Feltham / UK. (nom) Nomad Foods Limited (Goodfella’s Pizza, Iglo, Findus and other brands) reported financial results for the three and six month periods ended June 30, 2020. Key operating highlights and financial performance for the second quarter of 2020, when compared to the second quarter 2019, include:
- Reported revenue increased 11.4 percent to EUR 599 million
- Organic revenue growth of 12.3 percent
- Reported Profit for the period of EUR 63 million
- Adjusted Ebitda increased 21 percent to EUR 119 million
- Adjusted EPS increased 26 percent to EUR 0.34
Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, «We experienced continued robust demand throughout the second quarter, even as restrictions were relaxed across Europe beginning in early May. Frozen food has proven to be one of the most durable consumer categories throughout the Covid-19 pandemic, a testament to its role in offering families quick and nutritious meal solutions at home. These are values which we believe will transcend beyond this acute period and appeal to a broader set of consumers in a post-Covid-19 world. As Europe’s leading frozen food company, we believe Nomad Foods is uniquely positioned with the strategy, resources and execution discipline to accelerate growth and drive sustained value creation for our stakeholders.»
Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, «We are pleased with our strong first half 2020 performance and now expect that second half organic revenue growth will remain elevated. This leads us to raise our guidance while also enabling us to accelerate strategic investments to convert the unprecedented adoption of frozen food and trial of our brands into permanent consumption behavior.»
Second Quarter of 2020 results compared to Q2-2019
- Revenue increased 11.4 percent to EUR 599 million. Organic revenue growth of 12.3 percent was comprised of 9.9 percent growth in volume/mix and 2.4 percent increase in price.
- Gross profit increased 13 percent to EUR 181 million. Gross margin increased 50 basis points to 30.3 percent as reduced promotions, fixed cost leverage and favorable mix offset cost of goods inflation.
- Adjusted operating expenses increased 1 percent to EUR 79 million as growth in Indirect expenses was offset by a double-digit decline in Advertising + Promotion.
- Adjusted Ebitda increased 21 percent to EUR 119 million and Adjusted Profit after tax increased 29 percent to EUR 68 million due to the aforementioned factors.
- Adjusted EPS increased 26 percent to EUR 0.34, which includes the impact of a lower share count resulting from the repurchase of ordinary shares during the first half of 2020. Reported EPS increased 33 percent to EUR 0.32.
First Six Months of 2020 results compared to H1-2019
- Revenue increased 10.9 percent to EUR 1,282 million. Organic revenue growth of 9.8 percent was comprised of 7.9 percent growth in volume/mix and 1.9 percent increase in price.
- Gross profit increased 8 percent to EUR 380 million. Gross margin declined 70 basis points to 29.7 percent as pricing, promotional efficiencies and mix were more than offset by cost of goods inflation.
- Adjusted operating expenses increased 7 percent to EUR 176 million as double digit growth in Indirects was offset by a decline in Advertising + Promotion.
- Adjusted Ebitda increased 8 percent to EUR 239 million and Adjusted Profit after tax increased 10 percent to EUR 135 million due to the aforementioned factors.
- Adjusted EPS increased 2 percent to EUR 0.67 and Reported EPS increased 49 percent to EUR 0.55.
The Company is raising 2020 guidance, which now includes approximately EUR 10 million of incremental strategic investments to fuel brand building activity, drive targeted retention of new consumers, and further accelerate the growth of Green Cuisine.
2020 Adjusted Ebitda is now expected to be in excess of EUR 460 million. Adjusted EPS, which does not reflect the potential outcome of the proposed tender offer, is now expected to be in excess of EUR 1.27 EPS. Full year guidance now assumes organic revenue growth at a high-single digit percentage range versus the prior expectation of mid-single digit organic revenue growth.