Nomad Foods Reports Third Quarter 2021 Financial Results

FELTHAM, England, Nov. 4, 2021 /PRNewswire/ -- Nomad Foods Limited (NYSE: NOMD), today 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% to €599 million
• Organic revenue decline of 1.4%
• Reported Profit for the period of €52 million
• Adjusted EBITDA increased 4% to €113 million
• Adjusted EPS increased 17% to €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% and Adjusted EPS growth of 17%, 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% to €599 million. Organic revenue decline of 1.4% was comprised of a 1.0% decline in volume/mix and a 0.4% decline in price.
• Gross profit decreased 4.3% to €168 million. Gross margin decreased 240 basis points to 28.0%, 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% to €72 million, reflecting comparable Advertising & Promotion spend versus the prior year and a decline in Indirect costs.
• Adjusted EBITDA increased 4% to €113 million and Adjusted Profit for the period increased 7% to €63 million due to the aforementioned factors.
• Adjusted EPS increased 17% to €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 €0.29.

First Nine Months of 2021 results compared to the First Nine Months of 2020

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

2021 Guidance
The Company is reiterating Adjusted EPS guidance of €1.50 to €1.55, representing 11-15% 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.

Conference Call and Webcast
The Company will host a conference call with members of the executive management team to discuss these results today, Thursday, November 4, 2021 at 12:30 p.m. GMT (8:30 a.m. Eastern Standard Time). A live audio webcast of the conference call and an accompanying presentation will both be available at Nomad Foods' website at www.nomadfoods.com under Investor Relations. A replay of the webcast will be available on the Company website for two weeks following the event. Additionally, participants in North America may access the live call by dialing +1-646-876-9923 and international participants may dial +44-330-088-5830; the passcode is 94539458359#.

Nomad Foods Contacts
Investor Relations Contact
Taposh Bari, CFA
Nomad Foods Limited
+1-718-290-7950

Media Contact
Felipe Ucros
Gladstone Place Partners
+1-212-230-5930

About Nomad Foods
Nomad Foods (NYSE: NOMD) is Europe's leading frozen food company. The Company's portfolio of iconic brands, which includes Birds Eye, Findus, iglo, Ledo and Frikom, have been a part of consumers' meals for generations, standing for great tasting food that is convenient, high quality and nutritious. Nomad Foods is headquartered in the United Kingdom. Additional information may be found at www.nomadfoods.com.

Non-IFRS Financial Information
Nomad Foods is presenting Adjusted and Organic financial information, which is considered non-IFRS financial information, for the three and nine months ended September 30, 2021 and for comparative purposes, the three and nine months ended September 30, 2020.

Adjusted financial information for the three and nine months ended September 30, 2021 and 2020 presented in this press release reflects the historical reported financial statements of Nomad Foods, adjusted primarily for share based payment expenses and related employer payroll taxes, non-operating M&A related costs, exceptional items and foreign currency translation charges/gains.

EBITDA is profit or loss for the period before taxation, net financing costs, depreciation and amortization. Adjusted EBITDA is EBITDA adjusted to exclude, when they occur, the impacts of exited markets, acquisition purchase price adjustments, chart of account ("CoA") alignments and exceptional items such as restructuring charges, goodwill and intangible asset impairment charges and other unusual or non-recurring items. In addition, we exclude other adjustments such as the impact of share based payment expenses and related employer payroll taxes, and non-operating M&A related costs, because we do not believe they are indicative of our normal operating costs, can vary significantly in amount and frequency, and are unrelated to our underlying operating performance. The Company believes Adjusted EBITDA provides important comparability of underlying operating results, allowing investors and management to assess operating performance on a consistent basis.

Adjusted EBITDA should not be considered as an alternative to profit/(loss) for the period, determined in accordance with IFRS, as an indicator of the Company's operating performance.

Adjusted Profit for the period is defined as profit for the period excluding, when they occur, the impacts of exited markets, acquisition purchase price adjustments, chart of account ("CoA") alignments and exceptional items such as restructuring charges, goodwill and intangible asset impairment charges, unissued preferred share dividends, as well as certain other items considered unusual or non-recurring in nature. In addition, we exclude other adjustments such as the impact of share based payment expenses and related employer payroll taxes, and non-operating M&A related costs, because we do not believe they are indicative of our normal operating costs, can vary significantly in amount and frequency, and are unrelated to our underlying operating performance. The Company believes Adjusted Profit after tax provides important comparability of underlying operating results, allowing investors and management to assess operating performance on a consistent basis.

Adjusted EPS is defined as basic earnings per share excluding, when they occur, the impacts of exited markets, acquisition purchase price adjustments, chart of account ("CoA") alignments and exceptional items such as restructuring charges, goodwill and intangible asset impairment charges, unissued preferred share dividends, as well as certain other items considered unusual or non-recurring in nature. In addition, we exclude other adjustments such as the impact of share based payment expenses and related employer payroll taxes, and non-operating M&A related costs, because we do not believe they are indicative of our normal operating costs, can vary significantly in amount and frequency, and are unrelated to our underlying operating performance. The Company believes Adjusted EPS provides important comparability of underlying operating results, allowing investors and management to assess operating performance on a consistent basis.

Organic revenue growth/(decline) is an adjusted measurement of our operating results. The comparison for the three and nine months ended September 30, 2021 and 2020 presented in this press release takes into consideration only those activities that were in effect during both time periods. Organic revenue growth/(decline) reflects reported revenue adjusted for currency translation and non-comparable trading items such as expansion, acquisitions, disposals, closures, chart of account ("CoA") alignments, trading day impacts or any other event that artificially impacts the comparability of our results.

Adjusted Gross Profit and adjusted gross margin exclude acquisition purchase price adjustments and other unusual or non-recurring items within cost of goods sold.

Adjustments for currency translation are calculated by translating data of the current and comparative periods using a budget foreign exchange rate that is set once a year as part of the Company's internal annual forecast process.

Adjusted and Organic non-IFRS financial information should be read in conjunction with the unaudited financial statements of Nomad Foods included in this press release as well as the historical financial statements of the Company previously filed with the SEC.

Nomad Foods believe its non-IFRS financial measures provide an important additional measure with which to monitor and evaluate the Company's ongoing financial results, as well as to reflect its acquisitions. Nomad Foods' calculation of these financial measures may be different from the calculations used by other companies and comparability may therefore be limited. The Adjusted and Organic financial information presented herein is based upon certain assumptions that Nomad Foods believes to be reasonable and is presented for informational purposes only and is not necessarily indicative of any anticipated financial position or future results of operations that the Company will experience. You should not consider the Company's non-IFRS financial measures an alternative or substitute for the Company's reported results and are cautioned not to place undue reliance on these results and information as they may not be representative of our actual or future results as a Company.

Please see on pages 8 to 13, the non-IFRS reconciliation tables attached hereto and the schedules accompanying this release for an explanation and reconciliation of the Adjusted and Organic financial information to the most directly comparable IFRS measure.

Forward-Looking Statements

Forward-Looking Statements and Disclaimers

Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts, including the Company's expectations regarding its future operating and financial performance, including its reiterated guidance with respect to Adjusted EPS and organic revenue growth.

These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including: (i) the impact of the COVID-19 pandemic on the Company's business, suppliers, co-manufacturers, distributors, transportation or logistics providers, customers, consumers and employees; (ii) disruptions or inefficiencies in the Company's operations or supply chain, including as a result of the COVID-19 pandemic, and the Company's ability to maintain the health and safety of its workforce; (iii) the duration, spread and intensity of the pandemic and related government restrictions and other government responses; (iv) the Company's ability to successfully identify suitable acquisition targets and adequately evaluate the potential performance of such acquisition targets; (v) the Company's ability to successfully implement its strategies (including its M&A strategy) and strategic initiatives and to recognize the anticipated benefits of such strategic initiatives; (vi) the Company's ability to accurately predict the performance of its Green Cuisine brand and its impact on the Company's growth; (vii) the Company's ability to effectively compete in its markets, including the ability of Green Cuisine to effectively compete in Continental Europe; (viii) changes in consumer preferences, such as meat substitutes, and the Company's failure to anticipate and respond to such changes or to successfully develop and renovate products; (ix) the effects of reputational damage from unsafe or poor quality food products; (x) the risk that securities markets will react negatively to actions by the Company; (xi) the adequacy of the Company's cash resources to achieve its anticipated growth agenda; (xii) increases in operating costs, including labor costs, and the Company's ability to manage its cost structure; (xiii) fluctuations in the availability of food ingredients and packaging materials that the Company uses in its products; (xiv) the Company's ability to effectively mitigate factors that negatively impact its supply of raw materials; (xv) the Company's ability to protect its brand names and trademarks; (xvi) the effects of Brexit and the new trade and cooperation agreement, as well as the potential adverse impact of Brexit on currency exchange rates, global economic conditions and cross-border agreements that affect the Company's business; (xvii) loss of the Company's financial arrangements with respect to receivables factoring; (xviii) the loss of any of the Company's major customers or a decrease in demand for its products; (xix) economic conditions that may affect the Company's future performance including exchange rate fluctuations; (xx) the Company's ability to successfully interpret and respond to key industry trends and to realize the expected benefits of its responsive actions; (xxi) the Company's failure to comply with, and liabilities related to, environmental, health and safety laws and regulations; (xxii) changes in applicable laws or regulations; (xxiii) the trading price of the Company's ordinary shares, which may be positively or negatively impacted by the share repurchase program, market and economic conditions, the availability of shares, the Company's financial performance or determinations following the date of this announcement in order to use the Company's funds for other purposes; and (xxiv) the other risks and uncertainties disclosed in the Company's public filings and any other public disclosures by the Company. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

No Offer or Solicitation

This release and referenced conference call is provided for informational purposes only and does not constitute an offer to sell, or an invitation to subscribe for, purchase or exchange, any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this press release in any jurisdiction in contravention of applicable law.

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.

SOURCE Nomad Foods Limited