Nomad Foods Reports Outstanding Year
Nomad Foods, Europe’s largest frozen food producer, has reported a 1.5% increase in revenue to €1.957 billion with organic revenue growth of 3.9%, driven by 2.7% growth in volume/mix and 1.2% growth in price, for the twelve months ended December 31, 2017. Reported profit for the period was €137 million and adjusted EBITDA increased 1% to €328 million.
Nomad Foods is building a global portfolio of best-in-class food companies and brands within the frozen category and across the broader food sector. Nomad Foods produces, markets and distributes brands in 17 countries and has the leading market share in Western Europe. The company’s portfolio of leading frozen food brands includes Birds Eye, Iglo, and Findus.
In line with this strategy, Nomad Foods recently agreed to purchase the Goodfella’s Pizza business of Green Isle Foods from Boparan Holdings (incorporating 2 Sisters Food Group) for approximately €225 million on a debt free, cash free basis. The transaction includes the purchase of brands such as Goodfella’s and San Marco, as well as the ongoing supply of private label frozen pizza contracts to UK and Irish retailers. The Goodfella’s brand, which accounts for the majority of Goodfella’s Pizza revenues, was founded in 1993 and holds number one and number two market share positions within the frozen pizza category in Ireland and the UK, respectively. The acquisition also includes two frozen pizza manufacturing facilities which provide a foundation for future expansion in the category. The Goodfella’s Pizza deal is expected to close during the second quarter of 2018.
Stéfan Descheemaeker, chief executive of Nomad Foods, comments: “2017 was an outstanding year for our company. We reported full year organic revenue growth of 3.9% and expanded gross margins by 100 basis points. These results, which exceeded the expectations we set at the start of the year, are a testament to the power of our iconic brands, a proven strategy and relentless execution. We enter 2018 in a position of strength. Goodfella’s Pizza, once closed, will provide a complementary source of growth to our base business and illustrate the power of our value creation model.”
Noam Gottesman, co-chairman and founder of Nomad Foods, says: “These results further validate the strategy that we have been executing against for the past two years. The combination of base business momentum, strong cash flow generation and accretive capital deployment positions us to drive continued shareholder value in 2018.”
For 2018, Nomad Foods expects that inclusive of a partial year contribution from Goodfella’s Pizza full year adjusted EBITDA to be approximately €350 to €360 million, which equates to adjusted EPS of approximately €1.08 to €1.13 based on the current share count of 176 million. Full year guidance assumes organic revenue growth at a low-single digits percentage rate.
