Nomad Foods Limited (NOMD) 10 Aug 222022 Q2 Earnings call transcript

Good day and welcome to the Nomad Foods Second Quarter 2022 Earnings Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Anthony Bucalo, Head of Investor Relations. Please go ahead.

Hello and welcome to the Nomad Foods Second Quarter 2022 Earnings Call. Officer. Head call Relations CEO; by Zekhout, Chief Bucalo, joined I and Anthony our the on Stefan Financial am of and Investor am Samy I Descheemaeker, our

draw Before our which of press prospects, your Slide we may the of This results statements company's our include presentation. and expectations attentions call cautionary are due our risks SEC would on that discussed begin, like and are X attention time. the based language. disclaimer in in presentation I to the at with on differ may uncertainties slide our forward-looking conference release, to to our filings Actual this which this and investor view includes

These for measures a results. We be considered should non-IFRS and not will with discuss call financial financial also should our replacement non-IFRS read measures be together during IFRS today. the

the just website. and for information release appendices presentation figures in XXXX the earnings related, can been non-IFRS presentation represent figures adjusted All acquisition within You and expenses payment on have well. our as end share slide find exceptional reconciliations related certain for adjusted within adjusted financial and note the that items, available the based IFRS at this to XXXX. of Please our

gains on hand FX you to losses. will non-cash over numbers. or all that, here noted, will I As refer Unless adjusted comments from otherwise With to those Stefan.

we for to the We both difficult already Good challenges joining down despite quickly performed Thank today. the on across in and otherwise. We and for pleased you requirements. on conditions by inflationary Europe. us our additional well you, Tony. macro results to quarter. war And inflationary addressing year the adopted afternoon thank everyone meet brought We're Ukraine call began review QX,

bunch a consumers are our people of of by resilience the and customers. We of encouraged

trends Our from revenues organic XX%, QX. sequentially while grew improve sales

share we cost we're pass while increase to value inflation. mitigate Our stable, price

improving service materially year. to have fill basis our service in levels XXX chain customers rates improved half Year-to-date, with provided Our excellent supply the points.

approvals. We will supply continue making chain crucial

further newly new growth introducing business. and our organic drive products in integrating athletic While to acquired

now for We cost. on most costs covered And our material XXXX. period the year are of nearly through all we raw input the of have challenging

worked that effectively pricing our brands. input and to achieve cost Additionally, partners support margins set allow appropriately we our our at with us retail address have gross which will levels to increases

As performance to a improve as our result, we business goes year the materially expect on.

prior all The the navigating would discussions rapid well uncertainty, annually As high you that normal become far in given environment Ukraine. dramatic inflation. in have consumer an this as of executing that more of war But the been inflation, in change our cadence of partners has with outbreak the know, includes to business Nomad extraordinary as realities retail our pricing actions QX. costs, cost increases given input of have the dynamic our be

pass year. this we increases price As

of with business. quarter and key This appropriate which €XXX to exit believe cost to We a year strength We further proper and metrics, of good sales higher the million single positive flow XXX of reflecting basis will from pricing to We to organic leading price fully reported costs with to maintain across margins. sales And cash we input us comparisons lingering like adjusted offset an year points year relatively million material factors. which of the compared to inflation testament Europe. a in offset margins expect investment gross higher QX reflecting primarily margin costs. but second our see a outcome the by year-on-year. inclusion increased volume allow maintain weakness share of adjusted our for increase revenues last of Adjusted recap sequential necessary the digit impact €XXX XX%, COVID finally, as business. to Adriatic our X% the acquired EBITDA and our driven by our raw the low the X.X%. was per A gross and the be as lower €X.XX first flat newly that, other Organic growth to and increases represents organic declined should financial year-on-year, delivered soft recoup still lockdown With by brands. declines, EPS revenue category XX.X%, beginning I'd improvement

ice revenue sales growth the XX% in to region. Slide Turning benefited strong Adriatic cream X, our from

X.X% delivered as company recovery trends in this While net the low the a results. unfavorable of year pricing mismatch July, saw And way are pricing lacked margins. pricing for more costs the we we most market. and favorably. QX for realized the normalized was But joining to to a we sales represented organic this in this quarter. we In now the

retailer is QX. lag are a increases the As increases There always time linear which we staggered. price are discussed in to between and our COGS which

long-term total pricing not to levels. a dialogue initiatives are further retailers our or recover We margin are And matching gross inflation. better towards average will with we price about maintaining which

our and good on the we the rest covered XX% On we up of QX. have well as visibility for year, we are cost from XX% energy, coverage Additionally, than are this we for in more year In the in points overall gained XXXX. we pricing while In pricing basis Win the share or market. was value stable, dynamic for HX, Must in XX Battles. covered environment up landed

Ukraine Win of we are success Our looking pleased Europe. environment, When markets where the high Battles performance. war inflation the define the and challenging well in across Must categories at we consumer as in our this consequence with the are as

We posture. are conservative taking a more

to are on to XXXX growth. on result, previous digit high strategy for to €XXX to EPS from of our guidance a we term, €XXX are single €X.XX. deliver track XXXX confident adjusted are adjusted business This EPS €XXX. we range represents our still As €XXX plan Longer and our we amending guidance is a

and as evolving new to We've always Turning is this done learning times. to X, organization is Nomad that many a Slide challenges. company an

our quickly and of inflation in top the strategy. rising Ukraine and supply exacerbated move at Green accelerate the adapting Adriatic in We're chains, agriculture already war diversification fully Europe in integrate the Cuisine QX discussed remarks, we Grow especially energy. growing in our rapidly to our fish unit. quickly and disrupted global and we As

supply. are of aggressively we de-risking fish First,

before fish to We the But have we global this address have macro the as plans volatile issue wall. the threatening QX picked in environment up is space supplies.

sources adding these supply. we are MSC We well remain current are fish sources geographic of our and securing within species augment new to as to plans. guardrails farmed committed sustainability We in staying as ASC and and

Italy. multiple recently QX, weather the campaign launched which category. In strong more market mid-single weeks. advertising Cuisine is being in received nearly well than an Green with a the has one year in despite has in XXX grown Green digit retailers. awards XX Cuisine U.K. Cuisine Green Second half and U.K. negative the by points share and in in organic basis growth events We training consumers trade

plan on was returned QX Bosnia volumes cream Herzegovina. the restrictions growth had Food early Croatia historically from hotels and our were Finally, and coast. the newly temperatures. as to In strong high acquired start and ahead benefited May, COVID good sales with in bars season well traffic ice strong and Adriatic was in to restaurants, Service and of business sales lifted a

we with to the that, Samy. is remarks integration the I schedule. And are of over And acquisition. of excited will Samy? about ahead new turn Our future this

all the participation for today. Thank thank you, your And Stefan. on you call

acquisition Turning of the of X, highlights. driven second key detail by to revenues business. of primarily year-on-year, Slide more we quarter, the operating growth a second million We Adriatic on XX% provide quarter in reported €XXX a our

fully become As and a into numbers transaction organic QX. was reminder, finalized that will in September integrated in our XXXX

year. XXX were margins second Second are of due decline organic generally whose reflecting to The a margin a small offset quarter, decline during point lockdown weak quarter due gross inclusion higher the revenues mostly across gross category. offset the seasonally from time also basis revenue favorable were Adriatic the effects. comparison and had year components margin pressure. a last by performance of revenues the benefit XX.X% helped X.X% this Gross in These a versus

of Moving to the P&L. rest the

million an XX.X%, Second quarter versus last €XX of year. increase COGS increased

year-over-year. profit in inclusion of numbers. adjusted our operating division exclusively Our to of due grew was €XXX was million gross million. rising expense up Adjusted Adriatic the the This X.X% expense XX% to €XX operating

As a was quarter this of XX.X% increase an XX.X% operating year, percentage last XX expense sales, basis versus of points.

input Our EBIT, rising done rapid impacted costs. EPS by negatively the performances were

Second was quarter €X.XX €XXX last up of versus EBITDA flat. of was adjusted year million X% adjusted EPS and our

was million anticipation equating of result. to to from CapEx Change we Turning material not working raw due as adjusted buildup to last free also outflow was was mostly material versus the of Slide believe cash well cash possible base This which year €XXX disruption into year, last is the capital prudent capital The inventories raw this for XX% million cash seasonal ago. slightly we markets. [indiscernible]. inclusion €XX impacted Adriatic the the flow year was in use in this inclusion below shortages. free Adriatic half of inventories adjusted considering raw Up of of as in flow generated X, as of flow the We conversion. the in year, working flat risk million a build cash. of on material a €XX due of

to cash our €XX support higher Change Adriatic year in broader tax expect incorporate stable As into decisions. we investment at we the mentioned QX, while million, by plant. And cash strategic €X was €XX for decreased as do in million million. we CapEx the interest selling

flows to year. we heavily But delivery expect through weighted free We improving deliver QX. this cash towards

directive to us implementation from typical that, XXXX short combination material and XXX% of long-term X earnings raw year the to the adjusting QX our our review of to first of higher setup turn Slide inventories With leave proactive May. targets. conversion unfair However, our to our which the in are report guidance slide. CAGNY final let's EU's CapEx, we XX% trading and

EPS best is on our other on XXXX. based of second of and the half guidance and factors Our sales inflation in cost projections

year to expect an the mentioned margins gross we better financial the the we our over based Stefan the we As takes XXXX. the cost back back plan in on hold. be his pricing clear, inflation through of half in margin of year expect in as sequentially performance thus To of recover profile improving remarks, improving course and half pricing

growth low X. consistent guided We what revenue will expect increases single-digit driven is in the This with range for we single-digit in by half May. Low and in sales price growth be organic XXXX.

price We to volume, expect a significant we declines. volume between fully price expect and spread offset

for contribution the digit Adriatic division to drive guidance of high revenues We reported single the full year. expect

operations. it our central see capital support For to use our is cash to still We share driving this allocation, year shareholder value. buyback to top as priority

not repurchases moderate However, we shares repurchase in after in did QX, QX.

place buyback Our August in remains XXXX. $XXX until million share program of

factors such we consideration balance the the of in the volatile For outlook impact XXXX, other of sense as Europe. of across cautious a are and war a consumer Ukraine taking

track we believe to €X.XX. a a we guidance our amending €X.XX per to the you. share EPS are reach XXXX target €X.XX. As to now previous that Thank result, EPS session remain turn back from our We to on adjusted will to Operator, €X.XX of I to range you. €X.XX concludes remarks. the our Q&A. That over adjusted of

[Operator Instructions] Lazar And with from Barclays. our first today Will come Andrew question

Great.

half. said, pricing is first environment But this a in comps is somewhat guess, of back And the maybe come. Nomad I sales appreciate Europe. organic X% So the as macro task organic growth than tough in obviously, the I running seems you easier. in light mid-single-digit more of half. implies, down more X% in are about And to

is accelerate the going little you a XQ discuss you elasticity with you visible Is the pricing much year? didn’t your for pricing, there? volume on And get kicking like then in can benefit What’s to in does mentioned, expectation expectation more maybe but pricing mostly of it worsen for here? that from in the the as an how become bit of P&L. it bridge So full sounds not

Good Thanks question. the morning, for Andrew.

Let your me question and bit the numbers me a point. handle to dissect let the

the plus really is -- When price I price, during of at we which the of the really in. indeed, was July, I sales are price July, starting And excluding is COVID end first increases, of the terms comes kick the And negotiated successfully think HX see, end is in our negotiated the for in really X% however, really around half example, of the it that representative Adriatics terms increase quarter. COVID comparison. of we behind to representative us. have

we're think will the when decline that, region the to we full going we're going And Elasticity we're see is terms And you year, in of expecting to we what we So but decline need the market obviously, I'm to to then a -- will volumes be mid-teens. forward share. as line in pricing know obviously, result. moving -- with is we of there. in

importantly, It's share combination. a Samy, and end it's market of COVID that's more pricing. really any above add-on? other So

QX effectively I be QX there and it's for think acceleration in as will an sure.

make Yes. Great. heard And just it sure to right. I

organic sort that year And You basis, on said I right? basis, Did I mid-teens year you’d think. on basis, of July was X%, full think an then a hear said a you up I expect full on pricing.

Correct.

Our question English with from Goldman next will Sachs. come Jason

questions. Two quick

First, the follow-up on It already you’re that increases need locked the to hear you to believe remarks of a have cost like going pricing. pressure. in prepared price cover I you but and you sounds it think negotiated say I most in did further

So can you clarify?

Hi, Jason. absolutely. Yes,

had the would we And the we is advancement say, we to first waves of clean next We primarily discussed year. through, what for third QX effectively the into that X now which QX as the mean, in successfully. have year a wave consider end towards had gone pricing said earlier, we Yes. -- I an of that is and And plan the previously this pricing alluded year, of let's that's sure.

quarter. I growth M&A were quite contribution of would of well. region, doing year? look the every appreciate first your continues to exceed business And It the is lot like a makes own the sense. clarification. acquisition, That including what the our sales like they If the looks base, through your organic half the the Adriatic expectation

And expectations a market your well, the their working share increased indeed, way, they as Well, very and extremely to wise of we've -- pricing. ahead By question. point, have also well. it's good it's

So all in is Adriatics. green the

Adriatics business obviously be for compare, forma would the in of in the it full are and -- we of X.X% we the X% just -- would -- when of the that would for minus Adriatics short pro for -- the business, include terms a plus you in So let's QX the the say, have, we business. we sales, we full existing do we excluding

So what size a it's that's difference. it is, of a

Or unique of Yes, for boosting what can is this durable? this because sure. Or And do this you? really contribute that’s cream? is ice kind weather reflective to business you think, the of warm just

me also also we Well, well, thing share. of wrong. weather Jason, in obviously, being a sell gaining is year Nobody The market going only get could we know role. know more. terms this. Don't next happen heat. Don't we is we're to that, what's even And knows know

also is quarter for it in a So X. learning us

of Okay, also can we even produce ahead time.

learning So we're all these things.

So difficult to know.

the heatwave less Let's playing role not is of rest much it's a forget be for role, that the business. bigger to business, negative a but pronounced the a fair

in, ice see learning very, cream, cream So We're the very what Jason. we all love with ice yes, business. pleased with and we we're

well business as fact effectively the just impulse which Stefan’s probably what the by driven year, Maybe category as the just would tourism of to fact I further. I pushed up has the this mean, is have the point that we seen add, even caught an effectively, that acceleration well has

of is But a from into anticipated let’s this advancement had healthy half year definitely. growth a potential business is say, this of effectively what good bit year. So with in very we health a there the standpoint,

Our next from with Rob come Moskow Credit will question Suisse.

for the the assumes in a prepare think shortages. an year year materials guidance a end pricing raw back decline a the on lot means half. said XX% you’ve which rapid also equally Your up volume year. loaded ramp And mid-teens in I rapid for to it of the But decline means the with that you by for of

also like leverage what’s a your impact and volume of balance the on your So sheet? operating on in this decline

Yes.

that I growth a net -- as is the going give effectively single-digit is sure. well. is volume of low to all is still of pricing, think there for is there I There mix think Rob, and

are So mid-teen not when you volume to combine the totality we of that, a getting decline.

We've that are margin projection. into getting our cost say, pricing reflected volume that's for the operating, significant And single-digit gross a to year into as planning we entered being let's probably this are high in our factored standpoint. that overall. We And with effectively costs from decline. those been

a What’s the mix implies significant that pretty mix benefit? benefit. So driving

higher executing that we Well, are we instance, the there higher effective acceleration which much for are are are margin a having country the pricing that all as to mix factor well have categories that have significant categories the the in pricing fact with wave side faster on a is starting clearly that margin margin the And most side very than U.K., and that as contributor pushing, this of driving with and rest. the the that the well. of category countries explains are clearly on those higher the that, fact growing is

Steve And our with come from next Powers question will Deutsche Bank.

you okay? Yes. me hear Can

Yes, yes.

Great. Okay, great.

a last, specially Or to be [indiscernible] Just on mid-teens on mix be on of mix positive the confused I'm sort digits negative that to negative bit positive to single-digit if you the year? back pricing, expected get you're have for just mix that and is to it little negative year. the single clarify, it's expected high volume negative is low year, the a you year. on to of expecting or

standpoint as the in the we business single-digit drive and mean, for business. that's beyond order is driven growth low well, from base No, put the average to which to is just things one. mid-teens that range I in over say, single secure need to the said, of by the an the promotion support, would is is high range say, that about, let's And there say, mix the equates there a of effectively we increased I about, actually, going have to pricing on a it's that as digit, volume let's balance be I talked, on the in place

[ph]. much Understood, pretty

in into some there what to this us also as for expectation early offer a hedge visibility from Okay. you cost point? ‘XX ‘XX given to color standpoint? is at it you talk ‘XX, your early inflation is of ability positions inflation like about an -- too your of for an I can Any looks

lot I stage I a it's parts. at this moving that say too there's think early. would of

there of have our a the those the some portion a effectively, now downward seen, those. of commodities though As you on effective down going are represent portfolio, items, tiny of even and for trend some is

in hedging -- On of to point there the continuing, a effective we order and next the we activities the had stabilization for effectively are the energy as extending like peak year. other, in well cover at some is areas

think as for provide more expect I guidance So we XXXX.

Understood.

I Okay. could, ask year. And I to than of schedule. of through we They and higher impacting in operating that I about expenses with rolling then they also, I think in it I the From lot your understand inflationary there the are want extent if that came aspects P&L operating were expecting line consensus in Fortenova Fortenova? came -- was is we be is probably should a really expenses. ahead not of about? other perspective, your only is to that in expectations, there thinking well as the Or ahead, this line

think hasn't that past, have the of a we clearly is as for item good there mean, I talked And you expense No. clearly be have operating been where pretty any in on. -- Fortenova, importance of effectively kind is and this That noticeable would we guys. area, visibility except is the I there on on COGS

Mizuho. John next And with come from question will Baumgartner our

Just think to a perspective, consumers do positioning pricing curious, ask gap increasing seeing pretty retailers? widened B, versus about And do the like you about environment price they where you fresh to have I to these be or to fresh, over visibility to frozen your the at seem frozen And the from to [indiscernible] categories? ago. years you think how for next in retail. compared Are frozen Stefan, the non-price even they crisis would From question. down relative for Are relative what value. for environment? then, credit promotion about mean and XX trading category you A, to gaps I’m shelf-stable I’d X they this months? price do supporting the then for categories? how this your categories differently them to X the expect seem for favorable frozen Thanks the are manage here and Samy

is same. a this in Well, your overall, John, that recession the we're category seeing I well point, this think time. stage, is doing And at to

because some In versus still of it's terms are fresh see same think I very increasing that the time, at price others, to the difficult we people Jon, later. read,

any But a stage, categories. the things significant see let's bit consumers again, people to think some we and moving additional are we're at is, coming; out-of-home we well. this see the And So are where with seen out you restaurants from, getting what of A, and big But remember can standing. category to coming back B, retailers. piece I difference is haven't obviously, down COVID let's new the say, other see restaurant, doing this

terms think to but is what a we great that it. keep this living. in you And we for will is what can do need -- with how lose of of explain this only of also in of in example. where anything. is category the doesn't also terms terms together great I This retailers It cost not is, affordability category waste,

long-term especially Absolutely. to in the the things And so category confident this these recession kind with in the going do are time? of future. But much future further we're are we of

Samy, for XXXX. a then for the And question Okay. guide on you

single-digit the it EPS a you to more but Is have that any the back gross you’re more net maybe macro discuss back Is the may OpEx, range. incremental stance high taking Just you lowered to conservative more? the change outlook. in to more maintained Can where in clarity comments? P&L it margin? You’ve sales on reinvest tied

increased overall. that reflecting the reality simply have is that be And on Yes, there. environment really uncertain the is we COGS, mean, visibility economic quite The it's fact are cautious a OpEx. clear. the not view on becoming I to on very we the

year. going require to the on pressure through is would full there top make the in that order the sure So further the strengthening line is business pricing effectively over probably that of

next with our Cody Ross come UBS. question will And from

on on line there, It sounds I question outlook. comment taking just you cautious you’re top Can sales you didn’t to [indiscernible] just like stance driving? more there. but follow-up what’s a organic view want last further

as the of is what margin, that see low. to the guidance within other margin Well, you the effectively change the from is range see, you one

would movement guidance. single-digit of but what EPS That's that year effectively from what Simply put, leave mean, be about effort when the this a the to is high some single-digit revenue perspective. there. going elements say, to see growth only some Let's said, there not increases is impact us the our This will takes execute stage, remains had anticipated. top as that continuing X price more effectively, at for be is effectively, overall I case. level uncertainty effectively is we overall. line of we still is range in the is affect we the some marginal constraints, it -- our impacting which see talk high case, element change the creating probably I to there, What growth. The But that that potentially to that's could progress we

Got you.

So it sounds the like the now. And – of end lower in the just at Understood. range range

might well. price have to one number I it's let's But the million, more reach it one. €XXX get determined the the within us, range to we're this get for is we thing And plan clearly leaving But to to uncertainty if is on But bit end of are We as clearly, higher Cody, there right. difficult. a a would priority important are which rent the add have we guidance clearly definitely, say, simply, the a reflect. there, within one felt the be it at

the talking is So are range this we about.

That’s me. helpful. And from Understood. then last just question

to the prior repurchase is in repurchases Can talk going quarter share shares potential trading with stock inventory. increase as where your guidance the about you line work given in you You which is especially at? your to didn’t any secure forward,

in to sure to right. clearly there. mean constraints, you the objective you're environment that is this the is state mean, absolutely are we we we taken in scheme this of one correct. as have a number the you to return of options the repurchase made returning, operations in continue order share which really that just our need say, our support an grand into product I From for shareholders. effectively And at terms for something we that is we price rates, consideration all of will have critical the let’s consumers. us the we within points right What to supply have. us it’s We standpoint, clearly very know, clearly other serve I At make the in stage, the appropriate is

So is time the this stage, remains forecast this at one possibility supporting operations. the being, the but clearly, for

Tanwanteng Securities. will question next with our come And from CJS Jon

fish, additional would remarks. This is Dan of just in Moore detail process, Jon. on two, [ph] supply specificity and you of your you detail alternatives updates prepared the Maybe for that have been any there can A Any for share covered. mentioned lot great. be the any one; questions strategic in terms securing alternative

you're I most question. that's me fish about key -- of think let I So understand. the cover, talking a

where last So We've a definitely gone since down from taken made steps. lot a of that it's standpoint, the -- improvement we've risk time. of has lot

we've but going consumers with pleased We've of The very lot the and we're We've to other outcome gone are also from our reduce And production. Russia. the of we're starting to starting testing piece very offers with reliance by importantly, very going all come we also farm with fish, quality the progress. purchase this start obviously made increased we've and have to soon outside species. to a a So industrial sessions. high made we're

is the kind we're said things exactly Cuisine part really of is that And are would the on we we doing pieces also Green fishes these do we said which So of it. part and the last top on of fire. that,

it makes combination that reliance we fish. that this our on part of So the are reducing definitely

the on on I provide there’s first of, I which stage. [indiscernible] no additional this the at question aware to And mean, comments, your one I think you're mean that was more

question And with Shekian our will next come from JM Citi.

to I move as also wanted additional private see you private hikes? you’re amidst category, just what the if to any, expect the from the frozen seeing, forward, you price impact And from labels? ask label pressure on do

you So we share. market have our overall, have maintained as seen,

to So you is easy want the but also Win well. the able Battles, where and the to of really win. in are. Must that's environment in something -- know we've categories want not given really, really, been this we That's really terms probably to And where we Must win our countries Win Battles do what

in share in this, of HX. in So increased we've quarter and the last market especially course the

Now future. obviously, go market that the the we we with is increase and what want in to share have obviously

think vis-a-vis I and well we private doing the have the programs have right label. brands, we're right we

are Let's all The only of obviously we're goods like we through -- these of and us. is which cost guys never moving increase difference is ahead. going same are kind forget that purchase the

leaders we they are definition terms their guys We only don't in the are of are increase at we pricing. price the shoe. know and if most going by should the stage. the ahead of to of thing obviously, I'm curve are in these And they again, but price we and not will time when some But

overall, position make our the right stronger pleased we're doing. we're gross is the one, we to And to exactly reinforce in number priority and that sure the as but to said, ever we're than be very margin start wanted equity going at So be to what is to the a to level with have brand -- XXXX able and going brands. we we're

pass I’ll Appreciate Great. the on. color.

question next [indiscernible]. will our come from And

Great.

historically, when great? about then. the Can mind. just effectively sort large last relating of below capital, And to you'll flow, XX% of of of you or couple color down X questions flows you maybe quite guidance what And question maybe them you over that's for receivables. be us final year of would inventories Can been idea the for running know working drivers full a year-to-date where outflow. large some year-end outflow see there's are that sort you ultimately an one I the million don't I the of just and the sort a Any on then get items capital exceptional or working also give the $XX year-to-date? and for just last million know and for sort cash €XX you've quarters. break cash Just if in on

percentage fish Russia. of and Just Can what today? from end actually you from maybe either the Russia in 'XX terms sourced are the quantify you at where is FY of sourced

would off-line, follow-up think one. mean, let's we I in that, session. this say, Yes. the the on took I item, I suggest off-line

it think of more these. sense, some I I to mean, makes

sure side, inventory that, year, need the look at capital. our is Fortenova has been raw On has a significant say, a driving, we down part that. move approach to plan made over effectively safeguard right mean, in capital, on in it cash year, rise in year -- have order with we have other we inventory. packing the time I by particularly There flow of, in consistent make taking we forward taking that go performance as been investments to the inclusion in had the place capital order the working our with sure rise on but the order of that let's effectively the material substantial clearly, level is what aggressive in material we on that I as very deliver that the I journey and the And the well let's we're there the revisiting frankly, mean, secure working our to supply. we a And of in mean driven there by working in of effectively CapEx, in inventory. the a in clearly make that cash say, the to expect we enter

fourth improvement the the working into QX have taking we in to expect returning mean, clearly investments account in in I and in we quarter, all capital. make, So substantial -- particular

and we will we we believe it's starting from and more amount. for to the will is easier species but I category which then a So is not that the are and we hemisphere think with we switch about next to years. but -- significant understand are now But the we for as position reasons, our which Pangasius that down will move that commercial mentioned, down Still, in reasons said, are Russian to future, as still I see plant also like it over go reasons, down and commercial be suppliers fish which as all more the disclosing go percentage to another. far other southern Russian, to not it have for going faster what's quarters one going protein, I is you is the Russian to we concerned, and the in work of

that’s So you’re Okay, great. anyway? level in just what of because and of level inflation Can seeing you context obviously, cost changing suppliers there’s obviously the seeing? fish inflation just put cost inflation general for you’re you’re

have depending I in broad it's depending the overall, ingredients, see range base overall. inflation of the all say, one we that I We that say, and the species, seeing broad-based double-digit that's we as effective on talked, see category, our on would would virtually on inflation

with come Instructions] Oriya HPS Our from Adi [ph]. [Operator question will next

you Can okay? me hear

Yes.

Yes.

Awesome.

off not and fish disclose fish that. couple you’re exact moving finally doing know be Just well other I on obviously, I able point appreciate, a to I and you the people the round percentage might and species. the ask of side appreciate is to

or sourcing. Just, clearly And it those what part there China, of year I of towards okay? fish you kind could regions And say on in you the and your maybe what -- I’m been so, do and -- you maybe China? you side? kind to U.S., maybe directionally just what Russia curious, it material could if the directionally, that would fish see fish? seen? And be sanctions talk sourcing says maybe kind providing impact will region Has a in then mean, the next speak the majority you’ve of a of represents was Russia

Okay.

question sanctions. first of which with start the the the me is Let part

the that checked negative whitefish lot sanctions be conclusion European for consumers, more because they've than they've way, standpoint, the makes, to a sense the EU, also vis-a-vis for be no anybody what consumers, which by else. for come So of would impact would from the it the the much

piece. one that's So

we've XX% just And this is As for the you tariffs, know, U.K. negligible. decisions. may But strategic in been have taken us, some levied some

in doesn't really fish impact our So it the U.K.

Let's not source forget, the we have several factories and obviously, to several ways fish.

that's thing. So one

of to on Russian said, The bit I that QX, well, Chinese early believe going reliance forward, been we're end QX. it's reduce looking -- fish. the As processing, during a we our

U.S., of MSC Council. we Chinese with long-term Russia see, process but And with a supply way the years farm Russia chaotic. back right we what Shanghai ASC or with whitefish standards mostly is be the doing really looking we're to at bit the the from value with very Very for level are between if going something on the going secure lockdown; that's is also, We're standards much quality. this did right But the level, let's and which quality. set coming XX the equivalent same good ago high say, the be remember again, and obviously Marine Vietnam Stewardship company in the the a for know will will exactly right it's would may at because us. farm the great And in important track. and are what great and to forward, be fish, a fish combination say, a could value to was the we You I I like it it's which a I

Okay.

fish like been again, it's increase requirements. energy seen of your your range given to percentage of cost kind the helpful of said double-digit what Obviously, increase kind prices And base. to on of sales material does costs. energy have know on have just Moving you you interesting What chain represent? cold

total of the is that tell -- course the I but and since year so whole mean, a started throughout, disclose cost is it X/X year. say, enabled that I that the the share of We thing What that. has the the energy have be with middle, cost. all well us Yes. you this because of that we've answer if approach, What we the of of hedging we say, level ahead let's mean, done cooking is that to the on I effectively, and can associated the the the is we off taken don't year to importance, you energy mean, of -- next beginning let's of in

managing well been next we've mitigate it the So in let's impact overall order quite, this of to say, year. in

for example, you countries, if kind considered you you material want, availability have weren't energy? and have any France the of in And European for if some get impact? and of that able example, Okay. would gas, to Germany Obviously,

good a It's question. very

As and you is can imagine, availability. also point, to there is price your there

consumer but reasons, something -- X of So over that's else. one has months, obviously we that's see worse outlook the by also and the last way, the significantly

another. move from from we've but ability in a energy In this other of to piece is terms switch on checking hard to terms availability, progress we're ability the working gas of what we're and obviously to to us of lot for one very made

give Okay, that mentioned it finally million million then in €XX period. of in growing really decline? organically XXXX in Fortenova from me, please million you revenue €XX well materials in same the the and about €XXX color Why that's to that from in [ph]. EBITDA period I did very And [ph] that? Could helpful. then recent most declined on obviously, you €XX some and XXXX And it's just million the read

and 'XX 'XX? between happen that did why So

of over directly Yes. tourism mean, tourism. I There And mean, where mean, you was proportionate. know, to this is is area I a clear driven mean there. impact, I I COVID, because importance. mean, an it's by as I

mind, base now, let's combination year going the part business of Well that from we I owner And was to well on in year. the As is thing back, compared is another the strategic. if and say, tourism mean start the and a say, very summer, business on former not considering prior we combined and this very as period. we don't the of, line the the is back could there you we which the see is something COVID with -- hot see clearly effective in let's see [indiscernible] see the doing a

considered food services the frozen when the was owner. it the retail. on So organization. for based we've strategic really we’ve -- focus longer whole were purchased as times. difference business a And it’s we've seen seen then, much very seen of several no We've previous that for that And

already see obviously, end so we’re And the of we on heat. to of, top there also COVID, starting said, the is as

We’re making progress share. in market

behind when the -- focused does. category, you things is one what kind it you’re this So fully have of

Understood. Okay.

levels Or which then kind of level, different a example, that go a for to there? growing the ballpark on carry for number then revenue there the of should XXXX is kind look think, XXXX they’ll different decent you do And -- a sorry, on we And by? is pre-COVID just towards? from

No.

volume as really and I a on business will and up the to the roll will mean end year growth business of clearly will think the contributor growing the this double-digit as to we be a the key of rest range it mean, is double-digit well. growth. well, within alluded the continue. I I year that. have

had exacerbated of over I growth one questions, that of fact there out the earlier the that bit we think be a years but [indiscernible] in year grow other is by exceptional impact to of outer of acceleration of we to the years. spread concentrated tourism As it planned forward the and said, a more continue have will this a in the acceleration is of this year, on Fortenova -- an probably bit we

that assume expect any changes for come still you billion would Or to the your in call. QX to you for any where think directionally to then, guided your expectation year you finally make be sorry, the make would And there? me, out? I Okay. change as it reasonable €X.X revenue do towards Is you

the maintained mean high the that said we fact revenue, guidance. effectively included. I on We've I a fully single-digit mean,

terms in gave unchanged guidance on sales. that's of think we I So the that

And remarks. turn Stefan any Descheemaeker to our the for over question-and-answer to conclude back I'd closing like this session. will conference

you, operator. Thank

and dynamic marketplace. we’re adapting the to So quickly challenging

war. Our the world has prices been I’m changed of how people adjusted. very of the by and with have back-to-back pleased well Ukraine we and the And our COVID determination

plans in the and Thank well XXXX. strong very are we for prepared back much. We have for you half place

for presentation. conference today's attending now Thank The concluded. you has

disconnect this at time. lines You may your now