UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________
FORM 6-K
_______________________________________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
_______________________________________________
For the month of February 2024
Commission File Number: 001-37669
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Nomad Foods Limited
(Translation of registrant’s name in English)
_______________________________________________
No. 1 New Square
Bedfont Lakes Business Park
Feltham, Middlesex TW14 8HA
+ (44) 208 918 3200
(Address of Principal Executive Offices)
_______________________________________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Financial Results
On February 29, 2024, Nomad Foods Limited (the “Company”) issued a press release announcing its financial results for the three and twelve month periods ended December 31, 2023. The press release is furnished as Exhibit 99.1 to this Report on Form 6-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| NOMAD FOODS LIMITED |
| |
| By: | | /s/ Samy Zekhout |
| Name: | | Samy Zekhout |
| Title: | | Chief Financial Officer |
Dated: February 29, 2024
Exhibit Index
| | | | | | | | |
Exhibit
Number | | Exhibit Title |
| |
| | Press Release issued by Nomad Foods Limited on February 29, 2024 relating to the Company’s financial results for the three and twelve month periods ended December 31, 2023. |
| |
Nomad Foods Reports Fourth Quarter and Full Year 2023 Financial Results
Delivers record-high net sales and Adjusted EBITDA; Full year Adjusted EPS of €1.61
Affirms strong 2024 financial guidance
FELTHAM, England - February 29, 2024 - Nomad Foods Limited (NYSE: NOMD) (the "Company" or "Nomad Foods"), today reported financial results for the three and twelve-month periods ended December 31, 2023.
The Company finished the year on excellent footing and given the ongoing sequential improvement in its monthly trends, the business is on track to return to positive volume growth in 2024.
Key operating highlights and financial performance for the fourth quarter 2023, when compared to the fourth quarter 2022, include:
•Reported revenue increased 1.4% to €761 million
•Organic revenue growth of 1.9%
•Adjusted EBITDA up 3.2% to €117 million
•Adjusted EPS of €0.32
Key operating highlights and financial performance for the full year 2023, when compared to the full year 2022, include:
•Reported revenue increased 3.6% to €3.0 billion
•Organic revenue growth of 4.9%
•Adjusted EBITDA increased 2.0% to €535 million
•Adjusted EPS of €1.61
•Adjusted free cash flow of €300 million, representing an adjusted free cash flow conversation of 109%
2024 full year guidance
For the full year 2024, the Company expects organic net revenue growth of 3%-4%, driven by positive volume/mix, adjusted EBITDA growth of 4%-6%, and adjusted EPS of €1.75-€1.80, implying growth of 9-12%. Based on USD/EUR exchange rate as of February 17th, this translates into 2024 adjusted EPS of $1.89-$1.95. The Company expects full year cash flow conversion in the range of 90% to 95%.
Management Comments
Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “I am proud of the dedication and resilience of the entire Nomad Foods team as we delivered another year of record-high sales and adjusted EBITDA.”
“Looking ahead to 2024, I am even more excited about our continued momentum as we return to our normal operating cadence. Frozen food consumption trends are rebounding, and we are well-positioned to deliver attractive organic growth as we sharpen our innovation focus and raise our marketing and brand investments. We are elevating our productivity agenda and aggressively managing costs, which, coupled with our effective capital allocation, positions us to generate stronger bottom-line growth and superior shareholder returns over the long-term.”
Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “We are delighted to report a record financial performance ahead of our expectations, marking yet another milestone in our continuous growth journey. We are delivering on our commitments to drive long-term value creation – sustainable organic growth, robust free cash flow generation and disciplined capital allocation. As we enter 2024, we are excited to be playing offence. Strong business momentum, increasing investments in our brands, impactful innovation, and a more normalized operating environment position us for success in 2024 and beyond.”
Fourth Quarter of 2023 results compared to the Fourth Quarter of 2022
•Revenue increased 1.4% to €761 million. Organic revenue increase of 1.9% was driven by a 7.5% increase in price offset by a 5.6% decline in volume/mix.
•Gross profit increased 8% to €208 million. Gross margin increased 160 basis points to 27.3% driven by a favorable comparison in the timing of pricing delivery in the prior year.
•Adjusted operating expenses increased 14% to €117 million due to increased A&P investment in the business.
•Adjusted EBITDA increased by 3.2% to €117 million and Adjusted Profit after tax decreased 9% to €52 million due to higher interest charges.
•Adjusted EPS decreased 3.0% to €0.32, reflecting the decrease in Adjusted Profit after tax due to higher interest charges. Reported EPS decreased 29% to €0.15.
Year Ended 2023 results compared to the Year Ended 2022
•Revenue increased 3.6% to €3,045 million. Organic revenue increase of 4.9% was driven by a 14.4% increase in price offset by a 9.5% decline in volume/mix.
•Gross profit increased 5% to €859 million. Gross margin increased 50 basis points to 28.2% linked to the successful recovery of higher input costs through pricing and a benefit in the cost of goods sold from the tail end of our cover positions from 2022.
•Adjusted operating expenses increased 10% to €419 million due to increased A&P investment in the business.
•Adjusted EBITDA increased 2% to €535 million and Adjusted Profit after tax decreased 6% to €275 million, due to higher interest charges.
•Adjusted EPS decreased 4.2% to €1.61, reflecting the decrease in Adjusted Profit after tax due to higher interest charges. Reported EPS decreased 21% to €1.13.
Conference Call and Webcast
The Company will host a conference call with members of the executive management team to discuss these results today, Thursday, February 29, 2023 at 1:30 p.m. GMT (8:30 a.m. Eastern Standard Time). To participate on the live call, listeners in North America may dial +1-877-451-6152 and international listeners may dial +1-201-389-0879. Additionally, there will be a presentation to accompany the conference call and the call is being webcast. Both can be accessed at the Nomad Foods website at www.nomadfoods.com under Investor Relations. A replay of the conference call will be available on the Company website for two weeks following the event and can be accessed by listeners in North America by dialing +1-844-512-2921 and by international listeners by dialing +1-412-317-6671; the replay pin number is 13744170.
Enquiries
Investor Relations Contact
Amit Sharma, Head of Investor Relations
amit.sharma@nomadfoods.com
Media Relations Contact
Jim Golden / Ed Hammond / Jack Kelleher
Collected Strategies
nomad-cs@collectedstrategies.com
+1-617-3124937; +1-917-3466841
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 twelve months ended December 31, 2023 and for comparative purposes, the three and twelve months ended December 31, 2022.
Adjusted financial information for the three and twelve months ended December 31, 2023 and 2022 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, acquisition purchase price adjustments, exceptional items and foreign currency exchange charges/gains.
Adjusted EBITDA is profit or loss for the period before taxation, net financing costs, depreciation and amortization, adjusted to exclude, when they occur, the impacts of exited markets, acquisition purchase price adjustments 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 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 diluted earnings per share excluding, when they occur, the impacts of exited markets, acquisition purchase
price adjustments and exceptional items such as restructuring charges, goodwill and intangible asset impairment charges, 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 twelve months ended December 31, 2023 and 2022 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, trading day impacts or any other event that artificially impacts the comparability of our results period over period.
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.
Adjusted Free Cash Flow – Adjusted free cash flow is the amount of cash generated from operating activities before cash flows related to exceptional items (as described above), non-operating M&A related costs and working capital movements on employer taxes associated with share based payment awards, but after capital expenditure (on property, plant and equipment and intangible assets), net interest paid, proceeds/(payments) on settlement of derivatives where hedge accounting is not applied and payments of lease liabilities. Adjusted free cash flow reflects cash flows that could be used for payment of dividends, repayment of debt or to fund acquisitions or other strategic objectives.
Please see on pages 8 to 17, 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. The Company is unable to reconcile, without unreasonable efforts, Adjusted EPS guidance to the most directly comparable IFRS measure.
Nomad Foods Limited As Reported
Statements of Profit or Loss (unaudited)
Three months ended December 31, 2023 and December 31, 2022
| | | | | | | | | | | |
| Three months ended December 31, 2023 | | Three months ended December 31, 2022 |
| €m | | €m |
| Revenue | 760.8 | | | 750.2 | |
| Cost of sales | (553.1) | | | (557.5) | |
| Gross profit | 207.7 | | | 192.7 | |
| Other operating expenses | (122.6) | | | (103.6) | |
| Exceptional items | (18.4) | | | (23.5) | |
| Operating profit | 66.7 | | | 65.6 | |
| Finance income | 6.2 | | | 2.7 | |
| Finance costs | (26.7) | | | (22.0) | |
| Net financing costs | (20.5) | | | (19.3) | |
| Profit before tax | 46.2 | | | 46.3 | |
| Taxation | (21.5) | | | (9.2) | |
| Profit for the period | 24.7 | | | 37.1 | |
| | | |
| Basic earnings per share | | | |
| Weighted average shares outstanding in millions | 163.8 | | | 174.2 | |
| Basic earnings per share in € | 0.15 | | | 0.21 | |
| Diluted earnings per share | | | |
| Weighted average shares outstanding in millions | 164.4 | | | 174.2 | |
| Diluted earnings per share in € | 0.15 | | | 0.21 | |
Statements of Profit or Loss (audited)
Twelve months ended December 31, 2023 and December 31, 2022
| | | | | | | | | | | |
| Twelve months ended December 31, 2023 | | Twelve months ended December 31, 2022 |
| €m | | €m |
| Revenue | 3,044.5 | | | 2,939.7 | |
| Cost of sales | (2,185.8) | | | (2,124.4) | |
| Gross profit | 858.7 | | | 815.3 | |
| Other operating expenses | (445.8) | | | (391.2) | |
| Exceptional items | (72.5) | | | (48.7) | |
| Operating profit | 340.4 | | | 375.4 | |
| Finance income | 22.8 | | | 12.1 | |
| Finance costs | (109.6) | | | (66.5) | |
| Net financing costs | (86.8) | | | (54.4) | |
| Profit before tax | 253.6 | | | 321.0 | |
| Taxation | (60.9) | | | (71.2) | |
| Profit for the period | 192.7 | | | 249.8 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Basic and diluted earnings per share in € | 1.13 | | | 1.43 | |
| | | |
| | | |
| | | |
| | | |
Nomad Foods Limited As Reported
Statements of Financial Position (audited)
As at December 31, 2023 and December 31, 2022
| | | | | | | | | | | |
| As at December 31, 2023 | | As at December 31, 2022 |
| €m | | €m |
| Non-current assets | | | |
| Goodwill | 2,105.0 | | | 2,101.6 | |
| Intangibles | 2,468.2 | | | 2,457.6 | |
| Property, plant and equipment | 563.7 | | | 542.9 | |
| Other non-current assets | 7.1 | | | 8.1 | |
| Derivative financial instruments | 0.7 | | | 0.2 | |
| Deferred tax assets | 106.9 | | | 100.4 | |
| Total non-current assets | 5,251.6 | | | 5,210.8 | |
| Current assets | | | |
| Cash and cash equivalents | 412.9 | | | 369.7 | |
| Inventories | 446.4 | | | 457.1 | |
| Trade and other receivables | 263.4 | | | 261.7 | |
| Current tax receivable | 40.7 | | | 5.1 | |
| Indemnification assets | 0.5 | | | 1.8 | |
| | | |
| Derivative financial instruments | 1.2 | | | 19.9 | |
| Total current assets | 1,165.1 | | | 1,115.3 | |
| Total assets | 6,416.7 | | | 6,326.1 | |
| Current liabilities | | | |
| Trade and other payables | 769.8 | | | 695.4 | |
| Current tax payable | 189.5 | | | 183.0 | |
| Provisions | 35.1 | | | 36.1 | |
| Loans and borrowings | 21.4 | | | 22.6 | |
| Derivative financial instruments | 12.2 | | | 3.7 | |
| Total current liabilities | 1,028.0 | | | 940.8 | |
| Non-current liabilities | | | |
| Loans and borrowings | 2,113.7 | | | 2,142.3 | |
| Employee benefits | 158.3 | | | 132.1 | |
| Other non-current liabilities | 0.5 | | | 1.1 | |
| Provisions | 1.4 | | | 1.3 | |
| Derivative financial instruments | 97.8 | | | 56.6 | |
| Deferred tax liabilities | 425.1 | | | 445.7 | |
| Total non-current liabilities | 2,796.8 | | | 2,779.1 | |
| Total liabilities | 3,824.8 | | | 3,719.9 | |
| Net assets | 2,591.9 | | | 2,606.2 | |
| Equity attributable to equity holders | | | |
| Share capital and capital reserve | 1,426.1 | | | 1,596.7 | |
| Share based compensation reserve | 31.4 | | | 13.8 | |
| | | |
| Translation reserve | 101.0 | | | 89.3 | |
| Other reserves | (24.6) | | | 19.8 | |
| Retained earnings | 1,058.0 | | | 886.6 | |
| | | |
| | | |
| Total equity | 2,591.9 | | | 2,606.2 | |
Nomad Foods Limited As Reported
Statements of Cash Flows (audited)
For the year ended December 31, 2023 and the year ended December 31, 2022
| | | | | | | | | | | |
| For the Year ended December 31, 2023 | | For the Year ended December 31, 2022 |
| €m | | €m |
| Cash flows from operating activities | | | |
| Profit for the period | 192.7 | | | 249.8 | |
| Adjustments for: | | | |
| Exceptional items | 72.5 | | | 48.7 | |
| | | |
| Share based payment expense | 24.1 | | | 8.1 | |
| Depreciation and amortization | 95.0 | | | 88.6 | |
| Loss on disposal and impairment of property, plant and equipment | 1.2 | | | 0.8 | |
| Net finance costs | 86.8 | | | 54.4 | |
| Taxation | 60.9 | | | 71.2 | |
| Operating cash flow before changes in working capital, provisions and exceptional items | 533.2 | | | 521.6 | |
| Decrease/(increase) in inventories | 18.8 | | | (61.7) | |
| Decrease/(increase) in trade and other receivables | 0.3 | | | (38.3) | |
| Increase in trade and other payables | 42.1 | | | 5.6 | |
| Decrease in employee benefits and other provisions | (3.2) | | | (2.4) | |
| Cash generated from operations before tax and exceptional items | 591.2 | | | 424.8 | |
| Payments relating to exceptional items | (67.6) | | | (65.2) | |
| Receipts relating to exceptional items | — | | | 24.4 | |
| Tax paid | (92.8) | | | (80.2) | |
| Net cash generated from operating activities | 430.8 | | | 303.8 | |
| Cash flows from investing activities | | | |
| Business combinations, net of cash acquired | — | | | 0.4 | |
| Purchase of property, plant and equipment and intangibles | (82.4) | | | (79.1) | |
| Interest received | 5.3 | | | — | |
| Redemption of investments | 0.3 | | | — | |
| Cash used in investing activities | (76.8) | | | (78.7) | |
| Cash flows from financing activities | | | |
| | | |
| | | |
| Repurchase of ordinary shares | (170.9) | | | (26.8) | |
| Payments related to shares withheld for tax | (7.1) | | | (2.9) | |
| Issuance of new loan principal | 6.0 | | | 799.3 | |
| Repayment of loan principal | (12.6) | | | (916.2) | |
| Payment of lease liabilities | (30.1) | | | (26.5) | |
| Payment of financing fees | (3.3) | | | (6.5) | |
| Interest paid | (93.9) | | | (54.2) | |
| Payment of interest on tax relating to legacy tax audits | (9.2) | | | — | |
| (Payment)/proceeds from settlements of derivatives | (0.4) | | | 124.8 | |
| Other financing cash flows | — | | | 0.9 | |
| Net cash used in financing activities | (321.5) | | | (108.1) | |
| Net increase in cash and cash equivalents | 32.5 | | | 117.0 | |
| Cash and cash equivalents at beginning of period | 366.8 | | | 254.2 | |
| Effect of exchange rate fluctuations | 0.4 | | | (4.4) | |
| Cash and cash equivalents at end of period* | 399.7 | | | 366.8 | |
*Cash and cash equivalents includes bank overdrafts of €13.2 million for the year ended December 31, 2023 (2022: €2.9 million).
Nomad Foods Limited
Reconciliation of Non-IFRS Financial Measures
(In € millions, except per share data)
The following table reconciles adjusted financial information for the three months ended December 31, 2023 to the reported results of Nomad Foods for such period.
Adjusted Statement of Profit or Loss (unaudited)
Three Months Ended December 31, 2023
| | | | | | | | | | | | | | | | | | | | | | | |
| € in millions, except per share data | As reported for the three months ended December 31, 2023 | | Adjustments | | | | As Adjusted for the three months ended December 31, 2023 |
| Revenue | 760.8 | | | — | | | | | 760.8 | |
| Cost of sales | (553.1) | | | — | | | | | (553.1) | |
| Gross profit | 207.7 | | | — | | | | | 207.7 | |
| Other operating expenses | (122.6) | | | 5.3 | | | (a) | | (117.3) | |
| Exceptional items | (18.4) | | | 18.4 | | | (b) | | — | |
| Operating profit | 66.7 | | | 23.7 | | | | | 90.4 | |
| Finance income | 6.2 | | | (5.2) | | | | | 1.0 | |
| Finance costs | (26.7) | | | 0.4 | | | | | (26.3) | |
| Net financing costs | (20.5) | | | (4.8) | | | (c) | | (25.3) | |
| Profit before tax | 46.2 | | | 18.9 | | | | | 65.1 | |
| Taxation | (21.5) | | | 8.7 | | | (d) | | (12.8) | |
| Profit for the period | 24.7 | | | 27.6 | | | | | 52.3 | |
| | | | | | | |
| Weighted average shares outstanding in millions - basic | 163.8 | | | — | | | | | 163.8 | |
| Basic earnings per share | 0.15 | | | | | | | 0.32 | |
| Weighted average shares outstanding in millions - diluted | 164.4 | | | — | | | | | 164.4 | |
| Diluted earnings per share | 0.15 | | | | | | | 0.32 | |
(a)Share based payment charge including employer payroll taxes of €5.1 million and a non-operating M&A related credit of €0.2 million.
(b)Exceptional items which management believes will only recur over a limited number of financial periods based in most cases on the completion of the particular project or program, and do not have a continuing impact. See table ‘Adjusted EBITDA (unaudited) three months ended December 31, 2023’ for a detailed list of exceptional items.
(c)Elimination of €4.9 million of foreign exchange translation gains, €0.3 million of interest income on legacy tax audits and €0.4 million of charges relating to the repricing of debt.
(d)Tax impact of the above at the applicable tax rate for each adjustment, determined by the nature of the item and the jurisdiction in which it arises.
Nomad Foods Limited
Reconciliation of Non-IFRS Financial Measures (continued)
The following table reconciles Adjusted EBITDA for the three months ended December 31, 2023 to the reported results of Nomad Foods for such period.
Adjusted EBITDA (unaudited)
Three Months Ended December 31, 2023
| | | | | | | | | | | |
| € in millions | As reported for the three months ended December 31, 2023 | | |
| Profit for the period | 24.7 | | | |
| Taxation | 21.5 | | | |
| Net financing costs | 20.5 | | | |
| Depreciation and amortization | 26.2 | | | |
| | | |
| | | |
| Exceptional items: | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Business Transformation Program | 16.6 | | | (a) |
| | | |
| | | |
| Fortenova Group integration costs | 2.8 | | | (b) |
| | | |
| Settlement of legacy matters | (1.0) | | | (c) |
| Other Adjustments: | | | |
| Other add-backs | 5.3 | | | (d) |
Adjusted EBITDA (e) | 116.6 | | | |
(a)Expenses associated with the multi-year, enterprise-wide transformation and optimization program. Expenses in the period consist of restructuring, severance and transformational project costs, including business technology transformation initiative costs and related professional fees.
(b)Expenses associated with the integration of the Fortenova Group acquired on September 30, 2021.
(c)Income and expenses associated with the release of acquired provisions relating to periods prior to acquisition by the Company and other gains or charges associated with items that were originally recognized as exceptional.
(d)Represents the elimination of share based payment charge including employer payroll taxes of €5.1 million and elimination of a non-operating M&A related credit of €0.2 million.
(e)Adjusted EBITDA margin of 15.3% for the three months ended December 31, 2023 is calculated by dividing Adjusted EBITDA by Revenue of €760.8 million.
Nomad Foods Limited
Reconciliation of Non-IFRS Financial Measures (continued)
The following table reconciles Adjusted financial information for the three months ended December 31, 2022 to the reported results of Nomad Foods for such period.
Adjusted Statements of Profit or Loss (unaudited)
Three Months Ended December 31, 2022
| | | | | | | | | | | | | | | | | | | | | | | |
| € in millions, except per share data | As reported for the three months ended December 31, 2022 | | Adjustments | | | | As Adjusted for the three months ended December 31, 2022 |
| Revenue | 750.2 | | | — | | | | | 750.2 | |
| Cost of sales | (557.5) | | | — | | | | | (557.5) | |
| Gross profit | 192.7 | | | — | | | | | 192.7 | |
| Other operating expenses | (103.6) | | | 1.1 | | | (a) | | (102.5) | |
| Exceptional items | (23.5) | | | 23.5 | | | (b) | | — | |
| Operating profit | 65.6 | | | 24.6 | | | | | 90.2 | |
| Finance income | 2.7 | | | (2.3) | | | | | 0.4 | |
| Finance costs | (22.0) | | | 3.1 | | | | | (18.9) | |
| Net financing costs | (19.3) | | | 0.8 | | | (c) | | (18.5) | |
| Profit before tax | 46.3 | | | 25.4 | | | | | 71.7 | |
| Taxation | (9.2) | | | (4.8) | | | (d) | | (14.0) | |
| Profit for the period | 37.1 | | | 20.6 | | | | | 57.7 | |
| | | | | | | |
| Weighted average shares outstanding in millions - basic | 174.2 | | | — | | | | | 174.2 | |
| Basic earnings per share | 0.21 | | | | | | | 0.33 | |
| Weighted average shares outstanding in millions - diluted | 174.2 | | | — | | | | | 174.2 | |
| Diluted earnings per share | 0.21 | | | | | | | 0.33 | |
(a)Share based payment charge including employer payroll taxes of €1.2 million and a non-operating M&A related credit of €0.1 million.
(b)Exceptional items which management believes will only recur over a limited number of financial periods based in most cases on the completion of the particular project or program, and do not have a continuing impact. See table ‘Adjusted EBITDA (unaudited) three months ended December 31, 2022’ for a detailed list of exceptional items.
(c)Elimination of a €2.3 million net gain from refinancing activities, €1.6 million of foreign exchange translation losses and €1.5 million of foreign exchange losses on derivatives.
(d)Tax impact of the above at the applicable tax rate for each adjustment, determined by the nature of the item and the jurisdiction in which it arises.
Nomad Foods Limited
Reconciliation of Non-IFRS Financial Measures (continued)
The following table reconciles Adjusted EBITDA for the three months ended December 31, 2022 to the reported results of Nomad Foods for such period.
Adjusted EBITDA (unaudited)
Three Months Ended December 31, 2022
| | | | | | | | | | | |
| € in millions | As reported for the three months ended December 31, 2022 | | |
| Profit for the period | 37.1 | | | |
| Taxation | 9.2 | | | |
| Net financing costs | 19.3 | | | |
| Depreciation and amortization | 22.8 | | | |
| | | |
| Exceptional items: | | | |
| Findus Switzerland integration costs | 0.7 | | | (a) |
| Impairment of customer relationships | 5.8 | | | (b) |
| Information Technology Transformation program | 0.6 | | | (c) |
| | | |
| Business Transformation Program | 10.9 | | | (d) |
| Distribution network integration | 1.6 | | | (e) |
| | | |
| Fortenova Group integration costs | 4.0 | | | (f) |
| Factory optimization | 0.9 | | | (g) |
| Settlement of legacy matters | (1.0) | | | (h) |
| Other Adjustments: | | | |
| Other add-backs | 1.1 | | | (i) |
| Adjusted EBITDA (j) | 113.0 | | | |
(a)Expenses associated with the integration of the Findus Switzerland business acquired on December 31, 2020.
(b)Charge for the impairment of our food service customer relationships in Sweden.
(c)Expenses associated with the Information Technology Transformation program, which are primarily professional fees.
(d)Expenses associated with the multi-year, enterprise-wide transformation and optimization program. Expenses in the period consisted of restructuring and transformational project costs, including business technology transformation initiative costs and related professional fees.
(e)Expenses associated with the restructuring of the sales operations in northern Italy which was completed in 2023.
(f)Expenses associated with the integration of the Fortenova Group acquired on September 30, 2021.
(g)Expenses associated with a three-year factory optimization program, initiated in 2018, to develop a new suite of standard manufacturing and supply chain processes, that will provide a single network of optimized factories. Due to delays in delivering the program, it was extended for an additional year and completed in 2022.
(h)Income and expenses associated with the release of acquired provisions relating to periods prior to acquisition by the Company and other gains or charges associated with items that were originally recognized as exceptional.
(i)Represents the elimination of share based payment charge including employer payroll taxes of €1.2 million and elimination of a non-operating M&A related credit of €0.1 million.
(j)Adjusted EBITDA margin of 15.1% for the three months ended December 31, 2022 is calculated by dividing Adjusted EBITDA by Revenue of €750.2 million.
Nomad Foods Limited
Reconciliation of Non-IFRS Financial Measures (continued)
The following table reconciles adjusted financial information for the twelve months ended December 31, 2023 to the reported results of Nomad Foods for such period.
Adjusted Statement of Profit or Loss (unaudited)
Twelve Months Ended December 31, 2023
| | | | | | | | | | | | | | | | | | | | | | | |
| € in millions, except per share data | As reported for the twelve months ended December 31, 2023 | | Adjustments | | | | As Adjusted for the twelve months ended December 31, 2023 |
| Revenue | 3,044.5 | | | — | | | | | 3,044.5 | |
| Cost of sales | (2,185.8) | | | — | | | | | (2,185.8) | |
| Gross profit | 858.7 | | | — | | | | | 858.7 | |
| Other operating expenses | (445.8) | | | 27.1 | | | (a) | | (418.7) | |
| Exceptional items | (72.5) | | | 72.5 | | | (b) | | — | |
| Operating profit | 340.4 | | | 99.6 | | | | | 440.0 | |
| Finance income | 22.8 | | | (17.0) | | | | | 5.8 | |
| Finance costs | (109.6) | | | 7.5 | | | | | (102.1) | |
| Net financing costs | (86.8) | | | (9.5) | | | (c) | | (96.3) | |
| Profit before tax | 253.6 | | | 90.1 | | | | | 343.7 | |
| Taxation | (60.9) | | | (8.0) | | | (d) | | (68.9) | |
| Profit for the period | 192.7 | | | 82.1 | | | | | 274.8 | |
| | | | | | | |
| Weighted average shares outstanding in millions - basic | 170.6 | | | — | | | | | 170.6 | |
| Basic earnings per share | 1.13 | | | | | | | 1.61 | |
| Weighted average shares outstanding in millions - diluted | 171.2 | | | — | | | | | 171.2 | |
| Diluted earnings per share | 1.13 | | | | | | | 1.61 | |
(a)Share based payment charge including employer payroll taxes of €26.1 million and non-operating M&A related costs of €1.0 million.
(b)Exceptional items which management believes will only recur over a limited number of financial periods based in most cases on the completion of the particular project or program, and do not have a continuing impact. See table ‘Adjusted EBITDA (unaudited) twelve months ended December 31, 2023’ for a detailed list of exceptional items.
(c)Elimination of €16.7 million of net gains on repricing of debt, €3.5 million of interest cost on tax relating to legacy tax audits, €3.0 million of foreign exchange translation losses, €1.0 million of losses on derivatives and a €0.3 million gain from the reversal of an impairment loss on a short-term investment.
(d)Tax impact of the above at the applicable tax rate for each adjustment, determined by the nature of the item and the jurisdiction in which it arises.
Nomad Foods Limited
Reconciliation of Non-IFRS Financial Measures (continued)
The following table reconciles Adjusted EBITDA for the twelve months ended December 31, 2023 to the reported results of Nomad Foods for such period:
Adjusted EBITDA (unaudited)
Twelve Months Ended December 31, 2023
| | | | | | | | | | | |
| € in millions | For the twelve months ended December 31, 2023 | | |
| Profit for the period | 192.7 | | | |
| Taxation | 60.9 | | | |
| Net financing costs | 86.8 | | | |
| Depreciation and amortization | 95.0 | | | |
| | | |
| | | |
| Exceptional items: | | | |
| | | |
| | | |
| | | |
| Information Technology Transformation program | 0.6 | | | (a) |
| | | |
| Business Transformation Program | 68.4 | | | (b) |
| | | |
| | | |
| Fortenova Group integration costs | 4.3 | | | (c) |
| | | |
| Settlement of legacy matters | (0.8) | | | (d) |
| | | |
| Other Adjustments: | | | |
| Other add-backs | 27.1 | | | (e) |
| | | |
| Adjusted EBITDA (f) | 535.0 | | | |
(a)Expenses associated with the Information Technology Transformation program, which are primarily professional fees. The program was completed in 2023.
(b)Expenses associated with the multi-year, enterprise-wide transformation and optimization program which began in 2020. Expenses in the period consist of restructuring, severance and transformational project costs, including business technology transformation initiative costs and related professional fees.
(c)Expenses associated with the integration of the Fortenova Group acquired on September 30, 2021.
(d)Income and expenses associated with the release of acquired provisions relating to periods prior to acquisition by the Company and other gains or charges associated with items that were originally recognized as exceptional.
(e)Represents the elimination of share based payment charge including employer payroll taxes of €26.1 million and elimination of non-operating M&A related costs of €1.0 million.
(f)Adjusted EBITDA margin of 17.6% for the twelve months ended December 31, 2023 is calculated by dividing Adjusted EBITDA by Revenue of €3,044.5 million.
Nomad Foods Limited
Reconciliation of Non-IFRS Financial Measures (continued)
The following table reconciles Adjusted financial information for the twelve months ended December 31, 2022 to the reported results of Nomad Foods for such period.
Adjusted Statements of Profit or Loss (unaudited)
Twelve Months Ended December 31, 2022
| | | | | | | | | | | | | | | | | | | | | | | |
| € in millions, except per share data | As reported for the twelve months ended December 31, 2022 | | Adjustments | | | | As Adjusted for the twelve months ended December 31, 2022 |
| Revenue | 2,939.7 | | | — | | | | | 2,939.7 | |
| Cost of sales | (2,124.4) | | | — | | | | | (2,124.4) | |
| Gross profit | 815.3 | | | — | | | | | 815.3 | |
| Other operating expenses | (391.2) | | | 11.7 | | | (a) | | (379.5) | |
| Exceptional items | (48.7) | | | 48.7 | | | (b) | | — | |
| Operating profit | 375.4 | | | 60.4 | | | | | 435.8 | |
| Finance income | 12.1 | | | (11.5) | | | | | 0.6 | |
| Finance costs | (66.5) | | | — | | | | | (66.5) | |
| Net financing costs | (54.4) | | | (11.5) | | | (c) | | (65.9) | |
| Profit before tax | 321.0 | | | 48.9 | | | | | 369.9 | |
| Taxation | (71.2) | | | (5.3) | | | (d) | | (76.5) | |
| Profit for the period | 249.8 | | | 43.6 | | | | | 293.4 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Weighted average shares outstanding in millions - basic | 174.3 | | | — | | | | | 174.3 | |
| Basic earnings per share | 1.43 | | | | | | | 1.68 | |
| Weighted average shares outstanding in millions - diluted | 174.3 | | | — | | | | | 174.3 | |
| Diluted earnings per share | 1.43 | | | | | | | 1.68 | |
(a)Share based payment charge including employer payroll taxes of €8.6 million and non-operating M&A related costs of €3.1 million.
(b)Exceptional items which management believes will only recur over a limited number of financial periods based in most cases on the completion of the particular project or program, and do not have a continuing impact. See table ‘Adjusted EBITDA (unaudited) twelve months ended December 31, 2022’ for a detailed list of exceptional items.
(c)Elimination of €2.3 million of net gain recognized as part of refinancing activities and €9.2 million of foreign exchange translation gains.
(d)Tax impact of the above at the applicable tax rate for each adjustment, determined by the nature of the item and the jurisdiction in which it arises.
Nomad Foods Limited
Reconciliation of Non-IFRS Financial Measures (continued)
The following table reconciles Adjusted EBITDA for the twelve months ended December 31, 2022 to the reported results of Nomad Foods for such period:
Adjusted EBITDA (unaudited)
Twelve Months Ended December 31, 2022
| | | | | | | | | | | |
| € in millions | For the twelve months ended December 31, 2022 | | |
| Profit for the period | 249.8 | | | |
| Taxation | 71.2 | | | |
| Net financing costs | 54.4 | | | |
| Depreciation and amortization | 88.6 | | | |
| | | |
| | | |
| Exceptional items: | | | |
| Findus Switzerland integration costs | 8.2 | | | (a) |
| Impairment of customer relationships | 5.8 | | | (b) |
| | | |
| Information Technology Transformation program | 4.4 | | | (c) |
| | | |
| Business Transformation Program | 37.0 | | | (d) |
| Distribution network integration | 2.2 | | | (e) |
| | | |
| Fortenova Group integration costs | 9.5 | | | (f) |
| Factory optimization | 3.5 | | | (g) |
| Settlement of legacy matters | (28.9) | | | (h) |
| Release of indemnification assets | 7.0 | | | (i) |
| Other Adjustments: | | | |
| Other add-backs | 11.7 | | | (j) |
| | | |
| Adjusted EBITDA (k) | 524.4 | | | |
(a)Expenses associated with the integration of the Findus Switzerland business acquired on December 31, 2020.
(b)Charge for the impairment of our food service customer relationships in Sweden.
(c)Expenses associated with the Information Technology Transformation program, which are primarily professional fees.
(d)Expenses associated with the multi-year, enterprise-wide transformation and optimization program which began in 2020. Expenses in the period consist of restructuring and transformational project costs, including business technology transformation initiative costs and related professional fees.
(e)Expenses associated with the restructuring of the sales operations in northern Italy which completed in 2023.
(f)Expenses associated with the integration of the Fortenova Group acquired on September 30, 2021.
(g)Expenses associated with a three-year factory optimization program, initiated in 2018, to develop a new suite of standard manufacturing and supply chain processes, that will provide a single network of optimized factories. Due to delays in delivering the program, it was extended for an additional year and completed in 2022.
(h)Income and expenses associated with the release of acquired provisions relating to periods prior to acquisition by the Company and other gains or charges associated with items that were originally recognized as exceptional.
(i)Charge for the release of shares held in escrow as part of the consideration on the acquisition of the Findus Group.
(j)Represents the elimination of share based payment charge including employer payroll taxes of €8.6 million and elimination of non-operating M&A related costs of €3.1 million.
(k)Adjusted EBITDA margin of 17.8% for the twelve months ended December 31, 2022 is calculated by dividing Adjusted EBITDA by Revenue of €2,939.7 million.
Nomad Foods Limited
Adjusted Financial Information (continued)
Appendix 1: Reconciliation from reported to organic revenue growth/(decline)
Year on Year Growth - December 31, 2023 compared with December 31, 2022:
| | | | | | | | | | | | | | | | | |
| Three Months Ended December 31, 2023 | | Twelve Months Ended December 31, 2023 | | |
| YoY change | | YoY change | | |
| Reported Revenue Growth | 1.4 | % | | 3.6 | % | | |
| | | | | |
| Of which: | | | | | |
| Organic Revenue Growth/(Decline) | 1.9 | % | | 4.9 | % | | |
| | | | | |
| Translational FX (a) | (0.5) | % | | (1.3) | % | | |
| Total | 1.4 | % | | 3.6 | % | | |
(a)Translational FX is 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.
Nomad Foods Limited
Adjusted Financial Information (continued)
Appendix 2: Reconciliation from reported net cash flows from operating activities to Adjusted free cash flow
The following table is a reconciliation of reported net cash flows from operating activities to Adjusted free cash flow for the year ended December 31, 2023.
Reconciliation of net cash flows from operating activities to Adjusted free cash flow (unaudited)
Twelve Months Ended December 31, 2023
| | | | | | | |
| € in millions | Twelve months ended December 31, 2023 | | |
| Net Cash Flows From Operating Activities | 430.8 | | | |
| Add back: | | | |
| Cash flows relating to exceptional items (a) | 67.6 | | | |
| Employer taxes related to share based payments (b) | 2.0 | | | |
| Non-operating M&A costs (c) | 1.0 | | | |
| Deduct: | | | |
| Capital expenditure (d) | (82.4) | | | |
| Net interest paid | (88.6) | | | |
| Other financing cash flows | (0.4) | | | |
| Payment of lease liabilities (e) | (30.1) | | | |
| Adjusted free cash flow | 299.9 | | | |
| | | |
| Adjusted profit for the period | 274.8 | | | |
| Adjusted free cash flow as % adjusted profit for the period | 109 | % | | |
(a)Adjustment to add back cash flows related to exceptional items which are not considered to be indicative of our ongoing operating cash flows.
(b)Adjustment to add back working capital movements related to employer taxes related to share based payments which are not considered to be indicative of our ongoing operating cash flows.
(c)Adjustment to add back cash flows related to non-operating M&A costs which are not considered to be indicative of our ongoing operating cash flows.
(d)Defined as the sum of property, plant and equipment and intangible assets purchased in the year, which are considered part of the underlying business cash flows.
(e)These lease liabilities are included in Net Cash Flows from Financing Activities. We believe these payments are part of the underlying business cash flows and should be reflected in Adjusted free cash flow.
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 (i) its future operating and financial performance, including its reiterated guidance with respect to organic net revenue growth, Adjusted EBITDA growth, free cash flow conversion, Adjusted EPS, and Adjusted EPS growth for 2024; (ii) its ability to generate stronger bottom-line growth and superior shareholder returns; and (iii) its success in 2024 and beyond.
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 Company’s ability to effectively mitigate factors that negatively impact its supply of raw materials, including the conflict in Ukraine; (ii) the Company’s ability to successfully mitigate inflationary changes in the market; (iii) the Company’s ability to successfully identify suitable acquisition targets and adequately evaluate the potential performance of such acquisition targets; (iv) 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; (v) the Company’s ability to accurately predict the performance of its Green Cuisine brand and the Findus Switzerland and Fortenova's frozen food businesses' and their impact on the Company’s growth; (vi) the Company’s ability to effectively compete in its markets, including the ability of Green Cuisine to effectively compete in Continental Europe; (vii) 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; (viii) the effects of reputational damage from unsafe or poor quality food products; (ix) the risk that securities markets will react negatively to actions by the Company; (x) the adequacy of the Company’s cash resources to achieve its anticipated growth agenda; (xi) increases in operating costs, including labor costs, and the Company’s ability to manage its cost structure; (xii) fluctuations in the availability of food ingredients and packaging materials that the Company uses in its products; (xiii) the Company’s ability to protect its brand names and trademarks; (xiv) the Company’s ability to prevent, or remediate, any future cybersecurity incidents; (xv) loss of the Company’s financial arrangements with respect to receivables factoring; (xvi) the loss of any of the Company’s major customers or a decrease in demand for its products; (xvii) economic conditions that may affect the Company’s future performance including exchange rate fluctuations; (xviii) the Company’s ability to successfully interpret and respond to key industry trends and to realize the expected benefits of its responsive actions; (xix) the Company’s failure to comply with, and liabilities related to, environmental, health and safety laws and regulations; (xx) changes in applicable laws or regulations; and (xxi) 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.
Nomad Foods (NYSE:NOMD)
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