Nomad Foods Limited · NYSE:NOMD
Nomad Foods — CAGNY 2023
58 slides from Nomad Foods's conference presentation, Feb 23, 2023
Slide 1: CAGNY Investor Presentation
CAGNY Investor Presentation February 23, 2023
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: Company Overview
Stéfan Descheemaeker Chief Executive Officer Company Overview
Slide 4: Most Attractive Growth Story in Global Frozen Food
1 2 3 4 5 6 Consistent organic growth with strong top and bottom line contributions from strategic acquisitions An established track record of winning in the market while delivering excellent financial performances A proven value-creating acquisition model supported by a highly effective integration
Slide 5: A Portfolio of Europe's Leading Frozen Food Brands
3% AVERAGE ORGANIC REVENUE GROWTH PER YEAR 2016-2022 12% ADJUSTED EPS CAGR 2016-2022 €3billion REVENUES >8,000 COMPANY EMPLOYEES 19 NUMBER OF PRODUCTION FACILITIES A Portfolio of Europe’s Leading Frozen Food Brands Company Overview 5CAGNY 2023
Slide 6: Nomad Foods European Footprint
22 COUNTRIES 8,000 EMPLOYEES 8 CATEGORIES €3bn TURNOVER Nomad Foods European Footprint SEPTEMBER 2021 Acquisition of Fortenova’s Frozen Food Business DECEMBER 2020 Acquisition of Findus Switzerland APRIL & JULY 2018 Acquisition of Goodfella’s and Aunt Bessie’s NOVEMBER 2015 Acquisition of Findus Gro
Slide 7: Fun Facts About Nomad
* Per the International Ice Cream Consortium Fun Facts About Finally, ONLY MCDONALD’S RIVALS NOMAD as the largest fish processor Our UK pea harvest will create TWO BILLION PORTIONS OF PEAS THIS YEAR and our spinach goes from field to frozen in less than three hours Our King Majestic Ice Cream was re
Slide 8: Double-digit Adjusted EPS Built on Organic Growth and Capital Allocation
6-year historical performance 2016-2022 12% Adjusted EPS CAGR Maximizing Shareholder Return 3% organic 4% M&A & FX 7% Revenue Growth CAGR Effective Cost Management Opportunistic Buy Back Accretive M&A & FX Double-digit Adjusted EPS Built on Consistent Organic Sales Growth, Disciplined Cost Control a
Slide 9: Strong Free Cash Flow to Fund Accretive Capital Allocation
Total Adjusted Free Cash Flow 2016-2022 Average Adjusted Cash Flow Conversion 2016-22 Average Free Cash Flow as % of Sales 2016-2022 108%€1.7bn 11% Nomad Generates Strong Free Cash Flow to Fund Accretive Capital Allocation 9CAGNY 2023
Slide 10: Iconic Brands with High Brand Awareness
Iconic Brands with High Brand Awareness 10CAGNY 2023
Slide 11: Commercial Strategy: Great Products, Communication and Brands
Source: Nomad/System1 *Does not include the 2021 acquisitions Source: Nomad/ Deloitte We have The Most Relevant Brands We have Great Communications Adriatics Ledo Multipack 2022 Italy Eat In Full Colour Sustainability Germany Fish fingers Get on Board Brand Equity Score 5% TOP 10% TOP 1% TOP We have
Slide 12: Portfolio and Strategy Anchored in Must Win Battles
*Does not include the 2021 acquisitions A Portfolio and Strategy Anchored in 70% of total sales 5% annual organic revenue growth since 2017 40% market share* Key Facts About our MWB portfolio: *includes Adriatic region and within MWB categories
Slide 13: Driven by Strategic Acquisitions
2018 Acquisition for approximately €225 million 2018 Acquisition for approximately €240 million 2020 Acquisition for approximately €110 million 2021 Acquisition for approximately €615 million 2015 Acquisition for approximately €700 million Driven by Strategic Acquisitions, We Have Grown Nomad Sales
Slide 14: Growing Contribution from Innovation
*Does not include the 2021 acquisitions Note: Innovation defined as new products introduced within the past two years Growing Contribution from Innovation as a % of Sales 4% 2018 6% 2021 8% 2025 GOAL
Slide 15: Green Cuisine Outperforming Competitors
Growth rates represent retail sales value from the start of 2020 to the end of 2022 across 11 European markets where Green Cuisine is current present. Source: Nielsen European Meat-Free Frozen Food 3-year CAGR Growth 2020-2022 PRIVATE LABEL -2% 12% -4% -5% -11% -12% -16% Green Cuisine is Outperformi
Slide 16: ESG is Becoming More Crucial for Investors
We expect to reduce our operational greenhouse gas emissions intensity by 45% from a 2019 baseline and reach net-zero emissions well before 2050 (2020: -21% CO2e) -22% We plan to grow the healthier meal choices in our portfolio every year (2020: 90%) 91.5% We expect to use 100% fish and seafood from
Slide 17: Nomad at the Cutting Edge of Key Consumer Trends
HEALTH AND SUSTAINABILITY PLANT PROTEIN TASTE AND NUTRITION CONVENIENCE AND AFFORDABILITY Nomad is at the Cutting Edge of Key Consumer Trends
Slide 18: Frozen is Expanding its Post-COVID Consumer Gains
Source: Nielsen/IRI Category Footprint excl. Adriatic region *Total Food FY22 projection, Category Footprint YTD 22 Total Savory Frozen Category – Value (BN) and % Change €16,7 €19,5 €18,8 €18,7 €20,2 In 2023, Frozen will be €3.5bn larger than pre-COVID The category has retained ¾ of ‘COVID’ value g
Slide 19: Added Nearly 500,000 Households Since Covid
Nomad Savory Frozen Household Penetration % 52 weeks* We have expanded our consumer reach since the pandemic We expect nearly 83m households will consume our products in 2023 Household penetration has increased by 1% since COVID Source: Europanel Q3 22. *Nomad Top 5 markets (UK, Germany, Italy, Fran
Slide 20: Right Plans to Meet New Challenges in 2023
Secured our long-term fish supply Leveraged our supply chain to address volatile markets despite unprecedented cost increases Priced to close the gap with inflation Refinanced our debt portfolio to extend our maturities to 2028/29 Strengthen our brands while adding to our consumer value and affordab
Slide 21: 2023 Commercial Strategy
LEVERAGING GROWING OCCASIONS Capture new in-home occasions with ‘fakeaway’ meal deals positioned to replicate takeaways Develop convenient Ready Meals as consumers ‘hybrid’ work & eat from home post-COVID Invest in affordable categories that will benefit from increased consumer stress (chicken, pizz
Slide 22: Enhanced Media Investment and Product Innovation
Nomad Foods Innovation NS & % of NS Nomad Foods Media Spend Evolution 2018 2019 2020 2021 2022 2023 Forecast Innovation net sales Innovation % NS 145 132 162 2023 Forecast Q3F 222021 >10% 5,7% 5,1% 5,9% Enhanced Media investment and Product Innovation Will Drive Success in the Market 22CAGNY 2023
Slide 23: Our Supply Chain is Evolving Rapidly
Inflation up nearly €300m, an unprecedented 10x increase Disrupted global supply chains coming out of COVID lockdowns, war in Ukraine, bad harvests, logistics disruptions, labour shortages Product scarcity and supply chain deterioration (fish especially) Easing COVID restrictions in Europe, supply c
Slide 24: Manufacturing Savings Sources
Labor 23% Fixed costs 15% Other variable costs 12% Utilities 25%RM price 5% Waste 20% Nomad Foods Sources of Savings, 2023 Nomad Foods Manufacturing Savings Evolution 2020 2021 2022 2023 Forecast Manufacturing Savings will come from a Variety of Sources, Providing Cash for Reinvestment 24CAGNY 2023
Slide 25: Pricing to Recoup Costs and Fund Investment
Pricing Inflation/ Elasticity Pricing Inflation/ Elasticity 2022 2023 Forecast We forecast that we will recoup our two-year inflation costs through pricing by year-end 2023 Pricing will Focus on Recouping our Costs and Funding Investment and Innovation 25CAGNY 2023
Slide 26: Revenue Growth Management Program
We will protect and grow our brands versus private label through improving RGM execution We have a clear process map to build & execute our plan to deliver optimized sales value versus volume, fueling sustainable share & profit growth Our long-term RGM plans will create balanced, sustainable organic
Slide 27: Financial Perspective
Samy Zekhout Chief Financial Officer Financial Perspective
Slide 28: Another Strong Year of Growth in 2022
+13% Revenue Growth +8% Adjusted EBITDA Growth +8% Adjusted EPS Growth We Achieved Another Strong Year of Growth in 2022 28CAGNY 2023
Slide 29: Sixth Consecutive Year of Record Financial Performance
Revenues Adjusted EBITDA Adjusted EPS 20172016 2018 2019 2020 2021 202220172016 2018 2019 2020 2021 2022 12% CAGR8% CAGR7% CAGR 20172016 2018 2019 2020 2021 2022 €1.9 bilion €2.9 bilion €325 milion €524 milion €1.68 per share €0.84 per share 2022 Marks the Sixth Consecutive Year of Record Financial
Slide 30: Growth Levers and Capital Deployed
FROZEN CATEGORY GROWTH TARGETED CAPITAL INVESTMENT STRONG CASH GENERATION MARKET SHARE EXPANSION Organic Growth Accretive Capital Deployment Share RepurchasesM&A Approximately €2.2 Billion of Capital Deployed Towards Share Repurchase and Acquisitions Since 2017 Growth Levers 30CAGNY 2023
Slide 31: Establishing 2023 Guidance
90-95% Mid-single digit growth Total Revenue Cash Flow Conversion Adjusted EPS €1.50-€1.55 *2023 EPS guidance range converted to USD, the currency in which Nomad Foods shares trade, for illustrative purposes and based on USD/EUR FX rate of 1.07 as of February 17th, 2023 $1.61 - $1.66* Establishing 2
Slide 32: Strategies to Meet Long-term Goals
Excel in our “Must Win Battles” Look for Accretive Acquisitions Leverage Revenue Growth Management Protect Product Supply Innovate for Affordability Accelerate Green Cuisine New markets New categories To Meet Our Long-term Goals, We Will Execute the Following Strategies:
Slide 33: Most Attractive Growth Story in Global Frozen Food
1 2 3 4 5 6 Consistent organic growth with strong top and bottom line contributions from strategic acquisitions An established track record of winning in the market while delivering excellent financial performances A proven value-creating acquisition model supported by a highly effective integration
Slide 34: Thank you
Thank you. Nomad Foods
Slide 35: Questions?
Questions?
Slide 36: Appendix
Appendix
Slide 37: Contents of Non-IFRS Reconciliation
2 The following tables have been included to allow users to reconcile Non-IFRS financial measures as well as Adjusted financial information included within this presentation to reported IFRS financial measures. 1. Definitions of Non-IFRS financial measures referred to in this presentation. 2. Reconc
Slide 38: Definitions of Non-IFRS Financial Measures
1. Definitions of Non-IFRS financial measures referred to in this presentation 3 Non-IFRS financial measures should not be considered as substitutes for, or superior to, measures of financial performance prepared in accordance with IFRS. They are limited in value because they exclude charges that ha
Slide 39: Reconciliation of Reported to Organic Revenue Growth
4 2. Reconciliation of reported to organic revenue growth/(decline) Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2021 Twelve Months Ended December 31, 2020 Twelve Months Ended December 31, 2019 Twelve Months Ended December 31, 2018 Twelve Months Ended December 31, 2017 YoY
Slide 40: Reconciliation of Non-IFRS Financial Measures
5 3. Reconciliation of Non-IFRS Financial Measures € in millions, except per share data As reported for the three months ended December 31, 2022 Adjustments As adjusted for the three months ended December 31, 2022 Revenue 750.2 — 750.2 Cost of sales (557.5) — (557.5) Gross profit 192.7 — 192.7 Other
Slide 41: Reconciliation of Non-IFRS Financial Measures (continued)
6 3. Reconciliation of Non-IFRS Financial Measures (continued) Adjusted EBITDA (unaudited) Three months ended December 31, 2022 (a) Expenses associated with the integration of the Findus Switzerland business acquired on December 31, 2020. (b) Charge for the impairment of our food service customer re
Slide 42: Reconciliation of Non-IFRS Financial Measures (continued)
7 3. Reconciliation of Non-IFRS Financial Measures (continued) € in millions, except per share data As reported for the three months ended December 31, 2021 Adjustments As adjusted for the three months ended December 31, 2021 Revenue 704.0 — 704.0 Cost of sales (523.7) 6.1 (a) (517.6) Gross profit 1
Slide 43: Adjusted EBITDA Three Months Ended December 2021
8 Adjusted EBITDA (unaudited) Three months ended December 31, 2021 € in millions As reported for the three months ended December 31, 2021 Profit for the period 28.8 Taxation 13.5 Net financing costs 15.6 Depreciation and amortization 20.9 Acquisition purchase price adjustments 6.1 (a) Exceptional it
Slide 44: Reconciliation of Non-IFRS Financial Measures (continued)
9 3. Reconciliation of Non-IFRS Financial Measures (continued) € in millions, except per share data As reported for the twelve months ended December 31, 2022 Adjustments As adjusted for the twelve months ended December 31, 2022 Revenue 2,939.7 — 2,939.7 Cost of sales (2,124.4) — (2,124.4) Gross prof
Slide 45: Adjusted EBITDA Twelve Months Ended December 2022
10 3. Reconciliation of Non-IFRS Financial Measures (continued) Adjusted EBITDA (audited) Twelve months ended December 31, 2022 € in millions As reported for the twelve months ended December 31, 2022 Profit for the period 249.8 Taxation 71.2 Net financing costs 54.4 Depreciation and amortization 88.
Slide 46: Reconciliation of Non-IFRS Financial Measures (continued)
11 3. Reconciliation of Non-IFRS Financial Measures (continued) € in millions, except per share data As reported for the twelve months ended December 31, 2021 Adjustments As adjusted for the twelve months ended December 31, 2021 Revenue 2,606.6 — 2,606.6 Cost of sales (1,862.3) 8.4 (a) (1,853.9) Gro
Slide 47: Adjusted EBITDA Twelve Months Ended December 2021
12 3. Reconciliation of Non-IFRS Financial Measures (continued) Adjusted EBITDA (audited) Twelve months ended December 31, 2021 € in millions As reported for the twelve months ended December 31, 2021 Profit for the period 181.0 Taxation 55.7 Net financing costs 106.0 Depreciation and amortization 71
Slide 48: Adjusted Statement of Profit or Loss 2020
13 Adjusted Statement of Profit or Loss (unaudited) Twelve months ended December 31, 2020 € in millions, except per share data As reported for the twelve months ended December 31, 2020 Adjustments As adjusted for the twelve months ended December 31, 2020 Revenue 2,515.9 — 2,515.9 Cost of sales (1,75
Slide 49: Adjusted EBITDA Twelve Months Ended December 2020
14 Adjusted EBITDA (audited) Twelve months ended December 31, 2020 € in millions As reported for the twelve months ended December 31, 2020 Profit for the period 225.1 Taxation 70.4 Net financing costs 63.7 Depreciation and amortization 67.6 Exceptional items: Brexit 1.6 (a) Supply chain reconfigurat
Slide 50: Adjusted Statement of Profit or Loss 2019
15 Adjusted Statement of Profit or Loss (unaudited) Twelve months ended December 31, 2019 € in millions, except per share data As reported for the twelve months ended December 31, 2019 Adjustments As adjusted for the twelve months ended December 31, 2019 Revenue 2,324.3 — 2,324.3 Cost of sales (1,62
Slide 51: Adjusted EBITDA Twelve Months Ended December 2019
16 Adjusted EBITDA (audited) Twelve months ended December 31, 2019 € in millions As reported for the twelve months ended December 31, 2019 Profit for the period 153.6 Taxation 56.7 Net financing costs 73.2 Depreciation and amortization 68.3 Exceptional items: Brexit 1.6 (a) Supply chain reconfigurat
Slide 52: Adjusted Statement of Profit or Loss 2018
17 Adjusted Statement of Profit or Loss (unaudited) Twelve months ended December 31, 2018 € in millions, except per share data As reported for the twelve months ended December 31, 2018 Adjustments As adjusted for the twelve months ended December 31, 2018 Revenue 2,172.8 — 2,172.8 Cost of sales (1,51
Slide 53: Adjusted EBITDA Twelve Months Ended December 2018
18 Adjusted EBITDA (audited) Twelve months ended December 31, 2018 € in millions As reported for the twelve months ended December 31, 2018 Profit for the period 170.5 Taxation 56.6 Net financing costs 56.0 Depreciation 39.3 Amortization 7.0 Acquisition purchase price adjustments 5.7 (a) Exceptional
Slide 54: Adjusted Statement of Profit or Loss 2017
19 Adjusted Statement of Profit or Loss (unaudited) Twelve months ended December 31, 2017 € in millions, except per share data As reported for the twelve months ended December 31, 2017 Adjustments As adjusted for the twelve months ended December 31, 2017 Revenue 1,956.6 — 1,956.6 Cost of sales (1,35
Slide 55: Adjusted EBITDA Twelve Months Ended December 2017
20 Adjusted EBITDA (audited) Twelve months ended December 31, 2017 € in millions As reported for the twelve months ended December 31, 2017 Profit for the period 136.5 Taxation 32.0 Net financing costs 74.4 Depreciation 35.9 Amortization 6.5 Exceptional items: Transactions related costs 3.2 (a) Inves
Slide 56: Adjusted Statement of Profit or Loss 2016
21 Adjusted Statement of Profit or Loss (unaudited) Twelve months ended December 31, 2016 € in millions, except per share data As reported for the twelve months ended December 31, 2016 Adjustments As adjusted for the twelve months ended December 31, 2016 Revenue 1,927.7 — 1,927.7 Cost of sales (1,35
Slide 57: Adjusted EBITDA Twelve Months Ended December 2016
22 Adjusted EBITDA (audited) Twelve months ended December 31, 2016 € in millions As reported for the twelve months ended December 31, 2016 Profit for the period 36.4 Taxation 39.6 Net financing costs 62.1 Depreciation 43.3 Amortization 7.8 Exceptional items: Costs related to transactions 4.8 (a) Cos
Slide 58: Reconciliation of Operating Cash Flow to Adjusted Free Cash Flow
23 Reconciliation of reported net cash flows from operating activities to Adjusted free cash flow for the years ended December 31, 2022, 2021, 2020, 2019, 2018, 2017 & 2016. € in millions Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Year Ended December 31, 2