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Financial

Nomad Foods Reports Second Quarter 2017 Financial Results

Aug 24, 2017
Q2 2017 Earnings Press Release
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Q2 2017 Earnings Presentation
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Nomad Foods Limited (NYSE: NOMD), today reported financial results for the three and six month periods ended June 30, 2017.  Key operating highlights and financial performance for the second quarter 2017, when compared to the second quarter 2016, include:

  • Reported revenue increased 0.5% to €458 million
  • Organic revenue increased 3.5%
  • Reported Profit for the period of €19 million
  • Adjusted EBITDA increased 2% to €79 million
  • Reported EPS of €0.11; Adjusted EPS increased 21% to €0.23
  • Company raises the low end of 2017 Adjusted EBITDA guidance to approximately €320 to €325 million

Management Comments

Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “Second quarter results were strong with 3.5% organic growth and 90 basis points of gross margin expansion. We continue to deliver against our strategic agenda with a clear focus on growing profitable market share within our core categories. Based on our year-to-date performance and visibility into the back half of the year, we now expect 2017 EBITDA to be in the upper half of our previous range.”

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “Our strategy continues to deliver strong results. The ongoing improvement in our fundamentals and robust cash flow generation place us in an attractive position. We repurchased 5% of our outstanding shares through an accretive transaction during the second quarter and remain committed to generating shareholder value through consolidation within European frozen, as well as our broader ambitions.”

Second Quarter of 2017 results compared to the Second Quarter of 2016

  • Revenue increased 0.5% to €458 million. After adjusting for foreign exchange currency translation, organic revenue growth was 3.5%. Organic revenue growth was driven by 0.8% growth in volume/mix and 2.7% growth in price. Price growth reflected the full realization of UK price actions, expected moderation of trade support in the UK and portfolio-wide net revenue management initiatives.
  • Gross profit increased 3.4% to €144 million. Gross margin expanded 90 basis points to 31.5% driven by positive mix and pricing actions, which were implemented to offset currency-driven inflation. Foreign exchange currency translation adversely impacted gross margin by 10 basis points.
  • Adjusted Operating expense was flat at €75 million. Advertising and promotion expense increased 3% to €27 million reflecting more seasonally balanced spending in 2017 versus 2016 while Indirect expense was effectively flat to last year at €48 million.
  • Adjusted EBITDA increased 2% to €79 million due to the aforementioned factors. Foreign exchange currency translation adversely affected adjusted EBITDA by €3 million.
  • Adjusted Profit after tax increased 20% to €42 million. Adjusted EPS increased 21% to €0.23, reflecting Adjusted Profit growth and a lower share count.

First Six Months of 2017 results compared to the First Six Months of 2016

  • Revenue decreased 1.4% to €989 million. After adjusting for foreign exchange currency translation and an extra trading day in the year-ago period, organic revenue growth was 2.2%. Organic revenue growth was driven by 1.9% growth in volume/mix and 0.3% growth in price.
  • Gross profit decreased 2.2% to €300 million. Gross margin contracted 20 basis points to 30.4% as positive mix and price increases were offset by currency-driven inflation. Foreign exchange currency translation adversely impacted gross margin by 10 basis points.
  • Adjusted Operating expense remained flat at €154 million. Advertising and promotion expense increased 3% to €56 million reflecting more seasonally balanced spending in 2017 versus 2016 while Indirect expense decreased 1% to €98 million.
  • Adjusted EBITDA decreased 5.4% to €168 million due to the aforementioned factors. Foreign exchange currency translation adversely affected adjusted EBITDA by €8 million.
  • Adjusted Profit after tax and Adjusted EPS are flat at €88 million and €0.48, respectively.

2017 Guidance

The Company is raising the low end of 2017 Adjusted EBITDA guidance to approximately €320 to €325 million, which represents the upper half of its previous range of €315 to €325 million.  Full year guidance continues to assume organic revenue growth at a low-single digit percentage rate.