Nomad Foods Limited · NYSE:NOMD
Nomad Foods — CAGNY 2020
53 slides from Nomad Foods's conference presentation, Feb 19, 2020
Slide 1: CAGNY 2020
CAGNY 2020 February 19, 2020
Slide 2: Disclosures
Disclosures This presentation has been prepared and issued by Nomad Foods Limited (the "Company"). This Presentation has been provided solely for information and background. The information in this Presentation is provided as at the date of the Presentation (unless stated otherwise). This Presentati
Slide 3: Agenda
Agenda 1 A Leader in Frozen Food 2 Accelerating Plant Protein 3 Raising the Bar 4 Financial Highlights
Slide 4: Nomad Foods is Europe's Leading Frozen Food Company
Nomad Foods is Europe’s Leading Frozen Food Company Revenue By Category net consecutive years of €2b+ revenues 3 organic revenue growth other pizza 6% 8% poultry 8% fish #1 market share 100% 40% within Western Europe frozen food meals of revenues in 9% frozen food primary countries potatoes across W
Slide 5: Nomad is Also the Third Largest Branded Frozen Food Company in the World
Nomad is Also the Third Largest Branded Frozen Food Company in the World €6.2 Global Frozen Savory (2019) Total Branded Retail Sales Value, bn €4.2 €3.3 €2.1 €2.1 €2.0 €1.5 €1.3 €1.2 €1.1 Source: Euromonitor 5
Slide 6: Sustainability Is a Fundamental Pillar of our Business
Sustainability Is a Fundamental Pillar of our Business 6
Slide 7: Why Invest in Nomad Foods?
Why Invest in Nomad Foods? • Undisputed market leader in a growing category • A leading portfolio committed to sustainable eating • Experienced leadership team • Focused strategy resulting in consistent execution • Organic and M&A growth opportunities • Solid balance sheet • Strong free cash flow pr
Slide 8: A Portfolio of Iconic Brands with High Brand Awareness
A Portfolio of Iconic Brands with High Brand Awareness 8
Slide 9: 9
9
Slide 10: Twelve Consecutive Quarters of Organic Revenue Growth
Twelve Consecutive Quarters of Organic Revenue Growth NOMAD FOODS Quarterly Organic Revenue Growth 5.9% 5.6% 4.2% 3.5% 3.5% 2.9% 2.5% 1.9% 1.7% 1.3% 1.1% 0.9% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 10
Slide 11: A Track Record of Solid Shareholder Value Creation
A Track Record of Solid Shareholder Value Creation 3 YR CAGR 23% 13% S&P 500 -1% S&P 500 Food 3 year trailing share price appreciation through February 15, 2020 11
Slide 12: Nomad is the Undisputed Leader in European Frozen Food
Nomad is the Undisputed Leader in European Frozen Food Western Europe Savory Frozen Food €27B Total Retail Sales Value Source: Euromonitor, 2019; branded only 12
Slide 13: Frozen Food is a Growing Category with Macro Tailwinds
Frozen Food is a Growing Category with Macro Tailwinds The Frozen Food Market Frozen is Aligned with Is Growing in Europe Consumer Trends 1 Health & Wellness • locks in nutrients & taste • 3x more vitamin C than fresh • no artificial additives or preservatives required for freezing 2 Convenience • q
Slide 14: Frozen Grew Across Most of Western Europe in 2019
Frozen Grew Across Most of Western Europe in 2019 6% Frozen Savory RSV Growth 52 week growth to December 2019 6% 5% 5% 4% 2% 2% 2% 1% 0% -1% -2% UK Germany Italy France Spain Sweden Belgium Austria Portugal Holland Norway Ireland Note: Frozen category above defined as Nomad category footprint in res
Slide 15: Frozen Food Shares Similarities and Differences: Western Europe vs North America
Frozen Food Shares Similarities and Differences When Comparing Western Europe to North America 5 Year Per Capita Largest Private Label CAGR Consumption Sub-Category Market Share Market Leader(s) Western +1-2% Europe 2014 2019 North +1-2% America 2014 2019 Source: Euromonitor 15
Slide 16: Our Strategy: Focus Invest Innovate Optimize Acquire
Our Strategy Focus Invest Innovate Optimize Acquire 16
Slide 17: Our Strategy: Focus Invest Innovate Optimize Acquire
Our Strategy Focus Invest Innovate Optimize Acquire 17
Slide 18: Creating Focus Through Strategic Portfolio Choices
Creating Focus Through Strategic Portfolio Choices CORE SECONDARY BRANDED PRODUCTS 70% of revenues 10% of revenues strategic, fully funded and accretive to growth & margins managed for margin & cash flow OTHER BRANDED PRODUCTS 10% of revenues managed for cash flow 18
Slide 19: Our Strategy: Focus Invest Innovate Optimize Acquire
Our Strategy Focus Invest Innovate Optimize Acquire 19
Slide 20: Investing Across the Business to Sustain Organic Revenue Growth
Investing Across the Business to Sustain Organic Revenue Growth Investing Partnering with Delivering Developing in Our Brands Our Retailers Breakthrough Innovation Our People 20
Slide 21: Our Strategy: Focus Invest Innovate Optimize Acquire
Our Strategy Focus Invest Innovate Optimize Acquire 21
Slide 22: Accelerating Plant Protein
Accelerating Plant Protein 1 A Leader in Frozen Food 2 Accelerating Plant Protein 3 Raising the Bar 4 Financial Highlights
Slide 23: A Shift to a More Sustainable Diet Can Have a Profound Effect on Climate Change
A Shift to a More Sustainable Diet Can Have a Profound Effect on Climate Change “Shifts in dietary choices towards foods with lower emissions and requirements for land, along with reduced food loss and waste, could reduce emissions and increase adaptation options.” Intergovernmental Panel on Climate
Slide 24: Nearly One-Third of Evening Meal Occasions in the UK are Now Meat-Free
Nearly One-Third of Evening Meal Occasions in the United Kingdom are Now Meat-Free Number of meat-free evening meal occasions in the UK 92% of plant-based meals are eaten by non-vegans 2014 2015 2016 2017 2018 Source: Kantar Worldpanel, UK 24
Slide 25: Green Cuisine Adds a New Dimension to a Flexitarian Portfolio
Green Cuisine Adds a New and Exciting Dimension to a Portfolio that is Already Flexitarian at Heart Fish Vegetables Meat Substitutes
Slide 26: The Market for Meat Substitutes is Still in its Infancy
The Market for Meat Substitutes is Still in its Infancy Consumers are at different stages of their journey to reduce meat and 1 increase vegetable consumption This is still an immature category even in the most advanced markets – 2 it’s hard to find, hard to shop, hard to do 3 There is a perception
Slide 27: European Countries at Different Stages of Development for Meat Substitutes
European Countries are at Different Stages of Development for Meat Substitute Products Sweden € 6.82 United Kingdom € 4.38 North America € 1.88 Finland € 1.63 Frozen Meat Substitutes Norway € 1.57 Per Capita Consumption, 2019 Denmark € 1.02 Netherlands € 0.81 Italy € 0.67 Germany € 0.66 >10% Belgium
Slide 28: We Have a Strong Right to Win in This Space
We Have a Strong Right to Win in This Space Frozen Market Unparalleled A Portfolio Flexitarian Unique Positioning Leadership Route to Market At Its Core of Green Cuisine 60% of revenues in fish and vegetables 28
Slide 29: Introduced in 2019, Green Cuisine is a New Range of Frozen Products
Introduced in 2019, Green Cuisine is a New Range of Frozen Products Powering Consumers’ Lives with Plants • Serving consumers across all meat-free need states • Leveraging European leadership in frozen • New and improved recipe which is winning versus the competition • Strong consumer-led positionin
Slide 30: Green Cuisine is Uniquely Positioned in the Marketplace
Green Cuisine is Uniquely Positioned in the Marketplace A Great TASTING Product Focused on SUSTAINABILITY Consumer taste tests Sourced from sustainable crops beating the competition such as pea protein Delivering on NUTRITION Short ingredient list, low in sat fat, high in fiber 30
Slide 31: Green Cuisine Offers Consumers a Wide Range of Meat Free Solutions
Green Cuisine Offers Consumers a Wide Range of Meat Free Solutions Meat Substitute Vegetarian Ready Components Components Meals 31
Slide 32: Green Cuisine Has Performed Well Since Launching in the UK in 2019
Green Cuisine Has Performed Well Since Launching in the UK in 2019 Green Cuisine, UK 4W Retail Sales Value March 2019 – January 2020 #3 meat-free frozen brand in less than 12 months Mar Jul Sep Nov Jan 32
Slide 33: Green Cuisine Will Expand Across Western Europe in 2020
Green Cuisine Will Expand Across Western Europe in 2020 2019 UK Ireland H1 2020 Germany France Netherlands Italy Belgium Austria Countries in green denote markets planning to sell Green Cuisine by the end of 2020. 33
Slide 34: Green Cuisine Will Be a Significant Driver of Growth
Green Cuisine Will be a Significant Driver of Growth In the Coming Years €100+ REVENUE MILLION BY 2022 34
Slide 35: Our Strategy: Focus Invest Innovate Optimize Acquire
Our Strategy Focus Invest Innovate Optimize Acquire 35
Slide 36: Raising the Bar
Raising the Bar 1 A Leader in Frozen Food 2 Accelerating Plant Protein 3 Raising the Bar 4 Financial Highlights
Slide 37: Applying Neuroscience to Drive Advertising Efficiency & Impact
Applying Neuroscience to Drive Advertising Efficiency & Impact Leverage Brand Assets With Strong Systematic Use of Neuroscience To Proven Predictive Power Allows For Advertising Development Pre-Test Creative Optimization Before Airing 37
Slide 38: Piloting Big Data and Machine Learning to Drive More Consumer Led Innovation
Piloting Big Data and Machine Learning to Drive More Consumer Led Innovation Web Listening Machine Learning Marketing Facts identifies emerging features & enables us to test millions of these removes our biases & benefits variations with consumers liberates our time 38
Slide 39: A Diversified Customer Base Across Multiple Channels
A Diversified Customer Base Across Multiple Channels Revenue By Channel Others Private Label 1% 7% Foodservice 5% Hard Discount 3% e-commerce 5% Branded Traditional Retail 79% 39
Slide 40: A Multi-Channel Approach to Increasing Penetration
A Multi-Channel Approach to Increasing Penetration with Growth Across All Core Channels Traditional Retail e-commerce Hard Discount creating more space & place for Driving double-digit growth in a attracting new consumers through frozen savory and our brands channel where frozen over-indexes select
Slide 41: Raising The Bar on Net Revenue Management
Raising The Bar on Net Revenue Management STRATEGIC Pricing Multi-year pricing and portfolio opportunities based on brand strength and developed to reduce elasticity impact PROMO Optimization Utilization of promotions as a strategic driver of margin and penetration Use of superior joint business pla
Slide 42: A Step Up in Supply Chain Productivity
A Step Up in Supply Chain Productivity >2% annual reduction in cost of goods PROCUREMENT MANUFACTURING NETWORK Productivity Efficiency Optimization Note reduction in cost of goods reflects productivity contribution and is before the effect of inflation 42
Slide 43: Financial Highlights
Financial Highlights 1 A Leader in Frozen Food 2 Accelerating Plant Protein 3 Raising the Bar 4 Financial Highlights
Slide 44: Long Term Growth Algorithm
Long Term Growth Algorithm ORGANIC ADJUSTED TOTAL Revenue Growth EBITDA Shareholder Return Low-single digit Mid-single digit Double-digit + growth growth growth Free Cash Flow productivity Impact from Acquisitions & Synergies would be incremental 44
Slide 45: Preliminary Fourth Quarter and Full Year 2019 Commentary
Preliminary Fourth Quarter and Full Year 2019 Commentary Fourth Quarter 2019 Full Year 2019 ORGANIC ORGANIC Revenue Growth 1.7% Revenue Growth 2.1% ADJUSTED approximately ADJUSTED approximately EBITDA €116m EBITDA €432m Full year 2019 Adjusted EBITDA ahead of prior guidance range 45
Slide 46: Introducing 2020 Guidance
Introducing 2020 Guidance ORGANIC ADJUSTED Revenue Growth EBITDA growth at a approximately Low-single digit €440 - €445 rate million Impact from potential acquisitions announced in 2020 could prove incremental to this view 46
Slide 47: Our Strategy: Focus Invest Innovate Optimize Acquire
Our Strategy Focus Invest Innovate Optimize Acquire 47
Slide 48: Acquisitions Are the Primary Intended Use of Cash
Acquisitions Are the Primary Intended Use of Cash CONSOLIDATE EUROPEAN FROZEN PURSUE UNIQUE OPPORTUNITIES Across geographies, categories & channels Beyond European Frozen QUALITY Food Assets ACCRETIVE STRONG to long-term Financial shareholder Returns value LONG-TERM GOAL Generate top tier TSR by bui
Slide 49: Nomad Foods is on a Journey to Transformation
Nomad Foods is on a Journey to Transformation Rebuild Turnaround Sustained Growth 2015 - 2016 2017 - 2018 2019 - o Refocused on the core o Returned to organic growth o Introduce “Big Bet” innovations o Created a strong company culture o Recruited leading industry talent o Drive top-tier employee eng
Slide 50: Better
Better
Slide 51: Questions?
QUESTIONS?
Slide 52: Appendix
Appendix
Slide 53: Reconciliation of reported to organic revenue growth
Reconciliation of reported to organic revenue growth Year on Year Growth – December 31, 2019 compared with December 31, 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY2019 YoY Growth YoY Growth YoY Growth YoY Growth YoY Growth Reported Revenue Growth 14.6% 10.2% 1.8% 2.2% 7.0% Of which: - Organic Revenue Gr