Feltham / UK. (nom) Nomad Foods Limited (Goodfella’s Pizza, Iglo, Findus and other brands) reported financial results for the three and nine month periods ended September 30, 2020. Key operating highlights and financial performance for the third quarter of 2020, when compared to the third quarter 2019, include:
- Reported revenue increased 6.7 percent to EUR 576 million
- Organic revenue growth of 5.4 percent
- Reported Profit for the period of EUR 56 million
- Adjusted Ebitda increased 13 percent to EUR 109 million
- Adjusted EPS increased 20 percent to EUR 0.30
Management Comments
Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, «Consumer demand remained elevated during the third quarter, and our performance continues to be led by our branded retail business. Frozen food is one of the fastest growing categories in Europe which is a testament to the resilience of the category even as offices, schools and restaurants gradually reopen. As the duration of this pandemic extends into its eight month, consumers are recognizing the benefits of our portfolio, forming new habits and repurchasing with greater frequency. We remain agile and prepared for the possibility of another demand spike as the number of new Covid-19 cases rises across Europe and local governments introduce new restrictions. While navigating the Covid-19 pandemic is a top near-term priority, we are equally focused on ensuring sustained growth beyond 2020. We look forward to outlining these initiatives at our Investor Day to be held virtually next week.»
Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, «Our business continues to perform well throughout the challenges of the Covid-19 pandemic as consumers recognize the value of frozen food and our brands in particular. Our financial results, including strong revenue and Adjusted EPS growth, strengthen our foundation for next year and years to come. Furthermore, year-to-date we have returned nearly USD 600 million of capital to shareholders – nearly USD 500 million through a successful tender offer in the third quarter and the balance through programmatic purchases. In doing so, we are optimizing our balance sheet while preserving financial flexibility to pursue our M+A strategy. We enter the fourth quarter with strong momentum, and we remain excited by Nomad’s near and long-term growth prospects.»
Third Quarter of 2020 results compared to the Third Quarter of 2019
- Revenue increased 6.7 percent to EUR 576 million. Organic revenue growth of 5.4 percent was comprised of 4.2 percent growth in volume/mix and 1.2 percent increase in price.
- Gross profit increased 10 percent to EUR 175 million. Gross margin increased 90 basis points to 30.4 percent as pricing, favorable mix and fixed cost leverage offset cost of goods inflation.
- Adjusted operating expenses increased 4 percent to EUR 83 million as growth in Indirect expenses was partially offset by a modest decline in Advertising and Promotion.
- Adjusted Ebitda increased 13 percent to EUR 109 million and Adjusted Profit after tax increased 20 percent to EUR 59 million due to the aforementioned factors.
- Adjusted EPS increased 20 percent to EUR 0.30, which includes the impact of a lower share count resulting from the repurchase of ordinary shares in the tender offer and otherwise during 2020. Reported EPS increased 45 percent to EUR 0.29.
First Nine Months of 2020 results compared to the First Nine Months of 2019
- Revenue increased 9.6 percent to EUR 1,858 million. Organic revenue growth of 8.4 percent was comprised of 6.7 percent growth in volume/mix and 1.7 percent increase in price.
- Gross profit increased 9 percent to EUR 555 million. Gross margin declined 20 basis points to 29.9 percent as pricing, promotional efficiencies and mix were more than offset by cost of goods inflation.
- Adjusted operating expenses increased 6 percent to EUR 260 million as double digit growth in Indirects was partially offset by a decline in Advertising and Promotion.
- Adjusted Ebitda increased 10 percent to EUR 347 million and Adjusted Profit after tax increased 13 percent to EUR 195 million due to the aforementioned factors.
- Adjusted EPS increased 8 percent to EUR 0.98 and Reported EPS increased 47 percent to EUR 0.84.
2020 Guidance
The Company is reiterating its 2020 Adjusted Ebitda guidance which is expected to be in excess of EUR 460 million. Adjusted EPS is now expected to be in excess of EUR 1.31 EPS, reflecting a lower share count assumption upon the completion of the tender offer in September 2020. Full year guidance continues to assume organic revenue growth at a high-single digit percentage range.
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