Stock Buzz: Nomad Foods Limited (NYSE: NOMD)

On Friday, Shares of Nomad Foods Limited (NYSE: NOMD) declined -0.52% to $21.10. The stock traded total volume of 685,297 shares lower than the average volume of 1.29M shares.

Nomad Foods Limited reports Fourth Quarter and Full Year 2018 financial results.

Fourth Quarter of 2018 results contrast to the Fourth Quarter of 2017:

  • Revenue increased 21% to €615.0M. Organic revenue growth of 4.2% was comprised of 1.7% growth in volume/mix and 2.5% growth in price. Revenue growth benefited 17.3 percentage points from the acquisitions of Goodfella’s and Aunt Bessie’s and was partially offset by 0.5 percentage points from foreign exchange translation.
  • Adjusted gross profit increased 15% to €184.0M. Adjusted gross margin declined 160 basis points to 29.9% as positive mix and pricing and promotional efficiencies were offset by cost of goods inflation and the inclusion of the recently attained acquisitions.
  • Adjusted operating expense increased 8% to €96.0M as financial discipline in the base business was offset by the inclusion of expenses related to the aforementioned acquisitions. Advertising and promotion expense increased 10% to €38.0M and indirect expense increased 7% to €58.0M.
  • Adjusted EBITDA increased 23% to €101.0M.
  • Adjusted profit after tax increased 13% to €52.0M and Adjusted EPS increased 7% to €0.29.

Year ended 2018 results contrast to the Year ended 2017:

  • Revenue increased 11% to €2,173.0M. Organic revenue growth of 2.6% was comprised of 1.2% growth in volume/mix and 1.4% growth in price. Revenue growth benefited 9.4 percentage points from the acquisitions of Goodfella’s and Aunt Bessie’s and was partially offset by 1.0 percentage points from foreign exchange translation.
  • Adjusted gross profit increased 9% to €659.0M. Adjusted gross margin declined 30 basis points to 30.3% with positive mix and pricing and promotional efficiencies more than offsetting cost of goods inflation and acquisition mix.
  • Adjusted operating expense increased 5% to €329.0M as financial discipline in the base business was offset by the inclusion of expenses related to the aforementioned acquisitions. Advertising and promotion expense increased 7% to €121.0M and indirect expense increased 3% to €208.0M.
  • Adjusted EBITDA increased 15% to €376.0M.
  • Adjusted profit after tax increased 19% to €209.0M and Adjusted EPS increased 19% to €1.19.

IFRS 16 – Leases:

  • EBITDA is expected to be about €15.0M higher because of lower lease expense, which will be replaced by higher depreciation and interest expense charges.
  • Profit before tax is expected to be about €5.0M lower and EPS is expected to be about €0.02 lower.
  • Assets are expected to be €84.0M higher and liabilities are expected to be €120.0M higher.

2019 Guidance:

The Company is initiating 2019 guidance, which includes the anticipated impact of IFRS 16. Full year 2019 Adjusted EBITDA is expected to be about €420 to €430.0M, inclusive of about €15.0M of anticipated benefit related to IFRS 16. This equates to expected 2019 Adjusted EBITDA growth of about 8-10% before the effect of IFRS 16.

NOMD has the market capitalization of $4.04B and its EPS growth ratio for the past five years was 14.59%. The return on assets ratio of the Company was 3.30% while its return on investment ratio stands at 5.90%. Price to sales ratio was 1.65 while 72.70% of the stock was owned by institutional investors.

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