Nomad Foods: Reports Q4 and Full Year 2023 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, 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 percent to EUR 761 million
• Organic revenue growth of 1.9 percent
• Adjusted Ebitda up 3.2 percent to EUR 117 million
• Adjusted EPS of EUR 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 percent to EUR 3.0 billion
• Organic revenue growth of 4.9 percent
• Adjusted Ebitda increased 2.0 percent to EUR 535 million
• Adjusted EPS of EUR 1.61
• Adjusted free cash flow of EUR 300 million, representing an adjusted free cash flow conversation of 109 percent

2024 full year guidance

For the full year 2024, the Company expects organic net revenue growth of 3 percent-4 percent, driven by positive volume/mix, adjusted Ebitda growth of 4 percent-6 percent, and adjusted EPS of EUR 1.75-EUR 1.80, implying growth of 9-12 percent. Based on USD /EUR exchange rate as of February 17th, this translates into 2024 adjusted EPS of USD 1.89-USD 1.95. The Company expects full year cash flow conversion in the range of 90 percent to 95 percent.

Management Comments

Chief Executive Officer Stéfan Descheemaeker: “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.”

Co-Chairman and Founder Noam Gottesman: “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 Q4-2022

• Revenue increased 1.4 percent to EUR 761 million. Organic revenue increase of 1.9 percent was driven by a 7.5 percent increase in price offset by a 5.6 percent decline in volume/mix.
• Gross profit increased 8 percent to EUR 208 million. Gross margin increased 160 basis points to 27.3 percent driven by a favorable comparison in the timing of pricing delivery in the prior year.
• Adjusted operating expenses increased 14 percent to EUR 117 million due to increased A+P investment in the business.
• Adjusted Ebitda increased by 3.2 percent to EUR 117 million and Adjusted Profit after tax decreased 9 percent to EUR 52 million due to higher interest charges.
• Adjusted EPS decreased 3.0 percent to EUR 0.32, reflecting the decrease in Adjusted Profit after tax due to higher interest charges. Reported EPS decreased 29 percent to EUR 0.15.

Year Ended 2023 results compared to FY-2022

• Revenue increased 3.6 percent to EUR 3,045 million. Organic revenue increase of 4.9 percent was driven by a 14.4 percent increase in price offset by a 9.5 percent decline in volume/mix.
• Gross profit increased 5 percent to EUR 859 million. Gross margin increased 50 basis points to 28.2 percent 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 percent to EUR 419 million due to increased A+P investment in the business.
• Adjusted Ebitda increased 2 percent to EUR 535 million and Adjusted Profit after tax decreased 6 percent to EUR 275 million, due to higher interest charges.
• Adjusted EPS decreased 4.2 percent to EUR 1.61, reflecting the decrease in Adjusted Profit after tax due to higher interest charges. Reported EPS decreased 21 percent to EUR 1.13.