Nomad Foods Reports Third Quarter 2021 Financial Results

Adjusted EPS Increased 17% to a New Record of €0.35

Reiterates Full Year Adjusted EPS Guidance of €1.50 - €1.55

FELTHAM, England - Nomad Foods Limited (NYSE: NOMD), today reported financial results for the three and nine month period ended September 30, 2021. Key operating highlights and financial performance for the third quarter 2021, when compared to the third quarter 2020, include:

• Reported revenue increased 4% to €599 million
• Organic revenue decline of 1.4%
• Reported Profit for the period of €52 million
• Adjusted EBITDA increased 4% to €113 million
• Adjusted EPS increased 17% to €0.35

Management Comments
Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “Third quarter results demonstrate the resilience of our business model in the context of dynamic macro cross currents, notably the normalization of demand trends alongside industry-wide inflation, supply chain and logistics challenges. We achieved record third quarter results against this backdrop with revenue growth of 4% and Adjusted EPS growth of 17%, and we remain on pace to achieve another year of double-digit Adjusted EPS growth in 2021. We are navigating the current environment by delivering on our near-term objectives while strengthening our foundation in support of sustainable long-term growth."

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “Our growth algorithm is based on strong base business fundamentals augmented with strategic acquisitions. We are pleased to see both elements of our strategy performing well. Our market share continues to trend in a positive trajectory, and we are investing in our future while maintaining strong levels of profitability. Our acquisition strategy is also yielding strong results: Findus Switzerland is performing well since being integrated earlier this year, and we are encouraged by the recent performance of Fortenova’s frozen food business which is expected to be a meaningful growth driver in the years to come. Our brands are in great health, we have a strong balance sheet, and we are actively pursuing opportunities to grow our portfolio.”

Third Quarter of 2021 results compared to the Third Quarter of 2020
• Revenue increased 4.0% to €599 million. Organic revenue decline of 1.4% was comprised of a 1.0% decline in volume/mix and a 0.4% decline in price.
• Gross profit decreased 4.3% to €168 million. Gross margin decreased 240 basis points to 28.0%, driven by higher raw material costs and the inclusion of the Findus Switzerland acquisition whose gross margins are below that of the base business.
• Adjusted operating expenses decreased 14% to €72 million, reflecting comparable Advertising & Promotion spend versus the prior year and a decline in Indirect costs.
• Adjusted EBITDA increased 4% to €113 million and Adjusted Profit for the period increased 7% to €63 million due to the aforementioned factors.
• Adjusted EPS increased 17% to €0.35, reflecting growth in Adjusted Profit after tax and the cumulative effect of share repurchases conducted during the prior year. Reported EPS was unchanged at €0.29.

First Nine Months of 2021 results compared to the First Nine Months of 2020
• Revenue increased 2.4% to €1,903 million. Organic revenue decline of 1.3% was comprised of a 1.1% decline in volume/mix and a 0.2% decline in price.
• Adjusted Gross profit increased 2.0% to €566 million. Adjusted gross margin decreased 10 basis points to 29.8% driven by favorable product mix in the base business offset by the inclusion of the Findus Switzerland acquisition whose gross margins are below that of the base business.
• Adjusted operating expenses decreased 6% to €243 million, reflecting comparable Advertising & Promotion spend versus the prior year and a decline in Indirect costs.
• Adjusted EBITDA increased 8% to €374 million and Adjusted Profit for the period increased 12% to €219 million due to the aforementioned factors.
• Adjusted EPS increased 26% to €1.23, reflecting growth in Adjusted Profit after tax and the cumulative effect of share repurchases conducted during the prior year. Reported EPS increased 1% to €0.85.

2021 Guidance
The Company is reiterating Adjusted EPS guidance of €1.50 to €1.55, representing 11-15% growth, despite the incremental inclusion of an expected seasonal operating loss from Fortenova Frozen during the remaining three months of 2021. Guidance assumes a modest organic revenue decline for the full year.

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 4, 2021 at 12:30 p.m. GMT (8:30 a.m. Eastern Standard Time). A live audio webcast of the conference call and an accompanying presentation will both be available at Nomad Foods’ website at www.nomadfoods.com under Investor Relations. A replay of the webcast will be available on the Company website for two weeks following the event. Additionally, participants in North America may access the live call by dialing +1-646-876-9923 and international participants may dial +44-330-088-5830; the passcode is 94539458359#.

Nomad Foods Contacts
Investor Relations Contact
Taposh Bari, CFA
Nomad Foods Limited
+1-718-290-7950

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

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.

Non-IFRS Financial Information
Nomad Foods is presenting Adjusted and Organic financial information, which is considered non-IFRS financial information, for the three and nine months ended September 30, 2021 and for comparative purposes, the three and nine months ended September 30, 2020.

Adjusted financial information for the three and nine months ended September 30, 2021 and 2020 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.

EBITDA is profit or loss for the period before taxation, net financing costs, depreciation and amortization. Adjusted EBITDA is EBITDA adjusted to exclude, when they occur, the impacts of exited markets, acquisition purchase price adjustments, chart of account (“CoA”) alignments 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, chart of account (“CoA”) alignments 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, chart of account (“CoA”) alignments 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 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 nine months ended September 30, 2021 and 2020 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, chart of account (“CoA”) alignments, trading day impacts or any other event that artificially impacts the comparability of our results.

Adjusted Gross Profit and adjusted gross margin exclude acquisition purchase price adjustments and other unusual or non-recurring items within cost of goods sold.

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.