Nomad Foods Limited · NYSE:NOMD
Nomad Foods — CAGNY 2016
40 slides from Nomad Foods's conference presentation, Feb 16, 2016
Slide 1: Nomad Foods CAGNY 2016
Nomad Foods CAGNY 2016 February 16, 2016
Slide 2: Disclaimer
Disclaimer 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 Presentatio
Slide 3: Today's Presenters
Today's Presenters Stéfan Descheemaeker, CEO Paul Kenyon, CFO 3
Slide 4: Investment Highlights
Investment Highlights Leading Player in the Large and Platform to Consolidate the Iconic Brands with Strong Resilient Western European Fragmented Global Food Sector Brand Equity Frozen Food Market Attractive Financial Experienced Team with a Multiple Organic Growth Characteristics and Significant St
Slide 5: Company & Market Overview
Company & Market Overview
Slide 6: Who We Are
Who We Are Nomad Foods is a leading packaged foods company seeking to build a global portfolio of best-in- class food companies and brands within the frozen category and across the broader food sector o Leading frozen o Headquartered in packaged food Feltham, UK company in Europe o Operations in 15
Slide 7: Iconic European Brands
Iconic European Brands Spontaneous Brand Awareness 100% 95% 93% 87% 80% 78% 73% 69% 62% 60% 40% 20% 0% Source: Ipsos. 7
Slide 8: Pan European Sales Footprint With Market Leadership
Pan European Sales Footprint With Market Leadership Rank 3 2 1 2 3 1 1 1 1 1 1 1 1 1 Source: Euromonitor. 8
Slide 9: Strategic Manufacturing Facilities
Strategic Manufacturing Facilities Tonsberg Cap. Products 89 Veg Loftahammer Cap. Products Larvik 9 Bakery Cap. Products 17 Veg, Fish, Other (Soup, Pizza) Sweden Finland Russia Lowestoft Norway Bjuv Cap. Products Cap. Products 155 Fish, Poultry, Veg, Burgers Denmark 110 Veg, Meals United Kingdom Net
Slide 10: Diversified Business Mix
Diversified Business Mix Categories Geographies Poultry, 9% Others, 12% Others, 18% Meals, 9% Austria, 5% UK & I, 25% Industrial, 2% Private Label, Norway, 7% 3% Foodservice, 6% Veg, 19% Sweden, 11% Italy, 20% Fish, 35% France, 8% Germany, 12% Note: Combined figures exclude synergies. 1. Nomad Foods
Slide 11: Nomad Foods has Winning Category Leadership in Frozen Fish
Nomad Foods has Winning Category Leadership in Frozen Fish Market Share in Respective Markets 25.7% 21.5% Net Sales €647 mm €99 mm # of Countries in leadership 5 3 positions Source: Nielsen, Euromonitor, IRI. Note: Sales and leadership as of 2014A. 11
Slide 12: Category Leadership in Frozen Vegetables
Category Leadership in Frozen Vegetables Market Share in Respective Markets 30.9% 23.8% Net Sales €359 mm €46.8 mm # of Countries in leadership 8 3 positions Source: Nielsen, Euromonitor, IRI. Note: Sales and leadership as of 2014A. 12
Slide 13: Category Leadership in Frozen Meals
Category Leadership in Frozen Meals Market Share in Respective Markets 23.8% 8.6% Net Sales €197 mm €70.6 mm # of Countries in leadership 5 3 positions Source: Nielsen, Euromonitor, IRI. Note: Sales and leadership as of 2014A. 13
Slide 14: Category Leadership in Frozen Poultry
Category Leadership in Frozen Poultry Market Share in Respective Markets 20.1% NA Net Sales €198 mm NA # of Countries in leadership 7 NA positions Source: Nielsen, Euromonitor, IRI. Note: Sales and leadership as of 2014A. 14
Slide 15: Top Tier Management Team to Drive Strategy
Top Tier Management Team to Drive Strategy Stéfan Descheemaeker Paul Kenyon Tania Howarth CEO CFO COO 15
Slide 16: The Frozen Aisle is Large, Resilient and Growing
The Frozen Aisle is Large, Resilient and Growing o €25 billion market(1) o Aligned with consumer trends; limited waste, no preservatives, nutrition, convenience o Freezer space is fixed and delivers attractive margins to retailers o Significant growth opportunity in online channel Source: Euromonito
Slide 17: The European Frozen Food Market is Sizeable and Continues to Grow
The European Frozen Food Market is Sizeable and Continues to Grow Retail Value €bn 100.0 2004-2015 CAGR 80.0 2.2% 60.0 40.0 3.1% 20.0 1.5% 0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Frozen €21.5 €21.6 €22.0 €22.6 €23.4 €23.8 €23.9 €24.3 €24.7 €25.1 €25.1 €25.3 Market Frozen Chil
Slide 18: Nomad's Value Creation Model
Nomad’s Value Creation Model Stabilize and Grow Core Excellence in Execution Efficient Capital Allocation o Identified strategy to stabilize o Building best-in-class integrator o Disciplined M&A strategy with sales: clear investment criteria o Swift and effective integration to Realize savings to
Slide 19: Growth Strategy
Growth Strategy
Slide 20: 2013 – 2015 Strategy and Key Learnings
2013 – 2015 Strategy and Key Learnings 1 Top Line Strategy A. Disproportionate investment behind new frozen food categories to drive incremental growth B. Adopt pan-European approach to food and advertising 2 Actions Taken A. Shift resources (e.g., A&P, R&D, promos) to NPD B. Implement centralized,
Slide 21: Key Actions to Stabilize and Grow
Key Actions to Stabilize and Grow A o Redirect resources behind Must Win Battles B o Leverage our local heroes C o Revenue management: untapped and complementary D o Cost efficiencies (organic and synergies) 21
Slide 22: Redirect resources behind Must Win Battles
A o Redirect resources behind Must Win Battles 22
Slide 23: A&P Resources Shifting From NPD to Core
A&P Resources Shifting From NPD to Core Core v. NPD GRPs 100% 90% 80% 45% 48% 70% 68% 74% 60% 50% 40% 30% 55% 52% 20% 32% 26% 10% 0% 2012 2013 2014 2015 Target Mix Core NPD 23
Slide 24: NPD Resources Have Already Shifted to Renovation Projects
NPD Resources Have Already Shifted to Renovation Projects Innovation Pipeline Examples of Total Value Renovation 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% May '15 Dec ' 15 NPD Line Extensions Existing Product Dev Price Pack Architecture 24
Slide 25: Leverage our local heroes
A o Redirect resources behind Must Win Battles B o Leverage our local heroes 25
Slide 26: Single Global, Masterbrand Campaigns Are Being Replaced by Local Hero Platforms
Single Global, Masterbrand Campaigns Are Being Replaced by Local Hero Platforms o Restore iconic local brand assets o Invest in 3-4 priority platforms at scale o Pursue 360⁰ campaigns from above the line to POS POS New product platform (linked to ATL & POS-brochures) (incl. new design & NPDs) Promot
Slide 27: Findus Sweden Has Delivered Success Following This Model
Findus Sweden Has Delivered Success Following This Model o Communication focused on quality of peas with halo across other natural veg o Consistent messaging over time o Expanding to drive new usage occasions o Consistent execution from advertising to digital to in store 27
Slide 28: Revenue management: untapped and complementary
A o Redirect resources behind Must Win Battles B o Leverage our local heroes C o Revenue management: untapped and complementary 28
Slide 29: Net Revenue Management Represents a €1+ billion Step Change Opportunity
Net Revenue Management Represents a €1+ billion Step Change Opportunity- Market by Market Reallocate Top-line Spend to Must Win Battles Prioritise distribution Reallocate opportunities promotion with defined spend “must have” assortments Improve Capabilities and Effectiveness of Top-line Spend Optim
Slide 30: Netherlands Made Similar Choices and Delivered Strong Growth
Netherlands Made Similar Choices and Delivered Strong Growth o Advertising at-scale in priority “Must win battles” o Supporting with innovation o Effectively used net revenue management to reduce volume on discount from 35% to 32% o Gross margin growth of 15% p.a. ’13-15 achieved, driven by core o G
Slide 31: Iglo Strategic Evolution
Iglo Strategic Evolution Pre-Nomad Strategy New Strategic Direction Strategic Review Food of Life Pan-European Ad Campaign Launch Revenue Mgmt. NPD Strategy Launches Cost Review New Packaging Launch Annual Promo Changes Negotiations New Ad Renovation Campaign Launches Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q
Slide 32: Cost efficiencies (organic and synergies)
A o Redirect resources behind Must Win Battles B o Leverage our local heroes C o Revenue management: untapped and complementary D o Cost efficiencies (organic and synergies) 32
Slide 33: Findus Synergy and Integration
Findus Synergy and Integration o High level of confidence to deliver €35 million to €40 million by 2018 o Incremental revenue synergy opportunity; zero EBITDA impact assumed within synergy target €35 €5m Commercial / “best practice” synergies €25 €5m €18m Supply chain and manufacturing synergies €10
Slide 34: Consolidation Opportunity
Consolidation Opportunity
Slide 35: Three "buckets" of M&A opportunity
Three “buckets” of M&A opportunity European Frozen: o Consolidation opportunity 1 o Procurement, manufacturing, logistics & sales force synergies o Best practice and G&A synergies European Non-Frozen: o Platform & tuck-in opportunity to expand into new categories 2 o Procurement and manufacturing sy
Slide 36: Financial Highlights
Financial Highlights
Slide 37: Iglo Financials
Iglo Financials Revenue (€m) (1) € 1,506 € 1,501 € 1,454 2013A 2014A LTM Q3 2015 Gross Profit (€m) and Gross Profit Margin (%) (1) € 504 € 530 € 502 35.3 34.5 33.5 2013A 2014A LTM Q3 2015 Gross Profit (€m) Gross Profit margin (%) Adj. EBITDA (1)(2) (€m) and EBITDA Margin (%) (1) € 300 € 306 € 295 19
Slide 38: Findus Acquisition is Transformative and Provides Diversification
Findus Acquisition is Transformative and Provides Diversification LTM Sept-2015 combined net sales(1) LTM Sept-2015 combined adjusted EBITDA(1) €m €m 400 Synergies 2,073 35 Increased scale 619 71 365 1,454 1,454 294 294 + + 2014A: Category split (2) 2014A: Geographical split (2) Poultry, Others, UK&
Slide 39: Conclusion
Conclusion Platform to Lead Consolidation Leading Player in the Large and Iconic Brands with Strong in the Fragmented Global Food Resilient Western European Brand Equity Sector Frozen Food Market Attractive Financial Experienced Team with a Multiple Organic Growth Characteristics and Significant Str
Slide 40: Nomad Foods
Nomad Foods