Nomad Foods Weathers Hot Summer Drought to Post Q3 Gains
- Adjusted gross profit increased 8% to €151 million. The margin declined 190 basis points to 28.4% as positive mix was offset by an unfavorable harvest and the inclusion of the recently acquired acquisitions.
- Adjusted operating expense rose 12% to €79 million, primarily due to acquisitions. Advertising and promotion expense increased 18% to €27 million due to acquisitions and phasing. Indirect expense increased 8% to €53 million because of acquisitions.
- Adjusted EBITDA advanced 7% to €84 million.
- Adjusted profit after tax increased 7% to €45 million.Adjusted EPS rose 8% to €0.26, reflecting Adjusted profit growth.
Feltham, England-headquartered Nomad Foods, which produces and markets Birds Eye, Iglo and Findus brand frozen vegetables as well as value-added fish and poultry dishes, beef burgers, ready meals and other products, has reported a 15.6% revenue increase to £531 million for the third quarter that ended on September 30, 2018. Organic revenue growth of 1.9% marked the company’s seventh consecutive quarter of gains.
Overall revenue growth advanced by14.7 percentage points from the acquisitions of Goodfella's and Aunt Bessie's, but was offset by 1.0 percentage point from foreign exchange translation.
“As anticipated, underlying gross margin improvement was offset by acquisition mix and an unfavorable pea harvest. We continue to expect accelerated EBITDA growth in the fourth quarter and look forward to a strong finish to 2018," said CEO Stéfan Descheemaeker.
Noam Gottesman, the company’s co-chairman and founder, added: “Third quarter results demonstrate our ability to anniversary strong year-ago performance while successfully navigating one of the hottest and driest summers on record in Europe. The prospects for frozen food remain bright with Nomad Foods well positioned as the market leader."
Here are other highlights of Q3 results compared to the third quarter of 2017:
For the nine-month period of 2018 through September 30, relative to the first three quarters of 2017, revenue increased 7.6% to €1,558 million. Organic revenue growth of 2.1% was comprised by a 1.0% rise in price and 1.1% increase in volume/mix. Revenue growth benefited 6.7 percentage points from the acquisitions of Goodfella's and Aunt Bessie's, and was offset by 1.2 percentage points from foreign exchange translation.