There is currently a seismic shift in how consumers are consuming food with more calories consumed at home. Nomad is an attractively valued, $3.5 Billion Western European food company, with strong brands and market share, and a rich history of smart acquisitions. As evidenced by Conagra's recent trends in the U.S., we believe the same trends are happening in Nomad's core markets but not quite the same magnitude in Europe, especially the U.K. and Italy. Year-to-date, the stock is down 18%, in line with the S&P 500, with fundamentals inflecting.
Nomad Foods is in the business of the manufacturing and distribution of branded frozen foods in products such as fish, vegetables, poultry, and ready meals. It sells its products primarily through the frozen aisle of large grocery retailers under the brand Birds Eye in the United Kingdom and Ireland, Findus in Italy, San Marino, France, Spain, and Scandinavia, and Iglo in Germany and other continental markets. The United Kingdom is 30% of sales; Italy is 17%; Germany 17%; France, Sweden, Norway, Austria, and Spain are in the mid-single digits.
We will be providing more detail about Nomad on the call, but the top three reasons to be LONG are:
- Strong operating history and financial model with a conservative balance sheet.
- Accelerating in-home calorie consumption.
- Right brands in a growing category in a turbulent time.
We will have more details as we get closer to April 13.
