Earnings Call: Q3 2020

Nov 5, 2020

Earnings release

Good day, and 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 Q3 2020 earnings results. With me on the call today are Chief Executive Officer, Stefan Deschmaker and Chief Financial Officer, Sami Zekau. Before we begin, I would like to draw your attention to the disclaimer on Slide 2 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-nineteen. 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 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 Stephane. 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-nineteen 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 case 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 Q3 earnings earlier today, which demonstrated continued momentum in the business with robust growth in our branded retail portfolio, offset by declines in foodservice and private label. 3rd 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 percent, reflecting 90 basis points of expansion adjusted EBITDA growth of 13% to €109,000,000 and adjusted EPS growth of 20% to €0.30 per share. We sustained strong performance in the Q3 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 UK's Eat Our to Help Out campaign reignited all the 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 outgrowth both total frozen savory and packaged fruits during the Q3, a testament to the value that our portfolio of family favorites is providing consumers during these unprecedented times. While COVID-nineteen continues to create a tailwind for companies like ours, we estimate that it's up least 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 reaccelerated 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 5. As the COVID-nineteen pandemic extends into its 8 months, it's increasingly clear that many of the new consumers who entered our portfolio in the March, April May month 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 and 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 and look forward trajectory in our gross margins as the inflationary headwinds for the past 2 years abate. Moving on, we continued our expansion of green cuisine during the quarter. In the UK, 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 3 new markets during the quarter: Portugal, Sweden and Finland. And 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. And 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 demand dimensional brand whose goal is to make meat free meal time 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 $467,000,000 of capital to shareholders during the Q3, the majority of which was executed through a successful tender offer in mid September. Year to date, we have repurchased approximately $600,000,000 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 and 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 10,000,030 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 2,030. 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 50% reduction in food loss and waste worldwide by 2,030, and we're looking forward to sharing future updates on our progress. We have also achieved the SAI platform, Farm Sustainability Assessment Goal level for P Farm Management Group. I'm incredibly proud to confirm that we are the 1st U. K. Farm Management Group and the 1st global in frozen foods to be awarded the gold level. This is a major milestone for our agriculture team in the UK, 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 the 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. And the guidance that Sami 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 will build on the extraordinary performance achieved this year, while making a considerable acceleration on a 2 year basis. Importantly, it would make NoMad one of the few companies delivering growth before, during and after the COVID-nineteen 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 10. This will be a unique opportunity for the investment community to hear from members of our management team beyond myself and Sami and to learn about the breadth and depth of our business model. We're excited to bring the Nomad story to life and hope you can join us for this engaging and unique session. Now over to Sami to review our financial performance and guidance in more detail. Thank you, Stefan, and thank you all for your participation on the call today. Turning to slide 6, I will provide more detail on our key 3rd quarter operating metrics, beginning with revenues, which increased 6.7% to €576,000,000 driven by 5.4 percent 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 Q3. This was offset by a 2 percentage point drag from foodservice and private label, which declined 23% and 5% respectively during the quarter. 2nd 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 2nd 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 and L. Adjusted operating expenses increased 4% year over year, reflecting growth in indirect and a modest decline in A and P. Adjusted EBITDA increased 13% to €109,000,000 and adjusted EPS increased 20 percent to €0.30 for the quarter. Turning to cash flow on slide 7. We generated €237,000,000 of adjusted free cash flow during the 1st 9 months of the year, equating to 122 percent cash conversion. This is an exceptional outcome when taking into consideration the rebuilding of our inventory stock this summer and the fact that the Q3 is seasonally depressed due to the harvest and other factors. We continue to make significant progress on our cash breakthrough intervention focused on all part of working capital, a true testament to our entire organization's commitment to creating value across both the P and 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 8 to review our 2020 guidance, which is based on foreign exchange rates as of November 3, 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 4th 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 4th quarter reported revenue, given the relative strength of the euro versus the pound sterling and the Norwegian krona versus the prior year. In summary, we are reiterating our guidance for adjusted EBITDA in excess of €460,000,000 which will be subject to how the impact from COVID-nineteen transpires over the coming weeks. This now equates to adjusted EPS guidance in excess of €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 118,000,000 for Q4 and 194,000,000 for the year. When translated into U. S. Dollars, the currency in which our shares trade, full year 2020 adjusted EBITDA guidance equates to at least $538,000,000 and adjusted EPS guidance equates to at least $1.53 Finally, gross margin are expected to increase year on year in Q4 and operating expenses are expected to grow significantly ahead of revenue growth due to the phasing of A and P into Q4. That concludes our remarks. I will now turn the session over to Q and A. Thank you. Operator, back to you. Thank you, sir. We will now begin the question and answer session. The first question comes from Rob Dickerson from Jefferies. Please go ahead. Hi, great. Thank you so much. Good morning. I guess, Stefan, 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, right? The timing wasn't great, but almost was like I didn't hear what kind of what you said about 'twenty one. It's kind of like we could be kind of in line with consensus or maybe there is still growth in 2021 and that was in line with the follow-up commentary around growth in NoMad kind of pre, during and post 2020 in the heart of the pandemic. So I just want to clarify the comments on 2021. Thanks. Okay. Good morning, Rob. Yes, let me clarify and maybe thereafter, I will leave it to Sami to further define the comments. What we said is growth across the board. So what we want to achieve objective in 2021 is to achieve organic revenue growth, adjusted EBITDA growth, adjusted EBITDA, adjusted EPS. So all growing versus obviously, needing to come with a guideline or baseline, growing versus 2020 consensus. So 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. But at least that's what we see. That's ambitious. Ambition and it's obviously we have to do if you want to do this, you have to lap a significant COVID impact in 2020. Okay. And so I guess then 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, right, some visibility on new innovation and distribution and maybe it's around Green Cuisine because obviously the lap is really significant, right? So 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're absolutely right. I mean, we do have a perspective on retention for new consumers I mean coming in. Green cuisine definitely I mean which will continue to be a growth driver for us. Recovery, input service and frankly continued, let's say, investments the return of the investment that we have made, I mean, 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. Sandy, 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 on year relative to the plans last year? How you feel about inventory situation going forward? Just any thought there will be appreciated. Yes. I'll probably give you a general overview on the supply situation and maybe Stephane will add some further perspective on the Brexit specific element of the question. So we definitely took the learning of the wave 1 into account into the way we are managing if you want the rest of the year relating to effectively rebuilding our safety stock. Can we continue to carry challenge because I mean the demand is fluctuating a fair deal, but definitely the situation we've taken the time I mean 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 a plan for at the end of December early January. So that's where we I mean, Stefan, if you want to add maybe any further perspective on Brexit? Yes. Good morning, Johnny. Yes, as you can imagine, this combination of Brexit and COVID makes it quite, I would say, interesting and volatile. So and you have to plan for this. So we are 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. So we obviously, we're going to plan in terms of inventory. And obviously, it's a very dynamic situation to change again hour by hour maybe in the few coming days. But 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, Stephane. And then 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. Yes. Definitely, I can imagine on November 10, we'll spend quite some time on sustainability because it's really fundamental for our business. The good news for us is sustainability does very well with Swaddlers and Foods in terms of waste. But also if you're taking a more proactive approach, it's commercially, it's critical for us because at the end of the day, it's great for the retailers, as we 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 keep that kind of label in terms of good for the planet and good for you. So all these things and it's again, it's going back to label. So it's everything. It covers the whole organization and the whole P and L from cost. Sometimes you're adding cost. Sometimes indeed you can reduce cost. And then it grows, which is even more important in the receipt goes back to your top line. And we see that little by little our consumers start to appreciate, especially during these times, how great our categories are doing in terms of sustainability. But more to come, as you can imagine, during our Investor Day. Great. Thanks for your time. You're welcome. The next question comes from John Tanwanteng from BJS Securities. Please go ahead. Hi, good morning. It's Pete Lucas for John from CJS. Just wanted to touch base. You touched on M and 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? Yes. It's a very good question. And I think let me start by providing a bit of background where we stand. So as you know, as together with the buyback, we also redefined and even focus even further our strategy in terms of M and A. So it's really focused on frozen food consolidation in Europe. So that's the real backdrop. And we believe with the cash flow we're generating, including obviously the right allocation of our capital, we can do this. And so that's one thing. 2nd, M and 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. And that's what we're doing. Sometimes you can be more proactive, sometimes a bit less, but things are coming. So back to your question about, let's say, how is it possible to do M and A? Time will tell. It's a volatile world. It has an impact on M and A as well. But you can see in the rest of the world, M and 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 Alteros on for Rob. Thanks for taking my question. Just on the reacceleration 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? And also how has consumer behavior changed in the 2nd lockdown period in terms of what they're buying and how much they're buying compared to what you saw earlier in the year? So to your first question, the answer is across the board in Europe, not really. I think consumers are consumers. And when you're 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 intensity, depending on whether the schools are closed, the restaurants and the way things. But that's normal. Now to your second question, which is how do we see the 2nd 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. They know what's working, what's not working. And so 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 and P going forward. Really a question on has plans or have plans changed where you guys are going to allocate that spend based on the current consumer economic environment? I would assume less promotional dollars more to the advertising side, but just want to get your thoughts on that and how you think about that going forward? Javier, I mean 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 and 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. So I mean at this very said, it's all about managing allocation and spending. Got it. And then just one on the cash flow. Oops, sorry. No, 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 are of course a fast start with the right level of A and P in Q1 because again, as we said, growing organically sales, EBITDA and EPS is what we wanted to achieve in 2021. Got it. Thanks for that. That's helpful. And then 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, etcetera, to continue to be a cash generation? Thank you. We continue to be committed to clearly converting more than 100% of our profit into cash, I mean, at this stage. So the factor you're describing have already been taken into consideration to end the year with a strong momentum. And I think we've been clearly stating that we want to continue to return, I mean, a significant, let's say, cash level, I mean, overall. And 100% is what we are after. So we're trying to balance all of the items from the cash part and that's frankly what the cash breakthrough intervention is about. So definitely all of these have been taken into considerations. Thank you. I'll pass it on. The next question comes from Jason English from Goldman Sachs. Please go ahead. Hey, good morning folks. Congratulations on another strong quarter. You're welcome. A couple of questions. I think you guys have been signaling aside from the Q2 where you pulled back, you've been signaling this ramp in investment into the Q3, into the Q4. Yet we haven't actually seen it show up in the P and L yet. What's 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, I mean, we are managing really our P and L if you want on a full year basis at this stage. We were planning effectively to start in Q3. I mean, some of it has started in Q3 and the majority will be effectively Q4 focused as we had laid down. But we intended to continue to spend, if you own, the amount of investment that we had planned for, as we said, because it's delivering good return and it's the right thing to do to exit the year with the right momentum going into the next year. Okay. And on the cost side, we had seen some spot market weakness in fish and I haven't checked recently, but on the back of foodservice weakness. Can you update us on whether or not you're seeing cost relief or where your input cost pressure stands pressure or release stands, both on an absolute basis and relative or post the currency transaction impact as well? Yes. I would say on the cost side, I mean, 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, I mean, focused and opportunistic at the same time. Definitely, there has been pockets of opportunity, as you know, I mean, from a spot standpoint and some ingredients. And we've taken advantage, I mean, from that perspective into this year. But what we are seeing if you want when you project that in a broader sense from a projection moving forward is that our current history. So on that front, I mean, there's no change. It would be back to more normal years to some extent, isn't it? And then on your question on FX effectively, I mean, we do see some effectively slight help, but it's not going to be I mean that's significant given the fact that we have a rolling hedging program there and most of it is being reflected if you are seeing 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 and I know the data that we're getting from Nielsen is not doesn't encompass everything. But that's showing sort of some increase in private label shares just in the latest few weeks here. So just wanted to get your perspective on what you're seeing on private label versus branded side in the fish category? So let me start, Sami, and please compliment this. I think I understand your point. I think quite frankly, a few weeks can be and most of the time is also promo related. So sometimes you have a week or so or 2 weeks, which are well, last week last year we had some promo this year this year we don't. So 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. And in other words, to to a game plan vis a vis private label. I think we are a branded company. We want to come up with the product superiority, And we obviously need to manage the price gaps, so that's an important consideration. But definitely, we're a fish company, and we intend to continue to be the leader. So I wouldn't be concerned. Okay. That's helpful. And then just back on the strategic investments Yes. Is that how you intended it? Like did you intend that most of these investments will come through in the Q4? Or did you sort of make that decision as as you got into Q3 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 like why you chose not to spend in the Q3? Well, as Sami said, it's something really that we're leaving to operators. And what I've seen is we believe that having it in Q4 and where they believe and hitting 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 €10,000,000 how to let's say, how to keep these new consumers. So far so good. It's too early to say. We will inform you. But apparently, we're trying see different situations, not limited by the way to television, but more it's broader than that. And we will inform you, we will monitor the situation and we'll let you know. But again, I wouldn't really read too much about Q3, Q4 because that's not we monitor we're managing the business. It's really up to the countries and the respective markets to see exactly when they want to invest. 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, 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. So it's a very good question. And you can imagine for us, it's a crucial question because green cuisineplant protein is really a big bet for NoMad, and we're investing accordingly resource in terms of resource, cash and time and talent, obviously. So when you see so 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. And so we start almost from scratch. And we're very pleased with the progress we have achieved. So 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. So that's one thing. Then you have you can go to other countries, especially in Continental Europe, which are less advanced. And there you see some flurry of new initiatives in countries like Germany, which is fine because it means that the category needs to grow. So you need to think a bit differently compared to a mature, let's say, category. The category first has to grow. So we're pleased with these additional offers. And obviously, it's our job with the quality of our products and with OAP and obviously our in store activation to make the difference. And then in some countries, it's really we are we're becoming as de facto the market leader because we're starting really from scratch. And again, it's our job to make sure that people are going to start to understand the beauty of plant protein. So a lot of things to do from different angles. And obviously, the same time, we also need to make sure that it's also a big impact in terms of R and D. We just started a new range of, let's say, of nuggets. So poultry free, fantastic product, I can tell you. I don't know if you it's 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. And we know it's going to make a difference and the numbers are very, very, very interesting. So and I could speak for hours about Korean cuisine. As you can imagine, it's big for us. Thank you. That was very helpful. And then could you speak in a little bit more detail about how the COVID retail landscape is impacting your SKU assortments? Potentially what learnings has provided about your brands and the package architecture? And then 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? Well, 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. So we don't think that innovation, the NPDs that came from green cuisines 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. So now looking forward, expecting at some stage of 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. But again, it's a very dynamic process that can happen country by country and retailer by retailer. Okay. And so it's sounding a little bit like Green Cuisine is an innovation that may be uniquely successful. And is it fair to say that maybe some of your competitors aren't having the same level of success plotting innovation? Or am I interpreting that wrong? Well, it's difficult to speak on behalf of our competitors. And let's not forget that competition goes both ways. It's frozen food, but it's also in, obviously, in chilled and fresh. So we have to think both ways, how to lead and, obviously, how to make sure that frozen is going to be well represented. So for the rest, difficult to comment on behalf of the others. But overall, what I would say, which is very important, is it's a long term trend structurally, and 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. 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, but I was hoping you could comment a little bit. I think you had mentioned that 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, but 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? So 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, we've given ourselves some targets. And what I can see is it takes a bit of time because obviously in frozen, I mean, the frequency is a bit lower than in chilled and or in, 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. So I wouldn't like to empty this the content of our conversation on November 10. Fair enough. Okay. So can I just ask about the plant based meat category? When you look at the category as a whole, where do you think those that is taking share from? I mean, 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 midstream battles, where by definition, you have a level of cannibalization, which is inherent from the name 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. So that's great. So where is it coming from? I think it's too early to say, but we can imagine that we can you can see on a macro basis that, let's say, meat is a bit more stable than it used to be, and I think we will see. But 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 the, let's say, the frozen products, they're adding more space to plant protein at the expense mostly of lower value frozen produce where we're not anyway. So it's probably a combination of lower value frozen products and also some meat content, which makes a lot of sense. So for us, it's a perfect innovation. It's a perfect new category because it's highly incremental with the margin that are obviously in line with our expectations. So, so far so good. But definitely, as you can imagine, it's also a category and rightly so where we need to invest ahead of time. And 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 Olson 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 2Q. So just wondering what you're seeing now and how you're seeing that region turnaround? So yes, it's as you know and 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 and in line with our expectations. So in Sweden, as you know, we had to rebuild everything. I wouldn't say from scratch, but quite frankly, quite deeply and something we've been doing with Wayne Hudson, who is now in charge of the U. K. And Nordics and Ireland. So 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, and we see that we're starting to really make progress. So starting to make progress means better relationship with these people and starting to see, obviously, the space allocated to us starting to increase again. So we see that little by little, it's going to take place in the course of the next quarters. So you won't don't expect anything spectacular in Q1. It's something that's going to take place. But we're starting to see some interesting results, also some interesting results pretty soon in terms of cost optimization, especially at the logistics level. So starting to see some green shoots. But again, don't expect a quick, quick, quick turnarounds. But 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. There are no more questions at this time. I would like to turn the conference back over to NoMad's CEO, Stephane Deschmaker, for any closing remarks. So thank you, operator, and thank you for joining our Q3 earnings call. Our business continues to perform well amidst the COVID-nineteen pandemic. I'd like to reiterate the comments 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 and A agenda or strategy. And we look forward to hosting you on our Investor Day next week to be held virtually, as you know, on Tuesday, November 10.