Nomad Foods Ltd
NYSE:NOMD
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Nomad Foods Ltd
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Good day, and welcome to Nomad Foods First Quarter 2021 Earnings Conference Call.
[Operator Instructions]
Today's conference call 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 First Quarter 2021 Earnings Results. With me on the call today are Chief Executive Officer, Stefan Descheemaeker; and Chief Financial Officer, Samy Zekhout. 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 impact of 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 can 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 represents adjusted figures for 2020 and 2021. All adjusted figures have been adjusted for exceptional items, acquisition-related, share-based payment and related expenses as well as noncash FX gains or losses. And all comments from hereon will refer to those adjusted numbers. With that, I will hand you over to Stefan.
Thank you, Taposh, and thank you all for joining us on the call today. Earlier today, we reported first quarter 2021 results, which represent the highest quarterly revenues, adjusted EBITDA and adjusted EPS in our company's history. We're pleased to report a strong start to the year as we anniversary accelerated demand resulting from the COVID-19 pandemic.
Before getting into the details of the quarter, I'd like to leave you with a few messages upfront: First, with the performance that we achieved in Q1, we are well positioned to deliver our full year guidance. When we introduced it in February, we qualified our guidance as ambitious, but it's achievable. Following our Q1 performance, we are increasingly confident in our ability to achieve these plans; second, we believe our record Q1 performance would have been even stronger had we not been capacity constrained. Sustained and elaborated demand exceeds forecast, and despite our efforts to keep up, we exhausted production capacity and safety stocks. As a result, there were customer orders that went unfulfilled notably in categories such as fish.
I will walk you through our plan of action, which we expect will result in improved service levels and a positive market share inflection beginning this summer; third, we delivered strong gross margin expansion despite a dynamic inflationary backdrop. Our procurement team executed well, and we benefited from favorable mix and lower promotion activity.
Overall, we continue to expect low single-digit inflation in 2021, and we believe we have the levers to manage our gross margin effectively; and fourth, we announced the planned acquisition of Fortenova's Frozen Food Group; a sizable, strategic and highly accretive deal, which will complement our core portfolio, starting in the second half of this year and result in combined annualized EPS above $2 per share.
With that, let's jump into the details of Q1, beginning with the highlights on Slide 3. Revenue growth of 3.6% was driven by 1.8% organic revenue growth in addition to the contribution from M&A as we acquired Findus Switzerland. Gross margin expanded 130 basis points, a greater outcome overall and one that sets Nomad apart from many other packaged food companies. Adjusted EBITDA growth of 15% to EUR 138 million, and adjusted EPS growth of 42% to EUR 0.47 per share.
We achieved 1.8% organic revenue growth in Q1, which built on the 7.7% growth during the first quarter of last year when demand accelerated the onset of the COVID-19 pandemic. Our Q1 performance represents 10% organic revenue growth on a 2-year basis. Growth during the quarter was once again led by a branded retail portfolio, namely core frozen food staples, such as fish fingers and coated fish.
We continue to build around our core with innovative new product launches, such as Green Cuisine. With the pandemic now in its 15th month, we continue to experience elevated demand as consumer mobility remains restrictive across Europe. For example, many corporate offices remain closed and restaurants still have capacity restrictions.
With that said, we're also experiencing more rational shopping behavior than early in the pandemic. Consumers have developed new routines, which include more family meal times and the purchase of food online. These trends are likely to persist and are well addressed by our portfolio. Overall, we continue to track in line with our retention expectations and continue to engage with the millions of new consumers who purchase our products over the past year.
At Nomad, we continue to invest in our brands through effective advertising, breakthrough innovation and superior products. These efforts, which have driven our success since 2017 will continue to fuel our performance in the years to come while helping retain new consumers who entered our portfolio since the beginning of the pandemic.
I mentioned earlier that we achieved strong Q1 results despite capacity constraints. As you may recall, capacity utilization was at 90% plus in our largest factories prior to COVID, resulting in operational efficiency. However, it limited our ability to fulfill a sustained level of demand like we've seen over the past 15 months.
Since the onset of COVID, we've treated supply constraints through tactical actions, including increasing -- increased shifts and select co-packing arrangements. These actions resulted in improved service level and higher safety stocks last summer after the first wave of COVID. The second wave, which began last November, stimulated a new and unforeseen level of demand. Despite our efforts to accelerate new capacity versus the first wave, we were still unable to fully service customer demand and this resulted in lost revenue during the first quarter of 2021.
In addition to near-term mitigations, we have also made strategic decisions to invest in new permanent capacity that will fuel growth in 2022 and beyond. This includes a new production line at our factory in the U.K., which will go live later this year.
These actions underscore our confidence in the long-term growth prospect of our business, which is fully aligned with the ambitions of our retail partners. Q1 supply constraint not only led to out of stocks, but also limited our ability to promote our products. Despite the challenges many markets have made progress in building stronger joint business plans with key customers. This has led to a shift in the timing of certain Q1 commercial activity for the rest of the year. These plans, which are expected to correspond with increased supply should result in a positive market share inflection beginning this summer.
After taking other drivers of growth into consideration, including international expansion and the anticipated recovery in food service, we remain confident in our plans to achieve another year of organic revenue growth in 2021, even as government restrictions eased.
Turning to profitability. We achieved nearly 200 basis points of EBITDA margin expansion during the first quarter, driven largely by our ability to expand gross margins despite negative mix from Findus Switzerland whose initial gross margins are below our base business. This was driven by many factors, most notably our ability to successfully navigate a dynamic inflationary backdrop, which is affecting many food companies. During Q1, we benefited from favorable mix in our base business as products, category and channel mix, all work in our favor.
Moreover, we achieved strong procurement efficiencies driven by tactical buying opportunities. We continue to complement strong performance in our base business with strategic acquisitions. During the first quarter, we began the integration of Findus Switzerland, which closed on December 31. We welcome the new team into Nomad Foods organization and they have been working hard to introduce them to our ways of working and culture. While still early, I can say that there is a high level of excitement and alignment between our strategy and our purpose of serving the world with better food.
From a commercial perspective, we have already applied our Must Win Battles framework to this business, identifying the core areas of investments and mobilizing activation plans in support. In addition, we are introducing innovations such as Green Cuisine, which is expected to be available in Switzerland later this year. Overall, the Findus Switzerland integration is off to a great start and with strong performance during Q1.
Finally, we announced our agreement to acquire Fortenova Frozen Food Business Group during the first quarter. This deal, which will take our adjusted EPS above $2 on an annual realized basis, expands Nomad frozen food leadership into 8 new markets, notably Croatia, Serbia and Bosnia & Herzegovina. It will also introduce us to ice cream a new and complementary category.
Overall, this acquisition will represent approximately 10% of our pro forma revenue base with an attractive growth profile and a meaningful opportunity for value creation. We look forward to closing this acquisition in the third quarter and welcoming the team to the Nomad Foods organization.
We had a very active first quarter. I'd like to spend a few minutes showcasing some of our most exciting commercial activations that began in Q1 and will continue throughout the year: First is our new Captain campaign, Get on Board. This is a follow-up to our successful Captain reboot from 2018 where we modernized our brand item and leverage these assets across our European fish portfolio.
In Q1, we further evolved this campaign by highlighting the freshness of our white codfish portfolio married with the convenience of frozen. We also introduced a new on-pack QR code feature allowing consumers to discover the origin of their fish through an immersive online experience. Both, they get on both campaign and the traceability tool we introduced in Q1 and will expand across our network this year.
During Q1, we also announced a new strategic partnership with WWF to promote a common goal of driving more sustainable eating and agriculture. This initiative we'll build on our existing sustainability efforts within our vegetable portfolio. We will work together with our farmers, policymakers in the commercial sector, to drive food productivity while reducing carbon emissions and supporting biodiversity. In an effort to enhance biodiversity and reduce food waste, we will drive on pack communication across several markets and then for its consumers to make choices that will benefit them and the planet. You see here an example of how we will execute this initiative on pack, which is now live in Spain.
As a company, we continue to make great strides along our sustainability agenda. Just last week, we published our 4th Annual, Eating for the Planet report, demonstrating progress across key sustainability commitment. Amongst the highlight is our commitment to nutrition, with 90% of our sales derived from healthy meal choices. These achievements was recognized by the Dow Jones Sustainability Index in 2020 where Nomad Foods achieved a perfect score of 100% in Health and Nutrition for a second consecutive year.
In summary, we are pleased with our fourth quarter performance and are off to a strong start in 2021. We are on pace to achieve our full year guidance and have an exciting new acquisition, which along with underlying growth in our business -- in our base business, will help propel Nomad Foods to new heights in the post-COVID world.
I will now hand it over to Samy to discuss our Q1 financials and full year outlook in more detail. Samy?
Thank you, Stefan, and thank you all for your participation on the call today.
Turning to Slide 7. I will provide more detail on our key first quarter operating metrics, beginning with revenues, which increased 3.6% to EUR 707 million, driven by 1.8% organic revenue growth and a 3% of growth from the acquisition of Findus Switzerland. As expected, this was offset by a 1.3% headwind relative to the anniversary of a leap year.
We are pleased to achieve organic revenue growth of 1.8%, which comes on top of a 7.7% increase during the first quarter of last year and represents nearly 10% growth on a 2-year basis. Performance during the quarter was once again led by our branded retail business, which grew mid-single digits. This was offset by double-digit declines in food service and private label, which represent approximately 10% of our revenues.
We achieved 130 basis points of gross margin expansion during the quarter. This was driven by a combination of product mix, strong procurement execution and lower promotional activity. This performance in our base business more than offsets 30 basis points of dilution, resulting from the inclusion of the Findus Switzerland acquisition, whose gross margin has a lower starting point.
With that said, we expect to improve the gross margin profile of this business in the coming years as we apply the Nomad playbook in Switzerland. Overall, our gross margin outlook remains unchanged despite our strong Q1 performance. Specifically, we expect product mix and promotional levels to normalize in the coming quarters and inflation while manageable to be higher in quarters 2 through 4 versus what we experienced in Q1.
Moving down to the rest of the P&L. Adjusted operating expenses declined 2% year-over-year, reflecting a more normalized spend versus a relatively elevated Q1 last year. Adjusted EBITDA increased 15% to EUR 138 million, and adjusted EPS increased 42% to EUR 0.47 for the quarter, reflecting strong performance in the business and significant share repurchase activity we have conducted over the past 12 months.
Turning to cash flow on Slide 8. We generated EUR 98 million of adjusted free cash flow in the first quarter, equating to 117% cash conversion. Our commitment to best-in-class cash generation remains a top priority, and we will look to build on last year's strong performance in 2021. With that said, there are a few unique factors this year that are worth highlighting. We have taken strategic investment decisions to support future demand in our core categories, which will result in a higher CapEx commitment for this year. These investments will fuel our ability to drive sustained organic revenue growth and market share expansion.
Additionally, we're looking to rebuild stock levels as a result of the unprecedented demand, thereby allowing us to support the seasonal demand expected at the end of 2021 and the start of 2022. We remain committed to our long-term 100% free cash flow conversion objective and are striving to come close to this target in 2021 despite increased capital investments and the normalization of working capital.
With that, let's turn to Slide 9 to review our 2021 guidance, which is based on foreign exchange rates as of May 3, 2021. Overall, we are pleased with our strong start of the year, which demonstrates our ability to achieve total and organic revenue growth, while meaningfully increasing our margins in a dynamic macro environment.
We have a strong commercial agenda in place for the remainder of 2021, which is aligned with our increased ability to supply. This should result in a positive market share inflection beginning this summer and support our top line objectives for the year. Regarding inflation, a hot topic amongst FMCG companies, we continue to expect a low single-digit increase in 2021 due to our active management of our cost inputs and have built our commercial plan accordingly.
With that said, we continued to monitor the macro environment and we'll use all our levers, including price and productivity to navigate the dynamic landscape. As I mentioned earlier, our gross margin expectation remain unchanged with the base business expected to be roughly flat versus 2020 and Findus Switzerland to result in approximately 30 basis points of dilution due to their lower initial gross margins versus the base business.
Taking all these factors into consideration, we are reiterating guidance for the full year 2021, which does not yet include potential contribution from the pending acquisition of Fortenova's Frozen Foods business. We continue to expect adjusted EPS in the range of EUR 1.50 to EUR 1.55 per share, which equates to 11% to 15% growth versus the prior year.
That concludes our remarks. I will now turn the session over to Q&A. Thank you. Operator, back to you.
[Operator Instructions] Our first question comes from Andrew Lazar of Barclays.
I guess, first off, I was trying to get a better sense on the differential that you saw in the quarter between shipments and consumption. Just trying to get a sense of sort of the magnitude that supply constraints kind of held back sales growth?
Okay. So I'm not sure that the communication was reasonably poor, but I understand that the question was really about the difference between the sell-out and the selling. So our branded sell-out was mid-single-digit percentage, so that's what it is. So as you know, you have a lot of puts and takes between, let's say, the Nielsen, the 50% of what you see out of our business and the final piece, but that's -- ultimately, that's the bottom line.
So branded business is doing well. And you remember, on top of that, we also have our core brands, which is slightly ahead of that. So that's that, but basically, to move from the Nielsen to the first part of the sell-out, you have to move first to flat. And then from flat, you have to go to your off-selling, which is, as I said, which is mid-single digits. And then obviously, you're giving it back a bit with our food service and the product label, which is going down.
And then you talked a little bit about expecting a share -- market share inflection as you go into later in the year and capacity comes online. Can you give us a sense of how market share has trended more recently as a result of the capacity constraints? And I'm trying to get a sense of, have others, whether it be private label or other branded players.
I would assume they would have had some similar supply constraints, right, given the elevated demand, but if -- I guess, if share has changed hands a little bit, have others been able to had more excess capacity than you did perhaps or weren't run as effectively or as efficiently as you had been prior to the pandemic? Just trying to get a sense of how that trended?
It's an excellent question, Andrew. And I think the first point to remember, we mentioned that our capacity utilization pre-COVID is in the region of 90% plus, which is in and of itself is fine. What we know of our competitors, what include the private label producers were lower from -- in a "pre-COVID situation", 90%-plus is fine because in terms of fixed cost recovery, it's a good situation to be.
But then, obviously, when you're standing from 90% plus and you have to go through the COVID-19, you quickly go away beyond even sometimes 100%, where the others obviously have a bigger cushion. So yes, what we understand is that a big portion of this market share loss is really due to the difference of capacity utilization between us and the other players.
And that's the kind of things, obviously, we're dealing with right now. We're taking some very tactical approach which is moving -- increasing the shift, the number of shifts from sometimes 0.5 to 6, so sometimes from 6 to 7 base, which is big. We also -- we have access also to some co-packing. That's the second piece. And more fundamentally, and given -- despite all the pluses and minuses and the puts and takes and the differences, we believe that long term, this situation -- so basically, people, if we believe in our retention, and we do believe in retention. We know that we're going -- after COVID, we're going to be from a higher baseline. And that's why we decided to commission a new line, which would be ready in early Q4 in England, which is great.
And we're continuously considering these kind of options. So yes, we believe it's a big product. So that's why, yes, this market share has really been taken by people that have had a lower capacity utilization and all in what we believe is market share is around down 1% of the past year, but that's -- this is something that we intent -- we have all intents to recoup in the course of the year.
And I thought it was interesting, your comment about building in some -- an additional line, obviously, capacity internally as opposed to simply leveraging just co-packers, which obviously speaks to your belief around retention sort of post-pandemic and such. So I appreciate that. One last one would just be...
Andy, we love gross margin as well, and we prefer that to keep the gross margin for us, as you know.
Yes. Yes. As long as -- obviously, as long as you see the demand, obviously, remains always [indiscernible]
It's a reflection. It's not a full science, but it's a very articulated guess we have. Yes.
Yes. And then very, very quickly, just last, I guess, how much would your -- I'm trying to get a sense of your level of flexibility or conservatism, if you will, for the year and how you're thinking about it. I guess, how much of the full year guidance is dependent on capacity coming back at the -- in the timeframe that you anticipate. I'm trying to get a sense of -- we obviously have to track capacity coming online, and I'm sure you have visibility to that, but how much of the full year is dependent on that versus potentially with more capacity, potentially driving upside to the full year?
Yes, Andrew, I think, let's say, overall, as we said, I mean, we're off to a good start, I mean, in Q1. I mean, the plan today will assume a return to full capacity, to capacity available as of Q3, Q4 and this is how our share plan, I mean, has been built, I mean at this stage. So if you think the guidance that we have is maintaining still at 11% to 15%. I mean, as we -- from an EPS standpoint, as we have mentioned. And the start that we issued, we had in Q1 to be gradually fading away as we get into Q3. And as Stefan was mentioning, the build-up of the line starting in Q4, is going to start to help the end of the year and let's say, going into 2022.
Our next question comes from Andrew Olsen of UBS.
I was wondering if we could just give -- if you guys could just give a little bit more color, and I appreciate the color that you already gave in terms of gross margin, but just thinking through your ability to price in the current market, how are those -- how do you view your pricing power in the market relative to offsetting the slightly higher inflation that you talked about. And then I think just comparing gross margin in the quarter to the sustainability for the rest of the year. What do you feel are kind of either might roll off or make it more tough as we look out for the rest of the year?
Yes -- sorry, I'll comment on growth and will add -- I mean perspective, indeed, I mean on that. So I think what you're seeing today, I mean, overall, from the pricing power standpoint is we had the forecast that was planning for effectively a manageable level of inflation. And what we saw in Q1, as we have mentioned, is an exceptional performance to really get a very good input price that has enabled us to deliver the performance that we have seen.
So we saw some deflation in Q1. We saw some help as well in mix and in the business and category mix, if you want and we saw as well some fewer promos simply adjusting our own planning to the capacity situation and our business and innovation planning as we talked.
So these factors are going to normalize, I mean, in the year-to-date period. The one element that's important is we did enter the year with pricing plans, and those were based effective on the planned inflation that we had. And what you see in Q1 with a better situation than the rest of the year has not changed our ability to deliver against our pricing.
Getting into the end of the year and into 2022, we clearly have strong brands. You know, we've demonstrated very good pricing power and the ability to drive pricing wherever it was necessary. The other piece, which I'd like to really insist on, is not just about pricing, but it's about net revenue management. And there's a number of areas that we are really exploring and looking at, as we've done in the past, and now we're elevating the game in the context we are facing.
But very clearly, we have the plans in place to end the year on a strong momentum and the pricing part is still there to stay. On the margin, I think we commented, I mean, on that one. The only point I wanted to highlight to you was Taposh will probably take you through more detail as you guys may get into the modeling later on, but the gross margin outlook has not changed. I think the inflation will be up low single digits, as we have mentioned. This is going to be offset by productivity. We will execute the pricing plan as we have planned for in a category that were impacted by inflation, as we have mentioned. And overall, if you want, we are not changing our plans for the year, and we had -- despite the fact that we have a good start because simply, we're going to see some other effects in the rest of the year ,that's how it's going to get us to the guidance that we have laid out. So the inclusion of Findus Switzerland effective will negatively impact our margin development, but that's not changed as to the guidance that we gave you.
Our next question comes from Robert Moskow of Crédit Suisse.
You might have answered this, but I was surprised that the inflation guidance hasn't moved higher. It's low to begin with at low single digit. Is that just a reflection of hedges you have in place, contracting spot rates for just about everything are up here in the U.S., do you expect a materially higher degree of inflation in 2022, I guess, based on where things are headed?
Yes. I think the one element I'd like to acknowledge, frankly, in this call is, is from an outlook standpoint, I mean, the inflation that we have planned for is -- was materializing. And we came into the year with a manageable view of it. We have pricing plan, and we have productivity, as I have mentioned.
The one element that has been happening in Q1 that is helping us is the fact that the procurement team, our procurement team has done an absolutely exceptional job at buying out if you're on the input materials and which has helped in Q1 and going into the rest of the year as well.
So overall, we are seeing inflation not to the same extent as many others, FX is helping us as well. And remember that we buy about 20% to 25% of our COGS, I mean, in U.S. dollar. So at this stage, frankly, it's too early to talk about 2022, but from what we see, we believe inflation continues to be manageable for us, and we have the levers to manage it.
Okay. Got it. And in terms of your market share losses in frozen fish, can you give us an order of magnitude of kind of what it's going to cost on the promotional side to get those share gains back? Maybe Taposh will give us more color in terms of the guidance, but is there -- is this just a shift in your promo plans or is there incremental spending that needs to happen?
I think it's going to be -- Rob, it's going to be more a promo shift so as Samy said, one of the reasons the gross margin is a bit higher is promo. So obviously, when you have some supply chain constraints you don't want to over promote -- to go too much in promotion because it doesn't make any sense, and you would waste money. But obviously, we're also able to shift some of the promo slots to the second part of the year, which is probably going to happen.
So that's why, by the way, hence, the answer from Samy in terms of gross margin and where we think we're going to go in the remainder of the year, but the fact is, yes, at the same time, yes, we think sales would have been higher, but that's -- it's a combination of these different elements, and that's why we think we're going to be a bit more aggressive in the second quarter, which makes sense.
Our next question comes from Jon Tanwanteng of CJS Securities.
Great quarter. I was wondering if you could talk about trends heading into April and May, and if you could break out maybe sequentially month-by-month or year-over-year, how those are looking with that? That will be appreciated.
Well, let's say, when you look at the year, I would say, Q1 is off to a great start, as we had mentioned. And with 4 months, let's say, of the year now complete, we are increasingly confident in our ability to achieve the full year plan, I would say, overall. So the trend continues to be strong, and the plan are unchanged versus what we had mentioned I mean earlier. On the 2 -- the one element to read that's important, I think, to keep in mind overall is that we need to look at things as well on the 2-year basis, many companies have done that, but I think it's a good perspective to highlight. And the fact that on a 2-year growth for us was about 10%, I think, for the year. And that's what we did in Q1, and that's frankly what we're going to be after, I mean, for the rest of the year.
And just on the CapEx side, I know you said you've increased your expectations for investment into the U.K. how much capacity does that actually add for you, number one? And number two, is it enough to accommodate the expected demand levels you're seeing across your business? Are there other places where you need to expand or maybe can you spread out the increased volume across, I guess, the recently acquired assets you purchased?
Well, Jonny, as you know, it's a never-ending process. We're continuously reassessing, especially in these very volatile situations. I mean we're trying to find out exactly what the demand is going to be post-COVID. We're feeling sufficiently comfortable with this additional line, which I think should bring something like 7,000 tonnes of finished goods, which is good.
But obviously, we're not limited to this. We had other elements that we could play with, as we said, last, we have first -- we have a network of different plan and different fishing lines that we know we've been able to maximize, that's one thing. And second, also, we're playing with the shifts. So all in, we have different elements to play with. And so at this stage, we're feeling comfortable.
Got it. And then maybe just when you get this capacity online, is there a gross margin benefit? Because if you're running hot now and using maybe outsourced co-packing, maybe it's not as efficient as you'd like it to be. Is there a benefit to getting this online and pulling some manufacturing in-house?
Absolutely. Absolutely. That's very clear. So it's a good pay -- this line is a good payback. And I can tell you, it's physically painful to see all these good gross profit going to some other places. So we'll be very pleased, number one, for our customers, for consumers, but also for ourselves.
[Operator Instructions]
Our next question comes from Rob Dickerson of Jefferies.
This is Ashish on for Rob. Just wanted to get more color on inflation. You mentioned low single-digit inflation for the year. Can you give us some more color on where you're seeing cost pressures and cost relief with respect to inputs?
Yes, we mentioned effective that the level of inflation was going to be normal in 2021 net of FX, we had mentioned effectively as well that the procurement team has done an exceptional job in Q1 in managing it very well, I mean, the inflation situation in U.S. is some, let's say, deflation. And the FX as well was an offset into the overall pool of costs that we have. So our outlook for the year remains unchanged versus what we have communicated earlier.
Got it. And then just a quick follow-up on the marketing spend. How did the marketing spend trend in the quarter? And how should we think about it for the remainder of the year?
We're investing behind the brands, behind innovation, behind, frankly, the equity as well. We talked about the Captain copy. We talked about effectively the Captain equity or renewal and we continue to support our brands very clearly. So they're comparable to last year's level, and we are trying to support in a disproportionate way any kind of innovation that is driving meaningful value.
This concludes the question-and-answer session. I would like to turn the conference back over to Nomad's CEO, Stefan Descheemaeker, for any closing remarks.
Thank you for your participation today. When we presented at CAGNY in February, we made the case that Nomad Foods is a different type of food company. Our first quarter results demonstrate the power of our value creation playbook with strong organic growth and capital allocation, driving a 42% increase in our adjusted earnings per share.
Looking out, our portfolio of frozen food brand is uniquely positioned in the post-COVID world. While the acquisition of Fortenova has us well on pace to achieve our long-term growth goal of double-digit EPS growth year in and year out. I hope you and your loved ones remain safe this summer, and we look forward to updating you on progress when we report next in August.
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.