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Financial

Nomad Foods Reports Second Quarter 2018 Financial Results

Aug 09, 2018
Q2 2018 Earnings Press Release
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Q2 2018 Earnings Presentation
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Company Raises 2018 Guidance

Nomad Foods Limited (NYSE: NOMD), today reported financial results for the three and six month periods ended June 30, 2018.  Key operating highlights and financial performance for the second quarter 2018, when compared to the second quarter 2017, include:

  • Reported revenue increased 6.6% to €488 million
  • Organic revenue growth of 1.3%
  • Reported Profit for the period of €31 million
  • Adjusted EBITDA increased 12% to €89 million
  • Reported EPS of €0.18; Adjusted EPS increased 22% to €0.28
  • Company raises 2018 guidance to €365 to €370 million Adjusted EBITDA and €1.14 to €1.17 Adjusted EPS

Management Comments

Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “We reported solid second quarter results, highlighted by 1.3% organic revenue growth, 90 basis points of Adjusted EBITDA margin expansion and 22% Adjusted EPS growth. Performance was particularly encouraging given this year's earlier Easter timing and the highly publicized summer heat waves throughout Europe. Recent acquisitions are proving complementary. Goodfella's is performing well in our first few months of ownership and Aunt Bessie's, which closed on July 2nd, is expected to be immediately accretive. We are pleased with our year-to-date progress and are on pace to deliver another year of top and bottom line growth."

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “Second quarter results demonstrate the strength of our business model and the execution ability of our management team. We remain uniquely positioned to capitalize on the favorable macro trends occurring within the frozen food space and are excited by the potential of our portfolio in both the near and long-term."

Second Quarter of 2018 results compared to the Second Quarter of 2017

  • Revenue increased 6.6% to €488 million. Organic revenue growth of 1.3% was comprised of 1.5% growth in price and a 0.2% decline in volume/mix. Revenue growth benefited 6.4 percentage points from the acquisition of Goodfella's and was offset by 1.1 percentage points from foreign exchange translation.
  • Adjusted gross profit increased 6% to €154 million. Adjusted gross margin was unchanged at 31.5% as positive mix and improved pricing and promotional efficiency were offset by mix related to the acquisition of Goodfella’s.
  • Adjusted operating expense increased 2% to €76 million. Advertising and promotion expense decreased 1% to €26 million. Indirect expense increased 4% to €50 million due to the acquisition of Goodfella's.
  • Adjusted EBITDA increased 12% to €89 million.
  • Adjusted Profit after tax increased 17% to €49 million reflecting interest savings. Adjusted EPS increased 22% to €0.28, reflecting Adjusted Profit growth and a lower share count resulting from prior year share repurchases.

First Six Months of 2018 results compared to the First Six Months of 2017

  • Revenue increased 6.6% to €488 million. Organic revenue growth of 1.3% was comprised of 1.5% growth in price and a 0.2% decline in volume/mix. Revenue growth benefited 6.4 percentage points from the acquisition of Goodfella's and was offset by 1.1 percentage points from foreign exchange translation.
  • Adjusted gross profit increased 6% to €154 million. Adjusted gross margin was unchanged at 31.5% as positive mix and improved pricing and promotional efficiency were offset by mix related to the acquisition of Goodfella’s.
  • Adjusted operating expense increased 2% to €76 million. Advertising and promotion expense decreased 1% to €26 million. Indirect expense increased 4% to €50 million due to the acquisition of Goodfella's.
  • Adjusted EBITDA increased 12% to €89 million.
  • Adjusted Profit after tax increased 17% to €49 million reflecting interest savings. Adjusted EPS increased 22% to €0.28, reflecting Adjusted Profit growth and a lower share count resulting from prior year share repurchases.

First Six Months of 2018 results compared to the First Six Months of 2017

  • Revenue increased 3.8% to €1,027 million. Organic revenue growth of 2.1% was comprised of 1.4% growth in price and 0.7% growth in volume/mix. Revenue growth benefited 3.0 percentage points from the acquisition of Goodfella's and was offset by 1.3 percentage points from foreign exchange translation.
  • Adjusted gross profit increased 8% to €325 million. Adjusted gross margin expanded 120 basis points to 31.6% as positive mix and price increases more than offset currency-driven inflation.
  • Adjusted Operating expense remained flat at €154 million. Advertising and promotion expense was flat at €56 million reflecting seasonally balanced spending in 2018 versus 2017 while Indirect expense was also flat at €98 million.
  • Adjusted EBITDA increased 14% to €192 million.
  • Adjusted Profit after tax increased 27% to €111 million reflecting interest rate savings and lower depreciation and amortization. Adjusted EPS increased 31% to €0.63, reflecting Adjusted Profit growth and a lower share count resulting from prior year share repurchases.

2018 Guidance

The Company is raising 2018 guidance to include the expected contribution from Aunt Bessie's, which was acquired on July 2, 2018. Management now expects Adjusted EBITDA of approximately €365 to €370 million and Adjusted EPS of approximately €1.14 to €1.17 per share. Full year guidance continues to assume organic revenue growth at a low-single digit percentage range.