Q3 profits fall for Nomad-owned Iglo
Nomad Foods’ total revenue for the three months ending 30 September 2015 fell by 8.4 percent or EUR 29.1 million (USD 31.2 million) year-on-year to EUR 315.5 million (USD 338.4 million). Allowing for currency impacts and the exit from Romania, Slovakia and Turkey, like-for-like revenue declined by 11.2 percent. At the same time, its gross profit decreased by 16.8 percent or EUR 20.7 million (USD 22.2 million) to EUR 102.6 million (USD 110 million).
The company acquired Iglo Foods Holdings Limited and its subsidiaries on 1 June 2015 for EUR 2.6 billion (USD 2.8 billion). Prior to this date, Nomad didn’t have any operations. It has, therefore, presented Pro Forma As Adjusted financial information for the period, based on the historical financial statements of Nomad and Iglo.
Stefan Descheemaeker, CEO of Nomad, said the overall third-quarter performance was in line with expectations at the time of the Iglo acquisition, taking into account the continuing difficult retail environment across its three largest markets – the United Kingdom, Germany and Italy.
“As we look forward to fiscal 2016, we are confident our revised strategy (shift from innovation to renovation, revenue management focus, recalibration between local and global), our renewed cost savings program and our management changes will enable us to improve results and take advantage of the growth opportunities in Europe.
“In addition, our successfully completed acquisitions of Iglo and the Findus Group's Continental European business, and the synergies we are confident of delivering, will strengthen Nomad's position as a leader within the frozen and packaged food space and enable us to strengthen our position in the marketplace," said Descheemaeker.
Noam Gottesman, co-chairman and founder of Nomad, said, “Our strategic acquisitions of Iglo and the Findus Group's Continental European business will increase Nomad's market share across Europe and allow us to yield substantial cost-saving synergies. I believe these transformative acquisitions coupled with the execution of Stefan’s strategic vision for long-term growth will lead to long-term value for shareholders as we build a best-in-class global consumer foods company."
On 2 November 2015, Nomad Foods completed its acquisition of Findus Sverige AB and its subsidiaries (Findus’ Continental European business) for approximately GBP 500 million (EUR 708.4 million; USD 759.7 million).
At the time the deal was announced, Nomad communicated a synergy target range of EUR 25 million (USD 26.8 million) to EUR 30 million (USD 32.2 million) over a three-year period ending in 2018. Following further analysis, the company’s management now expects to deliver synergies in the range of EUR 35 million (USD 37.5 million) to EUR 40 million (USD 42.9 million) over the same period.