Nomad Foods Reports Third Quarter 2023 Financial Results

Revenue growth of +0.5% with Adjusted EPS of €0.43

Raise Full Year Adjusted EPS Guidance to €1.57 – €1.60

Announces a New Share Repurchase Authorization of up to $500 million

Announces intention to launch quarterly dividend in early 2024 

FELTHAM, England, Nov. 9, 2023 /PRNewswire/ — Nomad Foods Limited (NYSE: NOMD), today reported financial results for the three and nine month periods ended September 30, 2023.  Key operating highlights and financial performance for the third quarter 2023, when compared to the third quarter 2022, include:

• Reported revenue increased 0.5% to €764 million
• Organic revenue growth of 1.6%
• Reported Profit for the period of €78 million
• Adjusted EBITDA of €140 million
• Adjusted EPS of €0.43

Management Comments

Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “In the third quarter, we maintained our organic sales momentum from the first half of the year. Additionally, during September we kicked off our stepped-up A&P investment plan with a new and dynamic media campaign augmented by a comprehensive in-store promotional program, positioning us for a return to sustainable, long-term volume and market share growth. As a result of our third quarter operational performance, share repurchase, and our positive expectations for the end of 2023, we are again raising our Adjusted EPS guidance range to €1.57 to €1.60 from our previous range of €1.54 to €1.57. We maintain our guidance for Adjusted Free Cash Flow conversion in the range of 90% to 95%, and we are on course to generate approximately €250 million of Adjusted Free Cash Flow for the year.”

Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “We are pleased to report another set of strong results this quarter with a continuation of our organic revenue growth trend. Our financial, commercial, and supply chain strategies are all delivering results consistent with our expectations which contributes to this success. We repurchased €65.8 million in shares this quarter and continue to believe our shares represent a significant value creation opportunity. Also, we have approved a new $500 million share repurchase authorization to replace our current program, which expires at the end of this year. Furthermore, to complement our capital allocation strategy, we also plan to institute a regular quarterly dividend in 2024, subject to board approval, with details to follow early next year. We believe the combination of a new share repurchase program and a dividend further underscores our commitment to maximizing shareholder returns.” 

Third Quarter of 2023 results compared to the Third Quarter of 2022

• Revenue increased 0.5% to €764 million. Organic revenue growth of 1.6% was comprised of a 11.2% decline in volume/mix offset by a 12.8% increase in price.
• Gross profit decreased 2.0% to €217 million. Gross margin declined 70 basis points to 28.4%, due to an unfavorable comparison in the timing of pricing delivery in the prior year.
• Adjusted operating expenses increased 10.7% to €100 million due to increased A&P investment in the business.
• Adjusted EBITDA decreased 8.8% to €140 million due to the aforementioned factors. Adjusted Profit for the period decreased 18.7% to €73 million due to the impact of the refinancing we performed in November 2022, resulting in higher cash interest payments on a portion of our debt.
• Adjusted EPS decreased 17.3% to €0.43, reflecting the decrease in Adjusted Profit after tax due to higher interest charges. Reported EPS decreased 2.1% to €0.46.

For the Nine Months ended September 30, 2023 results compared to the Nine Months ended September 30, 2022

• Revenue increased 4.3% to €2,284 million. Organic revenue growth of 6.0% was comprised of a 10.6% decline in volume/mix offset by a 16.6% increase in price.
• Gross profit increased 4.6% to €651 million. Gross margin increased 10 basis points to 28.5%, 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 8.8% to €301 million.
• Adjusted EBITDA increased 1.7% to €418 million. Adjusted Profit for the period decreased 5.6% to €223 million due to the aforementioned factors.
• Adjusted EPS decreased 4.4% to €1.29, reflecting the decrease in Adjusted Profit after tax. Reported EPS decreased 20.5% to 0.97.

2023 Guidance

For the full year 2023, driven by our operational performance and share repurchase program, we are raising our Adjusted EPS guidance to €1.57 to €1.60 from €1.54 to €1.57. We maintain our full-year guidance of mid-single-digit organic revenue growth and Adjusted Cash Flow conversion in the range of 90% to 95%, unchanged…