Earnings Call Transcript - NOMD Q4 2024

Operator, Operator

Good day, ladies and gentlemen. And welcome to Nomad Foods Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. Please note that this conference is being recorded. I would now like to turn the conference over to Jason English, Head of Investor Relations. Please go ahead.

Jason English, Head of Investor Relations

Hello, and welcome to Nomad Foods' fourth quarter 2024 earnings call. I am Jason English, Head of Investor Relations. And I'm joined in the call today by Stefan Descheemaeker our CEO; and Ruben Baldew, our CFO. By now, everyone should have access to the earnings release for the period ended December 31, 2024 that was published at approximately 06:45 A.M. Eastern Time. The press release and investor presentation are available on Nomad Foods' website. This call is being webcast and a replay will be available on the company's website. This conference call will include forward-looking statements that are based on our view of the company's prospects, expectations, and intentions at this time. Actual results may differ due to the risks and uncertainties, which are discussed in our press release, our filings with the SEC, and 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 2023 and 2024. All these adjusted figures have been adjusted primarily for share-based payment expenses and related employer payroll taxes, non-operating M&A related costs, acquisition purchase price adjustments, exceptional items, and foreign currency translation charges or gains. Unless otherwise noted, comments from here will refer to those adjusted numbers. With that, I'll hand it over to Stefan.

Stefan Descheemaeker, CEO

Thank you, Jason. I'm happy to report that Nomad Foods had a strong finish to 2024, with impressive volume-driven organic sales growth and robust margin expansion. But before I go too deep into results, I want to step back and reflect on where we are in our journey. As you can see on Slide 3, we have now delivered nine consecutive years of sales and adjusted EBITDA growth. While this growth has been aided by M&A, organic growth has also been a strong and consistent contributor to this growth over time. In fact, since 2016, we have grown our organic sales at a nearly 3% CAGR with growth in every year other than 2021 when we lapped the COVID demand spike. We are now entering our 10th year as a public company and are well positioned to continue to deliver sustainable growth, including another year of organic growth in 2025 while generating considerable shareholder value. We have created an enviable company since embarking on this journey in 2015. We have assembled a portfolio of iconic brands with superior equity and strong market share positions, and we have accomplished this by remaining focused on building a pure play frozen food business that now spans both developed and developing markets across Europe. We have acted with purpose, creating a portfolio of high-quality, great-tasting convenient food that is good value and good for you. Roughly two-thirds of our portfolio is comprised of vegetables, fish, and poultry, and 93% of our UK and Western European revenue is generated from products deemed healthy meal choices by the UK government. We have done this in a responsible way. I'm happy to share that Nomad Foods has been included in the Annual Dow Jones Sustainability Europe Index for the fourth consecutive year, while receiving a maximum score of 100 in Health and Nutrition for the sixth consecutive year. We are well positioned for the trends that are reshaping this industry. We have a clear portfolio advantage and we also have a people advantage. In recent years, we have reshaped the organization, we have rewired how we work to improve efficiency, agility, and idea sharing. We have upgraded our talent pool by promoting high performers from within and selectively hiring externally to fill knowledge and capability gaps where necessary. This has helped us own our strategy to energize the organization and improve our execution. Lastly, we've been able to lean in and arm our team with the tools they need to further strategy and initiatives. Our supply chain organization has delivered meaningful productivity over the past two years while our strategic focus on driving growth in our profitable investment platform and growth platform is delivering margin mix benefits that have allowed us to increase investments in our products, advertising, and in-store merchandising, while building capabilities in areas such as revenue growth management and cybersecurity, among others. Given all of this, I feel great about how we are positioned as we enter our 10th year as a public company, and I'm confident we will deliver our 10th consecutive year of top and bottom line growth in 2025. Recent results have only emboldened my confidence in this. It became clear to us in 2023 that the period of outsized inflation-induced revenue growth was nearing an end. We knew that growth would become more dependent on ongoing gains, market share expansion, and effective revenue growth management initiatives. It was then that we introduced our new commercial flywheeling innovation framework while beginning to increase our investment in our products, advertising, and merchandising. Our A&P spend increased by 14% in 2023 and then again by high single digits last year, totaling 4% of net sales. This places us in the top tier of our peer group and we expect A&P growth to once again outpace sales growth in 2025. I’m excited to share some of our new creatives with you later this year. It is some of the best I have ever seen from Nomad Foods. Our innovation, meanwhile, jumped from 4.2% in 2023 to 4.8% in 2024, and we expect it to easily exceed 5% in 2025. When we combine innovation with renovation, we expect our renewal rate or percentage of sales where our products are new or refreshed to double from high single digits in 2024 to mid to high teens in 2025. We are upgrading our food and packaging to achieve superiority across an increasingly large percentage of our business. All of this is helping our commercial flywheel to spin faster and faster while delivering solid returns. As you can see on Slide 5, we have now delivered three consecutive quarters of volume growth. Growth has varied quarter-to-quarter, but the trend line is clearly in the right direction. It helps that our European food category is healthy, and we are controlling much of our own destiny, although investments are supporting category growth while driving share growth. As you can see on Slide 6, we have now achieved market share growth in the last two quarters. Impressively, we accomplished this by expanding our gross margin. In fact, our gross margin in the last nine months of 2024 modestly exceeded the pre-COVID level we achieved in 2019. Focus has been a key contributor to our success, and focus will continue to define how we go to market in the future. We continue to concentrate a significant amount of our time, energy, and investment in our Must Win Battles. These are the four category combinations that are critically important to our success, are margin accretive, and where we have a clear right to win. The top 25 merchant backlogs recorded for more than half of our sales last year, and an even larger share of gross profit, and grew net sales by 2.7% for the year and 3.5% in the quarter. While our focus remains on our Must Win Battles, we have also been strategically investing behind select growth platforms. These are primarily areas where we see opportunities to leverage capability in one market to expand our presence in another market with a lift and launch approach. Our organic sales for growth platforms grew by 16% in 2024 and 40% in the fourth quarter. Over the past year, we have been highlighting poultry as an example. We have more than doubled our poultry sales in the UK over the past five years, and it has gone from a growth platform to an investment platform for us given the success. Our goal is to make all of our growth platforms into investment platforms over time. Italy and Germany are two more recent markets where we have made poultry into a growth platform, seeking to replicate our success in the UK. The frozen prepared poultry segment is underdeveloped in Italy, and we began to invest in developing the segment there in early 2024. I’m happy to say that it is working. In the fourth quarter, our retail sales for prepared poultry in Italy rose 98% year-on-year, with our market share growing from 8% in Q4 2023 to 50% in Q4 2024. The category, meanwhile, is now growing 6% in Italy with Nomad accounting for more than 100% of the category growth. It is a great story for both us and our retail partners. In the back half of 2024, we turned our attention to Germany, where the frozen prepared poultry market is large and well-developed but dominated by private label. Here our strategy is to create a premium fee in the segment. I’m happy to say that we’re finding success here too. It is early, but in the fourth quarter, our retail sales for prepared poultry rose 35% year-on-year in Germany. We reached a 2.7% market share in the fourth quarter, which is 17 basis points higher than the prior year and illustrates how long the runway could be for us in this market. The other growth platform we highlighted last year was potatoes. As a leading frozen fish company, it’s only proper that we'll be a leading frozen chip company as well. In Belgium, we already have a strong market share position in potatoes, but we are leaning in to make it a bit stronger and grew our market share by 420 basis points year-on-year in 2024. We’re happy to report that we became the category leader in Belgium last year, climbing from number two to number one in value share. In France, our share grew 550 basis points to 16.1% in the quarter. And in the UK, where the market is very large, our share grew 70 basis points year-on-year to 8.9%, a great accomplishment even if it's not keeping pace with the fantastic results in France and Belgium. Turning to 2025, our playbook will not look meaningfully different. Our strategy is working, and we will stay the course by championing frozen food. We will continue to focus on our investments beyond our merchant battles and targeted growth platforms, but we will do it with more advertising, more innovation, more renovation, and more revenue growth management initiatives. Ongoing productivity realization from across the organization is fueling investment growth, allowing us to deliver balanced top and bottom line growth. Hence, as has always been the case with Nomad Foods, we will deploy capital in ways that create value for our shareholders and go above and beyond organic growth. I'm excited to celebrate our 10th year as a public company with you in 2025. With that, let me turn it over to Ruben to tell you more about what we expect and provide some more detail on what we achieved last quarter.

Ruben Baldew, CFO

Thank you, Stefan, and good morning, everyone. I have been with the company now for roughly eight months, and I'm increasingly confident in the opportunities that lie ahead of us. We have an amazing portfolio and a great pedigree with top-tier talent and nutritional tailwinds at our back. Our playbook is working, and the innovation, renovation, and marketing plans we have to drive sustainable growth in '25 and beyond are compelling. Turning to results. As you can see on Slide 7 and 9, for the fourth quarter reported net revenues increased by 4.3% to EUR793 million. Organic growth was 3.1%, which marked our 10th consecutive quarter of organic growth. Our growth remained positive for the third consecutive quarter, rising by an impressive 4.7% while our price/mix was a negative 1.6% offset to volume growth as we reinvested some of our margin upsides to drive impact from merchandising at retail. The net price investment was an 80 basis point headwind to gross margin and was more than overcome by 40 basis points of favorable mix and 160 basis points of productivity, thanks to efficiency gains. This quarter, robust gross margin and healthy revenue growth delivered a 9% increase in gross profit, which was amplified by a 2.6% year-on-year decrease in SG&A expenses to result in a 17.6% increase in adjusted EBITDA. The lower SG&A expenses were driven by lower A&P expenses as we lapped the sharp increase in prior year investments and benefited from a more even investment cadence throughout the year. A&P investment rose high single digits for the year on top of double digit increases in 2023. Indirect investments growth slowed to low single digits in the quarter as we began to cycle the capability investment that we gained in late '23 and carried through to '24. Adjusted profit rose 28% year-on-year, while adjusted EPS rose 31% to EUR0.42 as our diluted share count rose 3% year-on-year. For the full year, we delivered our ninth consecutive year of sales and adjusted EBITDA growth. As you can see on Slide 8 and 10, full year revenue grew 1.8%, with organic sales rising 1% as volume returned to growth, gaining 1.3% year-on-year. Gross margin rose by 40 basis points for the year to 29.6%, nearly reaching the 30% peak COVID gross margin we achieved in 2019. Investment in price and promotion was a 30 basis point year-on-year headwind to our full year gross margin, which was more than offset by 110 basis points of favorable margin mix and 100 basis points of net productivity realized by our supply chain teams. Our teams have a robust pipeline of productivity initiatives and expect these benefits to continue funding our growth investments going forward. Our SG&A expenses grew 7.4% for the full year as we increased our A&P and indirect investments each by high single digits. The higher A&P was a continuation of the reinvestment plans that we started in 2023 and continues in '24. We expect even more reinvestment in '25. The higher indirect expenses were due to a combination of underlying inflation and capability investments in areas such as cybersecurity and revenue growth management. With these investments now behind us, we expect much more moderate growth in indirect expenses going forward. Despite these investments made in 2024, we were still able to grow our adjusted EBITDA by 5.6% for the year, delivering near the high end of our initial 4% to 6% EBITDA growth guidance range that we provided this time last year. Our full-year EPS of EUR1.78 was also near the high end of our initial EUR1.75 to EUR1.80 range. Turning to cash flow now. Strong fourth quarter results helped us over-deliver on our full year cash flow guidance with free cash flow conversion of 101% coming in well above our initial 90 to 99% conversion guidance. We saw nice working capital inflows in the fourth quarter due to the normal seasonal timing of inventory balances and an unwind of higher receivable balances that were a headwind in the third quarter due to timing dynamics. The strong free cash flow allowed us to return EUR208 million to shareholders in '24 versus EUR171 million we returned to shareholders in '23, representing more than a 20% increase. Last year, we returned cash in the form of a $0.60 per share annual dividend and share repurchases. We finished the year with 156.1 million basic shares outstanding, a 4% reduction from where we finished 2023. Over the past two years, we've now repurchased EUR290 million of our shares. Turning to our guidance for '25 on Slide 12. We are pleased with the progress our commercial team has made improving the market results and restoring our market share to growth, and we are happy to see our supply chain delivering healthy productivity savings. This gives us strong momentum into '25, which will be our 10th year as a public company and is also expected to be our 10th year of positive revenue and adjusted EBITDA growth. We continue to expect organic sales growth of 1% to 3% for the year and adjusted EBITDA growth of 2% to 4%. We had a stronger than expected finish to 2024, which means we now expect a higher absolute level of adjusted EBITDA. As a result, we have raised our full year adjusted EPS range to EUR1.85 to EUR1.89 from the initial EUR1.81 to EUR1.85. At recent exchange rates, this translates into US dollar denominated EPS of $1.94 to $1.98. Lastly, we continue to expect full year adjusted free cash flow conversion of at least 90%. We expect to use this cash flow to create incremental value for shareholders that goes above and beyond organic growth. But still relatively new dividends are a great example of this. Our Board of Directors has approved a 13% increase in the first quarter '25 cash dividend to $0.07 per share from the $0.15 quarterly payout in 2024. As we think about the shape of the year, we expect growth to be somewhat choppy quarter-to-quarter and in the phasing of investments, prior year comparisons, and some seasonal movements. Nonetheless, we expect the underlying trend line of improvement to hold throughout the year in totality. While our advertising investment growth will be meaningful in late quarter one, our new innovation-fueled distribution gains and associated merchandising activity are expected to be more phased into quarter two and quarter three this year. This, in combination with Easter falling into quarter two this year versus quarter one last year, will lead to revenue headwinds in the first quarter. At this moment, we therefore expect organic sales to modestly decline in quarter one. These are just timing dynamics and not a reflection of the underlying health of the business. Our shipments are moving around. We are happy to see our retail sales growing in the 1% to 2% range over the past two months despite the later phasing of our activity. Overall, I'm pleased with the progress we are making. We returned the business to profitable volume and market share driven growth last year and are confident that we can keep the momentum going in 2025. With that, I will now turn the call back to the operator to open the line for questions.

Operator, Operator

Our first question comes from Andrew Lazar with Barclays.

Andrew Lazar, Analyst

Stefan, to begin, what is your forecast for 1% to 3% organic sales growth for the full year 2025 based on your expectations for category growth and market share performance?

Stefan Descheemaeker, CEO

In the current low inflation environment, we've achieved 1% category growth as an initial point. Our overall sales are growing, and our portfolio, which is primarily made up of poultry, fish, and vegetables, is performing very well, accounting for about two-thirds of our offerings. The commercial flywheel is functioning effectively, with innovation contributing roughly 5%. The remaining growth of 1% to 3% is attributed to market share gains and product mix. Regarding our ERP situation, we experienced disruptions last year in the UK, our largest market. We are continuing to work on our ERP implementation but have opted to proceed more cautiously this year, focusing initially on the smaller segments of our business and applying lessons learned. While there may still be some disruptions, they should be significantly less than what we encountered in Q3 last year. This context helps explain the source of our 1% to 3% growth forecast.

Andrew Lazar, Analyst

Then you mentioned in the fourth quarter you reinvested some of the upside and some of the sort of promotional activity, getting sort of distribution and some retail work and whatnot, and that obviously benefited volume pretty nicely. As you move through the first quarter, I realize there are some impacts on volume due to a later Easter and such. How would you expect sort of the price/mix piece to come in now that you're two months through the first quarter? Would it be consistent on a year-over-year basis as an impact with what you saw in Q4 or more modest, do you think, again, on the price/mix side?

Ruben Baldew, CFO

Let me answer that. We can't provide a specific outlook for separate line items of the P&L and the price/volume, but I can offer some context. You've observed positive volume over the last three quarters, particularly in quarter four, where we nearly achieved 5% growth. Volume is crucial to us from the perspectives of consumers and retailers, and it also influences efficiency in our factories. We're committed to maintaining our strategy of driving efficiencies and reinvesting in volume. Recently, we've noticed lower inflation, which may be relevant. For the full year, while we are not fully hedged yet, there might be more alignment with this year's trends, although the exact implications remain uncertain. If we encounter inflation in our costs, we might need to adjust our pricing to remain competitive. We'll keep pursuing savings in procurement and enhancing efficiencies in our factories and indirect costs. There may be necessary price adjustments, but when those occur is still unclear. So far, with only a month of actual data, we're observing stable volume and some downward pressure on pricing. As the year progresses, it's possible that pricing may improve. That's the best context I can provide at this time.

Operator, Operator

And the next question is from Steve Powers with Deutsche Bank.

Steve Powers, Analyst

Stefan, the stepped-up innovation and renovation activity that you mentioned in your prepared remarks. I'm curious as to how much of that you expect to be focused on existing must-win battles as opposed to some of the new and emerging growth platforms that you talked about in '25? And just how you think about striking that balance?

Stefan Descheemaeker, CEO

To address your point, our focus will primarily be on growth, particularly essential areas for success in our growth platforms. These critical areas represent about 50% of our business, which will also be where most of our innovation efforts are directed. Additionally, our growth platform, currently exceeding 100 million, is experiencing significant and rapid growth. This will require a proportional increase in investment, but it will primarily affect the smaller segment of our business. Therefore, the top priority for innovation will be in the must-win battles, followed by our growth platforms.

Steve Powers, Analyst

You talked about the organizational changes and rewiring efforts that you've done to improve overall execution and agility, et cetera. To what extent do you feel that mission is sort of accomplished versus there being more work to do? And what would be the priorities in '25 on that front?

Stefan Descheemaeker, CEO

Let me begin by saying that this process is never really finished. I tend to be someone who is never fully satisfied, so I won't describe our work as fantastic or perfect. My main point is that it’s an ongoing journey. However, we did simplify our organization significantly last year. At one point, we had 22 countries reporting, which wasn’t optimal. Now, we’ve consolidated that reporting under one person across six clusters, which is a major improvement. We have also made substantial investments in areas like growth, revenue management, and innovation to support these clusters. Supply chain management is a continuous process of restructuring and improvement to ensure we can achieve savings that will then allow us to invest in advertising and gross margin. So while I believe there is always more to do, we accomplished significant progress last year. We also need to stay focused on managing costs because my goal is to direct our savings toward advertising and innovation to support both our short-term and long-term EBITDA objectives. That’s our vision moving forward.

Operator, Operator

And the next question comes from Rob Dickerson with Jefferies.

Rob Dickerson, Analyst

I guess maybe just first question on gross margin. I think about a year or so ago kind of the idea was you can gradually get back, right, to the 30% gross margin range or somewhere around there, really based on volume recovery also combined with just all the productivity initiatives and the mix benefits. As you think through kind of '25 relative to '24, I guess first question is, it seems like you're kind of already there, right as you finish the full year '24, you're pretty close already. Is there any kind of change to the thinking in terms of like what the real gross margin benefit from here could be on the business, just given clearly the focus on must-win battles, given the volumes starting to recover, given the productivity initiatives? That's just the first question.

Ruben Baldew, CFO

Our strategy will remain unchanged as we focus on driving efficiencies in the supply chain. In the fourth quarter, we achieved supply chain efficiencies that contributed around 100 to 110 basis points for the full year. We will keep pursuing these efficiencies and reinvest them along with our efforts to enhance our brands and products. Most of this will be directed towards advertising and promotion, as well as product investments, but we may also consider some pricing adjustments, as seen in the past three quarters. Our commitment is clear. While we are not providing specific guidance for gross margin in 2025, such as a target of 30%, we are pleased with the recovery expected in 2024. We will continue to strive for improvements. There will be some inflation, and we recognize the need to be competitive on costs, which may require us to adjust prices. This will impact our gross margin, and how it develops in 2025 remains to be determined. Overall, we expect to continue our journey towards achieving further gross margin recovery in the long term.

Rob Dickerson, Analyst

And then maybe just a bigger question for you, Stefan, just around kind of strategic opportunities, inorganic strategic opportunities and kind of where you sit now. For a long time, Nomad was clearly acquiring a lot more actively. Lots occurred over the past three, four years that made that maybe a little bit more completed, maybe valuations even a little lower. I'm just curious like kind of where you sit today. Are you more actively thinking about acquisition potential? If there were something that were to come up that were attractive, would you still consider that, or are you maybe in a period right now such that the focus on the core portfolio really is primary number one initiative? And you really think, at some point, we'll get back there, but right now, we're really not thinking about acquisition potential at this point.

Stefan Descheemaeker, CEO

The point is with or without acquisitions, Rob, the focus has always been for the existing portfolio, that's the first piece. We never deviated. Even when we did the Switzerland or Goodfella's or Aunt Bessie's or the Adriatic's, we never deviated, that's the key piece. I don't think you can be a good acquirer if you're not doing the right job with your core business because the business model behind the acquisition always predicated on a very solid organic model. And that's why we never did any acquisitions between '15, '16 and '17, because we had nothing to offer. We had first to clean up the whole thing, and then we started. Since basically 2022, we start. To your point, because first, we need to focus on the business as such even more, that's one thing. And second, because there was a difference between sellers and buyers. I think this gap is reducing. In the meantime, no regrets. We keep buying back shares, which is the best acquisition we can do. At the same time, I think what we also see is there are some, maybe under the radar screen, things not shiny objects that we could consider in our category, new subcategories in some countries where we have a lot of synergies, and that's the kind of things we're considering. Nothing done yet, but obviously, I'm not in the business of disclosing any names. There is no guarantee to do anything, Rob, because if you guarantee something, that's the best way to make mistakes, by the way. But definitely, we believe that we have something to offer, which is not necessarily the big names in Europe but other add-on deals. By doing so, we could create a nice pipeline of M&A as we're also creating a pipeline of innovation.

Ruben Baldew, CFO

Just to build on that, and I can give credits to Stefan, I wasn't there. But since 2016, this business has deployed roughly EUR1.2 billion for M&A, while shrinking the share count by 13%. This, combined with our organic growth, has allowed us to increase our EBITDA per share by 97%, almost 100%, nearly doubling it from 2016 to 2024. We were doing this whilst managing the dividends and lowering our net debt-to-EBITDA leverage. I think that also tells you something in my humble opinion.

Operator, Operator

And the next question comes from John Baumgartner with Mizuho.

John Baumgartner, Analyst

Maybe first question, I wanted to come back to the enterprise-wide transformation. The charges taken for that program in the quarter were fairly sizable. How far along are you in terms of taking these charges at this point, implementing the program? And then on the other side of that, how should we think about the ramp and the related efficiency benefits? I know it's not something you normally discuss in detail, but should that ramp and efficiencies begin in 2025, or is it more 2026? Just any thoughts there?

Ruben Baldew, CFO

So a couple of points. You've seen that there's a bit of disturbance on the line. The ramp in terms of cost was around EUR5 million in the quarter, and if you look at the last year. What we said before in some interaction is we will bring that down but clearly, we don't all of a sudden going to half that. Can we bring that down these run rates with 20% to 25%? That's clearly the aim, and we are working towards that. That’s one point. The other point is what Stefan said regarding efficiencies. We will go slower and simpler. This means we need proper time to test it, onboard our teams and our people and suppliers. With that, we will go smaller. What we're going to put live at the end of this year, the current plan is that what we went live last year was around a third of our business. What we're going to implement this year is not even 15% of our business. The third point is, where we can, we're going to simplify it. The big efficiency gains in terms of what Stefan spoke about, simplifying the organization, factory optimization at both a factory and a macro level in terms of supplier rationalization—nothing is stopping us from doing that already in the next quarters and in the next one or two years.

John Baumgartner, Analyst

Then a follow-up on the commentary on price. I'm curious, as you sort of see the waves of material inflation having passed, and you look back to assess how the volumes are evolving after rebasing to these higher price levels for the category. How do you think about everyday value for your frozen categories at this point? And do you sense that anything has changed in terms of maybe cross elasticities relative to fresh or shelf-stable options for consumers in the categories?

Stefan Descheemaeker, CEO

I think vis-a-vis, let's say, the center store and fresh, it's a bit more difficult to see. The only thing we see is, during this crisis, as expected, we led the price increases, and the other guys have been a bit slower to react, including private label. It has been a great time for private label in terms of market share, as expected. We have no regrets because that was the right thing to do, by far. Back to Rob's question on gross margin, I can tell you that we wouldn't have this discussion about when we’re going to go back to 30% if we were very far from that. Now what we see is at least in this category, I would put in the category that we are gaining market share. It's a bit choppy still, but we're gaining market share with this private label, which is good because the market price has stabilized, which is good news as well. Back to your question, how are we doing versus other categories like fresh or center store? I think overall, frozen has proven to be a very resilient and favorable category. With all the things we have ahead in terms of long-term trends, good food, and waste management, I think it's only going to amplify in the future.

Operator, Operator

And the next question comes from Jon Tanwanteng with CJS Securities.

Jon Tanwanteng, Analyst

First, just a small one for Ruben. Are there any repurchases assumed in the EPS guidance for the year or the capital allocation at all?

Ruben Baldew, CFO

No, we have not assumed that. What we have assumed is that our share count will remain unchanged. There will always be some shares issued for our internal share program, and for that, we expect some buybacks. For the rest, we assume it will stay flat. Additional share buybacks could provide some benefits. However, as for EPS, depending on the floating interest rate, there might be some challenges.

Jon Tanwanteng, Analyst

Have you thought of the potential for tariffs from the US and how that might impact European markets and ability to procure seafood that's denominated in US dollars? And what the knock-on impacts might be to you and how you might change your strategy to mitigate anything that might flow through there to you?

Ruben Baldew, CFO

To be clear, we don't export into the US. If you look at our buy-side outside fish, which I will come to, we don't import ingredients from the US. We don't see an overall big impact from tariffs. If you do look at fish and the US, Russian fish, there is an executive order that Russian fish is not allowed into the US. We think if you look also a bit deeper into the population base from a US perspective where a lot of that is in Alaska, we don't think that will change. But again, no one knows in these times. What we then see is there is a tariff in Europe, in UK on fish. On that one, we’re an important US fish, so it's not an impact for us. It could be that there are additional tariffs also in Europe. But at this moment, we're not foreseeing that. You have to look at the overall fish supply where we would run out of fish if tariffs were to go too high. We don't see that as a major risk but we're not complacent about it. We have done more strategic work to look at diversifying our fish sourcing to assure that, in five to ten years, we have the right fish sourcing.

Operator, Operator

And the next question comes from Peter Saleh with BTIG.

Peter Saleh, Analyst

I just wanted to ask if you guys could provide a little bit more color on the overall consumer environment in Western Europe? Just given the inflation that you're seeing, the incremental. Have you seen any change in behavior at all in some of your core markets? Given that you're starting to see a little bit more inflation, has that flowed through to the consumer already, or are we still a little early on that front?

Stefan Descheemaeker, CEO

I would say it's improving gradually. While it's not back to pre-crisis levels, there is some progress. When Ruben mentions increased inflation, it's not comparable to what we experienced in 2022; we're seeing slight price increases but nothing substantial. Overall, it is slightly improving, though it will take some time. It's also encouraging to see private label brands losing some market share, indicating that consumers are returning to established brands, which they recognize for their quality. This is reflected in our guidance.

Operator, Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Stefan Descheemaeker for any closing remarks.

Stefan Descheemaeker, CEO

Thank you very much. I'm proud of the progress our company has made over the past year and confident in our growth outlook going forward. Our strategy is working, and our teams are executing our plans well. We have compelling innovation, renovation, advertising, and merchandising plans slated for 2025, which, when combined with our ongoing productivity programs, give us good visibility to another year of top and bottom line growth. We expect to keep our top and bottom line growth streak going again in 2025, extending the streak to 10 years as we mark our 10-year anniversary as a public company. Thank you to all our employees and investors who have joined us on this journey. The best is yet to come.

Operator, Operator

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