Birds Eye owner Nomad Foods has cut its earnings expectations after shoppers bought less of its frozen products as prices climbed.
Revenues in the second quarter of 2022 increased 17% year on year to €697m thanks to its acquisition of Fortenova’s frozen food assets in 2021.
However, organic sales declined 3.2% in the period as volumes slumped 5.7% on a 2.5% increase in price.
The group’s margins were also squeezed by higher raw material prices, but the price hikes and the higher-margin Fortenova business helped offset the headwinds.
Adjusted EBITDA for the quarter increased 2.9% to €127m but adjusted profits fell 1.7% to €70m.
Nomad CEO Stéfan Descheemaeker said the group was adopting a more conservative outlook for the year as a result of the ongoing war in Ukraine and associated impact on consumer confidence throughout Europe.
Adjusted earnings per share for the year have been revised down to a range of €1.65 to €1.71, compared with €1.71 to €1.75 previously.
Descheemaeker added: “I am pleased with our second quarter performance, which saw our overall revenue base rise by 17% and our market share remain steady in a dynamic pricing environment.
“We are adjusting our business well to inflationary pressures and believe that supply chains are normalising.”
Co-chairman Noam Gottesman said the group showed “extraordinary resilience” this quarter.
“We are focused on execution and have maintained share in a highly competitive market while staying focused on investments in the business, especially the supply chain improvements necessary to navigate this historically difficult environment,” he added.
Revenues for the first half rose 9.7% to €1.4bn, but organic sales fell 3.9% on a 5.9% decline in volumes offset by a 2% increase in prices.
Descheemaeker said: “Despite our cautious outlook for the year, we believe our business is stronger today than at any other time in our history.”
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