Nomad Foods Reports First Quarter 2017 Financial Results

Company Raises FY 2017 Guidance

Feltham, England – May 25, 2017 – Nomad Foods Limited (NYSE: NOMD) today reported financial results for the first quarter ended March 31, 2017 and raises its full year 2017 guidance.

• Reported revenue decreased 2.9% to €531 million
• Organic revenue increased 1.1%
• Reported Profit for the period of €48 million
• Adjusted EBITDA decreased 11% to €89 million
• Reported EPS of €0.26; Adjusted EPS decreased 14% to €0.25
• Company raises 2017 Adjusted EBITDA guidance to be approximately €315 to €325 million

Management Comments

Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “2017 is off to a strong start with organic revenue growing +1.1% in Q1, a marked improvement from recent quarters and particularly encouraging given the later timing of Easter this year versus last. Both retailers and consumers are responding well to our targeted “Must Win Battle” activations, which continue to grow as a percentage of our overall portfolio. As expected, Q1 gross margins reflect higher planned promotions to help ease price increases into the UK market. We are pleased with the execution of these actions and expect promotions to moderate in Q2. Based on our year-to-date performance and increased visibility into the year, we are increasing our 2017 guidance.”

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “Following a successful and encouraging Q1, we are now even more optimistic about our prospects for the balance of the year. We look forward to capitalizing on our forward momentum with respect to both continued organic growth, as well as strategic opportunities. Our business is strong, and we believe Stéfan and our entire team are delivering great results and are well positioned to build long-term value for all of our stakeholders.”

First Quarter 2017 Results

• Revenue decreased 2.9% to €531 million. After adjusting for foreign exchange currency translation and an extra trading day in the year-ago period, organic revenue growth was 1.1%. Organic revenue growth was driven by 3.0% growth in volume/mix offset by 1.9% decline in price, where UK price increases were more than offset by elevated planned promotions in the UK and the anniversary of unusually low promotional levels in other markets.
• Gross profit decreased 7% to €156 million. Gross margin contracted 120 basis points to 29.4% as higher volume, positive mix and UK price increases were more than offset by elevated planned promotions in the UK and the anniversary of unusually low promotional levels in other markets. Foreign exchange currency translation adversely impacted gross margin by 20 basis points.
• Adjusted Operating expense was unchanged at €80 million. Advertising and promotion expense increased 3% to €30 million reflecting more seasonally balanced spending in 2017 versus 2016 while Indirect expense decreased 2% to €50 million.
• Adjusted EBITDA decreased 11% to €89 million due to the aforementioned factors. Foreign exchange currency translation adversely affected adjusted EBITDA by €4 million.
• Adjusted Profit after tax and Adjusted EPS decreased 14% to €45 million and €0.25, respectively.

2017 Guidance

The Company raises its 2017 Adjusted EBITDA outlook to a range of approximately €315 to €325 million, versus the prior expectation of approximately €315 million, which now assumes organic revenue growth at a low-single digit percentage rate.