Annual Report 2021
Uniquely Positioned for Sustainable Growth
Uniquely Positioned
Uniquely Positioned for Sustainable Growth
Annual Report 2020 Corporate Information
Nomad Foods is Europe’s leading frozen food company. The company’s
portfolio of iconic brands, which includes Birds Eye, Findus, iglo, Ledo and
Frikom, have been a part of consumers’ meals for generations, standing for
great-tasting food that is convenient, high quality and nutritious.
Table of Contents
Letters to Our Shareholders ........................................................................2-4
Financial Statements .............................................................................. 5-184
Corporate Information ...............................................................................185
portfolio remains structurally aligned with nutrition
and sustainability goals and we have joined the
Race to Zero. Through these extraordinary efforts
as well as many others, we are entering 2022 with
positive market share momentum and healthy
brands. We are well-positioned to sustain long-
term growth.
Our strong balance sheet position allowed us to
successfully pursue acquisition opportunities. We
are excited to have completed the acquisition
of the Fortenova Group’s Frozen Food Business, a
leading European frozen food portfolio operating
in eight attractive markets, all new to Nomad
Foods. Not only did we add two anchor number
one market share brands, Ledo and Frikom, but
we also have entered the ice cream space with
regional leadership in a highly profitable and
strategically complementary category.
In addition to fruitful M&A activity, healthy cash flow
generation allowed us to dedicate some of our cash
to repurchase shares opportunistically at times when
the value of our company materially dislocated
from fundamentals. Overall, we completed more
than €100 million of share repurchases during
2021 and early 2022, representing approx. 3% of
our outstanding shares, all while maintaining a
leverage ratio below 3.75x.
Looking ahead, there will be new challenges, but
we also see many new opportunities. We created
Nomad Foods to be a resilient business for the long-
term, with investments in our people, our brands
and our growth, all supported with disciplined
capital allocation. While recent events remind us
all that we cannot predict or control all outcomes,
we can make sure that we are prepared and
ready to outpace the market and adapt to new
circumstances. We are incredibly proud of our
more than 8,000 employees - their best-in-class
performance, dedication and commitment make
us better every day and allow our business to thrive
while providing our customers with nutritious, high-
quality, affordable and sustainable food options, all
while creating long-term value for our shareholders.
We are excited about the next phase of the
Nomad Foods journey and we appreciate your
support and partnership.
Respectfully,
Dear Fellow Shareholders,
2021 marked the sixth year since the start
of our exciting journey. Over the last year,
and notably in the last several months, our
business experienced good times and great
opportunities, accompanied by unique challenges
and changing macro realities. These challenges
include the lingering effects of the COVID-19
pandemic, inflation and rising input costs, and,
of course, the devastating war in Ukraine, which
has introduced geopolitical instability and further
impacted the European markets, creating some
supply chain constraints.
staple, benefitting from elevated demand
and encouraging industry trends.
• Our business is underpinned by consistent
and attractive financial delivery and cash
flow generation, fueling thoughtful capital
in
allocation with balanced
innovation, renovation and R&D, alongside
a successful track record of M&A and share
buy-backs.
investments
• We believe businesses are about people and
we have a world-class team of talented and
passionate employees.
Importantly, in the midst of these macro challenges,
Nomad Foods has never been stronger, nor had so
much opportunity. We think this underscores the
extraordinary resilience of our business and the
strength of its foundation.
• We have a clear purpose: Serving the World
with Better Food.
• We began our journey with the ambition of
building a world-class organization and we
have done so with long-term thinking and a
disciplined approach.
• We build great iconic brands with leading
positions
respective markets,
leveraging the diversity of our product families
and geographies with our global scale and
local proximity to enhance value.
their
in
• The frozen food category is a resilient consumer
Collectively, this foundation enabled us to deliver
another year of record financial performance.
We are positioned not only to withstand current
challenges, but to capture meaningful growth and
success. We see growing opportunities to create
long-term value for our shareholders, our customers,
our partners and our employees.
Sir Martin Ellis Franklin
Co-Chairman
Noam Gottesman
Co-Chairman
During the past two years, we have strengthened
our supply chain through new investments and
process improvements, which are now proving
more crucial than ever. We are playing offense
through targeted investments in our brands –
notably our Must Win Battles – and Green Cuisine
is at the forefront of our product innovation efforts.
In addition, we have advanced several important
sustainability
new
milestones to best forward our ambitions. Our
implementing
initiatives,
2 Nomad Foods Annual Report 2021
Nomad Foods Annual Report 2019 3
serious. We are appalled by the war in Ukraine and the
worsening humanitarian crisis which will have far-reaching
implications for the entire world and for the food sector. We
are supporting global relief efforts and, while we do not
have operations in Russia or Ukraine, that does not mean
we are isolated from the fallout. In 2022, our business will
feel the impact of input cost inflation brought on by the
conflict, especially higher energy, protein and edible oil
prices. We expect to see high-single-digit cost of goods
inflation, which we will offset with higher prices passed
throughout the year.
Like many other companies in Europe, we purchase a
material percentage of our fish from Russia. However,
we are accelerating plans to significantly reduce the
percentage of fish sourced from Russian waters while
still providing high quality products that are both
sustainable and affordable. We know that this will take
time, but we believe that this is in the best interest of
the company, as well as the right action to take for our
employees, customers, consumers, and shareholders.
Overall, we are pleased with what we accomplished
in 2021. Navigating the difficult waters of the past two
years has given us greater confidence in the Nomad
Foods financial playbook: strong revenue growth,
consistent cash flow and the deployment of excess
capital in an accretive manner. Looking out to 2025,
we expect to produce €1.5 billion of cumulative free
cash flow, translating into a 2025 Adjusted EPS target of
€2.30 per share.
We think the best is yet to come, and we look forward
to keeping you updated on our progress.
Respectfully yours,
Stéfan Descheemaeker
CEO
Dear Fellow Shareholders,
2 021 was another challenging year for Nomad Foods
as the lingering effects of the COVID-19 pandemic,
rising inflation and unprecedented input costs
impacted our employees, customers and consumers.
However, we have a proven track record of adapting,
getting stronger and growing in difficult circumstances,
and I am very proud that we were able to further position
our business for sustainable growth while delivering another
record financial performance.
We completed the successful integration of Findus
Switzerland, acquired Fortenova Group's Frozen Food
Business and grew our exciting meat-free flagship product
line, Green Cuisine. We also maintained the highest health
and safety standards for our employees across the business.
Financially, we met or exceeded our 2021 expectations
in all key areas. Against difficult pandemic lockdown
sales comparisons, our organic sales slipped only -2.1%
against a nearly +9% performance from 2020. We grew
reported sales +12% on a two-year basis. Adjusted
EPS grew double-digit, and we posted Adjusted Free
Cash Flow conversion of 84%. We deployed roughly
€700 million of capital towards buybacks and M&A, the
equivalent of more than 15% of our market capitalization
at the start of 2021.
I am also proud to share that in 2021 we pushed forward
on our sustainability commitments and ambitions. I am
particularly pleased that the Science Based Targets
Initiative (SBTi) has validated our ambitious emission
reduction targets. These targets will see us nearly halve
emissions per ton of product and ensure the top 75% of
our suppliers have science-based reduction targets in
place by 2025 as part of our wider net zero journey. In
2021, Nomad Foods was also included in the Dow Jones
Sustainability Europe Index for the first time, as one of
the top four companies in Europe within the Food and
Beverages group.
This is very much in line with our purpose of Serving the
World with Better Food and with the expectations of
consumers who see sustainability as an attractive driver
for purchase, an important competitive advantage for
Nomad Foods. The frozen category is gaining popularity
and our unique portfolio, centred around fish, vegetables
and plant protein, positions us perfectly to benefit
from the increasing trend for nutritious, high quality,
affordable, and sustainable food options. Consumers
are also increasingly interested in the additional benefits
that frozen can bring, including reduced food waste
and natural preservation of nutrients.
We begin 2022 with another crisis
in Europe, one
distinctly different than the COVID pandemic, but no less
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
o
Registration Statement Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
FORM 20-F
☒
☐
o
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Fiscal Year Ended December 31, 2021
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Shell Company Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission file number 001-37669
Nomad Foods Limited
(Exact Name of Registrant as Specified in Its Charter)
British Virgin Islands
(Jurisdiction of Incorporation or Organization)
No. 1 New Square
Bedfont Lakes Business Park
Feltham, Middlesex TW14 8HA, United Kingdom
(Address of Principal Executive Offices)
Samy Zekhout
No. 1 New Square
Bedfont Lakes Business Park
Feltham, Middlesex TW14 8HA
Telephone:+(44) 208 918 3200
Facsimile:+(44) 208 918 3491
(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class
Ordinary Shares, no par value
Trading Symbol (s)
NOMD
Name of Each Exchange on which Registered
New York Stock Exchange
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: Preferred Shares, no par value
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
173,559,173 Ordinary Shares and 1,500,000 Preferred Shares.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. x Yes o No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. o Yes x No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. x Yes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See
definition of “large accelerated filer, accelerated filer, and emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer x Accelerated filer o Non-accelerated filer o
Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use
the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. o
†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards
Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. x
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAPo
International Financial Reporting Standards as Issued
by the International Accounting Standards Boardx
Othero
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to
follow. o Item 17 o Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No
TABLE OF CONTENTS
TERMS USED IN THIS REPORT
TERMS USED IN THIS REPORT
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
INDUSTRY AND MARKET DATA
TRADEMARKS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
PART I
Item 1:
Identity of Directors, Senior Management and Advisers
Item 2:
Offer Statistics and Expected Timetable
Item 3:
Key Information
Item 4.
Information on the Company
Item 4A. Unresolved Staff Comments
Item 5.
Operating and Financial Review and Prospects
Item 6.
Directors, Senior Management and Employees
Item 7.
Major Shareholders and Related Party Transactions
Item 8.
Financial Information
Item 9.
The Offer and Listing
Item 10.
Additional Information
Item 11. Quantitative and Qualitative Disclosures About Market Risk
Item 12. Description of Securities Other than Equity Securities
Item 13. Defaults, Dividend Arrearages and Delinquencies
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
Item 15. Controls and Procedures
Item 16A. Audit Committee Financial Expert
Item 16B. Code of Ethics
Item 16C. Principal Accountant Fees and Services
Item 16D. Exemptions from the Listing Standards for Audit Committees
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Item 16F. Change in Registrants’ Certifying Accountant
Item 16G. Corporate Governance
Item 16H. Mine Safety Disclosure
Item 17.
Financial Statements
Item 18.
Financial Statements
Item 19.
Exhibits
1
1
1
2
2
5
5
5
5
33
49
50
67
75
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78
86
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90
90
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97
97
98
Unless the context otherwise requires, in this annual report, the term(s) “we,” “us,” “our,”
“Company,” “Nomad” and “our business” refer to Nomad Foods Limited (formerly known as Nomad Holdings Limited) and
its consolidated subsidiaries.
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
In this annual report, references to “Euro” and “€” are to the single currency adopted by
participating member states of the European Union ("EU") relating to Economic and Monetary Union, references to “$”,
“US$” and “U.S. Dollars” are to the lawful currency of the United States of America, and references to “Pound Sterling”,
“Sterling” and “£” are to the lawful currency of the United Kingdom ("UK").
The historical financial information for the Company has been prepared in accordance with
International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS IASB”) and
International Financial Reporting Standards as endorsed by the European Union (together “IFRS”) which can differ in
certain significant respects from U.S. GAAP.
Unless otherwise noted, all financial information for the Company provided in this annual report is
denominated in Euros.
Historical Financial Information
This annual report includes our consolidated financial statements at and as of the years ended
December 31, 2021 (the “Fiscal 2021 Period”), December 31, 2020 (the “Fiscal 2020 Period”) and December 31, 2019
(the “Fiscal 2019 Period”).
Non-IFRS Financial Measures
In this annual report, we present certain supplemental financial measures that are not recognized
by IFRS. These financial measures are unaudited and have not been prepared in accordance with IFRS, SEC
requirements or the accounting standards of any other jurisdiction. The non-IFRS financial measures used in this annual
report are Adjusted EBITDA and Adjusted EBITDA margin. For additional information on why we present non-IFRS
financial measures, the limitations associated with using non-IFRS financial measures and reconciliations of our non-IFRS
financial measures to the most comparable applicable IFRS measure, see Item 5: Operating and Financial Review and
Prospects.
INDUSTRY AND MARKET DATA
We obtained the industry, market and competitive position data throughout this annual report from
our own internal estimates and research as well as from industry and general publications and research, surveys and
studies conducted by Euromonitor. Industry surveys and publications generally state that the information contained therein
has been obtained from sources believed to be reliable, but the accuracy and completeness of the information contained
in industry publications is not guaranteed. While we believe that each of these studies and publications is reliable, we
have not independently verified market and industry data from third-party sources. While we believe our internal company
research is reliable and the definitions of our market and industry are appropriate, neither this research nor these
definitions have been verified by any independent source. Further, while we believe the market opportunity information
included in this annual report is generally reliable, such information is inherently imprecise. In addition, projections,
assumptions and estimates of the future performance of the industry in which we operate and our future performance are
necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in
Item 3D: Key Information - Risk Factors. These and other factors could cause results to differ materially from those
expressed in the estimates made by the independent parties and by us. See Cautionary Note Regarding Forward-Looking
Statements.
Market share data presented throughout this annual report is measured by retail sales value. The
frozen food market data we refer to throughout this annual report includes the following categories: Frozen Processed
Meat, Frozen Processed Seafood, Frozen Meat Substitutes, Frozen Pizza, Frozen Ready Meals, Frozen Noodles, Frozen
Soup, Frozen Potatoes, Frozen Baked Goods, Processed Frozen Vegetables and Ice Cream.
i
1
TRADEMARKS
These factors include but are not limited to:
We operate under a number of trademarks, including, among others, “Birds Eye”, "Findus", “iglo,”
“Ledo” and “Frikom”, all of which are registered under applicable intellectual property laws. This annual report contains
references to our trademarks and service marks and to those belonging to other entities. Solely for convenience,
trademarks and trade names referred to in this annual report may appear without the ® or TM symbols, but such
references are not intended to indicate, in any way, that we will not assert, to the fullest extent possible under applicable
law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or
display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or
sponsorship of us by, any other companies.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this annual report constitute forward-looking statements that do not
directly or exclusively relate to historical facts. You should not place undue reliance on such statements because they are
subject to numerous uncertainties and factors relating to our operations and business environment, all of which are
difficult to predict and many of which are beyond our control. Forward-looking statements include information concerning
our possible or assumed future results of operations, including descriptions of our business strategy. These statements
often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar
expressions. Forward-looking statements included in this annual report include statements regarding:
•
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•
•
•
•
•
•
•
•
•
our beliefs and intentions regarding our strategic initiatives and their impact on the growth and
profitability of our business;
our intent to profitably grow our business through our strategic initiatives;
our intent to seek additional acquisition opportunities in food products and our expectation regarding
competition for acquisitions;
our beliefs regarding the impact of the exit by the UK from the EU ("Brexit") on our business;
our expectations concerning our ability to fund our liquidity requirements and to raise cash through equity and
debt offerings;
our expectations concerning our capital expenditures in 2022;
our beliefs regarding our sales, marketing and advertising strategies, competitive strengths and ability to
successfully compete in the markets in which we participate;
our expectations concerning consumer demand for our products, our future growth opportunities, market share
and sales channels, including online channels;
our beliefs and intentions regarding the impact of key industry trends on our business, our actions in response
to such trends and the resulting impact on our profitability and competitive position;
our future operating and financial performance;
our intent to settle any Founder Preferred Shares Annual Dividend Amount (as defined herein) with equity;
our belief that we have sufficient spare capacity to accommodate future growth in our main product categories
and to accommodate the seasonal nature of some of our products;
our beliefs and intentions regarding our sustainability program;
our intent to rely on some of the available foreign private issuer exemptions to the New York Stock Exchange
(the “NYSE”) corporate governance rules; and
the accuracy of our estimates and key judgments regarding certain tax matters and accounting valuations.
The forward-looking statements contained in this annual report are based on assumptions that we
have made in light of our management’s experience in the industry as well as our perceptions of historical trends, current
conditions, expected future developments and other factors that we believe are appropriate under the circumstances. As
you read and consider this annual report, you should understand that these statements are not guarantees of
performance or results. They involve known and unknown risks, uncertainties and assumptions. Although we believe that
these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could
affect our actual financial results or results of operations and could cause actual results to differ materially from those in
these forward-looking statements.
•
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•
•
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•
•
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•
•
•
•
•
•
•
•
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•
•
•
•
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the long-term impact of the COVID-19 pandemic on our business, suppliers, co-manufacturers, distributors,
transportation or logistics providers, customers, consumers and employees;
disruptions or inefficiencies in our operations or supply chain, including as a result of the COVID-19 pandemic,
and our ability to maintain the health and safety of our workforce;
the duration, spread and intensity of the COVID-19 pandemic and related government restrictions and other
government responses;
our ability to successfully implement our strategies and strategic initiatives and recognize the anticipated
benefits of such strategic initiatives;
the anticipated benefits from our recent acquisitions including the Fortenova Group's Frozen Food Business
Group (the "Fortenova Acquisition") and Findus Switzerland business may take longer to realize and may cost
more to achieve than expected, particularly since the Fortenova Acquisition represents entry into a new
product category and new geographies;
uncertainty about the potential adverse impact of Brexit on currency exchange rates, global economic
conditions and cross-border agreements that affect our business;
the loss of any of our executive officers or members of our senior management team or other key employees;
the loss of any of our major customers or a decrease in demand for our products;
changes in consumer preferences and our failure to anticipate and respond to such changes or to successfully
develop and renovate products;
our ability to successfully interpret and respond to key industry trends and to realize the expected benefits of
our responsive actions;
our ability to protect our brand names and trademarks;
the commercial success of our Green Cuisine brand of products, including as a result of its expansion into
continental Europe, and other innovations introduced to the markets, and other innovations introduced to the
markets and our ability to accurately forecast the brand’s performance in light of COVID-19;
our ability to effectively compete in our markets, including the ability of our Green Cuisine brand to effectively
penetrate the markets in continental Europe;
economic conditions that may affect our future performance including exchange rate fluctuations;
fluctuations in the availability of food ingredients and packaging materials that we use in our products;
our ability to effectively mitigate factors that negatively impact our supply of raw materials;
disruptions in our information technology systems, whether as a result of cyber attack or otherwise, supply
network, manufacturing and distribution facilities or our workforce or the workforce of our suppliers;
our ability to continue to comply with covenants and the terms of our credit instruments and our ability to obtain
additional financing, as needed, to fund our liquidity requirements and capital expenditures;
availability of debt and equity financing under favorable terms;
increases in operating costs, including labor costs, and our ability to manage our cost structure;
the occurrence of liabilities not covered by our insurance;
our ability to successfully implement, and engage other stakeholders in implementing, our sustainability
program;
the loss of our financial arrangements with respect to receivables factoring;
the loss of our foreign private issuer status;
the effects of reputational damage from unsafe or poor-quality food products, particularly if such issues involve
products we manufactured or distributed;
our failure to comply with, and liabilities related to, environmental, health and safety laws and regulations; and
changes in applicable laws or regulations.
2
3
These and other factors are more fully discussed in Item 3D: Key Information - Risk Factors and
elsewhere in this annual report. These risks could cause actual results to differ materially from those implied by forward-
looking statements in this annual report.
All information contained in this annual report is materially accurate and complete as of the date of
this annual report. You should keep in mind, however, that any forward-looking statement made by us in this annual
report, or elsewhere, speaks only as of the date on which we make it. New risks and uncertainties come up from time to
time, and it is impossible for us to predict these events or how they may affect us. We do not undertake any obligation to
update or revise any forward-looking statements after the date of this annual report, whether as a result of new
information, future events or otherwise, except as required by law. In light of these risks and uncertainties, you should
keep in mind that any event described in a forward-looking statement made in this annual report or elsewhere might not
occur.
Item 1:
Identity of Directors, Senior Management and Advisers
PART I
A.
B.
C.
Directors and Senior Management
Not applicable.
Advisers
Not applicable.
Auditors
Not applicable.
Item 2:
Offer Statistics and Expected Timetable
A.
B.
Offer Statistics
Not applicable.
Method and Expected Timetable
Not applicable.
Item 3:
Key Information
A. Selected Financial Data
The following table sets forth selected historical consolidated financial and other data for the
Company for the periods presented. The selected historical consolidated financial data below should be read in
conjunction with our Audited Consolidated Financial Statements and related notes (Item 18), as well as Item 4: Information
on the Company and Item 5: Operating and Financial Review and Prospects of this annual report.
The statement of income data for the Fiscal 2021 Period, Fiscal 2020 Period and Fiscal 2019
Period and the balance sheet data as of December 31, 2021 and 2020 have been derived from our audited consolidated
financial statements included elsewhere in this annual report.
4
5
Statement of Income data:
Revenue
Cost of sales
Gross profit
Other operating expenses
Exceptional items
Operating profit
Net finance costs
Profit before tax
Taxation
Profit for the period
Year
ended
Dec 31 2021
Year
ended
Dec 31 2020
Year
ended
Dec 31 2019
Year
ended
Dec 31 2018
Year
ended
Dec 31 2017
€m
€m
€m
€m
€m
2,606.6
2,515.9
2,324.3
2,172.8
1,956.6
(1,862.3)
(1,753.4)
(1,626.4)
(1,519.3)
(1,357.2)
744.3
762.5
697.9
653.5
(356.3)
(382.7)
(359.9)
(352.7)
(45.3)
(20.6)
(54.5)
(17.7)
342.7
359.2
283.5
283.1
(106.0)
(63.7)
(73.2)
(56.0)
236.7
295.5
210.3
227.1
(55.7)
(70.4)
(56.7)
(56.6)
181.0
225.1
153.6
170.5
599.4
(319.3)
(37.2)
242.9
(74.4)
168.5
(32.0)
136.5
Basic weighted number of shares
Diluted weighted number of shares
178,070,770
194,019,070
192,004,803
175,622,538
176,080,272
178,070,770
197,894,106
198,425,877
175,793,631
184,786,162
Basic earnings per share
Diluted earnings per share
Balance Sheet data:
Total assets*
Total equity
Share capital
1.02
1.02
6,170.8
2,299.0
—
1.16
1.14
5,580.6
2,126.1
—
0.80
0.78
5,904.5
2,556.7
—
0.97
0.97
5,340.8
2,059.1
—
0.78
0.74
4,601.7
1,852.6
—
*As disclosed in Note 14 "Acquisitions" to our consolidated financial statements in Item 18, values
for total assets the year ended December 31, 2020 have been restated for fair value adjustments related to the Findus
Switzerland acquisition.
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
An investment in our ordinary shares carries a significant degree of risk. You should carefully
consider the following risks and other information in this annual report, including our consolidated financial statements and
related notes included elsewhere in this annual report, before you decide to purchase our ordinary shares. Additional risks
and uncertainties of which we are not presently aware or that we currently deem immaterial could also affect our business
operations and financial condition. If any of these risks actually occur, our business, financial condition, results of
operations or prospects could be materially affected. As a result, the trading price of our ordinary shares could decline,
and you could lose part or all of your investment.
i. Risk Factor Summary
The risks described below include, but are not limited to, the following:
Risks Related to Our Business and Industry
• We operate in a highly competitive market
•
• Our future results and competitive position are dependent on the successful development of new products and
Sales of our products are subject to changing consumer preferences and trends
•
improvement of existing products.
The COVID-19 pandemic could have a material adverse impact on our business, results of operations and
financial condition.
• We are subject to the ongoing negotiations and implementation of the exit of the UK from the EU. We are exposed
to macroeconomic and other trends that could adversely impact our operations in our Key Markets.
• We may not be able to achieve our sustainability targets to the extent we expect.
• We may not be able to source raw materials or other inputs of an acceptable type or quality.
• We may not be able to pass on price increases for materials or other inputs to our customers.
• We rely on sales to a limited number of large food retailers.
• We may be subject to increased distribution costs or disruption of transportation services.
•
Failure to protect our brand names and trademarks could materially affect our business.
• Our business is dependent on third-party suppliers.
• Health concerns or adverse developments with respect to the safety or quality of our products may damage our
•
•
•
reputation, increase our costs of operations and decrease demand for our products.
A failure in our cold chain could lead to unsafe food conditions and increased costs.
Potential liabilities and costs from litigation could adversely affect our business.
The price of energy we consume in the manufacture, storage and distribution of our products is subject to volatile
market conditions.
• Our supply network and manufacturing and distribution facilities could be disrupted by factors beyond our control.
•
Seasonality impacts our business, and our revenue and working capital levels may vary quarter to quarter.
• We may be unable to realize the expected benefits of actions taken to align our resources, operate more
efficiently and control costs.
• We may be subject to significant disruption in our workforce or the workforce of our suppliers.
• We are dependent upon key executives and highly qualified managers and we cannot assure their retention.
Risks Related to Our Acquisition Strategy
• We may not be able to consummate future acquisitions or successfully integrate acquisitions into our business.
• We may be subject to antitrust regulations with respect to future acquisition opportunities.
•
Any due diligence by us in connection with agreed acquisitions or potential future acquisitions may not reveal all
relevant considerations or liabilities of the target business.
The Fortenova Acquisition represents entry into a new product category and new geographies for us.
•
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Risks Related to Regulations
• We could incur material costs to address violations of, or liabilities under all applicable directives, regulations and
laws.
• We are subject to complying with a variety of regulatory schemes.
• Changes in the European regulatory environment regarding privacy and data protection regulations could expose
us to risks of noncompliance and costs associated with compliance.
Risks Related to Financial Management
• We have risks related to our indebtedness, including our ability to withstand adverse business conditions and to
meet our debt service obligations.
• Our variable rate indebtedness subjects us to interest rate risk.
• Our indebtedness is subject to changes in interest reference rates including those related to the replacement of
LIBOR and/or EURIBOR.
• We are exposed to exchange rate risks.
• Changes to our payment terms with both customers and suppliers may materially adversely affect our operating
cash flows.
• Dividend payments and purchases made pursuant to announced share repurchase programs may have an impact
•
on our cash flows and our ability to meet our debt service obligations.
An impairment of the carrying value of goodwill or other intangible assets could negatively affect our consolidated
operating results and net worth.
• We are exposed to risks in connection with our treasury and cash management activities.
• We face risks associated with certain pension obligations.
• We are a holding company whose principal source of operating cash is the income received from our subsidiaries.
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The Founders and/or the Founder Entities may in the future enter into related party transactions with us, which
may give rise to conflicts of interest between us and some or all of the Founders and/or the Directors.
General Risk Factors
• We are subject to disruptions, failures or security breaches of our information technology systems.
• Changes in accounting standards and subjective assumptions, estimates and judgments by management related
•
to accounting matters could significantly affect our financial results.
If we fail to or are unable to implement and maintain effective internal controls over financial reporting, the
accuracy and timeliness of our financial reporting may be adversely affected.
Risks Related to our Ordinary Shares
• We have various equity instruments outstanding that would require us to issue additional ordinary shares.
•
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Securities or industry analysts may not or may cease publishing research reports about us.
As a foreign private issuer, we are subject to different U.S. securities laws and NYSE governance standards than
domestic U.S. issuers.
• We may lose our foreign private issuer status in the future.
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•
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The rights of shareholders under British Virgin Islands law differ from those under United States law.
The laws of the British Virgin Islands provide limited protection for minority shareholders.
British Virgin Islands companies may not be able to initiate shareholder derivative actions.
Shareholders may experience a dilution of their percentage ownership if we make non-pre-emptive offers of
ordinary shares in the future.
Risks Related to Taxation
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•
•
Failure to maintain our tax status may negatively affect our financial and operating results and shareholders.
Disputes with tax authorities may give rise to unforeseen adjustments.
If any dividend is declared in the future and paid in a foreign currency, U.S. holders may be taxed on a larger
amount in U.S. Dollars than the U.S. Dollar amount actually received.
ii. Details of our Risk Factors
Risks Related to Our Business and Industry
We operate in a highly competitive market and our failure to compete effectively could adversely affect our
results of operations.
The market for frozen food is highly competitive, and further consolidation in the industry would
likely increase competition. Our competitors include retailers who promote private label products and well-established
branded producers that operate on both a national and an international basis across single or multiple frozen food
categories. We also face competition more generally from chilled food, distributors and retailers of fresh products, baked
goods and ready-made meals. We may not successfully compete with our existing competitors and new competitors may
enter the market. Discounters are supermarket retailers which offer a narrow range of food and grocery products at
discounted prices and which typically focus on non-branded rather than branded products. A continued increase in
discounter sales may adversely affect the sales of our branded products. We are increasing our investment in online sales
(sales made through retailers’ online platforms). However, there is no guarantee we will achieve our expected return on
investment from this strategy. The growth of online retailers, and the corresponding growth in our online sales, may also
adversely affect our competitive position. Market dynamics continue to evolve and growth rates might change by channel
and over time. In particular, during the COVID-19 pandemic we saw a shift in consumer behavior to online shopping as
shoppers looked to avoid physical stores.
In addition, it is difficult to accurately predict the pricing or promotional actions of our competitors or
their effect on consumer perceptions or the success of our own advertising and promotional efforts. Our competitors
develop and launch products targeted to compete directly with our products. Our retail customers, most of which promote
their own private label products, control the shelf space allocations within their stores. As a result, they may allocate more
shelf space to private label products or to our branded competitors’ products in accordance with their respective
promotional or pricing strategies. Decreases in shelf space allocated to our products, increases in competitor promotional
activity, aggressive marketing strategies by competitors, changes to the strategies deployed by retailers or other factors
may require us to reduce our prices or invest greater amounts in advertising and promotion of our products to ensure our
products remain competitive.
Furthermore, some of our competitors may have substantially greater financial, marketing and other
resources than we have. This creates competitive pressures that could cause us to lose market share or require us to
lower prices, increase advertising expenditures or increase the use of discounting or promotional campaigns. These
competitive factors may also restrict our ability to increase prices, including in response to commodity and other cost
increases. If we are unable to continue to respond effectively to these and other competitive pressures, our customers
may reduce orders of our products, may insist on prices that erode our margins or may allocate less shelf space and
fewer displays for our products. These or other developments could materially and adversely affect our sales volumes and
margins and result in a decrease in our operating results, which could have a material adverse effect on our business and
financial condition.
Sales of our products are subject to changing consumer preferences and trends; if we do not correctly anticipate
such changes, our sales and profitability may decline.
There are a number of trends in consumer preferences which have an impact on us and the frozen
food industry as a whole. These include, among others, preferences for speed, convenience and ease of food preparation;
natural, nutritious and well-proportioned meals; products that are sustainably sourced and produced and are otherwise
environmentally friendly and the recent trend towards meat substitutes. Concerns as to the health impacts and nutritional
value of certain foods may increasingly result in food producers being encouraged or required to produce products with
reduced levels of salt, sugar and fat and to eliminate trans-fatty acids and certain other ingredients, including gluten and
animal products. Consumer preferences are also shaped by concern over waste reduction and the environmental impact
of products.
The success of our business depends on both the continued appeal of our products and, given the
varied backgrounds and tastes of our customer base, our ability to offer a sufficient range of products to satisfy a broad
spectrum of preferences. Any shift in consumer preferences in the UK, Italy, Germany, France, Sweden or Austria (the
“Key Markets”) could have a material adverse effect on our business.
Our competitiveness depends on our ability to predict and quickly adapt to consumer preferences
and trends and to exploit profitable opportunities for product development without alienating our existing consumer base
or focusing excessive resources or attention on unprofitable or short-lived trends. All of these efforts require significant
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research and development and marketing investments. If we are unable to respond on a timely and appropriate basis to
changes in demand or consumer preferences and trends, our sales volumes and margins could be materially adversely
affected.
Activist groups have in the past, and may in the future, use pressure tactics to influence our
decisions regarding commodities, raw materials and supply chains based on their stances regarding, for example,
inhumane treatment of animals and deforestation by our suppliers. These groups may be able to coordinate their actions
with other groups, threaten strikes or boycotts or enlist the support of well-known persons or organizations in order to
increase the pressure on us to achieve their stated aims. In the future, these actions or the threat of these actions may
force us to change our business practices or pricing policies, which may have a material adverse effect on our business,
results of operations and financial condition.
Our future results and competitive position are dependent on the successful development of new products and
improvement of existing products.
We aim to introduce new products and re-launch and extend existing product lines on a timely basis
in order to counteract obsolescence and decreases in sales of existing products as well as to increase overall sales of our
products. The launch and success of new or modified products are inherently uncertain, especially as to the products’
appeal to consumers, and there can be no assurance as to our continuing ability to develop and launch successful new
products or variations of existing products. The failure to launch a product successfully can give rise to inventory write-offs
and other costs, can affect consumer perception of our other products and can lead to erosion of brand equity. Market
factors and the need to develop and provide modified or alternative products may also increase costs. In addition,
launching new or modified products can result in cannibalization of sales of our existing products if consumers purchase
the new product in place of our existing products. If we are unsuccessful in developing new products in response to
changing consumer demands or preferences in an efficient and economical manner, or if our competitors respond more
effectively than we do, demand for our products may decrease, which could materially and adversely affect our business,
financial condition and results of operations Additionally, our ability to develop new and modified products and to gain
distribution and advertising space for such new and modified products in order to sustain sales may be negatively
impacted by COVID-19 restrictions as described below, which could impede our anticipated growth in this area. As a
result, we may not be able to phase these planned innovations and execute our strategy as planned and may be forced to
mitigate the risk by focusing on our core business.
The COVID-19 pandemic could have a material adverse impact on our business, results of operations and
financial condition.
On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. The
global outbreak has created significant volatility, uncertainty and economic disruption which has resulted in significant
governmental measures being implemented in many European countries in which we operate, including lockdowns,
closures, quarantines and travel bans, intended to control the spread of the virus. These measures continue to evolve as
countries and local governments continue to adapt to the ongoing outbreak, with precautions including vaccination
programs, lockdowns and self-isolation measures, requiring employees to work remotely and imposing travel restrictions.
These restrictions, and future prevention and mitigation measures, have had and are continuing to have, an adverse
impact on global economic conditions. This is particularly the case since further waves of COVID-19 outbreaks and the
emergence of new variants of the virus may cause these restrictions to tighten and continue to have an adverse impact on
global economic conditions, which could materially adversely affect our business and operating results. For example, in
south-eastern Europe, a number of countries are still subject to high levels of restriction and certain other European
countries have recently increased restrictions, including the Netherlands and Austria. Uncertainties regarding the ongoing
economic impact of COVID-19 are likely to result in sustained market turmoil, which could also negatively impact our
business, financial condition and cash flows.
While restrictions have been in place during the pandemic, we have experienced increased
demand for our branded products as a result of a general increase in frozen food consumption. For example, as a result of
unusually high demand during the fourth quarter of 2020 and the first quarter of 2021, we were unable to meet all sales
demand, primarily due to a number of our production facilities already being highly utilized prior to that period of unusually
high demand. If our suppliers, co-manufacturers, distributors or transportation and logistics providers are unable to keep
pace with this increased demand, and we are unable either to access alternatives, or to access alternatives on
commercially reasonable terms, this could negatively impact our market share, our ability to increase revenue, cause
harm to our reputation and have a material adverse impact on our operating results. When the effect of the pandemic has
significantly abated, this might lead to the reversal of such unusually high demand which could lead to lower demand,
higher inventory which could negatively impact our market share, our ability to increase revenue and have a material
adverse impact on our operating results. During the pandemic we have also experienced lower demand for our food
service products, which support commercial food establishments, due to governmental restrictions on the ability to eat out
of home. Depending on the extent and length of such restrictions, this could see demand for such products to continually
decline which could negatively impact our ability to increase revenue and have an adverse impact on our operating results
and goodwill.
We operate production space in facilities across Europe. While we have not experienced any
significant disruptions to our facilities, we could, in the future, be forced to close our facilities or reduce operations due to
government responses to the pandemic or employee illness or health concerns, including as a result of sustained periods
of employees working from home. If a significant percentage of our workforce is unable to work, including because of
illness or travel or government restrictions in connection with COVID-19, or if we are required to shut down one or more of
our facilities, this could have a material adverse effect on our revenue, operations and results of operations. For example,
extended shutdowns or reduced operations could also result in an increase in operating costs in connection with our
continuing to pay employees at non-operating facilities and higher costs associated with ensuring the continued health
and safety of workers, which may include checking workers’ temperatures, providing personal protective equipment, deep
cleaning facilities, and requiring sick workers to stay home by providing enhanced employee benefits.
The extent of COVID-19’s effect on our operational and financial performance will depend on future
developments, including the duration, spread and intensity of the outbreak, the emergence of new variants of the virus,
the availability and effectiveness of vaccines and government responses to the pandemic (including any further
lockdowns, mandatory social distancing or other restrictive measures), all of which are uncertain and difficult to predict
considering the rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of
COVID-19 on our business. However, if the pandemic continues to evolve in such a way that its effects are likely to
continue for a longer period than currently envisaged, the disease could exacerbate other risks we face, and also have a
material adverse effect on our business, results of operations, financial condition and cash flows and adversely impact the
trading price of our ordinary shares. Also, as restrictions are eased or lifted, this is now highlighting other trends which are
proving to be difficult to predict in a rapidly evolving landscape. Examples of trends which are in part the result of
COVID-19 restrictions include, the increase in the cost of sea freight partly driven by the dislocation of sea containers,
increases in the cost of energy and raw materials and shortages of commercial truck drivers. These create challenges
with the supply of our products to our customers as a result of the return to home drivers and the continued challenges of
cross-border supply.
We are subject to the ongoing negotiations and implementation of the exit of the UK from the EU.
Since January 1, 2021, the UK has been trading as an independent country outside of the
European Union following the UK electorate voting in favor of leaving the European Union (commonly referred to as
“Brexit”) on June 23, 2016 and the conclusion of a new trading agreement between the European Union and the UK which
was entered into on December 24, 2020. This means that new regulations are in place governing the import and export of
goods between the UK and the European Union from this date which places a greater cost and administrative burden on
us, for example by requiring veterinary certificates for exporting products of animal origin from the UK to the European
Union. There are also additional regulations in place governing tariffs for products of non-EU origin when they are
exported across the border from the UK to the European Union which also can place a greater cost and administrative
burden on us. From July 1, 2022, veterinary certificates will additionally be required for importing products from the
European Union to the UK (recently delayed from October 1, 2021) and negotiations continue over the ongoing trade
relationship with Europe, for example, the ongoing negotiations in relation to the Northern Ireland Protocol, which could
lead to further changes which could lead to increased tariffs, packaging changes and a greater cost and administrative
burden on us.
For the year ended December 31, 2021, excluding sales from business included within the
Fortenova acquisition, 93% of our revenue was derived from the EU and the UK (29% was derived from the UK). In
addition, we have manufacturing facilities and employees in both the UK and other European countries. As a result of
Brexit, we may experience adverse impacts on profitability in the UK and other markets. The new Brexit administration
requirements could mean that the UK suffers as a result of losing commercially favorable access to the EU single market,
or specific countries in the EU, resulting in a negative impact on the general and economic conditions in the UK and the
EU which could in turn have a negative impact on our business and results of operations. Future changes may occur in
regulations that we are required to comply with as well as amendments to treaties governing tax, duties, tariffs, etc. which
could adversely impact our operations and require us to modify our financial and supply arrangements. To avoid such
impacts, we may have to restructure or relocate some or all of our operations which would be costly and negatively impact
our profitability, cash flow and financial condition.
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We are exposed to macroeconomic and other trends that could adversely impact our operations in our Key
Markets.
We conduct operations in our key markets of the UK, Italy, Germany, France, Sweden and Austria,
from which approximately 78% of our revenue was generated during the year ended December 31, 2021 (the "Key
Markets"). We are particularly influenced by economic developments and changes in consumer habits in those countries.
The geographic markets in which we compete have been affected by negative macroeconomic
trends which have affected consumer confidence. For example, Brexit and the COVID-19 pandemic have created political
and economic uncertainty both in the UK and the other geographies in which we operate. A deterioration in economic
conditions could result in increased unemployment rates, increased short and long-term interest rates, consumer and
commercial bankruptcy filings, a decline in the strength of national and local economies, and other results that negatively
impact household incomes. This can result in consumers purchasing cheaper private label products instead of equivalent
branded products. Such macroeconomic trends could, among other things, negatively impact global demand for branded
and premium food products, which could result in a reduction of sales or pressure on margins of our branded products or
cause an increasing transfer to lower priced product categories.
We may not be able to achieve our sustainability targets to the extent we expect.
We have adopted a sustainability strategy which sets out our role in supporting the change to how
food is produced and consumed, in line with the UN Sustainable Development Goals and our corporate purpose. Our
ability to successfully implement, and engage other stakeholders in implementing, our sustainability strategy, will depend
on a number of factors which are beyond our control, including the extent to which our suppliers and other stakeholders
prioritize sustainability initiatives themselves in their own businesses, the reaction of retailers and our customers to our
sustainability strategy and broader macroeconomic and social trends. Further, unanticipated events, including changes in
our ability to source sustainably produced food ingredients, may have an impact on the extent to which we can meet our
own sustainability targets in any given year. If our expectations surrounding our sustainability strategy are not met and/or if
consumers consider that we are not making sufficient progress with regards to our sustainability strategy, this could have
an impact upon demand for our products and materially adversely affect our business, financial condition and results of
operations.
We may not be able to source raw materials or other inputs of an acceptable type or quality.
We use significant quantities of food ingredients and packaging materials and are therefore
vulnerable to fluctuations in the availability and price of such food ingredients, packaging materials and other supplies . In
particular, raw materials have historically represented a significant portion of our cost of sales, and accordingly, adverse
changes in raw material prices have in the past negatively impacted and may in future negatively impact our results of
operations.
Specifically, the availability and the price of fish, vegetables and other agricultural commodities,
including poultry and meat, can be volatile. We are also affected by the availability of quality raw materials, most notably
fish, which can be impacted by the fishing and agricultural policies of the UK, European Union and other countries
including national or international quotas that can limit volume of raw materials. General economic conditions, economic
sanctions due to regional conflict, unanticipated demand, problems in manufacturing or distribution, natural disasters,
weather conditions during the growing and harvesting seasons, plant, fish and livestock diseases, the availability of
sustainably sourced raw materials, or national or international quarantines can all also adversely affect availability and
prices of commodities in the long and short term.
While we attempt to negotiate fixed prices for certain materials with our suppliers for periods
ranging from one month to a full year, we cannot guarantee that our strategy will be successful in managing input costs if
prices increase for extended periods of time. Additionally, by entering fixed price agreements we may potentially be
limiting our ability to benefit from possible price decreases. Moreover, there is no market for hedging against price volatility
for certain raw materials and accordingly such materials are bought at the spot rate in the market.
Our ability to avoid the adverse effects of a pronounced, sustained price increase in raw materials is
limited. Any increases in prices or scarcity of ingredients or packaging materials required for our products could increase
our costs and disrupt our operations. If the availability of any of our inputs is constrained for any reason, we may not be
able to obtain sufficient supplies or supplies of a suitable quality on favorable terms or at all. Such shortages could
materially adversely affect our market share, business, financial condition and results of operations.
We may not be able to pass on price increases for materials or other inputs to our customers.
Our ability to pass through increases in the prices of raw materials, energy, packaging or freight and
logistics costs to our customers depends, among others, on prevailing competitive conditions and pricing methods in the
markets in which we operate, and we may not be able to pass through such price increases to our customers. Even if we
are able to pass through increases in prices, there is typically a time lag between cost increases impacting our business
and implementation of product price increases during which time our profit margin may be negatively impacted. Recovery
of cost inflation, driven by both commodity cost increases or changes in the foreign exchange rate of the currency the
commodity is denominated in, can also lead to disparities in retailers’ shelf-prices between different brands which can
result in a competitive disadvantage and volume decline. During our negotiations to increase our prices to recover cost
increases, customers may take actions which exacerbate the impact of such cost increases, for example by ceasing to
offer our products or deferring orders until negotiations have ended. Our inability to pass through price increases in raw
materials, energy, packaging or freight and logistics and preserve our profit margins in the future could materially
adversely affect our business, financial condition and results of operations.
We rely on sales to a limited number of large food retailers and should they perform poorly or the buying power
of these large retailers increase, our business could be adversely affected.
Our customers include supermarkets and large chain food retailers. Throughout our markets, the
food retail segments are highly concentrated. For the year ended December 31, 2021, our top 10 customers accounted for
40% of revenue. In recent years, the major multiple (multi-channel) retailers in those countries have increased their share
of the grocery market and price competition between retailers has intensified. The strength of the major multiple retailers’
bargaining position gives them significant leverage over their suppliers in negotiating pricing, product specification and the
level of supplier participation in promotional campaigns and offers, which can reduce our margins. International alliances
among retailers continue to become stronger, and the trend for consolidation in Europe at a local level and across borders
is ongoing. Further consolidation among the major multiple retailers or disproportionate growth in relation to their
competitors could increase their relative negotiating power and allow them to force a negative shift in our trade terms. Our
results of operations could also be adversely affected if these retailers suffer a significant deterioration in sales
performance, if we are required to reduce our prices or increase our promotional spending activity as a consequence, if
we lose business from a major customer or if our relationship with a major customer deteriorates.
Our retail customers also offer private label products that compete directly with our products for
retail shelf space and consumer purchases. Private label products typically have higher margins for retailers than other
branded products. Accordingly, there is a risk that our customers may give higher priority to private label products or the
branded products of our competitors as a result of a change in pricing strategy which would adversely affect sales of our
products. Our major multiple retail customers are also expanding into non-food product lines in their stores, thereby
exerting pressure on available shelf space for other categories including our products. We may be unable to adequately
respond to these trends and, as a result, the volume of our sales may decrease, or we may need to lower the prices of our
products.
As is typical in our industry, sales to our retail customers in our markets are made on a daily
demand basis. We generally do not have long-term contractual commitments to supply such customers and must
renegotiate supply and pricing terms of our products on a regular basis. Customarily, trade terms are renegotiated
annually; however, ad hoc changes are often made on an informal basis, such as by email, to reflect discounts and
promotional arrangements. Amounts paid can be subject to end of period reconciliations to reflect these informal
arrangements. In some cases, our customers seek to claim reimbursement for informal discount arrangements going back
multiple periods. In addition, we do not have written contractual arrangements with a number of our other customers. Most
of our customer relationships or arrangements could be terminated or renegotiated at any time and, in some cases,
without reasonable notice.
Our business is subject to the risks of non-payment and non-performance by our retail customers.
We manage our exposure to credit risk through credit analysis and monitoring procedures, and sometimes use letters of
credit, prepayments and guarantees. However, these procedures and policies cannot fully eliminate customer credit risk,
and to the extent our policies and procedures prove to be inadequate, it could negatively affect our financial condition and
results of operations. In addition, some of our customers may be highly leveraged and subject to their own operating and
regulatory risks and, even if our credit review and analysis mechanisms work properly, we may experience financial losses
in our dealings with such parties. Any future financial market disruptions or tightening of the credit markets could result in
some of our customers experiencing a significant decline in profits and/or reduced liquidity. A significant adverse change in
the financial position of a customer could require us to assume greater credit risk relating to that customer and could limit
our ability to collect receivables. We do not maintain credit insurance to insure against customer credit risk.
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Any of the above risk factors in relation to our retailers could have a material adverse effect on our
We may be subject to increased distribution costs or disruption of transportation services.
business, financial condition and results of operations. In recent years, the major multiple (multi-channel) retailers in those
countries have increased their share of the grocery market and price competition between retailers has intensified. The
strength of the major multiple retailers’ bargaining position gives them significant leverage over their suppliers in
negotiating pricing, product specification and the level of supplier participation in promotional campaigns and offers, which
can reduce our margins. International alliances among retailers continue to become stronger, and the trend for
consolidation in Europe at a local level and across borders is ongoing. Further consolidation among the major multiple
retailers or disproportionate growth in relation to their competitors could increase their relative negotiating power and allow
them to force a negative shift in our trade terms. Our results of operations could also be adversely affected if these
retailers suffer a significant deterioration in sales performance, if we are required to reduce our prices or increase our
promotional spending activity as a consequence, if we lose business from a major customer or if our relationship with a
major customer deteriorates.
Our retail customers also offer private label products that compete directly with our products for
retail shelf space and consumer purchases. Private label products typically have higher margins for retailers than other
branded products. Accordingly, there is a risk that our customers may give higher priority to private label products or the
branded products of our competitors as a result of a change in pricing strategy which would adversely affect sales of our
products. Our major multiple retail customers are also expanding into non-food product lines in their stores, thereby
exerting pressure on available shelf space for other categories including our products. We may be unable to adequately
respond to these trends and, as a result, the volume of our sales may decrease, or we may need to lower the prices of our
products.
As is typical in our industry, sales to our retail customers in our Key Markets are made on a daily
demand basis. We generally do not have long-term contractual commitments to supply such customers and must
renegotiate supply and pricing terms of our products on a regular basis. Customarily, trade terms are renegotiated
annually; however, ad hoc changes are often made on an informal basis, such as by email, to reflect discounts and
promotional arrangements. Amounts paid can be subject to end of period reconciliations to reflect these informal
arrangements. In some cases, our customers seek to claim reimbursement for informal discount arrangements going back
multiple periods. In addition, we do not have written contractual arrangements with a number of our other customers. Most
of our customer relationships or arrangements could be terminated or renegotiated at any time and, in some cases,
without reasonable notice.
Our business is subject to the risks of non-payment and non-performance by our retail customers.
We manage our exposure to credit risk through credit analysis and monitoring procedures, and sometimes use letters of
credit, prepayments and guarantees. However, these procedures and policies cannot fully eliminate customer credit risk,
and to the extent our policies and procedures prove to be inadequate, it could negatively affect our financial condition and
results of operations. In addition, some of our customers may be highly leveraged and subject to their own operating and
regulatory risks and, even if our credit review and analysis mechanisms work properly, we may experience financial losses
in our dealings with such parties. Any future financial market disruptions or tightening of the credit markets could result in
some of our customers experiencing a significant decline in profits and/or reduced liquidity. A significant adverse change in
the financial position of a customer could require us to assume greater credit risk relating to that customer and could limit
our ability to collect receivables. We do not maintain credit insurance to insure against customer credit risk.
business, financial condition and results of operations.
Any of the above risk factors in relation to our retailers could have a material adverse effect on our
We are dependent on third parties for almost all of our transportation and distribution requirements
and distribution costs have historically fluctuated significantly over time. Increases in such costs could result in reduced
profits. In addition, certain factors affecting distribution costs are controlled by our third-party carriers. To the extent that
the market price for fuel or freight or the number or availability of carriers fluctuates, our distribution costs could be
affected. Furthermore, temporary or long-term disruption of transportation services due to weather-related problems,
impacts of COVID-19, strikes or other events could impair our ability to supply products affordably and in a timely manner
or at all. Failure to receive our raw materials or to deliver our food products promptly could also result in inventory
spoilage. These factors could impact our commercial reputation and result in our customers reducing their orders or
ceasing to order our products. We require the use of refrigerated vehicles to ship our products and such distribution costs
represent an important element of our cost structure. If we change the transportation services we use, we could face
logistical difficulties that could delay deliveries, and we could incur costs and expend resources in connection with such
change. Any increases in the cost of transportation, and any disruption in transportation, including the availability of
suitable transportation (including the availability of suitable refrigerated transport, freight containers or lorry drivers), could
have a material adverse effect on our business, financial condition and results of operations.
Failure to protect our brand names and trademarks could materially affect our business.
Our principal brand names and trademarks (including but not limited to Birds Eye, Iglo, Findus, Aunt
Bessie's, Goodfella's, Ledo and Frikom) are key assets of our business and our success depends upon our ability to
protect our intellectual property rights. We rely upon trademark laws to establish and protect our intellectual property rights
but cannot be certain that the actions we have taken or will take in the future will be adequate to prevent violation of our
proprietary rights. Litigation may be necessary to enforce our trademark or proprietary rights. In addition, the Birds Eye
brand, which we use in the UK, is used by other producers in the United States and Australia. Even though the brands
have different logos, adverse publicity from such other markets may negatively impact the perception of our brands in our
respective markets. Adverse publicity, legal action or other factors could lead to substantial erosion in the value of our
brands, which could lead to decreased consumer demand and could have a material adverse effect on our business,
financial condition and results of operations.
There is also a risk that other parties may have intellectual property rights covering some of our
brands, products or technology. If any third parties bring a claim of intellectual property infringement against us, we may
be subject to costly and time-consuming litigation, diverting the attention of management and our employees. If we are
unsuccessful in defending against such claims, we may be subject to, among other things, significant damages,
injunctions against development and sale of certain products, or we may be required to enter into costly licensing
agreements, any of which could have an adverse impact on our business, financial condition, and results of operations.
Our business is dependent on third-party suppliers.
We outsource some of our business functions to third-party suppliers, such as the processing of
certain vegetables and other products, the manufacturing of products and packaging materials and distribution of our
products. Our suppliers are subject to their own unique operational and financial risks, which are out of our control. Our
suppliers may fail to meet timelines or contractual obligations or fail to provide us with sufficient products or services,
which may adversely affect our business. For example, if a third party supplier is impacted by COVID-19, this could
negatively affect the price and availability of our ingredients and/or packaging materials and may adversely impact our
supply chain and operations. Moreover, there may be delays or shortages in procuring alternative suppliers, co-
manufacturing capacity, or distribution capability.
Certain of our contracts with key suppliers, such as for the raw materials we use in our products,
are short term, can be terminated by the supplier upon giving notice within a certain period and restrict us from using other
suppliers. Also, a number of our supply contracts, including for fish and vegetables, may be terminated by the supplier
upon a change in our ownership. Failure to appropriately structure or adequately manage our agreements with third
parties may adversely affect our supply of raw materials or our supply of products to our customers. We are also subject
to credit risk with respect to our third-party suppliers. If any such suppliers become insolvent, an appointed trustee could
potentially ignore the service contracts we have in place with such party, resulting in increased charges or the termination
of the service contracts. We may not be able to replace a service provider within a reasonable period of time, on as
favorable terms or without disruption to our operations.
effect on our image, brand and reputation, as well as on our business, financial condition and results of operations.
Any adverse changes to our relationships with third-party suppliers could have a material adverse
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In addition, to the extent that our creditworthiness is impaired, or general economic conditions
A failure in our cold chain could lead to unsafe food conditions and increased costs.
decline, certain of our key suppliers may demand different or onerous payment terms that could materially adversely affect
our working capital position, or such suppliers may refuse to continue to supply to us. A number of our key suppliers have
taken out trade credit insurance on our ability to pay them. To the extent that such trade credit insurance becomes
unobtainable or more expensive due to market conditions, we may face adverse changes to payment terms by our key
suppliers or they may refuse to continue to supply us.
Health concerns or adverse developments with respect to the safety or quality of products of the food industry
may damage our reputation, increase our costs of operations and decrease demand for our products.
“Cold chain” requirements setting out the temperatures at which our ingredients and products are
stored are established both by statute and by us to help guarantee the safety of our food products. The cold chain is
maintained from the moment the ingredients arrive at, or are frozen by, our suppliers, through our manufacturing and
transportation of products and ultimately to the time of sale in retail stores. These standards ensure the quality, freshness
and safety of our products. A failure in the cold chain could lead to wastage, increased costs, food contamination, risks to
the health of consumers, fines and damage to our brands and reputation, each of which could have a material adverse
effect on our business, financial condition and results of operations.
Food safety and the public’s perception that our products are safe and healthy are essential to our
Potential liabilities and costs from litigation could adversely affect our business.
image and business. We sell food products for human consumption, which subjects us to safety risks such as product
contamination, spoilage, misbranding or product tampering. Product contamination, including the presence of foreign
objects, undeclared allergens, substances, chemicals or other agents or residues or the introduction of genetically
modified organisms, could require product withdrawals or recalls or the destruction of inventory, and could result in
negative publicity, reputational harm, temporary plant closures and substantial costs of compliance or remediation. In
addition, food producers, including us, have been targeted by extortion attempts that threatened to contaminate products
displayed in supermarkets. Such attempts can result in the temporary removal of products from shelf displays as a
precautionary measure and result in lost revenue. We may also be impacted by publicity concerning any assertion that our
products caused illness, injury or death. In addition, we could be subject to claims or lawsuits relating to an actual or
alleged illness stemming from product contamination or any other incidents that compromise the safety and quality of our
products. Any significant lawsuit or widespread product recall or other events leading to the loss of consumer confidence
in the safety and quality of our products could damage our brand, reputation and image and negatively impact our sales,
profitability and prospects for growth.
We could also be adversely affected if consumers lose confidence in the safety and quality of
certain food products or ingredients, or the food safety system generally. If another company recalls or experiences
negative publicity related to a product in a category in which we compete, consumers might reduce their overall
consumption of products in this category or confuse our products with those of such company. Adverse publicity about
these types of concerns, whether valid or not, may discourage consumers from buying our products or cause production
and delivery disruptions. In addition, product recalls are difficult to foresee and prepare for and, in the event we are
required to recall one or more of our products, such recall may result in loss of sales due to unavailability of our products
and may take up a significant amount of our management’s time and attention. We cannot guarantee that our efforts to
monitor food safety risks and such efforts of our suppliers will be successful or that such risks will not materialize,
particularly since such systems are harder to implement and monitor in the context of the COVID-19 pandemic, which may
continue to be the case after the pandemic has substantially abated. In addition, we cannot guarantee that our efforts,
through contractual relationships and regular inspections, to control the risk of contamination caused by third parties in
relation to the several manufacturing and distribution processes we outsource, will be successful or that contamination of
our products by third parties will not materialize and have a material adverse effect on our business, financial condition
and results of operations.
We are also subject to further risks affecting the food industry generally, including risks posed by
widespread contamination and evolving nutritional, environmental/sustainability, social and health-related concerns.
Regulatory authorities may limit the supply of or place prohibitive charges on certain types of food products in response to
public health concerns and consumers may perceive certain products to be unsafe, unsustainable, unhealthy or otherwise
undesirable. In addition, governmental regulations may require us to discontinue certain offerings or limit the range of
products we offer. We may be unable to find substitutes that are as appealing to our customer base, or such substitutes
may not be widely available or may be available only at increased costs. Such substitutions or limitations could also
reduce demand for our products.
We could also be subject to claims or lawsuits relating to an actual or alleged illness or injury or
death stemming from the consumption of a misbranded, altered, contaminated or spoiled product, even where such
misbranding, alteration, contamination or spoilage is out of our control, which could negatively affect our reputation and
business. Awards of damages, settlement amounts and fees and expenses resulting from such claims and the public
relations implications of any such claims could be significant and have an adverse effect on our business. The availability
and price of insurance to cover claims for damages are subject to market forces that we do not control, and such
insurance may not cover all the costs of such claims and would not cover damage to our reputation. Even if product
liability claims against us are not successful or fully pursued, these claims could be costly and time consuming, increase
our insurance premiums and divert our management’s time and resources towards defending them rather than operating
our business. In addition, any adverse publicity concerning such claims, even if unfounded, could cause customers to lose
confidence in the safety and quality of our products and damage our reputation and brand image.
We are subject to litigation, arbitration and regulatory proceedings, audits and investigations from
time to time. There is no guarantee that we will be successful in defending ourselves in civil, criminal or regulatory actions,
including under general, commercial, employment, intellectual property, food quality and safety, anti-trust and trade, tax,
advertising and claims, and environmental laws and regulations, or in asserting our rights under various new and existing
laws and regulations. For example, we could face allegations of false, misleading or deceptive advertising, claims or
marketing or other criticisms which could result in litigation, arbitration or regulatory proceedings and result in potential
liabilities or costs which may be significant and may damage our reputation. In addition, the defense of these lawsuits may
divert our management’s attention from other business matters. The costs and other effects of potential and pending
litigation and administrative actions against us, and new legal requirements, cannot be determined with certainty and may
differ from expectations and may have a material adverse effect on our reputation, business, financial condition and
results of operations.
We are exposed to local business and tax risks in many different countries.
Our business is subject to risks resulting from differing legal, political, social and regulatory
requirements, economic conditions and unforeseeable developments in our markets, all or any of which could result in
disruption of our activities. These risks include, among others, political instability , differing economic cycles, tariffs, duties
and adverse economic conditions, changes in regulatory and legislative environments , currency exchange rate
fluctuations, inability to collect payments or seek recourse under or comply with ambiguous or vague commercial or other
laws, changes in distribution and supply channels, foreign exchange controls and restrictions on repatriation of funds, and
difficulties in attracting and retaining qualified management and employees. Our overall success in the markets in which
we operate depends, to a considerable extent, on our ability to effectively manage differing legal, political, social and
regulatory requirements, economic conditions and both foreseeable and unforeseeable developments. We cannot
guarantee that we will succeed in developing and implementing policies and strategies which will be effective in each
location where we do business.
We must comply with complex and evolving tax regulations in the various jurisdictions in which we
operate, which subjects us to international tax compliance risks. Some tax jurisdictions in which we operate have complex
and subjective rules regarding income tax, value-added tax, sales or excise tax, tariffs, duties and transfer tax. From time
to time, our foreign subsidiaries are subject to tax audits and may be required to pay additional taxes, interest or penalties
should the taxing authority assert different interpretations, or different allocations or valuations of our services which could
be material and could reduce our income and cash flow from our international subsidiaries. We currently have several
pending tax assessments and audits in various jurisdictions including Germany and Italy. The agreements by which we
acquired certain businesses provide for certain indemnifications of tax liabilities which may arise in certain jurisdictions
which we believe are sufficient to address these specific tax matters as far as they relate to those businesses but our
belief that these indemnities are sufficient may prove incorrect. We have also established, where appropriate, reserves
and provisions for tax assessments which we believe to be adequate to address potential tax liabilities but our belief that
these reserves and provisions are adequate may prove incorrect. However, it is possible that the tax audits referred to
above could result in the volatility of timings of cash tax payment and recoveries. In addition, it is possible that countries
will increase tax rates in the future, as a result of the COVID-19 pandemic.
The price of energy we consume in the manufacture, storage and distribution of our products is subject to
volatile market conditions.
The price of electricity and other energy resources required in the manufacture, storage and
distribution of our products is subject to volatile market conditions. These market conditions are often affected by political
and economic factors beyond our control, including, for instance, the energy policies of the countries in which we operate.
For example, the German government’s decision to phase out nuclear power generation by 2022 could cause electricity
prices and price volatility in Germany to increase. Any sustained increases in energy costs could have an adverse effect
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on the attractiveness of frozen food products for our customers and consumers and could affect our competitive position if
our competitors’ energy costs do not increase at the same rate as ours. Such disruptions may also occur as a result of the
loss of energy supply contracts or the inability to enter into new energy supply contracts on commercially attractive terms.
Furthermore, natural catastrophes, regional conflicts or similar events could affect the electricity grid. Any such disruptions
or increases in energy costs as a result of the aforementioned factors or otherwise, could have a material adverse effect
on our business, financial condition and results of operations.
Our supply network and manufacturing and distribution facilities could be disrupted by factors beyond our
control.
Severe weather conditions and natural disasters, such as storms, floods, droughts, frosts,
earthquakes or pestilence, may affect the supply of the raw materials and energy resources that we use for the
manufacturing of our products. For example, changing climate may cause flooding and drought in crop growing areas or
changes in sea temperatures may affect marine biomass, fishing catch rates and overall fishing conditions. In addition,
drought or floods may affect the feed supply for red meat and poultry, which in turn may affect the quality and availability
of protein sources for our products. Adverse weather conditions and natural disasters can reduce crop size and crop
quality, which in turn can reduce our supplies of raw materials, lower recoveries of usable raw materials, increase the
prices of our raw materials, increase our cost of transporting and storing raw materials and finished goods, or disrupt our
production schedules. Competing food producers can be affected differently by weather conditions and natural disasters
depending on the location of their supply sources. If our supplies of raw materials are reduced, we may not be able to find
adequate supplemental supply sources, if at all, on favorable terms, which could have a material adverse effect on our
business, financial condition and results of operation.
Our supply network could also be adversely affected by the outbreak of various diseases or other
public health crises, such as the current COVID-19 pandemic that may result in delays in procurement or an inability to
access alternative supply on commercially reasonable terms, which may have an adverse impact on our operating results.
In addition, a significant outbreak of a contagious disease in the human population could result in a widespread health
crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic
downturn that could affect demand for our products and have a material adverse effect on our results of operations.
In addition, our manufacturing and distribution facilities may be subject to damage, disruption or
closure resulting from fire, terrorist activity, natural disasters, health epidemics or other causes. For example, our
Lowestoft and Bremerhaven manufacturing facilities are situated in regions which have historically been prone to flooding.
Extensive damage to any of our fourteen major manufacturing facilities as a result of any of the foregoing reasons, could,
to the extent that lost production could not be compensated for by unaffected facilities, severely affect our ability to
conduct our business operations and, as a result, adversely affect our business, financial condition and results of
operations.
Furthermore, as we lease parts of our Boulogne, Bremerhaven, Lowestoft, and Tonsberg manufacturing sites, the use of
these properties is subject to certain terms and conditions, the breach of which could affect our ability to continue use of
these properties which in turn may disrupt our operations and may materially adversely affect our results of operations.
Seasonality impacts our business, and our revenue and working capital levels may vary quarter to quarter.
Our sales and working capital levels have historically been affected to a limited extent by
seasonality. In general, sales volumes for frozen food are slightly higher in cold or winter months, partly because there are
fewer fresh alternatives available for vegetables and because our customers typically allocate more freezer space to the
ice cream segment in summer or hotter months. The Fortenova Acquisition follows a different seasonality to the legacy
business, with stronger performance through the summer months as a result of the ice-cream business. In addition,
variable production costs, including costs for seasonal staff, and working capital requirements associated with the keeping
of inventories, vary depending on the harvesting and buying periods of seasonal raw materials, in particular vegetable
crops. For example, inventory (and therefore net working capital) levels typically peak in August to September just after
the pea harvest. If seasonal fluctuations are greater than anticipated, our business, financial condition and results of
operations could be adversely affected.
We may be unable to realize the expected benefits of actions taken to align our resources, operate more
efficiently and control costs.
When required we take actions, such as workforce reductions, plant closures and consolidations,
and other cost reduction initiatives, to align our resources with our growth strategies, operate more efficiently and control
costs. As these plans and actions are complex, unforeseen factors could result in expected savings and benefits to be
delayed or not realized to the full extent planned, could negatively impact labor relations, including causing work
stoppages, and could lead to disruptions in our business and operations and higher short-term costs related to severance
and related capital expenditures.
We may be subject to significant disruption in our workforce or the workforce of our suppliers, which could
adversely affect our business, financial condition and results of operations.
As of December 31, 2021, we employed approximately 8,002 employees, of which approximately
1,437 were located in Germany, 1,389 were located in the UK, 1,302 were located in Serbia, 853 were located in Croatia, ,
494 were located in Italy, 378 were located in Sweden/Norway, 348 were located in Bosnia & Herzegovina, 333 were
located in France and 1,468 employees in other locations. As of December 31, 2021, approximately 70% of our
employees worked in our manufacturing operations. We have in the past, and may in the future, experience labor disputes
and work stoppages at one or more of our manufacturing sites due to localized strikes or strikes in the larger retail food
industry sector. We have also been involved in negotiations on collective bargaining agreements. A labor stoppage or
other interruption at one of our nineteen manufacturing sites (or at the site of any of our suppliers) would impact our ability
to supply our customers and could have a material adverse effect on such facility’s operations and, potentially, on our
business, financial condition and results of operations.
Higher labor costs could adversely affect our business and financial results.
We compete with other producers for good and dependable employees. The supply of such
employees is limited and competition to hire and retain them may result in higher labor costs. Furthermore, a number of
our employees are subject to national minimum wage requirements. If legislation is enacted that has the effect of raising
national minimum wage requirements, requires additional mandatory employee benefits or affects our ability to hire or
dismiss employees, we could face substantially higher labor costs. High labor costs could adversely affect our profitability
if we are not able to pass them on to our customers.
We are dependent upon key executives and highly qualified managers and we cannot assure their retention.
Our success depends, in part, upon the continued services of key members of our management.
Our executives’ and managers’ knowledge of the market, our business and our Company represents a key strength of our
business, which cannot be easily replicated. The success of our business strategy and our future growth also depend on
our ability to attract, train, retain and motivate skilled managerial, sales, administration, development and operating
personnel. There can be no assurance that our existing personnel will be adequate or qualified to carry out our strategy, or
that we will be able to hire or retain experienced, qualified employees to carry out our strategy. The loss of one or more of
our key management or operating personnel, or the failure to attract and retain additional key personnel, could have a
material adverse effect on our business, financial condition and results of operations.
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Risks Related to Our Acquisition Strategy
We may be subject to antitrust regulations with respect to future acquisition opportunities.
We may not be able to consummate future acquisitions or successfully integrate acquisitions into our business,
which could result in unanticipated expenses and losses.
Our acquisitions strategy is largely based on our ability to grow through acquisitions of additional
businesses to build an integrated group. Consummating acquisitions of businesses, or our failure to integrate such
businesses successfully into our existing businesses, could result in unanticipated expenses and losses. Furthermore, we
may not be able to realize any of the anticipated benefits from completed acquisitions, including the Findus Switzerland
and Fortenova acquisitions.
We anticipate that any future acquisitions we may pursue as part of our business strategy may be
partially financed through additional debt or equity. Any future financial market disruptions or tightening of the credit
markets may make it more difficult for us to obtain financing for acquisitions or increase the cost of obtaining financing. If
new debt is added to current debt levels, or if we incur other liabilities, including contingent liabilities, in connection with an
acquisition, the debt or liabilities could impose additional constraints and requirements on our business and operations,
which could materially adversely affect our financial condition and results of operation. In addition, to the extent our
ordinary shares are used for all or a portion of the consideration to be paid for future acquisitions, dilution may be
experienced by existing shareholders.
In connection with our completed and future acquisitions, the process of integrating acquired
operations into our existing group operations may result in unforeseen operating difficulties and may require significant
financial resources that would otherwise be available for the ongoing development or expansion of existing operations.
Some of the risks associated with acquisitions include:
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unexpected losses of key employees or customers of the acquired company;
conforming the acquired company's standards, processes, procedures and controls with our
operations;
coordinating new product and process development;
hiring additional management and other critical personnel;
negotiating with labor unions; and
increasing the scope, geographic diversity and complexity of our current operations.
We may encounter unforeseen obstacles or costs in the integration of businesses that we may
acquire. For example, an acquisition may trigger change of control clauses entered into by the previous owner in which
case the counterparties to such agreements may terminate their agreements requiring the acquired business to enter into
new contracts, potentially on less favorable terms. In addition, general economic and market conditions or other factors
outside of our control could make our operating strategies difficult or impossible to implement. Any such unforeseen
obstacles or costs or failure to implement operational improvements successfully and/or the failure of any operational
improvements to deliver the anticipated benefits could have a material adverse effect on our results of operations and
financial condition.
Typically, when acquiring a business, the seller will provide certain warranties regarding its
ownership of the acquired business as well as warranties regarding the business and operations of the acquired business.
We may also obtain a warranty & indemnity insurance policy which provides coverage in respect of certain of these
warranties. Any unexpected liabilities, individually or in the aggregate, which are not subject to such warranties or which
are not recoverable under the such insurance policy, could have a material adverse effect on the business, financial
condition and results of operations of the acquired business following the acquisition, whether or not such liabilities result
from breaches of warranties. There can be no assurance that we will be able to enforce any claims against the seller
relating to breaches of such warranties or successfully claim under our insurance policy. Moreover, even if we are
ultimately able to recover any amounts from the seller or the insurer, we may be required to temporarily bear some or all
of the losses which may arise from any breaches of warranties, which could have a material adverse effect on our
financial condition and results of operations.
Many jurisdictions in which we operate have antitrust regulations which involve governmental filings
for certain acquisitions, impose waiting periods and require approvals by government regulators. Governmental authorities
may seek to challenge potential acquisitions or impose conditions, terms, obligations or restrictions that may delay
completion of the acquisition or materially reduce the anticipated benefits (financial or otherwise) as a result of applying
the relevant antitrust regulations. Our inability to consummate potential future acquisitions or to receive the full benefits of
such acquisitions because of antitrust regulations could limit our ability to execute on our acquisition strategy which could
have a material adverse effect on our financial condition and results of operations.
We may face significant competition for acquisition opportunities.
There may be significant competition in some or all of the acquisition opportunities that we may
explore. Such competition may for example come from strategic buyers, sovereign wealth funds, special purpose
acquisition companies and public and private investment funds, many of which are well established and have extensive
experience in identifying and completing acquisitions. Such competition may cause us to be unsuccessful in executing any
acquisition or may result in a successful acquisition being made at a significantly higher price than would otherwise have
been the case.
Any due diligence by us in connection with potential future acquisitions may not reveal all relevant
considerations or liabilities of the target business, which could have a material adverse effect on our financial
condition or results of operations.
We intend to conduct such due diligence as we deem reasonably practicable and appropriate
based on the facts and circumstances applicable to any potential acquisition. The objective of the due diligence process
will be to identify material issues which may affect the decision to proceed with any one particular acquisition target or the
consideration payable for an acquisition. We also intend to use information revealed during the due diligence process to
formulate our business and operational planning for, and our valuation of, any target company or business. While
conducting due diligence and assessing a potential acquisition, we may rely on publicly available information, if any,
information provided by the relevant target company to the extent such company is willing or able to provide such
information and, in some circumstances, third party investigations where certain of our diligence efforts may be delayed or
prohibited due to government or practical restrictions.
There can be no assurance that the due diligence undertaken with respect to an acquisition will
reveal all relevant facts that may be necessary to evaluate such acquisition including the determination of the price we
may pay for an acquisition target or to formulate a business strategy. Furthermore, the information provided during due
diligence may be incomplete, inadequate or inaccurate. As part of the due diligence process, we will also make subjective
judgments regarding the results of operations, financial condition and prospects of a potential target. If the due diligence
investigation fails to correctly identify material issues and liabilities that may be present in a target company or business,
or if we consider such material risks to be commercially acceptable relative to the opportunity, and we proceed with an
acquisition, we may subsequently incur substantial impairment charges or other losses.
In addition, following any acquisition, we may be subject to significant, previously undisclosed
liabilities of the acquired business that were not identified during due diligence and which could contribute to poor
operational performance, undermine any attempt to restructure the acquired company or business in line with our
business plan and have a material adverse effect on our financial condition and results of operations.
The Fortenova Acquisition represents entry into a new product category and new geographies for us.
The Fortenova Acquisition provides entry into a new product category (ice cream) and new
geographies (in Central and Eastern Europe) in which we do not have previous experience. Our ability to successfully
realize the benefits and synergies of the Fortenova Acquisition will depend in part upon maintaining and growing the
business in this new product category and these new geographies, and integrating the Fortenova Acquisition into our
wider business processes, for which we will be reliant upon the current management of the business. Consumer buying
habits, preferences, seasonal trends and brand loyalty in these Central and Eastern European markets, among other
things, may differ materially from our experience in our prevailing markets. For example, the promotion and advertising
strategies used in our existing businesses may not be able to be replicated successfully in these new geographies and/or
in the ice cream category. Any failure to maintain the existing market share of the Target Group, or any failure to fully
deliver the anticipated benefits of the Fortenova Acquisition (which could result from the factors outlined above or other
factors) could have a material adverse effect on our results of operations and financial condition.
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Risks Related to Regulations
We could incur material costs to address violations of, or liabilities under all applicable directives, regulations
and laws.
As a producer of food products for human consumption, we are subject to extensive regulation in
our Key Markets and other countries in which we operate, at both a national and European Union level, that governs
production, composition, manufacturing, storage, transport, advertising, packaging, quality, labeling, and distribution
standards. It is unclear how such existing rules will be impacted as a result of Brexit but there may be changes and further
regulations that we must adhere to. Any failure to comply with applicable laws and regulations could subject us to civil
remedies, including fines, injunctions, product recalls or asset seizures, as well as potential criminal sanctions.
In addition, our facilities and our suppliers’ facilities are subject to licensing, reporting requirements
and official quality controls by numerous governmental authorities. These governmental authorities include European,
national and local health, environmental, labor relations, sanitation, building, zoning, and fire and safety departments.
Difficulties in obtaining or failure to obtain the necessary licenses or approval could delay or prevent the development,
expansion or operation of a given production or warehouse facility. Any changes in those regulations may require us or
our suppliers to implement new quality controls and possibly invest in new equipment, which could delay the development
of new products and increase our operating costs.
All of our products and production facilities must comply with strict national and international
hygiene regulations. Our facilities and our suppliers’ facilities are subject to regular inspection by authorities for
compliance with hygiene regulations applicable to the sale, storage and manufacturing of foodstuffs and the traceability of
genetically modified organisms, meats and other raw materials. Additionally, in certain jurisdictions, food business
operators, including those in the food storage, processing and distribution sectors, are required to trace all food, animal
feed, and food-producing animals under their control using registration systems that track the source of the products
through the supply chain. Despite the precautions we undertake, should any non-compliance with such regulations be
discovered during an inspection or otherwise, authorities may temporarily shut down any of our facilities, demand a
product recall and/or levy a fine for such non-compliance.
Our facilities and operations are subject to numerous health, safety and environmental regulations,
including local and national laws, and European directives and regulations governing, among other things, water supply
and use, water discharges, air emissions, chemical safety, solid and hazardous waste management and disposal, clean-
up of contamination, energy use, noise pollution, and workplace health and safety. Health, safety and environmental
legislation in Europe and elsewhere has generally become more comprehensive and restrictive and more rigid over time
and enforcement has become more stringent. Failure to comply with applicable requirements, or the terms of required
permits, can result in penalties or fines, clean-up costs, third party property damage and personal injury claims. In
addition, if health, safety and environmental laws and regulations in our Key Markets and the other countries in which we
operate or from which we source raw materials and ingredients become more stringent in the future, the extent and timing
of investments required to maintain compliance may exceed our budgets or estimates and may limit the availability of
funding for other investments.
Furthermore, under some environmental laws, we could be liable for costs incurred in investigating
or remediating contamination at properties we own or occupy, even if the contamination was caused by a party unrelated
to us or was not caused by us, and even if the activity which caused the contamination was legal at the time it occurred.
The discovery of previously unknown contamination, or the imposition of new or more burdensome obligations to
investigate or remediate contamination at our properties or at third-party sites, could result in substantial unanticipated
costs.
In certain jurisdictions, we are also subject to legislation designed to significantly reduce industrial
energy use, water use, carbon dioxide emissions and the emission of ozone depleting compounds more generally. If we
fail to meet applicable standards for energy use reduction or are unable to decrease, and in some cases eliminate, certain
emissions within the applicable period required by relevant laws and regulations, we could be subject to significant
penalties or fines and temporary or long-term disruptions to production at our facilities.
section could have a material adverse effect on our business, financial condition, reputation and results of operations.
Any failure to comply with any of the applicable directives, regulations and laws as set out in this
We are subject to a variety of regulatory schemes; failure to comply with applicable rules and regulations could
adversely affect our business, results of operations and reputation.
Our operations are subject to a variety of regulatory schemes which require us to implement
processes, procedures and controls to provide reasonable assurance that we are operating in compliance with applicable
regulations, including the UK Bribery Act, the Modern Slavery Act 2015, the Foreign Corrupt Practices Act of 1977, the
Trade Sanctions and Export Controls and GDPR. In addition, our business, including our ability to operate and continue to
expand internationally, could be adversely affected if local and foreign laws or regulations are adopted, interpreted, or
implemented in a manner that is inconsistent with our current business practices and that require rapid changes to these
practices or our products, services, policies and procedures. If we are not able to adapt our business practices or
strategies to changes in laws or regulations, it could subject us to liability, increased costs and reduced product demand.
Additionally, the costs of compliance with laws and regulations may increase in the future as a result of changes in
interpretation. Failure to comply (or any alleged failure to comply) with the regulations referenced above or any other
regulations could result in civil and criminal, monetary and non-monetary penalties, and any such failure or alleged failure
(or becoming subject to a regulatory enforcement investigation) could also damage our reputation, disrupt our business,
result in loss of customers and cause us to incur significant legal and investigatory fees.
Changes in the European regulatory environment regarding privacy and data protection regulations could
expose us to risks of noncompliance and costs associated with compliance.
On May 25, 2018, the EU’s GDPR became enforceable. The GDPR relates to the collection, use,
retention, security, processing and transfer of personally identifiable information of residents of EU countries, and because
of our operations in the EU and in the UK, we are subject to these heightened standards. The GDPR created a range of
new compliance obligations and imposes significant fines and sanctions for violations. Among other things, the GDPR
requires companies to meet stringent requirements regarding the handling of personal data of individuals located in the
European Economic Area, or EEA. The GDPR imposes substantial fines for breaches and violations (up to the greater of
€20 million or 4% of our annual global revenue). Furthermore, there is significant uncertainty with respect to compliance
with privacy and data protection laws and regulations, including the GDPR, because they are continuously evolving and
developing and may be interpreted and applied differently from country to country and may create inconsistent or
conflicting requirements. Our efforts to comply with privacy and data protection laws in all our markets, including the
GDPR, may impose significant costs and challenges that are likely to increase over time. Since January 1, 2021 the
GDPR has ceased to have direct effect in the UK but with the implementation of the Data Protection, Privacy and
Electronic Communications (Amendments etc) (EU Exit) Regulations 2019 in the UK, this ensures that the UK has in
effect the same legal framework for data protection in place as under the GDPR.
Risks Related to Financial Management
We have risks related to our indebtedness, including our ability to withstand adverse business conditions and to
meet our debt service obligations.
Our ability to make payments on and to refinance our indebtedness, and to fund our operations,
working capital and capital expenditures, depends on our ability to generate cash. To a certain extent, our cash flow is
subject to general economic, industry, financial, competitive, operating, legislative, regulatory and other factors, many of
which are beyond our control.
We cannot assure you that our business will generate sufficient cash flow from operations or that
future sources of cash will be available to us in an amount sufficient to enable us to pay amounts due on our indebtedness
or to fund our other liquidity needs.
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Additionally, if we incur additional indebtedness in connection with any future acquisitions or
development projects or for any other purpose, our debt service obligations could increase. We may need to refinance all
or a portion of our indebtedness before maturity. Our ability to refinance our indebtedness or obtain additional financing
will depend on, among other things:
• our financial condition and market conditions at the time;
• restrictions in the agreements governing our indebtedness;
• general economic and capital market conditions;
• the availability of credit from banks or other lenders;
• investor confidence in us; and
• our results of operations.
In addition, a significant part of our indebtedness includes provisions with respect to maintaining
and complying with certain financial and operational covenants. Our ability to comply with these covenants may be
affected by events beyond our control. A breach of one or more of these covenants could result in an event of default and
may give rise to an acceleration of the debt. In the longer term, such breach of covenants could have a material adverse
effect on our operations and cash flows.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to
increase significantly.
An increase in market interest rates may increase our interest expense arising on our existing and
future floating rate indebtedness. Pursuant to the terms of the restated Senior Facilities Agreement as at June 24, 2021,
the interest rate paid on indebtedness incurred under our senior loans and revolving credit facility varies based on a fixed
margin over a base reference rate. If interest rates increase, our debt service obligations on the variable rate
indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows,
including cash available for operational or strategic purposes, will correspondingly decrease. Pursuant to our interest rate
hedging policy, we may enter into interest rate derivatives that may involve the exchange of floating for fixed rate interest
payments in order to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect to all of
our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.
Our indebtedness is subject to changes in interest reference rates
Pursuant to the terms of the restated Senior Facilities Agreement as at June 24, 2021, the interest
rate paid on indebtedness incurred under senior loans and our revolving credit facility varies based on a fixed margin over
a base reference rate. As a result of the refinancing, fallback language has been included in the restated Senior Facilities
Agreement in relation to our revolving credit facility, to include use of risk-free interest rates (RFR) when the existing rates
are phased out. The Sterling Overnight Index Average (“SONIA”) has replaced GBP LIBOR and is effective immediately.
The Secured Overnight Financing Rate (“SOFR”) will replace U.S. Dollar LIBOR and Swiss Average Rate Overnight
(“SARON”) will replace CHF LIBOR.
The restated Senior Facilities Agreement does not include fallback language to address interest
rates paid on indebtedness incurred under our Senior U.S. Dollar Loan or Senior Euro Loan. U.S. Dollar LIBOR rates are
expected to be phased out between 2021 and 2023, and as such we will need to renegotiate the terms of our Senior
Facilities Agreement with our lenders and amend the terms of linked interest rate hedging arrangements. As a result of
these changes to underlying interest reference rates, we may be exposed to volatility with regards to interest costs on
indebtedness and linked interest rate hedging arrangements. There is currently no indication of the timing of the phase-out
of EURIBOR.
We are exposed to exchange rate risks.
We are exposed to exchange rate risk. Our reporting currency is the Euro. We are exposed to
foreign exchange translation risk as we convert the Pound Sterling results of our UK business, the Norwegian Krone of
our Norwegian business, Swedish Krona results of our Swedish business and Swiss Franc results of our Swiss business
into our reporting currency of Euro. Pursuant to Company foreign exchange hedging policy, we have converted our USD
term loan to EUR designated as a cash flow hedge. We are exposed to transactional exchange rate risk as many of our
raw material purchases may be denominated in non-functional currencies of the purchasing entity, predominantly U.S.
Dollars and Euro. Company policy is to reduce this risk by using foreign exchange forward contracts that are designated
as cash flow hedges. Hedging arrangements are subject to changes in Company policy, may not fully protect us against
currency fluctuations and may or not achieve hedge effectiveness. Fluctuations and sustained strengthening of non-
functional currencies against the functional currency of the operating entities may materially adversely affect our business,
financial condition and results of operations.
Changes to our payment terms with both customers and suppliers may materially adversely affect our operating
cash flows.
We may experience significant pressure from our key suppliers to reduce trade payable terms. At
the same time, we may experience pressure from our customers to extend trade receivable terms. European and country
legislation can also set conditions and restrictions related to payment terms between suppliers and purchasers at different
levels of the supply chain, for example, Directive 2019/633 on unfair trading practices in business to business
relationships in the agricultural and food supply chain, which was intended to be implemented by Member States by
November 1, 2021. Any failure to comply with applicable laws and regulations could subject us to civil remedies, including
fines, which could have a material adverse effect on our business, financial condition and results of operations. Any such
changes in commercial arrangements regarding trade payable and trade receivable payment terms, as a result of
changes in legislation or otherwise, may have a material adverse effect on our business, financial condition and results of
operations.
Dividend payments and purchases made pursuant to announced share repurchase programs may have an
impact on our cash flows and our ability to meet our debt service obligations.
We do not currently intend to pay dividends on our ordinary shares. We intend to pay such
dividends only at such times, if any, and in such amounts, if any, as the board determines appropriate and in accordance
with applicable law, and then only if we receive dividends from our operating subsidiaries. The board from time to time has
announced share repurchase programs as set out further in the Financing and Acquisition section below. Our ability to
make payments on and to refinance our indebtedness, and to fund our operations, working capital and capital
expenditures, depends on cash flows. A significant part of our indebtedness includes provisions with respect to
maintaining and complying with certain financial and operational covenants. In the event that we were to pay any
dividends or to repurchase shares pursuant to any announced share repurchase programs, such dividends and share
repurchases may have an impact on our cash flows and on our ability to make repayments on and refinance our
indebtedness and to comply with those financial covenants.
An impairment of the carrying value of goodwill or other intangible assets could negatively affect our
consolidated operating results and net worth.
Goodwill represents amounts arising from acquisitions and is the difference between the cost of the
acquisition and the fair value of the net identifiable assets acquired. Intangible assets can include computer software,
brands, customer relationships and other acquired intangibles as of the acquisition date. Goodwill and other intangibles
expected to contribute indefinitely to our cash flows are not amortized but must be evaluated by management at least
annually for impairment. If carrying value exceeds its recoverable amount, the intangible is considered impaired and is
reduced to fair value via a charge to earnings. Factors outside of our control which could result in an impairment include,
but are not limited to: (i) reduced demand for our products; (ii) higher commodity prices; (iii) lower prices for our products
or increased marketing as a result of increased competition; and (iv) significant disruptions to our operations as a result of
both internal and external events. Should the value of one or more of the acquired intangibles become impaired, our
consolidated profit or loss and net assets may be materially adversely affected. As of December 31, 2021, the carrying
value of intangible assets totaled €4,555.1 million, of which €2,099.4 million was goodwill and €2,455.7 million
represented brands, computer software, customer relationships and other acquired intangibles compared to total assets of
€6,170.8 million.
We are exposed to risks in connection with our treasury and cash management activities.
From time to time we may acquire, various investment securities as part of our cash management
and treasury activities. Factors beyond our control can significantly and adversely influence the fair value of our
investment securities, including, but not limited to, the risk that the counterparty may not return the funds and that
movements in financial, currency or interest rate markets may have an impact on the value of the investment securities.
For example, fixed-rate securities are generally subject to decreases in market value when interest rates rise. Additional
factors include, but are not limited to, rating agency downgrades of the securities, defaults by the issuer or individual
borrowers with respect to the underlying securities, and instability in the credit markets. Any of the foregoing factors could
cause other-than-temporary impairment in future periods and result in realized losses. The process for determining
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whether impairment is other-than-temporary may require, subjective judgments about the future financial performance of
the issuer and any collateral underlying the security in order to assess the probability of receiving all contractual principal
and interest payments on the security.
In the ordinary course of treasury activities, whether entering into derivative hedging arrangements,
cash account deposits or otherwise, we are exposed to the risk that the financial counterparty with whom we have
conducted dealings will not be able to perform the agreed services and as a result may have a material adverse effect on
our business, financial condition and results of operation.
We face risks associated with certain pension obligations.
The Company has a mixture of partially funded and unfunded post-employment defined benefit
plans in Germany, Sweden, Switzerland and Austria as well as defined benefit indemnity arrangements in Italy and
France. Deterioration in the value or lower than expected returns on investments may lead to an increase in our obligation
to make contributions to these plans.
The obligations that arise from these plans are calculated using actuarial valuations which are
based on assumptions linked to the performance of financial markets, interest rates and legislation which changes over
time. Adverse changes to these assumptions will impact the obligations recognized and would lead to higher cash
payments in the long term.
Our obligation to make contributions to the pension plans could reduce the cash available for
operational and other corporate uses and may have a materially adverse impact on our operations, financial condition and
liquidity.
We are exposed to risks related to our financial arrangements with respect to receivables factoring, reverse
factoring and supply chain financing.
We may enter into factoring, reverse factoring or supply chain financing arrangements with financial
institutions from time to time to sell certain of our accounts receivables from customers without recourse or to otherwise
finance aspects of our supply chain. If we were to cease entering into such arrangements, our operating results, financial
condition and cash flows could be adversely impacted. However, by entering into these arrangements we are exposed to
additional risks. If any of these financial institutions or other counterparties experiences financial difficulties or is otherwise
unable to honor the terms of our factoring, reverse factoring or supply chain financing arrangements with them, we may
experience material financial losses due to the failure of such arrangements which could have an adverse impact upon
our operating results, financial condition and cash flows.
We are a holding company whose principal source of operating cash is the income received from our
subsidiaries.
We are a holding company and rely on the earnings and cash flows of our subsidiaries, which are
paid to us by our subsidiaries in the form of dividends and other payments or distributions, to meet our debt service and
other obligations, or, if applicable, to pay dividends on our ordinary shares. The ability of our subsidiaries to pay dividends
or make other payments or distributions to us will depend on their respective operating results and may be restricted by,
among other things, the laws of their jurisdiction of organization (which may limit the amount of funds available for the
payment of dividends and other distributions to us), their constitutional documents, documents governing any existing
indebtedness and the covenants of any future outstanding indebtedness that our subsidiaries incur, and other factors
which may be outside our control.
The Founders and/or the Founder Entities may in the future enter into and/or amend related party transactions
with us, which may give rise to conflicts of interest between us and some or all of the Founders and/or the
Directors.
Our founders, Sir Martin Franklin and Noam Gottesman (the “Founders”) and/or one or more of
their affiliates, including Mariposa Acquisition II, LLC and TOMS Acquisition I LLC (the “Founder Entities”) may in the
future enter into and/or amend agreements with us that are not currently under contemplation. While we have
implemented procedures to ensure we will not enter into any related party transaction without the approval of our Audit
Committee, it is possible that the entering into of such an agreement might raise conflicts of interest between us and some
or all of the Founders and/or the directors.
General Risk Factors
We are subject to disruptions, failures or security breaches of our information technology systems, or those of
third parties on which we rely.
We are increasingly dependent upon on our information technology systems for communication
among our suppliers, manufacturing plants, distribution functions, headquarters and customers. Our performance
depends on the availability of accurate and timely data and other information from key software applications to aid day-to-
day business and decision-making processes. We may be adversely affected if our controls designed to manage
information technology operational risks fail to contain such risks. If we do not allocate and effectively manage the
resources necessary to build and sustain the proper technology infrastructure and to maintain the related automated and
manual control processes, we could be subject to adverse effects including billing and collection errors, business
disruptions, in particular concerning our manufacturing and logistics functions, issues with or errors in system's
maintenance and security and migration of applications to the cloud and security breaches. Any disruption caused by
failings in our information technology infrastructure equipment or of communication networks, could delay or otherwise
impact our day-to-day business and decision-making processes and negatively impact our performance. In addition, we
are reliant on third parties to service parts of our IT infrastructure. Failure on their part to provide good and timely service
may have an adverse impact on our information technology network. Furthermore, we do not control the facilities or
operations of our suppliers or third parties. An interruption of operations at any of their or our facilities or any failure by
them to deliver on their contractual commitments may have a material adverse effect on our business, financial condition
and results of operations.
Although our information technology systems are protected through physical and software
safeguards, it is difficult to protect against the possibility of damage or breach created by cyber-attacks or other security
attacks in every potential circumstance that may arise. In addition, governmental authorities have warned that
cybercriminals will take advantage of the uncertainty created by COVID-19 and federal and state mandated quarantines to
launch cybersecurity attacks. The risks could include more frequent malicious cybersecurity and fraudulent activities, as
well as schemes which attempt to take advantage of employees’ use of various technologies to enable remote work
activities. We believe the COVID-19 outbreak has incrementally increased our cyber risk profile, but we are unable to
predict the extent or impacts of those risks at this time. As cyber-attacks are increasing in frequency and sophistication, it
becomes even more difficult to protect against a breach of our information technology systems. Cybersecurity incidents
that impact the availability, reliability, speed, accuracy, or other proper functioning of these information technology systems
could have a significant impact on our operations. If we are unable to prevent physical and electronic break-ins, cyber-
attacks and other information security breaches, we may suffer financial and reputational damage, be subject to litigation
or incur remediation costs or penalties because of the unauthorized disclosure of confidential information belonging to us
or to our customers, suppliers or employees. The mishandling or inappropriate disclosure of non-public sensitive or
protected information could lead to the loss of intellectual property, negatively impact planned corporate transactions or
damage our reputation and brand image. Misuse, leakage or falsification of legally protected information could also result
in a violation of data privacy laws and regulations and have a negative impact on our reputation, business, financial
condition and results of operations.
Changes in accounting standards and subjective assumptions, estimates and judgments by management related
to complex accounting matters could significantly affect our financial results.
Generally accepted accounting principles and related accounting pronouncements, implementation
guidelines and interpretations with regard to a wide range of matters that are relevant to our business, including but not
limited to revenue recognition, leases, estimating valuation allowances and accrued liabilities (including allowances for
returns, doubtful accounts and obsolete and damaged inventory), accounting for income taxes, valuation of long-lived and
intangible assets and goodwill, stock-based compensation and loss contingencies, are highly complex and involve many
subjective assumptions, estimates and judgments by our management. Changes in these rules or their interpretation or
changes in underlying assumptions, estimates or judgments by our management could significantly change our reported
or expected financial performance, and could have a material adverse effect on our business.
Company prior to their adoption dates.
Management continues to assess new accounting pronouncements and their impact on the
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We may incur liabilities that are not covered by insurance.
Risks Related to our Ordinary Shares
While we seek to maintain appropriate levels of insurance, not all claims are insurable, and we may
experience major incidents of a nature that are not covered by insurance. Our insurance policies cover, among other
things, employee-related accidents and injuries, property damage and liability deriving from our activities. In particular, our
Lowestoft and Bremerhaven manufacturing facilities are situated in regions that have historically been affected by
flooding. We may not be able to obtain flood insurance on reasonable terms or at all with respect to those facilities. We
maintain an amount of insurance protection that we believe is adequate, but there can be no assurance that such
insurance will continue to be available on acceptable terms or that our insurance coverage will be sufficient or effective
under all circumstances and against all liabilities to which we may be subject. We could, for example, be subject to
substantial claims for damages upon the occurrence of several events within one calendar year. In addition, our insurance
costs may increase over time in response to any negative development in our claims history or due to material price
increases in the insurance market in general.
If we fail to or are unable to implement and maintain effective internal controls over financial reporting, the
accuracy and timeliness of our financial reporting may be adversely affected.
We are subject to reporting obligations under U.S. securities laws. The SEC, as required under
Section 404 of the Sarbanes-Oxley Act of 2002, has adopted rules requiring every public company to include a report of
management on the effectiveness of such company's internal control over financial reporting in its annual report. In
addition, an independent registered public accounting firm must issue an attestation report on the effectiveness of the
company's internal control over financial reporting.
We recognize that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving their objectives, and our management necessarily applies its judgment in
evaluating the cost-benefit relationship of possible controls and procedures. If we fail to maintain effective internal control
over financial reporting in the future, we and our independent registered public accounting firm may not be able to
conclude that we have effective internal control over financial reporting at a reasonable assurance level. This could in turn
result in the loss of investor confidence in the reliability of our financial statements. Furthermore, we have incurred and
anticipate that we will continue to incur considerable costs and use significant management time and other resources in
an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley Act. If we are not able to continue to
meet the requirements of Section 404 in a timely manner or with adequate compliance, we might be subject to sanctions
or investigation by the SEC, the NYSE or other regulatory authorities. Any such action could adversely affect the accuracy
and timeliness of our financial reporting.
We have various equity instruments outstanding that would require us to issue additional ordinary shares.
Therefore, you may experience significant dilution of your ownership interests and the future issuance of
additional ordinary shares, or the anticipation of such issuances, could have an adverse effect on our share
price.
We currently have various equity instruments outstanding that would require us to issue additional
ordinary shares for no or a fixed amount of additional consideration. Specifically, as of February 17, 2022, we had
outstanding the following:
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1,500,000 Founder Preferred Shares held by the Founder Entities, which are controlled by the
Founders. The preferred shares held by the Founder Entities (the “Founder Preferred Shares”) will
automatically convert into ordinary shares on a one for one basis (subject to adjustment in
accordance with our Memorandum and Articles of Association) on December 31, 2022 and some or
all of them may be converted following written request from the holder; and
4,558,487 equity awards that have either been issued to participants or been granted and are
outstanding under the LTIP, which may be converted into ordinary shares subject, in most cases, to
meeting certain performance conditions.
We currently have 11,181,376 ordinary shares currently available for issuance under our LTIP.
Holders of the Founder Preferred Shares are entitled to receive annual dividend amounts subject to
certain performance conditions (the “Founder Preferred Shares Annual Dividend Amount”). The payment of the Founder
Preferred Shares Annual Dividend Amount became mandatory after January 1, 2015 if certain share price performance
conditions are met for any given year. At our discretion, we may settle the Founder Preferred Shares Annual Dividend
Amount by issuing shares or by cash payment, but we intend to equity settle. For the year ended December 31, 2021, no
Founder Preferred Shares Annual Dividend Amount was payable pursuant to the terms of the Founder Preferred
Shares. In 2022, the Founder Preferred Shares Annual Dividend Amount will be calculated based upon the volume
weighted average share price for the last ten trading days of the financial year and the resulting appreciated average
share price compared to the highest price previously used in calculating the Founder Preferred Shares Annual Dividend
Amount, which was the previously achieved 2020 Dividend Price of $25.2127. The issuance of ordinary shares pursuant
to the terms of the Founder Preferred Shares will reduce (by the applicable proportion) the percentage shareholdings of
those shareholders holding ordinary shares prior to such issuance which may reduce your net return on your investment
in our ordinary shares.
Our ordinary share price may be volatile, and as a result, you could lose a significant portion or all of your
investment.
including the following:
The market price of the ordinary shares on the NYSE may fluctuate as a result of several factors,
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variations in our quarterly operating results;
volatility in our industry, the industries of our customers and suppliers and the global securities
markets;
risks relating to our business and industry, including those discussed above;
strategic actions by us or our competitors;
reputational damage from unsafe or poor-quality food products;
actual or expected changes in our growth rates or our competitors’ growth rates;
investor perception of us, the industry in which we operate, the investment opportunity associated
with the ordinary shares and our future performance;
addition or departure of our executive officers;
changes in financial estimates or publication of research reports by analysts regarding our ordinary
shares, other comparable companies or our industry generally;
trading volume of our ordinary shares;
future issuances or purchases of our ordinary shares by us or our shareholders;
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domestic and international economic, legal and regulatory factors unrelated to our performance; or
the release or expiration of lock-up or other transfer restrictions on our outstanding ordinary shares.
The rights of shareholders under British Virgin Islands law differ from those under United States law, you
may have fewer protections as a shareholder.
Furthermore, the stock markets often experience significant price and volume fluctuations that have
affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have
been unrelated or disproportionate to the operating performance of those companies. These broad market and industry
fluctuations, as well as general economic, political and market conditions such as recessions or interest rate changes may
cause the market price of ordinary shares to decline.
If securities or industry analysts do not publish or cease publishing research reports about us, if they adversely
change their recommendations regarding our ordinary shares or if our operating results do not meet their
expectations, the price of our ordinary shares could decline.
The trading market for our ordinary shares will be influenced by the research and reports that
industry or securities analysts may publish about us, our business, our market or our competitors. Securities and industry
analysts currently publish limited research on us. If there is limited or no securities or industry analyst coverage of our
company, the market price and trading volume of our ordinary shares would likely be negatively impacted. Moreover, if
any of the analysts who may cover us downgrade our ordinary shares, provide more favorable relative recommendations
about our competitors or if our operating results or prospects do not meet their expectations, the market price of our
ordinary shares could decline. If any of the analysts who may cover us were to cease coverage or fail to regularly publish
reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume
to decline.
As a foreign private issuer, we are subject to different U.S. securities laws and NYSE governance standards than
domestic U.S. issuers, which may afford less protection to holders of our ordinary shares.
As a foreign private issuer, the rules governing the information that we disclose differ from those
governing U.S. corporations pursuant to the Exchange Act. Although we report quarterly financial results and certain
material events, we are not required to file quarterly reports on Form 10-Q or provide current reports on Form 8-K
disclosing significant events within four days of their occurrence and our quarterly or current reports may contain less
information than required for domestic issuers. In addition, we are exempt from the SEC’s proxy rules, and proxy
statements that we distribute will not be subject to review by the SEC. Our exemption from Section 16 rules regarding
sales of ordinary shares by insiders means that you will have less data in this regard than shareholders of U.S. companies
that are subject to the Exchange Act. As a result, you may not have all the data that you are accustomed to having when
making investment decisions with respect to U.S. public companies.
As a foreign private issuer, we are exempt from complying with certain corporate governance
requirements of the NYSE applicable to a U.S. issuer, including the requirement that a majority of our board of directors
consist of independent directors. As the corporate governance standards applicable to us are different than those
applicable to domestic U.S. issuers, you may not have the same protections afforded under U.S. law and the NYSE rules
as shareholders of companies that do not have such exemptions. See Item 16G: Corporate Governance.
We may lose our foreign private issuer status in the future, which could result in significant additional costs and
expenses.
We could cease to be a foreign private issuer if a majority of our outstanding voting securities are
directly or indirectly held of record by U.S. residents and we fail to meet additional requirements necessary to avoid loss of
foreign private issuer status. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic
issuer may be significantly higher than costs we incur as a foreign private issuer, which could have a material adverse
effect on our business and financial results.
Our corporate affairs are governed by our Memorandum and Articles of Association, the BVI
Business Companies Act, 2004 (as amended, the “BVI Act”) and the common law of the British Virgin Islands. The rights
of shareholders to take legal action against our directors, actions by minority shareholders and the fiduciary
responsibilities of our directors under British Virgin Islands law are to a large extent governed by the common law of the
British Virgin Islands and by the BVI Act. The common law of the British Virgin Islands is derived in part from
comparatively limited judicial precedent in the British Virgin Islands as well as from English common law, which has
persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of our shareholders and the
fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be
under statutes or judicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has
a less developed body of securities laws as compared to the United States, and some states (such as Delaware) have
more fully developed and judicially interpreted bodies of corporate law. As a result of the foregoing, holders of our ordinary
shares may have more difficulty in protecting their interests through actions against our management, directors or major
shareholders than they would as shareholders of a U.S. company. See Item 16G: Corporate Governance.
The laws of the British Virgin Islands provide limited protection for minority shareholders. Minority shareholders
will have limited or no recourse if they are dissatisfied with the conduct of our affairs
Under the laws of the British Virgin Islands, there is limited statutory law for the protection of
minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies (as summarized under
Item 16G: Corporate Governance). The principal protection under statutory law is that shareholders may bring an action to
enforce the constituent documents of the Company and are entitled to have the affairs of the Company conducted in
accordance with the BVI Act and the memorandum and articles of association of the Company. As such, if those who
control the Company have persistently disregarded the requirements of the BVI Act or the provisions of the Company’s
memorandum and articles of association, then the courts will likely grant relief. Generally, the areas in which the courts will
intervene are the following: (i) an act complained of which is outside the scope of the authorized business or is illegal or
not capable of ratification by the majority; (ii) acts that constitute fraud on the minority where the wrongdoers control the
Company; (iii) acts that infringe on the personal rights of the shareholders, such as the right to vote; and (iv) acts where
the Company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders,
which are more limited than the rights afforded minority shareholders under the laws of many states in the United States.
To the extent allowed by law, the rights and obligations among or between us, any of our current or
former directors, officers and employees and any current or former shareholder will be governed exclusively by the laws of
the British Virgin Islands and subject to the jurisdiction of the British Virgin Islands courts, unless those rights or
obligations do not relate to or arise out of their capacities as such. Although there is doubt as to whether United States
courts would enforce these provisions in an action brought in the United States under United States securities laws, these
provisions could make judgments obtained outside of the British Virgin Islands more difficult to enforce against our assets
in the British Virgin Islands or jurisdictions that would apply British Virgin Islands law.
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British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving
shareholders of one avenue to protect their interests
British Virgin Islands companies may not have standing to initiate a shareholder derivative action in
a federal court of the United States. The circumstances in which any such an action may be brought, and the procedures
and defenses that may be available in respect of any such action, may result in the rights of shareholders of a British
Virgin Islands company being more limited than those of shareholders of a company organized in the United
States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing
has occurred. The British Virgin Islands courts are also unlikely to recognize or enforce judgments of courts in the United
States based on certain liability provisions of United States securities law or to impose liabilities, in original actions brought
in the British Virgin Islands, based on certain liability provisions of the United States securities laws that are penal in
nature. There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although
the courts of the British Virgin Islands will generally recognize and enforce the non-penal judgment of a foreign court of
competent jurisdiction without retrial on the merits. This means that even if shareholders were to sue us successfully, they
may not be able to recover anything to make up for the losses suffered.
Shareholders may experience a dilution of their percentage ownership if we make non-pre-emptive offers of
ordinary shares in the future.
We have opted-out of statutory pre-emptive rights pursuant to the terms of our Memorandum and
Articles of Association. No pre-emption rights therefore exist in respect of future issuance of ordinary shares whether or
not for cash. Should we decide to offer additional ordinary shares on a non-pre-emptive basis in the future, this could
dilute the interests of shareholders and/or have an adverse effect on the market price of the ordinary shares.
Risks Related to Taxation
Changes in tax law and practice may reduce any net returns for shareholders.
The tax treatment of the Company, our shareholders and any subsidiary of ours (including Iglo and
its subsidiaries), any special purpose vehicle that we may establish and any other company which we may acquire are all
subject to changes in tax laws or practices in the British Virgin Islands, the UK, the U.S. and any other relevant
jurisdiction. Any change may reduce the value of your investment in our ordinary shares.
Failure to maintain our tax status may negatively affect our financial and operating results and shareholders.
If we were to be considered to be resident in or to carry on a trade or business within the United
States for U.S. taxation purposes or in any other country in which we are not currently treated as having a taxable
presence, we could be subject to U.S. income tax or taxes in such other country on all or a portion of our profits, as the
case may be, which may negatively affect our financial and operating results.
Item 4.
Information on the Company
A. History and Development of the Company
We are Europe's leading frozen foods company based on net sales value. We were incorporated
with limited liability under the laws of the British Virgin Islands under the BVI Companies Act on April 1, 2014 under the
name Nomad Holdings Limited.
Our principal executive offices are located at No. 1 New Square, Bedfont Lakes Business Park,
Feltham, Middlesex, TW14 8HA. Our telephone number is +(44) 208 918 3200 and our fax number is +(44) 208 918
3491. Our registered office is located at Ritter House, Wickhams Cay II, Road Town, Tortola, VG1110 British Virgin
Islands and its telephone number is (284) 852-7900. Our registered agent in the United States is Mariposa Capital,
LLC, 500 South Pointe Drive, Suite 240 Miami Beach, Florida 33139.
The SEC maintains an Internet website that contains reports, proxy and information statements,
and other information regarding the Company and other issuers that file electronically with the SEC. The SEC's
Internet website address is http://www.sec.gov. Our Internet website can be found at www.nomadfoods.com.
See Item 5B: Operating and Financial Review and Prospects—Liquidity and Capital Resources
for information regarding our capital expenditures for the past three fiscal years and principal capital expenditures
currently in progress.
B.
Business Overview
Our Company
We are Europe's leading frozen food company with a portfolio of best-in-class food brands within
the frozen category, including fish, vegetables, poultry, meals, pizza and ice cream. Our products are sold primarily
through large grocery retailers under the “Birds Eye” brand in the UK and Ireland, “Findus” in Italy, France, Spain,
Sweden, Switzerland and Norway, “Iglo” in Germany and other continental markets, “La Cocinera” in Spain, "Ledo" in
south-eastern Europe and "Frikom" in Serbia and North Macedonia. The majority of our products are in the savory
frozen food market, where according to Nielsen, our market share in the countries we operate stood at 17.9% in 2021
(2020: 18.2%). For the categories in which we operate, we maintain the number one position in sixteen European
geographies, namely the UK, Italy, Germany, France, Sweden, Austria, Norway, Switzerland, Belgium, The
Netherlands, Portugal, Ireland, Croatia, Serbia, Bosnia & Herzegovina and North Macedonia. The countries
representing our top six markets, collectively UK, Italy, Germany, France, Sweden and Austria, represented
approximately 79% of the total European Savory frozen food markets. For a description of the principal markets in
which we compete and related revenue, see Note 5 “Segment reporting” to our audited consolidated financial
statements which appear elsewhere in this annual report.
Taxation of returns from subsidiaries may reduce any net return to shareholders.
Savory Frozen Food Market
We and our subsidiaries are subject to taxes in a number of jurisdictions. It is possible that any
return we receive from any present or future subsidiary may be reduced by irrecoverable withholding or other local taxes,
including those arising from future changes in legislation and other local rules and this may reduce the value of your
investment in our ordinary shares.
If any dividend is declared in the future and paid in a foreign currency, U.S. holders may be taxed on a larger
amount in U.S. Dollars than the U.S. Dollar amount actually received.
U.S. holders will be taxed on the U.S. Dollar value of dividends at the time they are received, even if
they are not converted to U.S. Dollars or are converted at a time when the U.S. Dollar value of the dividends has fallen.
The U.S. Dollar value of the payments made in the foreign currency will be determined for tax purposes at the spot rate of
the foreign currency to the U.S. Dollar on the date the dividend distribution is deemed included in such U.S. holder’s
income, regardless of whether or when the payment is in fact converted into U.S. Dollars.
The European savory frozen food market is served by a number of national and international
producers, both with branded and private label offerings, and within single or multiple product categories. We have the
broadest participation by category and geography in Europe.
competes in across Europe is estimated to have generated close to €20 billion in retail sales value in 2021.
According to Nielsen, the market for savory frozen food in categories which the Company
Frozen food products are particularly attractive because they address important global food
trends. Consumers increasingly prefer products that allow them to prepare meals quickly and with confidence and
expect products to be healthy and good value for money. In addition, consumers are increasingly focused on reducing
food waste. Frozen food products can have all of these characteristics. They are easy to prepare, they reduce the need
for artificial preservatives, they are often better value for money than chilled alternatives and they reduce waste at all
points in the supply chain and also in-home (due to the long shelf life, and the ease of portionability).
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Over the last seven years the European savory frozen food market has grown on average 1%
Strategic and geographically diversified manufacturing facilities.
per year, driven by the aforementioned ability to address global food consumption trends. Furthermore, the amount of
space that frozen food as a category occupies within the grocery retail environment is relatively stable due to the fixed
amount of freezer space at the retailer that is not exposed to reductions in shelf space in favor of other categories or
formats, as can be the case in shelf-stable parts of the retailer.
Our Brands
Our brands are household names with long histories and local heritage in their respective
markets. Our Birds Eye brand was established in 1922 and is primarily marketed in the UK and Ireland. The Findus
brand, which is marketed in Italy, France, Spain, Sweden, Switzerland and Norway, was formed in Italy in 1941 and
has a loyal following in each of its respective geographies. Iglo, founded in 1956, has a long-standing history and is
marketed in Germany and other continental European countries. Recently acquired Ledo (established in 1958) and
Frikom (established in 1975) are the lead brands with strong heritage in south-eastern Europe.
Our Competitive Strengths
contribute to our ongoing success.
We believe the following competitive strengths differentiate us from our competitors and
Market leader with solid European platform and strong acquisition opportunities.
As the leading branded savory frozen food producer in Europe, we benefit from economies of
scale and have developed a strong platform for our products throughout Europe in 2021. We are market leaders in the
savory categories where we offer products in sixteen geographies and have a 17.9% market share in the savory frozen
food market in the countries we operate. We benefit from longstanding relationships with our customers which provide
access to our diversified distribution channels, including supermarkets, discount retailers, the food service channel and
other food retailers that sell directly to consumers. We benefit from a diverse category and geographic mix and believe
our strong existing platforms facilitate our expansion within a large addressable market and provide a broad set of
potential acquisition targets in various food categories and geographic markets.
Effective brand equity strategy to leverage and expand well-known brands.
Our brands are well-established household names with long histories and local heritage in their
respective markets. We possess several iconic brand assets and focus on our local "hero" platforms that are designed
to leverage these iconic assets such as the “Captain”. Each of the Birds Eye, iglo, Findus, Ledo and Frikom brands
holds a leading position in terms of spontaneous brand awareness in certain European markets. Our leading brand
recognition, broad product offering, and local provenance of these brands are key drivers of consumer trust and result
in demand for our products.
Experienced management team and Board with a proven track record.
Our management team has extensive experience in the food industry and other fast-moving
consumer goods markets and has worked with leading multinational consumer goods companies globally. Our
management team is complemented by an experienced Board of Directors, and collectively, they have a proven track
record of successfully acquiring, integrating and managing consumer businesses. We believe our management team
and Board of Directors’ collective industry knowledge, coupled with our track record of achieving growth and
responding to challenging market conditions, will enable us to continue to generate profitable growth.
Optimized sourcing through established platform and diversified supplier base.
We operate an efficient and centralized procurement and supply chain function which is closely
aligned with our geographic footprint, allowing us to optimize our supply arrangements and reduce distribution costs.
We source our products globally from a diverse supplier base and, as a result, we minimize our dependency on any
one supplier. Our relationships with diverse suppliers enable us to safeguard the security of our supply and raw
materials as well as enhance the quality and sustainability of such materials, while also delivering competitive pricing
and limiting exposure to geographic risk and adverse currency movements.
We own and operate an efficient network of nineteen manufacturing facilities with low capital
expenditure requirements, all of which are located near the major markets we serve, providing for a balance between
manufacturing and logistics costs and allowing for high levels of customer service. These facilities have what we
believe to be sufficient spare capacity to accommodate future growth in our main product categories.
Commitment to innovation and research and development.
Innovation is core to our growth model. Our R&D team actively scan new and emerging
technologies, alongside consumer trends and unmet needs. The intersection of these insights leads us to identify new
opportunities to drive penetration and frequency. In addition, we regularly benchmark our existing ranges to ensure that
these continue to deliver experiences that delight our consumers. In response to these insights we establish
multifunctional project teams that design new and improved products and packaging delivered through our core Must
Win Battles for fish, veg, poultry, pizza and meat replacements. Each time we create a new product or pack we apply
the principles of sustainable by design. To ensure the development and introduction of successful products, we follow a
robust process through which we move from idea generation, concept screening, concept and product development, to
scale up and final validation before launch.
Our Strategy
Our strategy is underpinned by three fundamental pillars which are to expand the category, grow
the core and accelerate innovation. In addition, we have developed and made significant progress in implementing the
following strategic initiatives:
1. Build an integrated group of best-in-class food companies and brands within existing
and related food categories and expand our geographic footprint through strategic
acquisitions.
Our goal is to transform our Company into an integrated best-in-class, global manufacturer,
marketer and distributor of food products, within the frozen food category and the broader food sector. We believe
there are significant growth opportunities in the European and North American markets and that our acquisitions
provide a strong platform on which to grow our business and expand and enhance our market share in the food
industry in key geographic markets.
2. Focus on “Core” products as a foundation for long-term growth.
We continue our strategy which is rooted in relentless focus on our Core products which, prior to
the Fortenova Acquisition, represented approximately 72% of our branded channel sales. These strategies include
improving product quality, packaging renovation and executing in-store initiatives such as ensuring the right product
assortment, display strategies and promotional efficiencies. We believe focusing on these Core product initiatives will
accelerate growth, lead to margin expansion and improve our return on investment. To further accelerate growth, we
continue to pursue innovation which leverages consumer trends such as health, wellness and convenience, but which
are anchored in our core categories.
3. Align our business with consumer preferences and trends.
Our goal is to create and acquire food businesses and brands that strongly align with consumer
needs and preferences that have high growth and margin potential and that leverage our existing portfolio of
brands. In addition, we seek to align our product innovation strategies with consumer trends such as increased
demand for nutrition-packed meals that can be prepared in shorter times, vegetarian options, meat substitutes and
sustainably sourced and produced food.
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4. Leverage our acquisition expertise, strong management team and access to capital to
identify and evaluate attractive growth opportunities.
Products
Our Founders and CEO have significant experience and expertise, and have been highly
successful, in identifying, acquiring and integrating value-added businesses. We believe that this expertise, our access
to capital and the deep industry knowledge of our management team will position us to acquire related and
complementary food businesses that can enhance our market position, create synergies and fully leverage our existing
marketing, manufacturing and supply chain capabilities, which we believe will allow us to deliver sustained profitable
growth and maximize shareholder value. For example, in 2018 we completed (i) the Goodfella's Acquisition including
the "Goodfella's" and "San Marco" brands, which enlarged our portfolio of brands to include the number one and
number two market share positions within the frozen pizza category in Ireland and the UK, a successful frozen private
label pizza business, and two frozen pizza manufacturing facilities and (ii) the Aunt Bessie’s acquisition including the
"Aunt Bessie's" brand, which enlarged our portfolio of brands to include the number one and number two market share
positions, respectively, within frozen Yorkshire puddings and frozen potatoes, which combine to represent the majority
of its revenues. On December 31, 2020 we completed the acquisition of Findus Switzerland. Findus is the leading
frozen food brand in Switzerland with a portfolio of value-added frozen products across categories including fish,
vegetables and ready meals. The acquisition expands Nomad Foods' geographic reach into Switzerland, a new and
sizeable market, providing a natural extension for our Findus product offering and brand family with an attractive entry
for Green Cuisine. The transaction unifies Nomad Foods' ownership of the iconic Findus brand across Europe. In
September 2021 we acquired Fortenova Group’s Frozen Food Business Group, which brings a leading European
frozen food portfolio operating in attractive new markets for Nomad Foods, including Croatia, Serbia, Bosnia &
Herzegovina, Hungary, Slovenia, Kosovo, North Macedonia and Montenegro. Its two anchor brands, "Ledo" and
"Frikom", have No 1 market share in many of these markets and offer a broad range of frozen food products including
fish, fruits, vegetables, ready meals, pastry and ice cream. The acquisition creates a platform for future expansion into
Central and Eastern Europe and introduces us to ice-cream which opens new potential avenues for growth.
5. Respond to changing consumer shopping habits and drive advertising efficiency and
impact.
We are responding to the growing consumer shift to digital and mobile technologies, apparent
across all of our markets, by investing in technology platforms and partnering with both existing and emerging retailer
partners who are executing their own e-commerce strategies to meet changing consumer habits. Online sales
represented approximately 8% of our total sales as of December 31, 2021 (compared to 7% in 2020 and 4% in 2019).
COVID-19 dynamics have played a part in accelerating existing consumer shopping behavior trends. The need of
social distancing measures due to COVID-19 resulted in many new consumers trialing Online grocery shopping
channels for the first time, and accelerated the expansion of other models, such as Quick Commerce in large cities
across Europe. We believe that the full Digital Commerce channel will continue to provide further opportunities to drive
market share gains through improved product content, allowing us to more fully share the benefits of the Frozen
category directly to consumers, and driving our mealtime solution programs. In addition, our strategies are evolving in
response to other consumer shopping trends such as increased purchases through the hard discounter channel, which
has been growing significantly in the UK and Southern Europe.
6. Generate strong margins and cash flow through disciplined net revenue management,
supply chain optimization and disciplined cost management.
We continue to increase our margins and cash flows by strengthening our net revenue
management capabilities and focusing on supply chain optimization and disciplined cost management. These efforts,
which will be implemented over time, will include developing stronger promotional programs, price pack architecture
and trade terms as well as continuing our focus on lean manufacturing, factory footprint optimization, and procurement
productivity.
During the past three fiscal years, we have manufactured, marketed and distributed the following
frozen food products:
Fish: includes frozen fish products such as fish fingers, coated fish and natural fish. These
products were the largest contributor to our revenues in 2021, 2020 and 2019.
Vegetables: includes ready to cook vegetable products such as peas and spinach.
Meals: includes ready to cook noodles, pasta, lasagna, pancakes and other ready-made meals
under the iglo, Findus and La Cocinera brand names.
Poultry: includes frozen poultry and meat products such as nuggets, grills and burgers.
Ice Cream: following the Fortenova Acquisition, includes in home and out of home ice cream.
Others: includes a variety of other offerings such as soups, pizza, bakery goods and meat
substitutes.
We continue to place a strong emphasis on renovation of our existing Core products, which
include fish, vegetables, meals and poultry, in order to overcome penetration barriers and continue to build loyalty. For
example, in 2019, we introduced under our new innovation platforms our Artisan (coated fish assortment), Veggie
Power (modern vegetable blends) and Green Cuisine (pea protein sub-brand). We manage renovation and innovation
centrally on European common product platforms and have more local involvement where products are differentiated
and country specific. Our research and development continues to be centralized, allowing us to leverage our research
and development investment across our markets and focus on our largest Core products.
Customers
Our customers are typically supermarkets and large food retail chains supplying food products
directly to consumers. Each key market in which we operate has its own distinct retail landscape. We consider our key
retailer clients to be, in the UK, Tesco, Asda and Sainsbury’s; in Italy, Coop, Conad and Esselunga; in Germany, Rewe
and Edeka; in Sweden, ICA, Axfood and Coop; and in France, Carrefour, Auchan and E.Leclerc. For the year ended
December 31, 2021, our top ten customers (in terms of revenue) accounted for 40% of revenues.
The majority of our sales are to established retailers and we expect this channel to remain our
most significant channel for the foreseeable future. We partner with traditional retailers when we identify commercial or
marketing opportunities that can be of interest for both businesses. In addition, we are selectively building partnerships
and are increasing our presence in the growing discounter channel.
We are increasing our investment in online sales, which represented approximately 8% of our
total sales as of December 31, 2021. The online grocery retail channel is growing faster than established grocery retail
formats across developed markets, partially as a result of the COVID-19 pandemic. Frozen foods particularly benefit
from the online channel as the advantages to the consumer of outsourcing transportation of frozen food to the retailer
are greater than in other categories, and also because some of the barriers to purchasing in-store (e.g. colder aisles)
are removed for the consumer online.
Approximately 4% of our total sales for the year ended December 31, 2021 were through the
food service channel. The majority of these sales were in Sweden and consist primarily of sales of institutional and
public sector customers such as schools and hospitals as well as privately run work canteens and quick service
restaurants. COVID-19 dynamics and governmental restrictions in Europe have adversely impacted food service sales
since early 2020, as we have experienced lower demand for our food service products, which supports commercial
food establishments, due to governmental restrictions on the consumers’ ability to eat out of home, for example, at
restaurants, cafes, bars and work canteens. There was a modest sales increase in 2021 as COVID-19 governmental
restrictions across Europe were eased.
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Nomad Foods International (formerly Exports) accounted for 1.7% of our total sales in 2021. In
We operate a global sourcing platform. Fish is sourced mainly from the United States, Russia
Western Europe, Nomad Foods International supplies to food service distributors which are not covered by our non-
Nomad Foods International channels.
Sales, Marketing and Pricing
Our commercial strategy is centered around our Core products and our growth model focuses
on three core elements: creating distinctive brands through leveraging our iconic brand assets, innovating to break
penetration barriers balanced between renovation and innovation, and executing in store through category leadership
driving the right assortment, display and promotional efficiency.
Our brand equity strategy aims to further increase brand awareness. We are utilizing our core
iconic assets at all consumer touchpoints including traditional media, digital media, point of sale and packaging.
Furthermore, we have invested and will continue to seek to invest at sufficient levels of media on all our Core products.
We maintain sales teams in each of our Key Markets and all other markets in which our products
are sold with the exception of the Central and Eastern Europe markets where we operate via a distribution model. Our
sales force is resourced to provide good store coverage. We have been chosen to lead category management projects
by several leading supermarkets in each of our main product categories and have developed innovative presentations
of our frozen food products and in-store marketing concepts with supermarkets in a number of our markets in order to
increase shopper traffic and sales. Most recently, we have developed and are executing our “Perfect Store” concept
which focuses on improving a consumer’s in-store shopping experience through presentation, layout and signage.
Manufacturing
We own and operate nineteen manufacturing facilities which are located in Lowestoft and Hull
(UK), Bremerhaven and Reken (Germany), Cisterna (Italy), Loftahammar and Bralanda (Sweden), Tonsberg and Larvik
(Norway), Boulogne-sur-Mer (France), Valladolid (Spain), Longford and Naas (Republic of Ireland), Rorschach
(Switzerland), Zagreb, Sesvete, and Daruvar (Croatia), Belgrade (Serbia) and Čitluk (Bosnia and Herzegovina). These
facilities produce approximately 671 kilo tonnes of frozen product per year, representing approximately 80% of the total
volumes of our sales. The manufacturing facilities are located near the major markets we serve, providing for a balance
between manufacturing and logistics costs and customer service. Our manufacturing facilities are focused on in house
manufacturing of our main product categories and emphasize quality and efficiency through scale. We have also
invested in automated lines, such as fish fingers, poultry and spinach lines.
Although capacity differs per product line and facility, we estimate that we have sufficient spare
capacity available to accommodate future growth in our main product categories and as necessary to accommodate
the seasonal nature of some of our products, particularly vegetables.
In 2021, through the Fortenova Acquisition we took on five new manufacturing sites in south-
eastern Europe. These are Zagreb, Sesvete, and Daruvar (Croatia), Belgrade (Serbia) and Čitluk (Bosnia and
Herzegovina).
Procurement
Our procurement functions are structured around primes and indirect raw materials (materials
used in manufacturing which form a part of the end product, such as fish, vegetables, meat, other ingredients and
packaging), non-production items (items purchased and services used to design, market and distribute the product,
such as logistics, operations, including maintenance, sales and marketing) and co-pack (finished products bought from
third parties, such as most vegetables other than peas and spinach).
We have an efficient and centralized supply chain which is closely aligned with our geographic
footprint, allowing us to optimize our supply arrangements and reduce distribution costs. We operate a centralized
procurement function, with all procurement of primes and the majority of non-production items and co-pack
procurement activities centralized to maximize scale efficiencies.
and China, vegetables are sourced predominantly from Europe and poultry is sourced largely from South America (but
also from Thailand and Eastern Europe). We have contracts in place with pea and spinach growers and third-party pea
processors in regions close to the location of pea growers. In addition, we utilize various co-pack suppliers for
vegetables other than peas and spinach. The contract terms we enter into with various suppliers differ extensively with
respect to length and provisions.
We aim to maintain an appropriately diverse supplier base to safeguard the security of our
supply of raw materials as well as enhance the quality and sustainability of such materials, while also delivering
competitive pricing.
We segregate vendors into “strategic” and “tactical” categories based on criteria such as
bargaining power or opportunistic procurement. On that basis, we have identified a number of strategic suppliers with
whom we maintain close relationships, particularly in relation to main product categories for which security of supply is
critical. Raw materials are mostly directly shipped to our manufacturing facilities.
The price of fish, vegetables and other agricultural commodities, including poultry and meat, can
be volatile. We limit our exposure to price increases of raw materials by contractually securing prices for periods
ranging from one month to a full year. Prices of raw materials that are harvested annually are generally fixed for a full
year. Prices for certain other products, such as fish, dairy products and potatoes, are fixed for several months in line
with industry practice.
Logistics
Our distribution network is made up of our manufacturing facilities, warehouses, local distribution
centers and third-party providers of services (such as co-packers & transport). We outsource the majority of our
distribution processes to third parties seeking to collaborate with shared sites and integrated transport networks. Our
distribution network is well consolidated and aligned with our manufacturing footprint in the UK, Ireland, Germany, Italy,
Sweden, France, Norway, Spain, Croatia, Serbia, and Bosnia & Herzegovina. From our manufacturing plants, our
products are sent to regional distribution centers to be further distributed to local markets. Our primary distribution
centers are used to consolidate both local production and imported products to be sold locally. These sites include
Wisbech in the UK, Naas in Ireland, Reken in Germany, Capua, Latina and Parma in Italy, Bjuv in Sweden, Brussels in
Belgium, Vantaa in Finland, Froneri in Switzerland, Vienna in Austria, Lognes in France, Tonsberg and Moss in Norway,
Lisbon in Portugal, Madrid in Spain. With our newly acquired DC’s in Podgorica in Montenegro, Skpoje in Macedonia,
Milosheve in Kosovo, Szada in Hungary, Ljubljana in Slovenia, Sarejevo, Tuzla and Banja Luka in Bosnia &
Herzegovina, Novi Beograd and Nis in Serbia, and Zagreb, Osijek and Slavonski Brod in Croatia.
Seasonality
Our sales and working capital levels have historically been affected to a limited extent by
seasonality. In general, sales volumes for frozen food are slightly higher in colder or winter months and variable
production costs and working capital will vary depending on the harvesting and buying periods of seasonal raw
materials, in particular vegetable crops. For example, inventory levels typically peak in August to September just after
the pea harvest and as a result, more working capital is required during those months. The Fortenova Acquisition
follows a different seasonality to the legacy business, with stronger performance through the summer months behind
the ice-cream business.
Corporate Social Responsibility
We continuously review our position to mitigate supply chain risks, working to meet relevant
ethical, environmental and social obligations. We seek to source, manufacture and sell our food to consumers in a
responsible way. We operate a sustainability program called Eating for the planet that reflects our commitments.
We do this by endeavoring to:
• Meet all relevant food and safety regulations
• Uphold international sustainability standards
• Lead, manage and review our approach, regularly assessing progress
• Report progress annually through the Nomad Foods’ Sustainability report
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improvement.
our website https://www.nomadfoods.com/eating-for-the-planet/sustainability-reports/
We also encourage all our suppliers to have or work towards a culture of continuous
Further details on these topics can be found in our latest Annual Sustainability Report found on
the UN Sustainability Development Goals (SDGs). It consists of three pillars, securing a “farm to fork” approach:
Our sustainability program is based on the concepts of materiality and salience and aligned with
Information Technology
1. Better Sourcing
• We focus on sustainably, responsibly sourced fish and seafood using independent sustainable
standards, such as the Marine Stewardship Council standard (MSC) and Agriculture
Stewardship Council (ASC). Our sustainable farming standards are expanding from regional
practices to global standards with the introduction of the FSA standard (Farm Sustainability
Assessment) from the Sustainable Agriculture Initiative (SAI).
• We are committed to ethical trading, sourcing and procurement, upholding fundamental
international standards. We are committed to require all suppliers to comply with applicable
human rights laws and regulations. We request our direct suppliers to register to Sedex, one of
the world’s largest collaborative platforms for sharing responsible sourcing data on supply
chains.
• We believe we are in compliance with all relevant environmental laws and regulations and we
expect all suppliers to do the same.
2. Better Nutrition
Every day our customers serve our food to their families. We want to inspire them to eat a more
balanced diet and live healthier lifestyles.
• We continuously work to improve our product portfolio, applying a nutrition strategy informed
by an independent Nutritional Advisory Board and assessing our products using an externally
verified Nutrient Profiling Tool. We also apply on pack nutritional labeling claims in markets
where this is relevant, favoring the NutriScore model where applicable.
• We assess any new product development to drive higher sustainability across the portfolio.
• We empower consumers to make their own decisions, communicating the nutritional values of
our products on pack.
3. Better Operations
• We recognize the importance of reducing the impact we have on the environment and are
committed to achieve net zero across our supply chain well before 2050 and are members of the
UN Race to zero.
• We consider the total packaging system when designing packaging, recognizing packaging
plays an important role in terms of food safety, securing shelf life, convenience, communication
as well as sustainability. We aim to minimize packaging material use. We work towards making
all consumer packaging material recyclable and prioritize packaging material from sustainable
origins.
• We believe that our people make the difference and make sure they have an active voice
through the ‘Our Voice’ employee survey. Sustainability is important for our employees and we
involve them in the work and encourage them to live our values every day as part of our
corporate purpose, Serving the World with Better Food.
• We actively work to engage with and add value to the broader communities we operate in,
while contributing to our wider sustainability agenda. We encourage our local businesses to
support social causes in their regions, engaging at a local level. For example, a majority of our
businesses contribute our products to local food banks and charities.
Our IT systems are critical to operating and growing our business, in particular to our general
operations and logistics functions but also to enable our teams to work from remote locations. A single SAP tool
underpins the processes to support the majority of our operations and management reporting across countries with
new tools being introduced to support Sales planning, S&OP and Net Revenue Management activities.
The IT architecture is designed as a consolidation platform enabling integration of future
acquisitions. During 2021, Nomad started the integration of the Findus Switzerland businesses onto the Nomad
platform and the IT team are looking at ways to accelerate future integrations. We believe that the role of data and
analytics will continue to increase in importance in decision-making, and we therefore intend to continue to enhance
our capability to use such data and analytics in our decision-making process.
Nomad foods have started project phoenix which is a business transformation project
underpinned by an upgrade to the latest SAP S4/HANA. This has started and will continue throughout 2022/23 and
finish in 2024. This program will enable integration of new acquisitions quickly with little or no adverse business
impact, while maintaining the low cost of ownership. Additionally, we utilize an new outsourced infrastructure service
provider, maintaining best in class IT cost alongside improved capability to scale in line with business developments.
Intellectual Property
Good brand protection continues to be of significant importance to our business as we rely on
our brands to implement our master brand strategy. We have a substantial trademark portfolio with around 1,630
trademarks across all of our markets including new export countries such as the US, Australia and New Zealand and
the Middle East. This year has also seen a dedicated drive to protect the business’ innovations, and capture valuable
intellectual property rights as early as possible, resulting in patent protection in the areas of our plant-based food
products and packaging processes. Our intellectual property is managed centrally, and we work closely with a
specialist team of trade mark and patent attorneys and intellectual property solicitors in respect of filings, renewals,
recordings and the prosecution and enforcement of intellectual property matters internationally.
We own EU trade mark rights across the EU as well as trade mark rights in all other commercial
countries of interest to the business in "Birds Eye", "iglo" and "Findus". We continue to own "Belviva" (formerly
"Lutosa") in Belgium, "La Cocinera" in Spain and Andorra, "Goodfella's" and "Aunt Bessie's" across the EU and in other
key markets, and we have secured registration for "Nomad Food" across the EU, United Kingdom, Norway, China and
the US.
Registered protection for "Green Cuisine" continues to grow in line with the importance of the
brand, with registrations in place in the UK, New Zealand and Liechtenstein, and pending applications across the EU
and other markets of interest around the world.
This year has also seen the successful acquisition of the Fortenova Group’s frozen food
business, acquiring key brands such as "Frikom" and "Ledo" across Eastern Europe and resulting in an increase in our
overall trade mark portfolio size by over 250 registrations.
Material Contracts
Each material contract to which we have been a party for the preceding two years, other than
those entered into in the ordinary course of business, is listed as an exhibit to this annual report and is summarized
elsewhere herein.
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Pensions
We operate a number of different pension schemes across our various countries of operation,
the majority of which are defined contribution schemes. We operate defined benefit pension plans in Germany,
Sweden, Italy, Switzerland and Austria which are all closed to new entrants, as well as various defined contribution
plans in other countries, the largest of which include Sweden and the UK. Long term service awards and other
employee benefits are also in operation in a number of countries.
Regulatory Matters
Our activities are subject to laws and regulations regarding food safety, the environment and
occupational health and safety.
Food Safety Regulation
As a manufacturer of foods intended for human consumption, we are subject to extensive
legislation and regulation both from the European Union, the EU Member States and European free trade association
(EFTA) members, UK adopted legislation and other European countries in which we operate. For the European Union,
The European Commission, Directorate-General for Health and Food Safety is responsible for EU policy on food safety
and health and for monitoring the implementation of related laws. The European Food Safety Authority advises the
European Commission, the European Parliament and the EU Member States on food safety matters. EU Member
States must ensure adequate enforcement, control and supervision of principles set forth in numerous EU Directives
and Regulations and may be allowed to maintain or establish more stringent measures in their own legislation. Other
European countries may follow the EU Directives and Regulations as is the case currently in the UK through the
adopted legislation process following Brexit, but it may be that there are additional regulations to comply with on a
country by country basis. We expect the UK to start generating its’ own regulatory matters as time progresses and as a
UK based entity, we will be duty bound to follow these. These regulations govern the composition, manufacture,
storage, handling, packaging, labeling, marketing and safety of our products. These regulations generally impose on
food business operators an obligation to ensure that the operations under their control satisfy the relevant food law
requirements and impose a mandatory traceability requirement along the food chain. The tracing information must be
kept for a period of five years and upon request, must be made available to the relevant authorities.
In addition, we are subject to specific food hygiene legislation that establishes rules and
procedures governing the hygiene of food products. This legislation sets forth specific rules governing the proper
hygiene for food products of animal origin and sets forth microbiological criteria for food products. In addition, there are
a number of other specific EU, adopted UK and local country requirements relating to specific matters such as
contaminants, packaging materials and additives. The new Brexit Trade Agreement has resulted in substantial delays
at Border Control Points for all food businesses due to the new level of documentation and checking which accompany
food shipments across the UK to EU. Nomad products are frozen and maintained at a temperature below 18 degrees
therefore there are no issues with food hygiene due to any delays or blockages which we may experience.
We are also subject to a broad range of European directives and regulations and local country
requirements regarding the manufacture and sale of frozen foods for human consumption. These directives and
regulations define technical standards of production, transport and storage of frozen foods intended for human
consumption and require us to assure internal quality control at each stage of the “cold chain” and to implement any
standards, as established by public authorities. These directives and regulations have in all areas of food safety been
translated into UK statutory instruments as written.
continuous compliance with all relevant regulatory and food safety standards:
Listed below are the various internal due diligence procedures we have established to ensure
• Implementing food hygiene principles across all production sites in accordance with food
hygiene regulations;
• Annual external auditing of our production sites conducted by independent compliance
companies applying the British Retail Consortium Global Standard for Food Safety Issue 8, its
European equivalent, the International Food Standard or the Global Food Safety Initiative.
Currently 93% of our suppliers are also certified to one or more of these food safety
management systems and it is our long-term objective to achieve 100% certification;
• Ensuring that our Group’s Quality Management Systems comply with ISO 9001 with external
audits to ISO or BRC standard;
• Conducting internal audits covering all production sites as part of our internal audit program
(including cross-audits where one site's audit team audits another's system);
• Maintaining a risk-based microbiological and contaminant screening program, including
screening for allergens, that covers raw materials and finished products; and
• Holding monthly regulatory updates to assess emerging risk areas, update policies and review
outstanding issues as part of the quality forum meeting which is attended by functional heads.
Tariffs and Trade
We are subject to specific trade requirements regarding fish and poultry, two main ingredients for
our products.
Food Labeling Regulation
Pre-packaged food products must comply with provisions on labeling, which are harmonized
throughout the European Union. Pre-packaged food products must also comply with provisions on nutrition labeling,
which are also harmonized throughout the European Union. Under the Food Information for Consumers Regulation
nutrition labeling is mandatory unless exempted.
In addition to general and nutrition requirements, pre-packaged food products must bear a lot
mark declaration via a manufacturing or packaging lot reference, which is also a harmonized system throughout the
European Union. The lot reference allows consumers and businesses to trace the product in the event of a product
withdrawal or recall.
Local laws may also impose additional requirements with which we must comply.
There are also specific labeling requirements for certain ingredients we use in our products.
Packaging
Our packaging protects the product against contamination, is designed to optimize logistics,
helps with portion sizes, carries information for customers, and, by maintaining the quality of products for the duration
of their shelf life, also helps to reduce food waste. However, packaging, in particular plastic packaging, has been in the
spotlight because of its environmental impacts. Poor management of recycling or waste disposal of plastic packaging
can result in plastic leaking from the waste management cycle into the ocean, threatening
the lives of sea birds and marine animals, and disrupting ecosystems.
We primarily design our packaging around food safety needs and environmental impact
concerns, ensuring that the packaging protects the product but does not waste natural resources. Our focus is on
moving to recyclable materials. However, in some places we do need to use flexible materials such as plastic where
innovation is required to find recyclable alternatives.
emergence of taxes or bans on the use of single-use plastic.
We expect packaging to be a focus for environmental law in the coming years, with the
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Environmental Law
The European Commission, Directorate-General for the Environment is responsible for EU
policy on the environment and for monitoring the implementation of related laws. The European Union has issued
numerous directives relating to environmental protection, including those aimed at improving the quality of water,
addressing air and noise pollution, assuring the safety of chemicals and setting standards for waste disposal and
clean-up of contamination. European directives are given effect by specific regulations in Member States and
applicable regulations have been implemented in each of the countries in which we conduct our manufacturing
activities. In addition, there may also be further regulations implemented at a country level in other countries in which
we operate. Accordingly, our facilities must obtain permits for certain operations and must comply with requirements
relating to, among others, water supply and use, water discharges and air emissions, solid and hazardous waste
storage, management and disposal of waste, clean-up of contamination and noise pollution.
We are also subject to legislation designed to reduce energy usage and carbon dioxide
emissions and also restrictions on the use of ozone depleting substances such as hydrochlorofluorocarbons
("HCFCs"). HCFCs are used in refrigeration systems and their use will be phased out as part of our normal
maintenance, repair and replacement activities and we do not expect a need for significant incremental capital
expenditures for this purpose.
Compliance with environmental laws and regulations is managed at the facility level. The
majority of our manufacturing facilities have a detailed environmental management system which are externally audited
on an annual basis for compliance with ISO 14001 or BRC.
In addition, under some environmental laws and regulations, we could be responsible for
contamination we may have caused and investigating or remediating contamination at properties we own or occupy,
even if the contamination was caused by a prior owner or other third party or was not due to our fault, and even if the
activity which resulted in the contamination was legal at the time it occurred.
Our SafeCall Line, which is operated by an external service provider, allows employees to report
issues anonymously. Compliance at the local level is based in large part on building strong local companies and
developing a proper approach in coping with operational dilemmas within the boundaries of applicable laws and
responsible conduct. Local management, assisted by the Internal Audit department, carries out reviews to identify
compliance risks and to ensure that adequate systems to manage those risks are in place. We continually analyze and
assess changes in applicable laws and regulations, and implement appropriate adaptations are implemented when
necessary.
Insurance
We have a comprehensive Global Insurance Program covering all territories that the
organization operates within and undertake regular risk reviews. We continually assess business risks as part of the
review to ensure we maintain an effect insurance program covering risk exposures.
The Global Insurance Program encompasses coverages such as directors and officers, property
damage and business interruption, public liability, product liability, employer's liability, personal accident and travel,
advertising, motor and marine.
Human Capital management
1.Leadership Development and Talent Management.
Recruiting, developing and engaging our workforce is critical to executing our strategy and
achieving business success. The board oversees and is updated on the company’s leadership development and talent
management strategies designed to recruit, attract, develop and retain business leaders who can drive financial and
strategic growth objectives and build long-term shareholder value. The board has also reviewed succession plans for
the Chief Executive Officer and his direct reports.
Occupational Health and Safety
2. Culture and Employee Engagement.
We have a legal responsibility to protect the health and safety of our employees, customers and
any other persons who may be affected by our operations. We strive to provide a safe workplace; controlling and
eliminating risks to health and well-being; ensuring that our facilities and the equipment within them are safe and that
the environmental, health and safety procedures are both established and adhered to. We strive to ensure that
dangerous articles and substances are transported, stored and used safely; provide adequate welfare facilities; provide
workers with the information, instruction, training and supervision necessary to preserve and improve their health and
safety; and consult with workers on health and safety matters. The COVID-19 pandemic has not impacted the majority
of our occupational health compliance programs but due to the need to follow local government guidelines, the
programs for the health monitoring of employees have needed to be suspended until such time as government
guidelines will allow the programs to resume safely. This could give rise to an increased risk of health issues of
employees not being picked up in a timely fashion as a result of the programs being suspended.
We aim to meet the European Framework Directive on Safety and Health at Work (89/391 EEC)
ensuring we comply with all the local and European legislation in all the countries we have a presence, ensuring we
share best practices and procedures across our business to continuously improve our safety and environmental
performance whilst driving a positive safety culture.
We have established a Health and Safety Management System modeled on the international
Occupational Health & Safety management system specification ISO 45001. Our manufacturing facilities continue to
strive for accreditation in ISO 45001 and many have already achieved this recognition and many more continue to work
towards it across our network.
Compliance Programs
We have established policies and procedures aimed at compliance with applicable legislation
and regulations, including policies for Anti-Bribery and Corruption as well as Trade Sanctions. In addition, our Code of
Business Principles is designed to ensure compliance with applicable legal and regulatory requirements to drive a
strong compliance culture. A breach of the Code of Business Principles can lead to disciplinary action, including
termination of employment.
The board is keenly interested in ensuring that the company maintains and promotes a culture
that fosters the values, behavior and attributes necessary to advance the company’s business strategy and purpose
and encourage employee engagement and commitment. We regularly seek colleagues views and feedback on how
successfully we are doing this through our annual survey.
3. Human Capital Management
The efficient production of high-quality products and successful execution of our strategy
requires a talented, skilled and engaged team of employees. We aim to give our colleagues training to do their jobs, as
well as opportunities to expand their skills and contributions over time. We are also committed to maintaining a safe
and secure workplace for our employees and have recently set specific safety standards to identify and manage critical
risks. We prohibit workplace discrimination, and we do not tolerate abusive conduct or harassment. We also believe
that respect for human rights is fundamental to our purpose of Serving the World with Better Food and to our
commitment to ethical business conduct. Our code of Business Conduct is set out in our ‘Code of Business Principles’
and is available on our website.
4. Diversity and Inclusion
We believe that fostering a culture of inclusion and belonging strengthens our ability to recruit
talent and allows all of our employees to thrive and succeed. We actively cultivate a culture that acknowledges,
respects and values all dimensions of diversity - including gender, race, sexual orientation, ability, backgrounds and
beliefs. Ensuring diversity of input and perspectives is core to our business strategy, and we are committed to
recruiting, retaining, developing and advancing a workforce that reflects the diversity of the consumers we serve. We
have an active Inclusion plan and are working to embed our culture of inclusion and belonging into our day-to-day
ways of working through: Shine (Support program aimed at improving internal female talent pipeline), a growing
number of networks promoting representation and inclusion and enabling our employees to have space for debate and
growth and continuing with our program of Inclusive leadership and Inclusive hiring training.
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Supporting Our Workforce During the COVID-19 pandemic, Nomad Foods implemented an
C. Organizational Structure
enterprise-wide response to ensure the health and safety of all of our colleagues. In our manufacturing facilities, we
enacted social distancing protocols, temperature checks, enhanced sanitation, mask use and other protective
equipment and practices. Our layered protections, combined with robust contact tracing and exclusion protocols,
enable the continued operation of our manufacturing and distribution facilities without significant disruption. During the
pandemic, our office staff shifted primarily to working remotely as dictated by local conditions.
owned by us. The following table provides a list of all of our significant subsidiaries and country of incorporation.
We (Nomad Foods Limited) are a holding company with 51 subsidiaries, all of which are wholly-
Name
Nomad Foods Europe Holdings Limited
Nomad Foods Europe Holdco Limited
Nomad Foods Europe Finco Limited
Nomad Foods Europe Midco Limited
Nomad Foods Bondco Plc
Nomad Foods Lux S.à.r.l.
Nomad Foods Europe Limited
Birds Eye Limited
Nomad Foods Europe Finance Limited
Birds Eye Ireland Limited
Iglo Holding GmbH
Iglo Nederland B.V.
Iglo Belgium S.A.
Iglo Portugal
Iglo Austria Holdings GmbH
C.S.I. Compagnia Surgelati Italiana S.R.L.
Findus Sverige Holdings AB
Iglo GmbH
Frozen Fish International GmbH
Liberator Germany Newco GmbH
Iglo Austria GmbH
Findus Sverige AB
Frionor Sverige AB
Findus Holdings France SAS
Findus France SAS
Findus Espana SLU
Findus Danmark A/S
Findus Finland Oy
Findus Norge AS
Findus Norge Holding AS
Toppfrys AB
Findus Switzerland AG
LEDO plus d.o.o.
INDUSTRIJA SMRZNUTE HRANE FRIKOM DOO
BEOGRAD
LEDO d.o.o. Čitluk
IRIDA d.o.o.
LEDO Jégkrém és Fagyasztott Élelmiszer Gyártó és
Forgalmazó Korlátolt Felelősségű Társaság
Ledo d.o.o. (LEDO, podjetje za trgovino s sladoledom,
zmrznjeno hrano in storitve, d.o.o.)
Activity
Holding
Holding
Holding
Holding/Finance
Finance
Finance
Management
Trading
Finance
Trading
Holding
Trading
Trading
Trading
Holding
Trading
Holding
Trading
Trading
Property
Trading
Trading
Holding
Holding
Trading
Trading
Trading
Trading
Trading
Holding
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Country of
incorporation
England
England
England
England
England
Luxembourg
England
England
England
Republic of
Ireland
Germany
Netherlands
Belgium
Portugal
Austria
Italy
Sweden
Germany
Germany
Germany
Austria
Sweden
Sweden
France
France
Spain
Denmark
Finland
Norway
Norway
Sweden
Switzerland
Croatia
Serbia
Bosnia &
Herzegovina
Croatia
Hungary
Trading
Slovenia
Ownership as
of December 31,
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
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47
Ledo d.o.o. Podgorica (Društvo Za Proizvodnju, promet roba
i usluga “Ledo” d.o.o. Podgorica)
Ledo Sh.p.k.
FRIKOM BEOGRAD DOOEL Cucer Sandevo
Trading
Trading
Kosovo
North
Macedonia
100%
100%
Trading
Montenegro
100%
D. Property, Plant and Equipment
The following table sets forth information on the main manufacturing sites used by us in our
Production
(ktons)
Utilization %
Freehold/
Leasehold
Freehold
business:
Facility
Belgrade,
Serbia
Boulogne,
France
Bralanda,
Sweden
Bremerhaven,
Germany
Cisterna, Italy
Citluk, Bosnia
&
Herzegovina
Daruvar,
Croatia
Hull, UK
Larvik,
Norway
Loftahammar,
Sweden
Products
Ice cream, Pastry Products,
Vegetables, Fruits
Fish Products
Vegetables
Fish Products
Vegetables, Free Flow Meals, Fish
Fingers, Sofficini
Fish Products, Fruits, Vegetables
Fish Products
Yorkshire Puddings,
Accompaniments & Desserts
Vegetables, Free Flow Meals,
Ready Meals
Bakery Products
Longford, ROI Frozen Pizza Products
Lowestoft, UK
Vegetables, Fish Products,
Poultry, Potato, Beef Burgers
Naas, ROI
Reken,
Germany
Rorschach,
Switzerland
Sesvete,
Croatia
Tonsberg,
Norway
Valladolid,
Spain
Zagreb,
Croatia
Frozen Pizza Products
Vegetables, Free Flow Meals,
Ready Meals, Special Foods
Pancakes, Ready Meals
Fruits, Vegetables
French Fries, Vegetables, Free
Flow Meals
Vegetables, Free Flow Meals,
Ready Meals, Pastry Products,
Pizza
Ice cream, Pastry Products
36
19
10
108
80
2
3
23
8
2
18
127
42
111
5
8
29
17
23
52%
71%
Leasehold
71%
Freehold
97%
Leasehold
77%
Freehold
47%
59%
72%
30%
47%
91%
92%
93%
90%
65%
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Mixed
Freehold
Freehold
Freehold
63%
Leasehold
68%
Leasehold
Footprint
Site: 116,500 m2
Buildings: 8,100 m2
Buildings: 11,000 m2
Site: 80,000m2
Buildings: 40,000m2
Site: 90,000 m2
Buildings: 30,000 m2
Site: 269,560 m2
Buildings: 69,198 m2
Site: 12,694 m2
Buildings: 6,552 m2
Site: 30,223 m2
Buildings: 2,589 m2
Site: 39,000 m2
Buildings: 15,000 m2
Site: 57,968 m2
Buildings: 7,246 m2
Buildings: 5,300 m2
Site: 21,000 m2
Buildings: 6,200 m2
Buildings: 45,000 m2
Site: 99,000 m2
Buildings: 12,000 m2
Site: 20,000 m2
Buildings: 118,000 m2
Site: 43,000 m2
Buildings: 8,500 m2
Site: 11,000 m2
Site: 2,208 m2
Buildings: 11,208 m2
Buildings: 30,000 m2
Site: 58,000 m2
60%
48%
Freehold
Freehold
Buildings: 50,000 m2
Site: 80,000 m2
Site: 23,129 m2
Buildings: 9,739 m2
For more information on property, plant and equipment see Note 12 “Property, plant and
equipment”. We lease our principal executive offices located at No. 1 New Square, Bedfont Lakes Business Park,
Feltham, Middlesex, TW14 8HA, which is 36,549 square feet in size.
Item 4A.
Unresolved Staff Comments
None.
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49
Item 5.
Operating and Financial Review and Prospects
Financings and Acquisitions
The following is a discussion of the financial condition and results of operations for the years
ended December 31, 2021 and 2020. Discussion regarding our financial condition and results of operations for the
year ended December 31, 2020 as compared to the year ended December 31, 2019 is included in Item 5 of our Annual
Report on Form 20-F for the year ended December 31, 2020, filed with the SEC on February 25, 2021 (the "2020 Form
20-F").
Some of the information contained in this discussion and analysis or set forth elsewhere in this
annual report, including information with respect to our plans and strategy for our business and related financing,
includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those
factors set forth in Item 3 Key Information-D. Risk Factors of this annual report, our actual results could differ materially
from the results described in or implied by the forward-looking statements contained in the following discussion and
analysis. This discussion should be read in conjunction with our audited historical consolidated financial statements
and other financial information included elsewhere in this annual report.
The historical financial information has been prepared in accordance with IFRS.
Overview
Nomad operates in the European frozen food market, selling its products primarily to large
grocery retailers either directly or through distribution arrangements primarily in the UK, Italy, Germany, France,
Sweden, and Austria.
The countries representing our top six markets collectively represented approximately 79% of
the total European Savory frozen food markets (in terms of retail sales value) and generated 78% of our revenue in
2021. We also sell our products in Ireland, Austria, Belgium, Finland, Ireland, Portugal, Switzerland, Denmark, The
Netherlands and Spain. The brands under which we sell our products are “Birds Eye”, "Aunt Bessie's" and
"Goodfella's" in the UK and Ireland, "San Marco" in the UK, “Findus” in Italy, France, Spain, Sweden, Switzerland and
Norway, “iglo” in Germany and other continental markets, "Ledo" in south-eastern Europe and "Frikom" in Serbia and
North Macedonia.
We currently operate nineteen manufacturing plants, three in Croatia, two in Germany, two in
Sweden, two in Norway, two in Ireland, two in the UK and one each in Spain, Italy, France, Serbia, Bosnia &
Herzegovina and Switzerland.
COVID-19
With the spread of COVID-19, we have experienced a significant increase in demand and
revenue growth, as consumers have increased their frozen food purchases for in-home consumption. One of our main
objectives as this crisis unfolds is to maintain the availability of our products to meet the needs of our consumers. In
response to increased demand, we have increased production. To date, we have not experienced material disruptions
in our supply chain or operations, although we cannot assure you that this will not occur in the future. We were not
materially affected by mandated lockdowns and other related restrictions and only experienced temporary disruptions
in operations that were not material to our consolidated results for the year ended December 31, 2020 or the year
ended December 31, 2021.
We believe the steps we have taken to enhance our capital structure and liquidity over the last
several years and months have strengthened our ability to operate through current conditions and we have not had to
take any steps to access additional credit or capital as a result of COVID-19.
The business and economic environment is changing rapidly, and additional impacts may arise
that we cannot currently anticipate. While there is still significant uncertainty about the ongoing impacts of the
COVID-19 outbreak on the global economy and on our business, barring material business disruptions in our supply
chain or otherwise or other negative developments discussed in our Risk Factors, including shutdowns of our facilities
or reduced operations due to outbreaks of the virus, we anticipate continuing to meet the demand of consumers for our
frozen food products. We continue to communicate with and support our employees and customers, monitor and take
steps to further safeguard our supply chain, operations, technology and assets, protect our liquidity and financial
position, work toward our strategic priorities and monitor our financial performance as we seek to position the
Company to withstand the current uncertainty related to this pandemic.
On March 22, 2019 we issued 20,000,000 ordinary shares in a public offering at $20.00 per
share for aggregate gross proceeds of $400.0 million (€353.6 million). Directly attributed transaction costs of €11.1
million were incurred.
On March 13, 2020, the Company announced a share repurchase program to purchase up to an
aggregate of $300.0 million of the Company’s ordinary shares. Acquisitions pursuant to the stock repurchase program
may be made from time to time through a combination of open-market repurchases, privately negotiated transactions,
accelerated share repurchase transactions, and/or other derivative transactions. After the announcement, the
Company entered into a series of open-market repurchases. During 2020, 11,913,682 ordinary shares at an average
price of $21.04, for aggregate gross costs of $250.9 million (€217.4 million) had been repurchased and canceled.
Directly attributed transaction costs of €0.2 million were incurred. During 2021, a further 507,396 ordinary shares were
repurchased and cancelled at an average price of $25.29 for aggregate gross costs of $12.8 million (€10.5 million).
On September 15, 2020, the Company repurchased by way of a Dutch auction a total of
18,061,952 shares at a clearing price of $25.50 per share amounting to the purchase price of $460.6 million
(€389.3 million) which was paid to the prevailing shareholders with all shares canceled as of the same date. Directly
attributed transaction costs of €1.9 million were incurred.
On December 31, 2020, we completed the Findus Switzerland AG acquisition for consideration
of €112.8 million which produces and sells frozen food in Switzerland. The deal extends the geographical reach of this
brand, complementing the existing business model. The acquisition also included a production facility in Rorschach,
Switzerland.
On June 24, 2021, the Company amended and restated its Senior Facilities Agreement to
refinance its existing €553.2 million senior secured term loan facility through a new 7-year term facility due 2028 (the
"Senior EUR Loan"), paying interest at a rate equal to the EURIBOR with a zero floor plus a margin of 2.5%, and
replace the existing €80 million revolving credit facility with a new €175 million facility, paying interest rate applicable to
the respective drawn down currency plus 2.25%. Per the restated Senior Facilities Agreement, the Sterling Overnight
Index Average (“SONIA”) has replaced GBP LIBOR and is effective immediately if there is a drawdown on the facility.
The Secured Overnight Financing Rate (“SOFR”) will replace U.S. Dollar LIBOR and Swiss Average Rate Overnight
(“SARON”) will replace CHF LIBOR, when existing benchmark rates are replaced. The revolving credit facility also
includes margin ratchets linked to the future leverage of the Group, and achievement of the ESG linked KPI's.
On June 24, 2021, the Company through its indirect, wholly-owned subsidiary, Nomad Foods
Bondco Plc, repaid the €400.0 million 3.25% senior secured notes due 2024 and completed a private offering of €750.0
million aggregate principal amount of 2.5% senior secured notes due June 24, 2028. Interest on the Notes accrues
from the date of issue and is payable semi-annually in arrears on January 15 and July 15, commencing on January 15,
2022. Subsequent to the Initial Bond Offering, on July 9, 2021 the Company completed a subsequent private offering of
€50.0 million aggregate principal amount of 2.5% senior secured notes due 2028, issued at a price of €100.75.
On August 5, 2021, the Company announced a new share repurchase program to purchase up
to an aggregate of $500.0 million of the Company’s ordinary shares to be executed. Acquisitions pursuant to the stock
repurchase program may be made from time to time through a combination of open market repurchases, privately
negotiated transactions, accelerated share repurchase transactions, and/or other derivative transactions, at the
Company's discretion, as permitted by securities law and other legal requirements. Pursuant to the program, as at
December 31, 2021, 3,090,082 ordinary shares had been repurchased and cancelled at an average price of $24.50,
for aggregate gross costs of $75.8 million (€67.1 million). Directly attributed transaction costs of €0.1 million were
incurred.
On September 30, 2021, the Company announced the completion of the acquisition of the
Fortenova Group’s Frozen Food Business Group (FFBG) for consideration of €640.1 million. FFBG is a leading
European frozen food portfolio operating in attractive markets new to Nomad, including Croatia, Serbia, Bosnia &
Herzegovina, Hungary, Slovenia, Kosovo, North Macedonia and Montenegro. Its two anchor brands, Ledo and Frikom,
have unparalleled consumer awareness and number one market share in many of these markets and offer a broad
range of frozen food products including fish, fruits, vegetables, ready meals, pastry and ice cream.
50
51
Accounting for the Findus Switzerland Acquisition
A. Operating Results
prepared in accordance with IFRS from the date of the acquisition, December 31, 2020.
We have reflected the Findus Switzerland acquisition in our consolidated financial statements
Overview of Results
We have accounted for the acquisition using the purchase method as required by IFRS 3
"Business Combinations" which allows the Company a year after the acquisition date in which to finalize the valuation
of identifiable assets acquired as well as liabilities assumed on the acquisition date. Due to the timing of the
acquisition, the valuation of the business had not been completed within the 2020 Form 20-F, with the difference
between the consideration paid and the book value of assets valued being provisionally allocated to goodwill. The
Company has since completed the exercise, resulting in a corresponding adjustment to Goodwill. These adjustments
have resulted in a restatement of the previously reported Statement of Financial Position as of December 31, 2020 as
disclosed in Note 14 "Acquisitions" within Item 18.
Accounting for the Fortenova Acquisition
accordance with IFRS from the date of the acquisition, September 30, 2021.
We have reflected the Fortenova acquisition in our consolidated financial statements prepared in
We have accounted for the acquisition using the purchase method as required by IFRS 3
"Business Combinations" which allows the Company a year after the acquisition date in which to finalize the valuation
of identifiable assets acquired as well as liabilities assumed on the acquisition date. The Company has performed a
preliminary exercise to fair value the acquired assets and liabilities as disclosed in Note 14 "Acquisitions" within Item
18.
Statement of Income data:
Revenue
Cost of sales
Gross profit
Other operating expenses
Exceptional items
Operating profit
Finance income
Finance costs
Net finance costs
Profit before tax
Taxation
Profit for the period
Year ended
December 31, 2021
Year ended
December 31, 2020
€m
€m
2,606.6
(1,862.3)
2,515.9
(1,753.4)
744.3
(356.3)
(45.3)
342.7
0.1
(106.1)
(106.0)
236.7
(55.7)
181.0
762.5
(382.7)
(20.6)
359.2
4.7
(68.4)
(63.7)
295.5
(70.4)
225.1
Recently Issued and Not Yet Adopted Accounting Pronouncements under IFRS
The table below presents certain additional key performance indicators:
are reported in Note 2 to the Financial Statements.
Information relating to “IFRSs recently issued and not yet adopted” are described in detail and
(€ in millions, except percentages)
Adjusted Gross Margin(1)
Adjusted EBITDA(2)
Adjusted EBITDA Margin(3)
Year ended
December 31, 2021
Year ended
December 31, 2020
€m
€m
28.9 %
486.7
18.7 %
30.3 %
466.8
18.6 %
(1) Adjusted Gross Margin. Represents Adjusted Gross Profit as a percentage of revenue for the relevant period. Adjusted Gross
Profit and Adjusted Gross Margin exclude acquisition purchase price adjustments within cost of goods sold. Adjusted Gross
Profit and Adjusted Gross Margin are non-IFRS financial measures and you should exercise caution in comparing our Adjusted
Gross Profit and Adjusted Gross Margin with similarly titled measures of other companies, as the definition may not be
comparable.
(2) Adjusted EBITDA. EBITDA is profit or loss for the period before taxation, net financing costs, depreciation and amortization.
Adjusted EBITDA is EBITDA adjusted to exclude, when they occur, the impacts of exited markets, acquisition purchase price
adjustments, and exceptional items such as restructuring charges, goodwill and intangible asset impairment charges and other
unusual or non-recurring items. In addition, we exclude other adjustments such as the impact of share-based payment expenses
and related employer payroll taxes, and non-operating M&A related 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. The Company believes Adjusted EBITDA provides important comparability of underlying operating results,
allowing investors and management to assess operating performance on a consistent basis. Accordingly, the information has
been disclosed in this annual report to permit a more complete and comprehensive analysis of our operating performance. You
should exercise caution in comparing our Adjusted EBITDA with similarly titled measures of other companies, as the definition
may not be comparable. Adjusted EBITDA should not be considered as an alternative to profit/(loss) for the period, determined
in accordance with IFRS, as an indicator of the Company’s operating performance.
(3) Adjusted EBITDA Margin. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenue for the relevant
period. Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS measures and you should not consider them an alternative
or substitute to operating profit or operating margin as a measure of operating performance.
52
53
the periods presented:
The following table reconciles revenue to Adjusted Gross Profit and Adjusted Gross Margin for
Revenue
Cost of sales
Gross Profit
Gross Margin (2)
Cost of sales adjustments (3)
Adjusted Gross Profit
Adjusted Gross Margin (4)
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019 (1)
€m
€m
€m
2,606.6
(1,862.3)
2,515.9
(1,753.4)
2,324.3
(1,626.4)
744.3
762.5
697.9
28.6 %
8.4
30.3 %
—
30.0 %
—
752.7
762.5
697.9
28.9 %
30.3 %
30.0 %
(1) The 2020 Form 20-F used Gross Margin as a Key Performance Indicator. Adjusted Gross Margin for the comparative periods
was identical to Gross Margin.
(2) Gross margin represents gross profit as a percentage of revenue for the relevant period.
(3) Cost of sales adjustments relate to acquisition purchase price adjustments within cost of goods sold.
(4) Adjusted Gross Margin represents Adjusted Gross Profit as a percentage of revenue for the relevant period.
follows:
The following table reconciles profit for the period to Adjusted EBITDA for the relevant period as
Profit for the period
Taxation
Net financing costs
Depreciation and amortization
Acquisition purchase price adjustments (1)
Exceptional items (2)
Other add-backs (3)
Adjusted EBITDA
Year ended
December 31,
2021
Year ended
December 31,
2020
€m
€m
181.0
55.7
106.0
71.6
8.4
45.3
18.7
225.1
70.4
63.7
67.6
—
20.6
19.4
486.7
466.8
(1) Relates to acquisition purchase price adjustments within cost of goods sold.
(2) Elimination of exceptional items which management believes are non-recurring and do not have a continuing impact. Details of
what has been identified as exceptional is included in the Results of Operations for each reporting period as set out in this item
and in Item 5 of the 2020 Form 20-F.
(3) Represents the elimination of share-based payment charges and related employer payroll expense of €5.8 million (2020: €12.1
million) and elimination of non-operating M&A related costs, professional fees, transaction costs and purchase accounting
related valuations of €12.9 million (2020: €7.3 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.
Description of Key Line Items and Certain Key Performance Indicators
Set forth below is a brief description of key items from our consolidated statements of
income. For additional information, see Note 3 to our audited consolidated financial statements which appear
elsewhere in this annual report.
Revenue. Revenue is comprised of sales of goods after deduction of discounts and sales taxes.
It does not include sales between Nomad subsidiaries. Discounts given by us include rebates, price reductions and
incentives given to customers, promotional couponing and trade communication costs. At each end date of a reporting
period, any discount incurred, but not yet invoiced, is estimated and accrued. Revenue is recognized when control of
the products has transferred, being when the products are delivered to the customer in accordance with the contractual
arrangements. This is usually upon either the dispatch of a shipment or the delivery of goods to the customer but is
dependent upon contractual terms that have been agreed with a customer. Sales discounts incurred but not yet
invoiced are established based on management’s best estimate at the end of the reporting period.
Cost of Sales. Cost of Sales are comprised of the cost of the inventories and distribution costs.
Cost of inventories includes expenses related to the procurement and purchase of raw materials, as well as conversion
costs including labor costs, depreciation of production assets, fuel, electricity, equipment maintenance and inspection.
Other Operating Expenses. Other operating expenses are comprised of advertising and
promotions and indirect costs. Indirect costs include staff costs, selling and marketing expenses, administration
expenses, research and development expenses, amortization of software, amortization of brands and other expenses.
Exceptional items. The separate reporting of exceptional items which are presented as
exceptional within the relevant income statement category helps provide an indication of our underlying business
performance. Exceptional items have been identified and adjusted by virtue of their size, nature or incidence. In
determining whether an event or transaction is exceptional, management considers quantitative as well as qualitative
factors such as the frequency or predictability of occurrence.
Finance Income. Finance income is comprised of interest income, other financing related
income and net foreign exchange gains on translations of financial assets and liabilities held for financing purposes in
currencies other than the Company’s functional currency.
Finance Costs. Finance costs are comprised of interest expenses, net interest on net defined
pension plan obligations, amortization of borrowing costs, net foreign exchange costs on translations of financial assets
and liabilities held for financing purposes in currencies other than the Company’s functional currency, financing costs
incurred as a result of amendments of debt terms and other financing related costs.
Taxation. Taxation is comprised of current tax expenses and deferred tax movements.
Gross Margin. Gross margin is gross profit as a percentage of revenue.
We also utilize certain additional key performance indicators, as described below. We believe
these measures provide an important alternative measure with which to assess our underlying operating performance
on a constant basis. Our calculation of Adjusted EBITDA and Adjusted EBITDA margin may be different from the
calculations used by other companies and therefore comparability may be limited. Adjusted EBITDA and Adjusted
EBITDA margin are non-IFRS measures and you should not consider them an alternative or substitute to operating
profit or operating margin as a measure of operating performance.
Adjusted Gross Margin. Adjusted Gross Margin represents Adjusted Gross Profit as a
percentage of revenue for the relevant period. Adjusted Gross Profit and Adjusted Gross Margin exclude acquisition
purchase price adjustments within cost of goods sold.
Adjusted EBITDA. Adjusted EBITDA is profit or loss for the period before taxation, net financing
costs, depreciation and amortization, adjusted to exclude, when they occur, the impacts of exited markets, acquisition
purchase price adjustments and exceptional items such as restructuring charges, goodwill and intangible asset
impairment charges and other unusual or non-recurring items. In addition, we exclude other adjustments such as the
impact of share-based payment expenses and related employer payroll taxes, and non-operating M&A related 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. The Company believes Adjusted EBITDA
provides important comparability of underlying operating results, allowing investors and management to assess
operating performance on a consistent basis.
revenue.
Adjusted EBITDA Margin. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of
54
55
Currency
Our consolidated financial statements have been presented in Euro, which is our functional
currency. Unless specifically stated otherwise herein, transactions in foreign currencies have been translated at the
foreign exchange rate at the date of the relevant transaction.
Changes in foreign currency rates have a translation impact on our reported operating results.
A significant portion of our operations have functional currencies other than Euro (including
Pound Sterling, Norwegian Krone, Swedish Krona and Swiss Franc). In preparing our financial statements, translations
in currencies other than our functional currency are recognized at the rates of exchange prevailing at the dates of
transaction. Accordingly, our results for each of the periods presented below have been impacted by fluctuations in
foreign exchange rates. Where material, the impact of translation of currency on results has been provided. For a
discussion on strategies to mitigate the effect of these fluctuations see Note 33 "Financial risk management".
Results of Operations for the Year Ended December 31, 2021 and the Year Ended December 31, 2020
Statement of Income data:
Revenue
Cost of sales
Gross profit
Other operating expenses
Exceptional items
Operating profit
Finance income
Finance costs
Net finance costs
Profit before tax
Taxation
Profit for the period
Year ended
December 31,
2021
Year ended
December 31,
2020
€m
2,606.6
(1,862.3)
744.3
(356.3)
(45.3)
342.7
0.1
(106.1)
(106.0)
236.7
(55.7)
181.0
€m
2,515.9
(1,753.4)
762.5
(382.7)
(20.6)
359.2
4.7
(68.4)
(63.7)
295.5
(70.4)
225.1
Revenue for the year ended December 31, 2021 was €2,606.6 million (year ended December
31, 2020: €2,515.9 million). The 3.6% revenue increase was driven by acquisitions, offset by organic revenue decline
of 2.1%, a measure which excludes the impact of the additional day in the comparative year (Leap Year) and the
impact of translational foreign exchange compared to the year ended December 31, 2020.
Gross profit, defined as revenue less cost of sales, decreased €18.2 million to €744.3 million for
the year ended December 31, 2021 from €762.5 million for the year ended December 31, 2020. The decrease in gross
profit was driven by the increase in revenue and a reduction in gross margin. Gross Margin, defined as gross profit as
a percentage of revenue, reduced by 170 basis points to 28.6% from 30.3% in the year ended December 31, 2020
primarily due to:
•
•
•
•
A 70 basis point decrease relating to the underlying lower margin rates on the acquired
businesses (Findus Switzerland and the Fortenova Acquisition).
A 30 basis point decrease relating to the unwinding of the non-cash fair value uplift of inventory
recorded as part of the Findus Switzerland and Fortenova Acquisitions.
A 10 basis points decrease from pricing, promotional investments and product mix.
A 60 basis points decrease due to cost of goods inflation.
Other operating expenses decreased to €356.3 million for the year ended December 31, 2021
(year ended December 31, 2020: €382.7 million). The decrease of €26.4 million was driven by decreased Advertising
and Promotion linked to the reduction in our organic sales, and by a decrease in Indirect costs as a result of the
Company's employee incentive program.
Exceptional items of €45.3 million were incurred in the year ended December 31, 2021 (year
ended December 31, 2020: €20.6 million). Included in this charge are (i) a charge of €5.0 million from the release of
indemnification assets (year ended December 31, 2020: €17.8 million), (ii) expenses related to integrating the
Fortenova Acquisition of €3.5 million, (iii) expenses for an Information Technology Transformation Program of €4.2
million, (iv) expenses of €4.9 million relating to a factory optimization program which was initiated in 2018 (year ended
December 31, 2020: €10.0 million), (v) expenses related to preparations for, and responding to, changes impacting our
supply chain of the United Kingdom exiting the European Union ("Brexit") of €5.3 million (year ended December 31,
2020: €1.6 million), (vi) expenses associated with a multi-year, enterprise-wide transformation and optimization
program that began in 2020 of €18.8 million (year ended December 31, 2020: €2.3 million), and (vii) expenses related
to the integration of the Findus Switzerland business of €6.2 million (year ended December 31, 2020: €0.3 million). In
the year ended December 31, 2020, expenses of €4.0 million related to integrating the Goodfella's pizza business and
Aunt Bessie's business.
Offsetting these charges are a net income on settlement of legacy matters relating to periods
prior to acquisition of businesses by the Company of €2.6 million (year ended December 31, 2020: income of €2.9
million). In the year ended December 31, 2020 a net income of €12.5 million was recognized on reaching an
agreement to end the leasehold on a cold store in Sweden.
Net finance costs of €106.0 million in the year ended December 31, 2021 (year ended
December 31, 2020: €63.7 million) include €58.2 million of interest payable on long term borrowings, lease liabilities
and other cash pay interest expenses net of hedges (year ended December 31, 2020: €58.1 million), financing costs
incurred in amending terms of debt of €17.9 million, losses on derivatives designated as fair value through profit and
loss of €13.7 million (year ended December 31, 2020: €5.6 million), a net impairment loss on short-term investments of
€8.6 million, a loss of €4.0 million resulting from the translation of foreign currency-denominated financial assets and
liabilities into Euros (year ended December 31, 2020: gain of €4.0 million), €1.7 million of other interest and finance
costs (year ended December 31, 2020: €2.7 million) and a €2.0 million of amortization of capitalized borrowing costs
(year ended December 31, 2020: €2.0 million). This is offset by finance income of €0.1 million (year ended December
31, 2020: €0.7 million).
There was a tax charge in the year ended December 31, 2021 of €55.7 million based on the
underlying taxable profits. A taxation charge of €70.4 million was booked in the year ended December 31, 2020. This
difference is principally caused by lower profits and the impact of the reversal of a deferred tax liability and recognition
of a deferred tax asset due to implementation of a local tax incentive, partly offset by an increase in tax rates on
deferred tax balances and provisions for uncertain tax positions.
As noted in Item 3:D. Risk Factors, the future performance of the business is affected by a range
of governmental economic, fiscal, monetary and political factors. In particular, the duration, spread and intensity of the
COVID-19 pandemic and the outcome of Brexit agreements could have a material impact on the future results of the
business.
B. Liquidity and Capital Resources
Overview
We believe that cash flow from operating activities, available cash and cash equivalents and our
access to our revolving credit facility will be sufficient to fund our liquidity and other requirements for at least the next
12 months. At December 31, 2021, we had €426.4 million of total liquidity, comprising €254.2 million in cash, and
€172.2 million of available borrowings under our revolving credit facility. We also continue to expect to be able to raise
capital through equity and debt offerings to support the strategic aims of the Company when it is advisable to do so and
market conditions allow. In addition, we may enter into working capital related facilities including receivables financing,
reverse factoring and supply chain financing to support the requirements of the business. Our principal liquidity
requirements are for working capital and general corporate purposes, including capital expenditures and debt service,
as well as to identify and effect strategic acquisitions, including the Fortenova Acquisition.
As a holding company, we depend on our receipt of cash dividends from our operating
subsidiaries. For more information, see Item 3D: Key Information - Risk Factors - We are a holding company whose
principal source of operating cash is the income received from our subsidiaries.
56
57
Restricted Cash
Capital Expenditures
Nomad had cash and cash equivalents of €254.2 million at December 31, 2021, of which €0.2
million was restricted. This compares with cash and cash equivalents of €393.2 million at December 31, 2020 of which
€0.1 million was restricted. Cash may be restricted for reasons including, but not limited to collateral as support for
issuance of guarantees.
Cash Flows
Our primary sources of liquidity for the periods reported were cash flow from operations and
financing activities, including: borrowings under credit facilities and high yield notes, together with cash raised through
the issuance of shares. Our liquidity requirements arise primarily from the need to meet debt service requirements, to
fund capital expenditures, to meet working capital requirements and to fund pension and tax obligations. Cash flows
generated from operating activities together with cash flows generated from financing activities, have historically been
sufficient to meet our liquidity needs and are expected to remain so for the foreseeable future.
financing activities for the periods indicated:
The following table summarizes net cash flows with respect to our operating, investing and
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by/(used in) financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at end of the period
Year ended
December 31,
2021
Year ended
December 31,
2020
€m
306.3
(660.0)
214.4
(139.3)
254.2
€m
457.0
(171.4)
(714.8)
(429.2)
382.5
Net Cash Provided by Operating Activities
Net cash provided by operating activities was €306.3 million for the year ended December 31,
2021, was down from €457.0 million for the year ended December 31, 2020. The €150.7 million decrease was primarily
due to working capital changes of €118.2 million, cash flows relating to exceptional items of €48.8 million compared to
€12.1 million in the year ended December 31, 2020, as well as cash flows relating to tax of €95.2 million compared to
€82.9 million in the year ended December 31, 2020. Operating cash flows for the year ended December 31, 2020 were
helped by higher sales and earnings driven by increased demand for frozen food during the COVID-19 pandemic.
Net Cash Used in Investing Activities
Net cash used in investing activities was €660.0 million for the year ended December 31, 2021,
compared to €171.4 million for the year ended December 31, 2020. The outflow in the year ended December 31, 2021
includes €597.3 million related to acquisitions, almost all of which relates to the Fortenova Acquisition as well as capital
expenditures, offset in part by proceeds of €16.5 million from the redemption of investments. The outflow in the year
ended December 31, 2020 includes the purchase of Findus Switzerland for €112.0 million as well as capital
expenditures.
Our capital expenditures as of December 31, 2021 consisted, and in 2022 we expect to consist
of, primarily expenditures for factory capacity expansion and maintenance, cost savings projects, information systems,
innovation, regulatory compliance and other items. Capital expenditure is expected to increase in 2022 as the
Company continues to grow but also due to the ongoing execution of its multi-year business transformation program
which will include the implementation of new systems.
Capital commitments as of December 31, 2021 are not considered to be significant and are
presented within Note 36 “Capital commitments” to our consolidated financial statements in Item 18. The anticipated
source of such funds for such capital expenditures are cash flow from operating activities, available cash and cash
equivalents and our revolving credit facility.
percentage of revenue:
The following table sets forth our capital expenditures for the periods indicated, including as a
Capital expenditures
Capital expenditure as a % of revenue
Trade Receivables - Factoring
Year ended
December 31,
2021
Year ended
December 31,
2020
€m
79.2
3.0%
€m
58.7
2.3%
To assist in managing operating cash flow, we have historically entered into non-recourse
factoring arrangements whereby we may sell specific account receivables to one or more external financial institutions.
Under the terms of such arrangements, the Company may continue to collect the cash from the customer receivables
sold, albeit acting solely as a collecting agent on behalf of the purchaser of receivables. The Company retains no credit
loss exposure to the receivables following sale. As a consequence, the risks and rewards of ownership are considered
to have been transferred at the date of sale. Factoring fees associated with the sale of factored receivables for the year
ended December 31, 2021 were minimal (2020: minimal). All factoring facilities have been cancelled during 2021 and
no receivables were factored at the end of December 31, 2021 (2020: €nil), due to sufficient liquidity resources
available to the Company. However, such facilities may be entered into and continue to be drawn in future periods for
strategic purposes.
Registration Statement
On June 4, 2018, we filed with the SEC an automatic shelf registration statement for well-known
seasoned issuers on Form F-3ASR. This registration statement enables us to issue ordinary shares, preferred shares,
debt securities or warrants, either separately or as units that include any of these securities. Under the rules governing
automatic shelf registration statements, we will file a prospectus supplement and advise the SEC of the amount and
type of securities each time we issue securities under this registration statement. On March 22, 2019, we issued
20,000,000 ordinary shares under this registration statement at $20.00 per share for aggregate gross proceeds of
$400.0 million (€353.6 million).
Net Cash Provided by Financing Activities
Funding and treasury policies
Net cash provided by financing activities was €214.4 million for the year ended December 31,
2021, compared to net cash used of €714.8 million for the year ended December 31, 2020. The net cash inflow in the
year ended December 31, 2021 is primarily the result of refinancing activities in which borrowings saw a net increase
of €391.3 million, offset in part by the payment of €77.6 million for the repurchase of ordinary shares, €22.6 million for
payments related to shares withheld for taxes and financing fees of €18.7 million. The outflow in the year ended
December 31, 2020 relates primarily to the purchase of our ordinary shares of €608.6 million, as well as €19.2 million
for payments related to shares withheld for taxes.
The Company uses centralized financial management to oversee access to financial markets,
monitor and manage financial risks, and control liquid assets. This process is conducted according to a policy that
applies to all group entities. All financial risk management strategies employed are for the purposes of risk mitigation
and not for speculation.
The primary objective of our capital structure management is to maintain a strong financial
profile for investor, creditor and customer confidence, and to support the growth of our business. We believe that the
liquid assets of the Company, together with undrawn credit facilities and projections for future cash flows from
operations, are sufficient to support the Company strategy. Access to external financing markets will be considered if
funds are required other than from free cash flow to support the viability and growth of the business (e.g. supporting
acquisitions).
58
59
Debt
Senior Facilities Agreement
We maintain a syndicated senior facilities agreement with certain finance parties and lenders,
originally dated July 3, 2014, as subsequently amended and restated on June 24, 2021 (the “Senior Facilities
Agreement”). Credit Suisse AG, London Branch, is currently both the facility agent and security agent.
The Senior Facilities Agreement governs our term loan facilities and our revolving credit facility.
Term Loan Facilities
U.S. Dollar Denominated Term Loan Facility
The U.S. Dollar (USD) denominated term loan facility consists of term loans in an aggregate
principal amount of $916.4 million. The USD denominated term loans bear interest at a rate per annum equal to
LIBOR (subject to a zero floor) plus 2.25% per annum. As of December 31, 2021, the amount outstanding under the
USD denominated term loan facility was accruing interest at a rate of 2.25% per annum plus LIBOR (subject to a zero
floor).
The USD denominated term loan facility is fully drawn and matures on May 15, 2024.
Euro Denominated Term Loan Facility
The Euro (EUR) denominated term loan facility consists of term loans in an aggregate principal
amount of €553.2 million. The EUR denominated term loans bear interest at a rate per annum equal to EURIBOR
(subject to a zero floor) plus 2.5% per annum payable at the end of each Interest Period. As of December 31, 2021, the
amount outstanding under the EUR denominated term loan facility was accruing interest at a rate of 2.5% per annum
plus EURIBOR (subject to a zero floor).
The EUR denominated term loan facility is fully drawn and matures on June 24, 2028.
Revolving Credit Facility
The Senior Facilities Agreement provides for an €175.0 million revolving credit facility, of which
up to €50 million can be used for the issuance of letters of credit and other ancillary facilities. The revolving credit
facility matures on June 24, 2026 and bears interest at a rate per annum equal to the underlying reference rate, plus
the applicable margin of 2.25% per annum, payable at the end of each interest period. The Revolving Credit Facility
also includes a margin ratchet linked to the future leverage of the Group and achievement of linked ESG target KPI's.
As of December 31, 2021, there was no cash drawn from the revolving facility, with €2.8 million outstanding by way of
issued letters of credit and bank guarantees.
Indebtedness at December 31, 2021
As of December 31, 2021, we had approximately €2,155.9 million (December 31, 2020:
€1,695.3 million) of indebtedness outstanding under our term loan facilities and no amounts outstanding under our
revolving credit facility, other than €2.8 million (December 31, 2020: €16.1 million) in relation to stand-by letters of credit
and bank guarantees.
Terms of the Senior Facilities Agreement
The Senior Facilities Agreement contains certain customary operating covenants (certain of
which are not applicable depending on the ratio of Consolidated Total Net Debt to Consolidated EBITDA) and other
customary provisions relating to events of default, including non-payment of principal, interest or fees,
misrepresentations, breach of covenants, creditor process, cross default to other indebtedness of the borrowers and its
subsidiaries. If, in respect of any Relevant Period, the aggregate amount of: (i) all Revolving Facility Loans; (ii) drawn
Letters of Credit; and (iii) Ancillary Outstanding’s (but excluding Ancillary Outstanding’s by way of undrawn letters of
credit and undrawn bank guarantees under the relevant Ancillary Facility) calculated as at the last day of each such
Relevant Period, is equal to or exceeds 40% of the Total Revolving Facility Commitments as at such date, Debt Cover
in respect of that Relevant Period shall not exceed 7.25:1. (Each of the foregoing terms is defined in the Senior
Facilities Agreement). As of December 31, 2021, we were in compliance with all financial and other covenants
contained in our Senior Facilities Agreement.
The USD denominated term loans include the requirement to repay 1% of original issued
notional per annum. In addition to the mandatory 1% per annum amortization, the Senior Facilities Agreement also
includes an excess cash flow calculation whereupon an amount of principal shall be repaid based upon terms including
cash generated during the year and Company leverage. As of December 31, 2021, no excess cash is expected to be
paid out in 2022 related to 2021.
Hedging
In order to mitigate underlying foreign exchange exposure, reduce overall interest charge, and
mitigate interest rate risk, the Company has entered into a number of cross-currency interest rate swaps. In exchange
for receiving cash flows in U.S. Dollar matching all of the payments of principal and interest due under the Senior U.S.
Dollar debt, the Company pays fixed amounts of interest and principal on notional amounts of EUR. All USD to EUR
swaps have been designated as a cash flow hedge. During the 2021 reporting period, cross-currency interest rate
swaps that had previously exchanged fixed cash flows in EUR into fixed GBP cash flows and had been designated as
a net investment hedge of the UK business have been extinguished.
As a result of decisions taken by national regulators, GBP LIBOR and certain U.S. Dollar LIBOR
time periods will become phased out at the end of December 2021 and replaced by an alternative reference index
(SONIA and SOFR). There are no current plans to phase out EURIBOR. If EURIBOR ceases to exist, we will need to
renegotiate the interest rate payable on Euro denominated portion of our Senior Facilities Agreement with our lenders
and on the USD LIBOR leg of the cross currency interest rate swaps. Our expectation is that both debt agreements
and hedging contracts will be aligned to the new benchmarks as they become known, and as such it is highly probable
that the existing hedging relationships can be continued. It is expected that the transition to the new benchmarks, to
the extent not already reflected in the current financing facilities, will occur during the amendment and extension of the
U.S. Dollar Term Loan.
Fixed Rate Senior Secured Notes due 2028
On June 24, 2021, the Company through its indirect, wholly-owned subsidiary, Nomad Foods
Bondco Plc, repaid the €400.0 million 3.25% senior secured notes due 2024 and completed a private offering of
€750.0 million aggregate principal amount of 2.5% senior secured notes due June 24, 2028. Interest on the Notes
accrues from the date of issue and is payable semi-annually in arrears on January 15 and July 15, commencing on
January 15, 2022.
On July 9, 2021 the Company announced that Nomad Foods Bondco Plc, an indirect, wholly-
owned subsidiary of the Company, completed its private offering of €50.0 million aggregate principal amount of
additional 2.5% senior secured notes due 2028, representing a tack-on to the €750.0 million aggregate principal
amount of senior secured notes due 2028 issued on June 24, 2021, and issued at a price of €100.75.
The Fixed Rate Senior Secured Notes are currently admitted to the Official List of the
Luxembourg Stock Exchange and for trading on the Euro MTF Market. As of December 31, 2021, we had
€800.0 million of Fixed Rate Senior Secured Notes outstanding.
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The indenture contains customary events of default and customary covenants including
C. Research and development, patents and licenses, etc.
limitations on indebtedness, restricted payments, liens, restrictions on distributions from restricted subsidiaries, sales of
assets and subsidiary stock, affiliate transactions, our activities, such as merger, conveyance, transfer or lease of all or
substantially all of our assets, and compliance requirements with respect to additional guarantees, reporting, additional
intercreditor agreements, payment of notes, withholding taxes, change of control, compliance certificate, payments for
consent and listing requirements. The Fixed Rate Senior Secured Notes are redeemable at our option in whole or in
part on the terms detailed in the indenture.
Intercreditor Agreement
The finance parties under the Senior Facilities Agreement and the holders of the Fixed Rate
Senior Secured Notes share the benefit of a security and guarantee package. The rights and obligations of the senior
creditors and other creditors (including intra-group creditors) between themselves is controlled by an Intercreditor
Agreement originally dated June 3, 2014, as subsequently amended and restated on April 28, 2017.
Pension Plans
We maintain defined benefit pension plans in Germany, Sweden, Switzerland, Italy and Austria
as well as various defined contribution plans in other countries. In addition, an unfunded post-retirement medical plan
is operated in Austria. The defined benefit pension plans are partially funded in Germany and Austria and unfunded in
Sweden and Italy. In Switzerland, the plan obligations are met via a contract with a collective foundation that offers a
fully insured solution to provide a contribution-based cash balance retirement plan. With the exception of Switzerland,
the defined benefit pension plans are closed to new entrants and there is no current requirement to fund the deficit in
any plan. We also maintain various defined contribution pension plans in other countries, the largest of which include
Sweden and the UK. In most countries, long term service awards are in operation.
for the net employee benefit obligations equaled €244.2 million (December 31, 2020: €276.2 million).
For accounting purposes, as of December 31, 2021 (based on the assumptions used), the deficit
For the year ended December 31, 2021 pension costs related to defined benefit, defined
contributions and long-term benefit plans equated to €19.8 million (2020: €17.3 million; 2019: €16.8 million). This
includes all costs related to the pension schemes and other long-term benefits plans as well as associated interest
costs.
statements in Item 18.
For additional information, see Note 23 “Employee benefits” to our consolidated financial
set out in Note 3 and Note 4 to our audited consolidated statements which appear elsewhere in this annual report.
A description of our principal accounting policies, critical accounting estimates and judgments is
Other cash commitments
We are contractually obliged to short and long term commitments regarding raw material
expenditures as well as for purchases of finished or semi-finished products. Agreements with co-packers that require
significant investment from the counterparty are generally negotiated to cover several years of our operational needs.
Furthermore, a high proportion of Advertising and promotional expenditure is negotiated and committed to through
annual contracts. We also have long term service contracts which we have committed to make but which are not yet
payable. These include those for the provision of logistical operations as well as software and IT support which typically
cover a number of years. All of these purchase commitments represent a modest proportion of our annual expenditure.
As of December 31, 2021 these commitments total €723.3 million.
Furthermore, a number of our tangible fixed assets are leased under short and long term
contracts for which a maturity profile is presented within Note 33 “Financial Risk Management” to our consolidated
financial statements in Item 18.
Growing our core through our Must Win Battle strategy is our focus across fish, vegetables and
local battles, e.g., chicken and pizza. Innovation is key to this and we have a strong pipeline of activities. Innovation is
a key driver of growth for our Green Cuisine business, development of meat alternatives. Our focus is to create
competitive advantage through delivery of innovations that leverage science and technology. To achieve this we are
embedding innovation in our strategy and seeking to ensure that technologies are fully protected to maintain
differentiation.
We are committed to ensuring product superiority on all our Must Win battles by focussing on
taste, health and sustainability. We invest in external benchmarking activities to track product performance and
renovation programs are in place to ensure that our core continues to delight our consumers.
To support this, we operate a clear governance process with a “Central Monthly Operating
Review Board” (“CMOR”) which is responsible for reviewing and approving innovations across the Company in our
core areas that stretch across multiple markets. "Local Monthly Operating Reviews" ("LMOR") occur within each
market on areas within local control, e.g. local Must Win Battles. Our research and development team has global and
local teams. This allows us to leverage our investment in research and development across our markets where scale
can be achieved and move fast within individual markets to address local opportunities, thus maximizing our ability to
deliver to consumer needs efficiently.
D. Trend information
may continue to impact, our business, operations and financial performance:
We are subject to the following key industry trends and challenges which have impacted, and
1.
2.
Consumer needs and preferences. Consumer needs within in home meal occasions
drive demand for our products. There are a number of macro trends which impact our
consumer and customers’ needs which impact on us and the frozen food industry as a
whole. These include needs for convenient and tasty meals including ease of meal
preparation; healthy and nutritious meals; and brands that are sustainably sourced
and produced and are otherwise environmentally friendly. In 2021 26% of European
consumers were ‘eco activists’, those who will make choices based on sustainable
credential of a brand, we expect this to rise to 36% by 2026 and 50% by 2029. Our
results of operation depend in large part on the continued appeal of our products and,
given the varying needs and preferences of our consumer base, our ability to offer a
suitable range of products to satisfy a broad spectrum of needs and preferences. For
example, there is a growing trend towards eating healthier and nutritious meals
leading to greater consumption of vegetarian and plant based foods, which resulted in
41% of households in the UK purchasing meat free products in 2021, an increase of
9.9% in 2021, and 16.2% in Germany with an increase of 18.2% in 2021. In order to
address consumer needs and ensure the continued success of our products, we aim
to introduce new products, renovate core products and extend existing product lines
on a timely basis.
Competition. In addition to the competition we face from traditional, well-established
branded frozen food manufacturers, over the last few years we have seen increased
competition from the discounter channel and, during COVID our branded competitors,
consumers looked for the quality and safety of buying well know brand, though we do
expect some shoppers to switch back to discounters as the restriction of COVID and
increases prices, due to inflation, impact all grocery products. The counter of this trend
is the growth of e-commerce and on line purchasing which has accelerated during the
COVID restrictions and we expect this to stay as shoppers enjoy the convenience of
shopping online. In 2021 9.3% of consumer purchases in the retail channel were
online, up 14% compared to 2020. To address this growing trend, we continue to
pursue opportunities to increase our presence in online retailers, particularly in UK and
France, which already have highly developed online sales.
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3.
4.
Shopping Habits. Consumers behaviors/attitudes in the current ‘living with Covid’
phase of the pandemic presents significant opportunities in the Frozen category.
Nielsen estimates that two in three consumers will continue to be financially
‘constrained’ as well as concerns about inflation resulting in more in-home meals and
consumers trading into Frozen to save money. There will continue to be elevated
levels of in-home consumption, primarily driven by hybrid working and the structural
shifts in the adoption of the e-commerce channel and experiential media will continue.
The pre-COVID trends of health and sustainability have accelerated and are rapidly
becoming table stakes for consumers.
Inflation. We are facing unprecedented levels of cost inflation in the market where we
will be taking appropriate pricing actions to cover cost inflation. This is in line with
other Consumer Packaged Goods companies who are forecasting anywhere between
mid-single digit to mid-double digit impact on their cost base in 2022. We have
programs in place across net revenue management and Sales that support this
process but customer retaliation remains a significant risk.
E. Critical Accounting Estimates and Judgments
Information relating to “Critical Accounting Estimates and Judgments” are described in Note 4 to
the Financial Statements. The following is a review of the more significant assumptions and estimates as well as
accounting policies we used to prepare our consolidated financial statements.
Discounts and trade promotions
Discounts given by the Company include rebates, price reductions and incentives given to
customers, promotional couponing and trade communication costs. Each customer has a unique agreement that is
governed by a combination of observable and unobservable performance conditions.
Trade promotions comprise of amounts paid to retailers for programs designed to promote
Company products and include pricing allowances, merchandising funds and customer coupons, which are offered
through various programs to customers and consumers. The ultimate costs of these programs can depend upon
retailer performance and is the subject of significant management estimates. The estimated ultimate cost of the
program is based upon the programs offered, timing of those offers, estimated retailer performance based on history,
management’s experience and current economic trends.
At each financial year end date, any discount or trade promotion expense incurred but not yet
invoiced is estimated and accrued for. In certain cases, the estimate for discounts and trade promotions requires the
use of forecast information for future trading periods and therefore a degree of estimation uncertainty exists. These
estimates are sensitive to variances between actual results and forecasts. The estimate is based on accumulated
experience and the principle that revenue is only recognized to the extent that it is highly probable that a significant
reversal will not occur. Management use judgment when considering when accruals can be released.
Business combinations
The Company is required to recognize separately, at the acquisition date, the identifiable assets,
liabilities and contingent liabilities acquired or assumed in a business combination at their fair values. This involves a
judgment as to what intangible assets can be separately identified as well as an estimate of fair value of all assets and
liabilities acquired. Such estimates are based on valuation techniques, which require considerable estimation in
forecasting future cash flows and developing other assumptions. These estimates are based on information available
on the acquisition date and assumptions that have been deemed reasonable by management.
Significant areas of judgment and estimation include valuing tangible and intangible assets,
including the determination of their remaining useful lives, as well as the consideration of liabilities, including uncertain
tax positions. Where such items are material to the financial statements, we engage third-party valuation firms to assist
in the valuation. The valuation of these assets and liabilities is based on the assumptions and criteria which include, in
some cases, estimates of future cash flows discounted at the appropriate rates. The choice of assumptions and
valuation technique can lead to significant differences in the valuation. We believe that the assumptions and
techniques applied are reasonable based on information available on the date of acquisition.
As disclosed in Note 14 in Item 18, one significant acquisition was made in 2021. The
accounting for this is provisional and will be finalized within twelve months of the acquisition date. During 2021, the
accounting for a significant acquisition made in 2020 was finalized.
Carrying value of goodwill and brands
As of December 31, 2021, the Company has reported Goodwill of €2,099.4 million as well as
indefinite-lived brands of €2,413.0 million. The Company’s goodwill and brand values have been allocated based on
the enterprise value at acquisition of each cash generating unit. Goodwill is monitored at an operating segment level
for which Nomad has one reporting and operating segment, ‘Frozen'. As required by IAS 36 “Impairment of Assets”, an
annual review of the carrying amount of the goodwill and the indefinite life brands is carried out to identify whether
there is any impairment to these carrying values. This is performed in the fourth quarter of each year. A qualitative
review is performed to coincide with all interim reporting periods, which is extended to a full review where indicators of
impairment are identified. Indicators of impairment include a sustained decrease in our market capitalization or
sustained deterioration in any factor that affects profitability, such as market share or competition. The review is
performed using the discounted cash flows model whereby a comparison of the carrying values to the value in use is
made. As there is one reporting and operating segment, value in use is calculated as the net present value of the
projected risk-adjusted cash flows of the Company as a whole.
The estimation of the value in use calculation requires the entity to estimate the future cash
flows expected to arise from the Company and apply a suitable discount rate in order to calculate present value. This
requires us to make assumptions and estimates regarding historical information, future plans and external sources.
Assumptions used are consistent with internal projections and we believe these are comparable to those used by other
participants in the market. Unanticipated changes to the market or wider economy may affect the assumptions made
and lead to reduced cash flows or higher discount rates, which could lead to an impairment being recognized.
The discount rate is calculated using a capital asset pricing model to determine a weighted
average cost of capital expected by a market participant. Observable market data is used, including available
information on comparable companies, such as expected rates of return and equity structure. These variables are
influenced by macroeconomic factors and an increase in these variables could reduce the present values of future
cash flows in the model. A pre-tax discount rate of 6.4% was applied to the cash flows in the 2021 review, as well as a
long-term growth rate of 1.0%. Neither of these assumptions reflect the long-term assumptions used by the Company
for investment planning.
Impairment was not required as at December 31, 2021. Valuations derived from the discounted
cash flow model indicate a sufficient amount of headroom for which any reasonably possible change to key
assumptions is unlikely to result in an impairment of the related goodwill and brands.
Employee benefit obligation
The Group operates a number of defined benefit pension schemes and post-employment benefit
schemes which are valued by estimating the amount of future benefit that employees have earned in return for their
service in the current and prior periods. Each scheme has an actuarial valuation performed and is dependent on a
series of assumptions to estimate the projected obligations. The assumptions include variables which are revised
periodically, that include discount rates, expected salary increases, inflation, employee turnover, retirement age,
mortality and medical care costs. Our assumptions reflect historical experience and management's best judgment
regarding future obligations. The assumptions used affect the current service cost and interest expense as well as
changes in the obligation recognized. Net actuarial gains or losses arising from changes in assumptions and from
experience are recognized in other comprehensive income/(loss).
Since defined benefit pension schemes and post-employment benefit schemes are measured on
a discounted basis, the discount rate applied has an impact on the expense and obligation recognized. These discount
rates are determined by reference to market yields at the end of the reporting period on high quality corporate bonds,
except for Sweden where a deep market does not exist, where mortgage bonds are used. Our significant schemes
operate in Germany and Sweden, where discount rates of 1.1% and 1.8% have been applied. A 1% increase in
discount rates used throughout the Company would decrease the obligation by €54.6 million, whilst a 1% decrease in
discount rates would increase the obligation by €71.9 million. The impact on profit before tax in either scenario is not
significant. Management consider the discount rate to be the most significant assumption. Note 23 in Item 18 contains
additional details on the schemes and obligation, including a sensitivity analysis over other key assumptions.
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Uncertain tax positions
The Company actively seeks to manage tax exposures by proactively engaging with local tax
authorities and applying for Advanced Pricing Agreements where appropriate. Where tax exposures can be quantified,
an accrual for uncertain tax positions is made based on best estimates with regard to the amounts expected to be paid
to the relevant tax authority. Given the inherent uncertainties in assessing the outcomes of these exposures (which can
sometimes be binary in nature), the Company could in future periods experience adjustments to these accruals. The
factors considered include the progress of discussions with the tax authorities and the level of documentary support for
historical positions taken by previous owners.
Item 6.
Directors, Senior Management and Employees
A. Executive Officers and Directors
and positions as of February 17, 2022.
The following table lists each of our executive officers and directors and their respective ages
Name
Sir Martin E. Franklin
Noam Gottesman
Ian G.H. Ashken
Stéfan Descheemaeker
Golnar Khosrowshahi
James E. Lillie
Stuart M. MacFarlane
Victoria Parry
Melanie Stack
Samy Zekhout
Director since
Age
April 4, 2014 57 Co-Chairman
April 4, 2014 60 Co-Chairman
Position
June 16, 2016 61 Director
June 1, 2015 61 Chief Executive Officer and Director
May 4, 2021 50 Director
May 28, 2015 60 Director
May 8, 2019 54 Director
February 16, 2016 56 Director
May 4, 2021 60 Director
April 1, 2018 59 Chief Financial Officer and Director
Set forth below is a brief biography of each of our executive officers and directors.
Sir Martin Ellis Franklin, KGCN, our co-founder and co-Chairman is the founder and CEO of
Mariposa Capital, LLC, a Miami-based family investment firm focused on long-term value creation across various
industries, and Chairman and controlling shareholder of Royal Oak Enterprises, LLC. Sir Martin is also the Founder
and Executive Chairman of Element Solutions Inc, and co-Chairman of APi Group Corporation. Sir Martin was the co-
founder and Chairman of Jarden Corporation (“Jarden”) from 2001 until April 2016 when Jarden merged with Newell
Brands Inc (“Newell”). Sir Martin became Chairman and Chief Executive Officer of Jarden in 2001, and served as
Chairman and Chief Executive Officer until 2011, at which time he began service as Executive Chairman. Prior to
founding Jarden in 2001, Sir Martin served as the Chairman and/or Chief Executive Officer of three public companies:
Benson Eyecare Corporation, Lumen Technologies, Inc., and Bollé Inc. between 1992 and 2000. In the last five years,
Sir Martin served as a director of the following public companies: Newell and Restaurant Brands International Inc.
Noam Gottesman, our co-founder and co-Chairman is the Founder and Managing Partner of
TOMS Capital LLC, which he founded in 2012. Mr. Gottesman is also co-CEO and director and founder of Go
Acquisition Corp., a Delaware blank check company. Mr. Gottesman serves as a non-executive director of Radius
Global Infrastructure Inc. (previously known as Digital Landscape Group, Inc. and prior to that known as Landscape
Acquisition Holdings Limited), a global aggregator of real property interests underlying wireless telecommunications
cell sites. Mr. Gottesman was the co-founder of GLG Partners Inc. and its predecessor entities where he served in
various chief executive capacities until January 2012. Mr. Gottesman served as GLG’s chief executive officer from
September 2000 until September 2005, and then as its co-chief executive officer from September 2005 until January
2012. Mr. Gottesman was also chairman of the board of GLG following its merger with Freedom Acquisition Holdings
Inc. and prior to its acquisition by Man Group plc. Mr. Gottesman co-founded GLG as a division of Lehman Brothers
International (Europe) in 1995 where he was a Managing Director. Prior to 1995, Mr. Gottesman was an executive
director of Goldman Sachs International, where he managed global equity portfolios in the private client group.
Ian G.H. Ashken serves as a director of APi Group Corporation (since 2017) and Element
Solutions Inc. (since 2013). Previously, he was the co-founder of Jarden and served as its Vice Chairman and
President until the consummation of Jarden’s business combination with Newell in April 2016. Mr. Ashken was
appointed to the Jarden board on June 25, 2001 and served as Vice Chairman, Chief Financial Officer and Secretary
from September 24, 2001. Mr. Ashken was Secretary of Jarden until February 15, 2007 and Chief Financial Officer until
June 12, 2014. Prior to Jarden, Mr. Ashken served as the Vice Chairman and/or Chief Financial Officer of three public
companies, Benson Eyecare Corporation, Lumen Technologies, Inc. and Bollé Inc. between 1992 and 2000. Mr.
Ashken is also a director or trustee of a number of private companies and charitable institutions. During the last five
years, Mr. Ashken also previously served as a director of Newell.
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Stéfan Descheemaeker was appointed as the Chief Executive Officer of the Company on
June 1, 2015. He was previously at Delhaize Group SA, the international food retailer, where he was Chief Financial
Officer between 2008 and 2011 before becoming Chief Executive Officer of its European division until October 2013.
Since leaving Delhaize Group SA, Mr. Descheemaeker held board positions with Telenet Group Holdings N.V. and
Group Psychologies, served as an industry advisor to Bain Capital and is currently a professor at the Université Libre
de Bruxelles. Between 1996 and 2008, Mr. Descheemaeker was at Interbrew (now Anheuser-Busch InBev "ABInBev")
where he was Head of Strategy & External Growth responsible for managing M&A and strategy, during the time of the
merger of Interbrew and AmBev in 2004, and prior to that he held operational management roles as Zone President in
the U.S., Central and Eastern Europe, and Western Europe. Mr. Descheemaeker started his career with Cobepa, at
that time the Benelux investment company of BNP-Paribas. Mr. Descheemaeker served as a Director on the Board of
ABInBev, a position he has held from 2008 to 2019. Since June 2019, SDS Invest S.A represented by Mr.
Descheemaeker has served as Chairman of the Board of Verlinvest.
Golnar Khosrowshahi has served as the Chief Executive Officer of Reservoir, an award-
winning independent music company based in New York with offices in Los Angeles, Nashville, London, Toronto, and
Abu Dhabi, since July 2007. Prior to that, Ms. Khosrowshahi worked in a number of different roles in advertising,
design and experiential marketing, including as the Global Brand Manager at Euro RSCG, a division of Havas
Advertising, for Fortune 500 companies such as Philips Electronics and MCI Telecommunications. Ms. Khosrowshahi
serves as a Director on the board of Restaurant Brands International, as current Director and former Board Chair at
Silkroad, a musical collective founded by cellist Yo-Yo Ma in 1998 (since September 2013), and as a Director on the
Board of the National Music Publishers Association, a trade association representing all American music publishers
and their songwriting partners (since June 2015). She also served on the Steering Committee for the Asia Society’s
Triennial of Asia and the ASCAP Board of Review.
James E. Lillie has served as co-Chairman of APi Group Corporation since October 2019, and
previously served as its director from October 2017. Mr. Lillie has also served on the board of directors of Tiffany & Co.
from February 2017 to January 2021. He served as Jarden’s Chief Executive Officer from June 2011 until the
consummation of Jarden’s business combination with Newell in April 2016. He joined Jarden in 2003 as Chief
Operating Officer and was named President in 2004 and CEO in June 2011. From 2000 to 2003, Mr. Lillie served as
Executive Vice President of Operations at Moore Corporation, Limited. From 1999 to 2000, he served as Executive
Vice President of Operations at Walter Industries, Inc., a Kohlberg, Kravis, Roberts & Company (KKR) portfolio
company. From 1990 to 1999, Mr. Lillie held a succession of senior level management positions across a variety of
disciplines including human resources, manufacturing, finance and operations at World Color, Inc., another KKR
portfolio company.
Stuart M. MacFarlane joined the Whitbread Beer Company in 1992, which was later acquired
by Interbrew and, subsequently ABInBev. At ABInBev, Mr. MacFarlane held various senior roles throughout the course
of his career, including in Finance, Marketing, Sales and as Managing Director for the company’s business in Ireland.
He was appointed President of ABInBev UK & Ireland in 2008 and in 2012 became a member of the Executive Board
of Management, serving as President of Central & Eastern Europe. Mr. MacFarlane most recently served as ABInBev’s
President of a combined Europe & Middle East from 2014 to May 2019. Mr. MacFarlane served as a director and
member of the Corporate Governance Committee of Anadolu EFES, a brewer company, until May 28, 2019. He
previously served as a director of ABI-EFES Russia & Ukraine, a joint venture of Anadolu EFES and ABInBev. Mr.
MacFarlane has a degree in Business Studies from Sheffield University in the UK and is also a qualified Chartered
Management Accountant.
Victoria Parry was Global Head of Product Legal for Man Group plc until April 2013 and now
acts as an independent non-executive director to the funds industry. Prior to the merger of Man Group plc with GLG
Partners, Inc. in 2010, she was Senior Legal Counsel for GLG Partners LP. Ms. Parry joined Lehman Brothers
International (Europe) in April 1996 where she was Legal Counsel with responsibility for inter alia the activities of the
GLG Partners division and left Lehman Brothers in September 2000 upon the establishment of GLG Partners LP. Prior
to joining Lehman Brothers in 1996 Ms. Parry practiced as a solicitor with a leading London based firm of
solicitors. Ms. Parry graduated from University College Cardiff, with a LLB (Hons) in 1986. Ms. Parry is a non-practicing
solicitor and a member of the Law Society of England and Wales. Ms. Parry is a director of a number of other
companies.
Melanie Stack Melanie Stack has served as President and Chief Executive Officer of Ideal
Protein, a medically-based weight-loss company, since November 2018. Prior to joining Ideal Protein, Ms. Stack served
as President EMEA of Newell Home Fragrance Division from May 2014 to September 2018. Prior to that, Ms. Stack
served as a Non-Executive Director of Bromley Healthcare, a leading provider of community health services in the
United Kingdom, from May 2013 to May 2014, in various roles at Weight Watchers International, a leading provider of
weight management services, from December 2003 to May 2013, ran the UK-based toy, game and trading card
operations for Hasbro, Inc. from January 2002 to November 2003 and served as the Vice President for
WeightWatchers.com from November 2000 to January 2002. Prior to joining WeightWatchers.com, Ms. Stack was
Managing Director, Hedstrom, U.K. from August 1998 to October 2000, and from July 1989 to July 1998 she held
various marketing positions at Mattel UK Ltd., including Group Marketing Director. Ms. Stack is a business graduate of
Manchester Metropolitan University.
Samy Zekhout has served as Chief Financial Officer of Nomad since April 1, 2018. Prior to
joining the Company, Mr. Zekhout most recently served as CFO and Vice President of Global Grooming at Procter &
Gamble since 2007. Mr. Zekhout has held various finance roles at Procter & Gamble throughout the course of his more
than 30-year career at that company. From February 2021, Mr Zekhout became a board member of Algama, a French
food-tech start-up.
B. Compensation of Executive Officers and Directors
This section sets forth for the year ended December 31, 2021: (i) the compensation and benefits
provided to our executive officers, (ii) a brief description of the bonus programs in which our executive officers
participated, and (iii) the total amounts set aside for pension, retirement and similar benefits for our executive officers.
This section also describes the Nomad Foods Amended and Restated Long Term 2015 Incentive Plan (“LTIP”)
including a summary of the material terms of the LTIP, a description of current executive employment agreements and
equity awards granted thereunder, and a description of our director compensation program.
Executive Compensation
Executive Officer Compensation and Benefits for the year ended December 31, 2021
For the year ended December 31, 2021, Nomad’s executive officers received total
compensation, including base salary, cash and equity bonus, and certain perquisites, equal to €4.0 million in the
aggregate.
Pension, Retirement and Similar Benefits
Our executive officers who participate in our money purchase pension plans do so on generally
the same terms as our other employees. The aggregate amount of the employer contributions to this plan for our
executive officers during the year ended December 31, 2021 was less than €0.1 million.
Employment Agreements
Chief Executive Officer. Stéfan Descheemaeker was appointed as the Chief Executive Officer of
the Company and as a Director of the Company effective on June 1, 2015. He entered into his Service Agreement with
us on June 17, 2015. He entered into a new Service Agreement with the Company on May 1, 2020. Under the
agreement, Mr. Descheemaeker will receive an annual salary that will be reviewed, but not necessarily increased, on
an annual basis. Mr. Descheemaeker's salary was reviewed in 2021 resulting in an increased salary of £784,000.
Mr. Descheemaeker is entitled to receive the following benefits under the terms of his agreement:
(a) an annual contribution of 10% of his salary paid either to a pension plan or to
Mr. Descheemaeker directly (as he so directs);
(b) eligibility for performance-related discretionary cash bonuses (target performance equating to
100% of salary), subject to the achievement of financial and other performance targets as the
Company may decide;
(c) the Company will annually advise Mr. Descheemaeker by letter of the award that he will be
granted under the Company's Long Term Incentive Plan (as amended, the "LTIP") in the third
year following the date of such letter (subject to the LTIP and vesting and performance
provisions); and
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(d) an annual car allowance of £14,400, death in service benefit (three times salary), group income
Performance conditions
protection (offering 75% of base salary less £5,000) and family medical insurance.
We have the right to place Mr. Descheemaeker on paid leave for up to six months of his 12
month notice period. Mr. Descheemaeker is subject to confidentiality provisions and to non-competition and non-
solicitation restrictive covenants for a period of between six and 12 months after the termination of his employment,
subject to an off-set for paid leave. We may terminate Mr. Descheemaeker’s employment at any time by serving a
notice stating that we will pay to Mr. Descheemaeker within 14 days a sum equal to the basic salary (as at the date of
the employment agreement), pension payment and car allowance in lieu of any required period of notice less certain
deductions. We may also terminate Mr. Descheemaeker’s employment agreement without any payment of
compensation, damages, payment in lieu of notice or otherwise under certain circumstances, including, among other
things, gross misconduct, material breach of the terms of such agreement or charge or conviction of a criminal offence.
Chief Financial Officer. Samy Zekhout was appointed as the Chief Financial Officer of the
Company and as a Director of the Company effective on April 1, 2018. He entered into his Service Agreement with us
on February 15, 2018. Under the agreement, Mr. Zekhout will receive an annual salary that will be reviewed, but not
necessarily increased, on an annual basis. A review took place in February 2021, with a base salary increase of 2.47%
effective April 1, 2021, which took his annual salary to £457,000. Mr. Zekhout was or is entitled to receive the following
benefits under the terms of his agreement:
The vesting of Awards will be subject to conditions determined by the Committee. The current
policy of the Committee is for vesting to be both time-based and related to the financial performance of the
Company. Generally, the vesting period (i.e. the period over which performance is to be measured) will be between
three and five years, and the ordinary shares subject to the Award will vest subject to the participant remaining an
employee of the Company and any performance targets relating to the Award having been fulfilled (and in some
circumstances an Award will lapse on the participant giving or receiving notice).
Permitted dilution
No Award may be granted on any date if, as a result, the total number of ordinary shares issued
or remaining issuable pursuant to Awards or options granted in the previous ten years under the LTIP or any other
employees’ share plan operated by the Company would exceed 10% of the issued ordinary share capital of the
Company on that date.
Awards may at the discretion of the Committee be satisfied out of new issue shares, treasury
shares or shares provided out of an employee trust. Ordinary shares issued will rank pari passu with ordinary shares in
issue at that time, save in relation to rights arising by reference to a record date before the date of issue. Participants
will not be entitled to votes or dividends on the ordinary shares subject to Awards until such Awards vest.
(a) an annual contribution of 10% of his base salary, paid either to a pension plan or to Mr. Zekhout
directly (as he so directs);
Early vesting
(b) eligibility for performance-related discretionary cash bonuses (up to 100% of salary with an
opportunity to increase this to 200% depending on business performance), subject to the
achievement of financial and other performance targets as the Company may decide;
(c) a one-time award of 300,000 ordinary shares as incentive compensation under the Company's
LTIP, subject to performance-based vesting conditions and the other terms and conditions set
forth in a share grant award agreement; and
(d) an annual car allowance of £13,200, death in service benefit (three times salary), group income
protection (offering 75% of base salary less £5,000) and family medical insurance.
We have the right to place Mr. Zekhout on paid leave for his notice period. Mr. Zekhout is subject
to confidentiality provisions and to non-competition and non-solicitation restrictive covenants for a period of 12 months
after the termination of his employment, subject to an off-set for paid leave. We have the right to terminate Mr.
Zekhout’s employment at any time by serving a notice stating that we will pay to Mr. Zekhout within 14 days a sum
equal to the basic salary (as at the date of the employment agreement), in lieu of any required period of notice less
certain deductions. We also have the right to terminate Mr. Zekhout’s employment agreement without any payment of
compensation, damages, payment in lieu of notice or otherwise under certain circumstances, including, among other
things, gross misconduct, material breach of the terms of such agreement or charge or conviction of a criminal offence.
Nomad Foods Limited Amended and Restated Long Term 2015 Incentive Plan (“LTIP”)
Eligibility
Unless otherwise determined by the Committee, if a participant ceases to be employed by the
Company due to death, disability, or otherwise as a good leaver, as determined by the Committee Awards will vest to
the extent performance targets (adapted, if necessary, at the discretion of the Committee, to take into account the
shortened vesting period) have been achieved and subject to the Committee’s discretion to waive the performance
targets in whole or in part. If a participant ceases employment for any other reason their Award(s) will lapse to the
extent unvested at the date of cessation.
Change of Control
Unless otherwise determined by the Committee, in the event of a Change of Control or winding
up of the Company (including by reason of an offer or scheme of arrangement), Awards will vest in accordance with the
performance targets applied at the date of the Change of Control, subject to the Committee’s discretion to waive such
targets in whole or in part.
Variation in share capital
The Committee may make such adjustments to Awards as it considers appropriate to preserve
their value in the event of any variation in the ordinary share capital of the Company or to take account of any
demerger or special dividend paid (or similar event which materially affects the market price of ordinary shares).
Amendments
The Committee may amend the LTIP as it considers appropriate, subject to the written consent
of participants to changes to their disadvantage to existing Awards. Shareholder approval is required to increase the
permitted dilution limits.
The LTIP is discretionary and will enable the Compensation Committee to make grants
(“Awards”) to any director or employee of the Company, although the current intention of the Committee is that Awards
be granted only to directors and senior management.
General
Benefits under the LTIP will not be pensionable. Awards are not transferable except to the
Awards
participant’s personal representatives on death.
Under the LTIP, the Committee or Board may grant Awards in the form of rights over ordinary
shares. Where an Award vests, the participant will receive ordinary shares free and clear of any restrictions, other than
those imposed by applicable securities laws.
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Director Compensation
In 2021, each of our non-executive directors (other than Messrs. Gottesman and Franklin)
received, and are entitled to receive in 2021, $50,000 per year together with an annual restricted stock grant issued
under the LTIP equal to $100,000 of ordinary shares valued at the date of issue, which vest on the earlier of the date of
the following year’s annual meeting of shareholders or 12 months from the issuance date. For those Directors who are
members of board committees, each member is entitled to receive an additional $2,000 per year. The chairman of the
Audit Committee, currently, is entitled to receive $10,000 per year and the chairmen of the Compensation and
Nominating and Corporate Governance Committees, currently and respectively, are entitled to receive $7,500 per year.
Messrs. Gottesman and Franklin will not receive a fee in relation to their services as Directors.
reimbursed by us for travel, hotel and other expenses incurred by them in the course of their directors’ duties.
Director fees are payable quarterly in arrears. In addition, all of the Directors are entitled to be
C.
Board Practices
Board Composition and Election of Directors
with respect to the compensation of other executive officers, reviewing our incentive compensation and other equity-
based plans, and reviewing, on a periodic basis, director compensation.
Nominating and Corporate Governance Committee
As of December 31, 2021, our Nominating and Corporate Governance Committee (the “N&CG
Committee”) consisted of three directors: Lord Myners, Ms. Parry, and Mr. Lillie and Lord Myners served as its
chairman.
Our N&CG Committee is responsible for considering and making recommendations to the board
of directors in respect of appointments to the board. The responsibility of our N&CG Committee as set forth in its
Charter include the following: recommending directors to the board to serve as members of each committee,
developing and recommending a set of corporate governance principles applicable to our company and overseeing
board evaluations. It is also responsible for regularly reviewing the structure, size and composition of the board and
making recommendations to the board with regard to any changes it deems necessary.
D. Employees
Our board of directors currently consists of ten members. Our Memorandum and Articles of
As of December 31, 2021, we had approximately 8,002 employees, including 684 temporary
Association provides that our board of directors must be composed of at least one director. The number of directors is
determined from time to time by resolution of our board of directors. Messrs. Gottesman and Franklin serve as Co-
Chairmen of our board of directors. The Co-Chairmen have primary responsibility for providing leadership and
guidance to our board and for managing the affairs of our board. Lord Myners served as our lead independent director
until his passing in January 2022. Our board of directors expects to name a new lead independent director in 2022.
staff. In addition, we employed approximately 826 agency workers in 2021. We source the majority of our temporary
workers from agencies to allow us to quickly respond and adapt to production demands. Approximately 70% of our
employees work in our manufacturing operations, with the remaining employees involved in sales, marketing, finance,
administration, procurement, logistics, product development, IT and other areas. Following are the number of
employees by region for the last three years:
Pursuant to our Memorandum and Articles of Association, our directors are appointed at the
annual meeting of shareholders for a one-year term, with each director serving until the annual meeting of
shareholders following their election. In addition, for so long as an initial holder of Founder Preferred Shares holds 20%
or more of the Founder Preferred Shares in issue, such holder is entitled to nominate, and the directors are required to
appoint, a person as director. For additional information regarding our board of directors, see Item 6A: Directors, Senior
Management and Employees - Executive Officers and Directors.
Our non-executive directors do not have service contracts with us or any of our subsidiaries
providing for benefits upon termination of employment.
Committees of the Board of Directors
Committee and a Nominating and Corporate Governance Committee.
Our board of directors has three standing committees: an Audit Committee, a Compensation
Audit Committee
As of December 31, 2021, our Audit Committee consisted of three directors: Messrs. Lillie,
Ashken and MacFarlane, and Mr. Lillie served as its chairman. Our Audit Committee is responsible for, among other
things, assisting the board of directors in its oversight of the integrity of our financial statements, of our compliance with
legal and regulatory requirements, and of the independence, qualifications and performance of our independent
auditors. In addition, it focuses on compliance with accounting policies and ensuring that an effective system of internal
and external audit and financial controls is maintained, and oversees our policies and procedures with respect to risk
assessment and risk management. Our Audit Committee will meet at least quarterly with management and the
independent auditors and report on such meetings to the board of directors. The responsibilities of our Audit Committee
as set forth in its charter include oversight of the following: external audit, financial reporting, public disclosure, internal
controls, risk management and compliance and whistleblowing.
Compensation Committee
Region
Germany
United Kingdom
Serbia
Croatia
Italy
Sweden/Norway
Bosnia & Herzegovina
France
Other
Total
2021
1,437
1,389
1,302
853
494
378
348
333
1,468
8,002
2020
1,374
1,333
—
—
479
397
—
343
964
4,890
2019
1,412
1,222
—
—
478
421
—
345
897
4,775
A number of our employees are members of trade unions in the UK, Germany, Italy, France,
Sweden, Norway or Spain. Trade union membership is not required to be disclosed by employees. Many of our plants
are governed by collective agreements with the respective unions. Our relationships with the trade unions are currently
stable.
E. Share Ownership
beneficial ownership of our ordinary shares by:
The following table sets forth, as of February 17, 2022, certain information regarding the
•
•
•
each of our current directors;
each of our named executive officers for the fiscal year ended December 31, 2021; and
all of our current directors and current executive officers as a group.
Percentages are based on the 172,398,626 ordinary shares that were issued and outstanding on
As of December 31, 2021, our Compensation Committee consisted of three directors: Mr.
Ashken, Lord Myners and Ms. Parry, and Mr. Ashken served as its chairman. Our Compensation Committee is
responsible for determining the compensation of our executive officers. The responsibilities of our Compensation
Committee as set forth in its charter include the following: assisting the board in evaluating potential candidates for
executive positions, determining the compensation of our chief executive officer, making recommendations to the board
February 17, 2022.
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73
Director and Executive Officers:
Sir Martin E. Franklin
Noam Gottesman
Ian G.H. Ashken
Stéfan Descheemaeker
Golnar Khosrowshahi
James E. Lillie
Stuart MacFarlane
Victoria Parry
Melanie Stack
Samy Zekhout
Directors and Executive Officers as a Group (10 persons)
Number
11,983,617 (1)
12,818,221 (2)
425,656 (3)
3,742,401 (4)
— (5)
783,810 (6)
5,455 (7)
19,437 (8)
— (9)
16,393 (10)
29,794,990
Percentage
7.0
7.4
*
2.2
*
*
*
*
*
*
17.3
*
(1)
(2)
(3)
(4)
(5)
(6)
Represents beneficial ownership of less than one percent of ordinary shares outstanding.
Consists of (i) 6,392,212 ordinary shares held indirectly through the Martin E. Franklin Revocable Trust, (ii)
750,000 Founder Preferred Shares held indirectly through Mariposa Acquisition II, LLC (which are convertible
at any time at the option of the holder into ordinary shares on a one-for-one basis) , (iii) 3,353,751 ordinary
shares held indirectly through RSMA, LLC and (iv) 1,209,466 ordinary shares held by other members of
Mariposa Acquisition II, LLC, respectively, which Sir Martin has the sole power to vote pursuant to irrevocable
proxy agreements. In addition, Sir Martin indirectly owns 69% of Mariposa Acquisition II, representing 517,500
Founder Preferred Shares. Sir Martin disclaims beneficial ownership of such shares except to the extent of his
pecuniary interest therein.
Includes (i) 9,496,772 ordinary shares of which 1,273,560 are held by TOMS Acquisition I LLC, 6,708,560 are
held by TOMS Capital Investments LLC and 1,514,652 are held indirectly by Mr. Gottesman through a wholly
owned entity, (ii) 750,000 Founder Preferred Shares which are convertible at any time at the option of the
holder into ordinary shares on a one-for-one basis and all of which are held by TOMS Acquisition I LLC (iii) an
aggregate of 1,821,449 ordinary shares held by the members of TOMS Acquisition I LLC that are subject to an
irrevocable proxy agreement granted to Mr. Gottesman and (iv) 750,000 ordinary shares held by Lavender
Fiduciary Management Inc., as a trustee of various trusts established by certain members of TOMS Acquisition
I LLC, that are subject to an irrevocable proxy agreement granted to Mr. Gottesman. Mr. Gottesman is the
managing member and majority owner of TOMS Acquisition I LLC and TOMS Capital Investments LLC and
may be considered to have beneficial ownership of TOMS Acquisition I LLC’s and TOMS Capital Investments
LLC’s interests in the Company. In addition, Mr. Gottesman owns or controls, directly or indirectly, 77.5% of
TOMS Acquisition I LLC and 100% of TOMS Capital Investments LLC. Mr. Gottesman disclaims beneficial
ownership of such shares except to the extent of his pecuniary interest therein.
Includes (i) 421,065 ordinary shares held by Tasburgh, LLC and (ii) 4,591 held by The Ian G.H. Ashken Living
Trust of which Mr. Ashken is the sole settlor and trustee, all of which are subject to an irrevocable proxy
agreement granted to Sir Martin (see note 1 above). Mr. Ashken is the Managing Manager of Tasburgh, LLC.
Excludes an indirect pecuniary interest in 56,250 Founder Preferred Shares (which are convertible at any time
at the option of the holder into ordinary shares on a one-for-one basis) held by Mariposa Acquisition II, LLC.
Also excludes 3,537 ordinary shares issuable under currently outstanding equity awards issued under the LTIP,
all of which will vest on the earlier of (i) the date of the Company’s annual meeting of shareholders in 2022 or
(ii) July 30, 2022.
Includes 2,543,897 ordinary shares held indirectly through Olidipoli Sprl, a company owned by
Mr. Descheemaeker. Excludes (i) 300,000 ordinary shares issuable under the LTIP which will vest on February
1, 2023 and (ii) 300,000 ordinary shares issuable under the LTIP, which will vest on February 1, 2024, both of
which will vest subject to performance based vesting conditions (and in each of cases (i) and (ii), subject to
further vesting conditions relating to Mr. Descheemaeker’s tenure as Chief Executive Officer).
Excludes 3,537 ordinary shares issuable under currently outstanding equity awards issued under the LTIP, all
of which will vest on the earlier of (i) the date of the Company’s annual meeting of shareholders in 2022 or (ii)
July 30, 2022.
Includes 783,810 ordinary shares held directly by Mr. Lillie and his spouse, all of which are subject to an
irrevocable proxy agreement granted to Sir Martin (see note 1 above). Excludes an indirect pecuniary interest
in 56,250 Founder Preferred Shares (which are convertible at any time at the option of the holder into ordinary
shares on a one-for-one basis) held by Mariposa Acquisition II, LLC. Also excludes 3,537 ordinary shares
issuable under currently outstanding equity awards issued under the LTIP, all of which will vest on the earlier of
(i) the date of the Company’s annual meeting of shareholders in 2022 or (ii) July 30, 2022.
(7)
(8)
(9)
Excludes 3,537 ordinary shares issuable under currently outstanding equity awards issued under the LTIP, all
of which will vest on the earlier of (i) the date of the Company’s annual meeting of shareholders in 2022 or (ii)
July 30, 2022.
Excludes 3,537 ordinary shares issuable under currently outstanding equity awards issued under the LTIP, all
of which will vest on the earlier of (i) the date of the Company’s annual meeting of shareholders in 2022 or (ii)
July 30, 2022.
Excludes 3,537 ordinary shares issuable under currently outstanding equity awards issued under the LTIP, all
of which will vest on the earlier of (i) the date of the Company’s annual meeting of shareholders in 2022 or (ii)
July 30, 2022.
(10)
Excludes 273,750 ordinary shares issuable under the LTIP, which will vest subject to performance based
vesting conditions (and subject to further vesting conditions relating to Mr. Zekhout's tenure as Chief Financial
Officer).
There are no arrangements for involving the employees in the capital of the Company, including
any arrangement that involves the issue or grant of options or shares or securities of the Company, other than those
described under Item 6. Directors, Senior Management and Employees—B. Compensation of Executive Officers and
Directors—Nomad Foods Limited Amended and Restated Long Term 2015 Incentive Plan (“LTIP").
Item 7.
Major Shareholders and Related Party Transactions
A.
Major Shareholders
The following table sets forth certain information regarding the beneficial ownership of our
ordinary shares by each person known by us to be a beneficial owner of more than 5% of the ordinary
shares. Currently we only have one class of listed shares issued and outstanding, that being ordinary shares, which
have no par value. All of our ordinary shares have the same voting rights. Percentages are based on the 172,398,626
ordinary shares that were issued and outstanding on February 17, 2022.
Name of Beneficial Owner:
5% Shareholders:
Wellington Management Group LLP
c/o Wellington Management Company LLP
280 Congress Street
Boston, MA 02210
Noam Gottesman
c/o TOMS Acquisition I LLC
450 W. 14th Street, 13th Floor
New York, NY 10014
Martin E. Franklin
c/o Mariposa Capital, LLC
500 South Pointe Drive, Suite 240
Miami Beach, FL 33139
Allspring Global Investments Holdings, LLC
420 Montgomery Street
San Francisco, CA 94163
FMR LLC
245 Summer Street
Boston, MA 02210
Ordinary Shares Beneficially
Owned
Number
Percentage
14,073,168 (1)
12,818,221 (2)
11,983,617 (3)
9,899,243 (4)
9,132,956 (5)
8.2
7.4
7.0
5.7
5.3
74
75
(1)
(2)
(3)
(4)
(5)
Based on a Schedule 13G/A filed by Wellington Management Group LLP on February 4, 2022
Based on a Schedule 13D/A filed by Mr. Gottesman, TOMS Acquisition I LLC and the other reporting persons
described therein on May 25, 2021.
Based on a Schedule 13D/A filed by Sir Martin Franklin, Martin E. Franklin Revocable Trust and the other
reporting persons described therein on January 6, 2021.
Based on a Schedule 13G filed by Allspring Global Investments Holdings, LLC on January 18, 2022.g
Based on a Schedule 13G filed by FMR LLC on February 9, 2022
Item 8.
Financial Information
A. Consolidated Statements and Other Financial Information
Financial Statements
Please see Item 18 below.
On January 18, 2022, Allspring Global Investments Holdings, LLC filed a Schedule 13G to report
Export Sales
that it beneficially owned 5.61% of our ordinary shares. Prior to its sale on November, 1, 2021, Allspring Global
Investments Holdings, LLC was a subsidiary of Wells Fargo & Company, and prior to that date, its holdings were
included on Schedules 13G filed by Wells Fargo & Company, LLC.
ownership in our ordinary shares decreased from 5.47% to 0.11% as of January 27, 2022.
On January 27, 2022, Wells Fargo & Company filed a Schedule 13G/A to report that its
On February 4, 2022, Wellington Management Group LLP filed a Schedule 13G/A to report that
its percentage ownership in our ordinary shares increased from 7.33% as of February 4, 2021 to 7.98% as of February
4, 2022.
of our ordinary shares.
On February 9, 2022, FMR LLC filed a Schedule 13G to report that it beneficially owned 5.17%
As of February 17, 2022, (i) approximately 172,354,384 of our outstanding ordinary shares were
held by one United States record holder (Cede and Company) and (ii) all 1,500,000 of our outstanding preferred
shares (Founder Preferred Shares), which have the same voting rights as the ordinary shares, were held in equal
amounts by two United States record holders (Mariposa Acquisition II, LLC and TOMS Acquisition I LLC).
percentage ownership of our ordinary shares during the three years ended December 31, 2021.
Except for the foregoing, no major shareholder has disclosed a significant change in its
B.
Related Party Transactions
consolidated financial statements which appear elsewhere in this annual report.
For a description of our related party transactions, see Note 37, Related Parties, to our audited
On January 1, 2022, the Company entered into an Amended and Restated Advisory Services
Agreement with Mariposa Capital, LLC, an affiliate of Sir Martin, and TOMS Capital LLC, an affiliate of Mr. Gottesman.
Pursuant to the terms of the Amended and Restated Advisory Services Agreement, Mariposa Capital, LLC and TOMS
Capital LLC provide high-level strategic advice and guidance to the Company. Under the terms of the Amended and
Restated Advisory Services Agreement, Mariposa Capital, LLC and TOMS Capital LLC are entitled to receive an
aggregate annual fee equal to $4.0 million, payable in quarterly installments. This agreement expires on January 1st
annually and will be automatically renewed for successive one-year terms unless any party notifies the other parties in
writing of its intention not to renew the agreement no later than 90 days prior to the expiration of the term. The
agreement may only be terminated by the Company upon a vote of a majority of its directors. In the event that the
agreement is terminated by the Company, the effective date of the termination will be 6 months following the expiration
of the initial term or a renewal term, as the case may be.
Related Party Transactions Procedures
The Audit Committee Charter provides that the Audit Committee shall review all related party
transactions, as defined under Item 404 of Regulation S-K under the Securities Act of 1933, as amended. Following
such review, the Audit Committee determines whether such transaction should be approved based on the terms of the
transaction, the business purpose for the transaction and whether the transaction is in the best interest of the Company
and its shareholders.
No member of the Audit Committee shall participate in any review, consideration or approval of
any related party transaction with respect to which such member or any of his or her immediate family members is the
related party.
information - External revenue by geography in Item 18, Note 5 below.
For a description of our export sales which constitute all of our sales, please see Geographical
Legal Proceedings
We are not currently subject to any legal proceedings, nor to the best of our knowledge, is any
proceeding threatened, the results of which would have a material impact on our properties, results of operation, or
financial condition. Tax audits are taking place in a number of countries. Whenever there is a difference in view
between local tax authorities and the Company, to the extent deemed necessary, provisions are made for exposures
for which it will be probable that they will lead to additional tax liabilities. To the best of our knowledge, none of our
officers or directors is involved in any legal proceedings in which we are an adverse party.
Dividend Policy
We have not declared or paid any dividends on our ordinary shares since our inception on
April 1, 2014, and have no current plans to pay dividends on our ordinary shares. The declaration and payment of
future dividends to holders of our ordinary shares will be at the discretion of our board of directors and will depend
upon many factors, including our financial condition, earnings, legal requirements, restrictions in our debt agreements
and other factors deemed relevant by our board of directors. In addition, as a holding company, our ability to pay
dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our
ability to pay dividends as a result of the laws of their respective jurisdictions of organization, agreements of our
subsidiaries or covenants under future indebtedness that we or they may incur. See Item 3D: Key Information - Risk
Factors - Risks Related to our Ordinary Shares - Dividend payments on our ordinary shares are not expected, and for
a discussion of taxation of any dividends, see Item 10E: Additional Information - Taxation.
The Founder Preferred Shares are entitled to receive an annual stock dividend based on the
market price of our ordinary shares if such market price exceeds certain trading price minimums and to participate in
any dividends on the ordinary shares. For the year ended December 31, 2021, no Founder Preferred Shares Annual
Dividend Amount was payable pursuant to the terms of the Founder Preferred Shares. For the year ended
December 31, 2020, we approved a 2020 Founder Preferred Share Dividend in an aggregate of 3,875,036 ordinary
shares. The dividend price used to calculate the 2020 Founder Preferred Shares Annual Dividend Amount was
$25.2127 and the Ordinary Shares were issued on January 2, 2020. For the year ended December 31, 2019, we
approved a 2019 Founder Preferred Share Dividend in an aggregate of 6,421,074 ordinary shares. The dividend price
used to calculate the 2019 Founder preferred Shares Annual Dividend Amount was $21.7289 (calculated based upon
the volume weighted average price for the last ten trading days of 2019) and the Ordinary Shares were issued on
January 2, 2019. In 2022, the Founder Preferred Shares Annual Dividend Amount will be calculated based upon the
volume weighted average price for the last ten trading days of the year and the appreciated average share price
compared to the highest price previously used in calculating the Founder Preferred Shares Annual Dividend
Amount. We currently expect to retain all our future earnings for use in the operation and expansion of our business
and do not anticipate paying any cash dividends for the foreseeable future. The declaration and payment of future
dividends to holders of our ordinary shares will be at the discretion of our board of directors and will depend upon many
factors, including our financial condition, earnings, legal requirements, and restrictions in our debt agreements,
including the Senior Facility Agreement, and other factors deemed relevant by our board of directors. As a holding
company, our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which
may further restrict our ability to pay dividends as a result of the laws of their respective jurisdictions of organization,
agreements of our subsidiaries or covenants under future indebtedness that we or they may incur. Furthermore, under
British Virgin Islands law, we may pay dividends to our shareholders only if, immediately after the dividend, the value of
our assets would exceed our liabilities and we would be able to pay our debts as they fall due.
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77
B.
Significant Changes
No significant change has occurred since the date of the annual financial statements included in
this annual report.
Item 9.
The Offer and Listing
A. Offer and Listing Details
Our ordinary shares are currently listed for trading on the NYSE under the symbol “NOMD”.
There is no public market for our preferred shares and the preferred shares will not be listed for
trading on any exchange.
Item 10.
Additional Information
A. Share Capital
Not applicable.
B. Memorandum and Articles of Association
A copy of our Memorandum and Articles of Association have been previously filed as Exhibit
99.1 to our Report of Foreign Private Issuer on Form 6-K (File No. 001-37669), filed with the SEC on January 14, 2016,
and is incorporated by reference into this annual report. The information called for by this Item 10B: Additional
Information - Memorandum and Articles of Association has been reported previously in our Registration Statement on
Form F-3 (File No. 333-225402), filed with the SEC on June 4, 2018 (the “Registration Statement”), under the heading
“Description of Share Capital,” and is incorporated by reference into this annual report. There are no limitations on the
rights to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights on
the securities imposed by the laws of the British Virgin Islands or by our Memorandum.
C. Material Contracts
Each material contract to which the Company has been a party for the preceding two years,
other than those entered into in the ordinary course of business, is listed as an exhibit to the Registration Statement
and is summarized elsewhere herein.
D. Exchange Controls
We are not aware of any governmental laws, decrees, regulations or other legislation in the
British Virgin Islands that restrict the export or import of capital, including the availability of cash and cash equivalents
for use by our affiliated companies, or that affect the remittance of dividends, interest or other payments to non-resident
holders of our securities.
E. Taxation
U.S. Federal Income Taxation
General
The following discussion is a summary of certain U.S. federal income tax issues relevant to the
acquisition, holding and disposition of the ordinary shares. Additional tax issues may exist that are not addressed in
this discussion and that could affect the U.S. federal income tax treatment of the acquisition, holding and disposition of
the ordinary shares.
This discussion does not address any tax consequences other than U.S. federal income tax
consequences, such as U.S. state and local tax consequences, U.S. estate and gift tax consequences, or non-U.S. tax
consequences. The discussion applies, unless indicated otherwise, only to holders of ordinary shares who acquire the
ordinary shares as capital assets. It does not address special classes of holders that may be subject to different
treatment under the Internal Revenue Code of 1986, as amended (the “Code”), such as:
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certain financial institutions, insurance companies, underwriters, real estate investment
trusts, or regulated investment companies;
controlled foreign corporations or passive foreign investment companies;
dealers and traders in securities;
persons holding ordinary shares as part of a hedge, straddle, conversion or other
integrated transaction;
partnerships or other entities or arrangements classified as partnerships for U.S. federal
income tax purposes;
persons liable for the alternative minimum tax;
tax-exempt organizations, qualified retirement plans, individual retirement accounts, or
other tax-deferred accounts;
certain U.S. expatriates or former long-term residents of the United States;
a person that is required to accelerate the recognition of any item of gross income with
respect to ordinary shares as a result of such income being recognized on an applicable
financial statement;
a person that acquired ordinary shares as compensation for services;
persons holding ordinary shares that own or are deemed to own 10 percent or more (by
vote or value) of the Company’s stock; or
persons that do not use the U.S. Dollar as their functional currency.
This section is based on the Code, its legislative history, existing and proposed Treasury
regulations, published rulings by the Internal Revenue Service (“IRS”) and court decisions, all as currently in effect.
These laws are subject to change, possibly on a retroactive basis. Holders of ordinary shares should consult their own
tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of acquiring, holding and
disposing of ordinary shares in their particular circumstances.
As used herein, a “U.S. Holder” is a beneficial owner of ordinary shares that is, for U.S. federal
income tax purposes: (i) an individual who is a citizen or resident of the United States; (ii) a corporation or other entity
taxable as a corporation, created or organized in or under the laws of the United States or any political subdivision
thereof; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a
trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust
and one or more “United States persons” (within the meaning of the Code) have the authority to control all substantial
decisions of the trust, or (2) it has a valid election in effect under applicable Treasury regulations to be treated as a
“United States person”.
This discussion does not consider the tax treatment of partnerships or other pass-through
entities that hold ordinary shares, or of persons who hold ordinary shares through such entities. If a partnership (or
other entity or arrangement classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of
ordinary shares, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the
status of the partner and the activities of the partnership.
This discussion is based upon certain understandings and assumptions with respect to the
business, assets and shareholders, including that the Company is not, does not expect to become, nor at any time has
been, a controlled foreign corporation as defined in Section 957 of the Code (a “CFC”). The Company believes that it is
not and has never been a CFC, and does not expect to become a CFC. In the event that one or more of such
understandings and assumptions proves to be inaccurate, the following discussion may not apply, and material
adverse U.S. federal income tax consequences may result to U.S. Holders.
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Passive Foreign Investment Company (“PFIC”) Considerations
Company is considered a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes.
The U.S. federal income tax treatment of U.S. Holders will differ depending on whether the
In general, the Company will be considered a PFIC for any taxable year in which: (i) 75 percent
or more of its gross income consists of passive income; or (ii) 50 percent or more of the average quarterly market value
of its assets in that year are assets (including cash) that produce, or are held for the production of, passive income. For
purposes of the above calculations, if the Company, directly or indirectly, owns at least 25 percent by value of the stock
of another corporation, then the Company generally would be treated as if it held its proportionate share of the assets
of such other corporation and received directly its proportionate share of the income of such other corporation. Passive
income generally includes, among other things, dividends, interest, rents, royalties, certain gains from the sale of stock
and securities, and certain other investment income.
Based on the current and anticipated composition of the income, assets and operations of the
Company and its subsidiaries, the Company believes that it will not be a PFIC in its current taxable year and is not
likely to be a PFIC in future taxable years. However, there is no assurance that the Company will not be a PFIC in any
taxable year because PFIC status is factual in nature, depends upon factors not wholly within the Company's control,
generally cannot be determined until the close of the taxable year in question, and is determined annually. If the
Company is a PFIC for any taxable year during which a U.S. Holder holds (or, in the case of a lower-tier PFIC, is
deemed to hold) its ordinary shares, such U.S. Holder will be subject to significant adverse U.S. federal income tax
rules. U.S. Holders should consult their tax advisors on the U.S. federal income tax consequences of the Company
being treated as a PFIC.
Tax Consequences for U.S. Holders if the Company is not a PFIC
Dividends
In general, subject to the PFIC rules discussed above, a distribution on an ordinary share will
constitute a dividend for U.S. federal income tax purposes to the extent that it is made from the Company’s current or
accumulated earnings and profits as determined under U.S. federal income tax principles. If a distribution exceeds the
Company’s current and accumulated earnings and profits, it will be treated as a non-taxable reduction of basis to the
extent of the U.S. Holder’s tax basis in the ordinary share on which it is paid, and to the extent it exceeds that basis it
will be treated as capital gain. For purposes of this discussion, the term “dividend” means a distribution that constitutes
a dividend for U.S. federal income tax purposes. However, it is not expected that the Company will maintain
calculations of its earnings and profits in accordance with U.S. federal income tax principles. U.S. Holders should
therefore assume that any distribution by the Company with respect to the Company’s ordinary shares will be reported
as dividend income. U.S. Holders should consult their own tax advisors with respect to the appropriate U.S. federal
income tax treatment of any distribution received from the Company.
The gross amount of any dividend on an ordinary share (which will include the amount of any
foreign taxes withheld) generally will be subject to U.S. federal income tax as foreign source dividend income, and
generally will not be eligible for the corporate dividends received deduction allowed to corporations in respect of
dividends received from U.S. corporations. The amount of a dividend paid in foreign currency will be its value in U.S.
Dollars based on the prevailing spot market exchange rate in effect on the day the U.S. Holder receives the dividend. A
U.S. Holder will have a tax basis in any distributed foreign currency equal to its U.S. Dollar amount on the date of
receipt, and any gain or loss realized on a subsequent conversion or other disposition of foreign currency generally will
be treated as U.S. source ordinary income or loss. If dividends paid in foreign currency are converted into U.S. Dollars
on the date they are received by a U.S. Holder, the U.S. Holder generally should not be required to recognize foreign
currency gain or loss in respect of the dividend income.
Subject to certain exceptions for short-term and hedged positions, a dividend that a non-
corporate holder receives on an ordinary share will be subject to a maximum federal income tax rate of 20 percent if
the dividend is a “qualified dividend” not including the Medicare Contribution Tax described below. A dividend on an
ordinary share will be a qualified dividend if (i) either (a) the ordinary shares are readily tradable on an established
market in the United States or (b) the Company is eligible for the benefits of a comprehensive income tax treaty with
the United States that the Secretary of the Treasury determines is satisfactory for purposes of these rules and that
includes an exchange of information program, and (ii) the Company was not, in the year prior to the year the dividend
was paid, and is not, in the year the dividend is paid, a PFIC. Since the ordinary shares are listed on the New York
Stock Exchange, the ordinary shares should be treated as readily tradable on an established securities market in the
United States. Even if dividends on the ordinary shares would otherwise be eligible for qualified dividend treatment, in
order to qualify for the reduced qualified dividend tax rates, a non-corporate holder must hold the ordinary share on
which a dividend is paid for more than 60 days during the 120-day period beginning 60 days before the ex-dividend
date, disregarding for this purpose any period during which the non-corporate holder has an option to sell, is under a
contractual obligation to sell or has made (and not closed) a short sale of substantially identical stock or securities, is
the grantor of an option to buy substantially identical stock or securities or, pursuant to Treasury regulations, has
diminished its risk of loss by holding one or more other positions with respect to substantially similar or related property.
In addition, to qualify for the reduced qualified dividend tax rates, the non-corporate holder must not be obligated to
make related payments with respect to positions in substantially similar or related property. Payments in lieu of
dividends from short sales or other similar transactions will not qualify for the reduced qualified dividend tax rates.
A non-corporate holder that receives an extraordinary dividend eligible for the reduced qualified
dividend rates must treat any loss on the sale of the stock as a long-term capital loss to the extent of the dividend. For
purposes of determining the amount of a non-corporate holder’s deductible investment interest expense, a dividend is
treated as investment income only if the non-corporate holder elects to treat the dividend as not eligible for the reduced
qualified dividend tax rates. Special limitations on foreign tax credits with respect to dividends subject to the reduced
qualified dividend tax rates apply to reflect the reduced rates of tax.
The U.S. Treasury has announced its intention to promulgate rules pursuant to which non-
corporate holders of stock of non-U.S. corporations, and intermediaries through whom the stock is held, will be
permitted to rely on certifications from issuers to establish that dividends are treated as qualified dividends. Because
those procedures have not yet been issued, it is not clear whether the Company will be able to comply with them.
Non-corporate holders of ordinary shares are urged to consult their own tax advisers regarding
the availability of the reduced qualified dividend tax rates with respect to dividends received on the ordinary shares in
light of their own particular circumstances.
Capital Gains
Subject to the PFIC rules discussed above, on a sale or other taxable disposition of an ordinary
share, a U.S. Holder will recognize capital gain or loss in an amount equal to the difference between the U.S. Holder’s
adjusted basis in the ordinary share and the amount realized on the sale or other disposition, each determined in U.S.
Dollars. Such capital gain or loss will be long-term capital gain or loss if at the time of the sale or other taxable
disposition the ordinary share has been held for more than one year. In general, any adjusted net capital gain of an
individual is subject to a maximum federal income tax rate of 20 percent, not including the Medicare Contribution Tax,
discussed below. Capital gains recognized by corporate U.S. holders generally are subject to U.S. federal income tax
at the same rate as ordinary income. The deductibility of capital losses is subject to limitations.
Any gain a U.S. Holder recognizes generally will be U.S. source income for U.S. foreign tax
credit purposes, and, subject to certain exceptions, any loss will generally be a U.S. source loss. If a non-U.S. income
tax is paid on a sale or other disposition of an ordinary share, the amount realized will include the gross amount of the
proceeds of that sale or disposition before deduction of the non-U.S. tax. The generally applicable limitations under
U.S. federal income tax law on crediting foreign income taxes may preclude a U.S. Holder from obtaining a foreign tax
credit for any non-U.S. tax paid on a sale or other disposition of an ordinary share. The rules relating to the
determination of the foreign tax credit are complex, and U.S. holders are urged to consult with their own tax advisers
regarding the application of such rules. Alternatively, any non-U.S. income tax paid on the sale or other disposition of
an ordinary share may be taken as a deduction against taxable income, provided the U.S. Holder takes a deduction
and not a credit for all foreign income taxes paid or accrued in the same taxable year.
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Medicare Contribution Tax
Dividends received with respect to ordinary shares and capital gains from the sale or other
taxable disposition of the ordinary shares recognized by certain non-corporate U.S. Holders will be includable in
computing net investment income of such U.S. Holder for purposes of the 3.8 percent Medicare Contribution Tax.
Tax Consequences for Non-U.S. Holders of Ordinary Shares
As used herein, a "non-U.S. Holder" is a beneficial owner of ordinary shares that is neither a
U.S. Holder nor a partnership (or entity or arrangement classified as a partnership) for U.S. federal income tax
purposes.
Dividends
A non-U.S. Holder generally will not be subject to U.S. federal income tax or withholding on
dividends received from the Company with respect to ordinary shares, other than in certain specific circumstances
where such income is deemed effectively connected with the conduct by the non-U.S. Holder of a trade or business in
the United States. If a non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to those
dividends, that income is generally subject to U.S. federal income tax only if it is attributable to a permanent
establishment maintained by the non-U.S. Holder in the United States. A non-U.S. Holder that is subject to U.S. federal
income tax on dividend income under the foregoing exception generally will be taxed with respect to such dividend
income on a net basis in the same manner as a U.S. Holder unless otherwise provided in an applicable income tax
treaty; a non-U.S. Holder that is a corporation for U.S. federal income tax purposes may also be subject to a branch
profits tax with respect to such dividend income at a rate of 30 percent (or at a reduced rate under an applicable
income tax treaty).
Sale, Exchange or Other Taxable Disposition of Ordinary Shares
respect to any gain recognized on a sale, exchange or other taxable disposition of ordinary shares unless:
A non-U.S. Holder generally will not be subject to U.S. federal income tax or withholding with
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the gain is treated as effectively connected with the conduct by the non-U.S. Holder of a
trade or business in the United States (and, if an applicable income tax treaty so requires,
such gain is attributable to a permanent establishment maintained by the non-U.S. Holder
in the United States); or
the non-U.S. Holder is an individual and is present in the United States for 183 or more
days in the taxable year of the sale, exchange or other taxable disposition, and meets
certain other requirements.
If the first exception applies, the non-U.S. Holder generally will be subject to U.S. federal income
tax with respect to such gain on a net basis in the same manner as a U.S. Holder unless otherwise provided in an
applicable income tax treaty; a non-U.S. Holder that is a corporation for U.S. federal income tax purposes may also be
subject to a branch profits tax with respect to such gain at a rate of 30 percent (or at a reduced rate under an
applicable income tax treaty). If the second exception applies, the non-U.S. Holder generally will be subject to U.S.
federal income tax at a rate of 30 percent (or at a reduced rate under an applicable income tax treaty) on the amount
by which such non-U.S. Holder’s capital gains allocable to U.S. sources exceed capital losses allocable to U.S.
sources during the taxable year of disposition of the ordinary shares.
Information Reporting and Backup Withholding
Under U.S. federal income tax laws, certain categories of U.S. Holders must file information
returns with respect to their investment in, or involvement in, a foreign corporation (including IRS Forms 926). Persons
who are required to file these information returns and fail to do so may be subject to substantial penalties. Pursuant to
Section 1298(f) of the Code, for any year in which the Company is a PFIC, each U.S. Holder will be required to file an
information statement, Form 8621, regarding such U.S. Holder’s ownership interest in the Company. U.S. Holders of
ordinary shares should consult with their own tax advisers regarding the requirements of filing information returns.
Furthermore, certain U.S. Holders who are individuals and to the extent provided in future
regulations, certain entities, will be required to report information with respect to such U.S. Holder’s investment in
“foreign financial assets” on IRS Form 8938. An interest in the Company constitutes a foreign financial asset for these
purposes. Persons who are required to report foreign financial assets and fail to do so may be subject to substantial
penalties. Potential shareholders are urged to consult with their own tax advisers regarding the foreign financial asset
reporting obligations and their application to an investment in ordinary shares.
Payments of dividends and sales proceeds that are made within the United States or through
certain U.S.-related financial intermediaries generally are subject to information reporting and to backup withholding
unless the U.S. Holder is a corporation or other exempt recipient, or, in the case of backup withholding, the U.S. Holder
provides a correct taxpayer identification number and certifies that no loss of exemption from backup withholding has
occurred. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against
the U.S. Holder’s U.S. federal income tax liability and may entitle such U.S. Holder to a refund, provided that the
required information is furnished to the IRS.
Non-U.S. Holders generally are not subject to information reporting or backup withholding with
respect to dividends paid on ordinary shares, or the proceeds from the sale, exchange or other disposition of ordinary
shares, provided that each such non-U.S. Holder certifies as to its foreign status on the applicable duly executed IRS
Form W-8 or otherwise establishes an exemption.
Foreign Account Tax Compliance Act
Under certain circumstances, the Company or its paying agent may be required, pursuant to the
Foreign Account Tax Compliance Act ("FATCA"), to withhold U.S. tax at a 30 percent rate on all or a portion of
payments of dividends or other corporate distributions to holders of ordinary shares that are treated as "foreign pass-
thru payments" made on or after the date that is two years after the issuance of final regulations concerning such
foreign pass-thru payments are published, if such payments are not in compliance with FATCA. Such regulations have
not yet been issued. The rules regarding FATCA and "foreign pass-thru payments," including the treatment of proceeds
from the disposition of ordinary shares, are complex and holders of ordinary shares are encouraged to consult their
own tax advisers regarding the impact of the FATCA rules on them.
This summary is for general information only and it is not intended to be, nor should it be construed to be, tax
or legal advice to any prospective shareholder. Further, this summary is not intended to constitute a complete
analysis of all U.S. federal income tax consequences relating to holders of their acquisition, ownership and
disposition of the ordinary shares. Accordingly, prospective holders of ordinary shares should consult their
own tax advisers about the U.S. federal, state, local and non-U.S. tax consequences of the acquisition,
ownership and disposition of the ordinary shares.
British Virgin Islands Taxation
The Company
We are not subject to any income, withholding or capital gains taxes in the British Virgin
Islands. No capital or stamp duties are levied in the British Virgin Islands on the issue, transfer or redemption of
ordinary shares.
Shareholders
Shareholders who are not tax resident in the British Virgin Islands will not be subject to any
income, withholding or capital gains taxes in the British Virgin Islands, with respect to the ordinary shares of the
Company owned by them and dividends received on such ordinary shares, nor will they be subject to any estate or
inheritance taxes in the British Virgin Islands.
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United Kingdom Taxation
General
The following is a general summary of material UK tax considerations relating to the ownership
and disposal of our ordinary shares. The comments set out below are based on current UK tax law as of the date of
this summary, which is subject to change, possibly with retrospective effect. This summary does not constitute legal or
tax advice and applies only to shareholders holding our ordinary shares as an investment and who are the beneficial
owners thereof, whose ordinary shares are not held through an individual savings account or a self-invested personal
pension and who have not acquired their or another person’s ordinary shares by reason of their or another person’s
employment. These comments may not apply to certain classes of persons, including dealers in securities, insurance
companies and collective investment schemes.
For a shareholder within the charge to UK corporation tax, a disposal (or deemed disposal) of
ordinary shares may give rise to a chargeable gain or allowable loss for the purposes of UK corporation
tax. Corporation tax is charged on chargeable gains at the rate applicable to that company, subject to any available
exemption or relief. Indexation allowance may reduce the amount of chargeable gain that is subject to corporation tax
(but may not give rise to or increase an allowable loss). No indexation allowance is available in respect of any period of
ownership falling after December 2017.
Dividends on Ordinary Shares
shares.
No UK tax will be withheld or deducted at source from dividends paid by us on our ordinary
Shareholders who are resident in the UK for tax purposes may, subject to their individual
This summary is for general information only and is not intended to be, nor should it be
circumstances, be liable to UK income tax or, as the case may be, UK corporation tax on dividends paid to them by us.
considered to be, legal or tax advice to any particular investor. It does not address all of the tax considerations that
may be relevant to specific investors in light of their particular circumstances or to investors subject to special
treatment under UK tax law. Potential investors should consult their own tax advisers concerning the overall tax
consequences of acquiring, holding and disposing of our ordinary shares in their particular circumstances.
The Company
UK and therefore became resident in the UK for UK taxation purposes.
As previously stated, on January 12, 2016, we became centrally managed and controlled in the
The UK Government has introduced an annual dividend tax allowance per tax year. For the year
ended April 5, 2021, it is £2,000. If and to the extent that an individual shareholder who is subject to UK income tax
receives dividends in each tax year which, in aggregate, do not exceed that allowance, the individual will not be liable
to UK income tax on those dividends. If and to the extent that an individual shareholder who is subject to UK income
tax receives dividends in each tax year which, in aggregate, exceed that allowance, the individual will be subject to UK
income tax on those dividends at the rate of 7.5% (in the case of basic rate taxpayers), 32.5% (in the case of higher
rate taxpayers) and 38.1% (in the case of additional rate taxpayers), and the individual will not be entitled to any tax
credit in respect of those dividends.
Accordingly, since that date, we are subject to UK taxation on our income and gains, except
where an exemption applies. Dividend income will generally be exempt from UK corporation tax on income if certain
conditions are met.
Shareholders who are within the charge to UK corporation tax are generally likely to be exempt
from corporation tax on dividends they receive from us, provided the dividends fall within an exempt class and certain
conditions are met.
We may be treated as a dual resident company for UK tax purposes. As a result, our right to
claim certain reliefs from UK tax may be restricted, and changes in law or practice in the UK could result in the
imposition of further restrictions on our right to claim UK tax reliefs.
Stamp duty/stamp duty reserve tax
(i) Issue of Ordinary Shares
Shareholders
No UK stamp duty or stamp duty reserve tax will be payable on the issue of ordinary shares.
Sale, Exchange or Other Taxable Disposition of Ordinary Shares
(ii) Transfers of Ordinary Shares
Subject to their individual circumstances, shareholders who are resident in the UK for UK
taxation purposes will potentially be liable to UK taxation, as further explained below, on any gains which accrue to
them on a sale or other disposition of their ordinary shares which constitutes a “disposal” for UK taxation purposes.
A shareholder who is not resident in the UK for UK tax purposes will not generally be subject to
UK tax on chargeable gains on a disposal of ordinary shares unless such a shareholder carries on a trade, profession
or vocation in the UK through a branch or agency or, in the case of a corporate shareholder, a permanent
establishment. For shareholders in such circumstances, a gain on a disposal of our ordinary shares may be subject to
UK taxation.
An individual shareholder who acquires ordinary shares while UK resident, who temporarily
ceases to be UK resident or becomes resident in a territory outside the UK for the purposes of double taxation relief
arrangements, and who disposes of our ordinary shares during that period of temporary non-UK residence, may on his
or her return to the UK be liable to UK capital gains tax on any chargeable gain realized on that disposal.
For an individual shareholder within the charge to capital gains tax, a disposal of ordinary shares
may give rise to a chargeable gain or allowable loss for the purposes of UK capital gains tax. The rate of capital gains
tax is 10% for individuals who are subject to income tax at the basic rate and 20% to the extent that an individual
shareholder’s chargeable gains, when aggregated with his or her income chargeable to income tax, exceeds the basic
rate band for income tax purposes. However, an individual shareholder is entitled to realize £12,300 of gains (the
annual exempt amount) in the UK tax year ended April 5, 2021, without being liable to tax.
UK stamp duty will in principle be payable on any instrument of transfer of our ordinary shares
that is executed in the UK or that relates to any property situated, or to any matter or thing done or to be done, in the
UK. An exemption from stamp duty is available on an instrument transferring ordinary shares where the amount or
value of the consideration is £1,000 or less and it is certified on the instrument that the transaction effected by the
instrument does not form part of a larger transaction or series of transactions in respect of which the aggregate amount
or value of the consideration exceeds £1,000. Shareholders should be aware that, even where an instrument of
transfer is in principle subject to stamp duty, stamp duty is not required to be paid unless it is necessary to rely on the
instrument for legal purposes, for example to register a change of ownership or in litigation in a UK court. An instrument
of transfer need not be stamped in order for the British Virgin Islands register of ordinary shares to be updated, and the
register is conclusive proof of legal ownership.
Provided that the ordinary shares are not registered in any register maintained in the UK by or
on behalf of us and are not paired with any shares issued by a UK incorporated company, any agreement to transfer
ordinary shares will not be subject to UK stamp duty reserve tax.
We currently do not intend that any register of our ordinary shares will be maintained in the UK.
F. Dividends and Paying Agents
Not applicable.
G. Statements by Experts
Not applicable.
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H. Documents on Display
Documents concerning us that are referred to herein may be inspected at our principal executive
offices at: No. 1 New Square, Bedfont Lakes Business Park, Feltham, Middlesex, TW14 8HA. Those documents, which
include our registration statements, periodic reports and other documents which were filed with the SEC, may be
obtained electronically from the Investor section of our website at www.nomadfoods.com or from the SEC’s website at
www.sec.gov. We do not incorporate the information contained on, or accessible through, our website into this annual
report, and you should not consider it a part of this annual report.
I. Subsidiary Information
Not applicable.
Item 11.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to certain market risks during the normal course of our business, such as risk
arising from fluctuations in foreign currency exchange rates, as well as fluctuations in interest rates. In attempts to
manage these risks, we employ certain strategies to mitigate the effect of these fluctuations. For a detailed discussion
of these risks, see Note 33 “Financial risk management” to our audited consolidated financial statements which appear
elsewhere in this annual report.
Item 15.
Controls and Procedures
Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of management,
including our Chief Executive Officer and Chief Financial Officer, our principal executive officer and principal financial
officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d - 15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of
the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this
annual report in providing a reasonable level of assurance that information we are required to disclose in reports that we
file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods in SEC
rules and forms, including providing a reasonable level of assurance that information required to be disclosed by us in
such reports is accumulated and communicated to our management, including our Chief Executive Officer and our Chief
Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting
During the period covered by this report, there have been no changes to our internal controls over
financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
Item 12.
Description of Securities Other than Equity Securities
Management’s annual report on internal control over financial reporting
Not applicable.
Item 13.
Defaults, Dividend Arrearages and Delinquencies
None.
Item 14.
Material Modifications to the Rights of Security Holders and Use of
Proceeds
Use of Proceeds
None.
None.
Our management is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control
over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
Company’s assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with authorizations of the Company’s management and
directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the Company’s assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Management has assessed the effectiveness of our internal control over financial reporting as of
December 31, 2021 using criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
Based on this assessment, management concluded that the internal control over financial reporting
was effective as of December 31, 2021 based on the criteria established in this Internal Control-Integrated Framework
(2013).
On September 30, 2021, the Company completed the Fortenova Acquisition, whereby the
Company acquired 9 additional wholly-owned subsidiaries. These are: Ledo Plus d.o.o, Ledo d.o.o. Čitluk, IRIDA d.o.o.,
Ledo Jégkrém és Fagyasztott Élelmiszer Gyártó és Forgalmazó Korlátolt Felelősségű Társaság, Ledo d.o.o, Ledo d.o.o
Podgorica, Ledo Sh.p.k, Industrija Smrznute Hrane Frikom Doo Beograd, and Frikom Beograd Dooel Cucer Sandevo. The
Company is in the process of evaluating the existing controls and procedures in these subsidiaries and integrating them
into the Company’s internal control over financial reporting. In accordance with SEC Staff guidance permitting a company
to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial
reporting for the year in which the acquisition is completed, the Company has excluded this business from its assessment
of the effectiveness of internal control over financial reporting as of December 31, 2021. The business acquired
represented 3.9% of the Company’s total assets as of December 31, 2021 and 1.6% of the Company's revenues for the
year ended December 31, 2021.
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Attestation report of the independent registered public accounting firm
Pre-Approval Policies and Procedures
The effectiveness of the Company's internal control over financial reporting as of December 31,
The advance approval of the Audit Committee or members thereof, to whom approval authority has
2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in
their report which appears herein.
been delegated, is required for all audit and non-audit services provided by our auditors.
All services provided by our auditors are approved in advance by either the Audit Committee or
members thereof, to whom authority has been delegated, in accordance with the Audit Committee’s pre-approval policy.
No such services were approved pursuant to the procedures described in Rule 2-01(c)(7)(i)(C) of Regulation S-X, which
waives the general requirement for pre-approval in certain circumstances.
Item 16D.
Exemptions from the Listing Standards for Audit Committees
None.
Item 16A.
Audit Committee Financial Expert
The board of directors has determined that Mr. Lillie qualifies as an audit committee financial expert
as defined in Item 16A of Form 20-F, and that he is also “independent,” as defined in Rule 10A-3 under the Exchange Act
and applicable NYSE standards. For more information about Mr. Lillie, see Item 6A: Directors, Senior Management and
Employees - Executive Officers and Directors.
Item 16B.
Code of Ethics
We have adopted a Code of Ethics that applies to our Chief Executive Officer and all senior
financial officers. The Code of Ethics is located on our Internet website at www.nomadfoods.com under "Investor
Relations - Corporate Governance".
website within five business days following the date of the amendment or waiver.
We intend to provide disclosure of any amendments or waivers of our Code of Ethics on our
Item 16C.
Principal Accountant Fees and Services
PricewaterhouseCoopers LLP (“PwC”) acted as our independent auditor for the years ended
December 31, 2021 and 2020. The table below sets out the total amount billed to us by PwC, for services performed in
the years ended December 31, 2021 and 2020, and breaks down these amounts by category of service:
(€ in millions)
Audit fees
Audit-related fees
Tax fees
All other fees
Total
Audit Fees
For the year ended
December 31, 2021
4.4
0.3
1.0
0.1
5.8
For the year ended
December 31, 2020
3.7
—
1.2
0.1
5.0
Audit fees in the years ended December 31, 2021 and 2020 are related to the audit of our
consolidated financial statements and other audit or interim review services provided in connection with statutory and
regulatory filings or engagements.
Audit-Related Fees
Audit-related fees in the year ended December 31, 2021 are related to other assurance services on
capital market transactions.
Tax Fees
Tax fees in the years ended December 31, 2021 and 2020 are related to tax compliance and other
tax related services.
All Other Fees
services.
Other fees in the years ended December 31, 2021 and 2020 relate to other non-audit assurance
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Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Item 16G.
Corporate Governance
The table below presents a summary of the ordinary shares repurchased by the Company in 2021:
Comparison of Shareholder Rights
Period
Total
Number of
Ordinary
Shares
Purchased
Average
Price Paid
per Ordinary
Share (USD)
Total Number of
Ordinary Shares
Purchased as Part of
Publicly Announced
Plans or Programs
Maximum Approximate
Value of Shares that may
yet be purchased under
the Plans or Programs in
USD
$300m repurchase program1
As of December 31, 2020
11,913,682
21.04
11,913,682 $
49,364,929
January 1, 2021 – January 31,
2021
Total
$500m repurchase program3
October 1, 2021 – October 31,
2021
November 1, 2021 – November 30,
2021
December 1, 2021 – December 31,
2021
507,396
25.29
507,396 $
36,523,187
12,421,078
24.62
12,421,078 $
— 2
4,995
26.96
4,995
499,865,223
499,942
24.24
504,937
487,737,834
2,585,145
24.55
3,090,082
424,224,433
Total
3,090,082
24.50
3,090,082 $
424,224,433 4
We are incorporated under, and are governed by, the laws of the British Virgin Islands. The
following discussion summarizes material differences between the rights of holders of our ordinary shares and the rights
of common shareholders of a typical corporation incorporated under the laws of the State of Delaware.
Director’s Fiduciary Duties
Under Delaware corporate law, a director of a solvent Delaware corporation owes fiduciary duties to
the corporation and its shareholders. These duties have two components: the duty of care and the duty of loyalty. The duty
of care requires that a director inform himself of all material information regarding a decision. The duty of loyalty requires
that a director act in a manner he reasonably believes to be in the best interests of the corporation and its shareholders. A
director must not use his corporate position for personal gain or advantage. The duty of loyalty prohibits self-dealing by a
director and mandates that the best interest of the corporation and its shareholders take precedence over any interest
possessed by a director, officer or controlling shareholder that is not shared by the shareholders generally. In general, the
“business judgment rule” presumes that actions of the board of directors are made on an informed basis, in good faith and
in the honest belief that the action taken was in the best interests of the corporation and its shareholders. This
presumption may be rebutted by evidence of a breach of the directors’ fiduciary duties. If this presumption is rebutted, the
board of directors bear the burden of proving that the actions were “entirely fair” to the corporation or its minority
shareholders. In addition, Delaware common law imposes “heightened” judicial scrutiny on actions of directors in certain
circumstances, such as upon a sale of the corporation.
British Virgin Islands law provides that every director of a British Virgin Islands company in
exercising his powers or performing his duties, shall act honestly and in good faith and in what the director believes to be
in the best interests of the company. Additionally, the director shall exercise the care, diligence, and skill that a reasonable
director would exercise in the same circumstances taking into account the nature of the company, the nature of the
decision and the position of the director and his responsibilities. In addition, British Virgin Islands law provides that a
director shall exercise his powers as a director for a proper purpose and shall not act, or agree to the company acting, in a
manner that contravenes British Virgin Islands law or the memorandum and articles of association of the company.
Item 16F.
Change in Registrants’ Certifying Accountant
Amendment of Governing Documents
Not applicable.
1 On March 13, 2020, the Company announced a share repurchase program to purchase up to an aggregate of
$300 million of the Company’s ordinary shares. Up until December 31, 2020, 11,913,682 had been repurchased with
approximately $49 million remaining. Since December 31, 2020, the Company has repurchased shares worth $12.8
million before concluding the program.
2 The program has concluded.
3 On August 5, 2021, the Company announced its Board of Directors authorized a share repurchase program to purchase
up to an aggregate $500 million of the Company's ordinary shares over 3 years. Acquisitions pursuant to the share
repurchase program may be made from time to time through a combination of open market repurchases, privately
negotiated transactions, accelerated share repurchase transactions, and/or other derivative transactions, at the
Company's discretion, as permitted by securities laws and other legal requirements.
4 As of December 31, 2021, the maximum number of shares that may yet be purchased under the share repurchase
program is approximately $424.2 million. Since December 31, 2021, the Company has repurchased shares worth $30.5
million.
Under Delaware corporate law, with very limited exceptions, a vote of the shareholders of a
corporation is required to amend the certificate of incorporation. In addition, Delaware corporate law provides that
shareholders have the right to amend the corporation’s bylaws, but the certificate of incorporation may also confer such
right on the directors of the corporation.
Consent in Lieu of Meeting
Under Delaware corporate law, a consent in lieu of a meeting of the directors must be unanimous to
take effect. Under British Virgin Islands law and our Memorandum and Articles, only a majority of the directors are
required to sign a written consent.
Under Delaware corporate law, unless otherwise provided in the certificate of incorporation, any
action to be taken at any annual or special meeting of shareholders of a corporation may be taken without a meeting by
consent of the holders of outstanding stock having not less than the minimum number of votes that would be necessary to
take that action at a meeting at which all shareholders entitled to vote were present and voted. If any shareholder action is
taken by less than unanimous consent, notice of such action must be given to those shareholders who have not
consented and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the
record date for notice of such meeting had been the date that consents signed by a sufficient number of shareholders
were delivered to the corporation.
Our Memorandum and Articles provides that any shareholder action permitted to be taken at a
shareholder meeting may also be taken by written consent of a majority of the votes of shares entitled to vote thereon. If
any shareholder resolution is adopted otherwise than by the unanimous written consent of all shareholders, a copy of
such resolution shall be sent to all shareholders not consenting to such resolution.
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Shareholder Proposals
Variation of Rights of Shares
Under Delaware corporate law, a shareholder has the right to put any proposal before the annual
Under Delaware corporate law, a corporation may vary the rights of a class of stock with the
meeting of shareholders, provided it complies with the relevant provisions (if any) in the corporation’s certificate of
incorporation or bylaws. A meeting of shareholders may be called by the board of directors or any other person authorized
to do so by the corporation’s certificate of incorporation or bylaws; shareholders may be precluded therein from calling
special meetings. British Virgin Islands law and our Memorandum and Articles provide that our directors shall call a
meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of the voting
rights in respect of the matter for which the meeting is requested.
Sale of Assets
Under Delaware corporate law, a vote of the shareholders is required to approve a sale, lease or
exchange of property and assets of a corporation (including property and assets of its qualifying subsidiaries) only when
all or substantially all of the corporation’s property and assets are being sold other than to a qualifying subsidiary of the
corporation. Under British Virgin Islands law generally, shareholder approval is required when more than 50% of a
company’s total assets by value are being disposed of or sold to any person if not made in the usual or regular course of
the business carried out by the company. Under our Memorandum and Articles, this requirement of British Virgin Islands
law has been disapplied and accordingly no shareholder approval is required in relation to such a disposal or sale.
Redemption of Shares
Under Delaware corporate law, by provision of the certificate of incorporation, any class or series of
stock may be made subject to redemption by the corporation at its option, at the option of the holders of that stock or upon
the happening of a specified event, provided that after such redemption shares of a class or series of stock with full voting
power remain outstanding. The class or series of stock may, by provision of the certificate of incorporation, be made
redeemable for cash, property or rights, as specified in the certificate of incorporation or in the resolution of the board of
directors providing for the issue of the stock pursuant to the power expressly vested in the board of directors by the
certificate of incorporation. Under Delaware corporate law, shares also may be repurchased with the consent of both the
corporation and the holder, except that shares may not be repurchased for more than the price at which such shares may
then be redeemed at the option of the corporation. Both the redemption and repurchase of shares of a Delaware
corporation are subject to certain solvency limitations established by Delaware corporate law and Delaware common
law. As permitted by British Virgin Islands law and our Memorandum and Articles, shares may be repurchased, redeemed
or otherwise acquired by us. However, the consent of the shareholder whose shares are to be repurchased, redeemed or
otherwise acquired must be obtained, except as specified in the terms of the applicable class or series of shares.
Squeeze-Out Merger
Under the Delaware General Corporation Law § 253, in a process known as a “short form” merger,
a corporation that owns at least 90% of the outstanding shares of each class of voting stock of another corporation and
where at least one of the corporations is a Delaware corporation and the laws of the jurisdiction of the other corporation
don’t prohibit such action, may either merge the other corporation into itself or merge itself into the other corporation by
executing, acknowledging and filing with the Delaware Secretary of State a certificate of ownership and merger setting
forth a copy of the resolution of its board of directors authorizing such merger. If the parent corporation is a Delaware
corporation that is not the surviving corporation, the merger also must be approved by a majority of the outstanding stock
of the parent corporation entitled to vote thereon and the resolution must include provision for the pro rata issuance of
stock of the surviving corporation to the holders of the stock of the parent corporation on surrender of any certificate
therefor. If the parent corporation does not own all of the stock of the subsidiary corporation immediately prior to the
merger, the minority shareholders of the subsidiary corporation party to the merger have appraisal rights as set forth in §
262 of the Delaware General Corporation Law.
Under the BVI Act, subject to any limitations in a company’s memorandum and articles of
association, members holding 90% of the votes of the outstanding shares entitled to vote, and members holding 90% of
the votes of the outstanding shares of each class of shares entitled to vote, may give a written instruction to the company
directing the company to redeem the shares held by the remaining members. In our Memorandum and Articles, we have
opted out of the BVI Act’s squeeze out provisions.
approval of a majority of the outstanding shares entitled to vote thereon, and, in certain circumstances, including if such
variation would change the rights of such class so as to affect them adversely, with the approval of a majority of the
outstanding shares of such class, voting separately as a single class.
As permitted by British Virgin Islands law and our Memorandum and Articles, we may vary the
rights attached to any class with the written consent of at least 50% of the holders of each class of shares affected or by a
resolution passed by at least 50% of the votes cast by eligible holders of the issued shares of the affected class at a
separate meeting of the holders of that class.
Election of Directors
Under Delaware corporate law generally, unless otherwise specified in the certificate of
incorporation or bylaws of a corporation, directors are elected by a plurality of the votes of the shares entitled to vote on
the election of directors and vacancies and newly created directorships resulting from an increase in the number of
directors may be filled by a majority of the directors then in office (although less than a quorum) or by the sole remaining
director. Subject to the BVI Act and pursuant to our Memorandum and Articles, directors shall be appointed at any time,
and from time to time, by our directors, without the approval of shareholders, either to fill a vacancy or as an alternate or
additional director. The shareholders may, by a majority vote, appoint any person as a director. In addition, for so long as
an initial holder of Founder Preferred Shares holds 20% or more of the Founder Preferred Shares in issue, such holder is
entitled to nominate, and the directors are required to appoint, a person as director. If such holder notifies the Company to
remove any director nominated by him or her, the other directors shall remove such director, and the holder will have the
right to nominate a director to fill the resulting vacancy. In the event an initial holder ceases to be a holder of Founder
Preferred Shares or holds less than 20% of the Founder Preferred Shares in issue, such initial holder will no longer be
entitled to nominate a person as a director, and the holders of a majority of the Founder Preferred Shares in issue will be
entitled to exercise that initial holder’s former rights to appoint a director instead.
Removal of Directors
Under Delaware corporate law generally, a director of a corporation without a classified board may
be removed, with or without cause, by the holders of a majority (or such larger portion set forth in the certificate of
incorporation) of the outstanding shares entitled to vote at an election of directors. Under Delaware corporate law,
generally a director of a corporation with a classified board may be removed only for cause with the approval of a majority
(or such larger portion set forth in the certificate of incorporation) of the outstanding shares entitled to vote at an election
of directors, unless the certificate of incorporation provides otherwise. Under Delaware corporate law, generally a director
may resign at any time upon notice given in writing or by electronic transmission to the corporation.
Our Memorandum and Articles provide that a director may be removed at any time if: (i) he resigns
by written notice to the Company; (ii) he is requested to resign by written notice of all of the other directors; (iii) he ceases
to be a director by virtue of any provision of law or becomes prohibited by law from or is disqualified from being a director;
(iv) he becomes bankrupt or makes any arrangement or composition with his creditors generally or otherwise has any
judgment executed on any of his assets; (v) he becomes of unsound mind or incapable; (vi) he is absent from meetings of
directors for a consecutive period of 12 months and the other directors resolve that his office shall be vacated; (vii) he
dies; or (viii) a resolution of shareholders is approved by a majority of the shares entitled to vote on such matter passed at
a meeting of shareholders called for the purposes of removing the director or for purposes including the removal of the
director or a written special resolution of shareholders is passed by at least 75% of the votes of shares entitled to vote
thereon.
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Mergers
Under Delaware corporate law, one or more constituent corporations may merge into and become
part of another constituent corporation in a process known as a merger. A Delaware corporation may merge with a foreign
corporation as long as the law of the foreign jurisdiction permits such a merger. To effect a merger under Delaware
General Corporation Law § 251, an agreement of merger must be properly adopted and the agreement of merger or a
certificate of merger must be filed with the Delaware Secretary of State. In order to be properly adopted, the agreement of
merger must be adopted by the board of directors of each constituent Delaware corporation by a resolution or unanimous
consent in lieu of a meeting. In addition, the agreement of merger generally must be approved at a meeting of
shareholders of each constituent Delaware corporation by a majority of the outstanding stock of such corporation entitled
to vote, unless the certificate of incorporation provides for a supermajority vote. In general, the surviving corporation is
vested in all of the assets and liabilities of the disappearing corporation or corporations as a result of the merger.
Under the BVI Act, two or more companies may merge or consolidate in accordance with the
statutory provisions. A merger means the merging of two or more constituent companies into one of the constituent
companies, and a consolidation means the uniting of two or more constituent companies into a new company. In order to
merge or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation,
which must be authorized by a resolution of shareholders. One or more companies may also merge or consolidate with
one or more companies incorporated under the laws of jurisdictions outside the British Virgin Islands if the merger or
consolidation is permitted by the laws of the jurisdictions in which the companies incorporated outside the British Virgin
Islands are incorporated. In respect of such a merger or consolidation, a British Virgin Islands company is required to
comply with the provisions of the BVI Act, and a company incorporated outside the British Virgin Islands is required to
comply with the laws of its jurisdiction of incorporation.
Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right
to vote if the plan of merger or consolidation contains any provision that, if proposed as an amendment to the
memorandum and articles of association, would entitle them to vote as a class or series on the proposed amendment. In
any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are
entitled to vote at the meeting or consent to the written resolution to approve the plan of merger or consolidation.
Inspection of Books and Records
Under Delaware corporate law, any shareholder of a corporation may, upon proper demand, and for
any proper purpose, inspect or make copies of the corporation’s stock ledger, list of shareholders and other books and
records. Members of the public, on payment of the requisite fee, can obtain a copy of a Delaware corporation’s certificate
of incorporation.
Under British Virgin Islands law, members of the general public, on payment of a nominal fee, can
obtain copies of the public records of a company available at the office of the British Virgin Islands Registrar of Corporate
Affairs, including the company’s certificate of incorporation, its memorandum and articles of association (with any
amendments), records of license fees paid to date, any articles of dissolution, any articles of merger and a register of
charges if the company has elected to file such a register.
A shareholder of a company is entitled, on giving written notice to the company, to inspect:
(a)
(b)
(c)
(d)
the memorandum and articles of association;
the register of members;
the register of directors; and
the minutes of meetings and resolutions of shareholders and of those classes of shares
of which he is a shareholder.
In addition, a shareholder may make copies of or take extracts from the documents and records
referred to in (a) through (d) above. However, subject to the memorandum and articles of association of the company, the
directors may, if they are satisfied that it would be contrary to the company’s interests to allow a shareholder to inspect
any document, or part of any document, specified in (b), (c) or (d) above, refuse to permit the shareholder to inspect the
document or limit the inspection of the document, including limiting the making of copies or the taking of extracts from the
records. Where a company fails or refuses to permit a shareholder to inspect a document or permits a shareholder to
inspect a document subject to limitations, that shareholder may apply to the court for an order that he should be permitted
to inspect the document or to inspect the document without limitation.
Where a company keeps a copy of the register of members or the register of directors at the office
of its registered agent, it is required to notify the registered agent of any changes to the originals of such registers, in
writing, within 15 days of any change; and to provide the registered agent with a written record of the physical address of
the place or places at which the original register of members or the original register of directors is kept. Where the place at
which the original register of members or the original register of directors is changed, the company is required to provide
the registered agent with the physical address of the new location of the records within 14 days of the change of location.
A company is also required to keep at the office of its registered agent or at such other place or
places, within or outside the British Virgin Islands, as the directors determine the minutes of meetings and resolutions of
shareholders and of classes of shareholders, and the minutes of meetings and resolutions of directors and committees of
directors. If such records are kept at a place other than at the office of the company’s registered agent, the company is
required to provide the registered agent with a written record of the physical address of the place or places at which the
records are kept and to notify the registered agent, within 14 days, of the physical address of any new location where such
records may be kept. The Company’s registered agent in the British Virgin Islands is: Intertrust Corporate Services (BVI)
Limited, Ritter House, Wickhams Cay II, Road Town, Tortola, British Virgin Islands.
Conflict of Interest
Under Delaware corporate law, a contract or transaction between a corporation and a director or
officer, or between a corporation and any other organization in which a director or officer has a financial interest or is a
director or officer, is not void or voidable as long as (i) the material facts as to the director’s or officer’s relationship or
interest are disclosed or known and either (A) a majority of the disinterested directors authorizes the contract or
transaction in good faith or (B) the shareholders vote in good faith to approve the contract or transaction or (ii) the contract
or transaction is fair to the corporation when it is authorized, approved or ratified by the board of directors, a committee
thereof or the shareholders. Delaware corporate law permits the corporation to renounce, in its certificate of incorporation
or by action of its board of directors, any interest or expectancy of the corporation in, or in being offered an opportunity to
participate in, specified business opportunities or specified classes or categories of business opportunities that are
presented to the corporation or one or more of its officers, directors or stockholders.
The BVI Act provides that a director shall, forthwith after becoming aware that he is interested in a
transaction entered into or to be entered into by the company, disclose that interest to the board of directors of the
company. The failure of a director to disclose that interest does not affect the validity of a transaction entered into by the
director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the
transaction or was not required to be disclosed because the transaction is between the company and the director himself
and is otherwise in the ordinary course of business and on usual terms and conditions. As permitted by British Virgin
Islands law and our Memorandum and Articles, a director interested in a particular transaction may vote on it, attend
meetings at which it is considered and sign documents on our behalf that relate to the transaction. In addition, if our
directors have other fiduciary obligations, including to other companies on whose board of directors they presently sit and
to other companies whose board of directors they may join in the future, to the extent that they identify business
opportunities that may be suitable for us or other companies on whose board of directors they may sit, our directors are
permitted to honor those pre-existing fiduciary obligations ahead of their obligations to us. Accordingly, they may refrain
from presenting certain opportunities to us that come to their attention in the performance of their duties as directors of
such other entities unless the other companies have declined to accept such opportunities or clearly lack the resources to
take advantage of such opportunities.
Transactions with “Interested Stockholders”
Delaware corporate law contains a business combination statute applicable to Delaware public
corporations whereby, unless the corporation has specifically elected not to be governed by that statute by appropriate
action, it is prohibited from engaging in certain business combinations with an “interested stockholder” for three years
following the date that the person becomes an “interested stockholder.” An “interested stockholder” generally is a person
or group that owns or owned 15% or more of the company’s outstanding voting stock within the past three years. This
statute has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the company in which all
shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which
the shareholder becomes an “interested stockholder,” the board of directors approves either the business combination or
the transaction that resulted in the person becoming an “interested stockholder.”
British Virgin Islands law has no comparable provision. However, although British Virgin Islands law
does not regulate transactions between a company and its significant shareholders, it does provide that these transactions
must be entered into in the bona fide best interests of the company and not with the effect of constituting a fraud on the
minority shareholders.
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Independent Directors
There are no provisions under Delaware corporate law or under the BVI Act that require a majority
of our directors to be independent.
Cumulative Voting
Under Delaware corporate law, cumulative voting for elections of directors is not permitted unless
the company’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the
representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the
votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect
to electing such director. There are no prohibitions on cumulative voting under the laws of the British Virgin Islands, but
our Memorandum and Articles do not provide for cumulative voting.
•
•
The NYSE rules applicable to domestic issuers require disclosure within four business days of any
determination to grant a waiver of the code of business conduct and ethics to directors and
officers. Although we will require board approval of any such waiver, we may choose not to disclose
the waiver in the manner set forth in the NYSE rules, as permitted by the foreign private issuer
exemption.
We are exempt from the rules and regulations under the Exchange Act and NYSE related to the
furnishing and content of proxy statements. Therefore, we intend to hold annual shareholder
meetings in accordance with the corporate governance practices of the British Virgin Islands and
our Memorandum and Articles of Association. Similarly, with respect to matters on which
shareholders will have a right to vote, we intend to comply with corporate governance practices of
the British Virgin Islands and the voting requirements under the NYSE rules applicable to foreign
private issuers.
Shareholders’ Rights under British Virgin Islands Law Generally
Item 16H.
Mine Safety Disclosure
None.
Item 17.
Financial Statements
Not Applicable.
The BVI Act provides for certain remedies that may be available to shareholders. Where a company
incorporated under the BVI Act or any of its directors engages in, or proposes to engage in, conduct that contravenes the
BVI Act or the company’s memorandum and articles of association, British Virgin Islands courts can issue a restraining or
compliance order. However, shareholders cannot also bring derivative, personal and representative actions under certain
circumstances. The traditional English basis for shareholders’ remedies has also been incorporated into the BVI Act:
where a shareholder of a company considers that the affairs of the company have been, are being or are likely to be
conducted in a manner likely to be oppressive, unfairly discriminating or unfairly prejudicial to him, he may apply to the
court for an order based on such conduct. In addition, any shareholder of a company may apply to the courts for the
appointment of a liquidator of the company and the court may appoint a liquidator of the company if it is of the opinion that
it is just and equitable to do so.
The BVI Act also provides that any shareholder of a company is entitled to payment of the fair value
of his shares upon dissenting from any of the following: (i) a merger, if the company is a constituent company, unless the
company is the surviving company and the shareholder continues to hold the same or similar shares; (ii) a consolidation, if
the company is a constituent company; (iii) any sale, transfer, lease, exchange or other disposition of more than 50% in
value of the assets or business of the company if not made in the usual or regular course of the business carried on by the
company but not including (a) a disposition pursuant to an order of the court having jurisdiction in the matter, (b) a
disposition for money on terms requiring all or substantially all net proceeds to be distributed to the shareholders in
accordance with their respective interest within one year after the date of disposition, or (c) a transfer pursuant to the
power of the directors to transfer assets for the protection thereof; (iv) a redemption of 10% or fewer of the issued shares
of the company required by the holders of 90% or more of the shares of the company pursuant to the terms of the BVI Act;
and (v) an arrangement, if permitted by the court.
Generally, any other claims against a company by its shareholders must be based on the general
laws of contract or tort applicable in the British Virgin Islands or their individual rights as shareholders as established by a
company’s memorandum and articles of association.
Foreign Private Issuer Exemption
As a “foreign private issuer,” as defined by the SEC, we are permitted to follow certain corporate
governance practices of our home country, the British Virgin Islands, instead of those otherwise required under the NYSE
for domestic issuers. While we voluntarily follow most NYSE corporate governance rules, we intend to take advantage of
the following limited exemptions:
•
Unlike NYSE corporate governance rules, under BVI law, there is no requirement that our board of
directors consist of a majority of independent directors and our independent directors are not
required to hold executive sessions. Currently, however only six out of our ten board members are
independent based on NYSE independence standards. Also, while our board’s non-management
directors will meet regularly in executive session without management, our board does not intend to
hold an executive session of only independent directors at least once a year as called for by the
NYSE.
96
97
Item 18.
Financial Statements
The following financial statements, together with the report of PricewaterhouseCoopers LLP thereon, are filed
as part of this annual report:
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Nomad Foods Limited
NOMAD FOODS LIMITED AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Consolidated Statements of Financial Position
Consolidated Statements of Profit or Loss
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Page
F-1
F-5
F-6
F-7
F-8
F-11
F-12
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying Consolidated Statements of Financial Position of Nomad Foods Limited and its
subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related Consolidated Statements of Profit or
Loss, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, and
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2021, including
the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the
Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal
Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2021 in conformity with International Financial
Reporting Standards as issued by the International Accounting Standards Board and International Financial Reporting
Standards as adopted by the European Union. Also in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal
Control - Integrated Framework (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it
accounts for hedge accounting in 2021.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under item
15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the
Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with
the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was
maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements. Our audit of internal control over financial reporting included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits
provide a reasonable basis for our opinions.
As described in Management’s Annual Report on Internal Control over Financial Reporting, management has excluded
Ledo Plus d.o.o., Ledo d.o.o. Čitluk, IRIDA d.o.o., Ledo d.o.o., Ledo Jégkrém és Fagyasztott Élelmiszer Gyártó és
Forgalmazó Korlátolt Felelősségű Társaság, Ledo d.o.o. Podgorica, Ledo Sh.p.k, Industrija Smirznute Hrane Frikom
Doo Beograd, and Frikom Beograd Dooel Cucer Sandevo (together known as “the Fortenova entities”) from its
assessment of internal control over financial reporting as of December 31, 2021 because they were acquired by the
Company in a purchase business combination during 2021. We have also excluded the Fortenova entities from our
98
F-1
audit of internal control over financial reporting. The Fortenova entities represent nine wholly-owned subsidiaries
whose total assets and total revenues are excluded from management’s assessment and our audit of internal control
over financial reporting represent 3.9% and, 1.6% respectively, of the related consolidated financial statement amounts
as of and for the year ended December 31, 2021.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and Directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on
the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated
financial statements that were communicated or required to be communicated to the audit committee and that (i) relate
to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way
our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which
they relate.
Impairment assessment for goodwill on the Group’s cash generating units
As described in Note 3, 4 and 13 to the consolidated financial statements, the Company’s consolidated goodwill
balance was €2,099.4 million at December 31, 2021. Management performs an annual review of the carrying amount
of the goodwill to identify whether there is any impairment to these carrying values. Potential impairment is identified by
comparing the value in use of the Frozen segment, being the level at which Goodwill is monitored, to its carrying value.
Value in use is calculated as the net present value of the estimated risk adjusted cash flows of each cash generating
unit. Estimating value in use requires various judgements and assumptions including estimating future revenue and
profit margin growth rates, long-term growth rate and discount rate.
The principal considerations for our determination that performing procedures relating to the goodwill impairment
assessment is a critical audit matter are that there is inherent estimation uncertainty requiring judgement by
management when developing the value in use using the discounted cash flow model. This in turn led to a degree of
auditor judgement, subjectivity, and effort in performing procedures and evaluating audit evidence obtained related to
management’s cash flow forecasts and significant assumptions, including estimated revenue and profit margin growth
rates, long-term growth rate and discount rate. In addition, the audit of the discount rate and long-term growth rate
involved the use of professionals with expert skill and knowledge to assist in performing these procedures and
evaluating the audit evidence obtained.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to management’s goodwill impairment assessment, including controls over the discounted cash flow
model. These procedures also included, among others, testing management’s process for developing the value in use
estimates; evaluating the appropriateness of the discounted cash flow model; testing the completeness, accuracy and
relevance of underlying data used in the model; and evaluating the reasonableness of the significant assumptions used
by management including the estimated revenue and profit margin growth rates, long-term growth rate and discount
rate. Evaluating the reasonableness of management’s assumptions related to the Company’s cash flow forecasts
involved evaluating whether the estimated revenue and profit margin growth rates were reasonable considering (i) the
current and past performance of the Group, (ii) the consistency with external market and industry data, (iii) whether
these assumptions were consistent with evidence obtained in other areas of the audit and (iv) performing sensitivity
analyses.
Uncertain tax positions
As described in Note 3, 4 and 11 to the consolidated financial statements, the Company operates in many different
jurisdictions and in some of these certain tax matters are under discussion with local tax authorities. These discussions
are often complex and can take many years to resolve, and are in different stages with respect to assessments,
appeals and refunds. Where tax exposures can be quantified, a provision is made based on management’s estimates
and judgements with regard to the amounts expected to be paid to the relevant tax authority. As of December 31, 2021,
the current tax payables of €198.5 million and deferred tax assets of €128.3 million included €163.4m million of
provisions for tax uncertainties. As management has further disclosed, given the inherent uncertainties in assessing
the outcomes of these exposures, the Company could in future periods experience adjustments to these accruals.
The principal considerations for our determination that performing procedures relating to uncertain tax positions is a
critical audit matter are that there was significant judgement by management when determining uncertain tax positions,
including a high degree of estimation uncertainty relative to the complexity of tax laws across various jurisdictions,
frequency of tax audits, and potential for significant adjustments as a result of such audits. This in turn led to a high
degree of auditor judgement, subjectivity, and effort in performing procedures to evaluate the timely identification and
accurate measurement of uncertain tax positions. Also, the evaluation of audit evidence available to support the tax
liabilities for uncertain tax positions was complex and required significant auditor judgement as the nature of the
evidence is often highly subjective, and the audit effort involved the use of professionals with specialized skill and
knowledge to assist in evaluating the audit evidence obtained.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to the identification and recognition of the liability for uncertain tax positions, and controls addressing
completeness of the uncertain tax positions, as well as controls over measurement of the liability. These procedures
also included, among others, (i) testing the information used in the calculation of the liability for uncertain tax positions;
(ii) testing the calculation of the liability for uncertain tax positions by jurisdiction, including management’s assessment
of the technical merits of tax positions and estimates of the amount of tax benefit expected to be sustained; (iii) testing
the completeness of management’s assessment of both the identification of uncertain tax positions and possible
outcomes of each uncertain tax position; (iv) assessing whether the uncertain tax positions remain appropriate to
recognise when considering the tax laws in the relevant jurisdiction; and (v) evaluating the status and results of income
tax audits with the relevant tax authorities. Professionals with specialized skill and knowledge were used to assist in
the evaluation of the completeness and measurement of the Company’s uncertain tax positions, including evaluating
the reasonableness of management’s assessment of whether tax positions are more likely- than-not of being sustained
and the amount of potential benefit to be realized, the application of relevant tax laws, and estimated interest and
penalties.
Business acquisitions
As described in Note 14 to the consolidated financial statements, the Company completed the acquisition of the
Fortenova Group’s Frozen Food Business Group (“Fortenova Acquisition”) on September 30, 2021 for consideration of
€640.1 million and further completed the Purchase Price Allocation for this acquisition in the last quarter of 2021. In
addition to this, the Purchase Price Allocation for Findus Switzerland, that had been acquired on 31 December 2020,
was finalised in 2021. The Company recognised Goodwill of €192.6 million and €40.1 million and Intangible assets of
€301.9 million and €66.1 million with regard to the Fortenova and Findus Switzerland acquisitions respectively. In both
instances, as described in Notes 3 and 4 to the consolidated financial statements, the valuation methods required
various judgements and assumptions including estimating future profitability and the expected useful economic lives of
acquired intangible and tangible assets.
F-2
F-3
The principal considerations behind our determination that performing procedures relating to the acquisition accounting
is a critical audit matter were a result of the significant judgements required by management in estimating the fair
values and identifying the useful lives of the intangible assets at the acquisition date. This in turn led to a high degree
of auditor judgement, subjectivity, and effort in performing procedures and evaluating audit evidence obtained related
to management’s judgements. This included: cash flow forecasts, judgements on the assets’ useful economic lives,
and significant assumptions, including estimated future profitability that are included in the valuation reports. In
addition, the audit of the valuation models and of significant assumptions involved the use of professionals with expert
skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to the acquisitions; reviewing the Sale and Purchase Agreements including any other supporting
agreements that may enhance our understanding of key terms related to the acquisitions; reviewing the valuation
reports and evaluating the appropriateness of the valuation models used by management with the support of our
internal valuation experts; testing the completeness, accuracy and relevance of underlying data used in the models;
and evaluating the reasonableness of the significant assumptions used by management.
/s/ PricewaterhouseCoopers LLP (Firm ID: 876)
London, United Kingdom
March 3, 2022
We have served as the Company’s or its predecessor's1 auditor since 2006.
1Nomad Foods Europe Holdings Limited (previously Iglo Foods Holdings Limited) and its subsidiaries
Consolidated Statements of Financial Position
Non-current assets
Goodwill
Intangibles
Property, plant and equipment
Other non-current assets
Derivative financial instruments
Deferred tax assets
Total non-current assets
Current assets
Cash and cash equivalents
Inventories
Trade and other receivables
Indemnification assets
Short-term investments
Derivative financial instruments
Total current assets
Total assets
Current liabilities
Trade and other payables
Current tax payable
Provisions
Loans and borrowings
Derivative financial instruments
Total current liabilities
Non-current liabilities
Loans and borrowings
Employee benefits
Other non-current liabilities
Provisions
Derivative financial instruments
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital and capital reserve
Share-based compensation reserve
Founder Preferred Shares Dividend Reserve
Translation reserve
Other reserves
Retained earnings
Total equity
December 31,
2021
December 31,
2020 Restated
(see note 14)
Note
€m
€m
13
13
12
18
34
16
20
17
18
19
34
34
22
24
21
34
21
23
22
24
34
16
25
26
27
28
29
2,099.4
2,455.7
549.4
8.9
—
128.3
5,241.7
254.2
410.6
234.6
9.5
—
20.2
929.1
6,170.8
692.0
198.5
39.3
29.1
7.3
966.2
2,198.3
244.2
1.8
2.9
20.8
437.6
2,905.6
3,871.8
2,299.0
1,623.1
6.9
166.0
105.1
10.5
387.4
2,299.0
1,902.5
2,155.7
422.2
1.1
17.2
113.5
4,612.2
393.2
344.3
185.0
15.4
25.0
5.5
968.4
5,580.6
647.2
166.2
45.7
22.5
35.5
917.1
1,736.3
276.2
2.2
6.1
89.5
427.1
2,537.4
3,454.5
2,126.1
1,620.5
8.3
245.5
84.7
(24.5)
191.6
2,126.1
F-4
F-5
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Profit or Loss
Consolidated Statements of Comprehensive Income
Revenue
Cost of sales
Gross profit
Other operating expenses
Exceptional items
Operating profit
Finance income
Finance costs
Net financing costs
Profit before tax
Taxation
Profit for the period
Attributable to:
Equity owners of the parent
Non-controlling interests
Earnings per share:
Basic earnings per share
Diluted earnings per share
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
Note
5
€m
2,606.6
€m
2,515.9
€m
2,324.3
(1,862.3)
(1,753.4)
(1,626.4)
7
6
10
10
11
744.3
(356.3)
(45.3)
342.7
0.1
(106.1)
(106.0)
236.7
(55.7)
181.0
762.5
(382.7)
(20.6)
359.2
4.7
(68.4)
(63.7)
295.5
(70.4)
225.1
697.9
(359.9)
(54.5)
283.5
2.5
(75.7)
(73.2)
210.3
(56.7)
153.6
Profit for the period
Other comprehensive income/(loss):
Actuarial gains/(losses) on defined benefit pension plans
Taxation (charge)/credit on remeasurement of defined benefit pension
plans
Items not reclassified to the Consolidated Statement of Profit or
Loss
Gain/(loss) on investment in foreign subsidiary, net of hedge
Effective portion of changes in fair value of cash flow hedges
Taxation (charge)/credit relating to components of other comprehensive
income
Items that may be subsequently reclassified to the Consolidated
Statement of Profit or Loss
Other comprehensive income/(loss) for the period, net of tax
Total comprehensive income for the period
181.0
—
181.0
225.2
(0.1)
154
(0.4)
225.1
153.6
Attributable to:
Equity owners of the parent
Non-controlling interests
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
Note
€m
€m
€m
181.0
225.1
153.6
23
11
29
11
36.1
(27.8)
(35.9)
(10.2)
8.3
6.7
25.9
18.8
22.6
(19.5)
(10.1)
(17.3)
(29.2)
6.0
(27.3)
(13.6)
6.0
5.6
27.8
53.7
234.7
234.7
—
234.7
(21.4)
(40.9)
184.2
(15.7)
(44.9)
108.7
184.3
(0.1)
184.2
109.1
(0.4)
108.7
30
30
€1.02
€1.02
€1.16
€1.14
€0.80
€0.78
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
F-6
F-7
Consolidated Statements of Cash Flows
Cash generated from operations before tax and exceptional items
Cash flows relating to exceptional items
Note
32
Tax paid
Net cash flows from operating activities
Cash flows from investing activities
Business combinations, net of cash acquired
Purchase of property, plant and equipment and intangibles
Purchase of investments
Redemption of investments
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issuance of Ordinary Shares
Share issuance costs
Repurchase of Ordinary Shares
Payments related to shares withheld for tax
Proceeds from new loans and notes
Repayment of loan principal
Payment of lease liabilities
Payment of financing fees
Interest paid
Interest received
Other financing cash flows
Net cash provided by/(used in) financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Effect of exchange rate fluctuations
Cash and cash equivalents at end of period
376.9
(15.9)
(45.6)
315.4
(1.5)
(47.3)
(25.0)
—
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
€m
€m
€m
450.3
(48.8)
(95.2)
306.3
552.0
(12.1)
(82.9)
457.0
14
(597.3)
(112.9)
(79.2)
—
16.5
(58.7)
(25.0)
25.2
(660.0)
(171.4)
(73.8)
—
—
(77.6)
(22.6)
800.0
(408.7)
(19.4)
(18.7)
(36.7)
0.1
(2.0)
214.4
(139.3)
382.5
11.0
254.2
0.6
—
(608.6)
(19.2)
—
(11.7)
(20.3)
—
354.1
(11.1)
—
—
2.0
(22.2)
(21.8)
—
(50.2)
(48.4)
0.7
(6.1)
(714.8)
(429.2)
824.8
(13.1)
382.5
2.4
(3.6)
251.4
493.0
327.6
4.2
824.8
25
25
25
26
20
20
The accompanying notes are an integral part of these consolidated financial statements.
F-11
Notes to the Consolidated Financial Statements
1)
General information
Nomad Foods Limited (the “Company” or “Nomad”) was incorporated in the British Virgin Islands on April 1,
2014. The address of Nomad’s registered office is Ritter House, Wickhams Cay II, Road Town, Tortola, VG1110 British
Virgin. The Company is domiciled for tax in the United Kingdom.
Nomad Foods Limited (NYSE: NOMD) is Europe's leading frozen foods company. Nomad Foods Limited's
(the “Company” or “Nomad”) portfolio of iconic brands, which includes Birds Eye, Findus, iglo, Ledo and Frikom, have
been a part of consumers’ meals for generations, standing for great tasting food that is convenient, high quality and
nutritious. Nomad Foods is headquartered in the United Kingdom. Additional information may be found at
www.nomadfoods.com.
2)
Basis of preparation
The consolidated financial statements of Nomad and its subsidiaries (the “Company” or “Nomad”) have
been prepared in accordance with International Financial Reporting Standards issued by the International Accounting
Standards Board. These consolidated financial statements are also in accordance with International Financial Reporting
Standards as adopted by the European Union.
The preparation of our consolidated financial statements requires us to make estimates and assumptions
that affect reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities.
We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe
appropriate under the circumstances, such as current economic conditions in light of the COVID-19 pandemic. Actual
results could differ from these estimates. In preparing cash flow forecasts, management consider severe but plausible
downside scenarios taking into consideration the Company's key risks, including the impacts of the COVID-19 pandemic.
Having considered these risks in their assessment, the Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going
concern basis in preparing these financial statements.
Adoption of new accounting standards - IFRS 9 'Financial Instruments'
IFRS 9 ‘Financial Instruments’ was issued in July 2014 and replaced IAS 39 ‘Financial Instruments:
Recognition and Measurement.’ The Company had previously elected to continue hedge accounting under IAS 39 as was
allowed by the standard. On January 1, 2021, the Company adopted hedge accounting under IFRS 9, as the hedge
accounting requirements have been simplified and are more closely aligned to the Company's risk management strategy.
Under IFRS 9 all existing hedging relationships qualified as continuing hedging relationships.
The Company applied IFRS 9 hedge accounting prospectively, "except for application of the cost of hedging
approach". The Company has elected the cost of hedging approach for the fair value movement of all hedging
instruments, whereby the movements will be recognized within equity, to the extent that they relate to the hedged item. As
permitted by the standard, adjustments required as a result of adopting the cost of hedging approach, have been made to
the opening Consolidated Statement of Changes in Equity. As such, prior year comparatives have not been restated. A
summary of adjustments arising from application of IFRS 9 for hedge accounting as of January 1, 2021 are as follows:
Cash flow hedge reserve
Cost of hedging reserve
Other reserves
Translation reserve
Opening Balance
January 1, 2021
(IAS 39)
€m
Impact of change in policy
€m
Opening Balance
January 1, 2021
(IFRS 9)
€m
(24.5)
—
(24.5)
84.7
2.8
(4.4)
(1.6)
1.6
(21.7)
(4.4)
(26.1)
86.3
The Company's policy is to reduce its risk of foreign exchange movements on forecasted transactions (such
as purchases of raw materials) in currencies other than the operating entity's functional currency using forward foreign
exchange contracts designated as cash flow hedges. Under IFRS 9, in cash flow hedges of a forecast transaction that
result in the recognition of a non-financial item (such as inventory), the amounts that were accumulated in the cash flow
hedging reserve and the cost of hedging reserve are included in the initial cost of the non-financial item upon its
recognition. The Company has elected to apply this accounting policy prospectively and therefore as at January 1, 2021
any existing hedges of non-financial items (such as inventory) that were already recognized in the Consolidated
Statement of Financial Position, did not result in an opening balance transfer out of equity to the non-financial item as a
result of the transition to IFRS 9. For the year ended December 31, 2021, €27.6 million was recognized as deferred
hedging gains transferred to the carrying value of inventory. This is not a reclassification adjustment and will not be
recognized in the Consolidated Statement of Other Comprehensive Income for the period.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform (Phase 2)
In August 2020, the IASB issued Interest Rate Benchmark Reform (Phase 2), which amends other IFRS
standards. The amendments provide temporary reliefs which address the financial reporting effects when an interbank
offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments in this final phase
relate to practical expedient for particular changes in contractual cash flows, relief from specific hedge accounting
requirements and certain disclosure requirement.
On June 24, 2021, the Company amended and restated its Senior Facilities Agreement to refinance its
existing revolving credit facility of €80.0 million and replace it with a new €175.0 million facility, paying interest rate
applicable to the respective drawn down currency. Per the restated Senior Facilities Agreement, the Sterling Overnight
Index Average (“SONIA”) has replaced GBP LIBOR and is effective immediately if there is a drawdown on the facility. The
Secured Overnight Financing Rate (“SOFR”) will replace USD LIBOR and Swiss Average Rate Overnight (“SARON”) will
replace CHF LIBOR, when existing benchmark rates are replaced and borrowings are requested under the Facility.
Equally, on June 24, 2021, the Company amended and restated its Senior Facilities Agreement to refinance
its existing €553.2 million senior secured term loan facility through a new 7-year term facility due 2028 (the "Senior EUR
Loan"), paying interest at a rate equal to EURIBOR with a zero floor plus a margin of 2.5%. There is currently no indication
of the timing of the phase-out of EURIBOR. The Company continues to assess changes in underlying markets and
expects to be able to refinance its Senior EUR Loan once replacement reference rates become confirmed.
The existing senior USD loan of $916.4 million (the "Senior USD Loan") paying interest at a rate per annum
equal to LIBOR (subject to a zero floor) plus 2.25% per annum has not been refinanced during 2021. The Company uses
cross currency interest rate swaps to convert cash flows payable under the Senior USD Loan into €827.8 million of EUR
denominated debt with a fixed rate of interest, designated as a cash flow hedge. The USD LIBOR phase out is expected
to be completed by June 2023, and therefore in due course the Company will need to renegotiate the terms of our Senior
Facilities Agreement with our lenders and amend the terms of linked interest rate hedging arrangements. Such an
amendment is expected to be able to be achieved without material financial impact on the Company.
The Amendments are effective for annual periods beginning on or after January 1, 2021. Phase 2
amendments will require the Company to account for a change in the basis for determining the cash flows of a financial
asset or a financial liability measured at amortized cost, by updating the effective interest rates as required by IBOR
reform. Management continues to assess implications as a result of these amendments on the wider business. These
amendments had no impact on the financial statements of the Company for the year ended December 31, 2021. The
Company intends to use the practical expedients in future periods as they become applicable.
Recently Issued and Not Yet Adopted Accounting Pronouncements under IFRS
Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction
In May 2021, the International Accounting Standards Board issued targeted amendments to IAS 12, Income
Taxes. The amendments are effective for annual periods beginning on or after January 1, 2023, although earlier
application is permitted. With a view to reducing diversity in reporting, the amendments will clarify that companies are
required to recognize deferred taxes on transactions where both assets and liabilities are recognized, such as with leases
and asset retirement (decommissioning) obligations. Based upon our current facts and circumstances, we do not expect
our financial performance or disclosure to be materially affected by the application of the amended standard.
Other
The consolidated financial statements and notes are presented in the reporting currency of millions of
Euros. All financial information has been rounded to the nearest €0.1 million, except where otherwise indicated.
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F-13
The consolidated financial statements were approved for issuance by the Board of Directors of Nomad
Foods Limited on March 2, 2022. The Directors have, at the time of approving the financial statements, a reasonable
expectation that Nomad has adequate resources to continue in operational existence for the foreseeable future given the
cash funds available and the current forecast cash outflows. Thus, Nomad continues to adopt the going concern basis of
accounting in preparing the financial statements.
3)
Accounting policies
The accounting policies set out below have, unless otherwise stated, been applied consistently. Judgments
made by the Directors in the application of these accounting policies that have a significant effect on the financial
statements and key sources of estimation uncertainty are discussed in Note 4.
3.1
Measurement convention
The financial statements are prepared on the historical cost basis with the exception of
derivative financial instruments, business combinations, share based payments, and founder preferred
shares which are stated at fair value.
3.2
Business combination
The Company uses the acquisition method to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the
liabilities incurred and the equity interest issued by the Company. The consideration transferred includes the
fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. Acquisition-related costs are expensed as incurred.
Non-controlling interests arise from business combinations in which the Company acquires
less than a 100 per cent interest. Non-controlling interests are initially measured at either fair value or at the
non-controlling interest’s proportionate share of the fair value of the acquiree’s identifiable net assets.
Nomad determines on a transaction by transaction basis which measurement method is used.
The excess of the consideration transferred, the amount of any non-controlling interests in
the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair
value of the identifiable net assets is recorded as goodwill.
Where selling shareholders have contractually agreed to indemnify Nomad Foods Limited
for contingent liabilities, an indemnification asset is recognized equivalent to the fair value of the liability
recognized by Nomad. The indemnification asset is deducted from consideration transferred for the
business combination. The indemnification asset value will subsequently be revised where revisions are
made to the value of the liability or where there are doubts over the ability to recover losses from the selling
shareholders.
3.3
Basis of consolidation
The consolidated financial statements include the accounts of the Company and its
subsidiaries. Intercompany balances and transactions, and any unrealized income and expenses arising
from intra-group transactions are eliminated. Accounting policies are applied consistently across the
Company.
Subsidiaries are all entities (including structured entities) over which Nomad has control;
directly or indirectly. The Company controls an entity when the Company is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the
Company. They are deconsolidated from the date that control ceases.
Where the Company owns less than a 100 per cent interest in a subsidiary, a non-
controlling interest is recognized. The carrying amount of non-controlling interests is increased or
decreased by the non-controlling interest’s share of subsequent changes in equity and payments to the
non-controlling interest. Total comprehensive income is attributed to the non-controlling interests even if this
results in the non-controlling interests having a negative balance.
3.4
Foreign currency
i)
Foreign currency transactions
Transactions in foreign currencies (currencies other than the functional
currency of the transacting entity) are translated into the functional currency at the foreign
exchange rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated into the functional currency at the foreign
exchange rate ruling the financial year end. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation of monetary assets and
liabilities denominated in foreign currencies at year end exchange rates are generally
recognized in profit or loss. They are deferred in equity if they relate to qualifying cash flow
hedges, qualifying net investment hedges or are attributable to part of a net investment in a
foreign operation.
Non-monetary assets and liabilities in a foreign currency are translated into
the functional currency to establish historical cost, using the exchange rate at the date of
the transaction. Non-monetary assets and liabilities denominated in foreign currencies that
are stated at fair value are translated at foreign exchange rates ruling at the date the fair
value was determined. Translation differences on assets and liabilities carried at fair value
are reported as part of the fair value gain or loss.
The revenues and expenses of foreign operations are translated at an
average rate for the period (unless this is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income and expenses
are translated at the dates of the transaction).
ii)
Assets and liabilities of foreign operations
For the purposes of presenting consolidated financial statements, the
assets and liabilities of foreign operations, including goodwill and fair value adjustments
arising on consolidation, are translated at foreign exchange rates ruling at the financial year
ended December 31, 2021 of £1:€1.19 (December 31, 2020: £1:€1.11). The revenues and
expenses of foreign operations are translated at an average rate for the period where this
rate approximates to the foreign exchange rates ruling at the dates of the transactions. The
average rate used for year ended December 31, 2021 is £1:€1.16 (year ended
December 31, 2020: £1:€1.13, year ended December 31, 2019: £1:€1.14).
Foreign exchange gains and losses that relate to these assets and
liabilities are presented in the Consolidated Statement of Profit or Loss within ‘finance
income or costs’, except where hedge accounting applies.
iii)
Net investment in foreign operations
Exchange differences arising from the translation of foreign operations and
of any related qualifying hedges are taken directly to the translation reserve within
equity. They are realized through the Consolidated Statement of Profit or Loss upon
disposal of the related foreign operation.
3.5
Goodwill
Goodwill represents amounts arising on acquisition of subsidiaries. Goodwill is the
difference between the cost of the acquisition and the fair value of the net identifiable assets acquired.
Goodwill is stated at cost less any accumulated impairment losses. Gains and losses on
the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is not monitored below the operating segment. Goodwill is not amortized but is
tested annually for impairment.
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3.6
Other intangible assets
ii)
Allocation of impairment losses
Intangible assets acquired separately are recorded at cost and those acquired as part of a
business combination are recorded at fair value as at the date of acquisition.
i)
Computer software
Capitalized software costs include the cost of acquired computer software
licenses and costs that are directly associated with the design, construction and testing of
such software where this relates to a major business system. Costs associated with
identifying, sourcing, evaluating or maintaining computer software are recognized as an
expense within other operating expenses as incurred.
The assets are stated at cost less accumulated amortization and
impairment losses. Software costs are amortized by equal monthly installments over their
estimated useful economic life of five to ten years once the software is capable of being
brought into use.
ii)
Brands
Our largest brands, including Birds Eye, Iglo, Findus, Ledo and Frikom are
considered to have indefinite lives. This is based on the market position of the brands, the
significant levels of investment in advertising and promoting the brands, and the fact that
they have been established for at least 20 years. Therefore these brands are not amortized,
but instead held at historical cost less provision for any impairment.
Brands that are deemed to not have an indefinite life are being amortized
by equal monthly installments within other operating expenses over the course of their
remaining useful economic life.
iii)
Customer relationships
Long standing Food Service customer relationships have been identified as
intangible assets as part of business combinations. These are deemed to not have an
indefinite life and are being amortized by equal monthly installments within other operating
expenses over their expected lives. The most significant of these assets were acquired as
part of the Findus Acquisition in 2015 and are being amortized over 14 years.
3.7
Impairment of non-current assets
The carrying amounts of the Company’s non-current assets are reviewed annually to
determine whether there is any indication of impairment. If any such indication exists, the asset’s
recoverable amount is estimated. Impairment losses are recognized in the Consolidated Statement of Profit
or Loss in the period in which they arise. For goodwill and assets that have an indefinite useful life an
impairment review is performed at least annually.
Assets that are subject to amortization are reviewed for impairment whenever events or
changes in circumstances indicate that the net carrying amount may not be recoverable. An impairment loss
is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount.
i)
Calculation of recoverable amount
Recoverable amount is the greater of fair value less costs to sell and value
in use. In assessing value in use, the estimated future cash flows of the business are
discounted to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. For an asset
that does not generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
Impairment losses recognized in respect of cash-generating units are
allocated first to reduce the carrying amount of any goodwill allocated to cash-generating
units, then to reduce the carrying amount of the other assets in the unit on a pro rata
basis. A cash-generating unit is the smallest identifiable group of assets that generates
cash inflows that are largely independent of the cash inflows from other assets or groups of
assets.
iii)
Reversals of impairment
An impairment loss in respect of goodwill is not reversed. In respect of
other assets, an impairment loss is reversed when there is an indication that the impairment
loss may no longer exist and there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortization, if no impairment loss had been recognized.
3.8
Property, plant and equipment
i)
Owned assets
Property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses. Cost includes the original purchase price of the asset
and the costs attributable to bringing the asset to its working condition for its intended use.
Where parts of an item of property, plant and equipment have different
useful lives, they are accounted for as separate items of property, plant and equipment.
ii)
Leased assets
The Company leases various properties, equipment and cars. The
Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
Where a contract contains both lease and non-lease components, the
Group has elected to account for the contract as a single lease.
Leases are recognized as a right-of-use asset and a corresponding liability
at the date at which the leased asset is available for use by the group. Each lease payment
is allocated between the liability and finance cost. The finance cost is charged to profit or
loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The right-of-use asset is classified within
property, plant and equipment and is depreciated over the shorter of the asset's useful life
or the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities are presented within loans and borrowings and include
the net present value of expected lease payments, including those from extension options if
the Company reasonably expects to exercise them. The lease payments are discounted
using the interest rate implicit in the lease, if that rate can be determined, otherwise the
Company’s incremental borrowing rate is used. Right-of-use assets are measured at cost
comprising the amount of the lease liability, adjusted for payments made or received before
the commencement date, initial direct costs and restoration costs.
Payments associated with short-term leases and leases of low-value
assets are recognized on a straight-line basis as an expense in profit or loss. Short-term
leases are leases with a lease term of 12 months or less. Low-value assets primarily
comprise IT equipment and small items of office furniture.
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iii)
Depreciation
3.11
Founder Preferred Shares
Depreciation is charged to the Consolidated Statement of Profit or Loss on
a straight line basis over the shorter of the lease term and the estimated useful lives of
each part of an item of property, plant and equipment once the item is brought into
use. Land is not depreciated. The estimated useful lives are as follows:
•
•
•
basis.
Buildings 40 years
Plant and equipment 5 to 14 years
Computer equipment 3 to 5 years
The assets’ residual values and useful lives are reviewed on a frequent
3.9
Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is based on the
weighted average principle and includes expenditure incurred in acquiring the inventories and bringing them
to their existing location and condition. Inventories that are acquired through business combinations are fair
valued at the time of acquisition. In the case of manufactured inventories and work in progress, cost
includes an appropriate share of direct costs and overheads based on normal operating capacity. Provision
is made for slow moving, obsolete and defective inventories.
3.10
Employee benefits
i)
Defined contribution plans
Obligations for contributions to defined contribution pension plans are
recognized as an expense in the Consolidated Statement of Profit or Loss as
incurred. Prepaid contributions are recognized as an asset to the extent that a cash refund
or reduction in the future payments is available.
ii)
Defined benefit plans
The Company’s net obligation in respect of defined benefit pension plans
and other post-employment benefits is calculated separately for each plan by estimating the
amount of future benefit that employees have earned in return for their service in the
current and prior periods. That net obligation is discounted to determine its present value.
The calculation is performed by a qualified actuary using the projected unit credit method.
The current service cost of the defined benefit plan, recognized in the
Consolidated Statement of Profit or Loss in staff costs included within Operating profit/
(loss), except where included in the cost of an asset, reflects the increase in the defined
benefit obligation resulting from employee service in the current year, benefit changes,
curtailments and settlements.
Actuarial gains and losses arising from experience adjustments and
changes in actuarial assumptions are charged or credited to equity in Other
Comprehensive Income in the period in which they arise.
The net interest cost is calculated by applying the discount rate to the net
balance of the defined benefit obligation and the fair value of plan assets. This cost is
included in employee benefit expense in the Consolidated Statement of Profit or Loss.
Past service cost is recognized immediately.
iii)
Share-based payment schemes
Employee benefits given through share-based payment schemes are
discussed further in section 3.15 of this note.
Nomad Foods issued Founder Preferred Shares to both TOMS Acquisition I LLC and
Mariposa Acquisition II, LLC (collectively the “Founder Entities”) in connection with its initial public offering in
April 2014. Holders of the Founder Preferred Shares are entitled to receive annual dividend amounts
subject to certain performance conditions (the “Founder Preferred Shares Dividend Amount”). The
instrument and its component parts were analyzed under IFRS 2. The Company intends that any future
Founder Preferred Shares Annual Dividend Amount will be equity settled. Accordingly, the Founder
Preferred Shares Annual Dividend Amount as of June 1, 2015, of €531.5 million (the “Founder Preferred
Shares Dividend reserve”) was classified as equity and no further revaluations will be required or recorded.
Should a Founder Preferred Share Annual Dividend Amount become due and payable, the
market value of any dividend paid will be deducted from the Founder Preferred Shares Dividend reserve,
with any excess deducted from the accumulated profit/(deficit) reserve within equity.
3.12
Provisions
Provisions are recognized when the Company has a legal or constructive present obligation
as a result of a past event and it is probable that the Company will be required to settle that obligation.
Provisions are measured at the Directors’ best estimate of the expenditure required to settle the obligation
at the financial year end date and are discounted to present value where the effect is material.
Where it is not possible to make a reliable estimate of the estimated financial effect of a
provision, appropriate disclosure of the resulting contingent liability is made, but no provision is recognized.
3.13
Financial instruments
Financial assets and liabilities are recognized in the Company’s Statement of Financial
Position when the Company becomes a party to the contractual provisions of the instrument.
i)
Trade receivables
Trade receivables are amounts due from customers for goods sold when
control of the products has transferred, being when the products are delivered in
accordance with the contractual arrangements. At this point, there is no unfulfilled
performance obligation that could affect the customer’s acceptance of the product, except
for returns due to quality. The Company holds the trade receivables with the objective of
collecting the contractual cash flows and so they are subsequently measured at amortized
cost using the effective interest method, less any loss allowance. Since trade receivables
are due within one year, this equates to initial carrying value less any loss allowance.
To assist in managing operating cash flow, we may enter into non-recourse
factoring arrangements with certain receivables whereby we sell specific account
receivables to one or more external financial institutions. The risks and rewards of
ownership are considered to have been transferred at the point of sale. Up to the point of
sale, these receivables are treated as held for sale and measured at fair value through
Profit or Loss. Under the terms of the contractual arrangements, the Company may
continue to collect the cash from the customer receivables sold, albeit acting solely as a
collecting agent on behalf of the purchaser of receivables. Any cash received from
customers which is due to be paid to the agent is presented as a financial liability in the
Statement of Financial Position and as a financing activity within the Statement of Cash
Flows. Factoring fees associated with the sale of factored receivables were minimal for all
periods presented. See Note 18.
The Company applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss allowance for all trade
receivables. Trade receivables are grouped by days past due. Expected loss rates are
based on historical credit losses experienced in each market as well as forward looking
information where this is significant. Trade receivables are written off when there is no
reasonable expectation of recovery. Appropriate allowances for expected credit losses and
estimated irrecoverable amounts are recognized in the Consolidated Statement of Profit or
Loss.
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Trade receivables are presented net of associated contract liabilities,
referred to as 'trade terms' as discussed further in Note 3.14 and Note 4.
ii)
Cash and cash equivalents
Cash and cash equivalents comprise of cash balances and deposits that
are readily convertible to a known amount of cash and are measured at amortized cost.
Deposits held in money market funds are measured at fair value through Profit or Loss as
the cash flows do not only represent principal and interest.
iii)
Loans and borrowings
a.
Valuation
Interest bearing borrowings are recognized initially at fair
value less attributable transaction costs.
Subsequent to initial recognition, interest bearing loans
and borrowings are stated at amortized cost with any difference between
cost and redemption value being recognized in the Consolidated Statement
of Profit or Loss over the expected period of the borrowings.
b.
Capitalization of transaction costs
Fees paid on the establishment of loan facilities are
recognized as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case, the fee is
deferred until the draw-down occurs.
iv)
Trade payables
Trade payables are measured at initial recognition at fair value and are
subsequently measured at amortized cost using the effective interest method. Since trade
payables are largely due within one year, this equates to initial carrying value.
v)
Derivative financial instruments and hedge accounting
Derivative financial instruments are recognized at fair value. When a
derivative financial instrument is not designated in a hedge accounting relationship, all
changes in its fair value are recognized immediately in the Consolidated Statement of Profit
or Loss. However, where derivatives qualify for hedge accounting, recognition of any
resultant gain or loss depends on the nature of the item being hedged. Since the adoption
of IFRS 9 for hedge accounting on January 1, 2021, the Company has elected the cost of
hedging approach for the fair value movement on currency basis spreads of all hedging
relationships, whereby the movements will be recognized within equity, if material, to the
extent that they relate to the hedged item. In cash flow hedges of a forecast transaction that
result in the recognition of a non-financial item (such as inventory), the amounts that were
accumulated in the cash flow hedging reserve and the cost of hedging reserve are included
in the initial cost of the non-financial item upon its recognition.
The fair value of all financial derivative instruments (including but not
limited to forward foreign exchange contracts, currency swaps and cross currency interest
rates swaps), is determined per market standard using forward foreign exchange and
interest rates at the balance sheet date, with the resulting value discounted back to present
value.
Since the adoption of IFRS 9 for hedge accounting on January 1, 2021, the
Company applies the hedge accounting requirements of IFRS 9 to all hedging
relationships. IAS 39 was beforehand with the impact of the changes disclosed in Note 2
Basis of preparation.
a.
Cash flow hedges
Where a derivative financial instrument is designated as a
hedge of the cash flow of a recognized asset or liability, (including a highly
probable forecast transaction) the effective part of any gain or loss on the
derivative financial instrument is recognized directly in the cash flow
hedging reserve, within other reserves. Any ineffective portion of the hedge
is recognized immediately in the Consolidated Statement of Profit or Loss.
Since the adoption of IFRS 9 for hedge accounting on
January 1, 2021, if the result of a forecasted transaction is recognition of a
non-financial asset (for example inventory), the amounts that were
accumulated in the cash flow hedging reserve and the cost of hedging
reserve (presented together as 'Other reserves') are included in the initial
cost of the non-financial item upon its recognition. For all other hedged
forecasted transactions, the amounts accumulated in the hedging reserve
and cost of hedging reserve are reclassified to the Consolidated
Statement of Profit or Loss in the same period, or periods, in which the
hedged forecasted future cash flows affect the Consolidated Statement of
Profit or Loss.
When a hedging instrument expires or is sold, exercised
or otherwise terminated, or the entity revokes designation of the hedge
relationship but the hedged forecast transaction is still expected to occur,
the cumulative gain or loss at that point remains in equity and is
recognized when the transaction occurs. If the hedged transaction is no
longer expected to take place, the cumulative unrealized gain or loss
recognized in equity is recognized in the Consolidated Statement of Profit
or Loss immediately.
When a hedging instrument is substantially modified, any
fair value gain or loss is recognized immediately in the Consolidated
Statement of Profit or Loss.
b.
Net investment hedges
Foreign currency differences arising on the retranslation of
the spot rate component of a financial liability designated as a hedge of a
net investment in a foreign operation are recognized in Other
Comprehensive Income to the extent that the hedge is effective, and are
presented in the translation reserve within equity.
Since the adoption of IFRS 9 for hedge accounting on
January 1, 2021, the change in fair value of the future price element of the
hedging instrument (‘forward element’) is not included as part of the
hedging relationships and is recognized in the Consolidated Statement of
Profit or Loss immediately.
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To the extent that any net investment hedge is entered into
and the hedge is deemed effective, any foreign currency differences arising
on the retranslation of the spot rate component of a financial liability
designated as a hedge of a net investment in a foreign operation are
recognized in Other Comprehensive Income, and are presented in the
translation reserve within equity. To the extent that the hedge is ineffective,
such differences are recognized in the Consolidated Statement of Profit or
Loss. When the hedged net investment is disposed of, the relevant amount
in the translation reserve is transferred to the Consolidated Statement of
Profit or Loss as part of the gain or loss on disposal.
vi)
Short-term investments
The grant date fair value of share-based payment awards granted to any Director or
employee is recognized as an expense, with a corresponding increase in equity, over the period that any
Director or employee becomes unconditionally entitled to the awards.
The fair value of the awards granted is measured using a valuation model, taking into
account the terms and conditions upon which the awards were granted. The amount recognized as an
expense is adjusted to reflect the actual number of awards for which the related service and non-market
vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is
based on the number of awards that do meet the related service and non-market performance conditions at
the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of
the share-based payment is measured to reflect such conditions and there is no true-up for differences
between expected and actual outcomes.
The Company may invest surplus cash positions in short-term investments
See Note 8(b) for further information on the Company’s share-based payment
to manage liquidity and credit risk. Short‑term investments are held within managed
investment funds and are measured at fair value with all changes in fair value are
recognized immediately in the Consolidated Statement of Profit or Loss.
Short-term investments are valued using inputs that are derived principally
from or corroborated by observable market data.
3.14
Revenue from contracts with customers
The Company manufactures and sells a range of frozen foods to retail, wholesale and Food
Service markets. Revenue is recognized when control of the products has transferred, being when the
products are delivered to the customer in accordance with the contractual arrangements. At this point, there
is no unfulfilled performance obligation that could affect the customer’s acceptance of the product, except
for returns due to quality. A provision for product return allowances, which is estimated based upon the
Company’s historical performance and management’s experience, is recorded as a reduction of sales in the
same period that the revenue is recognized. Revenue excludes sales taxes and intra-company sales.
Products are often sold with variable pricing arrangements, including payment discounts,
trade promotions and slotting fees. Discounts given by the Company include rebates, price reductions and
incentives to customers, promotional couponing and trade communication costs. Trade promotions consist
of pricing allowances, merchandising funds and customer coupons, which are offered through various
programs to customers and consumers. Certain retailers require the payment of slotting fees to obtain
space for the Company’s products on the retailers’ store shelves.
Where variable pricing arrangements are in place, revenue is only recognized to the extent
that it is highly probable that the amount recognized is unlikely to be reversed. Accumulated experience is
used to estimate and provide for the discounts. Revenue is only recognized to the extent that it is highly
probable that a significant reversal will not occur. Accruals for expected pay-outs under these programs are
collectively known as ‘trade terms’ and are included within trade and other receivables or within trade and
other payables in the Consolidated Statement of Financial Position. No element of financing is deemed
present as the sales are made in line with market practice and accruals are typically settled within twelve
months of the sale.
3.15
Share based payments
The Nomad Foods Long-term Incentive Plan known as the (the "Management Share
Awards"), which incorporates an annual Non-Executive Directors Restricted Stock Scheme, falls within the
provisions of IFRS 2 “Share-based Payment” and awards under the Management Share Awards represent
equity settled share based payments. A charge is taken to the Consolidated Statement of Profit or Loss for
the difference between the fair value of the shares at grant date and the amount subscribed, spread over
the vesting period.
Share based payment arrangements in which Nomad receives goods or services as
consideration for its own equity instruments are accounted for as equity-settled share based payment
transactions, regardless of how the equity instruments are obtained by Nomad.
arrangements and details of the valuation model used.
3.16
Interest income
Interest income is recognized in the Consolidated Statement of Profit or Loss on an
accruals basis using the effective interest method.
3.17
Expenses & Exceptional items
i)
Borrowing costs
Unless capitalized as part of the cost of borrowing (see Note 3.13(iii)),
borrowing costs are recognized in the Consolidated Statement of Profit or Loss in the
period in which they are incurred.
ii)
Exceptional items
The separate reporting of exceptional items which are presented as
exceptional within the relevant Consolidated Statement of Profit or Loss category, helps
provide an indication of the Company’s underlying business performance. Exceptional
items have been identified and presented by virtue of their size, nature or incidence. In
determining whether an event or transaction is exceptional, management considers
quantitative as well as qualitative factors such as the frequency or predictability of
occurrence. Exceptional items comprise restructuring costs, impairments or reversal of
impairments of intangible assets, operational restructuring, integration and acquisition costs
relating to new acquisitions, implementation of strategic opportunities and other significant
items (see Note 7).
iii)
Research and development
Expenditure on research activities is recognized in the Consolidated
Statement of Profit or Loss as an expense as incurred.
3.18
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognized
in the Consolidated Statement of Profit and Loss except to the extent that it relates to items recognized in
Other Comprehensive Income, in which case it is recognized within the Statement of Other Comprehensive
Income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantively enacted at the financial year end date, and any adjustment to tax payable in
respect of previous years. Where tax exposures can be quantified, an accrual for uncertain tax positions is
made based on the best estimates and management’s judgments. Given the inherent uncertainties in
assessing the outcomes of these exposures (which can sometimes be binary in nature), the Company could
in future periods experience adjustments to these accruals.
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F-23
Deferred tax is provided on temporary differences between the carrying amounts of assets
and liabilities recognized for financial reporting purposes and the amounts used for taxation purposes on an
undiscounted basis. The following temporary differences are not provided for: the initial recognition of
goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other
than in a business combination, and differences relating to investments in subsidiaries to the extent that
they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on
the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax
rates enacted or substantively enacted at the financial year end date.
A deferred tax asset is recognized only to the extent that it is probable that future taxable
profits will be available against which the asset can be utilized.
3.19
Segment reporting
The Chief Operating Decision Maker (“CODM”) has been determined to be the Chief
Executive Officer as he is primarily responsible for the allocation of resources to the segments and the
assessment of performance of the segments.
Nomad’s operations are organized into one operating unit, "Frozen", which comprises all
the brands, as well as the factories, private label business units and certain corporate overheads. The
CODM primarily uses “Adjusted EBITDA”, disclosed in Note 5, as the key measure of the segment’s results.
Adjusted EBITDA is EBITDA adjusted to exclude, when they occur, the impacts of exited markets,
acquisition purchase price adjustments and exceptional items such as restructuring charges, goodwill and
intangible asset impairment charges and other unusual or non-recurring items. In addition, we exclude other
adjustments such as the impact of share based payment expenses and related employer payroll taxes, and
non-operating M&A related 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.
EBITDA, disclosed in Note 5, is defined as profit/(loss) for the period before taxation, net
financing costs, depreciation and amortization.
3.20
Onerous contracts provisions
Where the costs of fulfilling a contract exceed the economic benefits that the Company
expects to receive from it, an onerous contract provision is recognized for the net unavoidable costs. In
estimating the net unavoidable costs, management estimate foreseeable income that may be received and
offset this against the minimum future cash outflows from fulfilling the contract. All cash flows are discounted
at an appropriate discount rate.
3.21
IFRSs not yet adopted
At the date of authorization of these financial statements, except as disclosed in Note 2,
there are no Standards and Interpretations relevant to the Company which are in issue but not yet effective.
a)
Business Combinations
For business combinations that have a significant effect on the amounts reported in the
consolidated financial statements. The Company is required to recognize separately, at the acquisition date,
the identifiable assets, liabilities and contingent liabilities acquired or assumed in a business combination at
their fair values. This involves judgment over whether intangible assets can be separately identified, the
useful economic life of assets and in selecting an appropriate valuation methodology. Furthermore,
judgment is applied in allocating business combinations to operating segments, as well as allocating
Goodwill to cash generating units. Please refer to Note 14 for details of business combinations in the
period.
b)
Discounts and trade promotions
Management use judgment when considering when accruals for discounts and trade
promotions can be released. Management makes the judgment based on the principle that accruals are
reversed only to the extent that it is highly probable that a significant reversal will not occur.
c)
Uncertain tax positions
Management use judgment when determining whether it is appropriate to accrue for
uncertain tax positions and for how long accruals for uncertain tax positions are retained. Management
considers tax laws which are in place in making that assessment determining whether it is appropriate to
release.
d)
Cash generating units
When performing goodwill impairment testing, management apply judgment to the
allocation of goodwill to cash generating units. Management has determined goodwill is monitored at the
operating segment level of “Frozen”. Please refer to Note 13 for further information.
e)
Operating segments
Management apply judgment in determining the Chief Operating Decision Maker (“CODM”),
and the nature and extent of the financial information which is reviewed by the CODM. Management have
considered how resources are allocated in determining the single reporting and operating segment of
“Frozen”. Please refer to Note 5 for further information.
Significant estimates
Information about estimates and assumptions that have significant effects on the amounts reported in the
consolidated financial statements are listed below. Management have taken into account the impact and potential future
impact of COVID-19 on these estimates. We will continue to assess the impact of future developments in relation to
COVID-19 as it relates to estimates, especially around the carrying value of goodwill, brands and other intangibles, as well
as on property, plant and equipment. In particular, we will focus on the long-term impact on the food service customer
relationship intangible assets.
4)
Critical accounting estimates and judgments
a)
Discounts and trade promotions
The preparation of financial statements in accordance with IFRS requires the use of judgment in applying
the accounting policies and estimation that affect the reported amounts of assets and liabilities and results. Actual results
could differ from those estimates and the financial statements will be impacted by key judgments taken.
Key Judgments
Judgments are made in the process of applying accounting policies. Those judgments which are considered
key are listed below.
Discounts given by the Company include rebates, price reductions and incentives given to
customers, promotional couponing and trade communication costs. Each customer has bespoke
agreements that are governed by a combination of observable and unobservable performance conditions.
Trade promotions comprise of amounts paid to retailers for programs designed to promote
Company products and include pricing allowances, merchandising funds and customer coupons, which are
offered through various programs to customers and consumers. The ultimate costs of these programs can
depend upon retailer performance and is the subject of significant management estimates. The estimated
ultimate cost of the program is based upon the programs offered, timing of those offers, estimated retailer
performance based on history, management’s experience and current economic trends.
F-24
F-25
At each financial year end date, any discount or trade promotion incurred but not yet
invoiced is estimated and accrued for. In certain cases, the estimate for discounts and trade promotions
requires the use of forecast information for future trading periods and therefore a degree of estimation
uncertainty exists. These estimates are sensitive to variances between actual results and forecasts. The
estimate is based on accumulated experience.
The accruals are presented as ‘trade terms’ and offset against trade receivables due to the
same customer, or as trade term payables where there is no receivable to be offset. The balance of the
reduction in trade receivables for trade terms as of December 31, 2021 is disclosed in Note 18 and the
balance classified as a trade term payable is disclosed in Note 22.
b)
Business combinations
The Company is required to recognize separately, at the acquisition date, the identifiable
assets, liabilities and contingent liabilities acquired or assumed in a business combination at their fair
values. This involves an estimate of fair value of all assets and liabilities acquired. Such estimates are
based on valuation techniques, which require considerable estimation in forecasting future cash flows and
developing other assumptions. These estimates are based on information available on the acquisition date
and assumptions that have been deemed reasonable by management. The following estimates and
assumptions can materially affect our financial position and profit:
• The fair value and expected useful economic life of acquired intangible and tangible
assets that are subject to depreciation or amortization in future periods.
• Future changes to the assumptions over forecast future profitability used in estimating the
value of intangible assets and goodwill may result in additional expenses or income.
• Future changes to the assumptions used in estimating the value of uncertain tax
positions may result in additional expenses or income.
Please refer to Note 14 for details of business combinations in the period.
c)
Carrying value of goodwill and brands
Determining whether goodwill and brands are impaired requires an estimation of the value
in use of the cash generating unit to which goodwill and brands have been allocated. The value in use
calculation requires the entity to estimate the future cash flows expected to arise from the cash generating
unit and a suitable discount rate in order to calculate present value. Future cash flows for the purposes of
the value in use calculation are taken from approved budgets. Details of impairment reviews including
disclosures covering sensitivities are provided in Note 13.
f)
Fair value of derivative financial instruments.
Note 34 includes details of the fair value of the derivative instruments that the Company
holds at each balance sheet period. Management has estimated the fair value of these instruments by using
valuations based on discounted cash flow calculations. These inputs may be readily observable, market
corroborated, or generally unobservable inputs and are further discussed in Note 34.
5)
Segment reporting
Nomad has one reporting and operating segment, "Frozen", reflected in the segment presentation below for
the periods presented. The CODM primarily uses “Adjusted EBITDA”, disclosed in Note 3.19, as the key measure of the
segment’s results, which is considered non-IFRS financial information.
Segment Adjusted EBITDA
Profit for the period
Taxation
Net financing costs
Depreciation and amortization
Acquisition purchase price adjustments
Exceptional items
Other add-backs
Adjusted EBITDA
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
Note
€m
€m
€m
181.0
55.7
106.0
71.6
8.4
45.3
18.7
225.1
70.4
63.7
67.6
—
20.6
19.4
153.6
56.7
73.2
68.3
—
54.5
25.7
486.7
466.8
432.0
7
Acquisition purchase price adjustments relate to the reversal of the non-cash increase applied to inventory
acquired in business combinations to value it at fair value as opposed to cost.
Other add-backs include the elimination of share-based payment expense and related employer payroll
expense of €5.8 million (2020: €12.1 million, 2019: €22.4 million) and elimination of non-operating M&A related costs,
professional fees and transaction costs of €12.9 million (2020: €7.3 million, 2019: €3.3 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.
No information on segment assets or liabilities is presented to the CODM.
d)
Employee benefit obligation
Product information
The Group operates a number of defined benefit pension schemes and post-employment
benefit schemes which are valued by estimating the amount of future benefit that employees have earned in
return for their service in the current and prior periods. Each scheme has an actuarial valuation performed
by a specialist third party and is dependent on a series of assumptions which are estimated by
management. See Note 23 for details of these assumptions and a sensitivity analysis on material
assumptions.
e)
Uncertain tax positions
Where tax exposures can be quantified, an accrual for uncertain tax positions is based on
the Group's judgment of the most likely amount of the liability expected to be paid to the relevant tax
authority; or, when there is a wide range of possible outcomes, a probability weighted average approach.
Given the inherent uncertainties in assessing the outcomes of these exposures, the Company could in
future periods experience adjustments to these accruals. The factors considered in estimating the accrual
include the progress of discussions with the tax authorities, the complexity of respective tax legislation,
valuations of assets for tax purposes and the level of documentary support for historical positions taken by
previous owners. The accruals are made on the basis of a weighted average of potential outcomes.
Management considers the products it sells belong to one category, being "Frozen".
F-26
F-27
Geographical information
External revenue by geography
United Kingdom
Italy
Germany
France
Sweden
Austria
Norway
Spain
Rest of Europe
Total external revenue by geography
Non-current assets by geography
Germany
United Kingdom
Italy
Serbia
Croatia
Ireland
Norway
Sweden
Rest of Europe
Total non-current assets by geography
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
€m
€m
€m
758.3
417.9
396.3
188.6
148.1
129.3
121.7
75.1
371.3
747.3
426.3
393.2
203.8
158.7
127.9
115.6
82.6
260.5
712.5
394.1
329.6
176.6
175.7
108.2
120.4
79.5
227.7
2,606.6
2,515.9
2,324.3
December 31,
2021
December 31,
2020
€m
€m
140.0
139.6
64.8
48.5
38.5
34.3
31.0
29.8
72.3
135.5
132.1
68.5
—
—
31.9
30.0
28.5
52.7
598.8
479.2
Non-current assets exclude deferred tax assets, goodwill and brands which are not bound to one
geographical area.
6)
Operating profit
Operating profit is stated after charging:
Staff costs
Depreciation of property, plant and equipment
Impairment of property, plant and equipment
Impairment of software and brands
Amortization of software and brands
Operating lease charges
Exchange losses/(gains)
Research & development expenditure
Inventories recognized as an expense within cost of goods sold
Note
8
12
12
13
13
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
€m
€m
€m
340.6
63.4
—
1.7
8.2
6.1
27.0
19.2
340.2
59.8
—
—
7.8
3.0
308.6
59.7
0.1
—
8.6
4.5
(2.8)
17.6
(14.6)
18.9
1,694.3
1,627.9
1,536.0
7)
Exceptional items
Exceptional items are made up as follows:
Supply chain reconfiguration (1)
Findus Group integration costs (2)
Fortenova Acquisition integration costs (3)
Findus Switzerland integration costs (4)
Brexit (5)
Business Transformation program (6)
Information Technology Transformation program (7)
Goodfella's Pizza & Aunt Bessie's integration costs (8)
Factory optimization (9)
Settlement of legacy matters (10)
Release of indemnification assets (11)
Total exceptional items
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
€m
€m
€m
—
—
3.5
6.2
5.3
18.8
4.2
—
4.9
(2.6)
5.0
45.3
(12.5)
(3.6)
—
—
0.3
1.6
2.3
—
4.0
10.0
(2.9)
17.8
20.6
3.5
—
—
1.6
—
—
12.5
5.7
(9.2)
44.0
54.5
We do not consider these items to be indicative of our ongoing operating performance.
(1)
Supply chain reconfiguration
Supply chain reconfiguration relates to activities associated with the closure of the Bjuv
manufacturing facility in Sweden which ceased production in 2017. No income has been recognized in the
year ended December 31, 2021 (2020: €12.5 million, 2019: €3.6 million).
In 2020, the Company signed an agreement to end its leasehold of a cold store in Sweden in
2021, which was originally due to expire in 2040. The cold store will continue to be used by the Company
under a service contract once the lease has come to an end. The agreement resulted in a significant
modification of a right-of-use asset and reduction in lease liabilities. The carrying value of the right-of-use
asset had previously been impaired such that its value was significantly lower than that of the liabilities
extinguished. Consequently, the Company recognized a gain from the transaction. As part of the
transaction, the Company has become liable to fulfill certain severance arrangements in 2021 which have
been provided for, the cost of which offsets a portion of the income from the modification of the lease.
In 2019, the income related to the sale of the agricultural land and the finalization of
consideration received for the sale of the industrial property, which had completed in 2018.
(2)
Findus Group integration costs
Following the acquisition of the Findus Group on November 2, 2015, the Company initiated a
substantial integration project. Expenses presented primarily relate to the roll-out of the Nomad ERP system
which completed in 2019.
(3)
Fortenova Acquisition integration costs
As disclosed in Note 14, the Company completed the acquisition of the Fortenova Group’s
Frozen Food Business Group on September 30, 2021, following which the Company is undertaking an
integration project over the next three years. Integration expenses incurred relate to external consultancy
costs, organizational structure alignment to Nomad design, systems configuration and roll-out of our
controls environment to the acquired business.
F-28
F-29
(4)
Findus Switzerland integration costs
(9)
Factory optimization
As disclosed in Note 14, the Company completed the acquisition of Findus Switzerland on
December 31, 2020, following which the Company commenced an integration project which is expected to
complete in 2022. Integration expenses incurred and to be incurred in the future relate to external
consultancy costs, organizational structure alignment to Nomad design and roll-out of the Nomad ERP
system.
(5)
Brexit
As part of the process of the United Kingdom exiting the European Union, commonly referred
to as Brexit, the Company has incurred expenses to prepare for, and respond to, changes impacting our
supply chain. Whilst an agreement with the EU was reached on December 24, 2020, border control
processes remain in a period of transition. Expenses in 2021 relate to project costs and the write-off of
system development costs no longer required due to changes in regulations and the Company's approach
to handling Brexit-related logistic issues.
(6)
Business transformation program
In 2020, the Company launched the first phase of a multi-year, enterprise-wide transformation
and optimization program. Over the next few years, additional transformation phases will be implemented.
The program aims to standardize, simplify and automate end-to-end business processes. This will enable
key decision making and analytical capability, building a platform and organization to support future growth
and provide better value for shareholders. Execution of the business transformation program will include the
evaluation and implementation of a new ERP system.
Expenses in the year consist of restructuring and transformational project costs, including
business technology transformation initiative costs and related professional fees.
(7)
Information Technology Transformation program
In 2021, the Company launched a program to transform the Information Technology (“IT”)
operating model, specifically to modernize the end-to-end technology estate to support current and future
complex and evolving business needs driven by acquisitions and organic growth. Among the many
changes being made, the program moves our operating model to a cloud-hosted solution, which better
deploys new services to the business and end user, including application management, supporting a
diverse workforce across multiple locations and languages, as well as deploying artificial Intelligence
assisted tools. Other key components of the program include the Company’s cyber security services to
adapt to rapidly changing threats and a change of IT service partners to enable one-off renovation and uplift
of capabilities across the business.
(8)
Goodfella's Pizza & Aunt Bessie's integration costs
Following the acquisition of the Goodfella’s pizza business in April 2018 and the Aunt Bessie's
business in July 2018, the Company completed an integration project which finished in 2020.
In 2018, the Company initiated a three-year factory optimization program. The focus of the
program is to develop a new suite of standard manufacturing and supply chain processes, that will provide
a single network of optimized factories. The program is expected to provide a number of benefits, including
an optimized supply chain infrastructure, benefits derived from the implementation of a standardized global
manufacturing and planning processes, and an increased level of sustainable performance improvement.
Due to delays in delivering the program across the Nomad manufacturing portfolio due to various
government lockdowns and travel bans, the project has been extended for an additional year.
(10)
Settlement of legacy matters
A net income of €2.6 million has been recognized associated with the release of acquired
provisions relating to periods prior to acquisition by the Company. Net income of €2.9 million was
recognized in the year ended December 31, 2020 associated with the release of acquired tax liabilities
relating to periods prior to acquisition by the Company. Net income of €9.2 million was recognized in the
year ended December 31, 2019. This includes an income of €2.7 million recognized on settlement of
contingent consideration for the La Cocinera acquisition and net income of €0.7 million associated with
settlements of tax audits.
(11)
Release of indemnification assets
The charges for the release of indemnification assets relates to the partial release of shares
held in escrow associated with the acquisition of the Findus Group in 2015, as discussed in Note 19.
Tax impact of exceptional items
The tax impact of the exceptional items amounts to a credit of €8.4 million in the year ended December 31,
2021 (year ended December 31, 2020: €3.5 million, year ended December 31, 2019: €3.1 million).
Cash flow impact of exceptional items
Included in the Consolidated Statements of Cash Flows for the year ended December 31, 2021 is €48.8
million (year ended December 31, 2020: €12.1 million, year ended December 31, 2019: €15.9 million) of cash outflows
relating to exceptional items. This includes cash flows related to the above items as well as the cash impact of the
settlement of provisions brought forward from previous accounting periods.
8)
Payroll costs, share based payments and management incentive schemes
(a)
Payroll costs
The average number of persons employed by the Company (excluding non-Executive Directors) is
analyzed and set out below:
Production
Administration, distribution & sales
Total number of employees
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
3,310
2,193
5,503
3,043
1,647
4,690
3,308
1,448
4,756
The increase in the average number of employees in the table above for the year ended December 31,
2021 compared with the year ended December 31, 2020 is primarily due to the Fortenova Acquisition and Findus
Switzerland acquisition as described in Note 14.
F-30
F-31
long term management incentive scheme and share based payment costs, but includes bonus costs.
The table below discloses the Company’s aggregate payroll costs of these persons. Payroll costs exclude
Director and Senior Management Share Awards
Wages and salaries
Social security costs
Other pension costs
Total payroll costs
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
€m
€m
€m
266.4
56.1
18.1
340.6
276.4
49.2
14.6
340.2
250.4
45.2
13.0
308.6
(b)
Share based payments
The Company's discretionary share award scheme, the LTIP, enables the Company’s
Compensation Committee to make grants (“Awards”) in the form of rights over ordinary shares, to any
Director, Non-Executive Director or employee of the Company. However, it is the Committee’s current
intention that Awards be granted only to Directors and senior management, whilst recognizing a separate
annual Restricted Stock Award for Non-Executive Directors.
All Awards are to be settled by physical delivery of shares.
Non-Executive Director Restricted Share Awards
In accordance with the Board approved independent Non-Executive Director compensation
guidelines, each independent Non-Executive Director is entitled to a grant of $100,000 of restricted shares
annually on the date of the annual general meeting, valued at the closing market price for such shares on
this date. The restricted shares vest on the earlier of twelve months from the date of grant or the date of the
Company’s next annual meeting of shareholders.
The Non-Executive Directors restricted share awards granted on June 19, 2018, which
consisted of 32,172 shares at a share price of $18.07, vested on June 14, 2019 and were issued at a share
price of $20.74, resulting in a €0.1 million increase in the share based compensation reserve. Of the total
44,272 number of shares vesting, 12,100 shares were held back from issue by the Company as settlement
towards personal tax liabilities arising on the vested shares.
The Non-Executive Directors restricted share awards granted on June 14, 2019, which
consisted of 39,370 shares at a share price of $20.32. In July 2019, in conjunction with the resignation of
one of our Non-Executive Directors, 2,460 shares from this grant were vested and issued. The remaining
awards vested on June 17, 2020 and were issued at a share price of $21.78. Of the total 34,447 number of
shares vesting, 8,656 shares were held back from issue by the Company as settlement towards personal
tax liabilities arising on the vested shares.
The Non-Executive Directors restricted share awards granted on June 17, 2020, which
consisted of 32,140 shares at a share price of $21.78, vested on June 30, 2021 and were issued at a share
price of $30.14, resulting in a €0.2 million increase in the share based compensation reserve. Of the total
32,140 number of shares vesting, 7,734 shares were held back from issue by the Company as settlement
towards personal tax liabilities arising on the vested shares.
On June 30, 2021, after the Company's annual general meeting of shareholders, the
current Non-Executive Directors were granted 24,759 restricted share award at a share price of $28.27.
The total charge for Non-Executive Director grants within the Statement of Consolidated
Profit or Loss for the year ended December 31, 2021 for stock compensation awards was €0.8 million (year
ended December 31, 2020: €0.7 million; year ended December 31, 2019: €0.9 million).
As part of its long term incentive initiatives, the Company has outstanding awards over
2,016,855 ordinary shares granted to certain members of its management team (the “Management Share
Awards”) as of the following four award dates:
January 1,
2016 Award
January 1,
2017 Award
January 1,
2018 Award
January 1,
2019 Award
January 1,
2020 Award
January 1,
2021 Award
Total
Number of awards
outstanding at
January 1, 2021
New awards granted
in the period
Awards vested and
issued in the period
Forfeitures in the
period
Number of awards
outstanding at
December 31, 2021
1,041,953
819,873
446,575
159,561
710,438
—
3,178,400
—
—
(1,041,953)
(819,873)
—
—
—
—
—
820,202
820,202
—
—
(1,861,826)
—
—
—
(14,785)
(6,866)
(65,345)
(32,925)
(119,921)
—
431,790
152,695
645,093
787,277
2,016,855
The 2018 award has vesting conditions based on cumulative EBITDA performance over
four years and Company share price performance over two years to five years. During 2021, the
Compensation Committee of the Board of Directors amended the non-market condition targets for this
award due to recent acquisitions, which did not increase its incremental fair value. The share price and
EBITDA performance conditions for the 2018 award are weighted 50% each per performance target.
•
For the 2018 award, for the share price target, the initial two-year period was through to
January 1, 2020 and the subsequent three-year period is through to January 1, 2023.
For the four-year cumulative EBITDA Performance Condition, if satisfied, will vest on
January 1, 2022.
For the 2019, 2020 and 2021 awards, those grants have vesting conditions based on
cumulative EBITDA performance, cumulative Net Sales and Company share price performance over three
years. During 2021, the Compensation Committee of the Board of Directors amended the non-market
condition targets for these awards due to recent acquisitions, which did not increase their incremental fair
value. In addition, the 2020 award had a holding period of one-year that has been removed from the vesting
period. The 2021 award was issued late in 2021 with a performance period starting January 1, 2021.
In September 2019, 166,427 restricted share awards were granted as part of the 2019
Management Share Award. The performance period associated with the award began as of January 1,
2019. The 2019 awards have vesting conditions based on three-year cumulative EBITDA and net sales,
and Company share price performance measures. One third of the total share award is assigned to each
type of performance measure. All shares are subject to a holding period of an additional year and require
that the participants to the scheme are still actively employed during the entire four year period, through
January 1, 2023.
In January 2020, 761,979 restricted share awards were granted as part of the 2020
Management Share Award. The performance period associated with the award began on January 1, 2020.
The Share awards will vest on the Company achieving a range of performance conditions including
cumulative EBITDA, cumulative net sales, and share price performance measures over a three-year period.
The cumulative EBITDA and Cumulative Net Sales tranches of shares are equally weighted, being worth
37.5% of the total award each. The Company Share Price Tranche is worth 25% of the total award. All
shares vest, subject to satisfaction of the award conditions, on January 1, 2023.
F-32
F-33
In late 2021, 820,202 restricted share awards were granted as part of the 2021
Management Share Award. The performance period associated with the award began on January 1, 2021.
The Share awards will vest on the Company achieving a range of performance conditions including
cumulative EBITDA, cumulative net sales, and Company share price performance measures over a three-
year period. The cumulative EBITDA and Cumulative Net Sales tranches of shares are equally weighted,
being worth 37.5% of the total award each. The Share Price Tranche is worth 25% of the total award. All
shares vest, subject to satisfaction of the award conditions, on January 1, 2024.
In January 2019, 85,315 restricted shares granted as part of the 2017 Management Share
Awards vested based on share price performance, resulting in the issuance of 51,932 ordinary shares (net
of 33,383 ordinary shares held back from issue by the Company as settlement towards personal tax
liabilities arising on the vested ordinary shares).
In January 2020, 284,555 restricted shares granted as part of the 2016 Management Share
Awards vested as a result of the satisfaction of the applicable Share Price Performance Condition (based
on a share price of $22.37), resulting in the issuance of 163,816 ordinary shares to participants in the LTIP
(net of 120,739 ordinary shares held back from issue by the Company as settlement towards personal tax
liabilities arising on the vested ordinary shares).
In February 2020, 1,626,006 restricted shares granted as part of the 2016 Management
Share Awards vested as a result of the satisfaction of the applicable Share Price Performance Condition
(based on a share price of $19.53), resulting in the issuance of 928,042 ordinary shares to participants in
the LTIP (net of 697,964 ordinary shares held back from issue by the Company as settlement towards
personal tax liabilities arising on the vested ordinary shares).
In September 2020, 42,825 restricted shares granted as part of the 2018 Management
Share Awards vested as a result of the satisfaction of the applicable Share Price Performance Condition
(based on a share price of $25.30). Due to the timing of the vesting, the resulting issuance of 25,655
ordinary shares to participants in the LTIP (net of 17,170 ordinary shares held back from issue by the
Company as settlement towards personal tax liabilities arising on the vested ordinary shares) occurred in
October 2020.
In January 2021, 1,041,953 restricted shares granted as part of the 2016 Management
Share Awards vested as a result of the satisfaction of the applicable Share Price Performance Condition
(based on a share price of $25.42), resulting in the issuance of 587,633 ordinary shares to participants in
the LTIP (net of 454,320 ordinary shares held back from issue by the Company as settlement towards
personal tax liabilities arising on the vested ordinary shares).
In January 2021, 368,154 restricted shares granted as part of the 2017 Management Share
Awards vested as a result of the satisfaction of the applicable Share Price Performance Condition (based
on a share price of $25.42), resulting in the issuance of 217,228 ordinary shares to participants in the LTIP
(net of 150,926 ordinary shares held back from issue by the Company as settlement towards personal tax
liabilities arising on the vested ordinary shares).
In February 2021, 451,719 restricted shares granted as part of the 2017 Management
Share Awards vested as a result of the satisfaction of the applicable EBITDA Performance Condition (based
on a share price of $25.89 at time of vesting), resulting in the issuance of 271,451 ordinary shares to
participants in the LTIP (net of 180,268 ordinary shares held back from issue by the Company as settlement
towards personal tax liabilities arising on the vested ordinary shares).
The stock compensation charge reported within the Consolidated Statement of Profit or
Loss for the year ended December 31, 2021 related to the director and senior management share awards is
€4.3 million (year ended December 31, 2020: €8.3 million: year ended December 31, 2019: €14.0 million).
Grant date price
Exercise price
Expected life of restricted share
Expected volatility of the share price
Dividend yield expected
Risk free rate
Employee exit rate
EBITDA Performance Target Condition
January 1, 2018
award
January 1, 2019
award
January 1, 2020
award
January 1, 2021
award
$
$
16.72
—
$
$
20.15
—
$
$
22.37
—
$
$
25.42
—
1.50 - 4.00
years
22.7 %
— %
2.55 %
14.0 %
35.0 %
4.00 years
24.0 %
— %
1.33 %
14.0 %
35.0 %
3.00 years
24.4 %
— %
1.70 %
27.3 %
35.0 %
3.00 years
30.0 %
— %
0.24 %
14.0 %
35.0 %
The expected volatility of the share price inputs above were estimated by referencing
selected quoted companies which are considered to exhibit some degree of comparability with the
Company, as the Company has only been listed for approximately six years.
Based on the latest assessments of fair value and the number of shares expected to vest,
the total fair values in respect of the Restricted Shares are:
• 2018 award - $1.6 million (€1.3 million)
• 2019 award - $1.4 million (€1.2 million)
• 2020 award - $4.8 million (€4.3 million)
• 2021 award - $7.0 million (€5.8 million)
Initial Director Options
In 2014, certain Non-Executive Directors were granted options (“Initial Options”) to
purchase a maximum of 125,000 Ordinary Shares at an exercise price of $11.50 per ordinary share. The
awards were valued at issuance and expensed during the two years ended April 1, 2016.
Throughout 2019, former Non-Executive Directors exercised 56,250 of the 125,000 initial
options granted to them for €0.6 million.
In May 2020, former and current Non-Executive Directors were issued an aggregate of
49,196 shares (net of shares withheld for the settlement of taxes), exercising all the remaining initial options
outstanding for €0.6 million.
9)
Directors and Key Management compensation
Short-term employee benefits
Share-based payment expense
Non-Executive Director fees
Total Directors' and executive officers' compensation
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
€m
€m
€m
2.2
2.4
0.3
4.9
3.9
3.5
0.3
7.7
2.8
7.6
0.4
10.8
The Company calculates the cost of the Management Share Awards based upon their fair
executive team, therefore key management are considered to be the Directors and executive Officers.
All significant management decision making authority is vested within the Board of Directors and the
value using the Monte Carlo Model, which is considered to be the most appropriate methodology
considering the restricted shares only vest once the market performance conditions have been satisfied.
The inputs and assumptions underlying the Monte Carlo models for all awards outstanding
as of the valuation date are now as follows:
F-34
F-35
Benefits are accruing to the following number of key management
personnel under:
Defined contribution plans
Share based payment schemes
10)
Finance income and costs
Interest income
Net foreign exchange gains on translation of financial assets and
liabilities
Finance income
Interest and finance charges paid/payable for lease liabilities and
financial liabilities not at fair value through profit or loss (a)
Cross-currency interest rate swaps: cash flow hedges, transfer from
equity
Net impairment loss on short-term investments
Net pension interest costs
Amortization of borrowing costs
Net foreign exchange losses on translation of financial assets and
liabilities
Net fair value losses on derivatives held at fair value through profit or
loss (b)
Financing costs incurred in amendment of terms of debt (c)
Finance costs
Net finance costs
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
2
2
2
2
2
2
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
€m
€m
€m
0.1
—
0.1
0.7
4.0
4.7
2.5
—
2.5
(59.8)
(64.0)
(79.0)
1.6
(8.6)
(1.7)
(2.0)
5.9
—
(2.7)
(2.0)
(4.0)
—
(13.7)
(17.9)
(106.1)
(106.0)
(5.6)
—
(68.4)
(63.7)
21.8
—
(3.8)
(2.0)
(3.9)
(8.8)
—
(75.7)
(73.2)
(a) Includes the unwinding of discounting on lease liabilities.
(b) Net fair value losses on derivatives held at fair value through profit or loss includes a one-off non-cash charge of €7.8
million for changes to cross currency interest rate swaps as disclosed in Note 34.
(c) Charges of €17.9 million have been recognized as a consequence of the refinancing in June 2021, as disclosed in
Note 34. Of this, €10.1 million relates to the extinguishment of the previous debts, including the write-off of deferred
transaction costs.
11)
Taxation
Current tax expense
Current tax on profits for the period
Adjustments in respect of prior periods
Deferred tax benefit/(expense)
Origination and reversal of temporary differences
Impact of change in tax rates
Total tax expense
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
Note
€m
€m
€m
(117.5)
0.6
(116.9)
116.3
(55.1)
61.2
(55.7)
(44.8)
(7.6)
(52.4)
(1.2)
(16.8)
(18.0)
(70.4)
(66.4)
—
(66.4)
9.7
—
9.7
(56.7)
16
F-36
Reconciliation of effective tax rate:
Profit before tax
Tax charge at the standard UK corporation tax rate 19% (2020: 19%;
2019: 19%)
Difference in tax rates
Non tax deductible interest
Other income and expenses not taxable or deductible
Unrecognized tax assets
Provisions for uncertainties
Impact of change in tax rates
Change in tax base of assets due to step-up
Prior period adjustment
Total tax expense
Effective tax rates
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
€m
€m
€m
236.7
295.5
210.3
(45.0)
22.7
0.1
2.5
(1.5)
(52.5)
(55.1)
72.5
0.6
(55.7)
(56.1)
(18.2)
(0.1)
(0.8)
(6.3)
35.5
(16.8)
—
(7.6)
(70.4)
(39.9)
(11.9)
0.6
(1.2)
(0.9)
(3.4)
—
—
—
(56.7)
The Company is resident in the United Kingdom for tax purposes. The effective tax rate for the year ended
December 31, 2021 was 23.5% (year ended December 31, 2020: 23.8%). The change is principally caused by the release
of uncertain tax positions in relation to exposures that are now time barred, offset in part by the impact of a change in tax
rates on deferred tax assets and liabilities.
The Company operates in many different jurisdictions and in some of these, certain matters are under
discussion with local tax authorities. These discussions are often complex and can take many years to resolve, and are in
different stages with respect to assessments appeals and refunds. The Company actively seeks to manage the
associated risks by proactively engaging with tax authorities and applying for Advanced Pricing Agreements where
appropriate. Accruals for tax contingencies require management to make estimates and judgments with respect to the
ultimate outcome of a tax audit, and actual results could vary from these estimates. Where tax exposures can be
quantified, a provision is made based on best estimates and management’s judgments. Given the inherent uncertainties in
assessing the outcomes of these exposures (which can sometimes be binary in nature), the Company could, in future
years, experience adjustments to this provision, including releases of provisions when those exposures become time-
barred.
Notwithstanding this, management believes that the Company’s position on all open matters including those
in current discussion with local tax authorities is robust and that the Company is appropriately provided. As of December
31, 2021, the current tax payable of €198.5m and deferred tax assets of €128.3m includes provisions for tax uncertainties
of €163.4m. As of December 31, 2020, the current tax payable of €166.2m and deferred tax assets of €113.5m included
provisions for tax uncertainties of €103.9m.
The UK government announced an increase in the standard rate of corporation tax from 19% for 2021
(2020: 19%) to 25% effective from April 1, 2023, substantively enacted on May 24, 2021. The increase gave rise to a
substantial one-off deferred tax expense, which is offset in part by a deferred tax benefit from the implementation of
certain arrangements benefiting from one-off government incentives and other tax incentives. The financial statements for
the year ended December 31, 2020 were prepared using the substantively enacted rate of corporation tax of 19%.
F-37
The tax (benefit)/expense relating to components of other comprehensive income is as follows:
12)
Property, plant and equipment
Year ended December 31, 2021
Remeasurement of post-employment benefit liabilities
Net investment hedge
Cash flow hedges
Other comprehensive (income)/loss
Current tax
Deferred tax
Year ended December 31, 2020
Remeasurement of post-employment benefit liabilities
Net investment hedge
Cash flow hedges
Other comprehensive loss/(income)
Current tax
Deferred tax
Year ended December 31, 2019
Remeasurement of post-employment benefit liabilities
Net investment hedge
Cash flow hedges
Other comprehensive loss/(income)
Current tax
Deferred tax
Before
tax
€m
Tax
charge
€m
Note
After tax
€m
16
Note
16
(25.9)
(18.8)
(9.0)
(53.7)
(36.1)
(18.8)
(22.6)
(77.5)
10.2
—
13.6
23.8
—
23.8
23.8
Before
tax
€m
Tax
benefit
€m
After tax
€m
27.8
10.1
17.3
55.2
19.5
10.1
11.3
40.9
(8.3)
—
(6.0)
(14.3)
—
(14.3)
(14.3)
Before
tax
€m
Tax
benefit
€m
After tax
€m
29.2
(6.0)
21.7
44.9
35.9
(6.0)
27.3
57.2
(6.7)
—
(5.6)
(12.3)
—
(12.3)
(12.3)
Owned property, plant and equipment (i)
Right-of-use assets (ii)
Property, plant and equipment
December 31,
2021
December 31,
2020
€m
€m
489.2
60.2
549.4
373.2
49.0
422.2
(i)
Owned property, plant and equipment
Land and
buildings
€m
Plant and
equipment
Computer
equipment
€m
€m
Total
€m
Cost
Balance at December 31, 2019
Acquisitions through business combinations
Additions
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2020
Acquisitions through business combinations
Additions
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2021
Accumulated depreciation and impairment
Balance at December 31, 2019
Depreciation
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2020
Depreciation
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2021
Net book value December 31, 2019
Net book value December 31, 2020
Balance at December 31, 2021
Assets under construction
156.2
5.1
6.8
(0.1)
(2.7)
165.3
30.5
14.8
331.9
3.5
54.6
(2.6)
(11.3)
376.1
45.0
62.8
(0.1)
(5.9)
6.2
216.7
16.2
494.2
23.0
7.6
—
(1.4)
29.2
8.4
—
2.9
40.5
133.2
136.1
176.2
125.0
33.5
(1.8)
(8.6)
148.1
35.4
(4.8)
12.6
191.3
206.9
228.0
302.9
13.8
—
2.1
(0.3)
(0.3)
15.3
0.5
3.5
—
0.4
501.9
8.6
63.5
(3.0)
(14.3)
556.7
76.0
81.1
(6.0)
22.8
19.7
730.6
3.9
3.0
(0.3)
(0.4)
6.2
3.0
—
0.4
9.6
9.9
9.1
10.1
151.9
44.1
(2.1)
(10.4)
183.5
46.8
(4.8)
15.9
241.4
350.0
373.2
489.2
Additions for the year ended December 31, 2021 include assets under construction of €40.5 million (year
ended December 31, 2020: €24.5 million).
F-38
F-39
Security
13)
Goodwill and Intangibles
Borrowings have been provided by a syndicate of third party lenders under the terms of the Senior Facilities
Agreement, (the “Syndicate”). Together with the holders of the Senior Secured Notes (the "Bond issue"), the Syndicate
has security over the assets of the "Guarantor Group". The "Guarantor Group" consists of those companies which
individually have more than 5% of consolidated total assets or EBITDA (subject to, and as defined in the Senior Facilities
Agreement) of the Company and in total comprise more than 80% of consolidated total assets or EBITDA at any testing
date.
(ii)
Right-of-use assets
Net book value
Land and Buildings
Plant and equipment and motor vehicles
Computer equipment
Right-of-use assets
December 31,
2021
December 31,
2020
€m
€m
44.8
15.3
0.1
60.2
38.5
10.3
0.2
49.0
Additions to right-of-use assets during the year ended December 31, 2021 were €8.1 million. A further €19.0
million of additions were acquired through business combinations.
Lease liabilities are included within loans and borrowings in Note 21. Interest on lease liabilities is presented
as a finance cost in Note 10. Payments of lease liabilities are included as a financing activity within the Statement of Cash
Flows.
Depreciation
Land and Buildings
Plant and equipment and motor vehicles
Computer equipment
Depreciation expense of right-of-use assets
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
€m
€m
€m
10.9
5.5
0.2
16.6
10.6
4.9
0.2
15.7
10.7
5.2
0.2
16.1
Cost
Balance at December 31, 2019
Acquisitions through business combinations (restated)
Additions
Effect of movements in foreign exchange
Balance at December 31, 2020 (restated)
Acquisitions through business combinations
Additions
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2021
Accumulated amortization and impairment
Balance at December 31, 2019
Amortization
Effect of movements in foreign exchange
Balance at December 31, 2020
Amortization
Impairment
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2021
Net book value December 31, 2019
Net book value December 31, 2020 (restated)
Net book value December 31, 2021
Goodwill
Brands
Computer
software
Customer
relationships
€m
€m
€m
€m
Total
€m
1,862.9
2,051.1
29.8
31.0
3,974.8
40.1
—
(0.5)
66.0
—
5.3
1,902.5
2,122.4
192.6
296.5
—
—
4.3
—
—
3.2
0.1
8.8
0.3
39.0
1.1
5.8
(2.5)
(0.5)
—
—
—
106.2
8.8
5.1
31.0
4,094.9
4.3
494.5
—
—
—
5.8
(2.5)
7.0
2,099.4
2,422.1
42.9
35.3
4,599.7
Goodwill
Brands
Computer
software
Customer
relationships
€m
€m
€m
€m
Total
€m
—
—
—
—
—
—
—
—
4.4
1.2
—
5.6
1.2
—
—
—
—
1,862.9
6.8
2,046.7
1,902.5
2,116.8
2,099.4
2,415.3
15.2
4.4
0.1
19.7
4.6
1.7
(1.7)
(0.3)
24.0
14.6
19.3
18.9
9.2
2.2
—
11.4
2.4
—
—
—
28.8
7.8
0.1
36.7
8.2
1.7
(1.7)
(0.3)
13.8
21.8
44.6
3,946.0
19.6
4,058.2
21.5
4,555.1
As disclosed in Note 14 "Acquisitions", values for the year ended December 31, 2020 have been restated
for fair value adjustments related to the Findus Switzerland acquisition.
Amortization and impairment of €9.9 million (December 31, 2020: €7.8 million; December 31, 2019: €8.6
million) is included in ‘other operating expenses’ in the Consolidated Statement of Profit or Loss.
Goodwill is initially recognized based on the accounting policy for goodwill (see note 3.5) and is
subsequently measured at cost less amounts provided for impairment.
The Company’s goodwill, brand and customer relationships values have been allocated to a level no larger
than the identified operating segment. This represents the lowest level within the Group at which the goodwill is monitored
for internal management purposes. As required by IAS 36 'Impairment of Assets', an annual review of the carrying amount
of the goodwill and the indefinite life brands is carried out to identify whether there is any impairment to these carrying
values. This is done by means of comparison of the carrying values to the value in use of the CGU. Value in use is
calculated as the net present value of the projected risk-adjusted cash flows of each CGU.
F-40
F-41
Key assumptions
The final assessment of the assets and liabilities acquired are as follows:
The values for the key assumptions relating to the annual review of the carrying amount of goodwill and
indefinite life brands were arrived at by taking into consideration detailed historical information and comparison to external
sources where appropriate, such as market rates for discount factors.
•
•
•
•
•
•
Budgeted cash flows: the calculation of value in use has been based on the cash flow forecasts
by management for 2022 to 2025. The trends in these forecasts have been extrapolated to
produce a forecast cash flow for 2026. Beyond 2026 the same assumptions have been applied
for future periods in the absence of longer term detailed forecasts. These plans have been
prepared and approved by management, and incorporate past performance of the entities
acquired in the period, historical growth rates and projections of developments in key markets.
Revenue: projected revenues are built up with reference to markets and product
platforms. They incorporate past performance, historical growth rates and projections of
developments in key markets.
Profit margins: projected margins reflect historical performance, adjusted to account for
volatility, such as the impact of COVID-19.
Capital expenditure forecast reflects expected expenditure requirements and includes an
allowance for the replacement of leased right-of-use assets.
Discount rate: a pre-tax discount rate of 6.4% (2020: 5.8%) was applied to the cash flows. This
discount rate has been calculated using a capital asset pricing model using observable market
data, including the share price of Nomad Foods Limited.
Long-term growth rates: the growth rate used in the testing after the detailed forecasting period
was 1.0% (2020: 1.0%). These rates do not reflect the long-term assumptions used by the
Company for investment planning.
Assets:
Intangible assets
Property, plant and equipment, including Right-of-use assets
Current assets
Inventories
Total assets
Liabilities:
Current liabilities
Non-current liabilities
Deferred tax liabilities
Total liabilities
Total identifiable net assets acquired
Total purchase consideration
As reported
December 31, 2020
Adjustments
As restated
December 31, 2020
€m
€m
€m
24.5
8.9
0.2
11.5
45.1
0.3
6.8
1.6
8.7
36.4
112.0
41.6
—
—
1.1
42.7
—
—
6.4
6.4
36.3
0.8
66.1
8.9
0.2
12.6
87.8
0.3
6.8
8.0
15.1
72.7
112.8
Sensitivity to changes in assumptions
Total identifiable net assets acquired
(36.4)
(36.3)
(72.7)
Impairment was not required at either December 31, 2021, or December 31, 2020. In each case the
valuations derived from the discounted cash flow model indicate a sufficient amount of headroom for which any
reasonably possible change to key assumptions is unlikely to result in an impairment of the related goodwill.
14)
Acquisitions
(a)
Findus Switzerland
Goodwill
75.6
(35.5)
40.1
Goodwill recognized on acquisition is €40.1 million. The goodwill recognized is attributable mainly to the
growth prospects for the business expected organically and operational synergies.
Restatement of prior year comparatives
On December 31, 2020, the Company completed its acquisition of all of the share capital of Findus
Switzerland for total cash consideration of €112.8 million, which produces and sells frozen food in Switzerland. The deal
extends the geographical reach of this brand, complementing the existing business model.
The acquisition accounting was completed in 2021. As IFRS 3 requires fair value adjustments to be
recorded with effect from the date of acquisition, this requires the restatement of previously reported financial results. The
impact on the Statement of Financial Position as at December 31, 2020 is shown below.
Due to the timing of the acquisition, the valuation of the business had not been completed within the
financial statements reported as at December 31, 2020, with the difference between the consideration paid and the book
value of assets valued being provisionally allocated to goodwill. The Company has since completed its fair valuation
exercise over the identifiable assets acquired as well as liabilities and contingent liabilities assumed, with any
corresponding adjustment necessary being made to the value of goodwill recognized. Furthermore, following customary
working capital adjustments, a final payment of €0.8 million has been made to the seller in 2021.
Goodwill
Intangible assets
Inventories
Deferred tax liabilities
Trade and other payables - current
Other assets and liabilities, not affected by restatement
Net assets
As reported
December 31, 2020
€m
1,938.0
2,114.1
343.2
(420.7)
(646.4)
(1,202.1)
2,126.1
Adjustments
€m
As restated
December 31, 2020
€m
(35.5)
41.6
1.1
(6.4)
(0.8)
—
—
1,902.5
2,155.7
344.3
(427.1)
(647.2)
(1,202.1)
2,126.1
F-42
F-43
(b)
Fortenova Acquisition
(d)
Purchase consideration - cash outflow
On September 30, 2021, the Company announced the completion of the acquisition of the Fortenova
Group’s Frozen Food Business Group (FFBG) for total cash consideration of €640.1 million, subject to customary
completion payment conditions. FFBG is a leading European frozen food portfolio operating in attractive markets new to
Nomad, including Croatia, Serbia, Bosnia & Herzegovina, Hungary, Slovenia, Kosovo, North Macedonia and Montenegro.
Its two anchor brands, Ledo and Frikom, have unparalleled consumer awareness and number one market share in many
of these markets and offer a broad range of frozen food products including fish, fruits, vegetables, ready meals, pastry and
ice cream.
The preliminary assessment of the values of assets and liabilities at the date acquisition and the
consideration paid is as follows:
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
Outflow of cash for business combinations, net of cash
acquired
Cash consideration
Less cash acquired
Contingent consideration paid related to acquisitions
24
Net outflow of cash - investing activities
€m
€m
€m
640.9
(43.6)
—
597.3
113.0
(0.1)
—
112.9
—
—
1.5
1.5
As reported
September 30,
2021
€m
15)
Investments
The following are the Company's significant investments as of December 31, 2021.
Assets:
Intangible assets
Property, plant and equipment, including Right-of-use assets
Trade and other receivables
Cash
Inventories
Deferred taxes
Total assets
Liabilities:
Current liabilities
Non-current liabilities
Deferred taxes
Total liabilities
Total identifiable net assets acquired
Total purchase consideration
Total identifiable net assets acquired
Goodwill
301.9
95.0
71.7
43.6
46.9
14.8
573.9
62.1
16.6
47.7
126.4
447.5
640.1
(447.5)
192.6
The preliminary goodwill recognized on acquisition is €192.6 million. The goodwill recognized is attributable
mainly to the growth prospects for the business expected organically and operational synergies.
If new information obtained within one year of the date of acquisition about facts and circumstances that
existed at the date of acquisition is identified, then the accounting for the acquisition will be revised.
(c)
Impact of acquisitions on financial statements
Acquisition related costs of €12.9 million (2020: €4.8 million) are recognized as an expense in other
operating expenses.
If the Fortenova Acquisition had occurred on January 1, 2021, management estimates that the combined
Company would have revenue of €2,851.7 million and profit before tax of €279.9 million for the year ended December 31,
2021.
F-44
Nomad Foods Europe Holdings Limited
Nomad Foods Europe Holdco Limited
Nomad Foods Europe Finco Limited
Nomad Foods Europe Midco Limited
Nomad Foods Bondco Plc
Nomad Foods Lux S.à.r.l.
Nomad Foods Europe Limited
Birds Eye Limited
Nomad Foods Europe Finance Limited
Birds Eye Ireland Limited
Iglo Holding GmbH
Iglo Nederland B.V.
Iglo Belgium S.A.
Iglo Portugal
Iglo Austria Holdings GmbH
C.S.I. Compagnia Surgelati Italiana S.R.L
Findus Sverige Holdings AB
Iglo GmbH
Frozen Fish International GmbH
Liberator Germany Newco GmbH
Iglo Austria GmbH
Findus Sverige AB
Frionor Sverige AB
Findus Holdings France SAS
Findus France SAS
Findus Espana SLU
Findus Danmark A/S
Findus Finland Oy
Findus Norge AS
Findus Norge Holding AS
Country of
incorporation
England
England
England
Class of
shares held
Ordinary
Ordinary
Ordinary
England
Ordinary
England
Luxembourg
England
England
England
Republic of
Ireland
Germany
Netherlands
Belgium
Portugal
Austria
Italy
Sweden
Germany
Germany
Germany
Austria
Sweden
Sweden
France
France
Spain
Denmark
Finland
Norway
Norway
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Activity
Holding
Holding
Holding
Holding/
Finance
Finance
Finance
Management
Trading
Finance
Trading
Holding
Trading
Trading
Trading
Holding
Trading
Holding
Trading
Trading
Property
Trading
Trading
Holding
Holding
Trading
Trading
Trading
Trading
Trading
Holding
F-45
Ownership
as of December
31, 2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Toppfrys AB
Findus Switzerland AG
LEDO plus d.o.o.
INDUSTRIJA SMRZNUTE HRANE FRIKOM DOO
BEOGRAD
LEDO d.o.o. Čitluk
IRIDA d.o.o.
LEDO Jégkrém és Fagyasztott Élelmiszer Gyártó és
Forgalmazó Korlátolt Felelősségű Társaság
Ledo d.o.o. (LEDO, podjetje za trgovino s sladoledom,
zmrznjeno hrano in storitve, d.o.o.)
Ledo d.o.o. Podgorica (Društvo Za Proizvodnju, promet
roba i usluga “Ledo” d.o.o. Podgorica)
Ledo Sh.p.k.
FRIKOM BEOGRAD DOOEL Cucer Sandevo
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Sweden
Switzerland
Croatia
Serbia
Bosnia &
Herzegovina
Croatia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Hungary
Ordinary
Trading
Slovenia
Ordinary
Trading
Montenegro
Ordinary
Trading
Trading
Kosovo
North
Macedonia
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
16)
Deferred tax assets and liabilities
Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
December 31, 2021
December 31, 2020 (restated)
Assets
Liabilities
Total
Assets
Liabilities
Property, plant and equipment
Intangible assets
Employee benefits
Tax value of loss carry forwards
Derivative financial instruments
Other
Tax assets/(liabilities)
€m
8.9
33.8
36.4
40.4
1.7
7.1
€m
(34.4)
€m
(25.5)
(382.9)
(349.1)
—
—
(7.0)
(13.3)
36.4
40.4
(5.3)
(6.2)
€m
20.6
0.9
48.3
24.6
9.3
9.8
€m
(27.3)
Total
€m
(6.7)
(384.4)
(383.5)
(0.3)
—
(0.1)
(15.0)
48.0
24.6
9.2
(5.2)
128.3
(437.6)
(309.3)
113.5
(427.1)
(313.6)
Movement in deferred tax during the year:
Opening
balance Jan 1,
2021 (restated)
Acquired in
business
combinations
Recognized
in Statement of
Profit or Loss
Recognized
in Other
Comprehensive
Income
€m
€m
€m
€m
Movement
in foreign
exchange
€m
Closing balance
Dec 31, 2021
€m
Property, plant and
equipment
Intangible assets
Employee benefits
Tax value of loss carry
forwards
Derivative financial
instruments
Other
Total deferred tax
Property, plant and
equipment
Intangible assets
Employee benefits
Tax value of loss carry
forwards
Derivative financial
instruments
Other
Total deferred tax
(6.7)
(383.5)
(2.2)
(30.1)
48.0
24.6
9.2
(5.2)
(313.6)
—
—
—
(0.6)
(32.9)
(17.2)
64.5
(1.2)
—
—
0.6
—
(10.2)
(0.2)
15.8
—
—
(0.3)
(0.4)
61.2
(13.6)
—
(0.6)
—
(23.8)
(0.2)
(309.3)
(25.5)
(349.1)
36.4
40.4
(5.3)
(6.2)
Opening
balance Jan 1,
2020
Acquired in
business
combinations
(restated)
Recognized
in Statement of
Profit or Loss
Recognized
in Other
Comprehensive
Income
€m
€m
€m
€m
Movement
in foreign
exchange
€m
Closing balance
Dec 31, 2020
(restated)
€m
(6.3)
(356.6)
39.8
20.7
2.9
(2.3)
(301.8)
(1.3)
(6.3)
1.0
(20.6)
—
—
—
—
3.9
0.3
(0.4)
(8.0)
(2.6)
(18.0)
—
—
8.3
—
6.0
—
14.3
(0.1)
—
(0.1)
—
—
0.1
(6.7)
(383.5)
48.0
24.6
9.2
(5.2)
(0.1)
(313.6)
As disclosed in Note 14 "Acquisitions", values for the year ended December 31, 2020 have been restated
for fair value adjustments related to the Findus Switzerland acquisition.
As disclosed in Note 14 "Acquisitions", values for the year ended December 31, 2020 have been restated
for fair value adjustments related to the Findus Switzerland acquisition.
17)
Inventories
Deferred income tax assets are recognized for tax loss carry-forwards to the extent that the realization of
the related tax benefit through future taxable profits is probable.
Deferred tax assets that the Company has not recognized in the financial statements amount to €70.4
million (December 31, 2020: €72.7 million). These deferred tax assets had not been recognized as the likelihood of
recovery is not probable.
The aggregate deferred tax relating to items that have been credited directly to equity is €23.8 million
(December 31, 2020: debit of €14.3 million).
Raw materials and consumables
Work in progress
Finished goods and goods for resale
Total inventories
December 31,
2021
December 31,
2020
(restated)
€m
€m
95.8
64.9
249.9
410.6
80.5
46.5
217.3
344.3
As disclosed in Note 14 "Acquisitions", values for the year ended December 31, 2020 have been restated
for fair value adjustments related to the Findus Switzerland acquisition.
As at December 31, 2021, €2.1 million was recognized as a basis adjustment transferred to the carrying
value of inventory. This has been applied to the three inventory categories above.
During the year ended December 31, 2021, €8.3 million (year ended December 31, 2020: €8.5 million, year
ended December 31, 2019: €9.0 million) was charged to the Consolidated Statement of Profit or Loss for the write down of
inventories.
F-46
F-47
18)
Trade and other receivables
Liabilities related to contracts with customers
The Company has recognized the following liabilities related to contracts with customers:
Current assets
Trade receivables
Prepayments and accrued income
Other receivables
Tax receivable
December 31,
2021
December 31,
2020
€m
€m
182.8
141.2
15.4
32.3
4.1
9.2
31.2
3.4
Trade terms liabilities reported within trade receivables
Trade terms liabilities reported within trade and other payables (Note 22)
December 31,
2021
December 31,
2020
€m
(189.9)
€m
(200.5)
(93.8)
(89.7)
(283.7)
(290.2)
Total current trade and other receivables
234.6
185.0
Total trade terms liabilities
Non-current assets
Other receivables
Total non-current trade and other receivables
Total trade and other receivables
8.9
8.9
1.1
1.1
243.5
186.1
Significant changes to trade terms
No significant changes to trade terms occurred in the year ended December 31, 2021.
Revenue recognized in relation to trade terms
Trade receivables, prepayments and other receivables, except for those defined as non-current, are
expected to be recovered in less than 12 months. Other receivables includes VAT receivable.
The aging of trade receivables is detailed below:
December 31, 2021
Not past due
Past due less than 1 month
Past due 1 to 3 months
Past due 3 to 6 months
Past due more than 6 months
Sub-total
Reduction in trade-terms
Total trade receivables
December 31, 2020
Not past due
Past due less than 1 month
Past due 1 to 3 months
Past due 3 to 6 months
Past due more than 6 months
Sub-total
Reduction in trade-terms
Total trade receivables
Gross
€m
Impaired
€m
Net
€m
343.8
19.9
5.2
2.4
5.0
376.3
(0.1)
(0.1)
(0.6)
(0.1)
(2.7)
(3.6)
343.7
19.8
4.6
2.3
2.3
372.7
(189.9)
182.8
Gross
€m
Impaired
€m
Net
€m
308.6
20.5
4.0
1.1
11.9
346.1
(0.3)
(0.2)
(0.1)
(0.1)
(3.7)
(4.4)
308.3
20.3
3.9
1.0
8.2
341.7
(200.5)
141.2
Reduction in trade-terms are described in Note 4(a). Trade receivables have been provided against based
on expected credit losses on positions net of trade-terms, which fall into all aging categories.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable. The
Company does not hold any collateral as security.
Debts past due are not impaired where there are eligible trade terms deductions which can be offset against
them.
For the periods covered in these financial statements, the Company has entered into facilities with third-
party banks/credit providers in which the Company has sold qualifying trade debtors on a non-recourse basis. Under the
terms of these agreements, the Company transferred substantially all the credit risks and control of the receivables. All
factoring facilities have been cancelled during 2021. No trade receivables have been derecognized at the period end
(December 31, 2020:€ nil).
Trade terms relate to sales made with variable consideration and are an estimate as disclosed in Note 4(a).
Revenue recognized in the year ended December 31, 2021 relating to performance obligations that were satisfied in the
prior year was €18.9 million (2020: €18.0 million).
19)
Indemnification assets
Balance at January 1
Release of indemnified provision
Balance at December 31
Year ended
December 31, 2021
Year ended
December 31, 2020
€m
€m
15.4
(5.9)
9.5
35.4
(20.0)
15.4
As at December 31, 2021, €7.0 million (December 31, 2020: €12.0 million) of the indemnification assets
relate to the acquisition of the Findus Group in 2015 for which 342,190 shares are held in escrow and are valued at
$25.39 (€22.40) (December 31, 2020: 618,099 shares valued at $25.42 (€20.69)) each. The shares placed in escrow
were released in stages over a four-year period beginning January 2019 with the final release in January 2022. During
2021, 275,909 shares were released from escrow. As a consequence the indemnification asset was reduced by €5.0
million with a corresponding charge of to the Statement of Profit or Loss within the financial statements for the year ended
December 31, 2021.
In January 2022, the remaining 342,190 shares were released from escrow. As a consequence the
indemnification asset will be reduced by €7.0 million with a corresponding charge of to the Statement of Profit or Loss
within the financial statements for the year ended December 31, 2022.
As at December 31, 2021, €2.5 million (2020: €3.4 million) of the indemnification asset relates to the
Goodfella’s Pizza acquisition for several contingent liabilities that arose prior to acquisition and were recognized in the
balance sheet to the same extent as the asset. During 2021, €0.9 million was released against the liabilities.
F-48
F-49
20)
Cash and cash equivalents
Cash and cash equivalents
Restricted cash
Cash and cash equivalents
Bank overdraft
Cash and cash equivalents per Statement of Cash Flows
December 31,
2021
December 31,
2020
Note
€m
€m
254.0
0.2
254.2
—
254.2
393.1
0.1
393.2
(10.7)
382.5
22
‘Cash and cash equivalents’ comprise cash balances and deposits. Restricted cash comprises money that
is primarily reserved for a specific purpose and therefore not available for immediate or general business use. Bank
overdrafts that are repayable on demand and form an integral part of the Company's cash management are included as a
component of cash and cash equivalents for the purposes of the Statement of Cash Flows.
21)
Loans and borrowings
On June 24, 2021, the Company amended and restated the Senior Facilities Agreement to refinance its
existing €553.2 million senior secured term loan facility originally due in May 2024, through a new 7-year term facility due
June 2028 (the "Senior EUR Loan"), paying interest at a rate equal to EURIBOR with a zero floor plus a margin of 2.5%.
This transaction was accounted for as an extinguishment of the existing debt and previously capitalized eligible
transaction costs were written-off to the Statement of Comprehensive Income, as disclosed in Note 10. On the new Senior
EUR Loan, eligible transaction costs of €3.8 million were capitalized and will be amortized over the life of the debt.
Under the refinancing, the existing revolving credit facility of €80.0 million due 2023, was also replaced with
a new €175.0 million facility (the "Revolving Credit Facility") available until June 2026 with an applicable margin of 2.25%
per annum that may be adjusted subject to a leverage ratchet. The Revolving Credit Facility may be utilized to support
working capital requirements, including letters of credit and bank guarantees. The structure of the Revolving Credit Facility
now also includes a pricing structure linked to environmental impact metrics during the life of the facility, and by doing so
demonstrates further commitment to the Company’s sustainability strategy by incorporating ESG target KPIs covering
areas of sourcing, packaging and carbon emissions.
Charges of €17.9 million have been recognized as a consequence of the refinancing activities in 2021. Of
this, €10.1 million relates to the extinguishment of the previous debts, including the write-off of deferred transaction costs.
The repayment profile of the syndicated and other loans held by the Company is as follows:
As at December 31, 2021 €2.8 million (December 31, 2020: €16.1 million) has been utilized for issuance of
Current liabilities
Syndicated loans
Lease liabilities
Less deferred borrowing costs to be amortized within 1 year
Total due in less than one year
Non-current liabilities
Syndicated loans
2024 fixed rate senior secured notes
2028 fixed rate senior secured notes
Lease liabilities
Less deferred borrowing costs to be amortized in 2-5 years
Less deferred borrowing costs to be amortized in more than 5 years
Total due after more than one year
Total borrowings
December 31,
2021
December 31,
2020
€m
€m
letters of credit and bank guarantees.
Guarantees and secured assets
8.5
22.6
(2.0)
29.1
1,347.4
—
800.0
58.3
(5.7)
(1.7)
2,198.3
2,227.4
7.8
16.7
(2.0)
22.5
1,287.5
400.0
—
53.7
(4.9)
—
1,736.3
1,758.8
The Senior Facility Agreement that governs the Company’s Senior debt, establishes security over the
assets of the “Guarantor Group”. The Guarantor Group consists of those companies that individually have more than 5%
of consolidated total assets or EBITDA (subject to the terms of the Senior Facilities Agreement) of the Company and in
total comprise more than 80% of consolidated total assets or EBITDA at any testing date.
The Senior Facilities Agreement includes an excess cash flow calculation whereupon an amount of principal
shall be repaid based upon terms including cash generated during the year and leverage. In 2021 the amount repaid was
nil relating to the calculation performed at the end of 2020. Based on the calculation performed for December 31, 2021,
there will be no excess cash flow repayment in 2022.
In connection with its pension scheme, Findus Sverige AB, a 100% owned subsidiary, is required to obtain
credit insurance with PRI Pensionsgaranti (“PRI”), a credit insurance company that provides insurance annually against
the risk of a sponsoring company’s insolvency. In connection with such credit insurance, as at December 31, 2021 Findus
Sverige AB has granted floating charges over certain assets in favor of PRI in an amount of SEK 300 million (€29.3
million) (December 31, 2020: €29.8 million) and Nomad Foods Limited has issued a parent guarantee to PRI which will
not exceed SEK 640 million (€62.4 million) (December 31, 2020: SEK 450 million (€44.7 million)).
Syndicated loans includes the Senior U.S. Dollar debt of $916.4 million (€808.6 million) (the “Senior USD
Loan”) and the Senior EUR debt of €553.2 million (the "Senior EUR Loan"), repayable in May 2024 and May 2028
respectively. The Senior USD Loan includes an annual amortization repayment, equivalent to 1.0% of the original
issuance value or $9.6 million (€8.5 million) in May each year until maturity. The Senior EUR Loan is repayable only upon
maturity. As required under the Senior Facilities Agreement, the Company is also required to undertake an annual excess
cash flow calculation whereby additional principal could be repaid.
On June 24, 2021, the Company through its indirect, wholly-owned subsidiary, Nomad Foods Bondco Plc,
repaid the €400.0 million 3.25% senior secured notes due 2024 and completed a private offering of €750.0 million
aggregate principal amount of 2.5% senior secured notes due June 24, 2028. In addition, on July 9, 2021 the Company
announced that Nomad Foods Bondco Plc completed a further private offering of €50.0 million aggregate principal amount
of additional 2.5% senior secured notes due 2028, representing a tack-on to the €750.0 million aggregate principal
amount of senior secured notes due 2028 issued on June 24, 2021, and issued at a price of €100.75 (together the
“Notes”).
Interest on the Notes accrue from June 24, 2021 (being the original date of issuance) and are payable
semi-annually in arrears on January 15 and July 15, commencing on January 15, 2022. The Notes are guaranteed on a
senior basis by the Company and certain subsidiaries thereof. This transaction was accounted for as an extinguishment of
the existing Notes and previously capitalized eligible transaction costs were written-off to the Statement of Comprehensive
Income, as disclosed in Note 10. Eligible transaction costs on the new Notes of €4.0 million were capitalized and will be
amortized over the life of the debt.
F-50
F-51
22)
Trade and other payables
Current liabilities
Trade payables
Accruals and deferred income
Trade terms payable
Social security and other taxes
Other payables
Financial payables
Bank overdrafts
Total current trade and other payables
Non-current liabilities
Accruals and deferred income
Total non-current trade and other payables
Total trade and other payables
December 31,
2021
December 31,
2020
(restated)
€m
€m
413.2
120.4
93.8
24.6
20.3
19.7
—
692.0
1.8
1.8
693.8
363.7
134.5
89.7
24.1
21.2
3.3
10.7
647.2
2.2
2.2
649.4
As disclosed in Note 14 "Acquisitions", values for the year ended December 31, 2020 have been restated
for fair value adjustments related to the Findus Switzerland acquisition.
The Company has implemented a Supply Chain Financing (“SCF”) program for its suppliers. The principal
purpose of these arrangements is to provide the supplier with the option to access liquidity earlier through the sale of its
receivables due from the Company to a bank or other financial institution prior to their due date. Management has
determined that the Company’s payables to these suppliers have neither been extinguished nor have the liabilities been
significantly modified by these arrangements. The value of amounts payable, invoice due dates and other terms and
conditions applicable, from the Company’s perspective, remain unaltered, with only the ultimate payee being changed. At
December 31, 2021, there was no material usage of the programs (December 31, 2020: nil). The cash outflows in respect
of these arrangements will be recognized within operating cash flows.
23)
Employee benefits
The Company operates defined benefit plans as well as defined contribution plans.
i.
Defined contribution plans
The total expense relating to defined contribution plans for the year ended December 31, 2021 was €10.2
million (year ended December 31, 2020: €8.3 million, year ended December 31, 2019: €9.0 million)
ii.
Defined benefit plans
The Company operates partially funded defined benefit pension plans in Germany and Austria, an unfunded
defined benefit pension plan in Sweden and defined benefit indemnity arrangements in Italy and Austria. In addition,
pension benefits in Switzerland are met via a contract with a collective foundation that offers a fully insured solution to
provide a contribution-based cash balance retirement plan, which is classified as a defined benefit plan. In addition, an
unfunded post-retirement medical plan is operated in Austria. In Germany and Italy, long term service awards are in
operation and various other countries provide other employee benefits.
Net employee benefit obligations-Germany
Net employee benefit obligations-Sweden
Net employee benefit obligations-Austria
Net employee benefit obligations-Switzerland
Net employee benefit obligations-Italy
Net employee benefit obligations-total of other countries
Total net employee benefit obligations
December 31,
2021
December 31,
2020
€m
€m
149.3
70.3
5.5
5.8
4.6
8.7
244.2
181.2
74.1
5.6
6.6
4.7
4.0
276.2
The net obligation of €8.7 million (December 31, 2020: €4.0 million) in respect of other countries is the
aggregate of a number of different types of minor schemes, each one not being considered individually material.
The amount included in the Statement of Financial Position arising from the Company’s obligations in
respect of its defined benefit retirement plans and other post-employment benefits is as follows:
December 31, 2021
Present value of unfunded employee benefit obligations
Present value of funded employee benefit obligations
Subtotal present value of employee benefit obligations
Fair value of plan assets
Recognized liability for net employee benefit obligations
December 31, 2020
Present value of unfunded employee benefit obligations
Present value of funded employee benefit obligations
Subtotal present value of employee benefit obligations
Fair value of plan assets
Recognized liability for net employee benefit obligations
Defined
benefit
retirement
plans
Post-
employment
medical
benefits
and other
benefits
€m
€m
77.5
264.0
341.5
(108.4)
233.1
11.1
—
11.1
—
11.1
Defined
benefit
retirement
plans
Post-
employment
medical
benefits
and other
benefits
€m
€m
79.6
285.5
365.1
(97.9)
267.2
9.0
—
9.0
—
9.0
Total
€m
88.6
264.0
352.6
(108.4)
244.2
Total
€m
88.6
285.5
374.1
(97.9)
276.2
F-52
F-53
Reconciliation from the opening balances to the closing balances for the net employee benefit obligation
and its components, including the amounts recognized in the Consolidated Statement of Profit or Loss and the
Consolidated Statement of Comprehensive Income:
Balance at January 1
Included in the Consolidated Statement of
Profit or Loss
Current service cost
Interest cost (income)
Included in the Consolidated Statement of
Comprehensive Income
Actuarial (gain) loss arising from:
–
–
–
demographic assumptions
financial assumptions
experience adjustment
Return on plan assets, excluding interest
income
Exchange adjustments
Other
Acquired through business combinations
Contributions by employer
Contributions by members
Benefits paid
Present value of defined
benefit obligation
Fair value of plan assets
Net defined benefit
obligation
2021
€m
2020
€m
2021
€m
2020
€m
2021
€m
2020
€m
374.1
323.9
(97.9)
(86.4)
276.2
237.5
7.9
2.2
10.1
6.6
3.7
10.3
—
(0.5)
(0.5)
—
(1.0)
(1.0)
7.9
1.7
9.6
(1.5)
—
(26.8)
29.1
1.8
—
(0.3)
(0.8)
—
2.8
—
—
—
—
—
—
(1.5)
(26.8)
1.8
(9.6)
(0.6)
(0.4)
—
(9.6)
(0.9)
(26.8)
31.1
(10.2)
(0.4)
(37.0)
3.5
—
0.8
18.4
—
0.4
(9.1)
(10.0)
(4.8)
8.8
—
(11.8)
3.5
(1.2)
(0.8)
2.2
0.2
(0.5)
(0.5)
2.7
(10.1)
(1.2)
—
(6.9)
(4.6)
6.6
2.7
9.3
—
29.1
(0.8)
(0.4)
2.8
30.7
6.6
(0.5)
(0.1)
(7.3)
(1.3)
Balance at December 31
352.6
374.1
(108.4)
(97.9)
244.2
276.2
Current service cost is allocated between cost of sales and other operating expenses. Interest on net
employee benefit obligation is disclosed in net financing costs.
The cumulative amount of actuarial losses recognized is as follows:
Cumulative amount of actuarial losses recognized in Consolidated Statement of
Comprehensive Income
The fair value of plan assets, all at quoted prices are as follows:
Equities
Debt instruments
Property
Other
Total
Year ended
December 31,
2021
Year ended
December 31,
2020
€m
€m
40.5
77.5
December 31,
2021
December 31,
2020
€m
€m
32.7
42.7
20.3
12.7
108.4
24.5
44.1
17.1
12.2
97.9
The following are the principal actuarial assumptions at the reporting date for the defined benefit retirement
plans in Germany, Sweden, Austria, Switzerland and Italy. The remaining employee benefit plans are not considered to be
material, individually and in aggregate, and therefore we do not provide disclosure of the individual actuarial assumptions
for those plans:
December 31, 2021
Discount rate
Inflation rate
Rate of increase in salaries
Rate of increase for pensions in payment
December 31, 2020
Discount rate
Inflation rate
Rate of increase in salaries
Rate of increase for pensions in payment
Defined benefit
retirement plans
Germany
Sweden
Austria
1.10 %
2.00 %
2.80 %
1%-2%
1.80 %
2.20 %
3.20 %
0.90 %
2.00 %
2.00 %
Switzerland
0.10 %
1.00 %
1.50 %
2.20 %
—
—
Germany
Sweden
0.55 %
2.00 %
2.80 %
1%-2%
Defined benefit
retirement plans
Austria
Switzerland
0.15 %
1.00 %
2.00 %
0.20 %
2.00 % 0%-2.50%
1.05 %
1.50 %
2.50 %
1.50 %
—
—
Italy
0.35 %
1.50 %
2.63 %
—
Italy
0.33 %
1.00 %
2.63 %
—
In valuing the liabilities of the pension fund at December 31, 2021 and December 31, 2020, mortality
assumptions have been made as indicated below. The assumptions relating to longevity underlying the pension liabilities
at the financial year end date are based on standard actuarial mortality tables and include an allowance for future
improvements in longevity. The assumptions are based on the following mortality tables:
•
•
•
•
•
Germany: Richttafeln 2018 G
Sweden: DUS 14
Austria: AVÖ 2018 - P
Switzerland: BVG 2020 GT (2020: BVG 2015 GT)
Italy: RG48
These references are to the specific standard rates of mortality that are published and widely used in each
country for the use of actuarial assessment of pension liabilities and take account of local current and future average life
expectancy.
December 31, 2021 (years)
Retiring at the end of the year:
Male
Female
December 31, 2020 (years)
Retiring at the end of the year:
Male
Female
Germany
Sweden
Austria
Switzerland
Italy
21
24
22
24
23
26
22
24
Germany
Sweden
Austria
Switzerland
Italy
21
24
22
24
23
26
21
24
21
22
21
22
F-54
F-55
The history of experience adjustments from inception of the Company for the employee benefit plans is as
24)
Provisions
follows:
Present value of defined benefit obligations
Fair value of plan assets
Recognized liability in the scheme
Experience losses/(gains) on plan liabilities
Experience gains on plan assets
Net defined benefit obligation - sensitivity analysis
December 31,
2021
December 31,
2020
December 31,
2019
€m
€m
€m
341.5
(108.4)
233.1
1.8
(9.6)
365.1
(97.9)
267.2
(0.8)
(0.4)
314.9
(86.4)
228.5
0.2
(5.1)
The effect of a 1 percentage point movement in the most significant assumptions for the year ended
December 31, 2021 is as follows:
Discount rate
Inflation rate
Rate of increase in salaries
Rate of increase for pensions in payment
Increase
Decrease
€m
€m
(54.6)
47.4
15.2
47.6
71.9
(38.7)
(11.5)
(37.0)
There are no deficit elimination plans for any of the defined benefit plans. Expected contributions and
payments to post-employment benefit plans for the period ending December 31, 2021 are €6.7 million. The weighted
average duration of the defined benefit obligations is 18.9 years.
Balance at December 31, 2019
Additional provision in the period
Release of provision
Utilization of provision
Foreign exchange
Balance at December 31, 2020
Acquired through business combinations
Additional provision in the period
Release of provision
Utilization of provision
Foreign exchange
Balance at December 31, 2021
Analysis of total provisions:
Current
Non-current
Total
Restructuring
Restructuring
Onerous/
unfavorable
contracts
Provisions
related to
other taxes
€m
€m
€m
Other
€m
Total
€m
7.4
15.6
—
(10.4)
0.3
12.9
—
2.6
(0.1)
(9.8)
—
5.6
1.2
—
(0.7)
(0.5)
—
—
—
—
—
—
—
—
6.9
0.1
(0.4)
—
—
6.6
0.3
1.0
—
—
—
7.9
31.3
13.4
(6.0)
(5.9)
(0.5)
32.3
3.8
2.5
(4.0)
(6.9)
1.0
28.7
46.8
29.1
(7.1)
(16.8)
(0.2)
51.8
4.1
6.1
(4.1)
(16.7)
1.0
42.2
December 31,
2021
December 31,
2020
39.3
2.9
42.2
45.7
6.1
51.8
The €5.6 million (2020: €12.9 million) provision relates to committed plans for certain restructuring activities
of exceptional nature which are due to be completed within the next 12 months.
The amounts have been provided based on the latest information available on the likely remaining
expenditure required to complete the committed plans. An additional provision of €2.6 million has been made and €9.8
million has been utilized in the year ended December 31, 2021.
Provisions relating to other taxes
The €7.9 million (2020: €6.6 million) provision relates to other, non-income taxes due to tax authorities after
tax investigations within certain operating subsidiaries within the Nomad Group.
Other
Other provisions include €3.9 million (December 31, 2020: €4.4 million) of contingent liabilities acquired as
part of the Goodfella’s Pizza acquisition that are indemnified by the Seller’s insurance policies, €4.3 million (December 31,
2020: €4.7 million) of obligations in Italy, €4.6 million (December 31, 2020: €6.1 million) for asset retirement
obligations, €1.3 million (December 31, 2020: €1.9 million) of pre-acquisition related liabilities related to the acquisition
date liabilities of Aunt Bessie's Limited, €2.4 million (December 31, 2020: €6.6 million) of provisions in the period relate to
employer taxes on the Long-term Incentive Plan (see Note 8) which would become payable on the issuance of shares,
and other obligations from previous accounting periods.
F-56
F-57
25)
Share capital, Capital reserve and Founder Preferred Shares Dividend reserve
Share capital and capital reserve
As at
December 31,
2021
As at
December 31,
2020
€m
€m
Authorized:
Unlimited number of Ordinary Shares with nil nominal value issued at $10.00 per share
Unlimited number of Founder Preferred Shares with nil nominal value issued at $10.00 per
share
Issued and fully paid:
173,559,173 (December 31, 2020: 172,180,897) Ordinary Shares with nil nominal value
1,500,000 (December 31, 2020: 1,500,000) Founder Preferred Shares with nil nominal value
Total share capital and capital reserve
Listing and share transaction costs
Total net share capital and capital reserve
n/a
n/a
n/a
n/a
1,639.6
1,636.9
10.6
1,650.2
(27.1)
1,623.1
10.6
1,647.5
(27.0)
1,620.5
Ordinary Shares
Balance at December 31, 2019
Shares issued in the year
Shares repurchased in the year
Balance at December 31, 2020
Shares issued in the year
Shares repurchased in the year
Balance at December 31, 2021
Issued and
Repurchased
Ordinary shares
(in millions)
194.5
7.6
(29.9)
172.2
5.0
(3.6)
173.6
Note 8(b) sets out the Non-Executive Director, Initial Director Options and Director and Senior Management
Restricted share awards.
Note 27 sets out the Founder Preferred Share Dividends issued as ordinary shares in all years presented.
On March 13, 2020, the Company announced a share repurchase program to purchase up to an aggregate
of $300.0 million of the Company’s ordinary shares. Acquisitions pursuant to the stock repurchase program may be made
from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated share
repurchase transactions, and/or other derivative transactions. After the announcement, the Company entered into a
series of open-market repurchases. During 2020, 11,913,682 ordinary shares at an average price of $21.04, for aggregate
gross costs of $250.9 million (€217.4 million) had been repurchased and canceled. Directly attributed transaction costs of
€0.2 million were incurred. During 2021, a further 507,396 ordinary shares were repurchased and cancelled at an average
price of $25.29 for aggregate gross costs of $12.8 million (€10.5 million) under this authorization.
In August 2020, the Company announced the repurchase of up to $500.0 million of shares, to be executed
by way of a Dutch auction. On September 15, 2020, a total of 18,061,952 shares at a clearing price of $25.50 per share
amounting to the purchase price of $460.6 million (€389.3 million) was paid to the prevailing shareholders with all shares
canceled as of the same date. Directly attributed transaction costs of €1.9 million were incurred.
On August 5, 2021, the Company announced a new share repurchase program to purchase up to an
aggregate of $500.0 million of the Company’s ordinary shares, to be executed in the period to August 2024. Acquisitions
pursuant to the stock repurchase program may be made from time to time through a combination of open market
repurchases, privately negotiated transactions, accelerated share repurchase transactions, and/or other derivative
transactions, at the Company's discretion, as permitted by securities laws and other legal requirements. Pursuant to the
program, as at December 31, 2021, 3,090,082 ordinary shares had been repurchased and canceled at an average price
of $24.50, for aggregate gross costs of $75.8 million (€67.1 million). Directly attributed transaction costs of €0.1 million
were incurred.
Listing and share transaction costs
As at December 31, 2021, cumulative listing and share transaction costs, which includes the total cost of
admission and share issuance expenses, as well as costs associated with share repurchases were €27.1 million and are
disclosed as a deduction directly against the capital reserve.
At December 31, 2019
Share transaction costs
At December 31, 2020
Share transaction costs
At December 31, 2021
Obligation to purchase shares
€m
24.9
2.1
27.0
0.1
27.1
As part of the August 5, 2021 authorized share repurchase program, the Company entered into share
purchases at agreed prices, totaling 135,621 shares in late 2021 which had not been settled and were therefore not
owned by Nomad until early 2022. As a result, the Company recorded €3.0 million within accounts payable to recognize
the liability for those shares, with a corresponding other receivable to reflect the value of the shares to be received upon
settlement.
Founder Preferred Shares Annual Dividend Amount
Each of the Founder Entities holds 750,000 shares for a total of 1,500,000 Founder Preferred Shares which
were issued at $10.00 per share. The Founder Preferred Shares are intended to incentivize the Founders to achieve
Nomad’s objectives. In addition to providing long term capital, the Founder Preferred Shares are structured to provide a
dividend based on the future appreciation of the market value of the ordinary shares thus aligning the interests of the
Founders with those of the holders of ordinary shares on a long term basis. The Founder Preferred Shares are also
intended to encourage the Founders to grow Nomad to maximize value for holders of ordinary shares. There are no
Founder Preferred Shares held in Treasury. Founder Preferred Shares confer upon the holder the following:
1.
2.
the right to one vote per Founder Preferred Share on all matters to be voted on by
shareholders generally and to vote together with the holders of ordinary shares;
commencing on January 1, 2015 and for each financial year thereafter:
a.
b.
once the average price per ordinary share for the Dividend Determination
Period, i.e. the last ten consecutive trading days of a year is at least $11.50
(which condition has been satisfied for the year ended December 31,
2015), the right to receive a Founder Preferred Shares Annual Dividend
Amount (as more fully described below), payable in Ordinary Shares or
cash, at the Company’s sole option; and
the right to receive dividends and other distributions as may be declared
from time to time by the Company’s board of directors with respect to the
Ordinary Shares (such dividends to be distributed among the holders of
Founder Preferred Shares, as if for such purpose the Founder Preferred
Shares had been converted into Ordinary Shares immediately prior to such
distribution) plus an amount equal to 20% of the dividend which would be
F-58
F-59
distributable on such number of Ordinary Shares equal to the Preferred
Share Dividend Equivalent (as defined below); and
in addition to amounts payable pursuant to clause 2 above, the right, together with the
holders of Ordinary Shares, to receive such portion of all amounts available for distribution
and from time to time distributed by way of dividend or otherwise at such time as
determined by the Directors; and
the right to an equal share (with the holders of Ordinary Shares on a share for share basis)
in the distribution of the surplus assets of Nomad on its liquidation as are attributable to the
Founder Preferred Shares; and
the ability to convert into Ordinary Shares on a 1-for-1 basis (mandatorily upon a Change of
Control or the seventh full financial year after an acquisition)
3.
4.
5.
See Note 27 for further information on the Founder Preferred Shares Dividends issued.
26)
Share-based compensation reserve
The Company's discretionary share award scheme, the LTIP, enables the Company’s Compensation
Committee to make grants (“Awards”) in the form of rights over ordinary shares, to any Director, Non-Executive Director or
employee of the Company. However, it is the Committee’s current intention that Awards be granted only to Directors and
senior management, whilst recognizing a separate annual Restricted Stock Award for Non-Executive Directors.
All Awards are to be settled by physical delivery of shares. Note 8(b) sets out the Non-Executive Director
and Director and Senior Management Restricted share awards.
Balance as of January 1, 2021
Non-Executive Director restricted share awards charge
Directors and Senior Management share awards charge
Shares issued upon vesting of awards
Reclassification of awards for settlement of tax liabilities
Balance as of December 31, 2021
27)
Founder Preferred Shares Dividend Reserve
Share based
compensation
reserve
€m
8.3
0.8
4.3
(0.7)
(5.8)
6.9
Nomad has issued Founder Preferred Shares to its Founder Entities. A summary of the key terms of the
Founder Preferred Shares is set out in Note 25.
The Founder Preferred Shares Annual Dividend Amount is structured to provide a dividend based on the
future appreciation of the market value of the ordinary shares, thus aligning the interests of the Founders with those of the
investors on a long term basis. Commencing in 2015, the Founder Preferred Share Annual Dividend Amount became
payable because the Company’s volume weighted average ordinary share price was above $11.50 for the last ten
consecutive trading days of the 2015 financial year.
The Preferred Shares Annual Dividend amount is determined with reference to the Dividend Determination
Period of a financial year, i.e. the last ten consecutive trading days and calculated as 20% of the increase in the volume
weighted average share price of our ordinary shares across the determination period compared to the highest price
previously used in calculating the Founder Preferred Share Annual Dividend Amounts (currently $25.2127) multiplied by
140,220,619 Preferred Share Dividend Equivalent (the “Preferred Share Dividend Equivalent”). The Preferred Share
Dividend Equivalent is equal to the number of ordinary shares outstanding immediately following the Iglo Acquisition, but
excluding the 13.7 million ordinary shares issued to the seller of the Iglo Group. The Founder Preferred Shares Annual
Dividend Amount is paid for so long as the Founder Preferred Shares remain outstanding.
The amounts used for the purposes of calculating the Founder Preferred Shares Annual Dividend Amount
and the relevant numbers of ordinary shares are subject to such adjustments for share splits, share dividends and certain
other recapitalization events as the Directors in their absolute discretion determine to be fair and reasonable in the event
of a consolidation or sub-division of the ordinary shares in issue, as determined in accordance with Nomad Foods’
Memorandum and Articles of Association.
Dividends on the Founder Preferred Shares are payable until the Founder Preferred Shares are converted
into Ordinary Shares. The Founder Preferred Shares automatically convert on a one for one basis (i) on the last day of the
seventh full financial year following our acquisition of Iglo Foods (or if such day is not a trading day, the next trading day)
or (ii) in the event of a change of control (unless the independent directors of our board of directors determine
otherwise). The holders of Founder Preferred Shares may also be converted to Ordinary shares on a one for one basis at
the option of the holder. In the event of an automatic conversion, a dividend on the Founder Preferred Shares shall be
payable with respect to the shorted dividend year on the trading day immediately prior to the conversion. In the event of
an optional conversion by the holder, no dividend on the Founder Preferred Shares shall be payable with respect to the
year in which the conversion occurred.
On December 31, 2019, the Company’s Board of Directors approved a share dividend of an aggregate of
6,421,074 ordinary shares calculated as 20% of the increase in the market price of our ordinary shares compared to 2018
dividend price of $16.7538 multiplied by Preferred Share Dividend Equivalent. The Dividend Price used to calculate the
Annual Dividend Amount was $21.7289 (calculated based upon the volume weighted average price for the last ten
consecutive trading days of 2019) and the ordinary shares underlying the Founder Preferred Share Dividend were issued
on January 2, 2020.
On December 31, 2020, the Company’s Board of Directors approved a share dividend of an aggregate of
3,875,036 ordinary shares calculated as 20% of the increase in the market price of our ordinary shares compared to 2019
dividend price of $21.7289 multiplied by the Preferred Share Dividend Equivalent. The Dividend Price used to calculate
the Annual Dividend Amount was $25.2127 (calculated based upon the volume weighted average price for the last ten
consecutive trading days of 2020) and the ordinary shares underlying the Founder Preferred Share Dividend were issued
on January 4, 2021.
As of December 31, 2021, no Founder Preferred Shares Annual Dividend Amount was due, as the average
price per ordinary share for the last ten consecutive trading days of the year did not reach the previously achieved 2020
Dividend Price of $25.2127.
Balance as of January 1, 2021
Settlement of dividend through share issue
Balance as of December 31, 2021
Founder
Preferred
Shares
Dividend
Reserve
€m
245.5
(79.5)
166.0
F-60
F-61
28)
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the
financial statements of foreign operations, as well as from the translation of liabilities that hedge the Company’s net
investment in a foreign subsidiary.
Balance as of January 1
Adjustment on adoption of hedge accounting under IFRS 9
Restated balance as of January 1
Foreign currency translation adjustments
Net deferred (losses)/gains on net investment hedges (1)
Total presented in Other Comprehensive Income
Balance as of December 31
Year ended December 31,
2021
€m
2020
€m
2019
€m
84.7
1.6
86.3
31.7
(12.9)
18.8
105.1
94.8
—
94.8
(23.6)
13.5
(10.1)
84.7
88.8
—
88.8
19.2
(13.2)
6.0
94.8
(1) (Losses)/gains on net investment hedges are offset by €24.6 million of gains (2020: losses of €25.7 million, 2019:
gains of €19.0 million) on GBP net investments included within the foreign currency translation adjustments.
The translation reserve as at December 31, 2021 does not include any balances relating to continuing
hedging relationships. As at December 31, 2020, the translation reserve included €17.3 million relating to continuing
hedging relationships in respect of GBP net investments. The translation reserve as at December 31, 2021 included €50.8
million (2020: €46.4 million) relating to a discontinued hedging relationship in respect of GBP net investments.
29)
Other reserves
Under IFRS, cost of hedging allows firms to separately account for the fair value movement attributable to
foreign currency basis under other comprehensive income (OCI) thereby excluding its impact from the hedge designation
itself. Details of the Company's cash flow hedge accounting is detailed in Note 33.
The table below shows the movement in the cash flow hedging reserve and cost of hedging reserve during
the year, including the gains or losses arising on the revaluation of hedging instruments during the year and the amount
reclassified from Other Comprehensive Income ("OCI") to the Consolidated Statement of Profit or Loss in the year.
Cross
currency
interest rate
swaps
Forward
currency
contracts
Total Cash
flow hedge
reserve
Cost of
Hedging
reserve
Total Other
reserves
€m
€m
€m
€m
€m
0.9
28.1
—
(37.4)
1.6
(6.8)
7.6
3.8
(21.8)
—
4.0
8.5
31.9
(21.8)
(37.4)
5.6
(6.4)
(13.2)
(63.7)
(20.0)
(83.7)
—
66.2
(0.2)
(4.5)
2.8
—
73.3
(64.1)
(2.4)
5.1
0.2
—
6.2
0.2
66.2
6.0
(20.0)
(24.5)
—
27.6
9.3
—
(11.1)
5.8
2.8
27.6
82.6
(64.1)
(13.5)
10.9
—
—
—
—
—
—
—
—
—
—
—
(4.4)
—
2.4
1.7
(0.1)
(0.4)
8.5
31.9
(21.8)
(37.4)
5.6
(13.2)
(83.7)
0.2
66.2
6.0
(24.5)
(1.6)
27.6
85.0
(62.4)
(13.6)
10.5
Balance as of January 1, 2019
Change in fair value of hedging instrument
recognized in OCI for the year
Reclassified to cost of goods sold
Reclassified from OCI to finance costs
Deferred tax
Balance as of December 31, 2019
Change in fair value of hedging instrument
recognized in OCI for the year
Reclassified to cost of goods sold
Reclassified from OCI to finance costs
Deferred tax
Balance as of December 31, 2020
Reallocation for IFRS 9 changes to policy (start of
the year)
Transferred to the carrying value of inventory
Change in fair value of hedging instrument
recognized in OCI for the year
Reclassified from OCI to finance costs
Deferred tax
Balance as of December 31, 2021
30)
Earnings per share
Basic earnings per share
Profit for the period attributable to equity owners of the parent (€m)
Weighted average Ordinary Shares and Founder Preferred Shares
Basic earnings per share (€’s)
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
181.0
225.2
154.0
178,070,770
194,019,070
192,004,803
1.02
1.16
0.80
For the year ended December 31, 2021, basic earnings per share is calculated by dividing the profit
attributable to the shareholders of the Company of €181.0 million (year ended December 31, 2020: €225.2 million, year
ended December 31, 2019: €154.0 million) by the weighted average number of Ordinary Shares of 176,570,770
(December 31, 2020: 192,519,070, year ended December 31, 2019: 190,504,803) and Founder Preferred Shares of
1,500,000 (December 31, 2020: 1,500,000, year ended December 31, 2019: 1,500,000).
Diluted earnings per share
Profit for the period attributable to equity owners of the parent (€m)
Weighted average Ordinary Shares and Founder Preferred Shares
Diluted earnings per share (€’s)
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
181.0
225.2
154.0
178,070,770
197,894,106
198,425,877
1.02
1.14
0.78
For the year ended December 31, 2021, the number of shares in the diluted earnings per share calculation
include nil shares for the dilutive impact of the Ordinary shares to settle the Founder Preferred Shares Annual Dividend for
the year ended December 31, 2021, as no shares were due to be issued. Refer to Notes 27 and 38 for further details.
F-62
F-63
31)
Reconciliation of liabilities arising from financing activities
32)
Cash flows from operating activities
The table below details changes in the Company's liabilities arising from financing activities, including both
cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash
flows will be classified in the Company's consolidated statements of cash flows from financing activities.
Cash /
non-cash
Total loans and
borrowings
(Note 21)
Financial
payables
(Note 22)
Derivatives: (Net) Fair
value of forward
foreign exchange and
currency swap
contracts FVPTL
Derivatives: (Net)
Fair value of cross
currency interest
rate swaps
Cash flows from operating activities
Profit for the period
Adjustments for:
Exceptional items
Non-cash fair value purchase price adjustment of inventory
Share based payments expense
€m
€m
€m
€m
Depreciation and amortization
Opening balance January 1, 2021
Cash inflow (1)
Cash outflow (2)
Interest accretion (3)
Cash
Cash
Cash
Acquired through business combinations Non-cash
Exchange movement
Fair value changes
Other non-cash adjustments
Non-cash
Non-cash
Non-cash
1,758.8
800.0
(436.0)
2.2
19.6
64.1
—
18.7
Closing balance December 31, 2021
2,227.4
3.3
—
(38.1)
57.6
—
(0.2)
—
(2.9)
19.7
0.2
0.3
—
—
—
—
(0.1)
—
0.4
72.3
1.4
(2.3)
—
—
—
(44.0)
(6.8)
20.6
Loss on disposal and impairment of property, plant and equipment
Net finance costs
Taxation
Operating cash flow before changes in working capital,
provisions and exceptional items
(Increase)/decrease in inventories
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Increase in employee benefit and other provisions
Cash generated from operations before tax and exceptional items
Cash / non-
cash
Total loans and
borrowings
(Note 21)
Financial
payables
(Note 22)
Derivatives: (Net) Fair
value of forward
foreign exchange and
currency swap
contracts FVPTL
Derivatives: (Net)
Fair value of cross
currency interest
rate swaps
€m
€m
€m
€m
33)
Financial risk management
Overall risk management policy
Year ended
December 31,
2021
Year ended
December 31,
2020
Year ended
December 31,
2019
Note
€m
€m
€m
181.0
225.1
153.6
7
5
10
11
45.3
8.4
5.1
71.6
0.7
106.0
55.7
473.8
(23.8)
24.1
(25.0)
1.2
450.3
20.6
—
9.0
67.6
0.9
63.7
70.4
457.3
(12.7)
(1.8)
107.2
2.0
552.0
54.5
—
14.9
68.3
0.6
73.2
56.7
421.8
23.5
(34.4)
(40.6)
6.6
376.9
Opening balance January 1, 2020
Cash inflow (1)
Cash outflow (2)
Interest accretion (3)
Cash
Cash
Cash
Acquired through business combinations Non-cash
Exchange movement
Fair value changes
Other non-cash adjustments
Closing balance December 31, 2020
Non-cash
Non-cash
Non-cash
1,875.3
—
(32.0)
5.2
0.4
(71.7)
—
(18.4)
1,758.8
4.1
—
(57.0)
58.8
—
0.9
—
(3.5)
3.3
(0.2)
—
(2.2)
—
—
—
2.6
—
0.2
15.3
6.8
(3.9)
—
—
—
54.1
—
72.3
(1) Cash inflows from cross currency interest rate swaps are part of effective cash flow hedging relationships and are
presented within interest paid within the Consolidated Statements of Cash Flows.
(2) Cash outflows from cross currency interest rate swaps are not part of a cash flow hedge and are presented within
proceeds on settlement of derivatives within the Consolidated Statements of Cash Flows.
(3) Interest accretion includes interest on lease liabilities.
The Company’s activities expose it to a variety of financial risks, including currency risk, interest rate risk,
credit risk and liquidity risk.
The Company’s overall risk management program focuses on minimizing potential adverse effects on the
Company’s financial performance. Where appropriate, the Company uses derivative financial instruments to hedge certain
risk exposures.
Risk management is led by senior management and executed according to Company policy. All hedging
activity is carried out by a central treasury department that evaluates and hedges financial risks according to forecasts
provided by the Company’s operating units.
Derivatives and hedging
Derivatives are used for economic hedging purposes and not as speculative investments. Where
derivatives do not meet hedge accounting criteria, they are classified as 'fair value through profit or loss' for accounting
purposes and are accounted for at fair value through profit or loss. They are presented as current assets or liabilities to
the extent they are expected to be settled within 12 months after the end of the reporting period. The Company's
derivative financial instruments are disclosed within Note 34.
Hedge accounting is applied to remove the accounting mismatch between the hedging instrument and the
hedged item. The effective portion of the change in the fair value of the hedging instrument is accounted for in the
translation reserve or cash flow hedge reserve through Other Comprehensive Income and will be recognized in profit or
loss in the same period as the hedged item. Movements in the Company's translation reserve and cash flow hedging
reserve are presented in Notes 28 and 29 respectively. The Company's accounting policy for hedge accounting is
disclosed within Note 3.
F-64
F-65
On July 29, 2021 the Company extended its CCIRS used to hedge the foreign currency and interest rate
In determining hedge effectiveness for a net investment hedge, the economic relationship between hedging
risk on the current Senior USD Loan from May 2022 to May 2024 to align with the maturity date of the USD Term Loan. As
part of the transaction, the EUR fixed rate paid by the Company has been amended and reflected in the underlying
interest cost. The transaction was considered to be a substantial modification of the hedging instruments, so is considered
to be a new hedging relationship which will give rise to some ineffectiveness in future periods. CCIRS contracts that were
previously used as a net investment hedge of the Company’s investments in Pound Sterling have also been extinguished.
A change in fair value of the CCIRS arose as a consequence of the transaction, which the Company has elected to write-
off immediately as a cost of extinguishment. This non-cash loss of €6.8 million, as well as the write-off of the cost of
hedging reserves associated with the discontinued net investment hedge, are presented as a one-off charge for the
transaction as disclosed in Note 10. The cash flow hedge reserve related to the previous hedge relationship will be
released on a straight line basis until May 2022.
As at December 31, 2021, the Company has $916.4 million of U.S. Dollar LIBOR floating rate debt. The
Company uses cross currency interest rate swaps to convert this into €827.8 million of debt with a fixed rate of interest
and designated as a cash flow hedge.
In creating cash flow hedges over U.S. Dollar debt, the Company enters into cross currency hedging
arrangements with matching critical terms as the hedged item, such as reference rate, reset dates, payment dates, and
notional amount. As part of the extension of the cross currency interest rate swaps on July 29, 2021 the Company entered
into off market derivatives with an embedded financing component. Amortization of the embedded financing component
shall lead to some ineffectiveness in the hedging relationship.
There was no material ineffectiveness during 2021 in relation to the cross currency interest rate swaps.
instrument and balance sheet exposure should be established including the notional amount and currency of the
underlying investment. Hedge ineffectiveness may arise due to the value of the hedged item being less than the notional
value of the hedging instrument. There was no material ineffectiveness in the net investment hedge in either 2021 or
2020. The ineffective amount taken through the Consolidated Statements of Profit or Loss in 2021 amounted to €nil (2020:
€nil).
The Company's policy is to reduce its risk of foreign exchange movements on material operating cash flows
in currencies other than the operating entity's functional currency using forward foreign exchange contracts designated as
cash flow hedges. These forecast cash flows represent the hedged item and is subject to management assessment.
In order to qualify as a cash flow hedge, the hedging instrument must meet the requirements of IFRS 9,
including alignment of the critical terms between the hedging instrument and hedged item. The group designates the
forward component of forward contracts as the hedging instrument.
Hedge ineffectiveness may arise if timing of the forecast transaction changes from what was originally
estimated, if credit dominates the relationship between hedged item of hedging instrument. There was no material
ineffectiveness during 2021 in relation to the forward foreign exchange contracts.
The effects of the foreign currency hedging instruments on the Company's financial position and
performance are as follows:
As at December 31, 2021
EUR/USD
GBP/USD
GBP/EUR
SEK/EUR
SEK/USD
Other
Currencies
The effects of the cash flow hedging instruments on the Company's financial position and performance are
€m
€m
€m
€m
€m
€m
as follows:
All amounts stated in €m, unless otherwise stated
USD - cross currency interest rate swaps
Carrying amount of liability
Notional amount (USD)
Maturity date
Change in fair value of outstanding hedging instruments since January 1
(Gain)/loss in value of hedged item used to determine effectiveness
Weighted average hedged rate for the year
December 31,
2021
December 31,
2020
(20.6)
$916.4
5/15/2024
68.9
(69.6)
1.11
(89.5)
$926.0
5/15/2022
(71.0)
71.0
1.11
The effects of the net investment hedging instruments on the Company's financial position and performance
are as follows:
All amounts stated in €m, unless otherwise stated
UK cross-currency interest rate swaps hedge
Carrying amount of cross-currency interest rate swaps
Notional amount (GBP)
Maturity date
Change in fair value of cross-currency interest rate swaps as a result of foreign
currency movements since January 1
Loss/(gain) in value of hedged item used to determine hedge effectiveness
Weighted average hedged rate for the year
December 31,
2021
December 31,
2020
—
—
7/29/2021
14.3
£220.2
5/15/2022
(12.9)
12.9
1.19
13.5
(13.5)
1.19
The impact of the net investment hedge is taken directly to equity via the foreign currency translation
reserve. The amount taken to this reserve that arose on the translation of the notional component of cross currency
interest rate swaps was a loss of €12.9 million (2020: €13.5 million gain).
Derivative financial instruments -
forward currency contracts
Carrying amount of (liability)/asset
Notional amount
Fair value (gains)/losses of outstanding
hedging instruments since January 1
Weighted average hedge rate for the year
17.5
343.6
1.2
58.4
(6.7)
244.7
0.5
70.4
(26.3)
1.20
(0.5)
1.38
12.0
1.15
(0.9)
0.10
0.1
4.5
13.5
0.11
0.3
96.4
0.6
—
As at December 31, 2020
EUR/USD
GBP/USD
GBP/EUR
SEK/EUR
SEK/USD
Other
Currencies
€m
€m
€m
€m
€m
€m
Derivative financial instruments -
forward currency contracts
Carrying amount of asset/(liability)
Notional amount
Fair value (gains)/losses of outstanding
hedging instruments since January 1
Weighted average hedge rate for the year
(21.9)
249.0
(20.6)
1.13
(3.7)
53.5
(2.0)
1.28
1.4
159.0
8.5
1.12
(4.0)
77.3
(4.2)
0.09
(2.6)
14.1
(2.2)
0.10
(0.5)
16.8
0.8
0.21
Gains/losses in the year from foreign exchange swap contracts used for liquidity purposes designated as
fair value through the Consolidated Statements of Profit or Loss amounted to a €0.6 million gain (2020: €2.4 million loss,
2019: €4.8 million gain).
Losses in the year from cross currency interest rate swap contracts designated as fair value through the
Consolidated Statement of Profit or Loss amounted to a €14.3 million loss (2020: €3.2 million loss, 2019: €13.6 million
loss).
F-66
F-67
Market risk (including foreign exchange and interest rate risk)
In managing market risks, the Company aims to minimize the impact of short term fluctuations on the
Company’s earnings. Over the longer term, permanent changes in both foreign exchange rates and interest rates will
have an impact on consolidated earnings.
Currency risk
Foreign currency risk on assets and liabilities in currencies other than functional currency
Foreign Exchange
translation risk
The Company is exposed to foreign exchange translation risk arising from the translation of
assets and liabilities denominated in currencies other than the Euro. Key areas of foreign
currency exposure include non-Euro debt and investments in subsidiaries not held in Euro.
Company policy is to mitigate the potential foreign exchange translation risk by converting where
appropriate, borrowings into Euro. This has been achieved on the Senior USD Loan through the
use of cross currency interest rate swaps designated as a cash flow hedge. The Company also
hedged translation exposure on consolidation of GBP net assets through the use of cross
currency interest rate swaps designated as a net investment hedge. The net investment hedge
was discontinued when CCIRS contracts that were used as a net investment hedge of the
Company’s investments in Pound Sterling were extinguished.
Mitigation & Impact on
Statement of Financial Foreign exchange translation risk resulting from the translation of non-Euro
Position
Denominated borrowings into Euros, to the extent that they are hedged will be mitigated by the
translation of the underlying cross currency interest rate hedging arrangements.
Currency risk
Foreign currency risk on purchases
The Company is exposed to foreign exchange risk where a business unit has material operating
cash flows in a currency other than the functional currency of that entity.
The most significant exposures for the Company are the purchase of raw materials, stock and
services purchased in U.S. Dollars and Euros.
Mitigation & Impact on The Company’s policy is to reduce this risk by using foreign exchange forward contracts
Statement of Financial
Position / Equity
that are designated as cash flow hedges.
As at December 31, 2021, the fair value of USD forward contracts entered into to hedge the
future purchase of U.S. Dollars in EUR, GBP and SEK functional currency entities is an asset of
€18.8 million (2020: €28.3 million liability). All forecast transactions are still expected to occur. As
at December 31, 2021, 95.1% (2020: 87.9%) of forecast future U.S. Dollar payments to the end of
2022 were hedged through the use of forward contracts and existing cash. All forward contracts
have been designated as cash flow hedges and have a maturity within the next 12 months.
The fair value of the Euro forward contracts with reference to non-Euro functional currencies as at
December 31, 2021, is a liability of €5.9 million (2020: €3.1 million). As at December 31, 2021,
77.2% (2020: 84.9%) of forecast future net Euro payments to the end of 2022 were hedged
through the use of forward contracts and existing cash. All forward contracts have been
designated as cash flow hedges and have a maturity within the next 12 months.
Sensitivity analysis
During 2021, the Euro weakened by 7.3% against Pound Sterling (2020: strengthened by 5.2%,
2019: weakened by 5.3%), weakened by 7.8% against the U.S. Dollar (2020: strengthened by
9.6%, 2019: weakened by 2.0%) and strengthened by 1.8% against the Swedish Krona (2020:
weakened by 3.8%, 2019: strengthened by 2.2%).
The table below illustrates the hypothetical sensitivity of the Company’s reported profit and
closing equity to a 1% movement in the EUR/GBP, EUR/USD and EUR/SEK exchange rates at
the reporting date, assuming all other variables remain unchanged. This analysis is for illustrative
purposes only, as in practice the foreign exchange rates rarely change in isolation. Figures are
presented post-tax.
The analysis assumes that exchange rate fluctuations on foreign exchange derivatives that form
part of an effective cash flow hedge relationship affect the cash flow hedge reserve in equity. For
foreign exchange derivatives which are not designated hedges, movements in exchange rates
impact the Income Statement.
Positive figures represent an increase in profit or equity.
Profit or loss
Equity
2021
€m
2020
€m
2021
€m
2020
€m
1% increase in the value of the Euro against
Pound Sterling
1% increase in the value of the Euro against
U.S. Dollar
1% increase in the value of the Euro against
Swedish Krona
—
—
0.7
—
1.5
2.8
(2.0)
(1.4)
(0.4)
(0.4)
0.4
0.5
A 1% decrease in the value of the Euro against the currencies identified in the table above would
result in a equal and opposite movement to the values disclosed in the table above. This analysis
is for illustrative purposes.
On an annualized 2021 basis, and assuming all other factors remain constant, for each 1%
movement in value of the Euro against Pound Sterling, the impact to the Company profit or loss
before tax would be approximately €3.3 million (2020: €3.0 million), excluding the impact of any
forward contracts.
On an annualized 2021 basis, and assuming all other factors remain constant, for each 1%
movement in value of the Euro against the U.S. Dollar, the impact to the Company profit or loss
before tax would be approximately €3.0 million (2020: €3.0 million), excluding the impact of any
forward contracts.
On an annualized 2021 basis, and assuming all other factors remain constant, for each 1%
movement in value of the Euro against Swedish Krona, the impact to the Company profit or loss
before tax would be approximately €1.0 million (2020: €1.1 million), excluding the impact of any
forward contracts.
We do not expect purchase levels to be materially different in the coming year.
Interest rate risk
Description
The Company is exposed to changes in interest rates to the extent that it enters into floating rate
borrowings, including the senior loans.
Mitigation & Impact on
Equity / Income The Company’s policy on interest rate risk is to mitigate the Company’s exposure to fluctuations
Statement
in interest rates.
As a result of decisions taken by national regulators, GBP LIBOR and certain USD LIBOR time
periods were phased out at the end of Dec 2021 and replaced by alternative reference indexes
(SONIA and SOFR). Our expectation is that both debt agreements and hedging contracts will be
aligned to the new benchmarks as they become known, and as such it is highly probable that the
existing hedging relationships can be continued. It is expected that the transition to the new
benchmarks, to the extent not already reflected in the current financing facilities, will occur during
the refinance of the USD Term Loan.
There are no current plans to phase out EURIBOR. If EURIBOR ceases to exist, we will need to
renegotiate our Senior Facilities Agreement with our lenders and associated cross currency
interest rate swaps.
F-68
F-69
Sensitivity analysis During 2021, three month EURIBOR rates remained below zero (2020: no change). Within the
Euro denominated senior loans, there is a EURIBOR floor of 0%.
2021
If interest rates were to move by 1%, this would have a correspondingly decrease or increase in
the Company’s profit/(loss) before tax by approximately €2.6 million (2020: €5.6 million), subject
to the EURIBOR floor of 0%.
Credit risk
Description
Credit risk arises on cash and cash equivalents, derivative financial instruments with banks and financial
institutions, any short term investments, as well as on credit exposures to customers. See Note 18 for
analysis of the trade receivables balance and Note 20 for analysis of the cash and cash equivalents
balance. The maximum exposure to credit risk at the end of the reporting period is the carrying amount
of each class of financial assets.
Mitigation
The Company limits counterparty exposures by monitoring each counterparty carefully and where
possible, sets credit limits according to approved treasury policy. The Company limits its exposure to
individual financial institutions by diversification of exposure across a range of financial institutions.
The credit quality of customers is assessed taking into account their financial position, past experience
and other factors. Credit limits are set for customers and regularly monitored to mitigate ongoing
payment risk.
Liquidity risk
Description
Mitigation
The Company is exposed to the risk that it is unable to meet its commitments as they fall due. The
Company has financial conditions, including financial covenants as part of the Senior debt arrangements
which it must comply with in order to maintain its current level of borrowings. There have been no
breaches of the covenants throughout the year.
The Company ensures that it has sufficient cash and available funding through regular cash flow and
covenant forecasting. The Company uses liquidity swaps to manage timing of cash flows in non-
functional currencies. These swaps are accounted for as FVTPL. In addition, the Company has access
to a revolving credit facility of €175.0 million, expiring in June 2026. This is available for general
corporate purposes. Currently €2.8 million is utilized for letters of credit, overdrafts, customs bonds and
bank guarantees.
Capital risk management
The objective of the Company when considering total capital is to protect the value of capital investments
and to generate returns on shareholder funds. Total capital is defined as including Loans and Borrowings and equity,
including derivatives used for the purpose of hedging currency and interest exposure on Loans and Borrowings, but
excluding the cash flow hedging reserve.
In support of its objectives, the Company may undertake actions to adjust its capital structure accordingly.
Actions may include, but not limited to, raising or prepayment of Borrowings together with related derivative instruments,
issuance of additional share capital, payment of dividends or share repurchase programs.
Maturity analysis
The USD senior loan includes the annual requirement to repay 1% of the original issued notional of
$9.6 million (€8.7 million) (2020: €8.7 million) In addition, the Senior Facilities Agreement also includes an excess cash
flow calculation whereupon an amount of principal shall be repaid based upon terms including cash generated and
leverage. Based upon the calculation as at December 31, 2021, no excess cash flow will be repayable in 2022 (2020: nil
repayable in 2021).
The tables below show a maturity analysis of contractual undiscounted cash flows prepared using forward
interest rates where applicable, showing items at the earliest date on which the Company could be required to pay the
liability:
Borrowings-principal
Borrowings-interest
Forward contracts Sell
Forward contracts Buy
Cross Currency Interest Rate Swaps Pay
Cross Currency Interest Rate Swaps
Receive
Lease Liabilities
Trade and other payables excluding non-
financial liabilities
Total
2020
Borrowings-principal
Borrowings-interest
Forward contracts Sell
Forward contracts Buy
2025
€m
2026
€m
2022
€m
2023
€m
8.5
57.5
805.3
(818.0)
25.0
8.5
63.5
—
—
24.9
2024
€m
791.7
50.4
—
—
818.5
(30.8)
(38.0)
(808.0)
23.1
18.2
11.2
647.1
717.7
—
77.1
—
863.8
—
34.0
—
—
—
—
7.3
—
41.3
Over 5
years
€m
1,353.2
67.0
—
—
—
Total
€m
2,161.9
306.5
805.3
(818.0)
868.4
—
(876.8)
25.2
90.6
—
34.1
—
—
—
—
5.6
—
39.7
—
1,445.4
647.1
3,185.0
2021
€m
7.8
46.6
677.3
(647.5)
2022
€m
7.8
46.8
—
—
2023
€m
7.8
47.2
2024
€m
1,683.1
20.4
—
—
—
—
9.9
—
—
—
—
—
6.2
—
2025
€m
Over 5
years
€m
Total
€m
1,706.5
161.0
677.3
(647.5)
1,174.4
—
—
—
—
—
—
(1,093.6)
28.1
80.2
—
601.1
28.1
2,659.4
—
—
—
—
—
—
5.2
—
5.2
Cross Currency Interest Rate Swaps Pay
38.5
1,135.9
Cross Currency Interest Rate Swaps
Receive
Lease Liabilities
(34.6) (1,059.0)
17.2
13.6
Trade and other payables excluding non-
financial liabilities
601.1
—
Total
706.4
145.1
64.9
1,709.7
34)
Financial instruments
Categories of financial instruments
The following table shows the carrying amount of each Statement of Financial Position class split into the
relevant category of financial instrument as defined in IFRS 9 'Financial Instruments'.
2021
Assets
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
Liabilities
Trade and other payables excluding
non-financial liabilities
Derivative financial instruments
Loans and borrowings (1)
Total
Financial
assets at
amortized
cost
Financial
Assets at
Fair Value
through
profit or loss
Derivatives at
fair value
through
profit
or loss
Derivatives
designated
in hedge
relationships
Financial
liabilities at
amortized
cost
€m
€m
€m
€m
€m
Total
€m
201.6
—
254.2
—
—
—
455.8
—
—
—
—
—
—
—
—
0.5
—
—
19.7
—
—
—
—
201.6
20.2
254.2
—
—
(647.1)
(647.1)
(0.1)
(28.0)
—
(28.1)
—
0.4
—
(2,236.8)
(2,236.8)
(8.3)
(2,883.9)
(2,436.0)
(1) Loans and borrowings excludes €9.4 million of deferred borrowing costs which are included within €2,227.4 million of
total loans and borrowings in Note 21.
F-70
F-71
2020
Assets
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
Short - term investments
Liabilities
Trade and other payables
excluding non-financial liabilities
Derivative financial instruments
Loans and borrowings (2)
141.2
—
393.2
—
—
—
—
—
—
—
25.0
—
—
—
Total
534.4
25.0
Financial
assets at
amortized
cost
Financial
Assets at
Fair Value
through
profit or loss
Derivatives at
fair value
through
profit
or loss
Derivatives
designated
in hedge
relationships
Financial
liabilities at
amortized
cost
€m
€m
€m
€m
€m
—
2.9
—
—
—
19.8
—
—
—
—
—
—
Total
€m
141.2
22.7
393.2
25.0
(i)
Derivative financial instruments
Derivative financial instruments are held at fair value. There is no difference between carrying value and fair
value. The valuation technique utilized by the Company maximizes the use of observable market data where it is
available. All significant inputs required to fair value the instrument are observable. The Company has classified its
derivative financial instruments as level 2 instruments as defined in IFRS 13 ‘Fair value measurement’.
(ii)
Trade and other payables/receivables
The notional amount of trade and other payables/receivables are deemed to be carried at fair value, short
term and settled in cash.
(iii)
Cash and cash equivalents
—
—
(601.1)
(0.2)
(124.8)
—
(601.1)
(125.0)
—
2.7
—
(1,765.7)
(1,765.7)
(105.0)
(2,366.8)
(1,909.7)
The carrying value of cash and cash equivalents is deemed to equal fair value.
(iv)
Short-term investments
Short-term investments are valued using inputs that are derived principally from or corroborated by
observable market data. The Company has classified these as level 2 instruments as defined in IFRS 13 “Fair value
measurement”.
(2) Loans and borrowings excludes €6.9 million of deferred borrowing costs which are included within €1,758.8 million of
total non-current loans and borrowings in Note 21.
(v)
Interest bearing loans and liabilities
Fair values
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. In determining fair value, Nomad uses various
methods including market, income and cost approaches. Based on these approaches, Nomad utilizes certain assumptions
that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent
in the inputs to the valuation technique. These inputs may be readily observable, market corroborated, or generally
unobservable inputs. The fair value hierarchy ranks the quality and reliability of the information used to determine fair
values.
Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following
three categories:
Level 1—Quoted prices for identical assets and liabilities traded in active exchange markets, such as the
New York Stock Exchange.
Level 2—Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted
prices in less active markets, or other observable inputs that can be corroborated by observable market data.
Level 3—Unobservable inputs supported by little or no market activity for financial instruments whose value
is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for
which the determination of fair value requires significant management judgment or estimation; also includes observable
inputs for non binding single dealer quotes not corroborated by observable market data. Where market information is not
available to support internal valuations, reviews of third party valuations are performed.
While Nomad believes its valuation methods are appropriate and consistent with other market participants,
the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result
in a different estimate of fair value at the reporting date.
The following is a description of the valuation methodologies and assumptions used for estimating the fair
values of financial instruments held by the Company.
The fair value of secured notes is determined by reference to price quotations in the active market in which
they are traded. They are classified as level 1 instruments. The fair value of the senior loans is calculated by discounting
the expected future cash flows at the year end’s prevailing interest rates. They are classified as level 2 instruments. There
is no requirement to determine or disclose the fair value of lease liabilities.
On June 24, 2021, the Company through its indirect, wholly-owned subsidiary, Nomad Foods Bondco Plc,
repaid the €400.0 million 3.25% senior secured notes due 2024 and completed a private offering of €750.0 million
aggregate principal amount of 2.5% senior secured notes due June 24, 2028 (the “Notes”). Interest on the Notes accrues
from the date of issue and is payable semi-annually in arrears on January 15 and July 15, commencing on January 15,
2022. The Notes are guaranteed on a senior basis by the Company and certain subsidiaries thereof. This transaction was
accounted for as an extinguishment of the existing Notes and previously capitalized eligible transaction costs were written-
off to the Statement of Comprehensive Income, as disclosed in Note 10. On the new Notes, eligible transaction costs of
approximately €4.0 million were capitalized and will be amortized over the life of the debt.
On July 9, 2021 the Company announced that Nomad Foods Bondco Plc, an indirect, wholly-owned
subsidiary of the Company, completed its private offering of €50.0 million aggregate principal amount of additional 2.5%
senior secured notes due 2028, representing a tack-on to the €750.0 million aggregate principal amount of senior secured
notes due 2028 issued on June 24, 2021, and issued at a price of €100.75.
On June 24, 2021, the Company amended and restated the Senior Facilities Agreement to refinance its
existing €553.2 million senior secured term loan facility originally due in May 2024, through a new 7-year term facility due
2028 (the "Senior EUR Loan"), paying interest at a rate equal to EURIBOR with a zero floor plus a margin of 2.5%. This
transaction was accounted for as an extinguishment of the existing debt and previously capitalized eligible transaction
costs were written-off to the Statement of Comprehensive Income, as disclosed in Note 10. On the new Senior EUR Loan,
eligible transaction costs of approximately €3.8 million were capitalized and will be amortized over the life of the debt.
Under the refinancing, the existing revolving credit facility of €80.0 million due 2023, was replaced with a
new €175.0 million facility (the "Revolving Credit Facility") available until June 2026 with an applicable margin of 2.25%
per annum and that includes a leverage ratchet. The Revolving Credit Facility may be utilized to support working capital
requirements, including letters of credit and bank guarantees. The structure of the Revolving Credit Facility now also
includes a pricing structure linked to environmental impact metrics during the life of the facility, and by doing so
demonstrates further commitment to the Company’s sustainability strategy by incorporating ESG target KPIs covering
areas of sourcing, packaging and carbon emissions.
The Company continues to have outstanding senior USD loans as at December 31, 2021 of $916.4 million
(€808.6 million) (the “Senior USD Loan”). The Senior USD Loan is repayable in May 2024. The Senior USD Loan requires
a repayment of $9.6 million (€8.5 million) in May each year until maturity equivalent to 1.0% of the original issued notional.
F-72
F-73
Furthermore as part of the senior loan structure, the Company is additionally required to undertake an annual excess cash
flow calculation whereby additional principal could be paid.
The Company uses cross currency interest rate swaps (“CCIRS”) to convert its $916.4 million of floating
rate Senior USD Loans into €827.8 million of EUR denominated debt with a fixed rate of interest, designated as a cash
flow hedge.
On July 29, 2021 the Company extended its CCIRS used to hedge the foreign currency and interest rate
risk on the current Senior Secured USD Term Loan from May 2022 to May 2024 to align with the maturity date of the USD
Term Loan. As part of the transaction, the EUR fixed rate paid by the Company has been amended and reflected in the
underlying interest cost. The transaction is considered to be a substantial modification of the hedging instruments, so is
considered to be a new hedging relationship which will give rise to some ineffectiveness in future periods. CCIRS
contracts that have previously been used as a net investment hedge of the Company’s investments in Pound Sterling
have also been extinguished. A change in fair value of the CCIRS arose as a consequence of the transaction, which the
Company has elected to write-off immediately as a cost of extinguishment. This non-cash loss, as well as the write-off of
the cost of hedging reserves associated with the discontinued net investment hedge, are presented as a one-off charge
for the transaction as disclosed in Note 10. The cash flow hedge reserve related to the previous hedge relationship will be
released on a straight line basis until May 2022.
The following table sets out the carrying amounts of recognized financial instruments that are subject to the
above agreements.
As at Dec 31, 2021
Derivatives - assets
Derivatives - liabilities
As at Dec 31, 2020
Derivatives - assets
Derivatives - liabilities
Gross amount
of financial
instruments as
presented upon
balance sheet
Related
financial
instruments
that are offset
€m
€m
Net amount
€m
20.2
(27.9)
(10.8)
10.8
9.4
(17.1)
Gross amount
of financial
instruments as
presented upon
balance sheet
Related
financial
instruments
that are offset
€m
€m
Net amount
€m
22.7
(125.0)
(22.7)
22.7
—
(102.3)
The senior loans, Senior Secured Notes and any drawn balances of the Revolving Credit Facility are
35)
Commitments
secured with equal ranking against assets of the Company and specified subsidiaries.
Senior EUR/USD loans
Other external debt
2024 fixed rate senior secured notes
2028 fixed rate senior secured notes
Less deferred borrowing costs
Derivatives
Cross Currency Interest Rate Swaps
Forward foreign exchange contracts
Total assets
Cross Currency Interest Rate Swaps
Forward foreign exchange contracts
Total liabilities
Total
Offsetting of derivatives
Fair value
Carrying value
December 31,
2021
December 31,
2020
December 31,
2021
December 31,
2020
€m
1,360.8
0.1
—
802.6
—
2,163.5
€m
1,300.4
0.2
405.8
—
—
1,706.4
€m
1,355.8
0.1
—
800.0
(9.4)
2,146.5
€m
1,295.1
0.2
400.0
—
(6.9)
1,688.4
As at
December 31,
2021
As at
December 31,
2020
€m
€m
—
20.2
20.2
(20.6)
(7.3)
(27.9)
(7.7)
17.2
5.5
22.7
(89.5)
(35.5)
(125.0)
(102.3)
Derivative contracts are held under International Swaps and Derivatives Association (ISDA) agreements
with financial institutions. An ISDA is an enforceable master netting agreement that permits the Company to settle net in
the event of default.
Future aggregate minimum contractual payments under non-cancellable service agreements and lease
rentals for short-lived and low-value assets are payable as follows:
Less than one year
Between one and three years
Between three and five years
More than five years
Total
As at
December 31,
2021
As at
December 31,
2020
€m
€m
2.2
4.1
2.2
0.2
8.7
1.9
3.5
2.0
0.1
7.5
These agreements may be subject to contractual annual increases linked to inflation indices. The payments
shown above exclude the impact of these contractual increases which cannot be reliably estimated.
36)
Capital commitments
Capital expenditure contracted for at the end of the reporting period but not yet incurred is as follows:
Property, plant and equipment
Intangible assets
Total
37)
Related parties
Founder Preferred Shares
As at
December 31,
2021
As at
December 31,
2020
€m
€m
21.3
1.7
23.0
13.6
3.4
17.0
F-74
F-75
Nomad has issued Founder Preferred Shares to its Founder Entities.
The conditions of the Founder Preferred Shares Annual Dividend Amount in 2018, 2019 and 2020 were met
and further details relating to these dividends is set out in Note 27.
Advisory Services Agreements
38)
Significant events after the Statement of Financial Position date
On June 15, 2015, the Company entered into an Advisory Services Agreement with Mariposa Capital, LLC,
From January 1, 2022 to March 2, 2022, the Company has repurchased and canceled an additional
1,160,547 ordinary shares in open market transactions for $30.5 million (€26.9 million) under its previously announced
share repurchase program authorized by Nomad’s Board of Directors in August 2021.
an affiliate of Mr. Franklin, and TOMS Capital LLC, an affiliate of Mr. Gottesman. Pursuant to the terms of the Advisory
Services Agreement, Mariposa Capital, LLC and TOMS Capital LLC provide high-level strategic advice and guidance to
the Company. Under the terms of the Advisory Services Agreement, Mariposa Capital, LLC and TOMS Capital LLC are
entitled to receive an aggregate annual fee equal to $2.0 million, payable in quarterly installments. This agreement expires
on June 1st annually and will be automatically renewed for successive one-year terms unless any party notifies the other
parties in writing of its intention not to renew the agreement no later than 90 days prior to the expiration of the term. The
agreement may only be terminated by the Company upon a vote of a majority of its directors. In the event that the
agreement is terminated by the Company, the effective date of the termination will be 6 months following the expiration of
the initial term or a renewal term, as the case may be.
On January 1, 2022, the Company entered into an Amended and Restated Advisory Services Agreement
with Mariposa Capital, LLC, an affiliate of Sir Martin, and TOMS Capital LLC, an affiliate of Mr. Gottesman. Pursuant to the
terms of the Amended and Restated Advisory Services Agreement, Mariposa Capital, LLC and TOMS Capital LLC provide
high-level strategic advice and guidance to the Company. Under the terms of the Amended and Restated Advisory
Services Agreement, Mariposa Capital, LLC and TOMS Capital LLC are entitled to receive an aggregate annual fee equal
to $4.0 million, payable in quarterly installments. This agreement expires on January 1st annually and will be automatically
renewed for successive one-year terms unless any party notifies the other parties in writing of its intention not to renew
the agreement no later than 90 days prior to the expiration of the term. The agreement may only be terminated by the
Company upon a vote of a majority of its directors. In the event that the agreement is terminated by the Company, the
effective date of the termination will be 6 months following the expiration of the initial term or a renewal term, as the case
may be.
Total fees and expenses of €0.8 million and €0.8 million were incurred by Mariposa Capital, LLC and TOMS
Capital LLC respectively in the course of their duties and were reimbursed in the year ending December 31, 2021 (year
ended December 31, 2020: €1.0 million and €0.9 million respectively).
During 2020, the Company entered into an agreement with a working capital solutions specialist to facilitate
a program that provides our suppliers with the ability to receive advance payments from a third party credit institution as
part of our ordinary course of business payables, in exchange for a discounted invoice amount. The working capital
solutions specialist is owned in part by affiliates of JRJ Group (of which one of our non-executive directors, Mr. Isaacs, is a
founding partner) and TOMS Capital LLC (of which Mr. Gottesman is the founder and managing partner). Amounts paid by
the Company to the working capital solutions specialist related to setup during 2020 were less than €0.1 million and are
not considered to be material to either party. Ongoing fees associated with this service are received by the working capital
solutions specialist directly from our suppliers utilizing the service.
Directors and Key Management
All significant management decision making authority is vested within the Board of Directors and the
Executive Team, therefore key management are considered to be the Directors and Executive Officers. Their
remuneration has been disclosed in Note 9.
In May 2020, former and current Non-Executive Directors were issued shares, exercising all the remaining
initial options outstanding as detailed in Note 25.
Non-executive Directors continue to receive fees for their services as board members and to certain
committees and are settled through payroll. Director fees are payable quarterly in arrears. Total Non-executive Director
fees and expenses for the year ending December 31, 2021 was €0.4 million (year ended December 31, 2020:
€0.3 million).
Non-Executive Directors are also eligible to an annual restricted stock grant issued under the LTIP which
will vest on the earlier to occur of the date of the Company’s annual meeting of shareholders or thirteen months from the
date of grant. Details of the annual restricted stock grants under the LTIP can be found in Note 8(b).
As part of its long term incentive initiatives, the Company has 2,016,855 restricted shares outstanding to the
management team (the “Management Share Awards”). The Directors and Executive Officers have all been awarded
shares. The associated performance metrics and valuation method is detailed in Note 8(b).
F-76
F-77
Item 19.
Exhibits
The following exhibits are filed as part of this annual report:
EXHIBIT INDEX
Incorporation by Reference
Exhibit
No.
8.1
List of Significant Subsidiaries.
Exhibit Description
Form
Exhibit
No.
Period
Covered or
Date of
Filing
Filed with
this
Annual
Report
X
Incorporation by Reference
12.1 Rule 13a-14(a)/15d-14(a) Certification of Chief
Executive Officer.
12.2 Rule 13a-14(a)/15d-14(a) Certification of Chief
Financial Officer.
13.1 Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
13.2 Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
15.1 Consent of PricewaterhouseCoopers LLP
101.IN
S
101.S
CH
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
101.D
EF
XBRL Taxonomy Extension Definition Linkbase
Document
101.C
AL
XBRL Taxonomy Extension Calculation Linkbase
Document
101.L
AB
XBRL Taxonomy Extension Label Linkbase Document
101.P
RE
XBRL Taxonomy Extension Presentation Linkbase
Document
X
X
X
X
X
X
X
X
X
X
X
Exhibit
No.
1.1
2.1
2.2
2.3
4.1
4.2
4.3
4.4
4.5
4.6
Exhibit Description
Amended and Restated Memorandum and Articles of
Association.
Registration Rights Agreement dated as of June 1,
2015 among Nomad Holdings Limited, Birds Eye Iglo
Limited Partnership Inc, Mariposa Acquisition II, LLC,
TOMS Acquisition I LLC, TOMS Capital Investments
LLC and funds managed by Pershing Square.
Form
6-
K (001-37669)
F-1 (333-20818
1)
Filed with
this
Annual
Report
Exhibit
No.
99.1
Period
Covered or
Date of
Filing
1/14/2016
4.1
11/24/2015
Indenture dated as of May 3, 2017 among Nomad
Foods Bondco PLC, Nomad Foods Limited, Deutsche
Trustee Company Limited, Deutsche Bank AG, London
Branch, Deutsche Bank Luxembourg S.A., and Credit
Suisse AG, London Branch and the Subsidiary
Guarantors named therein.
Description of Securities.
6-K
(001-37669)
99.3
5/3/2017
Share Sale and Purchase Agreement, dated as of
October 29, 2015, among Liongem Sweden 1 AB, Iglo
Foods Group Limited and Nomad Foods Limited
F-1 (333-20818
1)
2.2
11/24/2015
Intercreditor Agreement, originally dated as of July 3,
2014, as amended and restated from time to time
including, pursuant to the 2017 Amendment and
Restatement Agreement among Nomad Foods
Limited, Credit Suisse AG, London Branch, Deutsche
Bank Company Limited and certain entities named
therein.
Amendment and Restatement Agreement, dated June
15, 2018, relating to Senior Facilities Agreement,
originally dated July 3, 2014, as amended and restated
from time to time, including pursuant to Amendment
and Restatement Agreement dated December 20,
2017 for Nomad Foods Limited with Credit Suisse AG,
London Branch.
Nomad Foods Limited Amended and Restated Long-
Term 2015 Incentive Plan.
Nomad Foods Limited Long Term 2015 Incentive Plan
Restricted Share Unit Agreement.
Service Agreement between the Company and Stéfan
Descheemaeker.
4.6A Amended and Restated Service Agreement between
the Company and Stéfan Descheemaeker, dated May
1, 2020.
4.7
4.8
Service Agreement, dated as of February 15, 2018,
between the Company and Samy Zekhout.
Advisory Services Agreement, dated as of June 15,
2015, among Nomad Foods Limited, Mariposa Capital,
LLC and TOMS Capital LLC.
4.8A Amended and Restated Advisory Services Agreement,
dated as of January 1, 2022, among Nomad Foods
Limited, Mariposa Capital, LLC and TOMS Capital
LLC.
6-K
(001-37669)
99.2
5/3/2017
20-F
(001-37669)
4.3
2/27/2020
20-F
(001-37669)
20-F
(001-37669)
F-1
(333-208181)
6-K
(001-37669)
20-F
(001-37669)
F-1
(333-208181)
4.4
4.5
2/27/2020
2/27/2020
10.3
11/24/2015
99.1
5/5/2020
4.7
3/22/2018
10.5
11/24/2015
X
X
F-78
F-79
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly
caused and authorized the undersigned to sign this Annual Report on Form 20-F on its behalf.
Date: March 3, 2022
SIGNATURES
NOMAD FOODS LIMITED
By: /s/ Samy Zekhout
Name: Samy Zekhout
Title: Chief Financial Officer
Annual Report 2021 Corporate Information
Independent Registered Public
Accounting Firm
PriceWaterhouseCoopers LLP
London, UK
Investor Relations
Anthony Bucalo
Head of Investor Relations
1 (914) 907 8724
Transfer Agent
Computershare
By Regular Mail
Computershare
P.O. Box 505000
Louisville, KY 40233
Overnight Correspondence
Computershare
462 South 4th Street, Suite 1600
anthony.bucalo@nomadfoods.com
Louisville, KY 40202
If you would like a free copy of
Toll Free Telephone US
the annual report please e-mail
(877) 373 6374
investors@nomadfoods.com
Toll and International Telephone
or write to:
Investor Relations
1, New Square
Bedfont Lakes Business Park
Feltham
Middlesex
TW14 8HA
1 (781) 575 3100
Shareholder website
www.computershare.com/investor
Shareholder online inquiries
https://www-us.computershare.com/investor/Contact
Securities Listing
Our shares of common stock are listed on the NYSE
Ticker symbol: NOMD
Board of Directors
and Executive Officers
Noam Gottesman
Founder
Co-Chairman and
Non-Executive Director
Sir Martin Ellis Franklin, KGCN
Founder
Co-Chairman and
Non-Executive Director
Ian G.H. Ashken
Independent Non-Executive Director
Stéfan Descheemaeker
Chief Executive Officer and Director
Golnar Khosrowshahi
Independent Non-Executive Director
James E. Lillie
Independent Non-Executive Director
Stuart M. MacFarlane
Independent Non-Executive Director
Victoria Parry
Independent Non-Executive Director
Melanie Stack
Independent Non-Executive Director
Samy Zekhout
Chief Financial Officer and Director
F-80
Nomad Foods Annual Report 2021 185
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