NOMAD FOODS LIMITED | ||
By: | /s/ Samy Zekhout | |
Name: | Samy Zekhout | |
Title: | Chief Financial Officer |
Exhibit Number | Exhibit Title | |
Press Release issued by Nomad Foods Limited on February 28, 2019 relating to the Company’s financial results for the three and twelve month periods ended December 31, 2018. | ||
• | Reported revenue increased 21% to €615 million |
• | Organic revenue growth of 4.2% |
• | Reported profit for the period of €41 million |
• | Adjusted EBITDA increased 23% to €101 million |
• | Reported EPS of €0.23; Adjusted EPS increased 7% to €0.29 |
• | Reported revenue increased 11% to €2,173 million |
• | Organic revenue growth of 2.6% |
• | Reported profit for the period of €171 million |
• | Adjusted EBITDA increased 15% to €376 million |
• | Reported EPS of €0.97; Adjusted EPS increased 19% to €1.19 |
• | Revenue increased 21% to €615 million. 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 million. 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 acquired acquisitions. |
• | Adjusted operating expense increased 8% to €96 million 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 million and Indirect expense increased 7% to €58 million. |
• | Adjusted EBITDA increased 23% to €101 million. |
• | Adjusted profit after tax increased 13% to €52 million and Adjusted EPS increased 7% to €0.29. |
• | Revenue increased 11% to €2,173 million. 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 million. 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 million 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 million and Indirect expense increased 3% to €208 million. |
• | Adjusted EBITDA increased 15% to €376 million. |
• | Adjusted profit after tax increased 19% to €209 million and Adjusted EPS increased 19% to €1.19. |
• | EBITDA is expected to be approximately €15 million higher due to lower lease expense, which will be replaced by higher depreciation and interest expense charges. |
• | Profit before tax is expected to be approximately €5 million lower and EPS is expected to be approximately €0.02 lower. |
• | Assets are expected to be €84 million higher and liabilities are expected to be €120 million higher. |
• | While IFRS 16 will not affect company cash flow, the standard will reclassify lease payments from operating activities to financing activities within the Statements of Cash Flows. |
Three Months Ended December 31, 2018 | Three Months Ended December 31, 2017 | ||||
€ millions | € millions | ||||
Revenue | 614.8 | 508.2 | |||
Cost of sales | (431.1 | ) | (348.2 | ) | |
Gross profit | 183.7 | 160.0 | |||
Other operating expenses | (99.6 | ) | (91.7 | ) | |
Exceptional items | (6.0 | ) | (20.4 | ) | |
Operating profit | 78.1 | 47.9 | |||
Finance costs | (19.9 | ) | (17.4 | ) | |
Net financing costs | (19.9 | ) | (17.4 | ) | |
Profit before tax | 58.2 | 30.5 | |||
Taxation | (17.4 | ) | (3.2 | ) | |
Profit for the period | 40.8 | 27.3 | |||
Attributable to: | |||||
Equity owners of the parent | 41.1 | 27.3 | |||
Non-controlling interests | (0.3 | ) | — | ||
40.8 | 27.3 | ||||
Basic earnings per share | |||||
Profit for the period attributable to equity owners of the parent in € millions | 41.1 | 27.3 | |||
Weighted average shares outstanding in millions | 175.8 | 166.8 | |||
Basic earnings per share in € | 0.23 | 0.16 | |||
Diluted earnings per share | |||||
Profit for the period attributable to equity owners of the parent in € millions | 41.1 | 27.3 | |||
Weighted average shares outstanding in millions | 175.9 | 175.6 | |||
Diluted earnings per share in € | 0.23 | 0.16 |
Twelve months ended December 31, 2018 | Twelve months ended December 31, 2017 | ||||
€ millions | € millions | ||||
Revenue | 2,172.8 | 1,956.6 | |||
Cost of sales | (1,519.3 | ) | (1,357.2 | ) | |
Gross profit | 653.5 | 599.4 | |||
Other operating expenses | (352.7 | ) | (319.3 | ) | |
Exceptional items | (17.7 | ) | (37.2 | ) | |
Operating profit | 283.1 | 242.9 | |||
Finance income | 1.6 | 7.2 | |||
Finance costs | (57.6 | ) | (81.6 | ) | |
Net financing costs | (56.0 | ) | (74.4 | ) | |
Profit before tax | 227.1 | 168.5 | |||
Taxation | (56.6 | ) | (32.0 | ) | |
Profit for the period | 170.5 | 136.5 | |||
Attributable to: | |||||
Equity owners of the parent | 171.2 | 136.5 | |||
Non-controlling interests | (0.7 | ) | — | ||
170.5 | 136.5 | ||||
Basic earnings per share | |||||
Profit for the period attributable to equity owners of the parent in € millions | 171.2 | 136.5 | |||
Weighted average shares outstanding in millions | 175.6 | 176.1 | |||
Basic earnings per share in € | 0.97 | 0.78 | |||
Diluted earnings per share | |||||
Profit for the period attributable to equity owners of the parent in € millions | 171.2 | 136.5 | |||
Weighted average shares outstanding in millions | 175.8 | 184.8 | |||
Diluted earnings per share in € | 0.97 | 0.74 |
As at December 31, 2018 | As at December 31, 2017 | ||||
€ millions | € millions | ||||
Non-current assets | |||||
Goodwill | 1,861.0 | 1,745.6 | |||
Intangibles | 2,087.2 | 1,724.4 | |||
Property, plant and equipment | 348.8 | 295.4 | |||
Other receivables | 2.6 | 4.3 | |||
Derivative financial instruments | 35.7 | 18.6 | |||
Deferred tax assets | 68.7 | 64.3 | |||
Total non-current assets | 4,404.0 | 3,852.6 | |||
Current assets | |||||
Cash and cash equivalents | 327.6 | 219.2 | |||
Inventories | 342.5 | 306.9 | |||
Trade and other receivables | 173.9 | 147.1 | |||
Indemnification assets | 79.4 | 73.8 | |||
Derivative financial instruments | 13.4 | 2.1 | |||
Total current assets | 936.8 | 749.1 | |||
Total assets | 5,340.8 | 4,601.7 | |||
Current liabilities | |||||
Trade and other payables | 571.6 | 477.5 | |||
Current tax payable | 201.2 | 145.3 | |||
Provisions | 44.3 | 68.0 | |||
Loans and borrowings | 21.4 | 3.3 | |||
Derivative financial instruments | 1.5 | 7.8 | |||
Total current liabilities | 840.0 | 701.9 | |||
Non-current liabilities | |||||
Loans and borrowings | 1,742.9 | 1,395.1 | |||
Employee benefits | 200.6 | 188.4 | |||
Trade and other payables | 1.3 | 1.8 | |||
Provisions | 69.4 | 72.8 | |||
Derivative financial instruments | 35.4 | 61.4 | |||
Deferred tax liabilities | 392.1 | 327.7 | |||
Total non-current liabilities | 2,441.7 | 2,047.2 | |||
Total liabilities | 3,281.7 | 2,749.1 | |||
Net assets | 2,059.1 | 1,852.6 | |||
Equity attributable to equity holders | |||||
Share capital | — | — | |||
Capital reserve | 1,748.5 | 1,623.7 | |||
Share based compensation reserve | 9.4 | 2.9 | |||
Founder Preferred Share Dividend reserve | 372.6 | 493.4 | |||
Translation reserve | 88.8 | 83.2 | |||
Cash flow hedging reserve | 8.5 | (3.0 | ) | ||
Accumulated deficit reserve | (167.9 | ) | (347.6 | ) | |
Equity attributable to owners of the parent | 2,059.9 | 1,852.6 | |||
Non-controlling interests | (0.8 | ) | — | ||
Total equity | 2,059.1 | 1,852.6 |
Twelve months ended December 31, 2018 | Twelve months ended December 31, 2017 | ||||
€ millions | € millions | ||||
Cash flows from operating activities | |||||
Profit for the period | 170.5 | 136.5 | |||
Adjustments for: | |||||
Non-cash fair value purchase price adjustment of inventory | 5.7 | — | |||
Exceptional items | 17.7 | 37.2 | |||
Share based payment expense | 13.0 | 2.6 | |||
Depreciation and amortization | 46.3 | 42.4 | |||
Loss on disposal of property, plant and equipment | 0.3 | 0.5 | |||
Finance costs | 57.6 | 81.6 | |||
Finance income | (1.6 | ) | (7.2 | ) | |
Taxation | 56.6 | 32.0 | |||
Operating cash flow before changes in working capital, provisions and exceptional items | 366.1 | 325.6 | |||
(Increase)/decrease in inventories | (20.2 | ) | 16.7 | ||
Increase in trade and other receivables | (10.8 | ) | (1.6 | ) | |
Increase in trade and other payables | 64.5 | 18.1 | |||
Decrease in employee benefits and other provisions | (2.0 | ) | (0.3 | ) | |
Cash generated from operations before tax and exceptional items | 397.6 | 358.5 | |||
Cash flows relating to exceptional items | (43.4 | ) | (99.5 | ) | |
Tax paid | (32.9 | ) | (65.2 | ) | |
Net cash generated from operating activities | 321.3 | 193.8 | |||
Cash flows from investing activities | |||||
Purchase of subsidiaries, net of cash acquired | (465.1 | ) | — | ||
Settlement of contingent consideration | (6.5 | ) | — | ||
Purchase of property, plant and equipment | (35.0 | ) | (38.0 | ) | |
Purchase of intangibles | (6.6 | ) | (4.6 | ) | |
Cash used in investing activities | (513.2 | ) | (42.6 | ) | |
Cash flows from financing activities | |||||
Proceeds from issuance of Ordinary Shares | 0.1 | — | |||
Repurchase of ordinary shares | — | (177.6 | ) | ||
Proceeds from new loans and notes | 355.6 | 1,470.5 | |||
Repayment of loan principal | (5.9 | ) | (1,469.5 | ) | |
Cash received from factored receivables | 3.4 | — | |||
Payment of finance leases | — | (1.6 | ) | ||
(Loss)/proceeds on settlement of derivatives | (2.8 | ) | 1.6 | ||
Payment of financing fees | (2.6 | ) | (16.7 | ) | |
Interest paid | (45.3 | ) | (48.8 | ) | |
Interest received | 0.2 | 0.3 | |||
Net cash from/(used in) financing activities | 302.7 | (241.8 | ) | ||
Net increase/(decrease) in cash and cash equivalents | 110.8 | (90.6 | ) | ||
Cash and cash equivalents at beginning of period | 219.2 | 329.5 | |||
Effect of exchange rate fluctuations | (2.4 | ) | (19.7 | ) | |
Cash and cash equivalents at end of period | 327.6 | 219.2 |
€ in millions, except per share data | As reported for the three months ended December 31, 2018 | Adjustments | As Adjusted for the three months ended December 31, 2018 | |||||||
Revenue | 614.8 | — | 614.8 | |||||||
Cost of sales | (431.1 | ) | — | (431.1 | ) | |||||
Gross profit | 183.7 | — | 183.7 | |||||||
Other operating expenses | (99.6 | ) | 3.8 | (a) | (95.8 | ) | ||||
Exceptional items | (6.0 | ) | 6.0 | (b) | — | |||||
Operating profit | 78.1 | 9.8 | 87.9 | |||||||
Finance income | — | — | — | |||||||
Finance costs | (19.9 | ) | (0.7 | ) | (20.6 | ) | ||||
Net financing costs | (19.9 | ) | (0.7 | ) | (c) | (20.6 | ) | |||
Profit before tax | 58.2 | 9.1 | 67.3 | |||||||
Taxation | (17.4 | ) | 1.7 | (d) | (15.7 | ) | ||||
Profit for the period | 40.8 | 10.8 | 51.6 | |||||||
Profit for the period attributable to equity owners of the parent | 41.1 | 10.8 | 51.9 | |||||||
Weighted average shares outstanding in millions - basic | 175.8 | 175.8 | ||||||||
Basic earnings per share | 0.23 | 0.29 | ||||||||
Weighted average shares outstanding in millions - diluted | 175.9 | (0.2 | ) | (e) | 175.7 | |||||
Diluted earnings per share | 0.23 | 0.29 |
(a) | Share-based payment charge including employer payroll taxes. |
(b) | Exceptional items which management believes are non-recurring and do not have a continuing impact. See table ‘EBITDA and Adjusted EBITDA (unaudited) three months ended December 31, 2018’ for a detailed list of exceptional items. |
(c) | Elimination of €1.0 million of realized gains on foreign currency derivatives as well as €0.3 million of realized and unrealized foreign exchange translation losses. |
(d) | Tax impact of the above at the applicable tax rate for each adjustment, determined by the nature of the item and the jurisdiction in which it arises. |
(e) | Adjustment to eliminate the dilutive effect of the Founder Preferred Share Dividend earned as of December 31, 2018 but for which shares were issued on January 2, 2019. |
€ in millions | As reported for the three months ended December 31, 2018 | |||
Profit for the period | 40.8 | |||
Taxation | 17.4 | |||
Net financing costs | 19.9 | |||
Depreciation | 10.9 | |||
Amortization | 1.8 | |||
EBITDA | 90.8 | |||
Exceptional items: | ||||
Supply chain reconfiguration | (0.1 | ) | (a) | |
Findus Group integration costs | 3.3 | (b) | ||
Goodfella's Pizza & Aunt Bessie's integration costs | 5.3 | (c) | ||
Factory optimization | 0.7 | (d) | ||
Settlement of legacy matters | (3.2 | ) | (e) | |
Other Adjustments: | ||||
Other add-backs | 3.8 | (f) | ||
Adjusted EBITDA(g) | 100.6 |
(a) | Supply chain reconfiguration costs following the closure of the factory in Bjuv, Sweden. Following the closure in 2017, the Company has incurred costs relating to the relocation of production to other factories. The costs are partially offset by income from the disposal of the remaining tangible assets. |
(b) | Non-recurring costs related to the roll-out of the Nomad ERP system following the acquisition of the Findus Group in November 2015. |
(c) | Non-recurring costs associated with the integration of the Goodfella's pizza business in April 2018 and the Aunt Bessie's business in July 2018. |
(d) | Non-recurring costs associated with a three-year factory optimization program to develop a new suite of standard manufacturing and supply chain processes, that will provide a single network of optimized factories. |
(e) | Non-recurring income and costs associated with liabilities relating to periods prior to acquisition of the Findus and Iglo Groups, settlements of tax audits, settlements of contingent consideration for acquisitions and other liabilities relating to periods prior to acquisition of the Findus and Iglo businesses by the Company including an income of €2.7 million recognized on settlement of contingent consideration for the purchase of the La Cocinera acquisition. |
(f) | Represents the elimination of share-based payment charges including employer payroll taxes. |
(g) | Adjusted EBITDA margin of 16.4% for the three months ended December 31, 2018 is calculated by dividing Adjusted EBITDA by Adjusted revenue of €614.8 million per page 8. |
€ in millions, except per share data | As Reported for the three months ended December 31, 2017 | Adjustments | As Adjusted for the three months ended December 31, 2017 | |||||||
Revenue | 508.2 | — | 508.2 | |||||||
Cost of sales | (348.2 | ) | — | (348.2 | ) | |||||
Gross profit | 160.0 | — | 160.0 | |||||||
Other operating expenses | (91.7 | ) | 3.2 | (a) | (88.5 | ) | ||||
Exceptional items | (20.4 | ) | 20.4 | (b) | — | |||||
Operating profit | 47.9 | 23.6 | 71.5 | |||||||
Finance income | — | — | — | |||||||
Finance costs | (17.4 | ) | 3.7 | (13.7 | ) | |||||
Net financing costs | (17.4 | ) | 3.7 | (c) | (13.7 | ) | ||||
Profit before tax | 30.5 | 27.3 | 57.8 | |||||||
Taxation | (3.2 | ) | (9.1 | ) | (d) | (12.3 | ) | |||
Profit for the period | 27.3 | 18.2 | 45.5 | |||||||
Weighted average shares outstanding in millions - basic | 166.8 | 166.8 | ||||||||
Basic earnings per share | 0.16 | 0.27 | ||||||||
Weighted average shares outstanding in millions - diluted | 175.6 | (8.7 | ) | (e) | 166.9 | |||||
Diluted earnings per share | 0.16 | 0.27 |
(a) | Share-based payment charge. |
(b) | Exceptional items which management believes do not have a continuing impact. See table ‘EBITDA and Adjusted EBITDA (unaudited) three months ended December 31, 2017’ for a detailed list of exceptional items. |
(c) | Elimination of €0.6 million of costs incurred as part of the repricing of debt on December 20, 2017, €1.7 million of non-cash foreign exchange translation losses and €1.4 million of foreign exchange losses on derivatives. |
(d) | Tax impact of the above at the applicable tax rate for each exceptional item, determined by the nature of the item and the jurisdiction in which it arises. |
(e) | Adjustment to eliminate the dilutive effect of the Founder Preferred Share Dividend earned as of December 31, 2017 but for which shares were issued on January 2, 2018. |
€ in millions | As reported for the three months ended December 31, 2017 | |||
Profit for the period | 27.3 | |||
Taxation | 3.2 | |||
Net financing costs | 17.4 | |||
Depreciation | 9.3 | |||
Amortization | 0.7 | |||
EBITDA | 57.9 | |||
Exceptional items: | ||||
Costs related to transactions | 0.7 | (a) | ||
Investigation and implementation of strategic opportunities | 8.3 | (b) | ||
Supply chain reconfiguration | 14.0 | (c) | ||
Findus Group integration costs | 5.6 | (d) | ||
Settlement of legacy matters | (8.2 | ) | (e) | |
Other Adjustments: | ||||
Other add-backs | 3.2 | (f) | ||
Adjusted EBITDA(g) | 81.5 |
(a) | Costs incurred related to enhanced control compliance procedures in territories. |
(b) | Costs incurred in relation to investigation and implementation of strategic opportunities for the combined group following acquisitions by the Company. These costs primarily relate to changes to the organizational structure of the combined businesses. |
(c) | Supply chain reconfiguration costs, namely the closure of the Bjuv factory. |
(d) | Costs recognized by Nomad Foods relating to the integration of the Findus Group, primarily relating to the roll-out of the Nomad ERP system. |
(e) | Non-recurring income associated with liabilities relating to periods prior to acquisition of the Findus and Iglo Groups including gains of €4.2 million from the reassessment of sales tax provisions, €1.2 million from the reassessment of interest on sales tax provisions, a €2.8 million gain on a legacy pension plan in Norway and a €1.3 million gain on disposal of a non-operational factory. |
(f) | Other add-backs include the elimination of share-based payment charges of €0.2 million and M&A related investigation costs, professional fees, transaction costs and purchase accounting related valuations of €3.0 million. We exclude these costs because we do not believe they are indicative of our normal operating costs, can vary significantly in amount and frequency, and are unrelated to our underlying operating performance. |
(g) | Adjusted EBITDA margin 16.0% for the three months ended December 31, 2017 is calculated by dividing Adjusted EBITDA by Adjusted revenue of €508.2 million per page 10. |
€ in millions, except per share data | As reported for the twelve months ended December 31, 2018 | Adjustments | As Adjusted for the twelve months ended December 31, 2018 | |||||||
Revenue | 2,172.8 | — | 2,172.8 | |||||||
Cost of sales | (1,519.3 | ) | 5.7 | (a) | (1,513.6 | ) | ||||
Gross profit | 653.5 | 5.7 | 659.2 | |||||||
Other operating expenses | (352.7 | ) | 23.6 | (b) | (329.1 | ) | ||||
Exceptional items | (17.7 | ) | 17.7 | (c) | — | |||||
Operating profit | 283.1 | 47.0 | 330.1 | |||||||
Finance income | 1.6 | (1.4 | ) | 0.2 | ||||||
Finance costs | (57.6 | ) | (2.4 | ) | (60.0 | ) | ||||
Net financing costs | (56.0 | ) | (3.8 | ) | (d) | (59.8 | ) | |||
Profit before tax | 227.1 | 43.2 | 270.3 | |||||||
Taxation | (56.6 | ) | (4.7 | ) | (e) | (61.3 | ) | |||
Profit for the period | 170.5 | 38.5 | 209.0 | |||||||
Profit for the period attributable to equity owners of the parent | 171.2 | 38.5 | 209.7 | |||||||
Weighted average shares outstanding in millions - basic | 175.6 | — | 175.6 | |||||||
Basic earnings per share | 0.97 | 1.19 | ||||||||
Weighted average shares outstanding in millions - diluted | 175.8 | (0.2 | ) | (f) | 175.6 | |||||
Diluted earnings per share | 0.97 | 1.19 |
(a) | Non-cash fair value uplift of inventory recorded as part of the Goodfella's Pizza and Aunt Bessie's purchase price accounting. |
(b) | Share-based payment expense including employer payroll taxes of €14.7 million and non-operating M&A transaction costs of €8.9 million. |
(c) | Exceptional items which management believes are non-recurring and do not have a continuing impact. See table ‘EBITDA and Adjusted EBITDA (unaudited) twelve months ended December 31, 2018’ for a detailed list of exceptional items. |
(d) | Elimination of €1.1 million of costs incurred as part of the refinancing on the May 3, 2017 and repricing on December 20, 2017, €0.3 million of realized and unrealized foreign exchange translation losses and €5.2 million of gains on foreign currency derivatives. |
(e) | Tax impact of the above at the applicable tax rate for each adjustment, determined by the nature of the item and the jurisdiction in which it arises. |
(f) | Adjustment to eliminate the dilutive effect of the Founder Preferred Share Dividend earned as of December 31, 2018 but for which shares were issued on January 2, 2019. |
€ in millions | As reported for the twelve months ended December 31, 2018 | |||
Profit for the period | 170.5 | |||
Taxation | 56.6 | |||
Net financing costs | 56.0 | |||
Depreciation | 39.3 | |||
Amortization | 7.0 | |||
EBITDA | 329.4 | |||
Acquisition purchase price adjustments | 5.7 | (a) | ||
Exceptional items: | ||||
Supply chain reconfiguration | 1.2 | (b) | ||
Findus Group integration costs | 10.4 | (c) | ||
Goodfella's Pizza & Aunt Bessie's integration costs | 8.3 | (d) | ||
Factory optimization | 1.6 | (e) | ||
Settlement of legacy matters | (3.8 | ) | (f) | |
Other Adjustments: | ||||
Other add-backs | 23.6 | (g) | ||
Adjusted EBITDA(h) | 376.4 |
(a) | Non-cash fair value uplift of inventory recorded as part of the Goodfella's Pizza and Aunt Bessie's purchase price accounting. |
(b) | Supply chain reconfiguration costs following the closure of the factory in Bjuv, Sweden. Following the closure in 2017, the Company has incurred costs relating to the relocation of production to other factories. The costs are partially offset by income from the disposal of the remaining tangible assets. |
(c) | Non-recurring costs related to the roll-out of the Nomad ERP system following the acquisition of the Findus Group in November 2015. |
(d) | Non-recurring costs associated with the integration of the Goodfella's pizza business in April 2018 and the Aunt Bessie's business in July 2018. |
(e) | Non-recurring costs associated with a three-year factory optimization program to develop a new suite of standard manufacturing and supply chain processes, that will provide a single network of optimized factories. |
(f) | Non-recurring income and costs associated with liabilities relating to periods prior to acquisition of the Findus and Iglo Groups, settlements of tax audits, settlements of contingent consideration for acquisitions and other liabilities relating to periods prior to acquisition of the Findus and Iglo businesses by the Company. This includes an income of €2.7 million recognized on settlement of contingent consideration for the purchase of the La Cocinera acquisition and net income of €0.7 million associated with settlements of tax audits. |
(g) | Represents the elimination of share-based payment charges including employer payroll taxes of €14.7 million and elimination of non-operating M&A related costs of €8.9 million. We exclude these costs because we do not believe they are indicative of our normal operating costs, can vary significantly in amount and frequency, and are unrelated to our underlying operating performance. |
(h) | Adjusted EBITDA margin of 17.3% for the twelve months ended December 31, 2018 is calculated by dividing Adjusted EBITDA by Adjusted revenue of €2,172.8 million per page 12. |
€ in millions, except per share data | As reported for the twelve months ended December 31, 2017 | Adjustments | As Adjusted for the twelve months ended December 31, 2017 | |||||||
Revenue | 1,956.6 | — | 1,956.6 | |||||||
Cost of sales | (1,357.2 | ) | — | (1,357.2 | ) | |||||
Gross profit | 599.4 | — | 599.4 | |||||||
Other operating expenses | (319.3 | ) | 5.6 | (a) | (313.7 | ) | ||||
Exceptional items | (37.2 | ) | 37.2 | (b) | — | |||||
Operating profit | 242.9 | 42.8 | 285.7 | |||||||
Finance income | 7.2 | (7.0 | ) | 0.2 | ||||||
Finance costs | (81.6 | ) | 22.0 | (59.6 | ) | |||||
Net financing costs | (74.4 | ) | 15.0 | (c) | (59.4 | ) | ||||
Profit before tax | 168.5 | 57.8 | 226.3 | |||||||
Taxation | (32.0 | ) | (19.1 | ) | (d) | (51.1 | ) | |||
Profit for the period | 136.5 | 38.7 | 175.2 | |||||||
Weighted average shares outstanding in millions - basic | 176.1 | 176.1 | ||||||||
Basic earnings per share | 0.78 | 1.00 | ||||||||
Weighted average shares outstanding in millions - diluted | 184.8 | (8.7 | ) | (e) | 176.1 | |||||
Diluted earnings per share | 0.74 | 1.00 |
(a) | Share-based payment charge |
(b) | Exceptional items which management believes do not have a continuing impact. See table ‘EBITDA and Adjusted EBITDA (unaudited) twelve months ended December 31, 2017’ for a detailed list of exceptional items. |
(c) | Elimination of €20.1 million of costs incurred as part of the refinancing on the May 3, 2017 and repricing on December 20, 2017, €3.9 million of foreign exchange translation losses and €9.0 million of foreign currency gains on derivatives. |
(d) | Tax impact of the above at the applicable tax rate for each adjustment, determined by the nature of the item and the jurisdiction in which it arises. |
(e) | Adjustment to eliminate the dilutive effect of the Founder Preferred Share Dividend earned as of December 31, 2017 but for which shares were issued on January 2, 2018. |
€ in millions | Twelve Months Ended December 31, 2017 | |||
Profit for the period | 136.5 | |||
Taxation | 32.0 | |||
Net financing costs | 74.4 | |||
Depreciation | 35.9 | |||
Amortization | 6.5 | |||
EBITDA | 285.3 | |||
Exceptional items: | ||||
Costs related to transactions | 3.2 | (a) | ||
Investigation and implementation of strategic opportunities | 18.8 | (b) | ||
Supply chain reconfiguration | 14.0 | (c) | ||
Findus Group integration costs | 15.1 | (d) | ||
Settlement of legacy matters | (5.6 | ) | (e) | |
Remeasurement of indemnification assets | (8.3 | ) | (f) | |
Other Adjustments: | ||||
Other add-backs | 5.6 | (g) | ||
Adjusted EBITDA(h) | 328.1 |
(a) | Costs incurred related to enhanced control compliance procedures in territories. |
(b) | Costs incurred in relation to investigation and implementation of strategic opportunities considered non-recurring for the combined group following acquisitions by the Company. These costs primarily relate to changes to the organizational structure of the combined businesses. |
(c) | Supply chain reconfiguration costs, namely the closure of the Bjuv factory. |
(d) | Costs recognized by Nomad Foods relating to the integration of the Findus Group, primarily relating to the rollout of the Nomad ERP system. |
(e) | Non-recurring income and costs associated with liabilities relating to periods prior to acquisition of the Findus and Iglo Groups, settlements of tax audits, sale of non-operating factories acquired and other liabilities relating to periods prior to acquisition of the Findus and Iglo businesses by the Company. This includes a charge of €3.9 million associated with settlements of tax audits, offset by gains of €4.2 million from the reassessment of sales tax provisions, €1.2 million from the reassessment of interest on sales tax provisions, a €2.8 million gain on a legacy pension plan in Norway and a €1.3 million gain on disposal of a non-operational factory. |
(f) | Adjustment to reflect the remeasurement of the indemnification assets recognized on the acquisition of the Findus Group, which is capped at the value of shares held in escrow at the share price as at December 31, 2017. Offsetting are the release of indemnification assets associated with final settlement of indemnity claims against an affiliate of Permira Advisors LLP, which are legacy tax matters that predate the Company's acquisition of Iglo Group in 2015. |
(g) | Represents the elimination of share-based payment charges of €2.6 million and elimination of non-operating M&A related costs of €3.0 million. We exclude these costs because we do not believe they are indicative of our normal operating costs, can vary significantly in amount and frequency, and are unrelated to our underlying operating performance. |
(h) | Adjusted EBITDA margin 16.8% for the twelve months ended December 31, 2017 is calculated by dividing Adjusted EBITDA by Adjusted revenue of €1,956.6 million per page 14. |
Three Months Ended December 31, 2018 | Twelve Months Ended December 31, 2018 | ||||
YoY Growth | YoY Growth | ||||
Reported Revenue Growth | 21.0 | % | 11.0 | % | |
Of which: | |||||
Organic Revenue Growth | 4.2 | % | 2.6 | % | |
Acquisitions | 17.3 | % | 9.4 | % | |
Translational FX (a) | (0.5 | )% | (1.0 | )% | |
Total | 21.0 | % | 11.0 | % |
(a) | Translational FX is calculated by translating data of the current and comparative periods using a budget foreign exchange rate that is set once a year as part of the Company's internal annual forecast process. |