Nomad Foods Reports Third Quarter 2019 Financial Results

Company Narrows 2019 Guidance to the Upper End of the Prior Range

FELTHAM, England - November 7, 2019 - Nomad Foods Limited (NYSE: NOMD), today reported financial results for the three and nine month periods ended September 30, 2019.  Key operating highlights and financial performance for the third quarter 2019, when compared to the third quarter 2018, include:

• Reported revenue increased 2% to €540 million
• Organic revenue growth of 2.5%
• Reported Profit for the period of €39 million
• Adjusted EBITDA increased 14% to €96 million
• Adjusted EPS of €0.25

Management Comments

Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “We achieved strong growth during the third quarter and made progress against our long-term strategic objectives. Organic revenue growth of 2.5% was driven by continued momentum in our core portfolio and the contribution from new product initiatives in fish, vegetables and plant protein. Most of our countries grew organically during the quarter, including the UK, Italy, Germany and France. Finally, we delivered 110 basis points of adjusted gross margin expansion, due in large part to an improved pea harvest. Overall, we are pleased with our performance and remain on pace to achieve our plans for the year.”

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “We are pleased with our third quarter and first nine months performance. The team continues to execute well while navigating a dynamic macro landscape, and we expect to report another year of solid earnings and cash generation in 2019.  With over €700 million of cash and leverage at 2.8x, our balance sheet has us well positioned to enhance long-term shareholder value through organic growth and accretive M&A. We have been evaluating a handful of acquisition opportunities in recent months and look forward to providing updates in due course."

Third Quarter of 2019 results compared to the Third Quarter of 2018

• Revenue increased 1.8% to €540 million. Organic revenue growth of 2.5% was comprised of 4.0% growth in price and a 1.5% decline in volume/mix.
• Adjusted gross profit increased 6% to €159 million. Adjusted gross margin increased 110 basis points to 29.5% as a favorable harvest, pricing and promotional efficiencies and mix more than offset cost of goods inflation.
• Adjusted operating expenses increased 1% to €80 million, reflecting Advertising and promotion expense growth of 3% to €27 million and Indirect expense unchanged at €53 million.
• Adjusted EBITDA increased 14% to €96 million, which included a benefit of €4.5 million related to IFRS 16.
• Adjusted Profit after tax increased 9% to €49 million, reflecting Adjusted EBITDA growth, higher finance costs and a lower effective tax rate. The impact of IFRS 16 reduced Adjusted Profit after tax by €0.7 million.
• Adjusted EPS decreased 4% to €0.25, as Adjusted Profit growth was offset by an increased share count resulting from the public offering of ordinary shares in the first quarter of 2019. The impact of IFRS 16 was immaterial to this metric. Reported EPS decreased 5% to €0.20.

First Nine Months of 2019 results compared to the First Nine Months of 2018

• Revenue increased 8.9% to €1,696 million. Organic revenue growth of 2.2% was comprised of 4.0% growth in price and a 1.8% decline in volume/mix. Revenue growth benefited 7.0% from acquisitions.
• Adjusted gross profit increased 7% to €510 million. Adjusted gross margin declined 40 basis points to 30.1% as pricing and promotional efficiencies were more than offset by cost of goods inflation and acquisition mix.
• Adjusted operating expenses increased 5% to €244 million primarily due to inclusion of acquisitions. Advertising and promotion expense increased 3% to €86 million while Indirect expense increased 5% to €159 million.
• Adjusted EBITDA increased 15% to €316 million, which included a benefit of €13.2 million related to IFRS 16.
• Adjusted Profit after tax increased 10% to €172 million, reflecting Adjusted EBITDA growth, higher finance costs and a lower effective tax rate. The impact of IFRS 16 reduced Adjusted Profit after tax by €2.0 million.
• Adjusted EPS increased 2% to €0.91, as Adjusted Profit after tax growth was partly offset by an increased share count resulting from the public offering of ordinary shares in the first quarter of 2019. The impact of IFRS 16 adversely impacted this metric by €0.01. Reported EPS decreased 23% to €0.57.

IFRS 16 - Leases

As previously disclosed, Nomad Foods has adopted IFRS 16, a new standard on lease accounting which requires certain operating leases to be capitalized on the balance sheet effective January 1, 2019. Based on the adoption method selected by the Company, prior year results have not been restated to reflect the new standard.

2019 Guidance

The Company is narrowing 2019 guidance to the upper end of the prior range and now expects Adjusted EBITDA of approximately €425 to €430 million and approximately €1.20 to €1.22 EPS.  Full year guidance continues to assume organic revenue growth at a low-single digit percentage range.

Conference Call and Webcast

The Company will host a conference call with members of the executive management team to discuss these results today, Thursday, November 7, 2019 at 1:30 p.m. GMT (8:30 a.m. Eastern Standard Time). Investors interested in participating in the live call can dial +1-855-327-6838 from North America. International callers can dial +1-604-235-2082.

In addition, the call will be broadcast live over the Internet hosted at the “Investor Relations” section of the Company’s website at http://www.nomadfoods.com. The webcast will be archived for 30 days.  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 10007877.

Nomad Foods Contacts

Investor Relations Contacts

Taposh Bari, CFA
Nomad Foods Limited
+1-718-290-7950

John Mills
ICR, Partner
+1-646-277-1254

Media Contact

Felipe Ucros
Gladstone Place Partners
+1-212-230-5930