Nomad Foods Limited · NYSE:NOMD
Nomad Foods — Investor Presentation (April 2017)
39 slides from Nomad Foods's investor presentation, April 2017
Slide 1: Investor Presentation April 2017
Investor Presentation April 2017
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 & Market Overview
Company a Company & Market Overview
Slide 4: Our Strategic Vision
Our Strategic Vision Our Goal Operational Excellence Consolidate Frozen Catalyze organic topline growth through “Must Win Battles” Transform Nomad Continue to seek bolt-on while managing operating into a Leading Global acquisitions to complete our consolidation of the European expenses with a discip
Slide 5: Company Snapshot
Company Snapshot Key Facts #1 Branded Frozen Player in 10 Countries Market Position ● Leading branded frozen food player in Western Europe with sales of €1,928m (FY 2016A) ● Operations in 17 countries in Western Europe, commanding a 13.8% market share of the frozen food market (excluding 3 ice cream
Slide 6: Geographic Overview
Geographic Overview UK Italy Germany Sweden France Brand Present Market Position 1 1 1 1 1 Relative Share1 1.7x 2.9x 1.1x 1.3x 1.4x Revenue and €459m (24%) €349m (18%) €267m (14%) €218m (11%) €169m (9%) % of Revenue Total² 13.2 Total² 23.0 Total² 11.1 Total² 11.2 Total² 22.9 Fish 19.1 Fish 22.3 Fish
Slide 7: Category Overview
Category Overview Nomad’s Relative # Countries Category Market Market with #1 2016 Categories Description Share1 Share1, 2 Position Sales % of 2016 Sales Select Products ● Comprises of products such as fish fingers, 39% Fish coated fish 25.8% 5.6x 9 €760m and natural fish among others ● Includes rea
Slide 8: A Portfolio of Iconic Brands with Strong Heritage
A Portfolio of Iconic Brands with Strong Heritage … Underpinned by Iconic Brands and Assets with Strong Brand Equity 2016 Spontaneous Brand Awareness %(1) ● Iconic brands with almost 100 years of history #1 #1 #1 #1 #2 ● #1 consumer choice ● Brand recognition drives consumer trust 86% and demand 74%
Slide 9: Geographically Diversified Manufacturing Footprint
Geographically Diversified Manufacturing Footprint ● 10 best-in-class / well-invested manufacturing facilities across Europe ● Strategically located in key markets with nimble supply chain able to serve local markets ● Sufficient spare capacity available to accommodate future growth in main categori
Slide 10: European Frozen Food is Large and Resilient
European Frozen Food is Large and Resilient Frozen Market Retail Value (€bn) 24.7 24.9 24.4 24.5 24.1 23.6 2011 2012 2013 2014 2015 2016 10 Source: Euromonitor
Slide 11: Market Leadership Across Most Business Lines
Market Leadership Across Most Business Lines (€Millions) Frozen Frozen Fish Vegetables Frozen Meals Frozen Poultry Total Nomad % Market Share in 25.8% 24.2% 14.3% 21.8% Respective Markets Market Position by Country (2015) Austria 1 1 1 1 1 Belgium 1 1 1 1 1 Finland 1 2 1 3 France 1 2 2 1 1 Germany 1
Slide 12: Organic Growth Strategy
Company a Organic Growth Strategy
Slide 13: 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) 13
Slide 14: Redirect resources behind Must Win Battles
A o Redirect resources behind cMust Win Battles 14
Slide 15: "Must Win Battles" Are Working
“Must Win Battles” Are Working What are “Must Win Battles”? ● A strategic cross-portfolio evaluation resulting in redirected resources to our most scalable sub-categories ● Key “Must Win Battles” criteria include market share, gross margin, growth potential and ROI ● A renewed focus on core products
Slide 16: Advertising Spending Redirected to Core
Advertising Spending Redirected to Core Core v. NPD GRPs 100% 11% 90% 80% 45% 48% 70% 68% 74% 60% 50% 89% 40% 30% 55% 52% 20% 32% 26% 10% 0% 2012 2013 2014 2015 2016 Core/MWBs NPD/Other 16 Note: 2012 – 2015 shows split between Core and NPD products, whilst 2016 shows split between MWBs and Other
Slide 17: "Must Win Battles" Success Stories
“Must Win Battles” Success Stories Fish Fingers Spinach Fish Fingers was one of the first “Must Win Battles” Spinach was activated in Germany, Austria and the launched across a number of markets Netherlands in 4Q16, resulting in a return to YoY growth 360 degree activation: return of highly effectiv
Slide 18: Packaging Renovation Illustration
Packaging Renovation Illustration New Strategy Previous Strategy Local icons (“Captain”) with focus on food Single global masterbrand campaigns 18
Slide 19: Leverage our local heroes
B o Leverage our local heroes c 19
Slide 20: Fish Fingers – The Captain is Back
Fish Fingers – The Captain is Back Strategy Actions Taken ● Restore iconic local brand assets ● Captain back on air in 6 countries and new copy for 2017 being developed ● Invest in 3-4 priority platforms at scale ● New packaging design to further utilise our iconic assets and also more focus ● Pursu
Slide 21: Fish Fingers - Strategy in Action
Fish Fingers - Strategy in Action Household Penetration pp change vs LY 52 weeks 12 weeks 4 weeks DE -0.5 1.0 0.6 IT -3.1 0.6 -0.3 UK 0.6 2.4 0.8 Source: Kantar GFK to 31/12/16 Fish Fingers Communications Effectiveness Index Fish Fingers Value Sales % change vs LY (sales out) 52 weeks 12 weeks 4 wee
Slide 22: Revenue management: untapped and complementary
C o Revenue management: untapped c and complementary 22
Slide 23: Net Revenue Management – A New Way of Working
Net Revenue Management – A New Way of Working Reallocate Top-line Spend to Must Win Battles 1. Prioritise 2. Reallocate Distribution Promotional Opportunities Spend Build Capabilities to Deliver Profitable Plans 3. Optimise 4. Increase 5. Upgrade Price Pack Trade Terms Capabilities Architecture Cond
Slide 24: Cost efficiencies (organic and synergies)
D o Cost efficiencies (organicc and synergies) 24
Slide 25: Findus Synergy and Integration
Findus Synergy and Integration ● High level of confidence to deliver potential €43 million to €48 million by 2018; realized €12 million run-rate synergies as of 2016 ● Potential incremental manufacturing footprint rationalization ● Potential incremental working capital and future capex opportunities
Slide 26: Consolidation Opportunity
Company a Consolidation Opportunity
Slide 27: 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 28: 2016 Financial Review
Company a 2016 Financial Review
Slide 29: 2016 Highlights
2016 Highlights Stabilize Topline Trends ● 4Q16 like-for-like sales decline of 2.7% ● 5th consecutive quarter of sequential topline improvement ● “Must Win Battles” strategy is working with related sales inflecting positive 1.2% in 4Q16 ● Momentum into 2017 with 1Q like-for-like sales growth expecte
Slide 30: 5 Consecutive Quarters of Sequential Improvement
5 Consecutive Quarters of Sequential Improvement Pre-Nomad Strategy New Strategic Direction Strategic Food of Life Pan-European Ad Campaign Launch Review Revenue Mgmt. Cost Review New NPD Strategy Launches Promo Changes Packaging Launch Annual Annual New Negotiations Negotiations Advertising Refresh
Slide 31: 2016 Revenue Bridge
2016 Revenue Bridge Like-for-Like Revenue: (4.0%) 1) 1) For comparative purposes, Nomad Foods is also presenting Pro Forma As Adjusted financial information for the twelve months ended December 31, 2015 for the combined results of Nomad Foods, the Iglo Group and the Findus Group. Pro Forma As Adjust
Slide 32: 2016 Gross Profit Bridge
2016 Gross Profit Bridge Gross Margin: +0.1% 29.5% Like-for-Like Gross Profit: (€18.7m) 29.6% 1) 2) 2) 1) For comparative purposes, Nomad Foods is also presenting Pro Forma As Adjusted financial information for the twelve months ended December 31, 2015 for the combined results of Nomad Foods, the Ig
Slide 33: 2016 Operating Performance
2016 Operating Performance 1) €m, except per share data 2016 2015 Delta Revenue 1,927.7 2,051.7 -124.0 Gross Profit 571.0 604.7 -33.7 Gross profit margin (%) 29.6% 29.5% 0.1% Advertising & Promotions -113.7 -120.1 6.4 Advertising &Promotions (% Revenue) 5.9% 5.9% 0.0% Indirects -183.5 -204.0 20.5 In
Slide 34: Key Cash Flow Metrics
Key Cash Flow Metrics (1) €m 2016 2015 Delta As Adjusted EBITDA 324.9 331.7 (6.8) Loss on disposal of property, plant & equipment 0.7 0.1 0.6 Working Capital movement 33.9 (26.0) 59.9 Pensions & Other Provisions movements (3.3) (6.8) 3.5 Capital Expenditure (42.4) (53.4) 11.0 As Adjusted Operating C
Slide 35: 2017 Guidance
Nomad Foods 2017 Guidance
Slide 36: 2017 Guidance
2017 Guidance Net Sales ● 1Q and 2017 Like-for-like sales growth to be positive ● 1Q reported sales growth negatively impacted 400 bps from foreign currency translation and leap year comparison Gross Profit and EBITDA ● 2017 gross profit ahead of 2016 ● 2017 underlying EBITDA growth to be offset by
Slide 37: 2017 EBITDA Drivers
2017 EBITDA Drivers 2017 EBITDA Drivers ● Revenues. Positive growth in like-for-like revenue offset by 180 bps related to leap year and FX ● Gross Profit. Gross profit dollars and gross margins to expand versus 2016 ● Indirect expenses. To decline versus 2016, excluding bonus reinstatement ● Adverti
Slide 38: 2017 EBITDA Bridge
2017 EBITDA Bridge 325.0 315.0 2016 Adjusted Underlying Reinstated Leap Currency 2017 Adjusted EBITDA EBITDA Growth Bonuses Year Translation EBITDA 38
Slide 39: Nomad Foods
Nomad Foods Nomad Foods