Nomad Foods: Reports Third 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 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 percent to EUR 599 million
• Organic revenue decline of 1.4 percent
• Reported Profit for the period of EUR 52 million
• Adjusted Ebitda increased 4 percent to EUR 113 million
• Adjusted EPS increased 17 percent to EUR 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 percent and Adjusted EPS growth of 17 percent, 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 percent to EUR 599 million. Organic revenue decline of 1.4 percent was comprised of a 1.0 percent decline in volume/mix and a 0.4 percent decline in price.
• Gross profit decreased 4.3 percent to EUR 168 million. Gross margin decreased 240 basis points to 28.0 percent, 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 percent to EUR 72 million, reflecting comparable Advertising +amp; Promotion spend versus the prior year and a decline in Indirect costs.
• Adjusted Ebitda increased 4 percent to EUR 113 million and Adjusted Profit for the period increased 7 percent to EUR 63 million due to the aforementioned factors.
• Adjusted EPS increased 17 percent to EUR 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 EUR 0.29.

First Nine Months of 2021 results compared to 9M-2020

• Revenue increased 2.4 percent to EUR 1,903 million. Organic revenue decline of 1.3 percent was comprised of a 1.1 percent decline in volume/mix and a 0.2 percent decline in price.
• Adjusted Gross profit increased 2.0 percent to EUR 566 million. Adjusted gross margin decreased 10 basis points to 29.8 percent driven by favourable 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 percent to EUR 243 million, reflecting comparable Advertising +amp; Promotion spend versus the prior year and a decline in Indirect costs.
• Adjusted Ebitda increased 8 percent to EUR 374 million and Adjusted Profit for the period increased 12 percent to EUR 219 million due to the aforementioned factors.
• Adjusted EPS increased 26 percent to EUR 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 percent to EUR 0.85.

2021 Guidance

The Company is reiterating Adjusted EPS guidance of EUR 1.50 to EUR 1.55, representing 11-15 percent 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.