Nomad Foods Limited · NYSE:NOMD
Nomad Foods — Investor Presentation (May 2017)
35 slides from Nomad Foods's investor presentation, May 2017
Slide 1: Investor Presentation May 2017
Investor Presentation May 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 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: A: 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: Packaging Renovation Illustration
Packaging Renovation Illustration New Strategy Previous Strategy Local icons (“Captain”) with focus on food Single global masterbrand campaigns 18
Slide 18: B: Leverage our local heroes
B o Leverage our local heroes c 19
Slide 19: 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 20: Fish Fingers - Strategy in Action
Fish Fingers - Strategy in Action Household Penetration pp change vs LY 52 weeks 12 weeks 4 weeks DE 1.5 1.2 2.2 IT -1.2 0.3 0.6 UK 0 0.5 0 Source: Kantar/GFK to 31/03/17 Fish Fingers Communications Effectiveness Index Fish Fingers Value Sales % change vs LY (sales out) 52 weeks 12 weeks 4 weeks Mar
Slide 21: C: Revenue management: untapped and complementary
C o Revenue management: untapped c and complementary 22
Slide 22: 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 23: D: Cost efficiencies (organic and synergies)
D o Cost efficiencies (organicc and synergies) 24
Slide 24: 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 25: Consolidation Opportunity
Company a Consolidation Opportunity
Slide 26: 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 27: First Quarter 2017 Financial Review
Company a First Quarter 2017 Financial Review
Slide 28: 1Q17 Highlights
1Q17 Highlights A Return to Organic Revenue Growth ● Organic revenue growth of +1.1% ● “Must Win Battles” growth of +5.5% ● Italy growth of +8%; joins Germany growth of +10% Raising Full Year Guidance ● Q1 results were in-line with expectations ● Momentum has continued into Q2 with improved gross ma
Slide 29: "Must Win Battles" Are Driving Organic Growth
“Must Win Battles” Are Driving Organic Growth 2015 2016 2017 5.5% 1.2% 1.1% -0.8% -2.7% -3.3% -3.8% -5.4% -6.1% -7.0% -8.0% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17E 3Q17E 4Q17E Organic Revenue Growth "Must Win Battles" Organic Revenue Growth 29
Slide 30: Organic Revenue Growth by Major Region
Organic Revenue Growth by Major Region UK Italy 7.9% (3.6%) (2.5%) (3.4%) (6.4%) (5.8%) (5.6%) (8.1%) (7.4%) (10.9%) 1Q16 2Q16 3Q16 4Q16 1Q17 1Q16 2Q16 3Q16 4Q16 1Q17 Germany Other Countries 9.8% 6.0% (1.2%) (0.6%) (3.9%) (2.7%) (2.6%) (2.5%) (4.2%) (9.1%) 1Q16 2Q16 3Q16 4Q16 1Q17 1Q16 2Q16 3Q16 4Q1
Slide 31: 1Q17 Gross Margin Bridge
1Q17 Gross Margin Bridge Gross Margin: (1.2%) 31 31
Slide 32: 1Q17 Operating Performance
1Q17 Operating Performance €m, except per share data 1Q/17 1Q/16 YoY Growth Revenue 531.3 547.1 (2.9%) Organic Revenue Growth 1.1% Gross Profit 156.1 167.5 (6.8%) Gross Margin (%) 29.4% 30.6% Advertising & Promotions (29.5) (28.8) 2.5% Advertising & Promotions (% Revenue) 5.6% 5.3% Indirects (50.1)
Slide 33: Key Cash Flow Metrics
Key Cash Flow Metrics YoY €m 1Q/17 1Q/16 Movement Adjusted EBITDA (1) 88.8 99.8 (11.0) Loss on disposal of property, plant & equipment 0.2 - 0.2 Working capital movement 2.6 (7.0) 9.6 Pensions & other provisions movements (0.3) (1.3) 1.0 Adjusted capital expenditure (2) (6.8) (5.8) (1.0) Adjusted op
Slide 34: Annual 2017 Guidance Assumptions
Annual 2017 Guidance Assumptions Net Revenues ● Organic revenue growth at a low-single digit percentage rate ● Reported revenue expected include a 170 bp offset related to FX translation and leap year comparison Gross Profit and EBITDA ● Gross profit and gross margins ahead of 2016 ● A&P investment
Slide 35: Nomad Foods
Nomad Foods Nomad Foods