Nomad Foods Reports Second Quarter 2022 Financial Results

Nomad Foods Reports Second Quarter 2022 Financial Results

Revenue growth of +17.0% with Adjusted EPS of €0.40

Updated Full Year Adjusted EPS Guidance of €1.65 - €1.71

FELTHAM, England - Nomad Foods Limited (NYSE: NOMD), today reported financial results for the three and six month periods ended June 30, 2022. Key operating highlights and financial performance for the second quarter 2022, when compared to the second quarter 2021, include:

•Reported revenue increased 17.0% to €697 million
•Organic revenue decline of 3.2%
•Reported Profit for the period of €75 million
•Adjusted EBITDA increased 2.9% to €127 million
•Adjusted EPS remained unchanged at €0.40

Management Comments
Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “I am pleased with our second quarter performance, which saw our overall revenue base rise by 17% and our market share remain steady in a dynamic pricing environment. We are adjusting our business well to inflationary pressures and believe that supply chains are normalizing. However, in light of the continuing war in Ukraine, its collateral risks and European consumer sentiment, we are taking a more conservative posture to full year earnings. We are revising our Adjusted EPS expectation for the year to a range of €1.65 to €1.71 for 2022. Despite our cautious outlook for the year, we believe our business is stronger today than at any other time in our history and we are confident we remain on track to deliver our €2.30 Adjusted EPS target for 2025."

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “Nomad Foods showed extraordinary resilience this quarter, and we continue to recognize compelling near-term and long-term opportunities ahead of us enabled by strong underlying cash flow, our brands and our people. We are focused on execution and have maintained share in a highly competitive market while staying focused on investments in the business, especially the supply chain improvements necessary to navigate this historically difficult environment. Long term, we will remain focused on a disciplined capital allocation strategy to enhance the success of our operating results for shareholders. We remain well-positioned for 2022 and for growth beyond this year.”

Second Quarter of 2022 results compared to the Second Quarter of 2021
• Revenue increased 17.0% to €697 million. Organic revenue decline of 3.2% was comprised of a 5.7% decline in volume/mix partially offset by a 2.5% increase in price.
• Adjusted Gross profit increased 7.2% to €197 million. Adjusted gross margin decreased 260 basis points to 28.2%, driven by higher raw material costs offset with higher pricing, and the inclusion of the Fortenova's frozen food business acquisition whose gross margins are above that of the base business.
• Adjusted operating expenses increased 19.1% to €92 million, driven by the inclusion of the Fortenova's frozen food business acquisition.
• Adjusted EBITDA increased 2.9% to €127 million and Adjusted Profit for the period decreased 1.7% to €70 million due to the aforementioned factors.
• Adjusted EPS flat at €0.40. Reported EPS increased 48.3% to €0.43.
First Six Months of 2022 results compared to the First Six Months of 2021
• Revenue increased 9.7% to €1,430 million. Organic revenue decline of 3.9% was comprised of a 5.9% decline in volume/mix partially offset by a 2.0% increase in price.
• Adjusted Gross profit increased 0.7% to €402 million. Adjusted gross margin decreased 250 basis points to 28.1%, driven by higher raw material costs and offset with higher pricing, and the inclusion of the Fortenova's frozen food business acquisition whose gross margins are above that of the base business.
• Adjusted operating expenses increased 8.6% to €187 million, driven by the inclusion of the Fortenova's frozen food business acquisition.
• Adjusted EBITDA decreased 0.9% to €258 million and Adjusted Profit for the period decreased 6.2% to €146 million due to the aforementioned factors.
• Adjusted EPS decreased 3.4% to €0.84, reflecting a decline in Adjusted Profit after tax. Reported EPS increased 33.9% to €0.75 .

2022 Guidance
The Company is updating Adjusted EPS guidance to a range of €1.65 to €1.71 from the previous range of €1.71 to €1.75 for 2022, representing high-single digit Adjusted EPS growth. This guidance assumes high-single digit revenue growth, low-single digit organic revenue growth, and the inclusion of Fortenova's frozen food business for the full-year.

Conference Call and Webcast
The Company will host a conference call with members of the executive management team to discuss these results today, Wednesday, August 10, 2022 at 1:30 p.m. BST (8:30 a.m. Eastern Daylight Time). A live audio webcast of the conference call and an accompanying presentation will both be available at Nomad Foods’ website at www.nomadfoods.com under Investor Relations. Additionally, participants in North America may access the live call by dialing +1-877-300-8521 and international participants may dial +1-412-317-6026.

A replay of the webcast will be available on the Company website for two weeks following the event. This can be accessed by dialing +1-844-512-2921 and by international listeners by dialing +1-412-317-6671; the replay pin number is 10169497.

Nomad Foods Contacts
Investor Relations Contact
Anthony Bucalo
Nomad Foods Limited
+1-914-907-8724

About Nomad Foods
Nomad Foods (NYSE: NOMD) is Europe’s leading frozen food company. The Company’s portfolio of iconic brands, which includes Birds Eye, Findus, iglo, Ledo and Frikom, have been a part of consumers’ meals for generations, standing for great tasting food that is convenient, high quality and nutritious. Nomad Foods is headquartered in the United Kingdom. Additional information may be found at www.nomadfoods.com.

Financial Information
Nomad Foods is presenting Adjusted and Organic financial information, which is considered non-IFRS financial information, for the three and six months ended June 30, 2022 and for comparative purposes, the three and six months ended June 30, 2021.

Adjusted financial information for the three and six months ended June 30, 2022 and 2021 presented in this press release reflects the historical reported financial statements of Nomad Foods, adjusted primarily for share based payment expenses and related employer payroll taxes, non-operating M&A related costs, exceptional items and foreign currency translation charges/gains.

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, 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 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 and six months ended June 30, 2022 and 2021 presented in this press release takes into consideration only those activities that were in effect during both time periods. Organic revenue growth/(decline) reflects reported revenue adjusted for currency translation and non-comparable trading items such as expansion, acquisitions, disposals, closures, trading day impacts or any other event that artificially impacts the comparability of our results.

Adjusted Gross Profit and adjusted gross margin exclude acquisition purchase price accounting adjustments within cost of goods sold.

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 and Organic non-IFRS financial information should be read in conjunction with the unaudited financial statements of Nomad Foods included in this press release as well as the historical financial statements of the Company previously filed with the SEC.

Nomad Foods believe its non-IFRS financial measures provide an important additional measure with which to monitor and evaluate the Company’s ongoing financial results, as well as to reflect its acquisitions. Nomad Foods’ calculation of these financial measures may be different from the calculations used by other companies and comparability may therefore be limited. The Adjusted and Organic financial information presented herein is based upon certain assumptions that Nomad Foods believes to be reasonable and is presented for informational purposes only and is not necessarily indicative of any anticipated financial position or future results of operations that the Company will experience. You should not consider the Company’s non-IFRS financial measures an alternative or substitute for the Company’s reported results and are cautioned not to place undue reliance on these results and information as they may not be representative of our actual or future results as a Company.

Please see on pages 8 to 13, 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.