Nomad Foods Limited · NYSE:NOMD
Nomad Foods — Investor Presentation (April 2018)
39 slides from Nomad Foods's investor presentation, April 2018
Slide 1: Investor Presentation April 2018
Investor Presentation April 2018
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: Nomad Foods Overview
Nomad Foods Overview In Western Europe’s €25B €2B Net Sales 13 Primary Countries Across Western Europe Savory Frozen Food Category 90% 3,800 Of Core Portfolio Ranked Company #1 Or #2 In Market Share Employees Source: Company Information; Euromonitor 3
Slide 4: Nomad Foods Delivered Strong 2017 Results
Nomad Foods Delivered Strong 2017 Results Full Year 2017 Financial Highlights 4% €328M €1.00 3% volume/mix 100 bps gross margin 19% growth 1% price expansion Organic Revenue Growth Adjusted EBITDA Adjusted EPS Figures above are approximate and are consistent with updated 2017 financial expectations
Slide 5: Nomad's 2017 Organic Revenue Growth Was Amongst Best in Class
Nomad’s 2017 Organic Revenue Growth Was Amongst Best in Class 7% Nomad Foods FCF Yield ~10% peer average FCF yield ~ 7% 4% 1% 1% -1% -2% -2% -3% -3% Hostess Nomad Post Pinnacle B&G Foods Campbell ConAgra General Mills Kellogg Foods Source: Company FIlings FCF Yield defined as Free Cash Flow (CY2018
Slide 6: Company Overview
Company Overview Nomad Foods
Slide 7: A Portfolio Anchored by Three Power Brands
A Portfolio Anchored by Three Power Brands 52% 26% 22% Italy France Spain Germany Austria Netherlands UK Ireland Sweden Norway Finland Belgium Portugal Note: Note:percent percentfigures figuresabove aboverepresent represent2017 2017net netrevenue revenuemix mixby bybrand brandand andexcludes exclude
Slide 8: Timeless Brands With A Rich Heritage
Timeless Brands With A Rich Heritage 88
Slide 9: Powerful Icons With Strong Brand Awareness
Powerful Icons With Strong Brand Awareness 99
Slide 10: Diversified Portfolio Anchored In Four Core Frozen Categories
Diversified Portfolio Anchored In Four Core Frozen Categories 1 2 3 4 FISH VEGETABLES MEALS POULTRY 40% OF REVENUES 20% OF REVENUES 10% OF REVENUES 10% OF REVENUES Remaining 20% consists of other frozen branded categories and non-branded (private label and food service) sales 10
Slide 11: Organizational Structure Designed for Scale and Local Market Expertise
Organizational Structure Designed for Scale and Local Market Expertise Corporate Commercial, Finance, HR, IT, Legal Supply Chain & Procurement UK & IRELAND WESTERN EUROPE SOUTHERN EUROPE NORDICS Germany France Austria UK Ireland Italy Spain Portugal Sweden Norway Finland Belgium Netherlands 11
Slide 12: The Undisputed Leader in Western Europe Savory Frozen Food
The Undisputed Leader in Western Europe Savory Frozen Food 14% market share Western Europe Savory Frozen Food €25B Total Retail Sales Value Source: Euromonitor, Source: Euromonitor, 2017; 2017; branded branded only only 12
Slide 13: Strong Market Share at the Local Category Level
Strong Market Share at the Local Category Level 90% of core portfolio #1 or 2 in market share UK Italy Germany Sweden France Norway Austria Spain Belgium Netherlands Portugal Finland Ireland Seafood 1 # #1 # 1 # 1 # 1 1 # # 1 #1 # 1 #2 # 1 #2 Vegetables 1 # #1 # 1 # 1 #2 1 # # 1 #1 #1 # 1 # 1 # 1 #2
Slide 14: Broad Based Share Gains in a Growing Category
Broad Based Share Gains in a Growing Category 2017 Consumer Takeaway 2017 Market Share 2017 Category Growth +4.8% +0.4pts +2.3% UK Italy Germany Sweden France Norway Austria Spain Belgium Netherlands Portugal Finland Ireland 2017 Sell-Out Growth 1.1% 7.4% 15.1% 1.9% (1.6)% 0.8% 2.4% 3.3% (1.0)% 5.6%
Slide 15: Growth Strategy
*Cronths Strategy | x R INA nar A= Nomad Foods
Slide 16: Frozen Food is Aligned With Consumer Trends
Frozen Food is Aligned With Consumer Trends Shorter Meal Times Nutrition Over-Indexed to Online Lower Carbon Footprint Sustainable Sourcing Reduced Waste 16
Slide 17: Room to Grow Share in New and Existing Categories
Room to Grow Share in New and Existing Categories Western Europe Savory Frozen Market Share by Category Meat Fruit Baked Goods Substitutes €.5B €1.3B Poultry Soup €.5B €1.5B €.3B 3% Red Meat 2% 2% €1.6B 33% 22% 6% Potatoes €3.0B Seafood Pizza €4.5B €4.3B Vegetables Ready Meals €3.7B 6% €3.8B 26% 24%
Slide 18: Growth Model
A Clear Set of Priorities With A Proven Model 1 Core Growth 2 Innovation Model 3 Category Growth 18 18
Slide 19: Growth Strategy Rooted in Relentless Focus on the Core
Growth Strategy Rooted in Relentless Focus on the Core Invest disproportionately in the highest margin and most attractive growth areas Portfolio choices Media investments behind brands Core Improved product quality 70% of sales Packaging renovation In-store execution 19
Slide 20: Core Growth is Driving Strong Underlying Performance
Core Growth is Driving Strong Underlying Performance 2017 Organic Revenue Growth Velocity1 Base Volumes1 Category 2% 9% 3% Nomad Foods Total 4% Penetration 1 Brand Health2 Nomad Foods Core 8% 1Aggregate for Nomad Foods’ top 5 markets (UK, Germany, Italy, France & Sweden) 1% 14% 2UK and Italy markets
Slide 21: Core Focus Continues into 2018
Core Focus Continues into 2018 21
Slide 22: Deploying Digital Capabilities
Deploying Digital Capabilities Digital as a % of Nomad Foods Total Advertising Spend 27% 20% 11% 2016 2017 2018E Source: Company Information 22
Slide 23: Building an Innovation Pipeline Behind Key Macro Trends
Building an Innovation Pipeline Behind Key Macro Trends New Launches as a Percent of Nomad Foods Net Revenues 6.0% 5.0% 4.5% Good For You Convenience 2016 2017 2018E Vegetarian Snacking Source: Company Information 23
Slide 24: Evolving with Changing Consumer Shopping Habits
Evolving with Changing Consumer Shopping Habits E- commerce Large Stores Discounter Small Shopping Explosion Re-Invigoration Expansion Trip Increasing 24
Slide 25: Leveraging Our Competitive Advantage in E-commerce
Leveraging Our Competitive Advantage in E-commerce E-commerce Sales by Country 14% others 23% Online represents 4% of sales today and is France 63% growing double-digits UK Frozen overtrades online and Nomad Foods overtrades within frozen BirdsEye is the #2 online grocery brand in the UK after Coca-
Slide 26: A White Space Opportunity As Hard Discounters Carry More A Brands
A White Space Opportunity As Hard Discounters Carry More “A Brands” The Hard Discount channel (Aldi & Lidl) is growing mid-single digits across Western Europe In 2017, this channel accounted for 1% of Nomad Foods revenues but grew 44% The channel is growing double-digits in the UK and Southern Europ
Slide 27: Mobilizing the Frozen Category Vision
Mobilizing the Frozen Category Vision Sizable Opportunity to Grow Frozen Occasions Category captaincy Retailer collaborations On-trend innovation Occasions Where Frozen is Used 11% Corporate social responsibility Occasions Where Frozen is Not Used But Considered 28% 29% Source: Usage and Occasion St
Slide 28: Shareholder Value Creation
Shareholder Value Creation 28
Slide 29: EBITDA Margin Expansion A Key Driver of Shareholder Value
EBITDA Margin Expansion A Key Driver of Shareholder Value EBITDA Margin Drivers 20% 1 Net Revenue Management 2 Supply Chain 17% Optimization 3 Expense Discipline 2017 Long-Term Opportunity 29 29
Slide 30: Strengthening Net Revenue Management Capabilities into 2018 and 2019
Strengthening Net Revenue Management Capabilities into 2018 and 2019 2016 2017 2018 2019 Teams & Capabilities Promotions Price Price Pack Architecture Trade Terms STAGE OF DEVELOPMENT basic intermediate advanced 30
Slide 31: Drivers of Supply Chain
Drivers of Supply Chain Lean Factory Procurement Manufacturing Footprint Productivity Optimization 31
Slide 32: Funding Growth With Discipline
Funding Growth With Discipline Invest Invest Non-Working Cost In Our Brands Behind Talent Reduction Expense Discipline 32
Slide 33: An Advantaged Balance Sheet with Strong Cash Flow Characteristics
An Advantaged Balance Sheet with Strong Cash Flow Characteristics 10% Adjusted Free Cash Flow Yield Strong Cash Flow Conversion under 3% Cost of Debt Actively Managed Capital Structure Value Creation through Capital Allocation >60% Of Interest Rate Exposure is Fixed 2024 Earliest Debt Maturity 33
Slide 34: Acquisition Criteria
Acquisition Criteria Market Leading Brands with Protective Moats Niche Categories with Opportunities for Growth Cash Flow Generation Strong Management Scale and Skill Synergies Valuation Discipline 34
Slide 35: Goodfella's Pizza Acquisition
Goodfella’s Pizza Acquisition Announced the acquisition of Goodfella’s Pizza in January 2018 for ~€225mn; expected to close by the second quarter of 2018 Frozen pizza is the 2nd largest category within W. Europe frozen Goodfella’s is a market leading frozen pizza brand in the U.K. and Ireland Opport
Slide 36: Goodfella's Acquisition Transforms UK and Ireland Businesses
Goodfella’s Acquisition Transforms UK and Ireland Businesses Revenue Synergies Cost Synergies Capabilities • Portfolio opportunities • Manufacturing • Net revenue management • Brand management • Procurement • Expense discipline • Distribution channel • Indirects • Lean manufacturing 36
Slide 37: Generate Shareholder Value by Leveraging Our Assets and Capabilities
Generate Shareholder Value by Leveraging Our Assets and Capabilities Create a Leading Global Consumer Food Company HIGH QUALITY ASSETS OPERATIONAL EXCELLENCE FINANCIAL DISCIPLINE Distinctive Brands Growing from the Core Cost Consciousness Pan-European Scale Net Revenue Management Cash Flow Generatio
Slide 38: 2018 Guidance
2018 Guidance Organic Revenue Growth Adjusted EBITDA Adjusted EPS growth at a approximately approximately Low-single digit €350 to €360 €1.08 to €1.13 percentage rate million per share $USD equivalent assuming 1.23 USD/euro Organic Revenue Growth Adjusted EBITDA Adjusted EPS growth at a approximatel
Slide 39: Nomad Foods
Nomad Foods