Nomad Foods Reports First Quarter 2024 Financial Results
Volume recovery on-track; Revenue growth of +1.1% with Adjusted EPS of €0.37
Reiterates full year 2024 financial guidance
WOKING,
- Reported revenue increased 1.1% to €784 million
- Organic revenue growth of 0.3%
- Adjusted EBITDA decreased 16.4% to €122 million
- Adjusted EPS of €0.37
Management Comments
Stéfan Descheemaeker,
He continued, "As a result, we are maintaining our full year guidance to deliver revenue growth of 3%-4%, Adjusted EBITDA growth of 4%-6%, and Adjusted EPS of €1.75-€1.80."
First Quarter of 2024 results compared to the First Quarter of 2023
- Revenue increased 1.1% to €784 million. Organic revenue growth of 0.3% was driven by favorable price/mix of 2.5%. Quarterly volume declines moderated to -2.2%, a marked improvement from -8.0% in 4Q23.
- Gross profit decreased 5.9% to €211 million. Gross margin decreased 200 basis points to 26.9% as anticipated impact from balance sheet inventory revaluation due to lower inflation more than offset positive contribution from favorable mix and higher productivity.
- Adjusted operating expenses increased 11.5% to €112 million due to the planned increase in A&P investments, ongoing investments in building capabilities, and inflationary headwinds.
- Adjusted EBITDA decreased 16.4% to €122 million due to the aforementioned factors.
- Adjusted Profit for the period decreased 25% to €61 million, and as a result, Adjusted EPS decreased by €0.09 to €0.37. Reported EPS decreased €0.03 to €0.21.
2024 Guidance
For the full year 2024, the Company continues to expect organic revenue growth of 3%-4%, driven by positive volume/mix, Adjusted EBITDA growth of 4%-6%, and Adjusted EPS of €1.75-€1.80, implying growth of 9-12%. Based on USD/EUR exchange rate as of
Conference Call and Webcast
The Company will host a conference call with members of the executive management team to discuss these results today,
Enquiries
Investor Relations Contact
amit.sharma@nomadfoods.com
About
Non-IFRS Financial Information
Adjusted financial information for the three months ended
Adjusted EBITDA is profit or loss for the period before taxation, net financing costs, depreciation and amortization, adjusted to exclude, when they occur, the impacts of exited markets, acquisition purchase price adjustments and exceptional items such as restructuring charges, goodwill and intangible asset impairment charges and other unusual or non-recurring items. In addition, we exclude other adjustments such as the impact of share based payment expenses and related employer payroll taxes, and non-operating M&A related costs, because we do not believe they are indicative of our normal operating costs, can vary significantly in amount and frequency, and are unrelated to our underlying operating performance. The Company believes Adjusted EBITDA provides important comparability of underlying operating results, allowing investors and management to assess operating performance on a consistent basis.
Adjusted EBITDA should not be considered as an alternative to profit/(loss) for the period, determined in accordance with IFRS, as an indicator of the Company's operating performance.
Adjusted Profit for the period is defined as profit for the period excluding, when they occur, the impacts of exited markets, acquisition purchase price adjustments and exceptional items such as restructuring charges, goodwill and intangible asset impairment charges, unissued preferred share dividends, as well as certain other items considered unusual or non-recurring in nature. In addition, we exclude other adjustments such as the impact of share based payment expenses and related employer payroll taxes, and non-operating M&A related costs, because we do not believe they are indicative of our normal operating costs, can vary significantly in amount and frequency, and are unrelated to our underlying operating performance. The Company believes Adjusted Profit after tax provides important comparability of underlying operating results, allowing investors and management to assess operating performance on a consistent basis.
Adjusted EPS is defined as basic earnings per share excluding, when they occur, the impacts of exited markets, acquisition purchase price adjustments and exceptional items such as restructuring charges, goodwill and intangible asset impairment charges, as well as certain other items considered unusual or non-recurring in nature. In addition, we exclude other adjustments such as the impact of share based payment expenses and related employer payroll taxes, and non-operating M&A related costs, because we do not believe they are indicative of our normal operating costs, can vary significantly in amount and frequency, and are unrelated to our underlying operating performance. The Company believes Adjusted EPS provides important comparability of underlying operating results, allowing investors and management to assess operating performance on a consistent basis.
Organic revenue growth/(decline) is an adjusted measurement of our operating results. The comparison for the three months ended
Adjustments for currency translation are calculated by translating data of the current and comparative periods using a budget foreign exchange rate that is set once a year as part of the Company's internal annual forecast process.
Adjusted Free Cash Flow – Adjusted free cash flow is the amount of cash generated from operating activities before cash flows related to exceptional items (as described above), non-operating M&A related costs and working capital movements on employer taxes associated with share based payment awards, but after capital expenditure (on property, plant and equipment and intangible assets), net interest paid, proceeds/(payments) on settlement of derivatives where hedge accounting is not applied and payments of lease liabilities. Adjusted free cash flow reflects cash flows that could be used for payment of dividends, repayment of debt or to fund acquisitions or other strategic objectives. Cash flow conversion is Adjusted Free Cash Flow as percentage of Adjusted Profit for the period.
Adjusted and Organic non-IFRS financial information should be read in conjunction with the unaudited financial statements of
Please see on pages 7 to 11, the non-IFRS reconciliation tables attached hereto and the schedules accompanying this release for an explanation and reconciliation of the Adjusted and Organic financial information to the most directly comparable IFRS measure. The Company is unable to reconcile, without unreasonable efforts, Organic Growth, Adjusted EBITDA and Adjusted EPS guidance to the most directly comparable IFRS measure.
Nomad Foods Limited As Reported Condensed Consolidated Interim Statements of Profit or Loss (unaudited)
Three months ended |
|||
|
|||
|
Three months ended |
|
Three months ended |
|
€m |
|
€m |
Revenue |
783.7 |
|
775.1 |
Cost of sales |
(572.8) |
|
(550.9) |
Gross profit |
210.9 |
|
224.2 |
Other operating expenses |
(115.4) |
|
(114.5) |
Exceptional items |
(23.5) |
|
(30.1) |
Operating profit |
72.0 |
|
79.6 |
Finance income |
5.9 |
|
1.1 |
Finance costs |
(36.0) |
|
(30.1) |
Net financing costs |
(30.1) |
|
(29.0) |
Profit before tax |
41.9 |
|
50.6 |
Taxation |
(7.4) |
|
(9.4) |
Profit for the period |
34.5 |
|
41.2 |
|
|
|
|
Basic & diluted earnings per share in € |
0.21 |
|
0.24 |
Nomad Foods Limited As Reported Condensed Consolidated Interim Statements of Financial Position
As at |
|||
|
|||
|
As at |
|
As at |
|
€m |
|
€m |
Non-current assets |
|
|
|
|
2,103.2 |
|
2,105.0 |
Intangibles |
2,467.0 |
|
2,468.2 |
Property, plant and equipment |
563.4 |
|
563.7 |
Other non-current assets |
7.3 |
|
7.1 |
Derivative financial instruments |
1.4 |
|
0.7 |
Deferred tax assets |
106.1 |
|
106.9 |
Total non-current assets |
5,248.4 |
|
5,251.6 |
Current assets |
|
|
|
Cash and cash equivalents |
390.7 |
|
412.9 |
Inventories |
432.6 |
|
446.4 |
Trade and other receivables |
343.8 |
|
263.4 |
Current tax receivable |
39.7 |
|
40.7 |
Indemnification assets |
0.5 |
|
0.5 |
Derivative financial instruments |
6.0 |
|
1.2 |
Total current assets |
1,213.3 |
|
1,165.1 |
Total assets |
6,461.7 |
|
6,416.7 |
Current liabilities |
|
|
|
Trade and other payables |
810.3 |
|
769.8 |
Current tax payable |
189.3 |
|
189.5 |
Provisions |
31.5 |
|
35.1 |
Loans and borrowings |
26.2 |
|
21.4 |
Derivative financial instruments |
8.9 |
|
12.2 |
Total current liabilities |
1,066.2 |
|
1,028.0 |
Non-current liabilities |
|
|
|
Loans and borrowings |
2,126.9 |
|
2,113.7 |
Employee benefits |
152.1 |
|
158.3 |
Other non-current liabilities |
0.5 |
|
0.5 |
Provisions |
1.4 |
|
1.4 |
Derivative financial instruments |
69.8 |
|
97.8 |
Deferred tax liabilities |
425.6 |
|
425.1 |
Total non-current liabilities |
2,776.3 |
|
2,796.8 |
Total liabilities |
3,842.5 |
|
3,824.8 |
Net assets |
2,619.2 |
|
2,591.9 |
Equity attributable to equity holders |
|
|
|
Share capital and capital reserve |
1,419.0 |
|
1,426.1 |
Share-based compensation reserve |
34.5 |
|
31.4 |
Translation reserve |
104.6 |
|
101.0 |
Other reserves |
(11.8) |
|
(24.6) |
Retained earnings |
1,072.9 |
|
1,058.0 |
Total equity |
2,619.2 |
|
2,591.9 |
Nomad Foods Limited As Reported Condensed Consolidated Interim Statements of Cash Flows (unaudited)
For the three months ended |
|||
|
|||
|
For the three months |
|
For the three months |
|
€m |
|
€m |
Cash flows from operating activities |
|
|
|
Profit for the period |
34.5 |
|
41.2 |
Adjustments for: |
|
|
|
Exceptional items |
23.5 |
|
30.1 |
Share based payment expense |
3.1 |
|
12.3 |
Depreciation and amortization |
23.1 |
|
22.3 |
Loss on disposal of property, plant and equipment |
0.4 |
|
0.5 |
Net finance costs |
30.1 |
|
29.0 |
Taxation |
7.4 |
|
9.4 |
Operating cash flow before changes in working capital, provisions and |
122.1 |
|
144.8 |
Decrease/(increase) in inventories |
14.2 |
|
(34.3) |
Increase in trade and other receivables |
(81.3) |
|
(53.7) |
Increase in trade and other payables |
77.1 |
|
20.6 |
(Decrease)/increase in employee benefits and other provisions |
(0.2) |
|
1.9 |
Cash generated from operations before tax and exceptional items |
131.9 |
|
79.3 |
Cash flows relating to exceptional items |
(24.0) |
|
(14.0) |
Tax paid |
(8.9) |
|
(10.0) |
Net cash generated from operating activities |
99.0 |
|
55.3 |
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment and intangibles |
(18.8) |
|
(20.6) |
Interest received |
2.0 |
|
1.1 |
Cash used in investing activities |
(16.8) |
|
(19.5) |
Cash flows from financing activities |
|
|
|
Repurchase of ordinary shares |
(7.1) |
|
— |
Payment of lease liabilities |
(7.2) |
|
(7.0) |
Dividends paid |
(22.3) |
|
— |
Payment of financing fees |
(0.5) |
|
(0.5) |
Interest paid |
(50.4) |
|
(19.3) |
Net cash used in financing activities |
(87.5) |
|
(26.8) |
Net (decrease)/increase in cash and cash equivalents |
(5.3) |
|
9.0 |
Cash and cash equivalents at beginning of period |
399.7 |
|
366.8 |
Effect of exchange rate fluctuations |
(3.7) |
|
(4.9) |
Cash and cash equivalents at end of period |
390.7 |
|
370.9 |
Adjusted Financial Information (In € millions, except per share data)
|
|||||||
|
|||||||
Reconciliation of Non-IFRS Financial Measures |
|||||||
|
|||||||
The following table reconciles adjusted financial information for the three months ended |
|||||||
|
|||||||
Adjusted Statement of Profit or Loss (unaudited)
Three Months Ended
|
|||||||
|
|||||||
€ in millions, except per share data |
As reported for the |
|
Adjustments |
|
|
|
As adjusted for the |
Revenue |
783.7 |
|
— |
|
|
|
783.7 |
Cost of sales |
(572.8) |
|
— |
|
|
|
(572.8) |
Gross profit |
210.9 |
|
— |
|
|
|
210.9 |
Other operating expenses |
(115.4) |
|
3.7 |
|
(a) |
|
(111.7) |
Exceptional items |
(23.5) |
|
23.5 |
|
(b) |
|
— |
Operating profit |
72.0 |
|
27.2 |
|
|
|
99.2 |
Finance income |
5.9 |
|
(4.1) |
|
|
|
1.8 |
Finance costs |
(36.0) |
|
10.4 |
|
|
|
(25.6) |
Net financing costs |
(30.1) |
|
6.3 |
|
(c) |
|
(23.8) |
Profit before tax |
41.9 |
|
33.5 |
|
|
|
75.4 |
Taxation |
(7.4) |
|
(7.4) |
|
(d) |
|
(14.8) |
Profit for the period |
34.5 |
|
26.1 |
|
|
|
60.6 |
|
|
|
|
|
|
|
|
Weighted average shares outstanding in millions - basic |
163.2 |
|
|
|
|
|
163.2 |
Basic earnings per share |
0.21 |
|
|
|
|
|
0.37 |
Weighted average shares outstanding in millions - diluted |
163.3 |
|
|
|
|
|
163.3 |
Diluted earnings per share |
0.21 |
|
|
|
|
|
0.37 |
|
|
(a) |
Represents share based payment charge including employer payroll taxes of €3.4 million and non-operating M&A transaction costs of €0.3 million. |
(b) |
Represents exceptional items which management believes are non-recurring and do not have a continuing impact. See Note 6, Exceptional items, within 'Exhibit 99.2 - Condensed Consolidated Interim Financial Statements' for a detailed list of exceptional items. |
(c) |
Elimination of €4.1 million net gains on repricing of debt, €10.2 million of foreign exchange translation losses and €0.2 million of foreign exchange losses on derivatives. |
(d) |
Represents tax impact of the above at the applicable tax rate for each adjustment, determined by the nature of the item and the jurisdiction in which it arises. |
Reconciliation of Non-IFRS Financial Measures (continued) |
|||||||
|
|||||||
The following table reconciles adjusted financial information for the three months ended |
|||||||
|
|||||||
Adjusted Statement of Profit or Loss (unaudited)
Three Months Ended
|
|||||||
|
|||||||
€ in millions, except per share data |
As reported for the |
|
Adjustments |
|
|
|
As adjusted for the |
Revenue |
775.1 |
|
— |
|
|
|
775.1 |
Cost of sales |
(550.9) |
|
— |
|
|
|
(550.9) |
Gross profit |
224.2 |
|
— |
|
|
|
224.2 |
Other operating expenses |
(114.5) |
|
14.3 |
|
(a) |
|
(100.2) |
Exceptional items |
(30.1) |
|
30.1 |
|
(b) |
|
— |
Operating profit |
79.6 |
|
44.4 |
|
|
|
124.0 |
Finance income |
1.1 |
|
— |
|
|
|
1.1 |
Finance costs |
(30.1) |
|
5.9 |
|
|
|
(24.2) |
Net financing costs |
(29.0) |
|
5.9 |
|
(c) |
|
(23.1) |
Profit before tax |
50.6 |
|
50.3 |
|
|
|
100.9 |
Taxation |
(9.4) |
|
(10.9) |
|
(d) |
|
(20.3) |
Profit for the period |
41.2 |
|
39.4 |
|
|
|
80.6 |
|
|
|
|
|
|
|
|
Weighted average shares outstanding in millions - basic |
174.5 |
|
|
|
|
|
174.5 |
Basic earnings per share |
0.24 |
|
|
|
|
|
0.46 |
Weighted average shares outstanding in millions - diluted |
174.5 |
|
|
|
|
|
174.5 |
Diluted earnings per share |
0.24 |
|
|
|
|
|
0.46 |
|
|
(a) |
Represents share based payment charge including employer payroll taxes of €13.9 million and non-operating M&A transaction costs of €0.4 million. |
(b) |
Represents exceptional items which management believes are non-recurring and do not have a continuing impact. See Note 6, Exceptional items, within 'Exhibit 99.2 - Condensed Consolidated Interim Financial Statements' for a detailed list of exceptional items. |
(c) |
Elimination of €5.8 million of foreign exchange translation losses and €0.1 million of foreign exchange losses on derivatives. |
(d) |
Represents tax impact of the above at the applicable tax rate for each adjustment, determined by the nature of the item and the jurisdiction in which it arises. |
Reconciliation of Non-IFRS Financial Measures (continued) Reconciliation of Profit for the period to Adjusted EBITDA (unaudited) |
|||
|
|||
|
Three months ended |
||
€ in millions |
|
|
|
Profit for the period |
34.5 |
|
41.2 |
Taxation |
7.4 |
|
9.4 |
Net financing costs |
30.1 |
|
29.0 |
Depreciation & amortization |
23.1 |
|
22.3 |
Exceptional items (a) |
23.5 |
|
30.1 |
Other add-backs (b) |
3.7 |
|
14.3 |
Adjusted EBITDA |
122.3 |
|
146.3 |
|
|
|
|
Revenue |
783.7 |
|
775.1 |
Adjusted EBITDA margin (c) |
15.6 % |
|
18.9 % |
|
|
(a) |
Adjustment to add back exceptional items. See Note 6, Exceptional items, within 'Exhibit 99.2 - Condensed Consolidated Interim Financial Statements' for a detailed list of exceptional items. |
(b) |
Represents the elimination of share-based payment charges including employer payroll taxes for the three month period to |
(c) |
Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenue. |
Adjusted Financial Information (continued) |
|
|
|
Appendix 1: Reconciliation from reported to organic revenue growth/(decline) |
|
|
|
Year on Year Growth - |
|
|
|
|
Three Months Ended |
|
YoY change |
Reported Revenue Growth |
1.1 % |
|
|
Of which: |
|
Organic Revenue Growth/(Decline) |
0.3 % |
Translational FX (a) |
0.8 % |
Total |
1.1 % |
(a) |
Translational FX is calculated by translating data of the current and comparative periods using a budget foreign exchange rate that is set once a year as part of the Company's internal annual forecast process. |
|
Adjusted Financial Information (continued) |
|
Appendix 2: Historical Year on Year Organic revenue growth/(decline) split by volume and Price/Mix |
YoY change |
Three Months Ended |
|
|
Volume |
(2.2) % |
Price/Mix |
2.5 % |
Organic Revenue Growth/(decline) |
0.3 % |
YoY change |
Twelve Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
|
|
|
|
|
|
Volume |
(10.9) % |
(8.0) % |
(12.7) % |
(12.0) % |
(9.7) % |
Price/Mix |
15.8 % |
9.9 % |
14.3 % |
20.6 % |
17.7 % |
Organic Revenue Growth/(decline) |
4.9 % |
1.9 % |
1.6 % |
8.6 % |
8.0 % |
|
|
|
|
|
|
YoY change |
Twelve Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
|
|
|
|
|
|
Volume |
(6.9) % |
(8.3) % |
(5.6) % |
(7.3) % |
(6.3) % |
Price/Mix |
8.7 % |
16.0 % |
12.8 % |
4.1 % |
1.8 % |
Organic Revenue Growth/(decline) |
1.8 % |
7.7 % |
7.2 % |
(3.2) % |
(4.5) % |
|
|
|
|
|
|
YoY change |
Twelve Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
|
|
|
|
|
|
Volume |
(2.4) % |
(4.4) % |
(0.3) % |
(3.2) % |
(1.6) % |
Price/Mix |
0.3 % |
(0.1) % |
(1.1) % |
(1.3) % |
3.4 % |
Organic Revenue Growth/(decline) |
(2.1) % |
(4.5) % |
(1.4) % |
(4.5) % |
1.8 % |
Forward-Looking Statements
Forward-Looking Statements and Disclaimers
Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts, including the Company's expectations regarding (i) its future operating and financial performance, including its reiterated guidance with respect to organic net revenue growth, Adjusted EBITDA growth, free cash flow conversion, Adjusted EPS, and Adjusted EPS growth for 2024; (ii) its ability to generate stronger bottom-line growth and superior shareholder returns; and (iii) its success in 2024 and beyond.
These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including: (i) the Company's ability to effectively mitigate factors that negatively impact its supply of raw materials, including the conflict in
No Offer or Solicitation
This release and referenced conference call is provided for informational purposes only and does not constitute an offer to sell, or an invitation to subscribe for, purchase or exchange, any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this press release in any jurisdiction in contravention of applicable law.
The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.
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