Nomad Foods Limited Announces Financial Results for the Period Ended 30 June 2015
TORTOLA, British Virgin Islands, Aug. 27, 2015 /PRNewswire/ -- Nomad Foods Limited ("Nomad Foods" or the "Company") (LSE: NHL), today issues the following trading update for the period ended 30 June 2015.
Nomad Foods Limited acquired the Iglo Foods Group "Iglo Group" on 1 June 2015 for approximately €2.6bn. As such, pro forma as adjusted and reported information is being commented on below for the 6 month period ended 30 June 2015. This information does not reflect the Company's results for the half yearly period ending on 30 September 2015.
Reported Results Highlights:
- €536m loss after tax in six months to 30 June 2015 primarily resulting from a non-cash founder shares valuation charge (€493m), purchase accounting adjustments (€26m) and costs associated with the acquisition of the Iglo Group (€22m).
- Net leverage ratio as at 30 June 2015 was 3.5x following the implementation of the new capital structure associated with the acquisition of the Iglo Group. The net leverage ratio excludes the $320 million (gross) of equity raised in July 2015.
Pro Forma As Adjusted Results Highlights:
Pro Forma As Adjusted results include actual Nomad Foods' results for the 6 months ended 30 June 2015 (which already include June 2015 results for the Iglo Group) and from 1 April 2014 through 30 June 2014 (Nomad Foods only being incorporated on 1 April 2014). The Iglo Group results have been added for pro forma purposes for the five months ended 31 May 2015 and for the 6 months ended 30 June 2014. Results have been adjusted for exceptional items in addition to transaction-related items associated with Nomad Foods acquisition of the Iglo Group on 1 June 2015.
- Net Revenue decline year-on-year was (2.4)%. Excluding the impact from currency exchange, the exit from Romania, Slovakia and Turkey and 1 less trading day year-on-year like-for-like Net Revenue decline was (4.9)%.
- Gross margin was broadly flat despite higher promotional investment.
- Six months to June 2015 pro forma As Adjusted EBITDA was €142.9m, (1.1)% down year-on-year but pro forma As Adjusted EBITDA margin increased 0.2% due to lower advertising and promotion spend (compared to significant one-time strategic launch activity in the comparable period) and FX benefit on translation of sterling profits.
- Pro forma As Adjusted EPS is €0.49 for six months to June 2015 and €0.50 for the comparable period.
- Adjusted cash conversion ratio high at 87%.
Acquisition Highlights and Recent Developments
On 14 July 2015, Nomad Foods completed the private placement of a total of 15,445,346 new ordinary shares of no par value raising gross proceeds of approximately US$320 million before expenses. The shares were issued at a price of US$20.75 per share. The proceeds are intended for general purposes including potential future acquisitions.
On 13 August 2015, Nomad Foods entered into an option agreement with LionGem Sweden 1 AB ('the seller') under which Nomad Foods or one of its subsidiaries shall be obliged, at the option of the seller, to acquire Findus Sverige AB and its subsidiaries for approximately £500 million. Through this transaction, Nomad Foods will acquire Findus Group's businesses in Sweden, Norway, Finland, Denmark, France, Spain and Belgium. These operations include the intellectual property and commercialisation rights to the Findus, Lutosa and La Cocinera brands in the respective markets.
Management Comments on Results
Stéfan Descheemaeker, Nomad Foods' Chief Executive Officer, stated, "Overall, results were in line with our expectations at the time of the acquisition, taking into account the difficult retail environment in Iglo Group's core geographies. In response to market conditions, we have selectively increased promotion levels to remain relevant to value-seeking consumers whilst maintaining profitability and cash generation through rigorous control of the cost base. We have also continued to rejuvenate our portfolio via the launch of the Breakfast Platform in Italy and the Wholegrain Platform across all major markets. As we look to the future, we believe Nomad is well positioned to take advantage of numerous growth opportunities across Western Europe and globally, not only within the frozen food category, but also within the broader packaged food space."
Noam Gottesman, Nomad Foods' Co-Chairman and Founder, commented, "Stéfan and his team have created a strong platform to lead the consolidation in the fragmented global food sector. The Iglo acquisition is performing as expected and we are excited about other potential acquisitions opportunities that meet our criteria of being market leaders in niche markets and having a long history of strong free cash flow generation. As an example, we recently entered into an agreement to acquire Findus, one of Europe's largest frozen food and seafood companies with leading brands in the Nordic region as well as Southern Europe. We remain dedicated to improving the operational efficiencies within our existing businesses which will lead to superior long-term value for shareholders. The momentum we have achieved thus far in 2015 have us well positioned to achieve meaningful long-term growth both organically as well as through prudent and complementary M&A opportunities."
Pro forma financial information
Pro forma As Adjusted financial information for Nomad Foods Limited is presented for the combined results of Nomad Foods Limited and the Iglo Group. All pro forma information is unaudited.
The Group has adjusted the financial information in order to provide meaningful pro forma results which includes the trading history of the Iglo Group and eliminates one-off impacts.
The pro forma information has not been prepared in accordance with the guidance and requirements of either Annex II of the PD Regulation or Article 11 of Regulation S-X and therefore may not be comparable to pro forma information prepared in accordance with those standards.
| Pro forma As Adjusted Profit and Loss (unaudited) |
||||||||||||||
| Six Months Ended 30 June 2015 |
||||||||||||||
| Nomad Foods |
Nomad Foods |
Iglo Group |
Adjustments(4) |
Pro forma |
||||||||||
| all figures in €m |
€m |
€m |
€m |
€m |
€m |
|||||||||
| Net Revenue |
102.8 |
- |
640.3 |
- |
743.1 |
|||||||||
| Cost of sales |
(94.5) |
- |
(417.9) |
25.4 |
a) |
(487.0) |
||||||||
| Gross profit |
8.3 |
- |
222.4 |
25.4 |
256.1 |
|||||||||
| Other costs/income |
(367.5) |
(143.8) |
(109.5) |
492.1 |
b) |
(128.7) |
||||||||
| Operating profit before exceptional items |
(359.2) |
(143.8) |
112.9 |
517.5 |
127.4 |
|||||||||
| Exceptional items |
(20.9) |
(0.6) |
(84.3) |
105.8 |
c) |
- |
||||||||
| Operating profit after exceptional items |
(380.1) |
(144.4) |
28.6 |
623.3 |
127.4 |
|||||||||
| Interest income |
10.2 |
- |
2.0 |
(9.3) |
d) |
2.9 |
||||||||
| Interest expense and other |
(16.6) |
- |
(97.2) |
84.5 |
d) |
(29.3) |
||||||||
| Foreign exchange |
(4.5) |
- |
(20.5) |
25.0 |
e) |
- |
||||||||
| Net Financing Costs |
(10.9) |
- |
(115.7) |
100.2 |
(26.4) |
|||||||||
| Group Profit/(Loss) before tax |
(391.0) |
(144.4) |
(87.1) |
723.5 |
101.0 |
|||||||||
| Taxation |
(0.7) |
- |
(40.9) |
17.2 |
f) |
(24.4) |
||||||||
| Profit/(Loss) for the period |
(391.7) |
(144.4) |
(128.0) |
740.8 |
76.7 |
|||||||||
| Earnings per Share |
Nomad Foods |
Pro forma |
||||||||||||
| Profit/(loss) for the year |
(€ 536.1) |
€ 76.7 |
||||||||||||
| Weighted Average Shares Outstanding(5) |
69,980,337 |
155,491,474 |
||||||||||||
| Income/(Loss) per share |
(€ 7.66) |
€ 0.49 |
||||||||||||
| (1) Actual results for Nomad Foods Limited for the three months ended 30 June 2015 (i.e., 3 months of Nomad Foods Limited and 1 month of Iglo Group) |
||||||||||||||
| (2) Actual results for Nomad Foods Limited for the three months ended 31 March 2015 (i.e. pre-acquisition) |
||||||||||||||
| (3) Actual results for Iglo Group for the period from 1 January 2015 through 31 May 2015 |
||||||||||||||
| (4a) Adjustment to add back the non-cash inventory fair value uplift recorded as part of purchase price accounting in June 2015 |
||||||||||||||
| (4b) Pro forma adjustment to add back the non-cash charge related to the fair value of founder preferred share dividends and deduct the income from |
||||||||||||||
| (4c) Pro forma adjustment to remove Exceptional items which do not have a continuing impact (see page 5) |
||||||||||||||
| (4d) Pro forma adjustments to eliminate non-cash intragroup interest, historical Iglo Group non-cash intercompany interest and to reduce senior debt |
||||||||||||||
| (4e) Pro forma adjustment to remove non-cash foreign exchange translation charges |
||||||||||||||
| (4f) Pro forma adjustment to add back the tax impact of the adjustments described above Group profit/loss before income taxes and to reflect applicable |
||||||||||||||
| (5) For both actual and pro forma EPS, weighted average shares outstanding includes Founder Preferred Shares because they are convertible into ordinary shares at the holder's option. Pro forma weighted average shares assumes all shares issued prior to 1 June 2015 were issued on 1 April 2014. All shares issued subsequent to 1 June 2015 are weighted according to their actual issuance date |
||||||||||||||
| Pro forma As Adjusted Profit and Loss (unaudited) |
|||||
| Six Months Ended 30 June 2014 |
|||||
| Nomad Foods |
Iglo Group results |
Adjustments(1) |
Pro forma As |
||
| all figures in €m |
€m |
€m |
€m |
€m |
|
| Net Revenue |
- |
761.2 |
- |
761.2 |
|
| Cost of sales |
- |
(496.7) |
(0.6) |
a) |
(497.3) |
| Gross profit |
- |
264.5 |
(0.6) |
263.9 |
|
| Other costs/income |
(22.5) |
(134.3) |
22.4 |
b) |
(134.4) |
| Operating profit before exceptional items |
(22.5) |
130.2 |
21.8 |
129.5 |
|
| Exceptional items |
- |
(11.4) |
11.4 |
c) |
- |
| Operating profit after exceptional items |
(22.5) |
118.8 |
33.2 |
129.5 |
|
| Interest income |
- |
3.4 |
- |
3.4 |
|
| Interest expense and other |
- |
(127.7) |
98.4 |
d) |
(29.3) |
| Foreign exchange |
- |
(9.7) |
9.7 |
e) |
- |
| Net Financing Costs |
- |
(134.0) |
108.1 |
(25.9) |
|
| Group Profit/(Loss) before tax |
(22.5) |
(15.2) |
141.3 |
103.6 |
|
| Taxation |
- |
(25.3) |
(1.0) |
f) |
(26.3) |
| Profit/(Loss) for the period |
(22.5) |
(40.5) |
140.3 |
77.3 |
|
| Earnings per Share |
Nomad Foods |
Pro forma As |
|||
| Profit/(loss) for the year |
(€ 22.5) |
€ 77.3 |
|||
| Weighted Average Shares Outstanding(2) |
42,310,001 |
155,463,713 |
|||
| Income/(Loss) per share |
(€ 0.53) |
€ 0.50 |
|||
| (1a) Adjustments to include the incremental depreciation on property plant and equipment fair value uplift recorded as part of purchase price accounting |
|||||
| (1b) Pro forma adjustment to add back the non-cash charge related to the fair value of founder preferred share dividends. The Company intends to settle |
|||||
| (1c) Pro forma adjustment to remove Exceptional items which do not have a continuing impact (see page 5) |
|||||
| (1d) Pro forma adjustments to eliminate historical Iglo Group intercompany non-cash interest and to reduce senior debt interest in order to reflect the |
|||||
| (1e) Pro forma adjustment to remove non-cash foreign exchange translation charges |
|||||
| (1f) Pro forma adjustment to add back the tax impact of the adjustments described above Group profit/loss before income taxes and to reflect applicable |
|||||
| (2) For both actual and pro forma EPS, weighted average shares outstanding includes Founder Preferred Shares because they are convertible into |
|||||
| EBITDA and Adjusted EBITDA (unaudited) |
||||||||
| Six Months Ended 30 June 2015 |
||||||||
| Nomad Foods |
Nomad Foods |
Iglo Group |
Adjustments |
Pro forma |
||||
| all figures in €m |
€m |
€m |
€m |
€m |
€m |
|||
| Group Profit/(Loss) before tax |
(€ 391.0) |
(€ 144.4) |
(€ 87.1) |
€ 723.5 |
€ 101.0 |
|||
| Interest |
10.9 |
- |
115.7 |
(100.2) |
26.4 |
|||
| Depreciation |
2.1 |
- |
11.3 |
0.6 |
14.0 |
|||
| Amortization |
0.3 |
- |
1.2 |
- |
1.5 |
|||
| EBITDA |
(€ 377.7) |
(€ 144.4) |
€ 41.1 |
€ 623.9 |
€ 142.9 |
|||
| Exceptional items |
20.9 |
0.6 |
84.3 |
(105.8) |
- |
|||
| Transaction related costs |
20.9 |
0.6 |
3.8 |
(25.3) |
- |
|||
| Adjustment to fair value intangible assets |
- |
- |
55.0 |
(55.0) |
- |
|||
| Costs related to long-term management |
- |
- |
22.9 |
(22.9) |
- |
|||
| Investigation of strategic opportunities and |
- |
- |
1.3 |
(1.3) |
- |
|||
| Cisterna fire net costs |
- |
- |
1.3 |
(1.3) |
- |
|||
| Adjusted EBITDA |
(€ 356.8) |
(€ 143.8) |
€ 125.4 |
€ 518.1 |
€ 142.9 |
|||
| EBITDA and Adjusted EBITDA (unaudited) |
|||||
| Six Months Ended 30 June 2014 |
|||||
| Nomad Foods |
Iglo Group results |
Adjustments |
Pro forma |
||
| all figures in €m |
€m |
€m |
€m |
€m |
|
| Group Profit/(Loss) before tax |
(€ 22.5) |
(€ 15.2) |
€ 141.3 |
€ 103.6 |
|
| Interest |
- |
134.0 |
(108.1) |
25.9 |
|
| Depreciation |
- |
12.0 |
0.6 |
12.6 |
|
| Amortization |
- |
2.4 |
- |
2.4 |
|
| EBITDA |
(€ 22.5) |
€ 133.2 |
€ 33.8 |
€ 144.5 |
|
| Exceptional items |
- |
11.4 |
(11.4) |
- |
|
| Costs related to long-term management |
- |
7.1 |
(7.1) |
- |
|
| Investigation of strategic opportunities and |
- |
3.2 |
(3.2) |
- |
|
| Other restructuring costs |
- |
1.1 |
(1.1) |
- |
|
| Adjusted EBITDA |
(€ 22.5) |
€ 144.6 |
€ 22.4 |
€ 144.5 |
|
| Balance Sheet as at 30 June 2015 (unaudited) |
||
| all figures in €m |
Nomad Foods Group as at 30 |
|
| Non-current assets |
||
| Intangible assets |
2,685.7 |
|
| Property, plant and equipment |
269.2 |
|
| Deferred tax assets |
47.3 |
|
| Total non-current assets |
3,002.2 |
|
| Current assets |
||
| Inventories |
212.3 |
|
| Trade and other receivables |
35.3 |
|
| Deferred borrowing costs |
3.1 |
|
| Derivative Financial Instruments |
5.5 |
|
| Cash and cash equivalents |
608.0 |
|
| Total current assets |
864.2 |
|
| Total assets |
3,866.4 |
|
| Current liabilities |
||
| Bank overdrafts |
478.8 |
|
| Trade and other payables |
298.4 |
|
| Derivative financial instruments |
2.9 |
|
| Current tax payable |
17.3 |
|
| Provisions |
25.7 |
|
| Total current liabilities |
823.1 |
|
| Non-current liabilities |
||
| Loans and borrowings |
1,183.5 |
|
| Employee benefits |
110.0 |
|
| Deferred tax liabilities |
307.5 |
|
| Total non-current liabilities |
1,601.0 |
|
| Total liabilities |
2,424.1 |
|
| Net assets |
1,442.4 |
|
| Deficit attributable to equity holders |
||
| Capital reserve |
1,367.8 |
|
| Founder Preferred Share Dividend reserve |
531.5 |
|
| Merger reserve |
0.9 |
|
| Translation reserve |
88.9 |
|
| Cash flow hedging reserve |
(3.2) |
|
| Accumulated deficit |
(543.5) |
|
| Total equity |
1,442.4 |
|
Forward-Looking Statements
Forward-Looking Statements and Disclaimers
Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts, including expectations regarding (i) the Company's ability to expand its presence in the frozen foods market; (ii) completion of successful acquisitions in same and adjacent categories, including the Findus acquisition; (iii) the reduction in the Iglo Group's debt levels; (iv) the future operating and financial performance of the Company; and (v) the success of the unified Findus brand. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including (i) economic conditions, competition and other risks that may affect the Company's future performance, (ii) the risk that securities markets will react negatively to actions by the Company; (iii) the ability to recognize the anticipated benefits of the Company to take advantage of strategic opportunities; (iv) the successful completion of strategic acquisitions, including the Findus acquisition; (v) the limited liquidity and trading of the Company's securities; (vi) changes in applicable laws or regulations; and (vii) the other risks and uncertainties disclosed in the Company's public filings and any other public disclosures by the Company or Iglo Group. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, neither the Company nor Iglo Group undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Conference Call
Later today, the Company will discuss its trading update for the period ended 30 June 2015 via a webcast presentation, currently scheduled at 4:00 p.m. British Summer Time (11:00 a.m. EST).
To participate on the live call listeners in the United Kingdom may dial 0808 2370030 and listeners in the United States may dial 1866 928 7517; the access code is 24500597#. For a list of all international dial-in numbers, please click here.
Additionally, the call is being webcast and can be accessed at www.nomadfoods.com under Investor Relations; the event password is 10464445#.
About Nomad Foods Limited
Nomad Foods Limited (LSE: NHL) is a leading packaged foods company. We aim to build a global portfolio of best-in-class food companies and brands within the frozen category and across the broader food sector. More information on Nomad Foods Limited is available at www.nomadfoods.com.
About Iglo Group
The Iglo Group has operations in 10 countries and a specific focus on markets in the United Kingdom, Germany and Italy. The Iglo Group's brands, which have a leading market share in each of their respective primary regions, include Birds Eye in the United Kingdom and Ireland, Iglo in Germany, Austria and other continental European markets and Findus in Italy. The Iglo Group is headquartered in the United Kingdom with approximately 2,800 employees and has four manufacturing plants and five primary distribution centres in Europe.
No Offer or Solicitation
This release and referenced conference call is provided for informational purposes only and does not constitute an offer to sell, or an invitation to subscribe for, purchase or exchange, any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this press release in any jurisdiction in contravention of applicable law.
The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.
Contact Details
Media Contact:
Kelly Gawlik
Weber Shandwick
+1-212-445-8368
[email protected]
Nick Oborne
Weber Shandwick
+44 (0) 20 7067 0721
[email protected]
Tom Jenkins
Weber Shandwick
+44 (0) 20 7067 0810
[email protected]
Investor Contacts:
John Mills
Partner, ICR
+1-646-277-1254
[email protected]
Scott Sublett
Toms Capital
+1-212-524-7300
[email protected]
SOURCE Nomad Foods Limited
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