Nomad Foods Limited (NYSE: NOMD) provided updates on fourth quarter 2020 business performance and share repurchase activity ahead of investor meetings taking place at the Citi Global Consumer Conference on December 8, 2020.
Fourth Quarter and Full Year 2020 Business Update
Fourth quarter 2020 performance is tracking ahead of management’s prior expectations with organic revenue growth now projected to increase in the high-single digit percent range. Organic revenue growth increased 10% through the first two months of the fourth quarter and is expected to remain above historical levels during the month of December. Management now expects to achieve 2020 Adjusted EBITDA of approximately €465 million and Adjusted EPS of approximately €1.34.
Capital Allocation Update
The Company announced that it has repurchased over $95 million of its ordinary shares thus far in the fourth quarter, resulting in excess of $195 million of cumulative share repurchases year-to-date under its $300 million share repurchase plan authorized in March 2020. This activity is in addition to the successful tender offer for $461 million of its ordinary shares completed in September 2020.
In aggregate, Nomad Foods has returned over $655 million of capital to shareholders year-to-date. The Company’s share count was approximately 176 million as of December 6, 2020, representing a 14% reduction versus the start of the year.
Stéfan Descheemaeker, Nomad Foods’ Chief Executive Officer, stated, “Our latest expectations have us on pace to achieve a 16th consecutive quarter of organic revenue growth and compounded annual Adjusted EPS growth of 12% since 2016. These preliminary results reinforce the focus and commitment of our entire organization to perform at a high level amidst a global pandemic. We are proud of the track record that we are establishing as a premier packaged food company delivering sustained organic growth, strong free cash conversion and accretive capital deployment. Equally, we are excited by our growth prospects – organically and inorganically – as we recently outlined at our Investor Day.”
Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented, “We are delighted to end the year on a strong note and are firmly on track to achieve the long-term financial targets that we shared at our Investor Day just last month, including €2.30 of Adjusted EPS by 2025. Our confidence in the management team and growth strategy are underpinned by the repurchase of our shares, which we continue to see as fundamentally undervalued relative to the historic performance and growth prospects of the business.”
This press release includes preliminary results for the first two months of the fourth quarter of 2020. These preliminary results are based on management’s initial analysis of operations for the two-month period and are subject to change. The Company’s actual financial results for the first two months of the fourth quarter of 2020 could differ materially from the preliminary estimates provided in this press release as a result of the completion of closing procedures, final adjustments, or other developments arising between now and the time that the Company’s financial results are finalized. The Company cautions that its results for the two-month period may not be indicative of results for future periods.