Reports Full Year 2017 Organic Revenue Growth
of 3.9%, Adjusted EBITDA of €328 million and Adjusted EPS of
€1.00
Initiates 2018 Guidance of Adjusted EBITDA of
€350 to €360 million and Adjusted EPS of €1.08 to €1.13
Nomad Foods Limited (NYSE: NOMD), today reported financial
results for the three and twelve month periods ended
December 31, 2017.
Key operating highlights and financial performance for the
fourth quarter 2017, when compared to the fourth quarter 2016,
include:
- Reported revenue increased 4.7% to
€508 million
- Organic revenue growth of
5.6%
- Reported profit for the period of
€27 million
- Adjusted EBITDA increased 31% to €82
million
- Reported EPS of €0.16; Adjusted EPS
increased 108% to €0.27
Key operating highlights and financial performance for the full
year 2017, when compared to the full year 2016, include:
- Reported revenue increased 1.5% to
€1,957 million
- Organic revenue growth of
3.9%
- Reported profit for the period of
€137 million
- Adjusted EBITDA increased 1% to €328
million
- Reported EPS of €0.78; Adjusted EPS
increased 19% to €1.00
Management Comments
Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer,
stated, “2017 was an outstanding year for our Company. We reported
full year organic revenue growth of 3.9% and expanded gross margins
by 100 basis points. These results, which exceeded the expectations
we set at the start of the year, are a testament to the power of
our iconic brands, a proven strategy and relentless execution. We
enter 2018 in a position of strength. Goodfella's Pizza, once
closed, will provide a complementary source of growth to our base
business and illustrate the power of our value creation model.”
Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented,
“These results further validate the strategy that we have been
executing against for the past two years. The combination of base
business momentum, strong cash flow generation and accretive
capital deployment positions us to drive continued shareholder
value in 2018.”
Fourth Quarter of 2017 results compared to the Fourth Quarter
of 2016
- Revenue increased 4.7% to €508
million. Organic revenue growth of 5.6% was driven by 3.0%
growth in volume/mix and 2.6% growth in price.
- Gross profit increased 18% to
€160 million. Gross margin expanded 350 basis points to 31.5% due
to positive mix, improved pricing and promotional efficiency and
manufacturing improvements. Foreign exchange currency translation
positively impacted gross margin by 10 basis points.
- Adjusted operating expense
increased 2% to €89 million. Advertising and promotion expense
decreased 7% to €35 million due to more normalized seasonality
versus the prior year. Indirect expense increased 8% to €54
million, primarily due to the reinstatement of bonuses in
2017.
- Adjusted EBITDA increased 31% to
€82 million.
- Adjusted profit after tax
increased 93% to €46 million reflecting interest rate savings from
debt repricing amendments and lower depreciation and amortization.
Adjusted EPS increased 108% to €0.27, reflecting Adjusted
EBITDA growth and a lower share count resulting from share
repurchases.
Year ended 2017 results compared to the Year ended
2016
- Revenue increased 1.5% to €1,957
million. Organic revenue growth of 3.9% was driven by 2.7%
growth in volume/mix and 1.2% growth in price.
- Gross profit increased 5% to
€599 million. Gross margin expanded 100 basis points to 30.6% due
to positive mix and improved pricing and promotional efficiencies
which more than offset currency driven inflation. Foreign exchange
currency translation adversely impacted gross margin by 10 basis
points.
- Adjusted operating expense
increased 6% to €314 million. Advertising and promotion expense
decreased 1% to €113 million with a favorable foreign exchange
impact of 2% offsetting increased media spend on core brands of 1%.
Indirect expense increased 9% to €201 million primarily due to the
reinstatement of bonuses in 2017.
- Adjusted EBITDA increased 1% to
€328 million. Foreign exchange currency translation adversely
affected adjusted EBITDA by €9 million.
- Adjusted profit after tax
increased 13% to €175 million reflecting interest rate savings from
debt repricing amendments and lower depreciation and amortization.
Adjusted EPS increased to €1.00, reflecting Adjusted EBITDA
growth and a lower share count resulting from share
repurchases.
2018 Guidance
The Company initiates 2018 guidance, inclusive of expected
partial year contribution from Goodfella's Pizza which is expected
to close during the second quarter of 2018.
Full year 2018 Adjusted EBITDA is expected to be approximately
€350 to €360 million, which equates to adjusted EPS of
approximately €1.08 to €1.13 based on the current share count of
176 million. Full year guidance assumes organic revenue growth at a
low-single digits percentage rate.
Conference Call and Webcast
The Company will host a conference call with members of the
executive management team to discuss these results today, Thursday,
March 22, 2018 at 1:30 p.m. GMT time (8:30 a.m. Eastern time).
Investors interested in participating in the live call can dial
+1-800-289-0438 from the U.S. International callers can dial
+1-323-994-2083.
In addition, the call will be broadcast live over the internet
hosted at the “Investor Relations” section of the Company’s website
at http://www.nomadfoods.com. The webcast will be archived
for 30 days. 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 8312259.
About Nomad Foods
Nomad Foods (NYSE: NOMD) is a leading frozen foods company
building a global portfolio of best-in-class food companies and
brands within the frozen category and across the broader food
sector. Nomad Foods produces, markets and distributes brands in 17
countries and has the leading market share in Western Europe. The
Company’s portfolio of leading frozen food brands includes Birds
Eye, Iglo, and Findus. More information on Nomad Foods Limited is
available at http://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, 2017 and
for comparative purposes, the three and twelve months ended
December 31, 2016.
Adjusted financial information for the three and twelve months
ended December 31, 2017 and 2016 presented in this press
release reflects the historical reported financial statements of
Nomad Foods, adjusted primarily for share based payment charges,
exceptional items and foreign currency exchange 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) exited markets, chart
of account (“CoA”) alignments and exceptional items such as
restructuring charges, goodwill and intangible asset impairment
charges, the impact of share based payment charges, charges
relating to the Founders Preferred Shares Annual Dividend Amount,
charges relating to the redemption of warrants and other unusual or
non-recurring items. 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 EPS is defined as basic earnings per share excluding,
when they occur, the impacts of exited markets, chart of account
(“CoA”) alignments and exceptional items such as restructuring
charges, goodwill and intangible asset impairment charges, share
based compensation expense, unissued preferred share dividends, and
other non-operating items as well as certain other items considered
unusual or non-recurring in nature. 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 for the three and twelve months ended
December 31, 2017 and 2016 presented in this press release
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 impact the
comparability of our results.
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 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.
Nomad Foods Limited As Reported
Statements of Profit or Loss
(unaudited)
Three Months Ended December 31, 2017
and December 31, 2016
Three Months EndedDecember 31,
2017
Three Months EndedDecember 31,
2016
€ millions € millions Revenue 508.2 485.2 Cost of
sales (348.2 ) (349.3 )
Gross profit 160.0
135.9 Other operating expenses (91.7 ) (87.5 ) Exceptional
items (20.4 ) (22.2 )
Operating profit 47.9
26.2 Finance income — (0.6 ) Finance costs (17.4 ) (21.6 )
Net financing costs (17.4 ) (22.2
) Profit before tax 30.5 4.0 Taxation
(3.2 ) (6.1 )
Profit/(loss) for the period 27.3
(2.1 ) Basic earnings/(loss) per share
Profit/(loss) for the period in € millions 27.3 (2.1 ) Weighted
average shares outstanding in millions 166.8 183.6
Basic
earnings/(loss) per share in € 0.16 (0.01
) Diluted earnings per share Profit/(loss) for the
period in € millions 27.3 (2.1 ) Weighted average shares
outstanding in millions 175.6 183.7
Diluted earnings/(loss) per
share in € 0.16 (0.01 )
Nomad Foods Limited As Reported
Statements of Profit or Loss
(audited)
Twelve months Ended December 31,
2017 and December 31, 2016
Twelve months endedDecember 31,
2017
Twelve months endedDecember 31,
2016
€ millions € millions Revenue 1,956.6 1,927.7 Cost of
sales (1,357.2 ) (1,356.7 )
Gross profit 599.4
571.0 Other operating expenses (319.3 ) (298.4 ) Exceptional
items (37.2 ) (134.5 )
Operating profit 242.9
138.1 Finance income 7.2 24.2 Finance costs (81.6 ) (86.3 )
Net financing costs (74.4 ) (62.1
) Profit before tax 168.5 76.0 Taxation
(32.0 ) (39.6 )
Profit for the period 136.5
36.4 Basic earnings per share Profit for the
period in € millions 136.5 36.4 Weighted average shares outstanding
in millions 176.1 183.5
Basic earnings per share in €
0.78 0.20 Diluted earnings per share Profit
for the period in € millions 136.5 36.4 Weighted average shares
outstanding in millions 184.8 183.5
Diluted earnings per share
in € 0.74 0.20
Nomad Foods Limited As Reported
Statements of Financial Position
(audited)
As at December 31, 2017 and
December 31, 2016
As at December 31, 2017 As at December 31,
2016 € millions € millions Non-current
assets Goodwill 1,745.6 1,745.6 Intangibles 1,724.4 1,726.6
Property, plant and equipment 295.4 298.2 Other receivables 4.3 0.4
Derivative financial instruments 18.6 — Deferred tax assets 64.3
64.9
Total non-current assets 3,852.6
3,835.7 Current assets Cash and cash
equivalents 219.2 329.5 Inventories 306.9 325.0 Trade and other
receivables 147.1 135.7 Indemnification assets 73.8 65.5
Capitalized borrowing costs — 5.0 Derivative financial instruments
2.1 13.1
Total current assets 749.1
873.8 Total assets 4,601.7
4,709.5 Current liabilities Trade and
other payables 477.5 472.7 Current tax payable 145.3 162.3
Provisions 68.0 116.7 Current portion of loans and borrowings 3.3 —
Derivative financial instruments 7.8 1.4
Total
current liabilities 701.9 753.1
Non-current liabilities Loans and borrowings 1,395.1 1,451.8
Employee benefits 188.4 190.9 Trade and other payables 1.8 1.0
Provisions 72.8 77.0 Derivative financial instruments 61.4 —
Deferred tax liabilities 327.7 333.2
Total
non-current liabilities 2,047.2 2,053.9
Total liabilities 2,749.1
2,807.0 Net assets 1,852.6
1,902.5 Equity attributable to equity holders
Share capital — — Capital reserve 1,623.7 1,800.7 Share based
compensation reserve 2.9 1.0 Founder Preferred Share Dividend
reserve 493.4 493.4 Translation reserve 83.2 84.0 Cash flow hedging
reserve (3.0 ) 8.4 Accumulated deficit (347.6 ) (485.0 )
Total
equity 1,852.6 1,902.5
Nomad Foods Limited As Reported
Statements of Cash Flows
(audited)
Twelve months Ended December 31,
2017 and December 31, 2016
Twelve months endedDecember 31,
2017
Twelve months endedDecember 31,
2016
€ millions € millions Cash flows from operating
activities Profit for the period 136.5
36.4 Adjustments for: Exceptional items 37.2 134.5 Share
based payment expense 2.6 1.2 Depreciation and amortization 42.4
51.1 Loss on disposal of property, plant and equipment 0.5 0.7
Finance costs 81.6 86.3 Finance income (7.2 ) (24.2 ) Taxation 32.0
39.6
Operating cash flow before changes in working
capital, provisions and exceptional items 325.6
325.6 Decrease/(increase) in inventories 16.7 (18.1 )
Increase in trade and other receivables (1.6 ) (8.8 ) Increase in
trade and other payables 18.1 60.8 Decrease in employee benefits
and other provisions (0.3 ) (3.3 )
Cash generated from
operations before tax and exceptional items 358.5
356.2 Cash flows relating to exceptional items (99.5 ) (49.2
) Tax paid (65.2 ) (24.9 )
Net cash generated from operating
activities 193.8 282.1 Cash
flows from investing activities Contingent consideration for
purchase of Frudesa brand — (8.0 ) Purchase of property, plant and
equipment (38.0 ) (38.0 ) Purchase of intangibles (4.6 ) (4.4 )
Cash used in investing activities (42.6 )
(50.4 ) Cash flows from financing activities
Repurchase of ordinary shares (177.6 ) — Proceeds from new loans
and notes 1,470.5 — Repayment of loan principal (1,469.5 ) —
Payment of finance leases (1.6 ) (0.7 ) Proceeds/(loss) on
settlement of derivatives 1.6 (4.0 ) Payment of financing fees
(16.7 ) — Interest paid (48.8 ) (70.9 ) Interest received 0.3
7.9
Net cash used in financing activities
(241.8 ) (67.7 ) Net
(decrease)/increase in cash and cash equivalents (90.6
) 164.0 Cash and cash equivalents at
beginning of period 329.5 186.1 Effect of
exchange rate fluctuations (19.7 ) (20.6 )
Cash and cash
equivalents at end of period 219.2 329.5
Nomad Foods LimitedAdjusted Financial
Information(In € millions, except per share data)
The following table reconciles Adjusted financial information
for the three months ended December 31, 2017 to the reported
results of Nomad Foods for such period.
Adjusted Statements of Profit or Loss
(unaudited)
Three Months Ended December 31,
2017
€ in millions, except per share data
As reported for thethree months
endedDecember 31, 2017
Adjustments
As Adjusted for thethree months
endedDecember 31, 2017
Revenue 508.2 — 508.2 Cost of sales (348.2 ) — (348.2 )
Gross profit 160.0 — 160.0 Other
operating expenses (91.7 ) 3.2 (a) (88.5 ) Exceptional items (20.4
) 20.4 (b) —
Operating profit 47.9
23.6 71.5 Finance income — — — Finance costs (17.4 )
3.7 (13.7 )
Net financing costs (17.4 )
3.7 (c)
(13.7 ) Profit before
tax 30.5 27.3 57.8 Taxation (3.2 ) (9.1 )
(d) (12.3 )
Profit for the period 27.3
18.2 45.5 Weighted average shares
outstanding in millions - basic 166.8 — 166.8
Basic earnings per
share 0.16 0.27 Weighted average shares
outstanding in millions - diluted 175.6 (8.7 ) (e) 166.9
Diluted
earnings per share 0.16 0.27
(a) Adjustment to add back share-based payment charge and
non-operating M&A transaction costs.(b) Adjustment to add back
exceptional items which management believes are non-recurring and
do not have a continuing impact. See table ‘EBITDA and
Adjusted EBITDA (unaudited) three months ended December 31, 2017’
for a detailed list of exceptional items.(c) Adjustment to
eliminate €0.6 million of costs incurred as part of the repricing
of debt on December 20, 2017, €1.7 million of non-cash foreign
exchange translation losses and €1.4 million of foreign exchange
losses on derivatives.(d) Adjustment to reflect the 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.(e) Adjustment to eliminate the dilutive effect of the
Founder Preferred Share Dividend which was issued subsequent to the
period-end, on January 2, 2018.
Nomad Foods LimitedAdjusted Financial
Information(In € millions)
The following table reconciles EBITDA and Adjusted EBITDA for
the three months ended December 31, 2017 to the reported results of
Nomad Foods for such period.
EBITDA and Adjusted EBITDA
(unaudited)
Three Months Ended December 31,
2017
€ in millions
As reported for thethree months
endedDecember 31, 2017
Profit for the period 27.3 Taxation 3.2 Net financing
costs 17.4 Depreciation 9.3 Amortization 0.7
EBITDA
57.9 Exceptional items: Costs related to transactions 0.7
(a) Investigation and implementation of strategic opportunities 8.3
(b) Supply chain reconfiguration 14.0 (c) Findus Group integration
costs 5.6 (d) Settlement of legacy matters (8.2 ) (e) Other
Adjustments: Other add-backs 3.2 (f)
Adjusted
EBITDA(g) 81.5
(a) Elimination of costs incurred related to enhanced control
compliance procedures in territories.(b) Elimination of costs
incurred in relation to investigation and implementation of
strategic opportunities considered non-recurring for the combined
group following acquisitions by the Company. These costs primarily
relate to changes to the organizational structure of the combined
businesses.(c) Elimination of supply chain reconfiguration costs,
namely the closure of the Bjuv factory.(d) Elimination of
non-recurring costs related to the integration of the Findus Group,
primarily relating to the rollout of the Nomad ERP system.(e)
Elimination of non-recurring income associated with liabilities
relating to periods prior to acquisition of the Findus and Iglo
Groups. settlements of tax audits, sale of non-operating factories
acquired and other liabilities relating to periods prior to
acquisition of the Findus and Iglo businesses by the Company. This
includes gains of €4.2 million from the reassessment of sales tax
provisions, €1.2 million from the reassessment of interest on sales
tax provisions, a €2.8 million gain on a legacy pension plan in
Norway and a €1.3 million gain on disposal of a non-operational
factory.(f) Other add-backs include the elimination of share-based
payment charges of €0.2 million and elimination of M&A related
investigation costs, professional fees, transaction costs and
purchase accounting related valuations of €3.0 million. We exclude
these 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.(g) Adjusted EBITDA margin of 16.0% for the three
months ended December 31, 2017 is calculated by dividing Adjusted
EBITDA by Adjusted revenue of €508.2 million per page 8.
Nomad Foods LimitedAdjusted Financial
Information(In € millions, except per share data)
The following table reconciles Adjusted financial information
for the three months ended December 31, 2016 to the reported
results of Nomad Foods for such period.
Adjusted Statements of Profit or Loss
(unaudited)
Three Months Ended December 31,
2016
€ in millions, except per share data
As Reported for thethree months
endedDecember 31, 2016
Adjustments
As Adjusted for thethree months
endedDecember 31, 2016
Revenue 485.2 — 485.2 Cost of sales (349.3 ) — (349.3 )
Gross profit 135.9 — 135.9 Other
operating expenses (87.5 ) 0.4 (a) (87.1 ) Exceptional items (22.2
) 22.2 (b) —
Operating profit 26.2
22.6 48.8 Finance income (0.6 ) 0.2 (0.4 ) Finance
costs (21.6 ) 3.7 (17.9 )
Net financing costs
(22.2 ) 3.9 (c)
(18.3 )
Profit before tax 4.0 26.5 30.5
Taxation (6.1 ) (0.8 ) (d) (6.9 )
(Loss)/profit for the
period (2.1 ) 25.7 23.6
Weighted average shares outstanding in millions - basic
183.6 183.6
Basic (loss)/earnings per share (0.01
) 0.13 Weighted average shares outstanding in
millions - diluted 183.7 183.7
Diluted (loss)/earnings per
share (0.01 ) 0.13
(a) Adjustment to add back share-based payment charge(b)
Adjustment to add back exceptional items which management believes
do not have a continuing impact. See table ‘EBITDA and Adjusted
EBITDA (unaudited) three months ended December 31, 2016’ for a
detailed list of exceptional items.(c) Adjustment to eliminate €0.2
million of non-cash foreign exchange translation losses, €0.9
million foreign exchange loss on derivatives and €2.8 million of
interest charges on provisions for tax exposures.(d) Adjustment to
reflect the tax impact of the above at the applicable tax rate for
each exceptional item, determined by the nature of the item and the
jurisdiction in which it arises.
Nomad Foods LimitedAdjusted Financial
Information(In € millions)
The following table reconciles EBITDA and Adjusted EBITDA for
the three months ended December 31, 2016 to the reported results of
Nomad Foods for such period.
EBITDA and Adjusted EBITDA
(unaudited)
Three Months Ended December 31,
2016
€ in millions
As reported for thethree months
endedDecember 31, 2016
Profit for the period (2.1 ) Taxation 6.1 Net
financing costs 22.2 Depreciation 10.5 Amortization 2.8
EBITDA 39.5 Exceptional items: Costs related to
transactions 1.8 (a) Cisterna fire net income (4.7 ) (b)
Investigation and implementation of strategic opportunities 1.0 (c)
Supply chain reconfiguration 9.4 (d) Other restructuring costs (0.9
) (e) Findus Group integration costs 4.6 (f) Settlement of legacy
matters 0.6 (g) Remeasurement of indemnification assets 10.4 (h)
Other Adjustments: Other add-backs 0.4 (i)
Adjusted
EBITDA(j) 62.1
(a) Elimination of costs incurred in relation to completed and
potential acquisitions and one-off compliance costs incurred as a
result of listing on the New York Stock Exchange.(b) Elimination of
net insurance income offset by incremental operational costs
incurred as a result of a fire in August 2014 in the Iglo Group’s
Italian production facility which produces Findus branded stock for
sale in Italy(c) Elimination of costs incurred in relation to
investigation and implementation of strategic opportunities
considered non-recurring for the combined group following
acquisitions by the Company. These costs primarily relate to
changes to the organizational structure of the combined
businesses.(d) Elimination of supply chain reconfiguration costs,
namely the closure of the Bjuv factory.(e) Elimination of a credit
on release of provisions for restructuring activities associated
with operating locations.(f) Elimination of costs recognized by
Nomad Foods relating to the integration of the Findus Group.(g)
Elimination of non-recurring costs associated with settlements of
tax audits and other liabilities relating to periods prior to
acquisition of the Findus and Iglo businesses by the Company. These
were previously classified within Investigation and implementation
of strategic opportunities and other items and have been
reclassified into this line for the period presented.(h) Adjustment
to reflect the remeasurement of the indemnification assets
recognized on the acquisition of the Findus Group, which is capped
at the value of shares held in escrow at the share price as at
December 31, 2016.(i) Other add-backs include the elimination of
share-based payment charges of €0.4 million.(j) Adjusted EBITDA
margin 12.8% for the three months ended December 31, 2016 is
calculated by dividing Adjusted EBITDA by Adjusted revenue of
€485.2 million per page 10.
Nomad Foods LimitedAdjusted Financial
Information(In € millions, except per share data)
The following table reconciles Adjusted financial information
for the twelve months ended December 31, 2017 to the reported
results of Nomad Foods for such period.
Adjusted Statements of Profit or Loss
(unaudited)
Twelve Months Ended December 31,
2017
€ in millions, except per share data
As reported for thetwelve months
endedDecember 31, 2017
Adjustments
As Adjusted for thetwelve months
endedDecember 31, 2017
Revenue 1,956.6 — 1,956.6 Cost of sales (1,357.2 ) —
(1,357.2 )
Gross profit 599.4 — 599.4
Other operating expenses (319.3 ) 5.6 (a) (313.7 ) Exceptional
items (37.2 ) 37.2 (b) —
Operating profit
242.9 42.8 285.7 Finance income 7.2 (7.0 ) 0.2
Finance costs (81.6 ) 22.0 (59.6 )
Net financing
costs (74.4 ) 15.0 (c)
(59.4
) Profit before tax 168.5 57.8
226.3 Taxation (32.0 ) (19.1 ) (d) (51.1 )
Profit for the
period 136.5 38.7 175.2
Weighted average shares outstanding in millions - basic
176.1
— 176.1
Basic earnings per share 0.78
1.00 Weighted average shares outstanding in millions -
diluted 184.8 (8.7 ) (e) 176.1
Diluted earnings per share
0.74 1.00
(a) Adjustment to add back share-based payment charge and
non-operating M&A transaction costs.(b) Adjustment to eliminate
exceptional items which management believes are non-recurring and
do not have a continuing impact. See table ‘EBITDA and
Adjusted EBITDA (unaudited) twelve months ended December 31,
2017’ for a detailed list of exceptional items.(c) Adjustment to
eliminate €20.1 million of costs incurred as part of the
refinancing on the May 3, 2017 and repricing on December 20, 2017,
€3.9 million of foreign exchange translation losses and €9.0
million of foreign currency gains on derivatives.(d) Adjustment to
reflect the 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.(e) Adjustment to eliminate the
dilutive effect of the Founder Preferred Share Dividend which was
issued subsequent to the period-end, on January 2, 2018.
Nomad Foods LimitedAdjusted Financial
Information(In € millions)
The following table reconciles EBITDA and Adjusted EBITDA for
the twelve months ended December 31, 2017 to the reported
results of Nomad Foods for such period:
EBITDA and Adjusted EBITDA
(unaudited)
Twelve Months Ended December 31,
2017
€ in millions
As reported for thetwelve months
endedDecember 31, 2017
Profit for the period 136.5 Taxation 32.0 Net
financing costs 74.4 Depreciation 35.9 Amortization 6.5
EBITDA 285.3 Exceptional items: Costs related to
transactions 3.2 (a) Investigation and implementation of strategic
opportunities 18.8 (b) Supply chain reconfiguration 14.0 (c) Findus
Group integration costs 15.1 (d) Remeasurement of indemnification
assets (8.3 ) (e) Settlement of legacy matters (5.6 ) (f) Other
Adjustments: Other add-backs 5.6 (g)
Adjusted
EBITDA(h) 328.1
(a) Elimination of costs incurred related to enhanced control
compliance procedures in territories.(b) Elimination of costs
incurred in relation to investigation and implementation of
strategic opportunities considered non-recurring for the combined
group following acquisitions by the Company. These costs primarily
relate to changes to the organizational structure of the combined
businesses.(c) Elimination of supply chain reconfiguration costs,
namely the closure of the Bjuv factory.(d) Elimination of
non-recurring costs related to the integration of the Findus Group,
primarily relating to the rollout of the Nomad ERP system.(e)
Adjustments to reflect the remeasurement of the indemnification
assets recognized on the acquisition of the Findus Group, which is
capped at the value of shares held in escrow at the share price as
at December 31, 2017. Offsetting are the release of
indemnification assets associated with final settlement of
indemnity claims against an affiliate of Permira Advisors LLP,
which are legacy tax matters that predate the Company's acquisition
of Iglo Group in 2015.(f) Elimination of non-recurring income and
costs associated with liabilities relating to periods prior to
acquisition of the Findus and Iglo Groups, settlements of tax
audits, sale of non-operating factories acquired and other
liabilities relating to periods prior to acquisition of the Findus
and Iglo businesses by the Company. This includes a charge of €3.9
million associated with settlements of tax audits, offset by gains
of €4.2 million from the reassessment of sales tax provisions, €1.2
million from the reassessment of interest on sales tax provisions,
a €2.8 million gain on a legacy pension plan in Norway and a €1.3
million gain on disposal of a non-operational factory. Legacy tax
issues were previously classified within Investigation and
implementation of strategic opportunities and other items and
non-operational factory gains were previously classified within
Findus Group integration costs, and both have been reclassified
into this line for the period presented.(g) Other add-backs include
the elimination of share-based payment charges of €2.6 million and
elimination of M&A related investigation costs, professional
fees, transaction costs and purchase accounting related valuations
of €3.0 million. We exclude these 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.(h) Adjusted EBITDA margin of
16.8% for the twelve months ended December 31, 2017 is
calculated by dividing Adjusted EBITDA by Adjusted revenue of
€1,956.6 million per page 12.
Nomad Foods LimitedAdjusted Financial
Information(In € millions, except per share data)
The following table reconciles Adjusted financial information
for the twelve months ended December 31, 2016 to the reported
results of Nomad Foods for such period:
Adjusted Statements of Profit or Loss
(unaudited)
Twelve Months Ended December 31,
2016
€ in millions, except per share data
As reported for thetwelve months
endedDecember 31, 2016
Adjustments
As Adjusted for thetwelve months
endedDecember 31, 2016
Revenue 1,927.7 — 1,927.7 Cost of sales (1,356.7 ) —
(1,356.7 )
Gross profit 571.0 — 571.0
Other operating expenses (298.4 ) 1.2 (a) (297.2 ) Exceptional
items (134.5 ) 134.5 (b) —
Operating profit
138.1 135.7 273.8 Finance income 24.2 (18.3 )
5.9 Finance costs (86.3 ) 7.1 (79.2 )
Net financing
costs (62.1 ) (11.2 ) (c)
(73.3 ) Profit before tax 76.0
124.5 200.5 Taxation (39.6 ) (6.0 ) (d) (45.6 )
Profit for the period 36.4 118.5
154.9 Weighted average shares outstanding in millions
- basic 183.5 183.5
Basic earnings per share 0.20
0.84 Weighted average shares outstanding in millions -
diluted 183.5 183.5
Diluted earnings per share 0.20
0.84
(a) Adjustment to add back share-based payment charge(b)
Adjustment to add back exceptional items which management believes
do not have a continuing impact. See table ‘EBITDA and Adjusted
EBITDA (unaudited) twelve months ended December 31, 2016’ for
a detailed list of exceptional items.(c) Adjustment to eliminate
€18.3 million of non-cash foreign exchange translation gains, €4.3
million foreign exchange loss on derivatives and €2.8 million of
other exceptional non-cash interest.(d) Adjustment to reflect the
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 LimitedAdjusted Financial
Information(In € millions)
The following table reconciles EBITDA and Adjusted EBITDA for
the twelve months ended December 31, 2016 to the reported
results of Nomad Foods for such period:
EBITDA and Adjusted EBITDA
(unaudited)
Twelve Months Ended December 31,
2016
€ in millions
Twelve MonthsEnded
December31, 2016
Profit for the period 36.4 Taxation 39.6 Net
financing costs 62.1 Depreciation 43.3 Amortization 7.8
EBITDA 189.2 Exceptional items: Costs related to
transactions 4.8 (a) Costs related to management incentive plans
1.9 (b) Investigation and implementation of strategic opportunities
7.0 (c) Cisterna fire net income (4.3 ) (d) Supply chain
reconfiguration 84.3 (e) Other restructuring costs (1.0 ) (f)
Findus Group integration costs 29.6 (g) Settlement of legacy
matters 1.8 (h) Remeasurement of indemnification assets 10.4 (i)
Other Adjustments: Other add-backs 1.2 (j)
Adjusted
EBITDA(k) 324.9
(a) Elimination of costs incurred in relation to completed and
potential acquisitions and one-off compliance costs incurred as a
result of listing on the New York Stock Exchange.(b) Adjustment to
eliminate long term management incentive scheme costs from prior
ownership.(c) Elimination of costs incurred in relation to
investigation and implementation of strategic opportunities
considered non-recurring for the combined group following
acquisitions by the Company. These costs primarily relate to
changes to the organizational structure of the combined
businesses.(d) Elimination of net insurance income offset by
incremental operational costs incurred as a result of a fire in
August 2014 in the Iglo Group’s Italian production facility which
produces Findus branded stock for sale in Italy.(e) Elimination of
supply chain reconfiguration costs, namely the closure of the Bjuv
factory.(f) Elimination of a credit on release of provisions for
restructuring activities associated with operating locations.(g)
Elimination of costs recognized by Nomad Foods relating to the
integration of the Findus Group.(h) Elimination of non-recurring
costs associated with settlements of tax audits and other
liabilities relating to periods prior to acquisition of the Findus
and Iglo businesses by the Company. These were previously
classified within Investigation and implementation of strategic
opportunities and other items and have been reclassified into this
line for the period presented.(i) Adjustment to reflect the
remeasurement of the indemnification assets recognized on the
acquisition of the Findus Group, which is capped at the value of
shares held in escrow at the share price as at December 31,
2016.(j) Other add-backs include the elimination of share-based
payment charges of €1.2 million.(k) Adjusted EBITDA margin 16.9%
for the twelve months ended December 31, 2016 is calculated by
dividing Adjusted EBITDA by Adjusted revenue of €1,927.7 million
per page 14.
Nomad Foods LimitedAdjusted Financial Information
(continued)
Appendix 1: Reconciliation from reported to organic
revenue growth
Year on Year Growth - Three and twelve months
December 31, 2017 compared with December 31,
2016:
Three Months EndedDecember 31,
2017
Twelve Months EndedDecember 31,
2017
YoY Growth YoY Growth Reported Revenue Growth
4.7 % 1.5 % Trading Day Impact — % 0.5
% Translational FX (a) 0.9 % 1.9 %
Organic Revenue Growth
5.6 % 3.9 %
(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.
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) the success of the Company’s strategic initiatives;
(iii) completion of successful acquisitions in the same and
adjacent categories; (iv) the future operating and financial
performance of the Company including our guidance with respect to
Adjusted EBITDA; and (v) synergies from combining the Findus and
Iglo businesses. 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 to the Company of strategic
initiatives; (iv) the successful completion of strategic
acquisitions; (v) changes in applicable laws or regulations; and
(vi) 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20180322005585/en/
Nomad Foods ContactsInvestor Relations
ContactsNomad Foods LimitedTaposh Bari,
+1-718-290-7950CFAorICRJohn Mills, +1-646-277-1254PartnerorMedia
ContactWeber ShandwickLiz Cohen, +1-212-445-8044
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