Good day, welcome to the Nomad Foods Third Quarter 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Taposh Bari, Head of Investor Relations. Please go ahead.
Thank you for joining us to review our third quarter 2020 earnings results. With me on the call today are Chief Executive Officer, Stéfan Descheemaeker, and Chief Financial Officer, Samy Zekhout. Before we begin, I would like to draw your attention to the disclaimer on slide two of our presentation. This conference call may make forward-looking statements that are based on our view of the company's prospects, expectations, and intentions at this time, including consideration related to the impacts from COVID-19. Actual results may differ due to risks and uncertainties which are discussed in our press release, our filings with the SEC, and this slide in our investor presentation, which includes cautionary language. We will also discuss non-IFRS financial measures during the call today. These non-IFRS financial measures should not be considered a replacement for and should be read together with IFRS results.
Users may find the IFRS to 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 does represent adjusted figures for 2019 and 2020, and all adjusted figures have been adjusted for exceptional items, acquisition-related share-based payment and related expenses, as well as non-cash FX gains or losses, and all comments from here on will refer to those adjusted numbers. With that, I will hand the call over to Stéfan.
Thank you, Taposh, and thank you all for joining us on the call today. I hope you and your loved ones remain well as we all continue to manage through these unprecedented times. As has been the case since the initial onset of the COVID-19 pandemic, we continue to prioritize the health and safety of our employees while ensuring the continued operation of our factories and meeting the needs of our consumers. With the number of confirmed cases rising across Europe, we will need to remain vigilant more than ever by sustaining the discipline and agility that has enabled us to navigate thus far. Moving on to our results. We reported third quarter earnings earlier today, which demonstrated continued momentum in the business with robust growth in our branded retail portfolio, offset by declines in food service and private label. Third quarter financial highlights were as follows.
Organic revenue growth of 5.4%, driven by a 4.2% increase in volume and mix, and a 1.2% increase in price. This performance was in line with our guidance of mid-single-digit organic growth for the back half of this year. Gross margin of 30.4%, reflecting 90 basis points of expansion. Adjusted EBITDA growth of 13% to EUR 109 million, and adjusted EPS growth of 20% to EUR 0.30 per share. We sustained strong performance in the third quarter, even as countries began to relax their restrictions and consumers learned to coexist with the virus. Offices, schools, and restaurants gradually reopened across Europe this summer, while other factors like unseasonably warm weather and the U.K.'s Eat Out to Help Out campaign reignited out-of-home consumption during the month of August.
As a result, there was a clear moderation of growth in packaged food, frozen savory, and our business relative to the extraordinary growth that we experienced in Q2. Nevertheless, we were pleased to see Nomad outgrow both total frozen savory and packaged foods during the third quarter, a testament to the value that our portfolio of family favorites is providing consumers during these unprecedented times. While COVID-19 continues to create a tailwind for companies like ours, we estimate that its uplift to our Q3 results was relatively small and a fraction of what it was in Q2 due to some of the aforementioned factors. What that implies, however, is that the underlying momentum in our business has accelerated every quarter this year.
With that said, as the number of cases surges across Europe, governments are resuming restrictions, and we are beginning to see early signs of re-accelerated rates of consumption growth. This is something that we will continue to monitor closely, and we have prepared our supply chain with high levels of safety stock across the board. Let's turn to some additional highlights of the quarter on slide five. As the COVID-19 pandemic extends into its eighth month, it's increasingly clear that many of the new consumers who entered our portfolio in the March, April, and May months are repurchasing our brands and are recognizing the value that frozen food has to offer. Our aim is to directly engage these new consumers through increased A&P investment in the coming months and to ultimately retain many of them in 2021 and beyond.
Between the significant amount of new trial that we are experiencing and the enhancement that we have made to our portfolio under Nomad ownership, we believe we are uniquely positioned in a post-COVID world. Our gross margin expanded 90 basis points during the quarter, driven by a combination of pricing, favorable mix, and fixed cost leverage. I'm also happy to share that our pea and spinach harvest met our expectation this season, providing the necessary supply to help achieve our goals for the coming year. We're pleased to see an upwards trajectory in our gross margin as the inflationary headwinds for the past two years abate. Moving on, we continue the expansion of Green Cuisine during the quarter. In the U.K., our largest and most advanced market, we demonstrated growth on growth by reaching a new record market share of 7% within the frozen plant protein category.
We're building on our position as the number 3 brand in the space and establishing strong strategic partnership with many of our top retailers. From a distribution perspective, we entered three new markets during the quarter, Portugal, Sweden, and Finland. Are now happy to announce that Green Cuisine is currently available across 12 of our European markets. We activated a new multi-channel advertising campaign across several European markets during the quarter to drive trial and awareness. Finally, we launched a new range of chicken-free poultry products, which are demonstrating strong initial sales velocity early on. As you know, Green Cuisine is a multi-country, multi-dimensional brand whose goal is to make meat-free mealtime easy and affordable for consumers. By the end of this year, we will have 28 Green Cuisine SKUs across Europe that we have either developed or rebranded.
It's quite an achievement, and we look forward to elevating this part of our business even further in the coming year. Finally, we returned EUR 467 million of capital to shareholders during the third quarter, the majority of which was executed through a successful tender offer in mid-September. Year to date, we have repurchased approximately EUR 600 million of our equity, which represents a 14% reduction in our share count versus the start of the year. Our capital structure is now realigned to a strategy of consistent organic growth, coupled with complementary acquisitions within European Frozen. We remain active on the M&A front and look forward to updating you in due course. We have the financial flexibility to pursue this objective and, in the meantime, continue to generate strong free cash flow. I'd like to provide an update on our sustainability commitments, where we're making great progress.
I'm proud to share the news that we recently joined the 10x20x30 Initiative, a collaboration of more than 10 of the world's biggest food retailers and manufacturers, each committing to engage in a whole supply chain approach to halving food loss and waste by 2030. We believe that our influence within the food industry makes us perfectly positioned to raise awareness of the issue and lead the way in achieving the UN Sustainable Development Goals for a 50% reduction in food loss and waste worldwide by 2030. We're looking forward to sharing future updates on our progress. We have also achieved the SAI Platform, Farm Sustainability Assessment Gold Level for pea farm management group. I'm incredibly proud to confirm that we are the first U.K. farm management group and the first globally in frozen food to be awarded the Gold Level.
This is a major milestone for our agriculture team in the U.K., underpinning our commitment to sourcing 100% of our vegetables and potatoes through sustainable farming practices by the end of 2025. We're pleased with the progress that we're making along with sustainability goals, which we expect will help drive our societal objectives and support longer-term financial performance. Staying on the theme of sustainable financial performance, I would like to share with you some preliminary thoughts on 2021, which I'm sure is an area of interest for many of you. There are a number of moving pieces, including how the pandemic may affect the balance of this year. The guidance that Samy will outline in his remarks does not yet include the potential impact from the recent COVID-related restrictions across Europe.
Having said that, we have strong underlying momentum supported with investments behind our core portfolio, Green Cuisine, and consumer retention, and we expect these actions to yield strong return next year. Taking all this into consideration, I am pleased to share today that our current 2021 plans show organic revenue, adjusted EBITDA, and adjusted EPS growth when compared to the current 2020 consensus. This outcome would build on the extraordinary performance achieved this year while making a considerable acceleration on the two-year basis. Importantly, it would make Nomad one of the few companies delivering growth before, during, and after the COVID-19 pandemic. As we always do, we will share more detailed guidance when we report Q4 results in early 2021. We plan to articulate our long-term strategy and growth drivers when we host our first ever investor day, to be held virtually next Tuesday, November 10th.
This will be a unique opportunity for the investment community to hear from members of our management team, beyond myself and Samy, and to learn about the breadth and depth of our business model. We are excited to bring the Nomad story to life, and hope you can join us for this engaging and unique session. Now over to Samy to review our financial performance and guidance in more detail.
Thank you, Stéfan, and thank you all for your participation on the call today. Turning to slide 6, I will provide more detail on our key third quarter operating metrics, beginning with revenues, which increased 6.7% to EUR 576 million, driven by 5.4% organic revenue growth and a 1.7% benefit from calendar timing, offset by 40 basis points from foreign exchange translation. Organic revenue growth was in line with our expectations, led by our branded retail business, which represents 90% of our sales and grew just over 7% during the third quarter. This was offset by a two percentage point drag from food service and private label, which declined 23% and 5% respectively during the quarter. Second quarter gross margins expanded 90 basis points to 30.4% due to a combination of pricing, favorable mix, and fixed cost leverage.
This marks our second consecutive quarter of gross margin expansion as we realize the benefits of supply chain productivity and opportunistic raw material purchases. Moving down to the rest of the P&L. Adjusted operating expenses increased 4% year-over-year, reflecting growth in indirect and a modest decline in A&P. Adjusted EBITDA increased 13% to EUR 109 million, and adjusted EPS increased 20% to EUR 0.30 for the quarter. Turning to cash flow on slide seven, we generated EUR 237 million of adjusted free cash flow during the first nine months of the year, equating to 122% cash conversion. This is an exceptional outcome when taking into consideration the rebuilding of our inventory stock this summer and the fact that the third quarter is seasonally depressed due to the harvest and other factors.
We continue to make significant progress on our Cash Breakthrough Intervention focused on all parts of working capital, a true testament to our entire organization's commitment to creating value across both the P&L and the balance sheet. We continue to expect to end the year with robust cash generation and cash conversion above 100%. With that, let's turn to slide eight to review our 2020 guidance, which is based on foreign exchange rates as of November 3rd of 2020. For the full year 2020, we continue to expect organic revenue guidance in the high single digits range, which implies mid-single digit organic revenue growth in the fourth quarter. Consistent with our original expectations, we expect organic revenue growth to be offset by a 3% headwind resulting from an unfavorable calendar shift in Q4.
In addition, based on current foreign exchange rates, we expect FX translation to create another 2% headwind to the fourth quarter reported revenue, given the relative strength of the euro versus the pound sterling and the Norwegian kroner versus the prior year. In summary, we are reiterating our guidance for adjusted EBITDA in excess of EUR 460 million, which will be subject to how the impact from COVID-19 transpires over the coming weeks. This now equates to adjusted EPS guidance in excess of EUR 1.31 for the year, which is higher than our prior EPS guidance due to the successful completion of the tender offer in September and share repurchases to date. Our guidance assume a weighted average share count of approximately 180 million for Q4 and 194 million for the year.
When translated into US dollars, the currency in which our shares trade, full year 2020 adjusted EBITDA guidance equates to at least $538 million, and adjusted EPS guidance equates to at least $1.53. Finally, gross margin are expected to increase year-over-year in Q4, and operating expenses are expected to grow significantly ahead of revenue growth due to the phasing of A&P into Q4. That concludes our remarks. I will now turn the session over to Q&A. Thank you. Operator, back to you.
Thank you, sir. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. Will pause for a moment as callers trying to queue. The first question comes from Rob Dickerson from Jefferies. Please go ahead.
All right, great. Thank you so much. Good morning. I guess, Stéfan, just a clarification question upfront. I know you had mentioned or you had some commentary around 2021. I thought I heard you say organic revenue growth, EBITDA, EPS, and it kind of went out. The timing wasn't great, almost was like I didn't hear what you said about 2021. It's like we could be in line with consensus or maybe there's still growth in 2021, that was in line with the follow-up commentary around growth in Nomad pre, during, and post 2020 in the heart of the pandemic. Just want to clarify the comments on 2021. Thanks.
Okay. Good morning, Rob. Yeah, let me clarify and maybe thereafter, I will leave it to Samy to further define the comments. What we said is growth across the board. What we want to achieve, objective in 2021 is to achieve organic revenue growth, adjusted EBITDA growth, adjusted EPS. All growing versus obviously needed to come with a guideline, a baseline growing versus 2020 consensus. What's also important to comment is we're doing this based on what we've seen so far. It doesn't take into consideration how the second wave is going to play out, which is obviously, it's so volatile, it's very difficult to say. At least that's what we see, that's ambitious. Ambition, it's obviously, if you want to do this, you have to lap a significant COVID impact in 2020.
Okay. I guess, obviously, the expectation is, and maybe you said you would point to this or discuss this in more detail at the Investor Day next week. You must have some visibility on new innovation and distribution, and maybe it's around Green Cuisine, because obviously the lap is really significant, right? If you still expect organic sales growth, there are at least some clear drivers of that growth that you see that can get you to growth on top of growth.
Rob, I'll take that one. Actually, you are totally right. We do have a perspective on retention for new consumers coming in. Green Cuisine definitely, which will continue to be a growth driver for us. frankly, continued, let's say, investments, the return of the investment that we have made this year carrying over into the next year.
Okay, super. I'll pass it on. Thank you.
Thank you, Rob.
Thank you. The next question comes from John Baumgartner from Wells Fargo. Please go ahead, sir.
Good morning. Thanks for the question. Samy, could you comment from a supply chain perspective, sort of the setup as it pertains to contingency plans relating to hard Brexit at this point, which I guess is still out there in addition to the COVID volatility? Anything different year-over-year relative to plans last year? How you feel about inventory situation going forward? Just any thought there will be appreciated.
Yeah, I'll probably give you a general overview on the supply situation, and maybe Stéfan will add some further perspective on the Brexit specific element of the question. We definitely took the learning of the wave one into account into the way we are managing, if you want, the rest of the year relating to particularly rebuilding our safety stock. We continue to carry challenge because the demand is fluctuating a fair deal, but definitely the situation, we've taken the time, over summer to rebuild our inventory in order for us to start, if you want, Q4 with a much better visibility on our safety stock. Okay, all of that is taken into consideration as well with the preparation of the Brexit timing that's going to come off, if you want, planned for at the end of December, early January. That's where we are.
Stéfan, if you want to add maybe any further perspective on Brexit.
Yeah. Good morning, Jon. Yeah, as you can imagine, this combination of Brexit and COVID makes it quite, I would say, interesting and volatile, and you have to plan for this. We've prepared very well for Brexit, and Brexit in terms of how to do business and obviously in terms of if the worst comes and happens. Obviously, we're going to plan in terms of inventory. Obviously, it's a very dynamic situation to change again hour by hour, maybe in a few of the coming days. At this stage, that's how we're planning our inventory, but obviously, 2021 is based on a deal basis as opposed to a no-deal basis.
Thanks, Stéfan. Maybe just a follow-up. Your emphasis on sustainability really seems to be ramping up at this point, and I'm curious as to what you've seen or heard or maybe your expectations as to how the sustainability efforts may lead to any sort of direct cost improvements tied to the waste initiatives, and maybe on the revenue side, the extent to which you think the program can provide a competitive advantage, incremental appeal for your brands relative to competitors or even other frozen food categories. Any thoughts there would be helpful.
Yeah, definitely. As you can imagine, on November 10th, we'll spend quite some time on sustainability because it's really fundamental for business. The good news for us is the sustainability does very well with frozen food in terms of waste. Also, if you're taking a more proactive approach, commercially, it's critical for us, because at the end of the day, it's great for the retailers, as you can imagine, again, back to waste, but also it's good for the consumers, in terms of nutrition, in terms of how you can keep, obviously, the vitamin, and how you can obviously keep that kind of label in terms of good for the planet and good for you. All these things, and again, it go back to label. It's everything. It covers the whole organization and the whole P&L.
From cost, sometimes you're adding cost, sometimes indeed you can reduce cost, and then it goes, which is even more important, is you will see it goes back to your top line. We see that little by little, our consumers start to appreciate, especially during these times, how great our category is doing in terms of sustainability. Again, more to come, as you can imagine, during our Investor Day.
Great. Thanks for your time.
You're welcome.
The next question comes from Jon Tanwanteng from CJS Securities. Please go ahead.
Hi, good morning. It's Pete Lucas for John from CJS. Just wanted to touch base. You touched on M&A, talked about it a little bit. I just wonder if you could talk about the number of opportunities that you're seeing and also the willingness of people to sell in this environment.
Yeah, it's a very good question, and I think let me start by providing a bit of background where we stand. As you know, together with the buyback, we also redefined and even focused even further our strategy in terms of M&A. It's really focused on frozen food consolidation in Europe. That's the real backdrop, and we believe, with the cash flow generating, including obviously, the right allocation of our capital, we can do this. That's one thing. Second, M&A-wise, it's quite simple. You have to be ready because you have to be flexible, you have to be prepared, and then from the moment an owner decides to sell, you have to be there, as simple as that. That's what we're doing. Sometimes you can be more proactive, sometimes a bit less, but things are coming.
Back to your question about, let's say, how is it possible to do M&A? Time will tell. It's a volatile world, and it has an impact on M&A as well. You can see in the rest of the world, M&A is still going on.
Very helpful. Thanks. My other questions have been covered. Thank you.
You're welcome.
The next question comes from Rob Moskow from Credit Suisse. Please go ahead.
Hi, this is Ariel Altaras on for Rob. Thanks for taking my question. Just on the re-acceleration in your consumption growth. As consumers are set to spend more time at home now because of new lockdowns, are you seeing any meaningful distinctions across geographies? Also, how has consumer behavior changed in this second lockdown period, in terms of what they're buying and how much they're buying compared to what you saw earlier in the year?
To your first question, the answer is, across the board in Europe, not really. I think consumers are consumers, and when you are at home, you start to appreciate even further frozen foods, whether you are in Finland or in Portugal or in Spain or Italy or in Germany. Obviously, the measures that the governments have been taking have impacted, let's say, not the behavior, but at least the intensity, depending on whether the schools are closed, the restaurants and all these things. That's normal. To your second question, which is, how do we see the second wave? It's obviously early game, so it's early moment, but what we can see so far, and not limited to frozen food, by the way, is that there is less panic buying. People have, we understand, have learned to cope with COVID-19.
They know what's working, what's not working. It's a bit easier to handle the demand and the offer from that standpoint.
All right, great. Thanks.
The next question comes from Bill Chappell from Truist Securities. Please go ahead.
Hi, this is actually Grant on for Bill. Thanks for taking the question. Had one on the step up in investment in A&P going forward. Really, a question on, has plans or have plans changed for where you guys are going to allocate that spend based on the current consumer economic environment? I would assume less promotional EUR, more to the advertising side, but just want to get your thoughts on that and how you think about that going forward.
Hi, Bill. It's a very dynamic environment, as you can imagine, and we have to remain super agile in the way we manage our own spending there. Clearly, at this very stage, if you're on the current plan now to spend the proceeds, then for us, it's all focused in maximizing the mix across the product lines and the different vectors of spending, if you want, in order to clearly end the year with a very strong momentum and get into the next year with a strong momentum as well. At this very stage, it's all about managing allocation and spendings.
Got it. Then just one on the cash flow. Oh, sorry.
No, please, keep going. I was just about to say that it's really this very delicate balance between navigating through Q4 and obviously how to make sure that we offer a fast start with the right level of A&P in Q1, because again, as we said, growing organically sales, EBITDA and EPS is what we want to achieve in 2021.
Got it. Thanks for that. That's helpful. One on the cash flow. Very strong so far, especially the free cash flow conversion. Just a question on your comments on more safety stock inventory investment going forward just to have a little bit of a cushion. Should we expect to be more of a cash investment going forward with that dynamic, or should we expect it based on some of the other initiatives that you have in place on payables, et cetera, to continue to be a cash generation? Thank you.
Bill, we continue to be committed to clearly converting more than 100% of our profit into cash, I mean, at this stage. The factor you're describing have already been taken into consideration, to end the year with a strong momentum. I think we've been clearly stating that we want to continue to return a significant, let's say, cash level, I mean, overall, and 100% is what we are after. We're trying to balance all of the item from the cash part, and that's frankly what the Cash Breakthrough Intervention is about. Definitely all of these have been taken into considerations.
Thank you. I'll pass it on.
Once again, if you have a question, please press star then one on your telephone keypad. The next question comes from Jason English from Goldman Sachs. Please go ahead.
Hey, good morning, folks. Congratulations on another strong quarter. A couple of questions.
Thank you.
You're welcome. A couple of questions. I think you guys have been signaling, aside from the second quarter where you pulled back, you've been signaling this ramp in investment into the third quarter, into the fourth quarter, yet we haven't actually seen it show up in the P&L yet. Is the spend just being deferred, or is it just not as substantial as perhaps I thought it was going to be?
Well, at this stage, to be fair, Jason, we are managing really our P&L, if you want, on a full year basis at this stage. We were planning effectively to start in Q3. Some of it has started in Q3, and the majority will be effectively Q4 focused as we had laid out. We intended to continue to spend, if you want, the amount of investment that we had planned for. As we said, because it's delivering good return and is the right thing to do to exit the year with the right momentum going into the next year.
Okay. On the cost side, we had seen some spot market weakness in fish, and I haven't checked recently, but on the back of food service weakness. Can you update us on whether or not you're seeing cost relief or where your input cost pressure or relief stands, both on an absolute basis and relative or post the currency transaction impact as well?
Yeah, I would say on the cost side, to the example that you used, but I would frankly broaden the point on the input cost on virtually all of the critical material we have in our cost of goods. We've been very focused and opportunistic at the same time. Definitely, there has been some pockets of opportunity, as you know, from a spot standpoint on some ingredients. We've taken advantage from that perspective into this year. What we are seeing, if you want, when you project that in a broader sense from a projection moving forward, is that our current expectation is that we have a low single digit, if you want, inflation moving into the next year, which is pretty much in line with frankly our longer-term history. On that front, there's no change.
We'll be back to more normal years to some extent, Jason.
On your question on FX, we do see some effectively slight help, but it is not going to be that significant given the fact that we have a rolling hedging program there, and most of it is being reflected, if you want, in the economics as we look at this year and the next year as well.
Very helpful. Thank you. I'll pass it on.
The next question comes from Faiza Alwy from Deutsche Bank. Please go ahead.
Yes. Hi. I wanted to talk about private label shares, just some of the data that we see in frozen fish. I know the data that we're getting from Nielsen doesn't encompass everything. That's showing sort of some increase in private label shares, just in the latest few weeks here. Just wanted to get your perspective on what you're seeing on private label versus branded side in the fish category.
Let me start, Samy, and please complement it. I think I understand your point. I think, quite frankly, a few weeks can be, and most of the time is also promo related. Sometimes, you have a week or so, two weeks, which last week, last year, we had some promo this year, this year we don't. Quite frankly, fish remains more than ever a very strong category for us.
Back to the previous question, we're going to invest a lot, and we're investing a lot in Q4, in other words. It doesn't change anything to our game plan vis-à-vis private label. I think we're a branded company. We want to come up with the product superiority. We obviously need to manage the price gaps, so that's an important consideration. Definitely, we're a fish company, and we intend to continue to be the leader. I wouldn't be concerned.
Okay, that's helpful. Then just back on the strategic investments that you had talked about and A&P, just going back to Jason's question.
Yes.
Is that how you intended it? Did you intend that most of these investments will come through in the fourth quarter? Did you sort of make that decision as you got into third quarter and decided that you were going to sort of defer this to the end of the year, so you get more of a return on it into next year? I'm just curious why you chose not to spend in the third quarter.
Well, as Samy said, it's something really that we're leaving to operators. What I've seen is we believe that having it in Q4, and where they believe that having it in Q4 is going to be the most impactful solution for their respective market in every country where we are. Back to the other question, which was, you remember that we said we're going to invest another EUR 10 million, let's say, how to keep these new consumers. Far, so good. It's too early to say we will inform you, apparently, we're trying different solutions, not limited, by the way, to television. It's broader than that. We will inform you, we will monitor the situation, and we'll let you know. Again, I wouldn't really read too much about Q3, Q4, because that's not how we're managing the business.
It's really up to the countries and the respective markets to see exactly when they want to invest.
Got it. Perfect. Thank you so much.
You're welcome.
The next question comes from Ryan Bell from Consumer Edge Research. Please go ahead.
Hi, everyone. For understandable reasons, we continue to see manufacturers across a number of countries focusing a bit more on meat alternatives and plant-based protein products in the pursuit of incremental growth. Would you be able to offer a bit of perspective about how the competitive landscape in Europe is now and has been evolving, and then maybe a little bit more about the positioning of Green Cuisine products within that spectrum?
Okay. It's a very good question. You can imagine for us, it's a crucial question because Green Cuisine/plant protein is really a big bet for Nomad, and we're investing accordingly in terms of resource, cash, time, and talent, obviously. Let me dissect a bit further. We started last year with the U.K. and Ireland, especially U.K. is probably the most advanced market in Europe. We start almost from scratch. We're very pleased with the progress we have achieved. In something like a year or so, we already have achieved a 7% market share, the number 3 brand, and still making a lot of progress and very close to the retailers. We know that some of our retailers have big ambitions in that category, and we want to be part of that together with them. That's one thing.
You can go to other countries, especially in continental Europe, which are less advanced. There you see some flurry of new initiatives in countries like Germany, which is fine because it means that the category needs to grow. You need to think a bit differently compared to a mature, let's say, category. The category first has to grow. We're pleased with these additional offers, and obviously it's our job with the quality of our products and with our IP and obviously our in-store activation to make the difference. In some countries, we're becoming as de facto the market leader because we're starting really from scratch. Again, it's our job to make sure that people are going to start to understand the beauty of plant protein. A lot of things to do from different angles.
Obviously, at the same time, we also need to make sure that it's also a big impact in terms of R&D. We just started a new range, let's say, of nuggets, so poultry free, fantastic product, I can tell you. Obviously, if you happen to be in the U.K., which is difficult now, I know, but you should try the new nugget. They're just fantastic. We know it's going to make a difference, and the numbers are very interesting. I could speak for hours about Green Cuisine. As you can imagine, it's big for us.
Thank you. That was very helpful. Could you speak in a little bit more detail about how the COVID retail landscape is impacting your SKU assortment, essentially what learnings this provided about your brands and the package architecture, and maybe how innovations are being able to get to market recently in the context of increasing cases and how retailers are positioned to handle that going forward?
It's common knowledge that normally in crisis times, the retailers tend to stick to the standard SKUs. In all fairness, we haven't seen that much with Green Cuisine. Or at least it's difficult to compare because we're doing well. We don't think that innovation, the NPD that came from Green Cuisine from some of the places have been, let's say, removed or slowed down by our retailers at this stage. Could happen, but at this stage we haven't seen it. Now looking forward, expecting at some stage a recession where we know that frozen food is doing well, yes, we're going to work at some stage together with the retailers and see how we can optimize the SKUs. Again, it's a very dynamic process that can happen country by country and retailer by retailer.
Okay, thanks. It's sounding a little bit like Green Cuisine is an innovation that may be uniquely successful. Is it fair to say that maybe some of your competitors aren't having the same level of success spotting innovation, or am I interpreting that wrong?
Well, it's difficult to speak on behalf of our competitors. Let's not forget that competition goes both ways. It's in frozen food, but it's also obviously in chilled and fresh. We have to think both ways, how to lead and obviously how to make sure that frozen is going to be well represented. For the rest, difficult to comment on behalf of the others. Overall, what I would say, which is very important, is it's a long-term trend structurally. We believe at this stage that we first need collectively to make sure that this category is going to grow and is going to be big enough.
Great. Thanks, Stéfan. That's it for me.
The next question comes from Peter Saleh from BTIG. Please go ahead.
Great. Thank you. Thanks for taking my question. I think this was touched on a little bit. I was hoping you could comment a little bit. I think you had mentioned that your consumers are creating new purchasing habits, purchasing more frequently. Any sort of detail or insight into how much of that you think is more permanent versus transitory? I know that may be a little bit difficult at this point. Any sort of insight you could provide that gives us confidence that some of the change in consumer habits are a little bit more here to stay.
Let me start with just a global comment. We're tracking, as you can imagine, we're tracking these repeat rates on a monthly basis, and we've given ourselves some targets. What I can see is, it takes a bit of time because obviously in frozen, the frequency is a bit lower than in chilled and/or obviously in ambient. This being said, we're pleased with what we're seeing right now, and my invitation is to come to the investor day because we will have more to say about our ambitions and how we're doing. I wouldn't like to empty the content of our conversation on November 10th.
Fair enough. Okay. Can I just ask about the plant-based meat category? When you look at the category as a whole, where do you think that is taking share from? I'm assuming consumers just aren't eating more food, so there's some share loss coming. Is it really coming from actual meat products? Is it coming from fish? Do you see any sort of evidence in terms of where the growth is taking share from?
To your point, compared to all the innovations we have in our western battles , where by definition you have a level of cannibalization, which is inherent from, it's the name of the game. Here, the beauty for us is, the only thing I can say is, it's not coming from our own products. That's great. Where is it coming from? I think it's too early to say, but we can imagine, you can see on the macro basis that, let's say meat is a bit more stable than it used to be. I think we will see. I think I would give ourselves a bit of time to really see where it's coming from. It should come from there. I think it's going to be also interesting to see from the retailers what their view is, but at least they already have voted.
I'm talking about the retailers, because even inside of, let's say, the frozen products, they're adding more space to plant protein, at the expense mostly of lower value frozen products where we're not anyway. It's probably a combination of lower value frozen products and also some meat content, which makes a lot of sense. For us, it's a perfect innovation. It's a perfect new category because it's highly incremental with margins that are obviously in line with our expectations. So far so good. Definitely, as you can imagine, it's also a category, and rightly so, where we need to invest ahead of time. That's what we've been doing in 2020, and that's what we're going to do in 2021.
Thank you very much.
You're welcome.
The next question comes from Andrew Olsen from UBS. Please go ahead.
Hey, good morning, everybody. I just wanted to touch a little bit on the Nordic region. I believe you started to lap the challenges there in Q2. Just wondering, what you're seeing now and how you're seeing that recent turnaround?
Yes. I wouldn't speak so much about the Nordics. I would just limit myself to Sweden, because the rest of the business is doing well, in line with our expectations. In Sweden, as you know, we had to rebuild everything, I wouldn't say from scratch, but quite frankly, quite deeply, something we've been doing with Wayne Hudson, who is now in charge of U.K. and Nordics and Ireland. We have a new team in place. I think we've changed a bit the mindset as well. The mindset is much more customer driven. We see that we're starting to really make progress. Starting to make progress means a better relationship with these people and starting to see, obviously, the space allocated to us starting to increase again. We see that little by little.
It's going to take place in the course of the next quarters. Don't expect anything spectacular in one quarter. It's something that's going to take place. We're starting to see some interesting results. Also some interesting results pretty soon in terms of cost optimization, especially at the logistics level. Starting to see some green shoots. Again, don't expect a quick turnaround. I think it's really starting first from how to rebuild the top line, and that's exactly what we are doing at this stage.
Okay, very helpful. Thank you. I'll pass the line.
There are no more questions at this time. I would like to turn the conference back over to Nomad CEO, Stéfan Descheemaeker, for any closing remarks.
Thank you, operator, and thank you for joining our third quarter earnings call. Our business continues to perform well amidst the COVID-19 pandemic. I'd like to reiterate the comment that I made in my prepared remarks. We're having an exceptional 2020 and are planning to build on that momentum in 2021 with organic revenue, adjusted EBITDA, and adjusted EPS growth. We're generating a significant amount of cash and remain active and well equipped to pursue M&A strategy. We look forward to hosting you on our Investor Day next week to be held virtually, as you know, on Tuesday, November 10th.
Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.