TIDMNHL TIDMTTM
RNS Number : 2302X
Nomad Foods Limited
27 August 2015
NOMAD FOODS LIMITED ANNOUNCES FINANCIAL RESULTS FOR THE PERIOD
ENDED 30 JUNE 2015
Tortola, British Virgin Islands - 27 August 2015 - Nomad Foods
Limited ("Nomad Foods" or the "Company") (LSE: NHL), today issues
the following trading update for the period ended 30 June 2015.
Nomad Foods Limited acquired the Iglo Foods Group "Iglo Group"
on 1 June 2015 for approximately EUR2.6bn. As such, pro forma as
adjusted and reported information is being commented on below for
the 6 month period ended 30 June 2015. This information does not
reflect the Company's results for the half yearly period ending on
30 September 2015.
Reported Results Highlights:
-- EUR536m loss after tax in six months to 30 June 2015
primarily resulting from a non-cash founder shares valuation charge
(EUR493m), purchase accounting adjustments (EUR26m) and costs
associated with the acquisition of the Iglo Group (EUR22m).
-- Net leverage ratio as at 30 June 2015 was 3.5x following the
implementation of the new capital structure associated with the
acquisition of the Iglo Group. The net leverage ratio excludes the
$320 million (gross) of equity raised in July 2015.
Pro Forma As Adjusted Results Highlights:
Pro Forma As Adjusted results include actual Nomad Foods'
results for the 6 months ended 30 June 2015 (which already include
June 2015 results for the Iglo Group) and from 1 April 2014 through
30 June 2014 (Nomad Foods only being incorporated on 1 April 2014).
The Iglo Group results have been added for pro forma purposes for
the five months ended 31 May 2015 and for the 6 months ended 30
June 2014. Results have been adjusted for exceptional items in
addition to transaction-related items associated with Nomad Foods
acquisition of the Iglo Group on 1 June 2015.
-- Net Revenue decline year-on-year was (2.4)%. Excluding the
impact from currency exchange, the exit from Romania, Slovakia and
Turkey and 1 less trading day year-on-year like-for-like Net
Revenue decline was (4.9)%.
-- Gross margin was broadly flat despite higher promotional investment.
-- Six months to June 2015 pro forma As Adjusted EBITDA was
EUR142.9m, (1.1)% down year-on-year but pro forma As Adjusted
EBITDA margin increased 0.2% due to lower advertising and promotion
spend (compared to significant one-time strategic launch activity
in the comparable period) and FX benefit on translation of sterling
profits.
-- Pro forma As Adjusted EPS is EUR0.49 for six months to June
2015 and EUR0.50 for the comparable period.
-- Adjusted cash conversion ratio high at 87%.
Acquisition Highlights and Recent Developments
On 14 July 2015, Nomad Foods completed the private placement of
a total of 15,445,346 new ordinary shares of no par value raising
gross proceeds of approximately US$320 million before expenses. The
shares were issued at a price of US$20.75 per share. The proceeds
are intended for general purposes including potential future
acquisitions.
On 13 August 2015, Nomad Foods entered into an option agreement
with LionGem Sweden 1 AB ('the seller') under which Nomad Foods or
one of its subsidiaries shall be obliged, at the option of the
seller, to acquire Findus Sverige AB and its subsidiaries for
approximately GBP500 million. Through this transaction, Nomad Foods
will acquire Findus Group's businesses in Sweden, Norway, Finland,
Denmark, France, Spain and Belgium. These operations include the
intellectual property and commercialisation rights to the Findus,
Lutosa and La Cocinera brands in the respective markets.
Management Comments on Results
Stéfan Descheemaeker, Nomad Foods' Chief Executive Officer,
stated, "Overall, results were in line with our expectations at the
time of the acquisition, taking into account the difficult retail
environment in Iglo Group's core geographies. In response to market
conditions, we have selectively increased promotion levels to
remain relevant to value-seeking consumers whilst maintaining
profitability and cash generation through rigorous control of the
cost base. We have also continued to rejuvenate our portfolio via
the launch of the Breakfast Platform in Italy and the Wholegrain
Platform across all major markets. As we look to the future, we
believe Nomad is well positioned to take advantage of numerous
growth opportunities across Western Europe and globally, not only
within the frozen food category, but also within the broader
packaged food space."
Noam Gottesman, Nomad Foods' Co-Chairman and Founder, commented,
"Stéfan and his team have created a strong platform to lead the
consolidation in the fragmented global food sector. The Iglo
acquisition is performing as expected and we are excited about
other potential acquisitions opportunities that meet our criteria
of being market leaders in niche markets and having a long history
of strong free cash flow generation. As an example, we recently
entered into an agreement to acquire Findus, one of Europe's
largest frozen food and seafood companies with leading brands in
the Nordic region as well as Southern Europe. We remain dedicated
to improving the operational efficiencies within our existing
businesses which will lead to superior long-term value for
shareholders. The momentum we have achieved thus far in 2015 have
us well positioned to achieve meaningful long-term growth both
organically as well as through prudent and complementary M&A
opportunities."
Pro forma financial information
Pro forma As Adjusted financial information for Nomad Foods
Limited is presented for the combined results of Nomad Foods
Limited and the Iglo Group. All pro forma information is
unaudited.
The Group has adjusted the financial information in order to
provide meaningful pro forma results which includes the trading
history of the Iglo Group and eliminates one-off impacts.
The pro forma information has not been prepared in accordance
with the guidance and requirements of either Annex II of the PD
Regulation or Article 11 of Regulation S-X and therefore may not be
comparable to pro forma information prepared in accordance with
those standards.
Pro forma As Adjusted Profit and Loss (unaudited)
Six Months Ended 30 June 2015
Nomad Iglo
Foods Group
Limited results
for the for the
three five
months months
ended ended
30 June Nomad Foods Limited for the three 31 May Pro forma As Adjusted for the six
2015(1) months ended 31 March 2015(2) 2015(3) Adjustments(4) months ended 30 June 2015
all figures in
EURm EURm EURm EURm EURm EURm
-------- ----------------------------------- -------- ------------------------------------- --- -------------------------------------
Net Revenue
............ 102.8 - 640.3 - 743.1
Cost of sales
......... (94.5) - (417.9) 25.4 a) (487.0)
Gross
profit.........
. 8.3 - 222.4 25.4 256.1
Other
costs/income...
..... (367.5) (143.8) (109.5) 492.1 b) (128.7)
Operating profit
before
exceptional
items....... (359.2) (143.8) 112.9 517.5 127.4
Exceptional
items......... (20.9) (0.6) (84.3) 105.8 c) -
Operating profit
after
exceptional
items....... (380.1) (144.4) 28.6 623.3 127.4
Interest
income........ 10.2 - 2.0 (9.3) d) 2.9
Interest expense
and
other........ (16.6) - (97.2) 84.5 d) (29.3)
Foreign
exchange.......
. (4.5) - (20.5) 25.0 e) -
Net Financing
Costs....... (10.9) - (115.7) 100.2 (26.4)
Group
Profit/(Loss)
before
tax......... (391.0) (144.4) (87.1) 723.5 101.0
Taxation..... (0.7) - (40.9) 17.2 f) (24.4)
Profit/(Loss)
for the
period..... (391.7) (144.4) (128.0) 740.8 76.7
======== =================================== ======== ===================================== === =====================================
(MORE TO FOLLOW) Dow Jones Newswires
August 27, 2015 02:04 ET (06:04 GMT)
Earnings per Nomad Foods Limited for the six Pro forma As Adjusted for the six
Share months ended 30 June 2015(1) months ended 30 June 2015
Profit/(loss)
for the year (EUR 536.1) EUR 76.7
Weighted
Average Shares
Outstanding(5) 69,980,337 155,491,474
------------------------------------- ---------------------------------------
Income/(Loss)
per share (EUR 7.66) EUR 0.49
(1) Actual results for Nomad Foods Limited for the three months ended 30 June 2015 (i.e.,
3 months of Nomad Foods Limited and 1 month of Iglo Group).
(2) Actual results for Nomad Foods Limited for the three months ended 31 March 2015 (i.e.
pre-acquisition).
(3) Actual results for Iglo Group for the period from 1 January 2015 through 31 May 2015.
(4a) Adjustment to add back the non-cash inventory fair value uplift recorded as part of purchase
price accounting in June 2015.
(4b) Pro forma adjustment to add back the non-cash charge related to the fair value of founder
preferred share dividends and deduct the income from the reversal of the warrant redemption
liability. The Company intends to settle the founder preferred dividends with equity and therefore
the liability has been classified as part of equity as of 1 June 2015 and accordingly no further
revaluations are expected. There are no longer any warrants outstanding as they were exercised
and accelerated in conjunction with the acquisition of Iglo Group.
(4c) Pro forma adjustment to remove Exceptional items which do not have a continuing impact
(see page 5).
(4d) Pro forma adjustments to eliminate non-cash intragroup interest, historical Iglo Group
non-cash intercompany interest and to reduce senior debt interest in order to reflect the
new debt structure and amount in place as at 1 June 2015.
(4e) Pro forma adjustment to remove non-cash foreign exchange translation charges.
(4f) Pro forma adjustment to add back the tax impact of the adjustments described above Group
profit/loss before income taxes and to reflect applicable effective tax rate and the resulting
pro forma as adjusted Group profit/loss before taxes.
(5) For both actual and pro forma EPS, weighted average shares outstanding includes Founder
Preferred Shares because they are convertible into ordinary shares at the holder's option.
Pro forma weighted average shares assumes all shares issued prior to 1 June 2015 were issued
on 1 April 2014. All shares issued subsequent to 1 June 2015 are weighted according to their
actual issuance date.
Pro forma As Adjusted Profit and Loss (unaudited)
Six Months
Ended 30 June
2014
Iglo
Group
results
for the
six
months
ended
Nomad Foods Limited for the six 30 June Pro forma As Adjusted for the six
months ended 30 June 2014 2014 Adjustments(1) months ended 30 June 2014
all figures in
EURm EURm EURm EURm EURm
-------------------------------- -------- -------------------------------- --- -------------------------------------
Net Revenue
............ - 761.2 - 761.2
Cost of sales
......... - (496.7) (0.6) a) (497.3)
Gross
profit........
.. - 264.5 (0.6) 263.9
Other
costs/income..
...... (22.5) (134.3) 22.4 b) (134.4)
Operating
profit before
exceptional
items....... (22.5) 130.2 21.8 129.5
Exceptional
items......... - (11.4) 11.4 c) -
Operating
profit after
exceptional
items....... (22.5) 118.8 33.2 129.5
Interest
income........ - 3.4 - 3.4
Interest
expense and
other........ - (127.7) 98.4 d) (29.3)
Foreign
exchange......
.. - (9.7) 9.7 e) -
Net Financing
Costs....... - (134.0) 108.1 (25.9)
Group
Profit/(Loss)
before
tax......... (22.5) (15.2) 141.3 103.6
Taxation..... - (25.3) (1.0) f) (26.3)
Profit/(Loss)
for the
period..... (22.5) (40.5) 140.3 77.3
================================ ======== ================================ === =====================================
Earnings per Nomad Foods Limited for the six Pro forma As Adjusted for the six
Share months ended 30 June 2014 months ended 30 June 2014
Profit/(loss)
for the year (EUR 22.5) EUR 77.3
Weighted
Average Shares
Outstanding(2) 42,310,001 155,463,713
-------------------------------- -------------------------------------
Income/(Loss)
per share (EUR 0.53) EUR 0.50
(1a) Adjustments to include the incremental depreciation on property plant and equipment fair
value uplift recorded as part of purchase price accounting.
(1b) Pro forma adjustment to add back the non-cash charge related to the fair value of founder
preferred share dividends. The Company intends to settle the founder preferred dividends with
equity and therefore the liability has been classified as part of equity as of 1 June 2015
and accordingly no further revaluations are expected.
(1c) Pro forma adjustment to remove Exceptional items which do not have a continuing impact
(see page 5).
(1d) Pro forma adjustments to eliminate historical Iglo Group intercompany non-cash interest
and to reduce senior debt interest in order to reflect the new debt structure and amount in
place as at 1 June 2015.
(1e) Pro forma adjustment to remove non-cash foreign exchange translation charges.
(1f) Pro forma adjustment to add back the tax impact of the adjustments described above Group
profit/loss before income taxes and to reflect applicable effective tax rate and the resulting
pro forma as adjusted Group profit/loss before taxes.
(2) For both actual and pro forma EPS, weighted average shares outstanding includes Founder
Preferred Shares because they are convertible into ordinary shares at the holder's option.
Pro forma weighted average shares assumes all shares issued prior to 1 June 2015 were issued
on 1 April 2014. All shares issued subsequent to 1 June 2015 are weighted according to their
actual issuance date.
EBITDA and Adjusted EBITDA (unaudited)
Six Months Ended 30 June 2015
Iglo Group results
Nomad Foods Limited for the three Nomad Foods Limited for the three for the five months Pro forma As Adjusted for the six months
months ended 30 June 2015 months ended 31 March 2015 ended 31 May 2015 Adjustments ended 30 June 2015
all figures
in EURm EURm EURm EURm EURm EURm
----------------------------------- ----------------------------------- --------------------- ----------------------- --------------------------------------------
Group
Profit/(Loss)
before
(MORE TO FOLLOW) Dow Jones Newswires
August 27, 2015 02:04 ET (06:04 GMT)
tax......... (EUR 391.0) (EUR 144.4) (EUR 87.1) EUR 723.5 EUR 101.0
Interest.....
.... 10.9 - 115.7 (100.2) 26.4
Depreciation.
........ 2.1 - 11.3 0.6 14.0
Amortization.
........ 0.3 - 1.2 - 1.5
----------------------------------- ----------------------------------- --------------------- ----------------------- --------------------------------------------
EBITDA (EUR 377.7) (EUR 144.4) EUR 41.1 EUR 623.9 EUR 142.9
Exceptional
items..... 20.9 0.6 84.3 (105.8) -
Transaction
related costs 20.9 0.6 3.8 (25.3) -
Adjustment to
fair value
intangible
assets - - 55.0 (55.0) -
Costs related
to long-term
management
incentive
plans - - 22.9 (22.9) -
Investigation
of strategic
opportunities
and other
items - - 1.3 (1.3) -
Cisterna fire
net costs - - 1.3 (1.3) -
Adjusted
EBITDA..... (EUR 356.8) (EUR 143.8) EUR 125.4 EUR 518.1 EUR 142.9
=================================== =================================== ===================== ======================= ============================================
EBITDA and Adjusted EBITDA (unaudited)
Six Months
Ended 30 June
2014
Iglo Group results for the
Nomad Foods Limited for the six months ended 30 June Pro forma As Adjusted for the six
six months ended 30 June 2014 2014 Adjustments months ended 30 June 2014
all figures
in EURm EURm EURm EURm EURm
------------------------------ ----------------------------- ------------------------------ ----------------------------------
Group
Profit/(Loss)
before
tax......... (EUR 22.5) (EUR 15.2) EUR 141.3 EUR 103.6
Interest.....
.... - 134.0 (108.1) 25.9
Depreciation.
........ - 12.0 0.6 12.6
Amortization.
........ - 2.4 - 2.4
------------------------------ ----------------------------- ------------------------------ ----------------------------------
EBITDA (EUR 22.5) EUR 133.2 EUR 33.8 EUR 144.5
Exceptional
items..... - 11.4 (11.4) -
Costs related
to long-term
management
incentive
plans - 7.1 (7.1) -
Investigation
of strategic
opportunities
and other
items - 3.2 (3.2) -
Other
restructuring
costs - 1.1 (1.1) -
Adjusted
EBITDA..... (EUR 22.5) EUR 144.6 EUR 22.4 EUR 144.5
============================== ============================= ============================== ==================================
Balance Sheet as at 30 June 2015 (unaudited)
Nomad Foods
Group as at
all figures in EURm 30 June 2015
---------------------------------- --------------
Non-current assets
Intangible assets 2,685.7
Property, plant and equipment 269.2
Deferred tax assets 47.3
Total non-current assets 3,002.2
---------------------------------- --------------
Current assets
Inventories 212.3
Trade and other receivables 35.3
Deferred borrowing costs 3.1
Derivative Financial Instruments 5.5
Cash and cash equivalents 608.0
---------------------------------- --------------
Total current assets 864.2
---------------------------------- --------------
Total assets 3,866.4
---------------------------------- --------------
Current liabilities
Bank overdrafts 478.8
Trade and other payables 298.4
Derivative financial instruments 2.9
Current tax payable 17.3
Provisions 25.7
---------------------------------- --------------
Total current liabilities 823.1
Non-current liabilities
Loans and borrowings 1,183.5
Employee benefits 110.0
Deferred tax liabilities 307.5
----------------------------------
Total non-current liabilities 1,601.0
---------------------------------- --------------
Total liabilities 2,424.1
---------------------------------- --------------
Net assets 1,442.4
---------------------------------- --------------
Deficit attributable to
equity holders
Capital reserve 1,367.8
Founder Preferred Share
Dividend reserve 531.5
Merger reserve 0.9
Translation reserve 88.9
Cash flow hedging reserve (3.2)
Accumulated deficit (543.5)
Total equity 1,442.4
---------------------------------- --------------
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 expectations regarding (i) the
Company's ability to expand its presence in the frozen foods
market; (ii) completion of successful acquisitions in same and
adjacent categories, including the Findus acquisition; (iii) the
reduction in the Iglo Group's debt levels; (iv) the future
operating and financial performance of the Company; and (v) the
success of the unified Findus brand. 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) economic
conditions, competition and other risks that may affect the
Company's future performance, (ii) the risk that securities markets
will react negatively to actions by the Company; (iii) the ability
to recognize the anticipated benefits of the Company to take
advantage of strategic opportunities; (iv) the successful
completion of strategic acquisitions, including the Findus
acquisition; (v) the limited liquidity and trading of the Company's
securities; (vi) changes in applicable laws or regulations; and
(vii) the other risks and uncertainties disclosed in the Company's
public filings and any other public disclosures by the Company or
Iglo Group. 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, neither the Company nor Iglo Group undertake any
obligation to update or revise publicly any forward-looking
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