscernible], high, let's say, high quality takes a bit of time to get there to be sustainable and all these things is good. Price wise, it's a little bit higher, but we also believe that as we're getting bigger, we'll be in a position also to negotiate, I mean, let's say, price that are more in line with the rest of the industry. But definitely, we're very pleased with what we have. And we also very importantly, we also have the ability in a flexible way to scale up depending on what the situation is in the world to scale up or obviously, or contract.

The one thing as well to comment on Stefan's point, I think the clear requirement of that one is that, that had to meet quality and taste requirement that we had on the rest of our lineup, whether it's we had work to have the CE certification on that one the Aquaculture Stewardship Council and certification, meaning it's safe, it's good and the consumer response has been really outstanding and into the quality and the taste of the product. So clearly, the diversification is one piece. The cost is another one. But of course, I mean, ultimately ending up on somebody's plate, I mean, taste and safety as well was very important products.

Yes. Nomad's faced significant supply chain volatility the last couple of years as a lot of food companies have. Can you share your learnings and plans to bolster the resiliency of the supply chain? Are you investing behind capabilities to enable better inventory management and things of that nature?

Yes, we would definitely have taken the learnings coming out of that where if you recall, we had, at some point, a pretty challenging situation, I mean, on the post-COVID moment relating to and even during the beginning of the crisis, I mean, last year on customer service performance and which we knew was effectively a channel. So we clearly have got a clearly substantial last year to make sure that we are securing volume, making sure that we have what it takes to produce what was needed, and we did that a year ago, and now we're back to the effective customer service performance that is clearly at the highest level we've ever had, I mean, right now on an average basis across product line. But at the same time, we stepped up effective productivity. We stepped up effectively and in the work where we procurement and our supplier by looking at means to secure supply in the right quality in the right location at the right price as well. So there's a lot of efforts we've taken on supply management. The other element is integrated business planning, meaning producing what we need for, let's say, the market not in excess, and at the same time, driving productivity and making sure that the large front, we are focused on scaling if you the production, the smaller products we're focusing on the product where they were really good at and re-managing volume allocation across the different manufacturing side from that perspective. But definitely, we are pretty [indiscernible] for a very strong year-in, year-out savings program as we move forward from a supply chain standpoint.

Taking a step back, I mean, what do you see as the advantage of being a pure-play frozen food company? I mean how do you leverage that positioning? And how do you work with retailers to maybe optimize the freezer case with intensifying competition.

It's a great question, Andrew. But I think the answer has to be -- it depends because Frozen food is great. We would start from a [indiscernible] category, quite frankly, my answer would be totally different. It could be we need to diversify away and to move to other categories. And some of the people -- some people are doing this because they have to obviously move from something which delivers something like minus 5% per annum to something, which is obviously more balanced. Thanks God, we are in Frozen Food. It's a great category, and we are the leader. So these 2 conditions, good category, leadership, yes, absolutely in terms of value creation, this is a great starting point to create value. So that's that. So some examples, I mentioned UK, UK, I mean, we can provide everything they need. And it's something that, obviously, that doesn't happen every time. So we have the [indiscernible] in terms of M&A, we're learning a lot because we are very focused. Our people don't think about -- we are one of the 5 categories within the company, so which one is really strategic? Frozen Food is the strategy. So it does a lot internally, externally in terms of M&A. I mean, people are very -- so focused. They know exactly. People know they have to come to us. So for all these reasons, I think it makes a lot of sense. Does it mean that we'll never go to something else, maybe at some stage, but definitely is a good category.

You mentioned earlier the -- what we'll call undemanding valuation currently out of Nomad share. What is it that you think investors are missing about the story if you think they're even missing anything or is it just about seeing your plan around upping M&A and whatnot coming to fruition in terms of pivoting back to volume growth as you exit '23 into '24 or is there something more fundamental that you think folks are missing if you had just that?

It's a difficult question because I hate to say I mean people don't see everything we [indiscernible]. So it's a very difficult question. I think that today, for example, I think this is the question obviously of Oh My God, what is the inflection point and how it's going to happen and all things. Might be it's a pure speculation. But above and beyond today, which is just a one-day event, I think what they -- what proven people don't see is but is algorithm that is something we've mastered that delivers a lot of cash and then we can deliver the company very well. When you see this, when you apply this on a multiyear basis, even with a very demanding multiple, there is a lot of value compared to where we are right now. You're adding buyback is another component. And so -- and on top of that, someone told me at some stage, you mentioned that we -- you are very imperfect which is interesting. I love that provided obviously, gives us the ambition to improve the whole thing. I think this crisis gave us a lot of improvement. And we believe that within this category as a leader, there is a lot we can do on top of what we have been ahead of the symptoms of 3-year plan. So that's that. Then, obviously, at the end of the day, well, we have to deliver, we will deliver and then people hopefully at some stage will change their mind. That's the way I'm seeing these schemes. I'm not very -- sorry to this be I'm too European from that time point and whatever it must deliver, we're delivering, and we're going to deliver and then people will have to judge.

With the way this year shapes up and moving to the back half being more fourth quarter weighted, right? It may be too early for this, but if you were going to point to anything that would be any green shoots even -- even early stage, not that we're seeing scanner data yet because you're just ramping up the promotional. Anything that you could point to that says, hey, this is what gives us the level of confidence that we're going to see the volume trends improve sequentially as we go forward. And again, it may be too early for that. Even anything you're seeing, whether it's with your discussions with your retail partners at the retail level or whatever it might be.

[indiscernible] one thing. I mean I think people will be concerned, Oh My God, after such a difficult comp, how are you going to deal with this. And actually, we're delivering very, very well. So that's one example. I can see in some countries, like, for example, in fish, where we had issues, I mean, affordability, we're starting the program of RGM, which is again back to price points, which is sometimes it's a PPA -- sometimes it's even higher promotion level where it should be. I think we're starting little by little to see these kind of things which gives me a lot of confidence we're going to do it. You may remember back in 2015, we were something like minus 11% sales in all the things. And then we have this investment battle going. And then it started to 2016 to one by one by one to -- and I think that's what we're going to see to some extent.

Great. All right. We're out of time. Why don't we cut it off here and head over to the breakout session for any more questions. And thank you, Stefan and Samy.

Thank you.