Nomad Foods has cut its full-year 2024 guidance following disruptions caused by its Enterprise Resource Planning (ERP) system implementation.
The UK-based frozen foods company now expects organic revenue growth to range between 1% and 2%, down from 3% to 4% previously, Nomad Foods said as it reported third-quarter results yesterday (14 November).
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In May, Nomad Foods reiterated its guidance that sales volumes would become positive in the latter half of this year despite three consecutive quarters of declines.
The company, which owns brands such as Findus, Iglo, Ledo and Frikom, also revised its adjusted EBITDA growth to a range of 3% to 5%, down from the earlier range of 4% to 6%.
Adjusted earnings per share (EPS) are now expected at €1.72 to €1.77, or growth of 7% to 10% compared to last year, slightly below its previous expectation of €1.75 to €1.80.
Despite these adjustments, Nomad Foods affirmed its cash flow conversion outlook, maintaining expectations of 90% to 95% for the full year.
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By GlobalDataFor the third quarter of 2024, Nomad Foods reported revenue growth of 0.8%, totaling €770m ($811.8m). Organic revenue growth stood at 0.3%, with volume increasing by 0.7%.
However, the company faced a 2.5% “temporary” headwind from ERP-related disruptions, which impacted operations and supply chain efficiency during the quarter.
Gross profit rose by 14.5% to €248m, while the gross margin improved by 390 basis points to 32.3%. This growth was driven by “supply chain productivity, positive product mix performance as we invested in our core most profitable ‘must win battles’, and lower than planned promotional investment”, Nomad Foods said.
The company’s gross profit grew by 14.5% to €248m, while adjusted EBITDA for the quarter rose by 19% to €166m. Additionally, adjusted EPS rose 28% to €0.55.
Nomad Foods CEO Stéfan Descheemaeker said: “The results this quarter are impressive given greater-than-anticipated headwinds related to ERP implementation that we have faced. Our service levels were negatively impacted during the transition but are returning to near normal levels.
“We have also modestly lowered our full-year adjusted EBITDA growth and adjusted EPS guidance given the lower sales outlook, alongside our choice to continue to invest in the business. Our volume growth and market share recovery are accelerating in the fourth quarter, and we have chosen to prioritise fueling the momentum.”
