Nomad Foods(NOMD) - 2024 Q4 - Annual Report

Executive Summary & Outlook Nomad Foods achieved record 2024 performance, issued positive 2025 guidance, and received strong management commentary Highlights of Q4 and Full Year 2024 Performance Nomad Foods achieved its ninth consecutive year of record-high net sales and Adjusted EBITDA in fiscal year 2024, driven by accelerated organic sales growth, higher volumes, robust margin expansion, and market share gains | Metric | Q4 2024 | Full Year 2024 | | :-------------------------------- | :------ | :------------- | | Reported Revenue Growth | 4.3% | 1.8% | | Organic Revenue Growth | 3.1% | 1.0% | | Volume Growth | 4.7% | 1.3% | | Adjusted EBITDA | €137M | €565M | | Adjusted EBITDA Growth | 17.6% | 5.6% | | Adjusted EPS | €0.42 | €1.78 | | Adjusted EPS Growth | 31% | 11% | | Adjusted Free Cash Flow | - | €292M | | Adjusted Free Cash Flow Conversion| - | 101% | - Nomad Foods returned €208 million to shareholders in 2024 through dividends and share repurchases, with basic shares outstanding decreasing by 4% from year-end 2023[4][12] Full Year 2025 Guidance For fiscal year 2025, Nomad Foods anticipates continued top and bottom-line growth, with an increased Adjusted EPS outlook, reflecting confidence in sustained momentum and strategic investments | Metric | 2025 Guidance | | :-------------------------------- | :------------ | | Organic Revenue Growth | 1%-3% | | Adjusted EBITDA Growth | 2%-4% | | Adjusted EPS (prior outlook) | €1.81-€1.85 | | Adjusted EPS (new outlook) | €1.85-€1.89 | | Adjusted EPS Growth (new outlook) | 4%-6% | | Adjusted Free Cash Flow Conversion| 90% or greater| - The Board of Directors approved a 13% increase to the company's Q1 2025 cash dividend, signaling strong cash generation and growth prospects[4] Management & Board Commentary Management highlighted successful brand investments and operational excellence in 2024, driving accelerating volume momentum and market share gains, expressing confidence for continued growth in 2025 - CEO Stéfan Descheemaeker noted that investments made in 2023 delivered strong returns in 2024, evidenced by accelerating volume momentum and market share gains in the latter half of the year[6] - The company strengthened its innovation engine, increasing innovation as a percentage of sales year-over-year, and expanded margins through supply chain productivity and focused growth investments[6] - Co-Chairman and Founder Noam Gottesman expressed optimism for Nomad Foods' growth potential, highlighting its curated portfolio of iconic brands and outperformance versus industry peers[6][8] Company Overview & Contacts This section details conference call information, investor contacts, and a brief company overview Conference Call and Webcast Information Nomad Foods hosted a conference call and webcast on March 3, 2025, to discuss the financial results, with replay options available for two weeks - The conference call was held on Monday, March 3, 2025, at 1:30 p.m. GMT (8:30 a.m. Eastern Standard Time)[10] - Both the presentation and webcast are accessible via the Nomad Foods website under Investor Relations[10] Investor Relations and Media Contacts Contact information for investor relations and media inquiries is provided for stakeholders - Investor Relations Contact: Jason English (investorrelations@nomadfoods.com)[11] - Media Contact: Elaine McCrimmon, Group Corporate Affairs Director (elaine.mccrimmon@nomadfoods.com)[11] About Nomad Foods Nomad Foods is Europe's leading frozen food company, known for its portfolio of iconic brands that provide convenient, high-quality, and nutritious food - Nomad Foods (NYSE: NOMD) is Europe's leading frozen food company[11] - Its brand portfolio includes Birds Eye, Findus, iglo, Ledo, and Frikom[11] - The company is headquartered in the United Kingdom[11] Detailed Financial Performance This section provides a detailed breakdown of Nomad Foods' financial results for the fourth quarter and full year 2024 compared to 2023 Fourth Quarter 2024 Results vs. Fourth Quarter 2023 Nomad Foods reported strong fourth-quarter results with significant growth in revenue, gross profit, and adjusted earnings, driven by volume growth and improved margins | Metric | Q4 2024 | Q4 2023 | Change | | :-------------------------------- | :------ | :------ | :----- | | Revenue | €793M | €760.8M | +4.3% | | Organic Revenue Growth | 3.1% | - | - | | Volume Growth | 4.7% | - | - | | Price/Mix | -1.6% | - | - | | Gross Profit | €226M | €207.7M | +9% | | Gross Margin | 28.5% | 27.3% | +120 bps| | Adjusted Operating Expenses | €114M | €122.6M | -3% | | Adjusted EBITDA | €137M | €116.6M | +17.6% | | Adjusted Profit after tax | €67M | €52.3M | +28% | | Adjusted EPS | €0.42 | €0.32 | +31% | | Reported Diluted EPS | €0.32 | €0.15 | +113% | - Gross margin increased by 120 basis points to 28.5% due to positive product mix performance and improved supply chain productivity[12] - Adjusted operating expenses decreased by 3% due to lower Advertising & Promotion (A&P) spend, cycling a sharp increase in Q4 2023[12] Full Year 2024 Results vs. Full Year 2023 For the full year 2024, Nomad Foods achieved revenue growth, significant gross profit improvement, and increased adjusted earnings, alongside substantial shareholder returns | Metric | FY 2024 | FY 2023 | Change | | :-------------------------------- | :------ | :------ | :----- | | Revenue | €3.1B | €3.04B | +1.8% | | Organic Revenue Growth | 1.0% | - | - | | Volume Growth | 1.3% | - | - | | Price/Mix | -0.3% | - | - | | Gross Profit | €918M | €858.7M | +7% | | Gross Margin | 29.6% | 28.2% | +140 bps| | Adjusted Operating Expenses | €450M | €418.7M | +7% | | Adjusted EBITDA | €565M | €535M | +5.6% | | Adjusted Profit after tax | €289M | €274.8M | +5% | | Adjusted EPS | €1.78 | €1.61 | +11% | | Reported Diluted EPS | €1.40 | €1.13 | +24% | - Gross margin increased by 140 basis points to 29.6% due to positive product mix and improved supply chain productivity[12] - Adjusted operating expenses increased by 7% due to higher A&P and ongoing investments in capabilities development, alongside inflationary headwinds[12] Non-IFRS Financial Measures This section defines the company's non-IFRS financial measures and outlines their purpose and inherent limitations Definition and Purpose of Non-IFRS Measures Nomad Foods presents Adjusted and Organic financial information as non-IFRS measures to provide a clearer view of underlying operating results by excluding certain non-recurring or non-operational items - Adjusted financial information primarily excludes share-based payment expenses, non-operating M&A costs, acquisition purchase price adjustments, exceptional items, and foreign currency exchange charges/gains[14] - Adjusted EBITDA, Adjusted Profit for the period, and Adjusted EPS are used to assess operating performance on a consistent basis, excluding items not indicative of normal operating costs[15][17][18] - Organic revenue growth reflects reported revenue adjusted for currency translation and non-comparable trading items to show underlying business growth[19] Limitations of Non-IFRS Measures The company cautions that its non-IFRS financial measures should not be considered alternatives to IFRS reported results, as their calculation may differ from other companies, limiting comparability and not necessarily indicating future financial performance - Non-IFRS financial measures should not be considered an alternative or substitute for the Company's reported results in accordance with IFRS[23] - Nomad Foods' calculation of these measures may differ from other companies, potentially limiting comparability[23] - Investors are cautioned not to place undue reliance on these results as they may not be representative of actual or future results[23] Consolidated Financial Statements (As Reported) This section presents the unaudited and audited consolidated financial statements, including profit or loss, financial position, and cash flows for 2024 and 2023 Statements of Profit or Loss (unaudited) Three months ended December 31, 2024 and December 31, 2023 The unaudited statements of profit or loss for Q4 2024 show an increase in revenue, gross profit, and profit for the period compared to Q4 2023 | € in millions | Dec 31, 2024 | Dec 31, 2023 | | :-------------------------- | :----------- | :----------- | | Revenue | 793.4 | 760.8 | | Cost of sales | (567.5) | (553.1) | | Gross profit | 225.9 | 207.7 | | Operating profit | 91.5 | 66.7 | | Profit before tax | 61.3 | 46.2 | | Profit for the period | 51.4 | 24.7 | | Basic earnings per share in € | 0.32 | 0.15 | | Diluted earnings per share in € | 0.32 | 0.15 | Statements of Profit or Loss (audited) Twelve months ended December 31, 2024 and December 31, 2023 The audited statements of profit or loss for the full year 2024 demonstrate growth in revenue, gross profit, and profit for the period compared to 2023 | € in millions | Dec 31, 2024 | Dec 31, 2023 | | :-------------------------- | :----------- | :----------- | | Revenue | 3,099.8 | 3,044.5 | | Cost of sales | (2,182.0) | (2,185.8) | | Gross profit | 917.8 | 858.7 | | Operating profit | 387.0 | 340.4 | | Profit before tax | 277.9 | 253.6 | | Profit for the period | 227.1 | 192.7 | | Basic earnings per share in € | 1.41 | 1.13 | | Diluted earnings per share in € | 1.40 | 1.13 | Statements of Financial Position (audited) As at December 31, 2024 and December 31, 2023 The audited statements of financial position show a slight increase in total assets and net assets at the end of 2024 compared to 2023, with changes in current and non-current liabilities | € in millions | Dec 31, 2024 | Dec 31, 2023 | | :-------------------------- | :----------- | :----------- | | Total non-current assets | 5,197.7 | 5,251.6 | | Total current assets | 1,233.9 | 1,165.1 | | Total assets | 6,431.6 | 6,416.7 | | Total current liabilities | 1,123.3 | 1,028.0 | | Total non-current liabilities | 2,645.8 | 2,796.8 | | Total liabilities | 3,769.1 | 3,824.8 | | Net assets | 2,662.5 | 2,591.9 | | Total equity | 2,662.5 | 2,591.9 | Statements of Cash Flows (audited) For the twelve months ended December 31, 2024 and the twelve months ended December 31, 2023 The audited statements of cash flows for 2024 indicate a slight increase in net cash flows from operating activities, while cash used in financing activities increased significantly | € in millions | FY 2024 | FY 2023 | | :-------------------------------- | :------ | :------ | | Net cash flows from operating activities | 435.4 | 430.8 | | Cash used in investing activities | (64.4) | (76.8) | | Net cash used in financing activities | (366.4) | (321.5) | | Net increase in cash and cash equivalents | 4.6 | 32.5 | | Cash and cash equivalents at end of period | 403.3 | 399.7 | - Repurchase of ordinary shares amounted to €118.7 million in 2024, and dividends paid were €89.2 million[28] Reconciliation of Non-IFRS Financial Measures This section provides detailed reconciliations of reported IFRS figures to non-IFRS adjusted financial measures for both quarterly and annual periods Adjusted Statement of Profit or Loss (unaudited) Three months ended December 31, 2024 The adjusted profit or loss statement for Q4 2024 shows adjustments for share-based payments, M&A costs, exceptional items, and foreign exchange, leading to a higher adjusted profit and EPS | € in millions, except per share data | As reported | Adjustments | As adjusted | | :----------------------------------- | :---------- | :---------- | :---------- | | Revenue | 793.4 | — | 793.4 | | Operating profit | 91.5 | 20.1 | 111.6 | | Profit for the period | 51.4 | 15.7 | 67.1 | | Diluted earnings per share in € | 0.32 | | 0.42 | - Adjustments include €0.8 million for share-based payment charges and non-operating M&A costs, €19.3 million for exceptional items, and €3.2 million for foreign exchange translation losses[30][31] Adjusted EBITDA (unaudited) Three months ended December 31, 2024 Adjusted EBITDA for Q4 2024 was €137.1 million, with a margin of 17.3%, after accounting for exceptional items and other adjustments | € in millions | Q4 2024 | | :-------------------------- | :------ | | Profit for the period | 51.4 | | Taxation | 9.9 | | Net financing costs | 30.2 | | Depreciation and amortization | 25.5 | | Exceptional items | 19.3 | | Other Adjustments | 0.8 | | Adjusted EBITDA | 137.1 | - Exceptional items primarily include €20.8 million for the Business Transformation Program, offset by €1.5 million income from settlement of legacy matters[35] - Adjusted EBITDA margin for Q4 2024 was 17.3%[37] Adjusted Statements of Profit or Loss (unaudited) Three months ended December 31, 2023 The adjusted profit or loss statement for Q4 2023 shows adjustments for share-based payments, M&A costs, exceptional items, and foreign exchange, leading to a higher adjusted profit and EPS | € in millions, except per share data | As reported | Adjustments | As adjusted | | :----------------------------------- | :---------- | :---------- | :---------- | | Revenue | 760.8 | — | 760.8 | | Operating profit | 66.7 | 23.7 | 90.4 | | Profit for the period | 24.7 | 27.6 | 52.3 | | Diluted earnings per share in € | 0.15 | | 0.32 | - Adjustments include €5.3 million for share-based payment charges and non-operating M&A costs, €18.4 million for exceptional items, and €4.8 million for net financing costs adjustments[39][41] Adjusted EBITDA (unaudited) Three months ended December 31, 2023 Adjusted EBITDA for Q4 2023 was €116.6 million, with a margin of 15.3%, after accounting for exceptional items and other adjustments | € in millions | Q4 2023 | | :-------------------------- | :------ | | Profit for the period | 24.7 | | Taxation | 21.5 | | Net financing costs | 20.5 | | Depreciation and amortization | 26.2 | | Exceptional items | 19.4 | | Other Adjustments | 4.3 | | Adjusted EBITDA | 116.6 | - Exceptional items include €16.6 million for the Business Transformation Program and €2.8 million for Fortenova Group integration costs[43] - Adjusted EBITDA margin for Q4 2023 was 15.3%[44] Adjusted Statement of Profit or Loss (unaudited) Twelve months ended December 31, 2024 The adjusted profit or loss statement for FY 2024 shows significant adjustments for non-operating items, resulting in a higher adjusted profit and EPS compared to reported figures | € in millions, except per share data | As reported | Adjustments | As adjusted | | :----------------------------------- | :---------- | :---------- | :---------- | | Revenue | 3,099.8 | — | 3,099.8 | | Operating profit | 387.0 | 81.2 | 468.2 | | Profit for the period | 227.1 | 61.7 | 288.8 | | Diluted earnings per share in € | 1.40 | | 1.78 | - Adjustments include €11.7 million for share-based payment charges and non-operating M&A costs, €69.5 million for exceptional items, and €0.9 million for net financing costs adjustments[46][48] Adjusted EBITDA (unaudited) Twelve months ended December 31, 2024 Adjusted EBITDA for FY 2024 was €565.1 million, with a margin of 18.2%, after accounting for various adjustments | € in millions | FY 2024 | | :-------------------------- | :------ | | Profit for the period | 227.1 | | Taxation | 50.8 | | Net financing costs | 109.1 | | Depreciation and amortization | 96.9 | | Exceptional items | 69.5 | | Other Adjustments | 11.7 | | Adjusted EBITDA | 565.1 | - Exceptional items include €68.0 million for the Business Transformation Program and €1.5 million for settlement of legacy matters[49] - Adjusted EBITDA margin for FY 2024 was 18.2%[50] Adjusted Statements of Profit or Loss (unaudited) Twelve months ended December 31, 2023 The adjusted profit or loss statement for FY 2023 shows adjustments for non-operating items, resulting in a higher adjusted profit and EPS compared to reported figures | € in millions, except per share data | As reported | Adjustments | As adjusted | | :----------------------------------- | :---------- | :---------- | :---------- | | Revenue | 3,044.5 | — | 3,044.5 | | Operating profit | 340.4 | 99.6 | 440.0 | | Profit for the period | 192.7 | 82.1 | 274.8 | | Diluted earnings per share in € | 1.13 | | 1.61 | - Adjustments include €27.1 million for share-based payment charges and non-operating M&A costs, €72.5 million for exceptional items, and €9.5 million for net financing costs adjustments[52][54] Adjusted EBITDA (unaudited) Twelve months ended December 31, 2023 Adjusted EBITDA for FY 2023 was €535.0 million, with a margin of 17.6%, after accounting for various adjustments | € in millions | FY 2023 | | :-------------------------- | :------ | | Profit for the period | 192.7 | | Taxation | 60.9 | | Net financing costs | 86.8 | | Depreciation and amortization | 95.0 | | Exceptional items | 72.5 | | Other Adjustments | 27.1 | | Adjusted EBITDA | 535.0 | - Exceptional items include €0.6 million for IT Transformation, €68.4 million for Business Transformation, and €4.3 million for Fortenova Group integration costs[55] - Adjusted EBITDA margin for FY 2023 was 17.6%[55] Reconciliation of Reported to Organic Revenue Growth The reconciliation shows the breakdown of reported revenue growth into organic revenue growth and the impact of translational foreign exchange for both Q4 and the full year 2024 | Metric | Q4 2024 YoY Change | FY 2024 YoY Change | | :-------------------------- | :----------------- | :----------------- | | Reported Revenue Growth | 4.3 % | 1.8 % | | Organic Revenue Growth | 3.1 % | 1.0 % | | Translational FX | 1.2 % | 0.8 % | Reconciliation of Net Cash Flows from Operating Activities to Adjusted Free Cash Flow The reconciliation details the adjustments made to net cash flows from operating activities to arrive at Adjusted Free Cash Flow for FY 2024, which stood at €292.3 million, representing a 101% conversion rate of adjusted profit | € in millions | FY 2024 | | :---------------------------------------------------- | :------ | | Net cash flows from operating activities | 435.4 | | Add back: Cash flows relating to exceptional items | 67.7 | | Add back: Employer taxes related to share based payments | 1.6 | | Add back: Non-operating M&A costs | 1.2 | | Deduct: Capital expenditure | (80.3) | | Deduct: Net interest paid | (102.0) | | Deduct: Payment of lease liabilities | (31.3) | | Adjusted free cash flow | 292.3 | | Adjusted profit for the period | 288.8 | | Adjusted free cash flow as % adjusted profit for the period | 101 % | - Adjusted free cash flow conversion was 101% of Adjusted Profit for the period in 2024[60] Legal Disclaimers This section outlines important legal disclaimers regarding forward-looking statements and the nature of the report as an informational release Forward-Looking Statements The report contains forward-looking statements regarding future performance and expectations, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are based on the Company's expectations, intentions, and projections regarding future performance, anticipated events, or trends[62] - These statements are not guarantees of future performance and are subject to various known and unknown risks and uncertainties, including supply chain issues, inflation, competition, and changes in consumer preferences[63] - Prospective investors are cautioned not to place undue reliance on forward-looking statements, and the Company does not undertake to update or revise them[63] No Offer or Solicitation This release is for informational purposes only and does not constitute an offer to sell or a solicitation to purchase securities, nor does it imply any sale or transfer of securities in contravention of applicable law - This release 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[64] - The release, publication, or distribution of this announcement in certain jurisdictions may be restricted by law[65]