Nomad Foods Reports Second Quarter 2023 Financial Results

Revenue growth of +6.9% with Adjusted EPS of €0.40

Raise Full Year Adjusted EPS Guidance to €1.54 - €1.57

FELTHAM, England - Nomad Foods Limited (NYSE: NOMD), today reported financial results for the three and six month periods ended June 30, 2023. Key operating highlights and financial performance for the second quarter 2023, when compared to the second quarter 2022, include:

• Reported revenue increased 6.9% to €745 million
• Organic revenue growth of 8.6%
• Reported Profit for the period of €49 million
• Adjusted EBITDA increased 4.5% to €132 million
• Adjusted EPS remained unchanged at €0.40

Management Comments
Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “Nomad Foods maintained sales momentum from the first quarter of the year into the second quarter. We grew organic sales by 8.6% and Adjusted EBITDA by 4.5% year-on-year, while keeping our Gross Margin stable. Furthermore, we completed our preparations and planning to kick off a comprehensive A&P investment plan next quarter, and we expect to see visible improvement in our volume and market share performance in the second half of the year. Building on this strong first half performance, second quarter share buyback, and our improving expectations for the second half, we are raising our Adjusted EPS guidance range to €1.54 to €1.57 from our previous range of €1.52 to €1.55. Furthermore, we maintain our guidance for Adjusted Free Cash Flow conversion in the range of 90% to 95% for 2023, generating approximately €250 million of Adjusted Free Cash Flow.”

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “Nomad Foods again reported a strong performance this quarter. We delivered strong organic revenue growth while protecting our Gross Margin through pricing and cost discipline. Additionally, we repurchased nearly €53 million in shares this quarter, and we continue to believe share buybacks are an important component of our capital allocation strategy representing tremendous value for our shareholders. Nomad’s leading brands, great people, and world-class supply chain continue to drive great results, and the operational plans we built for this year are coming to fruition which gives us confidence to revise our guidance. As we look ahead to the balance of the year, we are excited about the renewed investment in A&P to drive long-term growth and recapture market momentum. Frozen food remains an excellent value for all consumers, and we see plenty of opportunities ahead. We are investing in sustainable long-term growth and remain focused on driving value for our shareholders.”

Second Quarter of 2023 results compared to the Second Quarter of 2022
• Revenue increased 6.9% to €745 million. Organic revenue growth of 8.6% was comprised of a 9.4% decline in volume/mix offset by a 18.0% increase in price.
• Gross profit increased 6.8% to €210 million. Gross margin remained unchanged at 28.2%, linked to the successful recovery of higher input costs through pricing.
• Adjusted operating expenses increased 9.7% to €101 million.
• Adjusted EBITDA increased 4.5% to €132 million due to the aforementioned factors. Adjusted Profit for the period decreased 2.4% to €69 million due to the impact of the refinancing we performed in November 2022, resulting in higher cash interest payments on a portion of our debt.
• Adjusted EPS remained unchanged at €0.40, reflecting a small decrease in Adjusted Profit after tax. Reported EPS decreased 34.9% to €0.28.

First Six Months of 2023 results compared to the First Six Months of 2022
• Revenue increased 6.3% to €1,520 million. Organic revenue growth of 8.3% was comprised of a 8.5% decline in volume/mix offset by a 16.8% increase in price.
• Gross profit increased 8.2% to €434 million. Gross margin increased 50 basis points to 28.6%, linked to the successful recovery of higher input costs through pricing, and a benefit in the cost of goods sold from the tail end of our cover positions from 2022.
• Adjusted operating expenses increased 7.9% to €201 million.
• Adjusted EBITDA increased 7.9% to €279 million. Adjusted Profit for the period increased 2.5% to €149 million due to the aforementioned factors.
• Adjusted EPS increased 2.4% to €0.86, reflecting the increase in Adjusted Profit after tax. Reported EPS decreased 30.7% to 0.52.

2023 Guidance
For the full year 2023, management is raising Adjusted EPS guidance to €1.54 to €1.57 from €1.52 to €1.55 . Our full-year guidance assumes mid-single-digit organic revenue growth and Adjusted Cash Flow conversion in the range of 90% to 95%. These are both unchanged from our last update in May.

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 9, 2023 at 1:30 p.m. BST (8:30 a.m. Eastern Daylight Time). To participate on the live call, listeners in North America may dial +1-844-826-3033 and international listeners may dial +1-412-317-5185. Additionally, there will be a presentation to accompany the conference call and the call is being webcast. Both can be accessed at the Nomad Foods website at
www.nomadfoods.com under Investor Relations. A replay of the conference call will be available on the Company website for two weeks following the event and can be accessed by listeners in North America by dialing +1-844-512-2921 and by international listeners by dialing +1-412-317-6671; the replay pin number is 10180901.

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, 2023 and for comparative purposes, the three and six months ended June 30, 2022.

Adjusted financial information for the three and six months ended June 30, 2023 and 2022 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, 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, 2023 and 2022 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.

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.