Nomad Foods: Reports Q1-2020 Financial Results

Feltham / UK. (nom) Nomad Foods Limited (Goodfella’s Pizza, Iglo, Findus and other brands) reported reported financial results for the three month period ended March 31, 2020. Key operating highlights and financial performance for the first quarter 2020, when compared to the first quarter 2019, include:

  • Reported revenue increased 10.5 percent to EUR 683 million
  • Organic revenue growth of 7.7 percent
  • Reported Profit for the period of EUR 47 million
  • Adjusted Ebitda of EUR 120 million
  • Adjusted EPS of EUR 0.33

Management Comments

Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, «First quarter revenues and earnings were significantly ahead of our expectations due to the unprecedented level of consumer demand for frozen food driven by the Covid-19 pandemic. This change in consumer behavior, which began in early March, has continued into the second quarter with in-home consumption the most meaningful driver. Our organization has collectively risen to the challenge by ensuring the continuous supply of our products and brands throughout this crisis while prioritizing the health and safety of our employees.»

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, «As Europe’s leading frozen food company, we are honored and humbled to serve our communities during this time of need. Our business model and supply chain are demonstrating extreme resilience as we all adapt to the current situation. As consumers eat more meals at home and gravitate towards brands they trust, we are addressing a growing need for quality, convenient, and reliable products. In addition, our financial and liquidity profiles have never been stronger, providing the flexibility to opportunistically repurchase shares during the first quarter of 2020.»

Sir Martin E. Franklin, Nomad Foods’ Co-Chairman and Founder, added, «Nomad Foods has distinguished itself as a leader in the packaged foods sector with 13 consecutive quarters of organic revenue growth. Further, as a frozen food pure play, our company is uniquely positioned to service the extraordinary demand for food at home throughout this crisis. Noam and I are proud of the team’s effort and execution, especially these past few months, and are confident that we will emerge from this pandemic with an even stronger commercial foundation.»

First Quarter of 2020 results compared to the First Quarter of 2019

  • Revenue increased 10.5 percent to EUR 683 million. Organic revenue growth of 7.7 percent was comprised of 1.4 percent growth in price and a 6.3 percent increase in volume/mix.
  • Gross profit increased 4 percent to EUR 199 million. Gross margin declined 180 basis points to 29.1 percent as pricing, promotional efficiencies and mix were more than offset by cost of goods inflation.
  • Adjusted operating expenses increased 14 percent to EUR 97 million reflecting double-digit growth in both Advertising + Promotion and Indirect expenses as a result of phasing.
  • Adjusted Ebitda decreased 2 percent to EUR 120 million due to the aforementioned factors.
  • Adjusted Profit after tax decreased 5 percent to EUR 68 million, reflecting Adjusted Ebitda decline and higher finance costs.
  • Adjusted EPS decreased 18 percent to EUR 0.33, which includes the impact of the increased share count resulting from the public offering of ordinary shares in the first quarter of 2019. Reported EPS increased 77 percent to EUR 0.23.

2020 Guidance

The Company is raising 2020 guidance and now expects Adjusted Ebitda of approximately EUR 450 to EUR 460 million versus the prior expectation of approximately EUR 440 to EUR 445 million. Adjusted EPS is now expected to be approximately EUR 1.24 to EUR 1.27 per share versus the prior expectation of approximately EUR 1.19 to EUR 1.21, reflecting a higher Adjusted Ebitda outlook and a lower share count as a result of recent share repurchase activity. Full year guidance now assumes organic revenue growth at a mid-single digit percentage range versus the prior expectation of low-single digit organic revenue growth.