Nomad Foods Limited (NOMD) Earnings Call Transcript & Summary

Okay. Welcome, everyone. Welcome back. I am thrilled to welcome Nomad Foods back to the consumer conference. I'm especially thrilled to welcome back both Stefan Descheemaeker, Chief Executive Officer; and Ruben Baldew, Chief Financial Officer. Together, Stefan and Ruben are going to run us through a presentation probably for the first 20-or-so minutes of the session, and then we'll use the balance of time for some Q&A. And with that, I'm going to turn it over to Stefan.

Thank you, Steve. Well, I'll try to go fast and do this together with this [indiscernible] thing. So let me start with, I think, the key messages, messages are quite simple. I think we have a category advantage. That's one thing. And when you think we had this series of conversation today about Europe versus U.S. Well, Europe is not a bad place to be right now. I think let's say, the consumers are still a bit there or thereabout, but let's say, I think it's moving the right way. So that's one thing. And overall, by the way, frozen food, when you take a longer distance, it's something that has been doing extremely well over the last 10 years, outpaced food overall. And we intended to keep it that way as a leader. Second is portfolio. We have a portfolio advantage. When we think about it, we are in all the categories that matter in frozen food between, obviously, a fish, vegetables, chicken, but also things that are more indulgent. We also are in ice cream, we are in pizza. We are also in potatoes. So we have a lot, but 2/3 of our business, and I'll come back on that later, is definitely is protein and then it's vegetable, so which is a good starting point if you think that the food is going to be increasingly be polarized between, let's say, health and the rest of it, however, taste is a big thing. The strategy is working. I think we put this together years ago, so it's a strategy of resource allocation. We passionately believe that market share matters in everything we do. And then that's where we put our money behind the Must Win Battles, what we call Must Win Battles and increasingly also new categories, very selected country-by-country, and that's working. It's been obviously, the back from the crisis '22, '23, '24, a little bit choppy, but we're making progress. Sometimes it's a bit down, but overall, the direction is moving the right way. That one is -- well, just a bit of ego, just a second. It's one I like. And every year, we can add another year, so which is, well, it's been probably the worst decade of food and beverage. And despite this, over the last 9 years, we've been able to increase every year sales, EBITDA and with a little exception of EPS 2 years ago with the change of in terms of interest rate, EPS as well. And so you've seen the number, 6%, 7%, 10%. So that's what we've been delivering despite all, obviously, the crisis we've been through. Next one is I'm not going to spend too much time. I think it's also about, let's say, market share and where we are. We are a pure play. We like it. We didn't like the idea of being some sort of food conglomerate. So being focused is one of our values, and I think it's working. Next one is a bit of a journey. Well, from the start, nobody was here at that time, obviously, when let's say, frozen food was invented. We really started in 2015. We put together the big brands like Birds Eye in the U.K., iglo in many other countries, Findus in key countries like this country, for example, Spain, or the Nordics. Then after 2, 3 years, we added some other things, which was very much a non-shiny object, but very much focused on frozen food and great add-ons. And we did Goodfella's, we did Aunt Bessie's in the U.K. which basically, we took the brand, we put them together with Birds Eye. And obviously, we're coming with a better solution for the retailers. We added at some stage Findus, and then we did also something you probably don't know the brands, but these are fantastic brand in the country, Serbia, Croatia and Bosnia. And it's a combination of frozen food, by the way, and ice cream and probably our best deal. Quickly, again, great brands, leading market share. As we said, we love this concept of what we call the Must Win Battles. So let's say, market share is not only something in terms of frozen food, but also in every category where we are. We've seen it. It's very clear in food and beverage. Market share matters if you want to obviously grab the highest part of the margin pool. And that's exactly what we're doing. So 46% is the weighted average market share we have for the 25 Must Win Battles, which represent around 37% and probably 45% in terms of net sales. You see the difference in terms of -- compared to the others. And then in terms of brand awareness. So definitely, we love our brands, and we intend to keep it that way and we're investing behind the brands as well. This one is, again, a reminder of what frozen food is. As we said, it's a good category. I don't expect something like a high single-digit year after year, but it's been a good category for the last 10 years. And we think that facts are proving themselves it's going to be to remain that way. So convenience, obviously, value is very affordable. Sustainability is one, but I think the biggest piece is taste. It's starting with taste. All our products are very tasty. And the food has to remain, at the end of the day, quite simple. It's about taste. It's about health increasingly so, but also it's about value and we're ticking all the boxes with frozen food. One example is Air Fryer as well. I think it does extremely well with frozen food. So definitely, it's a category. It's something we want to further leverage and we're going to do this. So we don't think it's something that is going to lead to disappear at some stage. You can see that it's not only people are buying Air Fryer, but they're using Air Fryers. And the combination with the frozen foods in terms of quality, in terms of convenience is really -- it's a perfect match. So it's really something that I believe that we haven't fully leveraged yet and it's something that is going to come in the coming months and years. The next one is just back to category. So frozen food, that's something like a bit more than -- what, 10 years ago, 10 years of trends, you can see that overall, we're doing slightly better than food, nothing extravagant, but overall, whether it's crisis or no crisis, obviously, you can see that we're doing better. And it hasn't changed, and we don't think it's going to change anytime soon, quite the contrary. We believe that frozen food plus what we have which is 2/3 of healthy food and also a bit of indulgence, which makes sense, by the way, we're going to -- it's going to the right way, because we believe that there is still some, let's say, wrong ideas around frozen food and it's our job, by the way, as a category leader to explain the difference. And we're doing this, but not enough probably something that I think we have a lot of opportunities. A long runway of growth and we just comparing, let's say, consumption per capita between the U.S. and all the other countries, or most of the countries where we are, and you see that it's a lot of runway ahead of us, not only in countries like Bosnia, you can see, but also, let's say, in countries like France, like Italy, U.K. is halfway. So a lot are ahead of us, which obviously also makes a bit of a difference with what the category is all about in the U.S. Portfolio, now the second piece. Well, as I said, more than 40% is protein. Fish has always been a big thing for us. We can see that poultry now is really moving the right way, which is, by the way, not by chance, you see that whether it's a chilled or fresh or it's frozen basically, poultry is on the way up. And we have all the intent to go that way. That's exactly what's happening right now. We're adding another 25% vegetables, so 2/3 of our business is really about, let's say, vegetables and protein. Then we have a bit of meals and then we have others. And what we have in other is simple, it's things that people like, by the way, it's pizza. It's about ice cream in some countries, and it's about, obviously, also potatoes. And that's growing as well. So in other words, yes, we like the idea that frozen food is healthy food and all the things, but at the same time, we are pragmatic and taste and obviously, what consumers think and they want to consume is obviously paramount for us. A&P, I think we've always been very, very clear. We want to feed our brand, the concept of Must Win Battles, which is really where we invest all our money together with the Growth Platform, which is the new categories. The A&P is in the middle of this. So we obviously have -- as anybody else, we have limited resources. But I think what makes us different is the rigor at which we apply A&P. So A&P is really behind our Must Win Battles. It's really behind our Growth Platforms. And the rest, quite frankly, we don't invest, and that's absolutely acceptable because you will see, obviously, the growth profile is very different, the margin is very different. So that's the kind of things we're doing. At some stage, back in '22, we reduced a bit like everybody else, by the way, A&P, and I think we're on the way back right now. We think that 4% is probably a good number. It might be more at some stage, but 4% is a good starting point for us. And in the meantime, we're also making sure that the return on investment is going to increase and is increasing year after year after year. So in terms of mix, we also having changed like anybody else, by the way. It was -- 5 years, 6 years ago, it was 80% TV. Now it's going to be something like around 50%. Then you're talking about product, which is really the key piece compared to our competitors like the private label. Well, innovation is a big thing. This year, we're probably going to be in the region of 6.5% of innovation. And it's really about different pieces. I think what makes us different compared to other people is we have a huge and very rich assortment across all the countries. And then when we know that something is working well in a country, we believe that it has the potential to go to be an innovation in other country. And the best example is chicken. Chicken is a really fantastic category for us in the U.K. And we started from there to build the foundations of chicken in Italy and Germany. So we'll show you some examples. But that's obviously what we like is, at the end of the day, it's innovation in the country, but it's also lower risk innovation, because we know it's working in other countries. So we're not starting from scratch. We have other examples, and we come with other examples, but that piece, which is really lift and launch is a big thing for us. That one is, I would put it that way. I like it and I hate it. I hate that the fact that in 2023, we are only -- we have a very rigorous process with our key brands or key products to see where we stand in terms of superiority with the other guys in terms of -- it's a blind test, and it's also a test with -- a second test with the brand in mind. And we need to be superior, the one that delivered on both, the rest is parity. So 2023, we only had 36%. I must admit that probably during the crisis, we really didn't go little and we're not very proud of that. But then we decided, okay, we need to get them to something like 80% in 2027, and we are on our way. We're going to get there. Pizza is a good example. I think some of our pizzas where, quite frankly, in our quest to have something very healthy non-high in fat, salt and sugar. Well, we probably -- the pace was not good enough, and we've changed in this. And it's going to be launched, the new Goodfella's in the U.K. is going to be launched, week 36. And quite frankly, the taste is fantastic. And again, I think as -- we don't need to overintellectualize food. Food Is starting with good food and with taste. And that fits the bill absolutely. So that's what we have. We have other examples. We need to obviously -- in some countries, we need also to raise the bar with fish fingers, which is a big thing for us. Our consumers are telling us, it need to be a bit more crispy, color need to be a bit less pale. So we're working on this. It seems to be obvious, but you need to make sure that you're doing this without obviously changing what fish finger is all about. So it's going to come probably in '26 but it's a never-ending process for us right now. We're thinking in terms of innovation and renovation. So the combination of the two. Overall, we're in the region of 15%, 17%, of which renovation is the bigger part. And that's absolutely fundamental. If we want to keep the -- let's say, the gap between us and private label. The last thing you want to do with private label is to underestimate these guys. They're doing well. They're doing a good job. And we as brands, we need to come with product which is superior. That's absolutely fundamental for us. So where are we going to invest, as I said, Must Win Battles is one thing, Growth Platforms, which is 10% of our business right now, but growing faster is the second piece. So that's where we're focusing on A&P, that's why we're focusing on innovation, that's why we're focusing our renovation. An example, as we said, is chicken, starting from scratch in Italy. So in other words, Italy is all about chicken, but nothing in terms of -- almost nothing in frozen food -- in frozen chicken. And we started, we adopted some of the recipes coming from the U.K. We came with a local player of this, which is this chameleon, which is extremely popular in Italy. And quite frankly, it's on fire. It's really on fire in Italy. It's on fire also in Germany, different business model. It's a very big, let's say, category in Germany, but it's a category which is today owned by private label. And we believe that we have a superior product, and we'll come with that and we'll demonstrate to the market. Yes, we can come with some premium even in Germany. It's been proven in other categories, so we're going to make it work. And we were very impressed by what's happening right now. And it's -- by the way, the idea is -- the concept is also to come with something which is margin accretive. Another one is potatoes, which is obvious for us when you think about it, we have the -- where we have the fish finger -- we have the fish, and we have the chips and then we have -- we can put -- we can come up with fish and chips. And so that's definitely kind of a lift and launch that we're doing right now. It's one example. We have many other examples. But again, it's a category that is doing well. It's a category you can see, for example, in Belgium, which is a big market in terms of french fries, as you say, and they say Belgian fries there. it's the category leader. So we overtook -- it's not that we're only dealing with private label. We're dealing also with people like McCain and we've taken the #1 position. So it can be done, We insisted on obviously, the local part of the Belgian fries, and it's really working. But definitely, it's the kind of things where we want to facilitate best practice from one country to another, as opposed to go to come with new innovation. We have obviously some new innovations. One example is -- it's a natural for us, it's basically high protein. It's there. We see this. Nobody knows yet exactly whether it's going to be a long-term trend or it's something which is more a fad, but we want to be there because we have all the facts behind us. So that's going to be, let's say, in the market in the U.K., something like, I think, week 37. And well, it's great in terms of taste. It's great in terms of number of grams. It's also great in terms of number of ingredients compared to competition. So it's the kind of things that we think is going to work. It's new. So it's not like a lift and launch. But if it's working well, obviously, then we're going to make it work with other countries. Fish, as you may remember, is a big thing for us. It's something like around more than EUR 1 billion overall across the board. And then we have three different things. One is, I mentioned renovation of fish fingers. That's one thing, which is a big thing. Fish finger is around EUR 400 million for us. Then we coming also with improved taste. So that's an example, again, it's available right now in the market. And so it's doing well so far. Too early to say, but at least it's a new varieties, a bit more, obviously, flavor, and well, it's based on the things we know, how to do best. So that's one -- the second piece of innovation. The third one is about this, which is basically an interesting point, which is people believe that, let's say, snacking is it doesn't work with fish. And yes, it does. It does. We just have never done it in the other way. We are probably very -- I mean we are overwhelmingly in the middle of the family meal time, but we believe that can work. So this is nothing new, by the way. All these products are not new at all. They're -- just we put them together to create a new category in Italy and is doing extremely well. And interestingly enough, it also comes with new consumers, younger, which is exactly what we need to be able to go with snacking in new generation and also higher disposable income, so high margin as well. So that's a good example. And I can tell you, some of the countries are now looking at the Italian example, and want to go the same way. One example is, well, I think -- well, that's an example of what we are doing in Italy, so... [Presentation]

So it's very simple, by the way, but very different from a fish finger, which is about children and all the rest of it. And that's -- so we demonstrated it can work, obviously, above and beyond chicken and chicken, obviously, we are there as well. Another example, again, chicken. So we're talking a lot about innovation at this stage is in the U.K. U.K., it's the biggest category for us. So it was half the size of what it is today. But it has done extremely well. And what we're doing is we're just copying the QSR guys. We're checking what they do, and we have -- we're very unapologetic about it. And we believe it is working already very nicely. And again, it's probably going to be at some stage 1 or 2 years down the road, some good lift and launch for other countries. So doing extremely well. That's another example. [Presentation]

So again, very different kind of consumers for us. And that's definitely the kind of thing the challenge and the opportunity for us is to obviously go to more this kind of consumers as opposed to older people, or to more children. Well, we never mentioned ice cream, I don't know why, by the way, but ice cream is really a great category for us in Serbia, Croatia and Bosnia. So first, it's -- as I said, it's a great acquisition. I think the combination of frozen food and ice cream works well. Basically, you have the same freezers. So in a nutshell, we own the freezers during the winter with frozen food, and we own the freezers during summertime with ice cream. And that's exactly what it's all about. Team is doing an extremely good job in these countries with new concepts. And so we have a great market share not only in the convenience, but definitely in this kind of categories which is more family driven. Here, it's a new innovation. The team is coming with something around 11% mark, let's say, innovation per year. They're doing extremely well, a nice margin. So it's a very good example. Again, a new ad. [Presentation]

I can see that it's coming from Serbia because it's Frikom, otherwise I would have been absolutely capable of saying whether it's Croatian or Serbian. So that's a bit what we're doing. So as I said, it's back to the category. It's back to the portfolio. It's back to the strategy, and it's working. And we're going to make it work in crisis time or no crisis time in the future. And with this, I'm leaving you with Ruben. He's going to start with the market share.

Thank you, Stefan. Let me indeed turn it over to the market share. What you can see here is our market share over the last, let's say, 16, 18 months. And let us recall what we did in '22, '23, we had to price ahead of the market for the heavy inflation. And we did that to protect the margin. But with that pricing ahead of the market, we saw the impact of market shares, and you see the carryover of that in the first half of 2024. But by protecting the margin, we have also been able to reinvest in our brands, to reinvest in our products, to reinvest in shop floor activities. And you see that happening in the second half of 2024 where actually the MAT of the 12-week share loss became smaller, and we saw on a monthly base share gains. You've then seen in the first quarter this year, a bit of a decline. There's some phasing of seasonal timings in P1 and P13. But overall, it's mainly because of phasing of activities. We do see, however, the recovery of market share in the last period. So you see P4 shares are going up again, and we have the first read of P5 where we are also recovering our shares. And if you now would look at P5, the last 12 months were roughly stable in volume share, and we're stabilizing our value share. And actually, stable share in this category is not a bad thing. On the left, you see the category growth. And you see in the beginning of '24, still the aftermath of pricing, so you see value and volume and higher value because of the carryover of pricing and that is coming closer to each other from the second half of '24. If we now look year-to-date before the category is growing 2%, with it then volumes growing 1%. There's a bit of a dip in P4 and also if we look at P5, and we don't see that as a structural dip. We see a bit of softness in the U.K. and a big part of that, and we don't like to talk about excuses. But a big part of that is a bit of slowness because people were barbequing, It was good weather and a bit less of frozen food consumption. But we don't see that as a structural issue. And again, year-to-date category is 2%. And it's also when you look and compare the last 12 months versus the other categories, frozen is growing 1.5%, food is growing at 0.5%, which links to what Stefan showed. If you look at the last 10 years, frozen food has outpaced the total food category by 70 basis points. So this is a good category to play in. And if you then look at our numbers, and these are the year-on-year reported volume growth numbers. You see in '23 and first quarter of '24 we're struggling in volume that also links to the share losses, and we have been able to recover share in quarter 2 '24, quarter 3, quarter 4, '24. We knew quarter 1 would be more tricky, some phasing because of the seasonal fact with Easter, some activities, and we saw the destocking. But if you take the 4 quarters, last 4 quarters in aggregate, we have been growing 1% in volume. And if you then look at the guidance, I spoke about a category which is growing 2% year-to-date in value, which is growing 1% in volume. You've seen on the long term, the category growth. You've seen that we are growing over the last 4 quarters 1% in volume, that also links to the midpoint of our organic revenue growth, which is between 0% and 2%. The absolute EBITDA growth this year, our guidance between 0% and 2% growth and there are two elements there. We expect this year a suppression of the gross margin. I'll come back to that compensated versus prior year by savings and overhead. The dampening and the suppression on the gross margin is not a structural issue. We see this year basically two effects. One is in the course of quarter 1, we saw more inflation coming up, mainly in protein, so mainly around chicken. It's not as big as we have seen in '22, '23 that you would open all your contracts with retailers and take in-year pricing. So we've made a conscious choice not to reopen a negotiation. So there's a timing lag. There are 1 or 2 markets where we will do the pricing, but not across. And that, therefore, has a temporary lag and an impact on gross margin. Secondly, we've seen a bit of a slower start of the ice cream season. Ice cream runs at higher margin, and that also has a temporary negative mix effect. Now looking at that EBITDA growth, and you then look at the other lines of the P&L up until net profit. We expect 2% to 6% growth in adjusted EPS. So in euro amount, EUR 1.82 to EUR 1.89 and at the latest exchange rate $2.7 to $2.15. And adjusted cash flow conversion, 90% and more. And we know and you know that this company has been able to deliver cash, and this is the cash we have delivered between 2017 and 2024. So more than EUR 2 billion of adjusted free cash flow. You see in '21, '22, it has been a bit lower, and that has been a consequence of a decision to take a bit more inventory because there was more kind of supply constraint element there. For the last 2 years, our adjusted free cash flow has been between EUR 275 million and EUR 300 million. And if you would also look at the years ahead and you look at our growth targets, that would imply roughly EUR 850 million of adjusted free cash flow which is around 1/3 of our market cap. How will we deploy that cash? What is our capital deployment? If you look at 2018-2021, you've seen that this company has done M&A and has been quite diligently in M&A. So you see the M&A in 2015, and the one in Switzerland in 2020, and one more recently and Stefan just showed some of the advertising of the business, the one in Southeastern Europe, which is doing very well for us. So that's something we have been doing. If you look more recently, and we also take a close look at our valuation. We've chosen to do a bit more cash allocation in terms of buybacks. You see that in 2023. And last, we choose an element of a bit of buyback and a bit of also cash return in total, almost generating EUR 200 million of cash for shareholders. So we will continue to drive right shareholder return. And with that, I would like to close and open up for questions.

Great. Thanks for that. I think the presentation was helpful. It's great to see innovation in person and also some of the advertising. So thank you for that. I guess first question is sort of the early returns on some of the commercial investments you've been making. When you talk about or think about your Must Win Battles today, what percentage of them are we winning today? And what's the -- what kind of near-term milestones that you set as targets?

Well, I think the milestone is we want to make sure that they're all going to win. I think in the last 2 years, it's been a bit of -- it was a bit on the back burner. But I think on the penetration, when more than 50% are growing right now, and we have every intent obviously to make sure that it's going to increase. And it's going to increase basically with simple. It's back to innovation, it's back to renovation. I think '22 -- let's say, definitely '23, '24, were really price years which were great, obviously, for product label because it was all about price as opposed to anything else. But it's all game now starting basically in the second half of '24. And now obviously, more and more, the second part will be very important, obviously, to come back with something which is more than price, which is value, which is obviously taste, which is all the things the brand should deliver and starting, obviously, with our Must Win Battles.

Okay. How have competitors responded to your accelerated investments? Where you're competing with private label, the responses are more limited arguably. But as you highlighted the fish and chips, as you move into other branded territory, what has been the competitive response?

Well, I think you should never underestimate the private labels. That's the first thing. So -- and then we're not. So when we're coming with a something new, well, you could say that 2, 3 years down the road, they're going to come with something. But that's been the game for the last whatever number of years. If you stop -- forget that, obviously, you have a bigger issue. But it's mostly -- that's -- I think that's -- well, when we think about us, we -- all competitors are private label. And then here and there are some brands in some regions with some categories. So we just focused more on the private label. But while it's been -- I think during the crisis, the price crisis they came late with price, probably a bit later than we thought it would, but now obviously, it has stabilized. And the game is back to what it should be.

Okay. Ruben, I think last quarter, you saw some inventory destocking in results. Apologies if I missed it, I don't think you talked about it in the presentation. Where are we on that today? Is that carried over into 2Q? Or is that now behind us?

Yes. That is now behind us. So we had, indeed, to your point, inventory destocking at retail. We saw throughout 2024 gradual increase. So I also want to be clear, it's not that we have big debates with retailers that they're seeing something like a different consumer sentiment. And you're probably at a level where they say, look, service levels are now at a better level, so we can actually allow to take a bit of a step back. Some of that was expected. Let's be clear. We always said there would be a bit of phasing between quarter 4 and quarter 1, but we've seen a bit more in quarter 1. The fast amount is now behind us, like we said at the time as well. There's still a little bit in U.K. but not material.

Okay. And one thing you did talk about in the presentation, but I want to expand on it is just the quarter-to-quarter volatility. There's a lot going on as we go through the year. 2Q benefits from Easter, but also specific challenges related to year ago comparisons. And then you -- the 3Q comparisons ease as you lap last year's ERP-related disruption. So just maybe walk us through the puts and takes of year-to-go.

No, I get that. And in the end is what is our underlying growth rate and also, are we competitive? So I think, first of all, if you take a stack back and again, P5, and by the way, we say P5, the period of May, but it's not fully until the end of May. We have most of the shares coming in, and we see a further recovery of share. So if you take a step back and you say, okay, let's look at the last 12 months, we're kind of flat in volume share. Are we satisfied? No. Can we do more? Yes. But is that a kind of stabilization? Yes, we're seeing that. So we're happy with that and a category which is now in that period around 1.5, maybe towards 20%. So that's not bad. Within that, in quarter 2 specifically to your question, we do have the advantage of Easter because we had the shift from Easter kind of quarter 1 to quarter 2. So that will help us. Having said that, the start so far of ice cream has been a bit disappointing with bad weather, and we've seen in U.K. a bit more softness, because it was a warm weather there. Now we're not a weather company, right? So -- but that has not helped. Is that a structural issue? Not at all. Then to your point, A&P last year, quarter 3 was around EUR 25 million, EUR 30 million impact. That's 1% on the full year, that's 2% on the H2, and that's where we see recovery of growth.

Okay. Move ice cream to the U.K. is what you...

Yes. Well, maybe.

Right now, the good thing is it's -- the weather is bad in the right countries. And the weather is good in the right country as well.

Back to normal. Okay. Maybe both of your perspectives on this, you closed your session or your slides with capital allocation. But M&A has been a big part of the Nomad story from the inception. So I don't think things have structurally changed, fundamentally changed, but maybe update us, Stefan, kind of how you see the landscape today and your appetite and the opportunity set for M&A. And then Stefan, on the kind of the financing opportunities.

Well, I have a very nonemotional view of M&A. That might be my background as well in M&A potentially. I think for the first 3 years, we didn't do any M&A because, quite frankly, we wouldn't have anything to offer. I think you need to -- the worst thing is when the model is not working well is to go to M&A, and thinking it's going to help you because M&A is only working if you're coming with a superior model that's going to obviously -- and you have to demonstrate that you are the right investor. So we didn't do anything. And then we started -- things are starting really -- '17, '18 started really to go the right way. Then we started with obvious things. First, we said no to a lot of nonfrozen food. We like this focus. It's really part of our values, by the way. And while it came to two deals, you can plan, obviously, but that's a big lesson, you cannot plan, it's coming. And it came with two additional brands in the U.K. And it was a no-brainer because we could add them and the synergy level was very high. Then we came with other deals. So the period of M&A was actually really focused on between 2018 and 2021. Then you have the crisis, quite frankly, the last thing I had in mind was let's go to M&A. And by the way, all the private guys thought that the multiple was still the multiple they have because they're not confronted every day with the multiple. That's easy, obviously, when you're thinking it's 14, it's 14 because you don't have something you don't see the screen every day. And it's obviously something you don't like to accept. It's the same thing in real estate, by the way, when you have to buy or sell your house, you don't like this kind of bad news. So we didn't do anything that was no time lost. Things now are starting to get back, but we will be rigorous anyway. We're not going to go to the shiny object. We like the idea of going to new categories that we can expand in the countries. We're taking the whole organization. We need 2 or 3 people, maybe a bit more sometimes. And then obviously, we're going to present this to our retailers, and they will love it. And that's the kind of deals, well, not a high multiple, a lot of synergies. And by the way, with the multiple of around -- even less than 8, well, I'm not going to buy something at 12x. I can tell you. I mean it's -- I'm not crazy. So unless there is something fantastic that comes with a huge level of synergy, but the math will not work. But that's the kind of things. Are they still in your targets? Absolutely. Can I tell you that we're going to buy something? Absolutely not. Because you need to, obviously, to be disciplined and make sure that the other guys are going to be reasonable as well.

Yes. So for you, best use of cash is your own shares?

Yes. And look...

It's good M&A.

That's not a bad M&A at all. And we've had a leverage year-end around 3%, quarter 1, 3.2%. Look at cash every day, it's pretty stable cash flow. So that allows us to indeed buy our shares.

Okay. You don't need due diligence, by the way.

Right. A couple of minutes left. I guess, Stefan, earlier in your presentation, you showed the long-term financial. So obviously, a good long-term phasing and trajectory. As you think back Nomad is about 10 years old as a public company. I guess, more strategically, what would you say the biggest successes are? And then in terms of as you look forward over the next 5, 10 years, what are the biggest opportunities?

Well, I think the strategic logic of focusing behind the best and brightest categories, the best and brightest product was huge. And then obviously, focusing, not spreading your money everywhere and your people that was -- I think we distilled some sort of rigor behind within this company, which is not only financial results but also in terms of culture. I'm quite proud of what we've been achieved. It's a company where people are delivering with or without crisis. So 9 years in a row. It's not bad. So people are proud of that. I think people are also proud of we've built a real company of something which was a combination of financial construct. And also, we've built a real portfolio in a category. I think we can do better. Back to your point, we can do better with the category. We haven't spent enough time behind delivering -- explaining what grade is with frozen food. So I think we were talking about 1.5%. Can it go for more? I don't know. But definitely, there is potential with this.

That's the aspiration.

I think that's the big aspiration. I think we also need to increase our level of innovation, renovation. You've seen the numbers in 2023. I don't like this number. I'm not proud of this number. So we're going to keep that well, and we're going to make sure that it's not going to happen again. So we are the guardian of the quality and the quantity and the brands we have, and we expect -- we intend to go that way. And then, let's say, M&A will come, but again, I think it's -- we're not going to have a strategy of M&A per se. If there is a great combination at some stage, it might happen, there are some interesting combination, but we're not going to go to something big for the sake of going to something big. We're not obsessed by that.

Very clear. And with that, we're right at time. So Stefan, thank you. Ruben, thank you. Thank you all for joining us, and look forward to seeing you...

Thanks for having us.