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Nomad Foods Reports First Quarter 2019 Financial Results

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Company Reiterates 2019 Adjusted EBITDA Guidance

Nomad Foods Limited (NYSE: NOMD), today reported financial results for
the three month period ended March 31, 2019. Key operating highlights
and financial performance for the first quarter 2019, when compared to
the first quarter 2018, include:

  • Reported revenue increased 15% to €618 million
  • Organic revenue growth of 0.9%
  • Reported Profit for the period of €22 million
  • Adjusted EBITDA increased 18% to €122 million
  • Adjusted EPS increased 14% to €0.40

Management Comments
Stéfan Descheemaeker, Nomad
Foods' Chief Executive Officer, stated, "We achieved strong performance
during the first quarter and are on pace to deliver another year of
revenue and Adjusted EBITDA growth in line with our long-term growth
algorithm. Organic revenue growth of 0.9% was achieved despite a later
Easter this year, reflecting our ability to consistently execute against
our growth model. Strategic focus on our core categories continues to
drive market share gains and favorable mix. Overall, we are pleased with
our start to the year and are well positioned to continue the solid
momentum throughout 2019 and beyond."

Noam Gottesman, Nomad Foods' Co-Chairman and Founder, commented, "First
quarter results reinforce the sustainability of the Nomad Foods business
model, now in its third consecutive year of organic revenue growth and
market share gains. The team continues to execute at a high level while
successfully navigating a dynamic packaged food backdrop. We ended the
quarter with a sizable cash position due to strong free cash generation
and a successful equity offering completed in late March. The
combination of solid operating momentum and a well-capitalized balance
sheet puts us in a position of strength as we pursue our organic and
acquisitive growth ambitions."

First Quarter of 2019 results compared to the First Quarter of 2018

  • Revenue increased 14.6% to €618 million. Organic revenue
    growth of 0.9% was comprised of 4.1% growth in price and a 3.2%
    decline in volume/mix. Revenue growth benefited 13.8% from
    acquisitions.
  • Gross profit increased 11% to €191 million. Gross margin
    declined 90 basis points to 30.9% as positive mix and pricing and
    promotional efficiencies were offset by cost of goods inflation and
    acquisition mix.
  • Adjusted operating expenses increased 9% to €85 million
    primarily due to inclusion of acquisitions. As a percentage of
    revenues, Adjusted operating expenses improved from 14.5% to 13.8%
    reflecting acquisition synergies, expense discipline and phasing.
    Advertising and promotion expense increased 6% to €32 million while
    Indirect expense increased 11% to €54 million.
  • Adjusted EBITDA increased 18% to €122 million, which included a
    benefit of €4.3 million related to IFRS 16.
  • Adjusted Profit after tax increased 14% to €71 million,
    reflecting Adjusted EBITDA growth, higher finance costs and a lower
    effective tax rate. The impact of IFRS 16 reduced Adjusted Profit
    after tax by €0.7 million.
  • Adjusted EPS increased 14% to €0.40, reflecting Adjusted Profit
    growth. The impact of IFRS 16 was immaterial to this metric. Reported
    EPS declined 64% to €0.13.

IFRS 16 - Leases
As previously disclosed, Nomad Foods
has adopted IFRS 16, a new standard on lease accounting which requires
certain operating leases to be capitalized on the balance sheet
effective January 1, 2019. Based on the adoption method selected by the
Company, prior year results have not been restated to reflect the new
standard.

2019 Guidance
The Company is reiterating 2019
guidance of approximately €420 to €430 million Adjusted EBITDA. Adjusted
EPS is now expected to be in the range of €1.18 to €1.22 per share,
reflecting a higher share count as a result of the March 2019 equity
offering. Full year guidance continues to assume organic revenue growth
at a low-single digit percentage range.

Conference Call and Webcast
The Company will host a
conference call with members of the executive management team to discuss
these results today, Thursday, May 9, 2019 at 1:30 p.m. GMT time (8:30
a.m. Eastern time). Investors interested in participating in the live
call can dial +1-800-263-0877 from the U.S. International callers can
dial +1-646-828-8143.

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 9138035.

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. The company's portfolio of iconic
brands, which includes Birds Eye, Findus, Iglo, Aunt Bessie's and
Goodfella's, have been a part of consumers' meals for generations,
standing for great tasting food that is convenient, high quality and
nutritious. Nomad Foods is headquartered in the United Kingdom.
Additional information may be found at 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 months ended
March 31, 2019 and for comparative purposes, the three months ended
March 31, 2018.

Adjusted financial information for the three months ended March 31, 2019
and 2018 presented in this press release reflects the historical
reported financial statements of Nomad Foods, adjusted primarily for
share based payment expenses and related employer payroll taxes,
non-operating M&A related costs, acquisition purchase price adjustments,
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, the impacts of exited markets, acquisition
purchase price adjustments, chart of account ("CoA") alignments and
exceptional items such as restructuring charges, goodwill and intangible
asset impairment charges and other unusual or non-recurring items. In
addition, we exclude other adjustments such as the impact of share based
payment expenses and related employer payroll taxes, and non-operating
M&A related 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. 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, acquisition purchase price
adjustments, chart of account ("CoA") alignments and exceptional items
such as restructuring charges, goodwill and intangible asset impairment
charges, unissued preferred share dividends, as well as certain other
items considered unusual or non-recurring in nature. In addition, we
exclude other adjustments such as the impact of share based payment
expenses and related employer payroll taxes, and non-operating M&A
related 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. 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 months ended March 31, 2019 and 2018
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 7 to 10, 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 March 31, 2019 and March 31, 2018

 

Three months ended
March 31, 2019

Three months ended
March 31, 2018

€m €m
Revenue 617.8 539.2
Cost of sales (427.1 ) (367.9 )
Gross profit 190.7 171.3
Other operating expenses (89.4 ) (82.8 )
Exceptional items (46.6 ) (1.5 )
Operating profit 54.7 87.0
Finance income 1.6 6.2
Finance costs (16.4 ) (12.3 )
Net financing costs (14.8 ) (6.1 )
Profit before tax 39.9 80.9
Taxation (17.6 ) (18.5 )
Profit for the period 22.3   62.4  
 
Attributable to:
Equity owners of the parent 22.4 62.4
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