Nomad Foods: Reports Second Quarter 2021 Financial Results

Feltham / UK. (nom) Nomad Foods Limited (Goodfella’s Pizza, Iglo, Findus and other brands) reported financial results for the three and six month period ended June 30, 2021. Key operating highlights and financial performance for the second quarter 2021, when compared to the second quarter 2020, include:

  • Reported revenue decreased 1 percent to EUR 596 million
  • Organic revenue decline of 4.5 percent
  • Reported Profit for the period of EUR 51 million
  • Adjusted Ebitda increased 4 percent to EUR 123 million
  • Adjusted EPS increased 18 percent to EUR 0.40

Management Comments

Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, «We achieved strong results during the second quarter notwithstanding easing of restrictions across Europe and the anniversary of peak Covid-related demand. Second quarter 2021 Adjusted EPS of EUR 0.40 represents 18 percent growth versus 2020 and 22 percent on a two-year basis. Results were driven by improving market share trends, a recovering foodservice business, accretive allocation of capital and successfully navigating a dynamic inflationary backdrop. With more than half of the year behind us, we remain confident in achieving our 2021 guidance.»

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, «Second quarter results clearly demonstrate the power of our value creation model as resilient base business performance was complemented by accretion from the Findus Switzerland acquisition and the effect of last year’s share repurchases. We are eager to close on the acquisition of Fortenova’s Frozen Food Business Group, a transaction that is expected to result in 2021 Adjusted EPS in excess of USD 2.00 on a combined and annualized basis and set a new baseline for growth. We have exciting growth opportunities, both organically and inorganically, and the approval of a new share repurchase authorization provides added flexibility to enhance shareholder value while maintaining a reasonable leverage profile.»

Second Quarter of 2021 results compared to Q2-2020

  • Revenue decreased 1 percent to EUR 596 million. Organic revenue decline of 4.5 percent was comprised of a 4.4 percent decline in volume/mix and a 0.1 percent decline in price.
  • Gross profit increased 1 percent to EUR 184 million. Gross margin increased 50 basis points to 30.8 percent driven by productivity and transactional FX which more than offset dilution from the inclusion of the Findus Switzerland acquisition.
  • Adjusted operating expenses decreased 3 percent to EUR 77 million, reflecting growth in Advertising + Promotion and a decline in Indirect costs.
  • Adjusted Ebitda increased 4 percent to EUR 123 million and Adjusted Profit for the period increased 6 percent to EUR 72 million due to the aforementioned factors.
  • Adjusted EPS increased 18 percent to EUR 0.40, reflecting growth in Adjusted Profit after tax and the cumulative effect of share repurchases conducted during the prior year. Reported EPS decreased 9 percent to EUR 0.29.

First Six Months of 2021 results compared to H1-2020

  • Revenue increased 2 percent to EUR 1,303 million. Organic revenue decline of 1.2 percent was comprised of a 1.1 percent decline in volume/mix and a 0.1 percent decline in price.
  • Adjusted Gross profit increased 4.9 percent to EUR 399 million. Adjusted gross margin increased 90 basis points to 30.6 percent driven by productivity and transactional FX which more than offset dilution from the inclusion of the Findus Switzerland acquisition.
  • Adjusted operating expenses decreased 3 percent to EUR 172 million, reflecting comparable Advertising + Promotion spend versus the prior year and a decline in Indirect costs.
  • Adjusted Ebitda increased 9 percent to EUR 261 million and Adjusted Profit for the period increased 15 percent to EUR 155 million due to the aforementioned factors.
  • Adjusted EPS increased 30 percent to EUR 0.87, reflecting growth in Adjusted Profit after tax and the cumulative effect of share repurchases conducted during the prior year. Reported EPS increased 2 percent to EUR 0.56.

2021 Guidance

The Company is reiterating 2021 guidance. Revenue and Adjusted Ebitda are expected to grow approximately 3-5 percent and Adjusted EPS is expected to be approximately EUR 1.50 to EUR 1.55, representing 11-15 percent growth. Full year guidance assumes organic revenue growth of approximately 1-2 percent. Guidance does not yet include the pending acquisition of Fortenova’s Frozen Food Business Group, which is expected to close at the end of the third quarter of 2021.

New Share Repurchase Authorization

The Company’s Board of Directors has approved a new share repurchase authorization of up to USD 500 million. This new program replaces the previous authorization which was established in March 2020 and has been nearly exhausted.