Top story

Frozen foods specialist Nomad Foods grew sales to almost €3bn last year as acquisitions and price growth mitigated a fall in sales volumes.

For the full year 2022, total revenue increased 12.8% to €2.94bn, boosted by its acquisition of Fortenova’s frozen food business.

Organic revenue at the Birds Eye and Findus owner increased 1.8%, which was driven by a 5.9% decline in volume/mix and a 7.7% increase in price.

For the fourth quarter, sales were up 6.6% to €750m, helped by a rebound in organic growth to 7.7% despite a 8.1% decline in volume/mix as prices were hiked by 15.8%.

Full-year adjusted gross profit increased 3% to €193m, with margin down by 80 basis points to 25.7%, driven by higher raw material costs in turn driven by inflation, partially offset by higher pricing.

Adjusted operating expenses increased 9% to €103m, primarily reflecting a number of one-off costs, including a €4.5m cost of living payment support package for employees.

Total adjusted EBITDA was up slightly to €113m and adjusted profit after tax decreased 1% to €58m.

For the full year 2023, management expects adjusted earnings per share of €1.50 to €1.55, assuming mid-single-digit revenue growth.

For 2022, adjusted EPS increased 8% to €1.68 and reported EPS increased 40% to €1.43.

CEO Stéfan Descheemaeker commented: “We are pleased to report that 2022 was another year of record revenue, adjusted EBITDA and adjusted EPS for Nomad Foods, again proving the resilience of our operating model in a challenging macro environment.

“Most importantly, we adjusted our business model in response to extraordinary changes in the market, especially in raw material sourcing and portfolio pricing. Looking ahead to 2023, the frozen food category remains great value for consumers, and we have exciting plans in place to deliver strong operational results to build value for our shareholders.”

Noam Gottesman, Nomad Foods’ co-chairman and founder, added: “Our 2022 results mark another record financial performance for Nomad Foods. We delivered adjusted EPS at the top end of our guidance range, grew organic sales against a challenging consumer backdrop, finished the successful integration of Fortenova’s frozen food business, and opportunistically accessed the capital markets to extend our debt maturities until mid-2028 and 2029.

“We enter 2023 with sales momentum, strong underlying cash generation, and financial flexibility providing the opportunity to prudently deploy capital to create value for shareholders. In addition to our ability to return capital to shareholders, we believe we have the right operational and financial plans in place to drive sustainable growth to compound value into the future.”

Morning update

Consumer confidence is beginning to rebound, according to GfK’s long-running Consumer Confidence Index.

The overall index increased by seven points, with all five measures up month on month, albeit the overall confidence score is still a lowly –38.

The measure for the general economic situation of the country during the past 12 months was up six points at –65, now 15 points lower than in February 2022.

Expectations for the general economic situation over the next 12 months are up by 11 points to –43, which is the same score as February 2022.

The index measuring changes in personal finances during the last 12 months increased five points to –26 – down 15 points year on year.

The forecast for personal finances over the next 12 months increased nine points to –18, down four points on last year.

Joe Staton, client strategy director, GfK, commented: “Despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost of living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year. While it’s too early to talk about ‘green shoots of recovery’, the uptick across all measures should be welcomed.

“But what’s happening? Are people simply fed up with hearing bad news? Do they see a milder recession than the pundits predicted? Do they sense the most worrying phase of the energy crisis is over? The headline consumer confidence score is still severely depressed and the mood, as well as the economy remain a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023.

“However, many challenges remain and this may be nothing more than a bubble of hope – and bubbles always burst.”

On the markets this morning, the FTSE 100 has regained ground, rising 0.3% to 7,930.7pts.

Risers include McBride, up 2.4% to 23.9p and THG, up 0.9% to 57.1p.

Fallers include Kerry Group, down 1.4% to €90.94, Deliveroo, down 1.3% to 80.9p and Domino’s Pizza Group, down 1.3% to 284p.

Yesterday in the City

The FTSE 100 lost ground for the third consecutive day, dropping another 0.3% to 7,907.7pts.

Supermarket Income REIT fell back 4% to 91p following its announcement its portfolio had lost value amid wider interest rate rises.

Fallers yesterday, on a quiet day for announcements, included WH Smith, down 4.6% to 1,583p, Naked Wines, down 3.8% to 107.5p, McBride, down 2.7% to 23.4p, Domino’s Pizza Group, down 2.3% to 287.8p, Unilever, down 1.7% to 4,193.5p and SSP Group, down 1.7% to 256.1p.

The day’s risers included Science in Sport, up 5.7% to 14p, Ocado, up 3.2% to 638.2p, C&C Group, up 3.1% to 150.2p, Bakkavor, up 2.7% to 107.8p, Coca-Cola Europacific Partners, up 2% to €52.40 and Deliveroo, up 1.7% to 82p.

Topics