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Frozen specialist Nomad Foods posted a fifth successive year of headline and profit growth, despite an organic sales decline amid a “difficult operating environment”.

For the full year in 2021 revenue increased 3.6% to €2.6m, though organic revenue decline of 2.1% was driven by a 1.6% decline in volume/mix and a 0.5% decline in price.

For the fourth quarter this was more marked, with reported revenue up 7% to €704m and organic revenues falling back 4.5% on a 3.1% decline in volume/mix and a 1.4% decline in price.

Annual adjusted gross profit decreased 1% to €753m, with adjusted gross margin down 140 basis points to 28.9% due to cost of goods inflation and mix from the acquisitions of Findus Switzerland and Fortenova Frozen.

However, adjusted operating expenses decreased 7% to €338m reflecting a decline in both advertising and promotion and indirect expense.

Therefore adjusted EBITDA increased 4% to €487m adjusted profit after tax increased 5% to €277m.

Stéfan Descheemaeker, Nomad Foods’ CEO, stated, “We are pleased to report strong operational and financial performance in 2021 and a fifth consecutive year of revenue, Adjusted EBITDA and Adjusted EPS growth.

“Following an exceptional year of growth in 2020, we focused this year on consolidating our consumer gains through product innovation and impactful promotion, while ensuring our supply chain was fit for purpose as we drove investments in capacity expansion and efficiency programs. Despite a difficult operating environment, we delivered a 4% increase in Adjusted EBITDA to €487 million and a 15% increase in Adjusted EPS to €1.55, reflecting the resilience of our operating model, the strength of our brands and our focus on maximizing value for our shareholders.”

Noam Gottesman, Nomad Foods’ co-chairman and founder, added:: “Our 2021 results mark a new record level of financial performance for our company. In addition to delivering Adjusted EPS at the top-end of guidance, this year’s notable achievements include a successful refinancing of our debt, the integration of Findus Switzerland, the acquisition of Fortenova’s frozen food business for €615m, as well as over $75m of share repurchases during the fourth quarter.

“Having established a strong platform for growth over the last five years, we are confident our business is well-positioned to repeat this pattern of growth in 2022 and beyond.”

Looking forwards Nomad expects reported revenue growth of high single-digit percentage and organic revenue growth at a low-single digit percentage.

Morning update

UK consumer confidence has been hit by worries over rising prices, according to GfK’s long-running Consumer Confidence Index.

The index decreased seven points to -26 in February, with all measures down in comparison to January.

The measure for the general economic situation of the country during the last 12 months is three points lower at -50, albeit this is 14 points higher than in February 2021.

However, expectations for the general economic situation over the coming 12 months have dropped by 11 points to -43, which is now 13 points lower than February 2021.

The index measuring changes in personal finances over the last 12 months has decreased five points to -11, which is this is three points worse than February 2021.

The forecast for personal finances over the next 12 months has decreased 12 points to -14, which is now 18 points lower than this time last year.

Joe Staton, Client Strategy Director GfK, said: “Fear about the impact of price rises from food to fuel and utilities, increased taxation and interest rate hikes has created a perfect storm of worries that has shaken consumer confidence.

“At -26, this is the lowest headline score since January 2021, one of the worst points in the Covid crisis. While all measures have fallen this month, the two forward-looking indicators tapping sentiment over the next 12 months on personal finances and the wider economic situation are showing the biggest falls – these are down 12 points and 11 points respectively.

“There’s clear anxiety in these findings as many consumers worry about balancing the household books at the end of the month without going further into debt. Slowing consumer spend slows the wheels of the UK economy so this is unwelcome news. And the good news on the easing or lifting of Covid restrictions around the UK seems to be doing little to lift the public’s mood.”

On the markets this morning, there has been a rebound after yesterday’s global share price crash, though stocks remain well below the level they were at on Wednesday.

The FTSE 100 is back up 1.2% to 7,292.1pts.

Early risers include THG, up 3.6% to 100.5p, McBride, up 3.2% to 45p and Nichols, up 2.9% to 1,440p.

Fallers include Bakkavor, down 3.8% to 121.2p, Virgin Wines, down 3.4% to 140.1p and Science in Sport, down 2.5% to 57.1p. 

Yesterday in the City

The FTSE 100 sank 3.9% yesterday as global markets reacted to Russia’s military assault on Ukraine and resultant sanctions on Russia.

Amongst those firms worst hit were DS Smith, down 7.3% to 331.6p, Imperial Brands, down 7.1% to 1,621.5p, Unilever, down 5.5% to 3,634p, Coca-Cola HBC, down 5.3% to 2,043p and British American Tobacco, down 5% to 3,229.5p.

Other fallers included McBride, down 5.2% to 43.6p, Glanbia, down 4.7% to €12.38, Compass Group, down 4.4% to 1,634p, Diageo, down 4.2% to 3.525p, Tate & Lyle, down 4.1% to 3,525p and Devro, down 4.1% to 201.5p.

The day’s few risers included Hotel Chocolat, up 7.1% to 432.5p, Just eat Takeaway.com, up 2.8% to 2,732p, McColl’s Retail Group, up 1.4% to 7.3p, Bakkavor, up 1.1% to 126p and THG, up 0.9% to 97p.

AB InBev, which yesterday said it grew revenues by more than 15% last year with volume growth, pricing and premiumisation driving growth, fell back 1.4% to €54.38.

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