Nomad Foods Limited · NYSE:NOMD
Nomad Foods — CAGNY 2021
48 slides from Nomad Foods's conference presentation, Feb 17, 2021
Slide 1: Nomad Foods February 17
February 17" y Nomad Foods
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: Poised to Deliver Strong Performance in 2020 and 2021
Adjusted EPS Growth Adjusted EPS, in Euros Adjusted EPS, in US Dollars1 Total Revenue Growth Organic Revenue Growth 2 Year CAGR 6 - 7% 11 - 13% 5% 10% €1.35 $1.63 8% 9% 2020 Preliminary Expectations 11 - 15% €1.50 - €1.55 $1.82 - $1.88 3 - 5% 1 - 2% 2021 Initial Guidance 1. Adjusted EPS converted to
Slide 4: Nomad Foods is Delivering Sustained Financial Performance
€2.6bn Revenues Adjusted EPS 2016 €1.9bn €0.84 2017 €2.0bn 2018 €2.2bn 2019 €2.3bn 2020 Preliminary €2.5bn 2021 Guidance 2016 2017 €1.00 2018 €1.19 2019 €1.23 2020 Preliminary €1.35 €1.50 - €1.55 2021 Guidance Nomad Foods is Delivering Sustained Financial Performance 4
Slide 5: Nomad Foods is a Uniquely Positioned Food Company
Western Europe’s Frozen Food Market Leader Attractive Market Dynamics Track Record of Strong Financial Performance A Long Runway for Growth Low Leverage with a 7% FCF Yield Active and Accretive Deployment of Capital 10%+ Annual EPS Growth Algorithm In Early Stages of Value Creation Nomad Foods is a
Slide 6: A European Frozen Food Pureplay with a Long Runway for Growth and Value Creation
Core Portfolio Growth Breakthrough Innovation Strategic Acquisitions Switzerland A European Frozen Food Pureplay with a Long Runway for Growth and Value Creation
Slide 7: Nomad Foods is Europe's Leading Frozen Food Company
€2.5b net revenues 4,900 company employees 4 consecutive years of organic revenue growth 14 primary countries across Western Europe market share within Western Europe frozen food #1 Nomad Foods is Europe’s Leading Frozen Food Company 7
Slide 8: We are a Frozen Food Pure Play
Frozen Fish Frozen Vegetables Frozen Meat Substitutes Frozen Pizza Frozen Poultry Frozen Potatoes Frozen Ready Meals We are a Frozen Food Pure Play
Slide 9: Frozen Food is an Attractive Category
Over-Indexed to Online Reduces Food Waste Convenient Locked in Nutrients Strong Value Proposition A Growing Category Frozen Food is an Attractive Category
Slide 10: The Current Frozen Food Boom is Part of a Broader Consumer Behavioral Shift
Retail Sales Growth Western Europe, 2020 Source: Nielsen FROZEN FOOD TOTAL FOOD 12% 8% Family MealtimeWorking from Home Shopping Online Scratch Cooking The Current Frozen Food Boom is Part of a Broader Consumer Behavioral Shift With Long-Term Implications
Slide 11: Frozen Food Market Dynamics are Advantageous in Europe
€2.5b net revenues 14 primary countries across Western Europe Source: Euromonitor United StatesEurope Private Label Long Term Market Share Fish & Vegetables Ready Meals #1 Market Leader Several Large Competitors Private Label Long Term Market Share Frozen Food Market Dynamics are Advantageous in Eur
Slide 12: Creating Focus Through Strategic Portfolio Choices
~10% of revenues ~70% of revenues SECONDARY BRANDED PRODUCTS Managed for margins & cash flow OTHER BRANDED PRODUCTS Managed for cash flow ~10% of revenues CORE Strategic, fully funded and accretive to growth & margins Non-retail (private label and foodservice) represent approximately 10% of revenues
Slide 13: We have a Distinct Advantage in Value-Added Frozen Food
4% 8% NOMAD TOTAL NOMAD CORE Outsized Growth Avg. Organic Revenue Growth 2017-2020 Strong Market ShareUndisputed Leadership ~20% Other Branded ~50% Nomad Foods ~30% Private Label CORE MARKET SHAREMARKET POSITION of CORE portfolio where Nomad ranks 94% #1 We have a Distinct Advantage in Value-Added F
Slide 14: Leveraging Synergies Across the Fish Portfolio
where your fish comes from Find t Leveraging Synergies Across the Fish Portfolio
Slide 15: Driving Vegetable Consumption with Powerful Advertising
91% (+00 pp vs. YA) Driving Vegetable Consumption with Powerful Advertising
Slide 16: Green Cuisine is a Dynamic Driver of Growth and Value Creation
Green Cuisine Revenues Green Cuisine is a Dynamic Driver of Growth and Value Creation for Nomad 2021 2022202020192018 ~€100+ million Beyond 16
Slide 17: Green Cuisine is Europe's Fastest Growing Frozen Meat-Free Brand
Growth rates represent 2020 retail sales value growth across 11 European markets where Green Cuisine is currently present. Source: Nielsen European Meat-Free Frozen Food 2020 Growth, Retail Sales 65% 35% 24% 20% 15% 15% 6% -1% 299% Private Label Green Cuisine is Europe’s Fastest Growing Frozen Meat-
Slide 18: Scaling Our Brands Across Multiple Growth Channels
Traditional Retailers E-commerce Discounters International Scaling Our Brands Across Multiple Growth Channels 18
Slide 19: Online Growth Exploded in 2020
#2 Selling brand in the UK after Coca-Cola UK accounts for 2/3 of Nomad’s online revenues YoY Growth in Nomad Foods Online Sales Source: Nielsen, IRI and retailer EPOS data 2018 2019 2020 12% 10% 66% Online Growth Exploded in 2020 19
Slide 20: Our Products are Nutritious and Accessible
90*% of Our Portfolio Qualifies as Healthier Meal Choice *90% of 2020 branded product revenues choices, excluding Spain (owing to data reliability). Our Products are Nutritious and Accessible 20
Slide 21: Eating for the Planet
-60*% CO 2 e incl efficiencies ...which will reduce carbon emissions from food A future diet aligned with maximum 1.5 degree global warming means... Plant Protein Consume significantly more Vegetables Double consumption by 2050 Fish Consume 2 times a week *Moving to a mainly plant based diet, has po
Slide 22: Fully aligned with the UN's Millennium Development Goals
Fully aligned with the UN's Millennium Development Goals 22
Slide 23: Select Sustainability Partnerships
Select Sustainability Partnerships 23
Slide 24: Would recommend Nomad Foods as a good place to work 94% Said they’re proud
Would recommend Nomad Foods as a good place to work 94% Said they’re proud to work at Nomad Foods 94% Feel energised to go the extra mile in their job 89% #4
Slide 25: Nomad's Blueprint for Superior Shareholder Value Creation
100% conversion of net income into FCF Efficient working capital management Capex at 3% of sales Tax rate of 21% Average borrowing rate of 3% Consolidate European frozen food Integrate and create synergies Opportunistically repurchase shares Frozen food category growth High ROI brand investments Bre
Slide 26: One of Few Food Companies Delivering Sustained Annual Organic Revenue Growth
Source: SEC Filings Average Organic Revenue Growth 2017 – 2020 4% 0% Nomad Foods is One of Few Food Companies Delivering Sustained Annual Organic Revenue Growth 26
Slide 27: Nomad has Outperformed Packaged Foods Peers
Cumulative total shareholder return, including dividends, from January 1, 2017 through February 8, 2021. Source: Factset Total Shareholder Return Since 2017 174% 103% 49% 38% 34% 6% 1% -3% -7% -10% -13% -51% 27% CAGR Nomad has Outperformed Packaged Foods Peers 27
Slide 28: A Long Term Track Record of Superior Financial Performance
Adjusted Free Cash Flow Conversion calculated as Adjusted Free Cash Flow as a percentage of Adjusted Profit. Adjusted EBITDA Growth Adjusted EPS Growth Adjusted Free Cash Flow Conversion 2017 2018 2019 2020 Preliminary 15% 15% 8% 19% 3% 10% 3% 2% 9%Organic Revenue Growth 137% 97% 131% 1% 19% 4% Reve
Slide 29: Accretive Deployment of Capital
1. Leverage defined as net debt / EBITDA. 2020 leverage is pro-forma for the acquisition of Findus Switzerland. 2. Adjusted Free Cash Flow Yield defined as 2021 Adjusted Free Cash Flow guidance divided by the company’s market capitalization as of February 8, 2021. Leverage1 2017 – 2020 2017 2020 3.6
Slide 30: European Frozen Acquisition Criteria
New Categories, Countries and Channels Reasonable Valuations Cash Flow Generative Strong Strategic and Financial Rational A Clear Path to Top and Bottom Line Growth Leading Market Share European Frozen Acquisition Criteria 30
Slide 31: Nomad Foods European Footprint
Nomad Foods European Footprint Existing Market Leadership BALKANS Potential next step White Space for Growth SWITZERLAND Recent acquisition
Slide 32: Introducing 2021 Guidance
Adjusted EPS converted to USD, the currency in which Nomad Foods shares trade, for illustrative purposes and based on USD/EUR FX rate of $1.21 as of February 8, 2021. TOTAL Revenue Growth ORGANIC Revenue Growth ADJUSTED EPS Growth Approximately 11-15% per share Approximately 1-2% Approximately 3-5%
Slide 33: 2021 Growth Building Blocks
Innovation Pipeline Led by Green Cuisine Market Share Expansion Findus Switzerland Future Capital Allocation BR EX IT C la rit y FX Tailw inds LSD% COGS INFLATION Underlying Growth within Core International Growth 2021 Growth Building Blocks 33
Slide 34: 2021 Macro Considerations
Brexit Clarity FX Tailwinds LSD% COGS Inflation Free-trade Brexit deal offers clarity for the first time in 5 years Translation and transaction benefits from a weak US dollar 2021 inflation expected to be in-line with history 2021 Macro Considerations 34
Slide 35: Financial Targets
Adjusted Free Cash Flow Adjusted EPSAdjusted EBITDARevenues 2020 2-3% organic growth MSD% base business growth 100%+ FCF conversion 10%+ Adjusted EPS CAGR 20252020 €2.5B €3B+ €467M €345M €600M+ €1.5B+ 2025 20252020 €1.35 €2.30 20252020 2025 Financial Targets 35
Slide 36: On Pace to Achieve 2025 EPS Target
>10% CAGR €2.30 Adjusted EPS $2.78 USD equivalent Adjusted EPS converted to USD, the currency in which Nomad Foods shares trade, for illustrative purposes and based on USD/EUR FX rate of $1.21 as of February 8, 2021. On Pace to Achieve 2025 EPS Target
Slide 37: Nomad Foods is a Uniquely Positioned Food Company
Western Europe’s Frozen Food Market Leader Attractive Market Dynamics Track Record of Strong Financial Performance A Long Runway for Growth Low Leverage with a 7% FCF Yield Active and Accretive Deployment of Capital 10%+ Annual EPS Growth Algorithm In Early Stages of Value Creation Nomad Foods is a
Slide 38: Appendix
| Appendix
Slide 39: Reconciliation of Reported to Organic Revenue Growth
FY 2020 FY 2019 FY 2018 FY 2017 YoY Growth YoY Growth YoY Growth YoY Growth Reported Revenue Growth 8.2% 7.0% 11.0% 1.5% Of which: - Organic Revenue Growth 8.7% 2.1% 2.6% 3.9% - Acquisitions 0.0% 4.9% 9.4% 0.0% - Trading Day Impact 0.4% 0.0% 0.0% (0.5%) - Translational FX (a) (0.9%) 0.0% (1.0%) (1.9
Slide 40: Reconciliation of Reported to Adjusted Financial Information 2019
(in €m, except EPS) As reported for twelve months ended December 31, 2019 Adjustments As adjusted for twelve months ended December 31, 2019 Revenue 2,324.3 — 2,324.3 Cost of sales (1,626.4) — (1,626.4) Gross Profit 697.9 — 697.9 Other operating expenses (a) (359.9) 25.7 (334.2) Exceptional items (b)
Slide 41: EBITDA and Adjusted EBITDA 2019
(in €m) 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 EBITDA 351.8 Exceptional Items: Brexit (a) 1.6 Supply chain reconfiguration (b) (3.6) Findus Group integration costs (c) 3.5 Goodfella's Pizza & Aunt Be
Slide 42: Reconciliation of Reported to Adjusted Financial Information 2018
(in €m, except EPS) As reported for twelve months ended December 31, 2018 Adjustments As adjusted for twelve months ended December 31, 2018 Revenue 2,172.8 — 2,172.8 Cost of sales (a) (1,519.3) 5.7 (1,513.6) Gross Profit (g) 653.5 5.7 659.2 Other operating expenses (b) (352.7) 23.6 (329.1) Exception
Slide 43: EBITDA and Adjusted EBITDA 2018
(in €m) 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 EBITDA 329.4 Acquisition purchase price adjustments (a) 5.7 Exceptional Items: Supply chain reconfiguration (b) 1.2 Findus Group integration costs (c) 1
Slide 44: Reconciliation of Reported to Adjusted Financial Information 2017
(in €m, except EPS) As reported for twelve months ended December 31, 2017 Adjustments As adjusted for twelve months ended December 31, 2017 Revenue 1,956.6 — 1,956.6 Cost of sales (1,357.2) — (1,357.2) Gross Profit (f) 599.4 — 599.4 Other operating expenses (a) (319.3) 5.6 (313.7) Exceptional items
Slide 45: EBITDA and Adjusted EBITDA 2017
(in €m) 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 EBITDA 285.3 Exceptional Items: Transactions related costs (a) 3.2 Investigation and implementation of strategic opportunities (b) 18.8 Supply chain rec
Slide 46: Reconciliation of Reported to Adjusted Financial Information 2016
(in €m. except EPS) 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 (1,356.7) — (1,356.7) Gross Profit (e) 571.0 — 571.0 Other operating expenses (a) (298.4) 1.2 (297.2) Exceptiona
Slide 47: EBITDA and Adjusted EBITDA 2016
(in €m) 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 EBITDA 189.2 Exceptional items: Costs related to transactions (a) 4.8 Costs related to management incentive plans (b) 1.9 Investigation and implementatio
Slide 48: Reconciliation of Net Cash Flows to Adjusted Free Cash Flow
(in €m) Twelve months ended December 31, 2019 Twelve months ended December 31, 2018 Twelve months ended December 31, 2017 Twelve months ended December 31, 2016 Net Cash Flows From Operating Activities 315.4 321.3 193.8 282.1 Add back: Cash flows relating to exceptional items (a) 15.9 43.4 99.5 49.2