FELTHAM, England--(BUSINESS WIRE)--
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 Ended |
Three Months Ended |
|||||
| € 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 ended |
Twelve months ended |
|||||
| € 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 ended |
Twelve months ended |
|||||
| € 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 Limited
Adjusted 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 the |
Adjustments |
As Adjusted for the |
||||||||
| 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 Limited
Adjusted 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 the |
||||
| 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 Limited
Adjusted 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 the |
Adjustments |
As Adjusted for the |
||||||||
| 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 Limited
Adjusted 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 the |
||||
| 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 Limited
Adjusted 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 the |
Adjustments |
As Adjusted for the |
||||||||
| 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 Limited
Adjusted 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 the |
||||
| 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 Limited
Adjusted 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 the |
Adjustments |
As Adjusted for the |
||||||||
| 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 Limited
Adjusted 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 Months |
||||
| 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 Limited
Adjusted 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 Ended |
Twelve Months Ended |
|||||
| 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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