Nomad Foods: Reports Q4 and Full Year 2022 Financial Results

Feltham / UK. (nom) Nomad Foods Limited (Goodfella’s Pizza, Iglo, Findus and other brands) reported financial results for the three and twelve-month periods ended December 31, 2022.

Key operating highlights and financial performance for Q4-2022, when compared to Q4-2021, include:

• Reported revenue increased 6.6 percent to EUR 750 million
• Organic revenue increase of 7.7 percent
• Reported Profit for the period of EUR 37 million
• Adjusted Ebitda up slightly to EUR 113 million
• Adjusted EPS of EUR 0.33

Key operating highlights and financial performance for FY-2022, when compared to FY-2021, include:

• Reported revenue increased 12.8 percent to EUR 2,940 million
• Organic revenue increase of 1.8 percent
• Reported Profit for the period of EUR 250 million
• Adjusted Ebitda increased 8 percent to EUR 524 million
• Adjusted EPS of EUR 1.68

Management Comments

Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “We are pleased to report that 2022 was another year of record revenue, Adjusted Ebitda and Adjusted EPS for Nomad Foods, again proving the resilience of our operating model in a challenging macro environment. Our organic sales returned to growth, we expanded Adjusted Ebitda and Adjusted EPS by 8 percent, and we extended our debt maturities at competitive rates. Most importantly, we adjusted our business model in response to extraordinary changes in the market, especially in raw material sourcing and portfolio pricing. Looking ahead to 2023, the frozen food category remains great value for consumers, and we have exciting plans in place to deliver strong operational results to build value for our shareholders.”

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “Our 2022 results mark another record financial performance for Nomad Foods. We delivered Adjusted EPS at the top-end of our guidance range, grew organic sales against a challenging consumer backdrop, finished the successful integration of Fortenova’s frozen food business, and opportunistically accessed the capital markets to extend our debt maturities until mid-2028 and 2029. We enter 2023 with sales momentum, strong underlying cash generation, and financial flexibility providing the opportunity to prudently deploy capital to create value for shareholders. In addition to our ability to return capital to shareholders, we believe we have the right operational and financial plans in place to drive sustainable growth to compound value into the future.”

Fourth Quarter of 2022 results compared to Q4-2021

• Revenue increased 6.6 percent to EUR 750 million. Organic revenue increase of 7.7 percent was driven by a 8.1 percent decline in volume/mix and a 15.8 percent increase in price.
• Adjusted gross profit increased 3 percent to EUR 193 million. Adjusted Gross margin decreased 80 basis points to 25.7 percent driven by higher raw material costs driven by inflation, partially offset by higher pricing.
• Adjusted operating expenses increased 9 percent to EUR 103 million, primarily reflecting a number of one-off costs in the quarter including a EUR 4.5 million Cost of Living payment support package for our employees.
• Adjusted Ebitda up slightly to EUR 113 million and Adjusted Profit after tax decreased 1 percent to EUR 58 million due to the aforementioned factors.
• Adjusted EPS remained unchanged at EUR 0.33. Reported EPS increased 31 percent to EUR 0.21.

Year Ended 2022 results compared to the Year Ended 2021

• Revenue increased 12.8 percent to EUR 2,940 million. Organic revenue increase of 1.8 percent was driven by a 5.9 percent decline in volume/mix and a 7.7 percent increase in price.
• Adjusted gross profit increased 8 percent to EUR 815 million. Adjusted Gross margin decreased 120 basis points to 27.7 percent driven by higher raw material costs driven by inflation, partially offset by higher pricing and the inclusion of the acquisition.
• Adjusted operating expenses increased 12 percent to EUR 380 million driven primarily by the first-time inclusion of our Adriatic region acquisition.
• Adjusted Ebitda increased 8 percent to EUR 524 million and Adjusted Profit after tax increased 6 percent to EUR 293 million, due to the aforementioned factors.
• Adjusted EPS increased 8 percent to EUR 1.68 and Reported EPS increased 40 percent to EUR 1.43.

2023 Guidance

For the full year 2023, management expects Adjusted EPS of EUR 1.50 to EUR 1.55. Full year guidance assumes mid-single-digit revenue growth and cash flow conversion in the range of 90 to 95 percent.