Annual Report 2023
Serving the World with Better Food
Serving the World with Better Food
Serving the World with Better Food
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 .............................................................................. 5-180
Corporate Information ...............................................................................181
Dear Fellow Shareholders,
Nomad Foods delivered another year of
continuing its impressive track record of
solid operational and financial
top-tier financial performance amongst its food
results
At Nomad Foods, our mission of “serving the world
with better food” drives everything that we do. For
us “better” represents more than our products; here
are a few examples:
peers. Notably, net sales exceeded €3 billion
for the first time – roughly double our net sales
• “ Better” encompasses our dedication to better
at the time of our inaugural letter in 2015. We
nutrition. More than 99% of our products do not
successfully navigated a volatile, complex and
use taste enhancers, artificial flavors, or artificial
highly inflationary macro environment to post
colours and more than 90% of our food is
record sales and EBITDA, fortifying our position
designated as nutritious by the UK Government
as the leading branded frozen foods pure-play
Nutrient Profiling Tool, an externally-verified
company on the global stage.
nutrient scoring system, which is even more
relevant given increasing consumer focus and
We are proud of Nomad Foods’ role leading the
demand for minimally processed food options
frozen category to deliver higher quality, more
and recent impacts of GLP-1 drugs on food
nutritious
food
in a convenient, sustainable
consumption.
and affordable
form
to consumers.
The
modern frozen food industry is celebrating its
• “ Better” means more sustainable operations.
100th year anniversary in 2024. Beginning with
99% of our fish and seafood is sourced from
Clarence Birdseye’s revolutionary quick-freezing
sustainable fisheries and 90% of our vegetables
technology, the frozen food category continues
are sourced
from sustainable
farms. We
to align with a number of secular, long-lasting
are committed to converting 100% of our
consumer trends. Given that, it is no surprise that
packaging to be recyclable by 2030 and to
frozen food is now a €57 billion business in Europe,
reduce our greenhouse emissions intensity by
growing by over €9 billion since 2021, faster than
overall food sales.
45% and we are well on our way to achieving
these goals.
2 Nomad Foods Annual Report 2023
• “ Better” people. Our most important asset, our
EBITDA and 6% CAGR in adjusted EPS over the
people, go home every night. We are proud of
last five years. During 2023, we repurchased
our talented and hard-working team members,
approximately $185 million of ordinary shares and in
who continue to execute at a high level. We are
February 2024, we initiated a quarterly cash dividend
investing in our people and remain committed
of $0.15 per share, a testament to the quality and
to growing sustainably for the benefit of all of
resilience of our business, our solid foundation, and
our stakeholders.
our confidence in our ability to generate significant
cash flows and sustainable, long-term growth.
• “ Better” also extends to our commitment to
drive long-term value to our shareholders. It is
Looking ahead, we believe Nomad Foods’ will
underpinned by strong financial performance
continue to deliver top-tier performance. Over
as Nomad Foods significantly outgrew food
the long term, we expect to deliver best-in-class
peers on net sales, EBITDA, and EPS over the
results: 3% to 4% organic revenue growth; 5% to 7%
last five years.
EBITDA growth; 7% to 9% EPS growth, and 90 to 95%
Nomad Foods’ resilient business model, focused
growth strategy, and portfolio of iconic brands has
We
look
forward
to
reporting our progress
delivered a 7% CAGR in net sales and adjusted
throughout 2024.
cash conversion.
Yours faithfully,
Sir Martin Ellis Franklin
Co-Chairman
Noam Gottesman
Co-Chairman
As I look ahead, frozen food categories remain healthy
with growing consumption, and we are positioned for
accelerated growth. The consumer environment
is
improving and we have repositioned the organization
from 22 countries into 6 clusters to capture the best of both,
local and global expertise. We are strengthening our core
by prioritizing our most attractive growth opportunities
– our top 20 Must Win Battles – and by cross-pollinating
our best ideas into markets where we already have
leadership, for new, low-risk growth opportunities. We are
also refocusing on innovation by building a pipeline of
new products and increasing our support behind both
innovation and our core.
For 2024, we expect net revenue growth of 3-4%, adjusted
EBITDA growth of 4%-6%, and adjusted EPS of €1.75 to €1.80
per share. We expect cash flow conversion of 90-95%.
Our retail volume trends are improving and we expect to
deliver positive volume growth for the full year.
We are a resilient company with a portfolio of iconic
brands, uninterrupted track-record of consistent, top-
tier financial performance, and an unwavering focus on
shareholder value creation. I am even more excited about
what lies ahead for Nomad Foods, which is enabled by the
support and dedication of our nearly 8,000 employees. I
am proud of their dedication, expertise, and commitment
of our team to work together to drive sustainable growth.
On behalf of everyone at Nomad Foods, I thank you for
your support and I look forward to sharing our progress
throughout the year.
Respectfully yours,
Stéfan Descheemaeker
CEO
Dear Fellow Shareholders,
2 023 marked a turning point for Nomad Foods as
we witnessed a gradual stabilization in the macro
environment after several years of unprecedented
challenges. More importantly, rather than passively waiting
for conditions to improve, we seized this opportunity
to get better. As a result, we not only delivered on our
financial commitments in 2023 but are better positioned for
accelerated growth in 2024 and beyond.
It started with a commitment to preserve the long-term
health and growth potential of our brands. In face of
record-high inflation, we worked hard to offer better
value to our consumers while raising prices to preserve our
margin structure. It wasn’t an easy choice but it was the
right choice for our long-term growth outlook. We are now
in a better position to invest in our brands, in our people,
in our innovation to deliver volume and share recovery in
2024 along with higher profit and earnings growth.
A few of our key accomplishments in 2023 include:
• Organic net sales growth of 3.6%, adjusted EPS of
€1.61, and adjusted cash flow conversion of 109% - all
at or above our guidance. Adjusted EBITDA increased
by 2% to €535 million.
• 50 basis points gross margin recovery driven by
successful implementation of several pricing actions,
increased focus on productivity, and revenue growth
management actions to mitigate high inflation.
• Excellent supply-chain execution to de-risk our fish
supplies, protect against supply shortages of key
ingredients, and maintained costs discipline.
• Another year of strong cash generation with adjusted
free cash flow of €300 million.
• Share buyback of nearly $185 million and quarterly
cash dividend of $0.15 per share highlighting a
balanced capital deployment strategy to maximize
shareholder returns.
• Continued progress on our sustainability agenda as
Nomad Foods was included in the annual Dow Jones
Sustainability Europe Index (DJSI Europe) for the third
consecutive year. The company also received a
maximum score of 100 in Health & Nutrition for the fifth
consecutive year.
• Successfully concluded a landmark study that could
change the temperature at which frozen food
is stored, leading to significant carbon emission
reductions and cost savings.
Nomad Foods has delivered uninterrupted growth since
2016 despite all the macroeconomic headwinds. We
learned from these crises and are emerging stronger.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)
o
☒
☐
o
Registration Statement Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Fiscal Year Ended December 31, 2023
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
Trading Symbol (s)
Name of Each Exchange on which Registered
Ordinary Shares, no par value
NOMD
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: None
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.
163,167,134 Ordinary 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
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in
the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
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
6
TERMS USED IN THIS REPORT
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
TABLE OF CONTENTS
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 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item 16J.
Insider Trading Policy
Item 16K. Cybersecurity
Item 17.
Financial Statements
Item 18.
Financial Statements
Item 19.
Exhibits
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TERMS USED IN THIS REPORT
Unless the context otherwise requires, in this annual report, the term(s) “we,” “us,” “our,”
“Company,” “Nomad,”, “Nomad Foods” and “our business” refer to Nomad Foods 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”) 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, 2023 (the “Fiscal 2023 Period”) and December 31, 2022 (the “Fiscal 2022 Period”) as well as selected
consolidated financial information for the year ended December 31, 2021 (the “Fiscal 2021 Period”).
Non-IFRS Financial Measures
In this annual report, we present certain supplemental financial measures that are not recognized
by IFRS. These financial measures 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.
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TRADEMARKS
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 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 2024;
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 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;
the anticipated benefits of diversifying our sources of sustainable food products and reduced exposure to
Russia;
our ability to prevent, or remediate, any future cybersecurity incidents;
our ability to implement our remediation plan in connection with the material weakness in our internal control
over financial reporting;
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.
2
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.
These factors include but are not limited to:
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disruptions or inefficiencies in our operations or supply chain, including as a result of pandemics, and our
ability to maintain the health and safety of our workforce;
the duration, spread and intensity of pandemics and government responses to such pandemics;
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 the Findus Switzerland AG business ("Findus Switzerland") 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;
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;
our ability to effectively compete in our markets, including the ability of our Green Cuisine brand to effectively
penetrate the markets in continental Europe;
our ability to commercialize sustainability and accelerate our presence in discounter stores;
economic conditions that may affect our future performance including increases in inflation and 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;
our ability to successfully diversify;
our ability to identify and remediate any material weakness or significant deficiencies in our internal control
over financial reporting;
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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.
our ability to fund future dividend payments as approved by the Board of Directors.
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.
4
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. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
5
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.
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• 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.
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improvement of existing products.
The ongoing conflict between Ukraine and Russia and the wider geopolitical impact of conflict could materially
and adversely affect our business.
• We may not be able to increase prices to offset inflationary pressures on costs for materials or other inputs.
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• We are exposed to macroeconomic and other trends that could adversely impact our operations in our Key
Pandemics could have a material adverse impact on our business, results of operations and financial condition.
Markets.
• We may not be able to source raw materials or other inputs of an acceptable type or quality.
• 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.
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• Our business is dependent on third-party suppliers.
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Failure to protect our brand names and trademarks could materially affect our business.
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.
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• We are exposed to local business and tax risks in many different countries.
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The price of energy and other raw materials we consume in the manufacture, storage and distribution of our
products are subject to volatile market conditions.
• Our supply network and manufacturing and distribution facilities could be disrupted by climate-related factors and
other factors beyond our control.
Seasonality impacts our business, and our revenue and working capital levels may vary quarter to quarter.
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• We may be unable to realize the expected benefits of actions taken to align our resources, operate more
efficiently and control costs.
Labor shortages and higher labor costs could adversely affect our business and financial results.
• We may be subject to significant disruption in our workforce or the workforce of our suppliers.
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• We are dependent upon key executives and highly qualified managers and we cannot assure their retention.
Failure to adequately address current and emerging sustainability risks, including environmental, social and
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governance matters, could have an impact on our business.
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.
• We may face significant competition for acquisition opportunities.
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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.
6
Risks Related to Regulations
• We could incur material costs for violations of, or liabilities under applicable directives, regulations and laws.
• We are subject to complying with a variety of regulatory schemes.
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European privacy and data protection regulations could expose us to compliance risks and costs.
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.
• We are exposed to exchange rate risks.
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Changes to our payment terms with customers and suppliers may materially adversely affect our 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.
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• We are exposed to risks in connection with our treasury and cash management activities.
• We face risks associated with certain pension obligations.
• We are exposed to risks related to our financial arrangements with respect to receivables factoring, reverse
factoring and supply chain financing.
• We are a holding company whose principal source of operating cash is the income received from our subsidiaries.
•
The Founders and/or the Founder Entities may in the future enter into related party transactions with us.
General Risk Factors
• We are subject to the risk of 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.
• We may incur liabilities that are not covered by insurance.
•
If we fail to or are unable to maintain effective internal controls over financial reporting, the accuracy and
timeliness of our financial reporting may be adversely affected.
In connection with the preparation of our 2023 financial statements, we have identified a material weakness in our
internal control over financial reporting
•
Risks Related to our Ordinary Shares
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.
• Outstanding equity award grants under our LTIP could require us to issue additional ordinary shares.
• Our ordinary share price may be volatile.
•
•
• We may lose our foreign private issuer status in the future.
•
•
•
•
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
Risks Related to Taxation
•
•
•
•
Changes in tax law and practice may reduce any net returns for shareholders.
Failure to maintain our tax status may negatively affect our financial and operating results and shareholders.
Taxation of returns from subsidiaries may reduce any net return to shareholders.
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.
7
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 distributors and retailers of chilled and fresh products, baked
goods and ready-made meals. We may not successfully compete with our existing competitors and new competitors may
enter the market.
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, particularly during the current
period of high inflation. Our competitors develop and launch products targeted to compete directly with our products. In
order to effectively compete, our products must provide higher value and/or quality than alternatives, particularly during
periods of economic uncertainty and rising prices. If they do not, consumers may be more likely to purchase private label
products. Our retail customers, most of which promote their own private label products, control the shelf space allocations
within their stores and they may allocate more shelf space to private label products, their own branded 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.
In addition, as high inflation continues, shoppers may move to other channels such as discounters.
Discounters are supermarket retailers which offer a narrow range of food and grocery products at discounted prices and
which typically focus more on non-branded rather than branded products. A continued increase in discounter sales may
adversely affect the sales of our branded products. Market dynamics continue to evolve and growth rates might change by
channel and over time. For example, during the COVID-19 pandemic we saw a shift in consumer behavior to online
shopping. The growth in eCommerce has encouraged the entry of new competitors and business models, intensifying
competition in the food industry.
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;
value for money at a time when consumers are subject to increased inflationary pressure on household spending; 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, the level of processing of
certain products 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, Serbia or Austria (the “Key
Markets”, based on sales of branded goods) could have a material adverse effect on our business.
8
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
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.
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.
The ongoing conflict between Ukraine and Russia and the wider geopolitical impact of conflict could materially
and adversely affect our business.
On February 24, 2022, Russian forces invaded Ukraine. While we do not have any direct
operations or sales in either Russia or Ukraine, these countries are responsible for the supply of many commonly used
raw materials and resources used in, or in the manufacturing of products such as ours, including, but not limited to some
species of fish, wheat and energy. The ongoing conflict in the Ukraine, and the imposition of economic sanctions and
additional tariffs could result in considerable reductions in the availability or increase the cost of such raw materials and
resources. In particular, both before and following the invasion, the U.S., the EU and the UK have imposed economic
sanctions and tariffs on Russia. It is not clear to what extent such sanctions and tariffs could continue to proliferate and
increase, what raw materials and resources may be affected, nor for how long they will be in place. Our inability, and the
inability of our suppliers, to source certain raw materials, particularly fish, and provide certain products to customers and
consumers could materially and adversely affect our business. In addition, sanctions and tariffs are intended to and will
have an impact on international trade and the global economy. Further steps that might be taken in response to the crisis
and their consequences are unknown but could include further sanctions, tariffs, embargoes, regional instability, adverse
effects on macroeconomic conditions and adverse effects on exchange rates and financial markets.
Should there be additional sanctions, tariffs or restrictions on the supply of fish from Russian waters
that impact our supply chain or specific products, it would not be possible to replace entirely the required volumes of MSC
certified fish in the short-to-medium term. Furthermore, should there be a reduction in availability we may also face higher
costs for the raw materials and resources available. In anticipation of that possibility, we are continually seeking clarity
from governments on the issue and diversifying our supply sources for raw materials and resources. For example, we are
continuing the diversification of our fish supply by looking into alternative species, geographies and product formats.
However, these efforts are subject to negotiation of acceptable contractual terms, availability of alternative species at
comparable prices and the conformity of any alternatives to our standards. Where additional sanctions or tariffs are being
considered, we are asking for a realistic transition period. There is no guarantee that any such transition period will be
provided.
Our factories in Europe use energy for which a proportion is sourced from Russia. If sanctions,
tariffs or restrictions were to be implemented by Russia or the EU on the use of such resources this could materially and
adversely affect our business.
Additionally, the invasion of Ukraine by Russian forces and the impact of wider geopolitical conflicts
could impact many of the other risk factors listed in these Risk Factors. In particular, but not limited to, the conflicts could
have an effect on our profitability, fluctuations on our future borrowings, fluctuations on the foreign currency market, the
cost of borrowings, the prevailing rate of inflation, the creditworthiness of our customers and our suppliers, the laws and
regulations affecting our business and the carrying value of goodwill and other assets in our business. To the extent
conflicts are ongoing, the potential for related sanctions, potential government actions and economic impact remain
9
uncertain. At this time it is not possible to predict the extent or nature of these impacts on our business although we
expect the current conflicts to continue for some time. Any change or movement in any of the elements listed in this
section could materially and adversely affect our business.
We may not be able to increase prices to fully offset inflationary pressures on costs for materials or other inputs.
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 and private
label products 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.
Pandemics and other contagious outbreaks and government actions in response, could have a material adverse
impact on our business, results of operations and financial condition.
The ultimate impact that a pandemic, such as COVID-19, or other contagious outbreaks will have
on our business, results of operations and financial condition is uncertain. Restrictions, as well as prevention and
mitigation measures, that may arise as a result of pandemic or contagious outbreak may have an adverse impact on
global economic conditions.
We operate production space in facilities across Europe. We could, in the future, be forced to close
our facilities or reduce operations due to government responses to any 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 any pandemic or
contagious outbreak, 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.
The extent of a pandemic's effect on our operational and financial performance will depend on
many factors, including the duration, spread, seasonality and intensity of further outbreaks, the emergence of new
variants, 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. If
a pandemic evolves in such a way that its effects are similar to the COVID-19 pandemic, 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. Examples of trends which we saw as a result of
COVID-19 restrictions included, supply chain pressures and delays as a result of localized lockdowns in China, increases
in the cost of energy and raw materials, shortage of labor across Europe, and shortages of commercial truck drivers. A
substantial supply of our fish is processed in China, and as such, any lockdowns or other incidents in China could have a
material impact on our business if they increase or continue for a longer period than anticipated.
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 from which approximately 69% of our revenue was
generated during the year ended December 31, 2023. 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, inflation and resulting increases in the cost of living have
created political and economic uncertainty both in the UK and the other geographies in which we operate. Additionally, the
continuing conflict in Ukraine and wider geopolitical conflict will also affect different geographies in different ways. A
deterioration in economic conditions could result in increased inflationary pressure, increased raw material and energy
cost, 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 changes to consumers' purchasing habits, for example by purchasing more promoted
10
products, purchasing cheaper private label products instead of equivalent branded products, switching to cheaper proteins
and switching to discounter stores. 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 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 and may in the 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. The current conflict in Ukraine is also causing continuous changes in the
global supply chain with fish, poultry, energy, fuel, edible oils, wheat, vegetables and packaging materials affected among
others. 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, US, European Union and other countries including national or international
quotas that can limit the volume of raw materials.
General economic conditions, economic sanctions or tariffs, whether due to regional conflict or
otherwise, unanticipated demand, problems in manufacturing or distribution, natural disasters, pandemics, weather
conditions during the growing and harvesting seasons, farmers choosing to grow different crops due to changing
economic conditions and commodity prices, 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 and
transportation costs 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.
Lastly, 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, human right abuses 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.
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 retail customers include supermarkets and large chain food retailers. Throughout our markets,
the food retail segments are highly concentrated. For the year ended December 31, 2023, our top 10 retail customers
accounted for 32% of revenue. In recent years, the major multiple (multi-channel) retailers in Key Markets 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
11
consequence, if we lose business from a major retail customer or if our relationship with a major retail 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 retail customers may give higher priority to private label products,
retailer owned brands or the branded products of our competitors as a result of a change in pricing strategy or a change in
economic conditions 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 or more frequently in periods of high inflation or deflation. It is not always the case that our retail customers
accept more frequent negotiations of price increases or decreases nor the amount of them. In addition, 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 retail 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 retail customers. Most of our retail 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 retail 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 retail 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 retail customers experiencing a significant decline in profits and/or reduced liquidity. A
significant adverse change in the financial position of a retail customer could require us to assume greater credit risk
relating to that retail customer and could limit our ability to collect receivables. We do not maintain credit insurance to
insure against retail customer credit risk.
on our business, financial condition and results of operations.
Any of the above risk factors in relation to our retail customers could have a material adverse effect
We may be subject to increased distribution costs or disruption of transportation services.
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,
pandemic related impacts, increased energy and fuel costs as a result of conflict, 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, energy or fuel, and any
disruption in transportation, including the availability of suitable transportation (including the availability of suitable
12
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 and other intellectual property 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 and
supply of certain vegetables and other products, the manufacturing of certain products and packaging materials and
distribution of our products. Our suppliers are subject to their own operational, sustainability 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
increased costs or unavailability of energy and raw materials as a result of the conflict in Ukraine, is prevented from
supplying as a result of changes in the international sanctions or customs regimes, or fails to take adequate steps to
operate their business sustainably with respect to environmental or social issues, this could negatively affect the price and
availability of our ingredients, products and/or packaging materials and may adversely impact our supply chain, operations
and corporate reputation. 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
In addition, to the extent that our creditworthiness is impaired, or general economic conditions
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 or seek to re-negotiate the contracts
they have with 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.
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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.
Food safety and the public’s perception that our products are safe and healthy are essential to our
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. 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, the sustainability credentials of certain products or ingredients, for example, palm oil
or soy, the frozen category 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. In addition, we cannot
guarantee that our efforts, through contractual relationships and regular inspections, to control the risk of contamination
caused by third parties, including 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, animal welfare, social and health-related
concerns. For example, we could be affected by overfishing in the seafood supply chain which poses a risk to current and
future fish stocks, ecosystems, and communities. Further damage is being done by careless fishing practices, including
avoidable by-catch of non-target species and fishing equipment left in the ocean (known as Ghost Gear), which is a
significant contributor to plastic pollution. Seafood supply chains are also at risk of a range of human rights abuses,
including modern slavery. Overfishing risks are compounded by the negative consequences of climate change, including
ocean heating and acidification. All or any of these factors could give rise to a negative perception of the seafood supply
chain and lead to reduced sales, higher prices and consumers choosing alternative products. 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, for
example by limiting the amount of certain nutrients in our products as is currently the case with regard to High in Fat, Salt
and Sugar ("HFSS") nutrients in the UK. 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.
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A failure in our cold chain could lead to unsafe food conditions and increased costs.
“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.
Potential liabilities and costs from litigation could adversely affect our business.
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, allegations or investigations of anti-competitive practices or other criticisms which could result in litigation,
arbitration or regulatory proceedings and result in potential liabilities or costs which may be significant and/or 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. 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, where management
assesses that it is probable that the liability will arise, 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 to address rising
costs following the COVID-19 pandemic and global economic pressures.
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The price of energy and other raw materials we consume in the manufacture, storage and distribution of our
products are subject to volatile market conditions.
The price and availability 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 current conflict in Ukraine is resulting in volatility in the markets for energy and fuel as a
result of the widespread usage of gas, oil and coal from Russia throughout Europe. Any sustained increases in energy
costs, or disruptions to or limitations in supply as a result of wider geopolitical conflict or otherwise, could have an adverse
effect on our business, financial conditions and results of operations and could affect our competitive position if our
competitors’ energy costs do not increase at the same rate as ours or if they do not suffer the same disruptions to or
limitations in supply. 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, climate change may increase the frequency of adverse weather events such
as flooding or droughts in crop growing areas or changes in sea temperature that may adversely 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 climate
continues to change, whether as a result of increased greenhouse gas emissions or otherwise, and leads to increasingly
severe weather conditions, shortages of raw materials, local water scarcity, soil health deterioration, ocean heating and
acidification, increased price volatility, increased regulation, and impacts the quality of raw materials, together with any
resulting social unrest, it could have a material adverse effect on our business, financial condition and results of operation.
In addition, our manufacturing and distribution facilities may be subject to damage, disruption or
closure resulting from conflict, 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 nineteen 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.
Also, while we do not have any direct operations or sales in either Russia or Ukraine, these
countries are responsible for many commonly used raw materials and resources such as fish, edible oils, wheat and
energy. The ongoing conflict in Ukraine could see considerable reductions in the availability or cost of such raw materials
and resources, for example if the crops are not planted in as great a quantity in any year, and if we are not able to source
or find suitable alternatives in a cost effective manner, then this may adversely affect our business, financial condition, and
results of operations.
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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 savory 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 one exception is our "Adriatic business", defined as
those entities acquired in the Fortenova Acquisition in 2021, which follows a different seasonality pattern 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 in order to 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, 2023, we employed approximately 7,894 employees, of which approximately
1,557 were located in the UK, 1,370 were located in Serbia, 1,269 were located in Germany, 1,073 were located in
Croatia, 449 were located in Italy, 365 were located in Sweden/Norway, 323 were located in Bosnia & Herzegovina, 306
were located in France and 1,182 employees in other locations. As of December 31, 2023, approximately 62% 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 eighteen 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.
Labor shortages and higher labor costs could adversely affect our business and financial results.
A sustained labor shortage or increased turnover rate within our workforce, caused by
macroeconomic factors beyond our control, have led, and could in the future lead, to production delays and increased
costs, such as increased overtime costs to meet demand. Such labor shortages and increased costs could adversely
affect our business and financial results.
Additionally, 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, for example as a result
of higher wages negotiated in response to inflationary pressure and cost of living increases. 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.
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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.
Failure to adequately address current and emerging sustainability risks, including environmental, social and
governance (“ESG”) matters, could have a material adverse effect on our business, financial condition and
results of operations.
Our ability to ensure a resilient business that delivers long-term sustainable growth, is reliant on our
ability to identify current and emerging sustainability risks and legislative requirements that could adversely impact our
business and ensure appropriate strategies are in place to manage such risks and requirements. Some of the key risks
and requirements include:
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Growing expectations of how businesses respond to and address sustainability issues from
customers, consumers, non-governmental organizations, and ESG-focused investors. Failure to
meet this expectation can have adverse consequences, such as: active product delisting,
negative non-governmental organization campaigns, loss of market share and omission from high
profile sustainability indices.
Increased mandatory sustainability due-diligence and non-financial reporting and disclosure
obligations, requiring businesses to take appropriate action or face regulatory penalties. This
includes the U.S. Securities and Exchange Commission's proposed climate disclosure rules, as
well as local legislation in the countries we operate, such as the EU Corporate Sustainability Due
Diligence Directive, EU Corporate Sustainability Reporting Directive, German Supply Chain Due
Diligence Act, Task Force on Climate Related Financial Disclosure (TCFD) and proposed Task
Force on Nature Related Financial Disclosures (TNFD).
Physical risks of climate change, such as increased frequency of adverse weather events
(droughts, floods, storms) impacting the availability of agricultural commodities or causing
damage to physical assets within our operations and wider supply chain.
Any of the above risks, together with any others which relate to our inability to address increased
and emerging sustainability risks could have a material adverse effect on our business, financial condition and results of
operations.
Risks Related to Our Acquisition Strategy
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 all 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.
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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;
challenges with conforming the acquired company's standards, processes, procedures and
controls with our operations;
difficulties with coordinating new product and process development;
hiring additional management and other critical personnel;
inheriting historic legacy business decisions and risks together with the potential for litigation,
arbitration and regulatory proceedings associated with them;
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 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.
We may be subject to antitrust regulations with respect to future acquisition opportunities.
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.
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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 an 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.
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, animal welfare, sustainability, storage, transport, advertising, packaging, quality,
marketing, including marketing to children, labeling, and distribution standards. 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, 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
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contamination, energy use, noise pollution, and workplace health and safety together with globally recognized health and
safety standards, including ISO compliance. Health, safety and environmental legislation and standards 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, personal injury claims and damage to our reputation and
relationships with our suppliers and retail customers. 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, 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. We are also subject to increasing
pressure to reduce waste in our supply chains and to reduce packaging overall, reduce the use of certain substances in
our packaging, for example non-recyclable plastic and increase the recyclability of our products. Any failure to do so could
see a reduction in our sales, the imposition of penalties or fines, retailers destocking as a result of not meeting increased
standards all or any of which could have a material adverse effect on our business, financial condition, reputation and
results of operations.
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 the General Data Protection Regulation ("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. For
example, if we are prevented from purchasing certain products and raw materials as a result of the increasing sanctions
currently being imposed on Russia and Belarus. 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.
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European privacy and data protection regulations could expose us to compliance risks and costs.
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 European Economic Area
(EEA) countries, and we are subject to these heightened standards. The GDPR created a range of new compliance
obligations and imposes substantial fines for breaches and violations (up to the greater of €20 million or 4% of our annual
global revenue). Furthermore, there is uncertainty with respect to compliance with privacy and data protection laws and
regulations, including the GDPR, because such laws and regulations 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 may impose significant costs and challenges that
are likely to increase over time, in particular with the UK, Switzerland and other non-EU countries in which we operate.
Since January 1, 2021 the GDPR has ceased to have direct effect in the UK but the Data Protection Act 2018 alongside
the UK GDPR ensures that the UK has in effect the same high standards for data protection in place as under the GDPR.
As with other EU-origin laws, how these are interpreted and applied by the UK might change and differ from the EU
approach over time.
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.
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.
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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 amended and restated Senior Facilities Agreement dated
September 15, 2023, the interest rate paid on indebtedness incurred under our senior loans and primary revolving credit
facility varies based on a fixed margin over a base reference rate, term SOFR for the USD denominated term loans or
EURIBOR for the EUR denominated term loans. 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. If any reference
rate ceases to exist, we will need to renegotiate the interest rate payable on our Senior Facilities Agreement with our
lenders.
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 results of our non-Euro businesses 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 customers and suppliers may materially adversely affect our 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 has been widely implemented across the European Union.
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 intend to pay dividends on our ordinary shares 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.
23
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 recoverable amount 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,
2023, the carrying value of intangible assets totaled €4,573.2 million, of which €2,105.0 million was goodwill and
€2,468.2 million represented brands, computer software, customer relationships and other acquired intangibles compared
to total assets of €6,416.7 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 a significant or prolonged decline in the fair value of an investment.
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.
24
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 the risk of disruptions, failures or security breaches of our information technology systems, or
those of third parties on which we rely.
We are increasingly dependent upon 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. 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. We may be adversely affected if our controls designed to manage
information technology operational risks fail to contain such risks. 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 our IT infrastructure. Failure on their part to provide good and timely service may have an adverse
impact on our information technology network. We rely on third parties for the support and maintenance of our software
solutions and 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, national and regional mandated quarantines
25
and recent international conflicts 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 and conflict in Ukraine have 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 including malfeasance, security breaches, computer viruses or other
malicious codes, ransomware, unauthorized access attempts, denial of service attacks, phishing, hacking, and other
cyberattacks that impact the availability, reliability, speed, accuracy, or other proper functioning of these information
technology systems could have a significant impact on our operations. Furthermore, there is increasing market use and
availability of third party Artificial Intelligence (AI) software and whilst we have policies and procedures in place to manage
their use, there is the risk of inadvertent use of 3rd party AI engines through sharing of data into an AI tool which then
becomes public domain. 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.
While, to date, we have not had a significant cybersecurity breach or attack that had a material
impact on our business or operations, there can be no assurance that our efforts to maintain the security and integrity of
our information technology systems will be effective or that attempted breach would not be successful in the future.
below.
For additional information on our cybersecurity risk management, see Item 16K Cybersecurity
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.
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 which could have a material impact on our business.
If we fail to or are unable to 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. 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. Please see the risk factor
below titled, “In connection with the preparation of our 2023 financial statements, we have identified a material weakness
in our internal control over financial reporting” for more information. This could in turn result in the loss of investor
confidence and a decline 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.
In connection with the preparation of our 2023 financial statements, we have identified a material weakness in our
internal control over financial reporting
As of December 31, 2023, our management assessed the effectiveness of our internal control over
financial reporting. We have concluded that there is a material weakness in our internal control over financial reporting,
related to operation of effective control over the review of supporting information to determine the completeness and
accuracy of the consolidated statement of cash flows for the year ended December 31, 2023. The material weakness did
not result in any material misstatement of our consolidated financial statements as of and for the year ended December
31, 2023 or prior periods; however, if it is not remediated, it could result in a material misstatement of our consolidated
financial statements that would not be prevented or detected on a timely basis.
A “material weakness” is a deficiency, or combination of deficiencies, in internal controls such that
there is a reasonable possibility that a material misstatement in financial statements will not be prevented or detected in a
timely basis.
Our failure to correct this material weakness or our failure to discover and address any other
material weaknesses could result in inaccuracies in our financial statements and could also impair our ability to comply
with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business,
financial condition, results of operations and prospects, as well as the trading price of our Ordinary Shares, may be
materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our
ability to prevent fraud. Should this material weakness not be remediated, our management may conclude that our internal
control over financial reporting is not effective. In addition, even if our management concludes that our internal control
over financial reporting is effective, our independent registered public accounting firm, after conducting its own
independent testing, may issue an adverse report if it is not satisfied with our internal controls or the level at which our
controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.
27
Risks Related to our Ordinary Shares
Outstanding equity award grants under our LTIP could 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 10,676,337 ordinary shares available for issuance under our LTIP. Additionally,
as of February 23, 2024, we have 5,595,580 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.
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;
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.
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.
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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 from 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.
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.
The rights of shareholders under British Virgin Islands law differ from those under United States law, you may
have fewer protections as a shareholder.
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.
29
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. 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.
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 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.
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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, 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.
Taxation of returns from subsidiaries may reduce any net return to shareholders.
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.
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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 and subsequently changed to Nomad Foods 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 Luna Tower, Waterfront Drive, Road Town, Tortola VG1110, British Virgin
Islands and its telephone number is +(1)(284) 394 9100. 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 18% in 2023
(2022: 19%). 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, Spain, Ireland, Croatia, Serbia and Bosnia & Herzegovina. The countries representing our top
six markets for branded goods (as opposed to total revenue), collectively UK, Italy, Germany, France, Serbia and
Austria, represented approximately 75% 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.
Savory Frozen Food Market
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 €22 billion in retail sales value in 2023.
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 modestly, while
experiencing a huge spike in category demand throughout the COVID pandemic, 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. The iglo brand, founded in 1956, has a long-standing history
and is marketed in Germany and other continental European countries. 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. We are market leaders in the savory
categories where we offer products in sixteen geographies and a 18% market share in the savory frozen food market in
the countries we operate. We benefit from longstanding relationships with our retail 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 have 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.
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Strategic and geographically diversified manufacturing facilities.
We own and operate an efficient network of eighteen manufacturing facilities, all of which are
located near the major markets we serve, balancing 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 consumer 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 strategic areas (called "Must Win Battles") for fish, vegetables, poultry, pizza and ice cream. 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. We are creating intellectual assets,
patenting our in-house science & technology solutions focused on our new products and renovations that we are
launching in several markets. The R&D nutritional pillar, keeps pushing the boundaries for healthier meal choices
(HMC) with the majority of sales coming from these products.
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 include
fish, vegetables, meals and poultry, and which, represents 68% of our branded retail 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.
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 Limited 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 the Company's 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 the Company's 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 the Company, 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. COVID-19 dynamics
have played a part in accelerating existing consumer shopping behavior trends. 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 revenue growth
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.
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Products
frozen food products:
During the past three fiscal years, we have manufactured, marketed and distributed the following
Fish: includes frozen fish products such as fish fingers, coated fish and natural fish. These
products were the largest contributor to our revenues in 2023, 2022 and 2021.
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 in order to
overcome penetration barriers and continue to build loyalty. For example, in 2023, we expanded the Chunky FiFi range
with a new curry flavor and expanded our prepared vegetables range with grilled vegetables. 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, 2023, our top ten customers (in terms of revenue) accounted for 32% 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.
The food service channel accounted for approximately 8% of our total sales for the year ended
December 31, 2023. The majority of these sales were in the Nordics, Croatia and Spain and consisted primarily of
sales to institutional and public sector customers such as schools and hospitals, and privately run work canteens and
restaurants.
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.
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We maintain sales teams in each of our Key Markets with a small proportion of sales being sold
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 of our key retailers 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.
Manufacturing
We own and operate eighteen 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) and Belgrade (Serbia). These facilities produce approximately
541 kilo tonnes of frozen product per year, representing approximately 77% 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 continue investing in improving the
safety and quality standards of our facilities.
Procurement
Our procurement function is structured around primes raw materials (materials used in
manufacturing which form a part of the end product, such as fish, vegetables, meat, other ingredients and packaging),
Indirects (non-production items 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).
Within our Supply Chain team we operate a centralized procurement function, with all
procurement of primes and co-pack and the majority of non-production items procured centrally to maximize scale and
efficiencies that cover the supply to all our manufacturing facilities and markets.
We are the world's largest buyer of Marine Stewardship Council (MSC) certified wild caught
whitefish sourcing globally and working with partners to bring to consumers nutritious, sustainable products. Our fish
primarily originates from wild-caught fish in the North Pacific, predominantly from U.S. and Russian waters whereby
MSC certification can be assured. Russia holds a large percentage of global fish quota and accounts for nearly 40% of
global whitefish catch and up to 60% of the most popular wild caught fish varieties that we and many other companies
buy, including Alaska pollock, Atlantic cod, haddock and wild caught salmon.
We are reducing our exposure to Russian origin fish, which will take some time to replace with
volumes from alternative wild caught sources and therefore we are continuing in our the second year accelerating our
species diversification strategy to bring a greater volume of responsibly farmed Aquaculture Stewardship Council
(ASC) certified products into our portfolio.
Our suppliers use a range of processing methods which also extends to activities in 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 where peas are harvested. 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
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year. Prices for certain other products, such as fish, dairy products and potatoes, are fixed for several months in line
with seasonality and/or industry practice.
Additionally, we are accelerating relevant R&D projects; diversifying our fish species, expanding
our poultry platform across our existing markets and developing other categories such as “fishless fish” and expanding
our vegetables category to create a broader range of options for our consumers.
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 and Serbia. 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, Podgorica in Montenegro, Skopje in North Macedonia, Milosheve in Kosovo, Szada in Hungary, Ljubljana in
Slovenia, Sarajevo, 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 savory 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 in
September 2021 follows a different seasonality to the legacy business, with stronger performance through the summer
months behind the ice-cream business.
Sustainability Strategy
tasting, good for people and the planet, affordable and available everywhere.
Our purpose is to serve the world with better food and that means focusing on food that is great
We know that consumers, retailers, and other stakeholders are increasingly asking for brands
that are more sustainable and we are very proud that our brands are for the masses because that gives us an
opportunity to make a huge difference. Put simply, we want to democratize sustainable eating and we do this by
working proactively and collaboratively to deliver strong, sustainable financial performance to help us grow and by
making an impact across the three key pillars of our “Appetite for a Better World” sustainability strategy:
1. Better Sourcing
2. Better Nutrition
3. Better Operations
The food system contributes a third of global greenhouse gas emissions (according to the United
Nations Food and Agriculture Organization) and so we aim to source, manufacture, and sell our food to consumers in a
responsible way and support the wider transformation that is needed to reduce pressure on resources and deliver a
more resilient and inclusive food system. This is essential for the long-term success of our business, and we are
always asking “how can we keep improving” as we work towards a future where food is produced with greater respect
for the health of people and our planet.
Our portfolio is centered around great tasting and affordable fish, chicken, vegetable, and plant-
based products with the majority of our products qualify as a healthier meal choice – well above the industry average.
Freezing is a natural way of preserving food that locks in nutrients and helps to reduce food waste and we are proud of
the role that we are playing to make healthier, more sustainable food available to everyone.
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Our sustainability strategy is embedded into our business planning processes and is informed by
perspectives from internal and external stakeholders, including our Sustainability Advisory Board, customers, suppliers,
peer benchmarking and the Nomad Foods Sustainability Risk Heat Map (see also Risk Factors – Failure to adequately
address current and emerging sustainability risks, including environmental, social and governance (“ESG”) matters,
could have a material adverse effect on our business, financial condition and results of operations).
We have set clear time-bound targets, aligned with the UN’s Sustainable Development Goals
and focused on areas that have the largest impact on our business, employees and the communities that we serve,
and where we believe we can make a meaningful contribution to wider efforts to tackle the climate crisis; working, of
course, with our suppliers and other key stakeholders, some of whom we have worked with for decades.
We are proud of how our teams are working together to drive progress. We are also excited to
be included in the Dow Jones Sustainability Europe Index, a recognized global sustainability benchmark, as the third
highest ranking company in Europe within the food product industry group with a maximum score of 100% in Health
and Nutrition for the fifth consecutive year. (2023, 2022, 2021, 2020, 2019).
further information available within our annual Sustainability Impact Report and Modern Slavery Act statement.
A summary of key activity under each pillar of our sustainability strategy is outlined below with
1. Better Sourcing
• We have a diverse supply chain that spans from fisheries to farming and sustainability is at the
heart of our approach to sourcing, from ensuring sustainable fishing and responsible aquaculture
along our value chain, to sourcing high risk crops in a sustainable way and improving the welfare
of animals throughout the supply chain. As a major purchaser of fish, seafood and vegetables
across Europe and beyond, we can help to drive change in how food is produced and, together
with our suppliers and partners, make a meaningful contribution to global efforts to tackle the
climate crisis.
• We prioritize fish and seafood sourced from Marine Stewardship Council (MSC) and
Aquaculture Stewardship Council (ASC) certified suppliers to ensure it meets strict requirements
related to stock management, impact on eco-habitats, bycatch and a range of other risk areas.
• For agricultural crops we use the Sustainable Agriculture Initiative Platform (SAI Platform)'s
global Farm Sustainability Assessment (FSA) to measure progress against our target to source
all of our vegetables, potatoes, fruit and fresh herbs through sustainable farming practices.
• We are committed to ethical trading, sourcing and procurement, upholding international
standards. Our Supplier Code of Conduct applies to all our supply chain partners and includes
requirements on human rights, workplace health and safety, fair business practices and
traceability. We also require our direct suppliers to register on 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
expect our suppliers to do the same.
2. Better Nutrition
• Globally and across Europe, obesity levels are rising and populations are consuming
inadequate intakes of vegetables, fruits, fiber, essential fatty acids and certain micronutrients.
This comes with an enormous health, well-being and financial toll for individuals and societies.
The world needs a transformed food system: one that supports sustainable, nutritionally
balanced diets for all.
• As a company, we are committed to meeting increasing consumer demand for affordable
nutritious food. We want to grow the proportion of our food that comes from healthy meal
choices and nutritionally improved products.
• Our Nutrition Manifesto sets out our eight key commitments to empower positive choices and
we continuously work to improve our product portfolio using an externally verified Nutrient
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Profiling Tool, with the majority of our products (based on net sales) already qualifying as a
healthy meal choice (HMC) – well above the food industry average. We launched a new Future
of Nutrition strategy in January 2022, to reflect the evolving nature of the Nomad Foods product
portfolio. This now includes Occasional Foods such as pizza and ice cream, alongside our core
Everyday Foods products such as vegetables, fish, plant-based foods and chicken. We use on-
pack nutritional labelling across all of our markets and in addition to improving our own product
offering we participate in a number of external partnerships that seek to influence a shift towards
healthier, more sustainable diets.
• Our "Clean Labelling Policy", which has been in place since 2003, outlines our approach to
ingredient selection to ensure that all new products are free from flavor enhancers, artificial
flavors and artificial colorants. Our approach to ingredient selection ensures we meet consumer
demand for more familiar ingredients.
3. Better Operations
• According to the United Nation’s Food and Agriculture Organization (FAO) the food system
contributes a third of global greenhouse gas emissions and is vulnerable to the impacts of
climate change. Consequently, as a large food company, we have a critical role in playing our
part to reduce greenhouse gas emissions across our value chain.
• Our significant investment in the development and promotion of meat alternatives which can
play a role in the shift towards plant-based diets also forms part of these broader efforts. We
also believe that frozen food more broadly, has an important role to play in helping consumers
reduce their carbon footprint.
• Our Safety Health and Environment Policy sets out our commitment to measure, manage and
mitigate our environmental impact and in 2021 our emissions reduction targets were approved
by the Science Based Targets Initiative (SBTi) enabling us to join the UN's Race to Zero and
support suppliers to develop their own science-based targets. This comes on the back of several
years of significant emission reductions. In addition to setting clear targets for our own business
which will see us almost halve emissions per ton of product, we want to ensure that the top 75%
of our suppliers by emissions also develop own science-based targets by 2025.
• To assess progress against our targets we measure our corporate carbon footprint annually by
calculating total Scope 1,2, and 3 emissions. Our footprint covers our own operations, all owned
and third-party warehousing and inbound and outbound logistics of finished goods.
• In 2020 we joined the global fight against food waste initiative 10x20x30, which unites the
world’s largest food retailers and providers to reduce food waste. For our legacy business (that
which excludes the acquisition of Findus Switzerland and the Adriatic business) we have
reduced edible food waste by a third since 2015.
• We consider the total packaging system when designing packaging, recognizing that it plays
an important role in terms of food safety, convenience, as well as sustainability. Under our
Packaging Policy we are committed to reducing packaging volumes, using more recyclable
packaging materials and promoting re-use. As driving progress on sustainable packaging is
particularly challenging, this is one of the key areas of focus for our Open Innovation Portal
initiative launched in 2022.
• Our people are our greatest asset and we continue to drive a safety first mindset across our
business. In 2023 we expanded our Safety First, Everyone, Everyday (SFEE) program to our
Adriatic business operations (Manufacturing, Logistics and Distribution). The program resulted in
a significant decrease in accidents in the region. We continue to focus on building strong
fundamentals through our Nomad Safety Management System. Alongside our SFEE program
we have developed a risk reduction program. In 2023 we will have completed safety audits of all
of our manufacturing facilities with priority risk reduction through targeted actions and
investment.
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• Our mission is to inspire, empower and equip our teams to be successful, so that everyone
can learn, develop and grow and have rewarding work experiences. This includes helping our
employees to nurture their health and well-being and measuring how we are doing as part of our
"Our Voice" employee survey.
Information Technology
Our IT systems are critical to operating and growing our business, in particular to our general
operations, logistics and commercial functions, as well as enabling work from hybrid locations. We have two SAP tool
kits, one supporting our Adriatic business and one supporting all other markets. These underpin the processes that
support all of our operations and management reporting across countries, with new tools being introduced to support
Sales planning, Customer Relationship Management and Net Revenue Management activities.
The IT architecture is designed as a consolidation platform enabling integration of future
acquisitions, whereby we can extend our current architecture to acquisitions to standardize, simplify and automate
processes where and when it makes sense to do so.
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. Our cyber security capability has increased with multiple tools and protection being implemented as
well as training across the Company.
The Company is undertaking a business transformation program underpinned by an upgrade to
the latest SAP S4/HANA Enterprise Resource Planning (ERP) platform. The program aims to modernize the end-to-
end technology estate to support current and future complex and evolving business needs. Among the many changes,
the program will move the operating model for our existing business to a cloud-hosted solution, which better deploys
new services to the business and end users, including application management, supporting a diverse workforce across
multiple locations and languages, as well as deploying artificial intelligence assisted tools. Additionally, we utilize an
outsourced service provider, maintaining best in class IT cost alongside improved capability to scale in line with
business developments. This will continue throughout 2024 and 2025.
Details of the Company's approach to Cybersecurity can be found in Item 16K Cybersecurity.
Intellectual Property
Intellectual Property remains a core focus for the business. In 2021, we saw our trademark
portfolio expand dramatically with the acquisition of the Fortenova business, and we now have over 1800 trademarks
across all our markets around the world. On the patent side, the dedicated drive to protect the business' innovations
and new technology continues, particularly in the area of plant-based food products, packaging and food coatings - the
business now has 20 pending or registered patents in place across the UK and Europe and there is an increased focus
on the protection of the business' trade secrets.
Our intellectual property is managed centrally, and we work in close collaboration with a
specialist team of trademark and patent attorneys and intellectual property solicitors in respect of trade mark, design
and patent protection and enforcement around the world. In particular, there are strategies in place to maintain, protect
and enforce our core central brands including Captain and Nomad Foods in the Group's commercial territories of
interest. Likewise, we monitor, protect and enforce our trademark rights in all local brands including Birds Eye, iglo,
Findus, Green Cuisine, Aunt Bessie's, Goodfella's, Frikom, Ledo, La Cocinera and Belviva, across the UK, Europe and
our export markets.
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 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. In October
2023, the UK and EU introduced the Windsor Framework which also layers on further restrictions in trade due to the
requirement to label primary packaging with a “not for EU” label. This restricts which goods can move from the UK to
the EU and will require us to run smaller volume production runs to continue supply into Europe.
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, the predicted review of this legislation in the UK has been halted
and all existing EU legislation will be passed into law with no further changes at this time.
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;
42
• Annual external auditing of our production sites conducted by independent compliance
companies applying the British Retail Consortium Global Standard for Food Safety Issue 9, 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;
• Maintaining a risk-based microbiological and contaminant screening program for due
diligence; 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 products of animal origin, including fish
and poultry, two of our main ingredients in our products. The UK government has indicated that it will implement a
Border Target Operating Model, that will be progressively introduced from January 2024, for which key components
remain in a period of consultation. This may affect trade movements going forward.
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
43
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. For all of our facilities we
track compliance against permit and license conditions. Any environmental legal action is escalated through the Risk
Committee.
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.
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. We track all losses to the environment that
may result in an onsite or offsite impact. Depending on severity of the incident the event may be escalated to the Risk
Committee. In 2023 there were no loss events resulting in contamination of the environment.
Occupational Health and Safety
The safety and health of our employees is the number one priority for the business. In 2023 we
expanded our "safety first everyone, everyday" program to our Adriatic business as part of our journey to embed the
culture of safety first across our business. The program has resulted in a significant reduction in accidents within the
region. We continue to make progress in reducing the number of accidents across the business and have reduced total
accident numbers against our 2022 performance.
We continue to develop our Group Safety Management system and are working towards
certification to International Standards ISO45001 and ISO18001 at all our Manufacturing Facilities. We are continuing
to build a centralized Nomad Safety Management System to ISO45001 standards.
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 and aim to meet the European Framework Directive on
Safety and Health at Work (89/391 EEC). We continually strive to 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.
In 2023, we focused on deploying our "5 Nomad Life Saving Principles" across all of our
manufacturing sites. We have implemented policies, procedures and control measures for the most significant risks in
our business including; electrical safety, confined space entry, working at height, workplace transport and "Lock Out
Tag Out".
At the start of 2023, we introduced a Safety, Health and Environment internal audit program
applicable to all of our manufacturing locations. By the end of the year, 72% of our facilities had been assessed against
a set of baseline criteria. Audit actions are tracked to closure to ensure we are addressing risks and improvement
opportunities.
44
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.
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. Our Code of Business
Principles as our framework policy is designed to ensure compliance with applicable legal and regulatory requirements
to drive a strong compliance culture throughout all of our operations. A breach of the Code of Business Principles can
lead to disciplinary action, including termination of employment.
Our Safecall reporting line, which is operated by an external service provider, allows employees
to report issues or ethical concerns 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 procedures to manage those risks are in place. We
continually analyze and assess changes in applicable laws and regulations, and implement appropriate adaptations
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 effective 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 and motor.
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, Executive team and direct reports.
2. Culture and Employee Engagement.
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 employee survey and through the quarterly all colleagues' engagement
sessions with the Executive team.
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.
45
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.
5. Measuring our Human Capital Performance
We welcome the increasing focus on measurement of Human Capital Practice through Indexes
such as the Dow Jones Sustainability Index and will address the increasing disclosure requirements through our
ongoing efforts in sustainability, including data collection and systems.
46
C. Organizational Structure
owned by us. The following table provides a list of all of our significant subsidiaries and their 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
47
Ownership as
of December 31,
2023
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%
Ledo d.o.o. Podgorica (Društvo Za Proizvodnju, promet roba
i usluga “Ledo” d.o.o. Podgorica)
Trading
Montenegro
100%
Ledo Sh.p.k.
FRIKOM BEOGRAD DOOEL Cucer Sandevo
Trading
Trading
Kosovo
North
Macedonia
100%
100%
48
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
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
Yorkshire Puddings,
Accompaniments & Desserts
Vegetables, Free Flow Meals,
Ready Meals
Bakery Products
Longford, ROI Frozen Pizza Products
28
16
9
90
59
2
20
6
2
16
Lowestoft, UK
Vegetables, Fish Products,
Poultry, Potato, Beef Burgers
109
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
38
80
3
6
24
14
19
46%
84%
Leasehold
38%
Freehold
90%
Leasehold
57%
21%
63%
73%
41%
88%
78%
88%
64%
56%
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Mixed
Freehold
Freehold
Freehold
40%
Leasehold
62%
Leasehold
44%
35%
Freehold
Freehold
Footprint
Site: 116,500 m2
Buildings: 8,100 m2
Buildings: 11,000 m2
Site: 80,000m2
Buildings: 22,000m2
Site: 90,000 m2
Buildings: 30,000 m2
Site: 269,560 m2
Buildings: 69,198 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: 5,930 m2
Site: 35,288 m2
Buildings: 43,000 m2
Site: 118,000 m2
Buildings: 8,500 m2
Site: 11,000 m2
Site: 4,540 m2
Buildings: 2,208 m2
Buildings: 30,000 m2
Site: 58,000 m2
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.
49
Item 5.
Operating and Financial Review and Prospects
The following is a discussion of the financial condition and results of operations for the years
ended December 31, 2023 and 2022. Discussion regarding our financial condition and results of operations for the
year ended December 31, 2022 as compared to the year ended December 31, 2021 is included in Item 5 of our Annual
Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on February 23, 2023 (the "2022 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, Serbia
and Austria.
These countries represent our top six markets and collectively represented approximately 75%
of the total European Savory frozen food markets (in terms of retail sales value) and generated 69% of our revenue in
2023. We also sell our products across western & southern Europe, as well as Ireland and the Nordics. Since the
Fortenova Acquisition in 2021, this has extended the reach to south-eastern Europe. The brands under which we sell
our products are “Birds Eye”, "Aunt Bessie's" and "Goodfella's" in the UK and Ireland, “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 eighteen 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 and Switzerland.
Management discussion on current macroeconomic issues
Since the start of 2022 we have seen huge volatility in our macro environment driven by the war
in Ukraine and further Covid restrictions impacting our supply chain (e.g. China). This has resulted in the need to focus
on our two most urgent challenges: significantly higher raw material prices and risks to our fish supply.
For our consumers, the Ukraine and Russia conflict and supply chain restrictions have driven a
cost of living crisis as well as an anticipated recession, and we have therefore made a number of interventions to our
plans to ensure we remain on track to deliver our medium-term commitments.
Throughout 2022, we experienced higher than anticipated input cost inflation, including higher
transportation and supply chain costs which we have attempted to mitigate through pricing increases. Inflation has
continued to persist throughout 2023. Our clear priorities in 2023 have been pricing for inflation and securing the future
of fish, as we believe these have, and will continue to have, the biggest commercial impact on our short term and long-
term success. We believe these agile commercial interventions, coupled with media investment, commercializing
sustainability and accelerating our presence in discounters, will allow us to retain our existing consumer base and
attract new consumers to the category and our brands. We believe these strong fundamentals will set us up for long-
term sustained growth.
50
Financings and Acquisitions
Financings
On August 5, 2021, the Company announced a 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, the Company repurchased and cancelled 3,090,082 ordinary shares 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. During 2022, the Company repurchased and cancelled a further 1,160,547 ordinary shares in open
market transactions at an average price of $26.23 for aggregate gross costs of $30.5 million (€26.8 million) under this
authorization. During 2023, a further 11,314,705 ordinary shares were repurchased and canceled in open market
transactions at an average price of $16.33 for aggregate gross costs of $185.0 million (€170.9 million) under this
authorization. Directly attributable costs of €0.2 million were incurred.
On November 10, 2022, the Company announced that it closed on the issuance of both a
$700.0 million (€700.6 million) term loan bearing interest at a rate per annum equal to SOFR plus 3.75% and a €130.0
million term loan bearing interest at a rate per annum equal to EURIBOR plus 3.5%, both due November 10, 2029. The
net proceeds from these loans were used to repay the Company's existing Senior Secured U.S. Dollar term loan due in
2024 in full, and for transaction expenses and general corporate purposes.
On September 22, 2023, the Company closed on the repricing of its USD denominated Term
Loan B of USD 700 million principal due 2029. Following the closing, the margin on the Term Loan has been reduced
by 0.75% to SOFR plus 3.0%.
On November 6, 2023, the Company's Board of Directors authorized a new share repurchase
program to purchase up to an aggregate of $500.0 million of the Company’s ordinary shares. 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. This new program replaces the
previous authorization which was established in August 2021 and finished at the end of 2023. The new program will
expire at the end of 2026.
Acquisitions
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 €641.6 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.
Recently Issued and Not Yet Adopted Accounting Pronouncements under IFRS
are reported in Note 2 to the Financial Statements.
Information relating to “IFRSs recently issued and not yet adopted” are described in detail and
51
A. Operating Results
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 2023 Period, Fiscal 2022 Period and Fiscal 2021
Period and the balance sheet data as of December 31, 2023 and 2022 have been derived from our audited
consolidated financial statements included elsewhere in this annual report.
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 2023
Year
ended
Dec 31 2022
Year
ended
Dec 31 2021
Year
ended
Dec 31 2020
Year
ended
Dec 31 2019
€m
€m
€m
€m
€m
3,044.5
2,939.7
2,606.6
2,515.9
2,324.3
(2,185.8)
(2,124.4)
(1,862.3)
(1,753.4)
(1,626.4)
858.7
815.3
744.3
762.5
(445.8)
(391.2)
(356.3)
(382.7)
(72.5)
(48.7)
(45.3)
(20.6)
340.4
375.4
342.7
359.2
(86.8)
(54.4)
(106.0)
(63.7)
253.6
321.0
236.7
295.5
(60.9)
(71.2)
(55.7)
(70.4)
192.7
249.8
181.0
225.1
697.9
(359.9)
(54.5)
283.5
(73.2)
210.3
(56.7)
153.6
Basic weighted number of shares
170,573,002
174,279,621
178,070,770
194,019,070
192,004,803
Diluted weighted number of shares
171,203,914
174,279,621
178,070,770
197,894,106
198,425,877
Basic earnings per share
Diluted earnings per share
Balance Sheet data:
Total assets
Total equity
Share capital
1.13
1.13
6,416.7
2,591.9
—
1.43
1.43
6,326.1
2,606.2
—
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
—
52
Overview of Results
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 year
Year ended
December 31, 2023
Year ended
December 31, 2022
€m
€m
3,044.5
(2,185.8)
2,939.7
(2,124.4)
858.7
(445.8)
(72.5)
340.4
22.8
(109.6)
(86.8)
253.6
(60.9)
192.7
815.3
(391.2)
(48.7)
375.4
12.1
(66.5)
(54.4)
321.0
(71.2)
249.8
The table below presents certain additional key performance indicators:
(€ in millions, except percentages)
Gross Margin(1)
Adjusted EBITDA(2)
Adjusted EBITDA Margin(3)
Year ended
December 31, 2023
Year ended
December 31, 2022
€m
€m
28.2 %
535.0
17.6 %
27.7 %
524.4
17.8 %
(1) Gross Margin. Represents Gross Profit as a percentage of revenue for the relevant period. You should exercise caution in
comparing our Gross Profit and 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.
53
presented:
Revenue
Cost of sales
Gross Profit
Gross Margin
follows:
The following table reconciles revenue to Gross Profit and Gross Margin for the periods
Year ended
December 31,
2023
Year ended
December 31,
2022
€m
€m
3,044.5
2,939.7
(2,185.8)
(2,124.4)
858.7
815.3
28.2 %
27.7 %
The following table reconciles profit for the year to Adjusted EBITDA for the relevant period as
Profit for the year
Taxation
Net financing costs
Depreciation and amortization
Exceptional items (1)
Other add-backs (2)
Adjusted EBITDA
Year ended
December 31,
2023
Year ended
December 31,
2022
€m
€m
192.7
249.8
60.9
86.8
95.0
72.5
27.1
71.2
54.4
88.6
48.7
11.7
535.0
524.4
(1) Elimination of exceptional items which management believes 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 2022 Form 20-F.
(2) Represents the elimination of share-based payment charges and related employer payroll expense of €26.1 million (2022: €8.6
million) and elimination of non-operating M&A related costs of €1.0 million (2022: €3.1 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.
54
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 debt discounts and 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 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.
Adjusted EBITDA Margin. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of
revenue.
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, Serbian Dinar and Swiss Franc amongst others). 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 32
"Financial risk management".
55
Results of Operations for the Year Ended December 31, 2023 and the Year Ended December 31, 2022
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 year
Year ended
December 31,
2023
Year ended
December 31,
2022
€m
3,044.5
(2,185.8)
858.7
(445.8)
(72.5)
340.4
22.8
(109.6)
(86.8)
253.6
(60.9)
192.7
€m
2,939.7
(2,124.4)
815.3
(391.2)
(48.7)
375.4
12.1
(66.5)
(54.4)
321.0
(71.2)
249.8
Revenue for the year ended December 31, 2023 was €3,044.5 million (year ended December
31, 2022: €2,939.7 million). The 3.6% revenue increase was driven by an organic revenue increase of 4.9%, a
measure which excludes the impact of translational foreign exchange and acquisitions compared to the year ended
December 31, 2022.
Gross profit, defined as revenue offset by cost of sales, increased €43.4 million to €858.7 million
for the year ended December 31, 2023 from €815.3 million for the year ended December 31, 2022. The increase in
gross profit was driven by the increase in revenue and gross margin. Gross Margin, defined as gross profit as a
percentage of revenue, increased by 50 basis points to 28.2% from 27.7% in the year ended December 31, 2022
primarily due to:
•
•
A 980 basis points increase from pricing, promotional investments and product mix
A 930 basis points decrease due to cost of goods inflation.
Other operating expenses increased to €445.8 million for the year ended December 31, 2023
(year ended December 31, 2022: €391.2 million). The increase of €54.6 million was driven primarily by increased
Advertising and Promotion linked to the organic sales growth, and by an increase in Indirect costs as a result of the
Company's employee incentive program.
Exceptional items of €72.5 million were incurred in the year ended December 31, 2023 (year
ended December 31, 2022: €48.7 million). Included in this charge are (i) expenses associated with a multi-year,
enterprise-wide transformation and optimization program that began in 2020 of €68.4 million (year ended December
31, 2022: €37.0 million), (ii) expenses related to integrating the Fortenova Acquisition of €4.3 million (year ended
December 31, 2022: €9.5 million), and (iii) expenses for an Information Technology Transformation Program of €0.6
million (year ended December 31, 2022: €4.4 million). In the year ended December 31, 2022, exceptional items also
included: expenses related to the integration of the Findus Switzerland business of €8.2 million, a charge of €7.0
million from the release of indemnification assets, a charge related to impairment of customer relationships of €5.8
million, expenses of €3.5 million relating to a factory optimization program, which was initiated in 2018 and was
completed in 2022, and expenses related to distribution network integration of €2.2 million.
Offsetting these charges are net income related to settlement of legacy matters of €0.8 million
(year ended December 31, 2022: net income of €28.9 million). For the year ended December 31, 2022, the majority of
the net income followed favorable rulings on a series of registration tax claims in relation to an acquisition in 2010, prior
to the formation of the Company in 2014. As a result, the Company received a refund of payments made in 2013 and
2018 in addition to interest.
56
Net finance costs of €86.8 million in the year ended December 31, 2023 (year ended December
31, 2022: €54.4 million) include €91.1 million of interest payable on long term borrowings, lease liabilities and other
cash pay interest expenses net of hedges (year ended December 31, 2022: €61.0 million), losses on derivatives
designated as fair value through profit and loss of €1.0 million (year ended December 31, 2022: nil), €8.1 million of
other interest and finance costs (year ended December 31, 2022: €2.8 million) and €6.4 million of amortization of
capitalized debt discounts and borrowing costs (year ended December 31, 2022: €2.7 million). This is offset by a gain
of €3.0 million resulting from the translation of foreign currency-denominated financial assets and liabilities into Euros
(year ended December 31, 2022: €9.2 million), finance income of €5.8 million (year ended December 31, 2022: €0.6
million), net financing gains incurred in amending terms of debt of €16.7 million (year ended December 31, 2022: €2.3
million) and a reversal of impairment on short-term investments of €0.3 million (year ended December 31, 2022: nil).
There was a tax charge in the year ended December 31, 2023 of €60.9 million based on the
underlying taxable profits. A taxation charge of €71.2 million was booked in the year ended December 31, 2022. This
difference is principally caused by lower profits and movements in provisions for uncertain tax positions, partly offset by
an increase in the rate of corporation tax in the United Kingdom.
As noted in Item 3D. Risk Factors, the future performance of the business is affected by a range
of governmental economic, fiscal, monetary and political factors. In particular, the ongoing conflict between the Ukraine
and Russia, which 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 facilities will be sufficient to fund our liquidity and other requirements for at least the next
12 months. At December 31, 2023, we had €584.3 million of total liquidity, comprising €412.9 million in cash and
€184.6 million of available borrowings under our revolving credit facilities, offset by bank overdrafts of €13.2 million. 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.
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.
Restricted Cash
Nomad had cash and cash equivalents of €412.9 million at December 31, 2023, of which €0.2
million was restricted. This compares with cash and cash equivalents of €369.7 million at December 31, 2022 of which
€0.3 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 Senior Secured notes. 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.
57
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 used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at end of the period
Year ended
December 31,
2023
Year ended
December 31,
2022
€m
430.8
(76.8)
€m
303.8
(78.7)
(321.5)
(108.1)
32.5
399.7
117.0
366.8
Net Cash Provided by Operating Activities
Net cash provided by operating activities was €430.8 million for the year ended December 31,
2023, compared to €303.8 million for the year ended December 31, 2022. The €127.0 million increase was mainly due
to movements in working capital. The net cash inflow from changes in working capital was €58.0 million in the year
ended December 31, 2023, compared to a net cash outflow of €96.8 million in the year ended December 31, 2022. The
contribution from movements in working capital was partly offset by cash receipts relating to exceptional items, which
were nil in the year ended December 31, 2023, compared to €24.4 million in the year ended December 31, 2022.
Net Cash Used in Investing Activities
Net cash used in investing activities was €76.8 million for the year ended December 31, 2023,
compared to €78.7 million for the year ended December 31, 2022. Payments for purchase of property, plant and
equipment and intangibles were €82.4 million in the year ended December 31, 2023, compared to €79.1 million in the
year ended December 31, 2022. Receipt of interest increased to €5.3 million in the year ended December 31, 2023.
Net Cash (Used in)/ Provided by Financing Activities
Net cash used in financing activities was €321.5 million for the year ended December 31, 2023,
compared to €108.1 million for the year ended December 31, 2022. The net cash outflow in the year ended December
31, 2023 includes payment of interest €93.9 million, payment of lease liabilities €30.1 million, and payments of €170.9
million for the repurchase of ordinary shares. The net cash outflow in the year ended December 31, 2022 included
payment of interest €54.2 million, payment of lease liabilities €26.5 million, and payments of €26.8 million for the
repurchase of ordinary shares.
58
Capital Expenditures
Our capital expenditures as of December 31, 2023 consisted, and in 2024 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 increased in 2023 due to the ongoing execution
of its multi-year business transformation program which includes the ongoing implementation of new systems. Capital
expenditure is expected to remain at heightened levels in 2024 as a result of this program.
Capital commitments as of December 31, 2023 are not considered to be significant and are
presented within Note 35 “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 facilities.
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
Funding and treasury policies
Year ended
December 31,
2023
Year ended
December 31,
2022
€m
82.4
2.7%
€m
79.1
2.7%
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).
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 most recently on September 15, 2023 (the
“Senior Facilities Agreement”). Morgan Stanley, London Branch, is currently both the facility agent and security agent.
credit facility.
The Senior Facilities Agreement governs our term loan facilities and our €175 million revolving
Term Loan Facilities
U.S. Dollar Denominated Term Loan Facility
The U.S. Dollar (USD) denominated term loan facility as at December 31, 2023 consists of term
loans in an aggregate principal amount of $693.0 million. The USD denominated term loans bear interest at a rate per
annum equal to term SOFR (subject to a 0.5% floor) plus 3.0% per annum.
The USD denominated term loan facility is fully drawn and matures on November 10, 2029.
59
Euro Denominated Term Loan Facilities
The Euro (EUR) denominated term loan facilities as at December 31, 2023 consists of term
loans in an aggregate principal amount of €683.2 million. Of this, €553.2 million bears interest at a rate per annum
equal to EURIBOR (subject to a zero floor) plus 2.5% and matures on June 24, 2028. A further €130.0 million bears
interest at a rate per annum of EURIBOR (subject to a zero floor) plus 3.5% and matures on November 10, 2029.
Revolving Credit Facilities
The Senior Facilities Agreement provides for an €175.0 million revolving credit facility, of which
up to €50.0 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.
In addition to the Revolving Credit Facility, the Company also has an aggregate of €12.3 million available through other
revolving credit facilities. As of December 31, 2023, there was no cash drawn from the revolving facilities, with €2.7
million outstanding by way of issued letters of credit and bank guarantees.
Indebtedness at December 31, 2023
As of December 31, 2023, we had approximately €2,094.1 million (December 31, 2022:
€2,140.2 million) of indebtedness outstanding under our term loan facilities and no amounts outstanding under our
revolving credit facilities, other than €2.7 million (December 31, 2022: €1.8 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, 2023, 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 from and including October 10, 2023. 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, 2023,
no excess cash is expected to be paid out in 2024 related to 2023.
Hedging
In order to mitigate underlying foreign exchange exposure and mitigate interest rate risk, the
Company has entered into a number of cross-currency swaps and interest rate swaps. In exchange for receiving cash
flows in U.S. Dollars matching 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 cross-currency swaps have
been designated as a cash flow hedge.
In order to mitigate interest rate risk, the Company has entered into a number of interest rate
swaps. In exchange for receiving cash flows matching all of the payments of interest due under the €130.0 million
Senior EUR debt, the Company pays fixed amounts of interest on notional amounts of EUR. These swaps have been
designated as a cash flow hedge.
60
As a result of decisions taken by national regulators, GBP LIBOR and certain U.S. Dollar LIBOR
time periods have been phased out and replaced by an alternative reference index (SONIA and SOFR, respectively).
This is reflected in the Company’s latest issuance of U.S. Dollar term loan and related cross currency interest rate
swaps, which use SOFR as the benchmark. There are no current plans to phase out EURIBOR.
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, 2023, we had
€800.0 million of Fixed Rate Senior Secured Notes outstanding.
The indenture contains customary events of default and customary covenants including
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 July 3, 2014, as amended, and restated on or about April 28, 2017, as may be further
amended, supplemented or otherwise modified from time to time.
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 €158.3 million (December 31, 2022: €132.1 million).
For accounting purposes, as of December 31, 2023 (based on the assumptions used), the deficit
For the year ended December 31, 2023 pension costs related to defined benefit, defined
contributions and long-term benefit plans equated to €22.1 million (2022: €22.4 million; 2021: €19.8 million). This
includes all costs related to the pension schemes and other long-term benefits plans as well as associated interest
costs.
61
statements in Item 18.
For additional information, see Note 22 “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, 2023 these commitments total €441.4 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 32 “Financial Risk Management” to our consolidated
financial statements in Item 18.
C. Research and development, patents and licenses, etc.
Growing our core through our Must Win Battle strategy is our focus across fish, vegetables and
local product portfolio, e.g., chicken and pizza. Innovation is key to this and we have a strong pipeline of activities.
Innovation is also a key driver of growth for our Green Cuisine business, which includes development of meat
alternatives and fish species diversification. Our focus is to create competitive advantage through delivery of
innovations that address consumer needs and are enabled by science and technology. To achieve this we have
embedded innovation in our strategy and seek to ensure that technologies are fully protected to maintain
differentiation.
We are committed to ensuring product superiority on all our Must Win battles by focusing 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 these activities, we operate a clear governance process with a “Central Monthly
Operating Review Board” (“CMOR”) which is responsible for reviewing and approving innovations in our core Must Win
Battles that span multiple markets. "Local Monthly Operating Reviews" ("LMOR") occur within each market and focus
on the local portfolio. Our Research and Development team is organized around our Must Win Battles, both centrally
and locally. 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
Accelerating costs in non-discretionary spend areas of energy, transport and housing costs has
squeezed household budgets. As a result, households are looking for savings, with an anticipated reduction in eating
out, entertainment and clothing.
Inflation is expected to result in a decline in the number of ‘comfortable’ households which have
higher incomes who are typically less impacted by inflation. Conversely, ‘struggling’ households with low incomes are
expected to increase in the near future. We believe these 'struggling’ households will manage their spend by buying
more products on promotional deals, buying cheaper brands and private labels or shopping in cheaper stores including
discounters.
As a result of these market dynamics, we expect that discounters and eCommerce will
accelerate their gain of market share. For example, we expect the growth of discounters to continue. Also, across all
channels retailers are responding to these new challenges by focusing on driving value for money, including
62
aggressive price comparisons, smaller packs and increasing private label offerings, and operating efficiency to help
maintain their margins through range optimization to mitigate costs and complexity.
We believe the differing consumer groups and the impact on their spending will result in ‘in-flows’
to the frozen category and our brands (gaining consumers) but we also anticipate ‘out-flows’ (losing consumers) from
the frozen category and our brands.
See Item 5 for a discussion of current macroeconomic issues facing the Company.
E. Critical Accounting Estimates and Judgments
The consolidated financial statements of Nomad and its subsidiaries have been prepared in
accordance with the International Financial Reporting Standards issued by the International Accounting Standards
Board. Information relating to “Critical Accounting Estimates and Judgments” are described in Note 4 to the Financial
Statements.
63
Item 6.
Directors, Senior Management and Employees
A. Executive Officers and Directors
and positions as of February 23, 2024.
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
James E. Lillie
Stuart M. MacFarlane
Victoria Parry
Amit Pilowsky
Melanie Stack
Samy Zekhout
Director since
Age
April 4, 2014 59 Co-Chairman
April 4, 2014 62 Co-Chairman
Position
June 16, 2016 63 Director
June 1, 2015 63 Chief Executive Officer and Director
May 28, 2015 62 Director
May 8, 2019 56 Director
February 16, 2016 58 Director
May 9, 2022 48 Director
May 4, 2021 62 Director
April 1, 2018 61 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, co-Chairman of APi Group Corporation and a founder and director
of Admiral Acquisition Limited. 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”) serving also as its CEO from 2001 to 2011 and
its Executive Chairman from 2011-2016 . 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.
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 also served until September 2023 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 2019) and Element
Solutions Inc. (since 2013). Previously, he was the co-founder of Jarden and served at various times as its Vice
Chairman, President, Chief Financial Officer, Secretary and as a director from June 2001 until the consummation of
Jarden’s business combination with Newell in April 2016. 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.
64
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.
James E. Lillie has served as co-Chairman of APi Group Corporation since October 2019, and
served as its director from October 2017. Previously, he served as Jarden’s Chief Executive Officer from June 2011
until the consummation of Jarden’s business combination with Newell in 2016. From 2003 to 2011 he served as
Jarden’s Chief Operating Officer and President (from 2004). 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. During the last
five years, Mr. Lillie also previously served as a director of Tiffany & Co.
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, including in Finance,
Marketing & Sales. 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. He is a Board Director
and Chair of the Audit Committee at JDE Peets’. 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 in the financial services sector. Mrs. Parry is an independent non-
executive director to funds affiliated with Guardian Capital Group Limited, Pacific Capital UCITS Fund plc, Dimensional
Holdings, Inc, and LSV Funds Plc. Prior to the merger of Man Group plc with GLG Partners, Inc. in 2010, she was
Senior Legal Counsel for GLG Partners LP. Mrs. 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 Mrs. Parry practiced as a solicitor with a leading London based firm of solicitors. Mrs. Parry graduated from
University College Cardiff, with a LLB (Hons) in 1986. Mrs. Parry is a non-practicing solicitor and a member of the Law
Society of England and Wales. From July 2019 to April 2022, Mrs. Parry previously served as a non-executive director
to funds affiliated with Fiera Capital Corporation. Mrs. Parry is a director of a number of other private companies.
Amit Pilowsky is the Founder and Managing Partner of Key1 Capital, a global investment firm
primarily focused on Israeli and Israeli-related growth technology companies. Prior to founding Key1 Capital in January
2022, Mr. Pilowsky held various leadership roles at Goldman Sachs in its London and Tel Aviv offices from February
2005 to May 2021, including Head of the Consumer and Retail team at the Cross Markets Group in EMEA and as
sector captain for Food, Beverage and Food Ingredients in EMEA. During his time at Goldman Sachs, Mr. Pilowsky led
teams in numerous deals across mergers and acquisitions and capital markets transactions in the consumer and retail,
food, beverage and food ingredient industries. From July 1993 to January 2004, Mr. Pilowsky served in the Israeli Air
Force, retiring as a Major. Since December 2021, Mr. Pilowsky has also served as a director of Movendo Capital, a
registered investment company. Mr. Pilowsky holds an MBA from INSEAD, France.
65
Melanie Stack has served on the board of directors of Admiral Acquisition Ltd since May 2023,
and served as Board Chair of MPowder, a provider of nutritional supplements for women since February 2023. Ms.
Stack served as President and Chief Executive Officer of Ideal Protein, a medically-based weight-loss company,
between November 2018 and December 2021. Prior to joining Ideal Protein, Ms. Stack served as President EMEA of
Newell Home Fragrance Division (formerly Jarden) from May 2014 to September 2018 and also as a Non-Executive
Director of Bromley Healthcare, a leading provider of community health services in the United Kingdom, from
November 2012 to May 2014. She both led the UK and then international businesses as President International of
Weight Watchers International, a leading provider of weight management services, from December 2003 to May 2013
prior to which she 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 served as CFO and Vice President of Global Grooming at Procter & Gamble since
2007. Preceding this, Mr. Zekhout has also held various finance leadership roles at Procter & Gamble throughout the
course of his more than 30-year career there, including General Manager and Vice President of the Art of Shaving
business. In February 2021, Mr. Zekhout became a board member of Algama, a French food-tech start-up and an
advisory board member for Blake Mill, a fashion design start-up in September 2023. Mr. Zekhout is passionate about
diving and sealife. He has been a PADI scuba diving instructor since 2014.
B. Compensation of Executive Officers and Directors
This section sets forth for the year ended December 31, 2023: (i) the aggregate 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, 2023
For the year ended December 31, 2023, Nomad’s executive officers received total
compensation, including base salary, cash and equity bonus, and certain perquisites, equal to €15.1 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, 2023 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 2023 resulting in an increased salary of £820,000.
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;
66
(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
(d) an annual car allowance of £14,400, 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. 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 2023, with a base salary increase of 3.5%
effective April 1, 2023, which took his annual salary to £483,700. Mr. Zekhout was or is entitled to receive the following
benefits under the terms of his agreement:
(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);
(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) the Company will annually advise Mr. Zekhout 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
(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.
Additionally, an amendment to his service agreement in 2023 entitles Mr. Zekhout to a payment
of €300,000 in three equal installments to be paid (less applicable deductions) on dates in 2023, 2024 and 2025,
respectively. The Company shall also grant Mr. Zekhout awards under the Amended and Restated Nomad Foods 2015
Long Term Incentive Plan to include (i) an award of 10,000 ordinary shares in 2023 and (ii) an additional award of
10,000 ordinary shares in 2024, in each case, as incentive compensation, subject only to time-based vesting
conditions over a three-year period from the date of the grant.
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.
67
Nomad Foods Limited Amended and Restated Long Term 2015 Incentive Plan (“LTIP”)
Eligibility
The LTIP is discretionary and enables 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.
Awards
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.
Performance conditions
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.
Early vesting
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).
68
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.
General
Benefits under the LTIP will not be pensionable. Awards are not transferable except to the
participant’s personal representatives on death.
Director Compensation
In 2023, each of our non-executive directors (other than Messrs. Gottesman and Franklin)
received, and are entitled to receive in 2023, $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 13 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
Our board of directors currently consists of ten members. Our Memorandum and Articles of
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. James E. Lillie is our lead independent director.
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. 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, 2023, our Audit Committee consisted of three directors: Messrs. Lillie and
MacFarlane and Ms. Stack, 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.
69
Compensation Committee
As of December 31, 2023, our Compensation Committee consisted of three directors: Messrs.
Ashken and MacFarlane 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
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, 2023, our Nominating and Corporate Governance Committee (the “N&CG
Committee”) consisted of three directors: Messrs. Ashken, Lillie and Ms. Parry and Mr. Ashken 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
As of December 31, 2023, we had approximately 7,894 employees, including 901 temporary
staff. In addition, we employed approximately 360 agency workers in 2023. We source the majority of our temporary
workers from agencies to allow us to quickly respond and adapt to production demands. Approximately 62% 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:
Region
United Kingdom
Serbia
Germany
Croatia
Italy
Sweden/Norway
Bosnia & Herzegovina
France
Other
Total
2023
1,557
1,370
1,269
1,073
449
365
323
306
1,182
7,894
2022
1,355
1,169
1,338
977
481
406
319
305
1,185
7,535
2021
1,389
1,302
1,437
853
494
378
348
333
1,468
8,002
A number of our employees are members of trade unions, including (but not limited to) the UK,
Germany, Italy, France, Sweden, Norway, Croatia, Serbia, Bosnia & Herzegovina and 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 23, 2024, certain information regarding the
•
•
•
each of our current directors;
each of our named executive officers for the fiscal year ended December 31, 2023; and
all of our current directors and current executive officers as a group.
70
Percentages are based on the 162,719,172 ordinary shares that were issued and outstanding on
February 23, 2024.
Director and Executive Officers:
Sir Martin E. Franklin
Noam Gottesman
Ian G.H. Ashken
Stéfan Descheemaeker
James E. Lillie
Stuart MacFarlane
Victoria Parry
Amit Pilowsky
Melanie Stack
Samy Zekhout
Directors and Executive Officers as a Group (10 persons)
Number
10,263,463 (1)
12,751,550 (2)
490,389 (3)
4,092,401 (4)
945,212 (5)
2,555 (6)
23,874 (7)
2,721 (8)
4,284 (9)
150,755 (10)
28,727,204
Percentage
6.3
7.8
*
2.5
*
*
*
*
*
*
17.7
*
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Represents beneficial ownership of less than one percent of ordinary shares outstanding.
Consists of (i) 6,722,212 ordinary shares held indirectly through the Martin E. Franklin Revocable Trust and (ii)
3,541,251 ordinary shares held indirectly through RSMA, LLC. Sir Martin disclaims beneficial ownership of
such shares except to the extent of his pecuniary interest therein.
Consists of (i) 8,565,449 ordinary shares held indirectly through TOMS Capital Investments LLC (ii) 1,514,652
ordinary shares held indirectly through an entity wholly-owned by Mr. Gottesman (iii) 1,921,449 ordinary shares
held by certain employees of TOMS Capital Investments 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 employees of TOMS Capital
Investments LLC, that are subject to an irrevocable proxy agreement granted to Mr. Gottesman. Mr. Gottesman
is the managing member and majority owner of TOMS Capital Investments LLC and may be considered to
have beneficial ownership of TOMS Capital Investments LLC’s interests in the Company. In addition, Mr.
Gottesman owns or controls, directly or indirectly, 100% of TOMS Capital Investments LLC. Mr. Gottesman
disclaims beneficial ownership of such shares to the extent of his pecuniary interest therein.
Includes (i) 485,443 ordinary shares held by Tasburgh, LLC and (ii) 4,946 held by The Ian G.H. Ashken Living
Trust of which Mr. Ashken is the sole settlor and trustee. Mr. Ashken is the Managing Manager of Tasburgh,
LLC. Excludes 5,847 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
2024 or (ii) August 6, 2024.
Includes 2,593,897 ordinary shares held indirectly through Olidipoli Sprl, a company owned by
Mr. Descheemaeker. Excludes a potential 300,000 ordinary shares issuable under management share awards
which have vested but have not yet been issued, as well as 600,000 ordinary shares issuable under
management share awards, which will vest subject to performance based vesting conditions (and subject to
further vesting conditions relating to Mr. Descheemaeker’s tenure as Chief Executive Officer).
Includes 788,962 ordinary shares held directly by Mr. Lillie, (ii) 100,000 ordinary shares held directly by a family
charitable foundation and (iii) 56,250 shares held directly by ZWC, LLC an entity managed by Mr. Lillie. Mr.
Lillie disclaims beneficial ownership of such ordinary shares except to the extent of his pecuniary interest
therein. Excludes 5,847 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
2024 or (ii) August 6, 2024.
Excludes 5,847 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 2024 or (ii)
August 6, 2024.
Excludes 5,847 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 2024 or (ii)
August 6, 2024.
71
(8)
(9)
(10)
Excludes 5,847 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 2024 or (ii)
August 6, 2024.
Excludes 5,847 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 2024 or (ii)
August 6, 2024.
Excludes 173,017 ordinary shares issuable under management share awards, 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").
F. Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation
None.
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 162,719,172
ordinary shares that were issued and outstanding on February 23, 2024.
Name of Beneficial Owner:
5% Shareholders:
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
FMR LLC
245 Summer Street
Boston, MA 02210
Ordinary Shares Beneficially
Owned
Number
Percentage
12,751,550 (1)
10,263,463 (2)
7.8
6.3
16,684,360 (3)
10.3
72
(1)
(2)
(3)
Consists of (i) 8,565,449 shares held indirectly through TOMS Capital Investments LLC, (ii) 1,514,652 ordinary
shares held indirectly through an entity wholly-owned by Mr. Gottesman and (iii) 1,921,449 ordinary shares
held by certain members of TOMS Capital Investments 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 Capital Investments LLC, that are subject to
an irrevocable proxy agreement granted to Mr. Gottesman. Mr. Gottesman is the managing member and
majority owner of TOMS Capital Investments LLC and may be considered to have beneficial ownership of
TOMS Capital Investments LLC’s interests in the Company. In addition, Mr. Gottesman owns or controls,
directly or indirectly, 100% of TOMS Capital Investments LLC. Mr. Gottesman disclaims beneficial ownership of
such shares to the extent of his pecuniary interest therein.
Consists of (i) 6,722,212 ordinary shares held indirectly through the Martin E. Franklin Revocable Trust and (ii)
3,541,251 ordinary shares held indirectly through RSMA, LLC. Sir Martin disclaims beneficial ownership of
such shares except to the extent of his pecuniary interest therein.
Based on a Schedule 13G/A filed by FMR LLC on February 9, 2024.
in our ordinary shares increased to 7.39% as of February 9, 2023 to 9.999% as of February 9, 2024.
On February 9, 2024, FMR LLC filed a Schedule 13G/A to report that its percentage ownership
held by one United States record holder (Cede and Company).
As of February 23, 2024, approximately 162,719,172 of our outstanding ordinary shares were
percentage ownership of our ordinary shares during the three years ended December 31, 2023.
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 36, 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.
Since 2020, the Company has utilized 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 TOMS Capital LLC (of which Mr. Gottesman is the founder and
managing partner). In November 2023, the agreement was amended so that a guaranteed minimum annualized fee of
up to £130,000 (€150,000) would be received by the working capital solutions specialist (previously all ongoing fees
associated with this service were received by the working capital solutions specialist directly from our suppliers utilizing
the service). Furthermore, a setup fee of less than €0.1 million has been incurred to allow the platform to be used on
the Company's new ERP platform. These amendments and fees are not considered to be material to either party.
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.
73
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.
Item 8.
Financial Information
A. Consolidated Statements and Other Financial Information
Financial Statements
Export Sales
Please see Item 18 below.
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
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.
paid can be found in Item 18, Note 24 below.
In 2024, the Company intends to declare quarterly dividends. Details of dividends declared and
The Founder Preferred Shares were entitled to receive an annual stock dividend based on the
market price of our ordinary shares if such market price exceeded certain trading price minimums and to participate in
any dividends on the ordinary shares. For the year ended December 31, 2022, no Founder Preferred Shares Annual
Dividend Amount was payable pursuant to the terms of the Founder Preferred Shares. On January 3, 2023, each of the
Founder Preferred Shares converted into one ordinary share and, as of such date, no Founder Preferred Shares
remained outstanding and no future dividend will be paid.
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”.
74
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. A description of securities registered under Section 12 of the
Exchange Act is filed as Exhibit 2.3 to this annual report on Form 20-F and includes a summary of the additional
information required by this Item 10B and is incorporated by reference herein. Such summary does not purport to be
complete and is subject to and qualified in its entirety by reference to our Memorandum and Articles of Association, as
amended, and to the relevant laws and regulations. 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:
•
•
•
•
•
•
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;
75
•
•
•
•
•
•
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.
76
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.
77
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.
78
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
•
•
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.
79
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.
80
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.
This summary is for general information only and is not intended to be, nor should it be
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
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.
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.
Shareholders
Sale, Exchange or Other Taxable Disposition 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 generally 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 £6,000 of gains
(the annual exempt amount) in the UK tax year ended April 5, 2024, without being liable to tax.
81
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
circumstances, be liable to UK income tax or, as the case may be, UK corporation tax on dividends paid to them by us.
Shareholders who are resident in the UK for tax purposes may, subject to their individual
A nil rate of income tax applies to the first £1,000 of dividend income received by an individual
shareholder in the UK tax year ended April 5, 2024. If and to the extent that an individual shareholder who is subject to
UK income tax receives dividends in the 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 the tax year which, in aggregate, exceed that allowance, the individual will be
subject to UK income tax on those dividends at the rate of 8.75% (in the case of basic rate taxpayers), 33.75% (in the
case of higher rate taxpayers) and 39.35% (in the case of additional rate taxpayers), and the individual will not be
entitled to any tax credit in respect of those dividends. In calculating into which income tax band any dividend income
in excess of the above nil rate allowance falls, savings and dividend income are treated as the highest part of an
individual's income.
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.
Stamp duty/stamp duty reserve tax
(i) Issue of Ordinary Shares
No UK stamp duty or stamp duty reserve tax will be payable on the issue of ordinary shares.
(ii) Transfers of Ordinary Shares
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.
82
G. Statements by Experts
Not applicable.
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
The consolidated financial statements of Nomad and its subsidiaries have been prepared in
accordance with the International Financial Reporting Standards issued by the International Accounting Standards
Board.
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 32 “Financial risk management” to our audited consolidated financial statements which appear
elsewhere in this annual report.
Item 12.
Description of Securities Other than Equity Securities
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.
83
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 not effective as of the end of the period covered by
this annual report in providing a reasonable level of assurance because of a material weakness in internal control over
financial reporting as described below. Notwithstanding the material weakness, management has concluded that our
consolidated financial statements as of and for the year ended December 31, 2023 are fairly stated in all material respects
in accordance with International Financial Reporting Standards as issued by the International Accounting Standards
Board.
Management’s annual report on internal control over financial reporting
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 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 IFRS. 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 IFRS, 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, 2023 using criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
was not effective as of December 31, 2023 due to the material weakness described below.
Based on this assessment, management concluded that our internal control over financial reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over
financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim
financial statements will not be prevented or detected on a timely basis.
We identified a material weakness in the operation of effective control over the review of supporting
information used to determine the completeness and accuracy of the consolidated statement of cash flows. Specifically,
the operation of the control did not address the completeness and accuracy objectives that could be impacted by the use
of customizable reports used in the preparation of the consolidated statement of cash flows, as well as insufficient
corroboration with supporting evidence. This ineffective operation could result in errors in future presentations of the
consolidated statement of cash flows, however the material weakness did not result in a material misstatement of our
consolidated financial statements as of and for the year ended December 31, 2023 or prior periods.
The effectiveness of the Company's internal control over financial reporting as of December 31,
2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in
their report which appears herein.
statements for the year ended December 31, 2023 or prior periods.
The control deficiency did not result in a material misstatement of our consolidated financial
84
Remediation Efforts to Address the Material Weakness
To remediate this deficiency, we plan to implement certain measures to address the underlying
causes of the control deficiency that gave rise to this material weakness. These measures include improving existing
controls over financial reporting with respect to the preparation, review, and approval of the consolidated statement of
cash flows. We also plan to enhance control activities over the completeness and accuracy of the underlying data used in
the preparation of our consolidated statement of cash flows, including performing additional testing, enhanced manual
checks and/or data corroboration.
The material weakness in our internal control over financial reporting will not be considered
remediated until the remediated controls operate for a sufficient period of time and management has concluded, through
testing, that these controls are operating effectively. There is no assurance that the remediation will be fully effective. If
these remediation efforts do not prove effective and control deficiencies and one or more material weaknesses persist or
occur in the future, the accuracy and timing of our financial reporting may be adversely affected.
Attestation report of the independent registered public accounting firm
The effectiveness of the Company's internal control over financial reporting as of December 31,
2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in
their report which appears herein.
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 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, 2023 and 2022. The table below sets out the total amount billed to us by PwC, for services performed in
the years ended December 31, 2023 and 2022, and breaks down these amounts by category of service:
(€ in millions)
Audit fees
Audit-related fees
Tax fees
All other fees
Total
For the year ended
December 31, 2023
8.7
—
0.7
0.1
9.5
For the year ended
December 31, 2022
5.3
—
0.9
0.1
6.3
85
Audit Fees
Audit fees in the years ended December 31, 2023 and 2022 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
Tax Fees
tax related services.
All Other Fees
services.
There were no audit-related fees in the year ended December 31, 2023 or 2022.
Tax fees in the years ended December 31, 2023 and 2022 are related to tax compliance and other
Other fees in the years ended December 31, 2023 and 2022 relate to other non-audit assurance
Pre-Approval Policies and Procedures
been delegated, is required for all audit and non-audit services provided by our auditors.
The advance approval of the Audit Committee or members thereof, to whom approval authority has
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.
86
Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The table below presents a summary of the ordinary shares repurchased by the Company in 2023:
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
2021 $500m repurchase program
(1)
As of December 31, 2022
4,250,629
24.97
4,250,629 $
393,763,086
May 1, 2023 – May 31, 2023
687,309
17.49
687,309 $
381,741,521
June 1, 2023 - June 30, 2023
2,852,493
17.51
2,852,493 $
331,798,601
August 1, 2023 - August 31, 2023
143,728
17.54
143,728 $
329,278,204
September 1, 2023 - September
30, 2023
5,764,609
15.93
5,764,609 $
237,435,353
October 1, 2023 - October 31, 2023
1,397,790
14.84
1,397,790 $
216,686,731
November 1, 2023 - November 30,
2023
December 1, 2023 - December 31,
2023
135,323
16.16
135,323 $
214,500,290
333,453
16.62
333,453 $
208,959,350
Total
15,565,334
18.70
15,565,334 $
208,959,350
2023 $500m repurchase program
(2)
Total
—
—
— $
500,000,000
(1) 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. The program has
concluded.
(2) On November 6, 2023, the Company's Board of Directors authorized a new share repurchase
program to purchase up to an aggregate of $500 million of the Company’s ordinary shares. 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. This new program replaces the
previous authorization which was established in August 2021 and finishes at the end of 2023. The new program will expire
at the end of 2026. As of December 31, 2023, the maximum number of shares that may yet be purchased under the share
repurchase program is $500 million.
Item 16F.
Change in Registrants’ Certifying Accountant
Not applicable.
87
Item 16G.
Corporate Governance
Comparison of Shareholder Rights
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 ordinary shares and the rights of
holders of common stock 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.
Amendment of Governing Documents
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.
88
Shareholder Proposals
Under Delaware corporate law, a shareholder has the right to put any proposal before the annual
meeting of shareholders, provided it complies with any notice provisions 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.
89
Variation of Rights of Shares
Under Delaware corporate law, a corporation may vary the rights of a class of stock with the
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.
90
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.
91
Where a British Virgin Islands 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 British Virgin Islands 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, Luna Tower, Waterfront Drive, 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 corporation’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 corporation 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.”
92
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.
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 corporation’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.
Shareholders’ Rights under British Virgin Islands Law Generally
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.
93
•
•
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.
Item 16H.
Mine Safety Disclosure
None.
Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 16J.
Insider Trading Policy
Not applicable.
Item 16K.
Cybersecurity
We have processes for assessing, identifying, and managing material risks from cybersecurity
threats which have been integrated into our overall risk management programs. Executive management works with our IT
security team to regularly review our cybersecurity and related Information Technology (“IT”) security risks and capability
along with our plans to mitigate cybersecurity risks and to respond to data breaches. Our cybersecurity risk management
is aligned to our business strategy and shares common reporting channels and governance processes that apply to other
areas of enterprise risk, including legal, compliance, operational, and financial risk.
Our IT systems are critical to operating and growing the Company, in particular to our general
operations and logistics functions but also in enabling our teams to work from hybrid locations and across countries. The
Company is undertaking a business transformation program underpinned by an upgrade to the latest SAP S4/HANA
Enterprise Resource Planning (ERP) platform. The program aims to modernize the end-to-end technology estate to
support current and future complex and evolving business needs. Among the many changes, the program will move the
operating model for our existing business to a cloud-hosted solution, which better deploys new services to the business
and end users, including application management, supporting a diverse workforce across multiple locations and
languages, as well as deploying artificial intelligence assisted tools. This is supported by a dedicated cybersecurity
program, including third-party risk management processes for service providers, suppliers, and vendors, enabling us to
further adapt to rapidly changing threats and increase our cybersecurity capabilities across the business.
Our Board has delegated the oversight of cybersecurity risks to the Audit Committee and the Audit
Committee reviews the Company's cybersecurity progress and status periodically. Regular updates from the Chief
Information Officer regarding recent cybersecurity threats and incidents (if any) are reported to, and reviewed by, the Audit
Committee, allowing the Committee to be informed about and monitor the prevention, detection, mitigation, and
remediation of cybersecurity incidents. These reports include incident assessments and, programs and incident responses
as well as any relevant regulatory developments.
Our Chief Information Officer, who has over 25 years of experience with information technology
systems and cybersecurity risk management, is supported by the Head of Cyber Security, who has obtained professional
security certifications and advanced training in the field of cybersecurity, along with the IT security team within the IT
organization, is responsible for the Company’s day to day information security activities and cyber risk programs, including
overseeing compliance with our cyber and information security policies. The Company monitors the prevention, detection,
mitigation, and remediation of cybersecurity incidents. Incidents are managed in accordance with our established
procedures and training is provided to relevant stakeholders. Additionally, we utilize external assurance and assessments,
94
vulnerability testing, and mock phishing campaigns to identify and mitigate risks. We have also engaged an outsourced
service provider, which improves our ability to scale in line with business developments.
reasonably likely to have, a material impact on our business strategy, results of operations, or financial condition.
To date, the Company has not had a significant cybersecurity breach or attack that has had, or is
Item 17.
Financial Statements
See item 18.
95
vulnerability testing, and mock phishing campaigns to identify and mitigate risks. We have also engaged an outsourced
Item 18.
Financial Statements
service provider, which improves our ability to scale in line with business developments.
reasonably likely to have, a material impact on our business strategy, results of operations, or financial condition.
To date, the Company has not had a significant cybersecurity breach or attack that has had, or is
The following financial statements, together with the report of PricewaterhouseCoopers LLP thereon, are filed
as part of this annual report:
Item 17.
Financial Statements
See item 18.
NOMAD FOODS LIMITED AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (Firm ID: 876)
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-4
F-5
F-6
F-7
F-10
F-11
95
96
113351_Body.indd 99
113351_Body.indd 99
4/10/24 11:57 AM
4/10/24 11:57 AM
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Nomad Foods Limited
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, 2023 and 2022, 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, 2023, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2023 in conformity with International Financial
Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company did
not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2023, based
on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because a material
weakness in internal control over financial reporting existed as of that date related to the operation of effective control
over the review of supporting information used to determine the completeness and accuracy of the consolidated
statement of cash flows.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not
be prevented or detected on a timely basis. The material weakness referred to above is described in Management’s
Annual Report on Internal Control over Financial Reporting appearing under Item 15. We considered this material
weakness in determining the nature, timing, and extent of audit tests applied in our audit of the 2023 consolidated
financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial
reporting does not affect our opinion on those consolidated financial statements.
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 report referred to above. 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.
F-1
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 matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i) relates
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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it
relates.
Provisions for uncertain tax positions
As described in Notes 3, 4 and 11 to the consolidated financial statements, provisions for uncertain tax positions were
€125.7 million as at December 31, 2023. The Company operates in many different jurisdictions and in some of these
there are certain tax matters which are under discussion with local tax authorities. Management considers these tax
audits and discussions with local tax authorities as well as the local tax legislation relative to their tax positions in those
jurisdictions when identifying uncertain tax positions. Management uses judgment when identifying and determining
whether it is appropriate to provide for uncertain tax positions and for how long provisions for uncertain tax positions
are retained, based on assessment as to whether it is probable that a risk would crystallize or not. Where tax
exposures can be quantified, and management assesses that the risk of an exposure crystallizing is probable, a
provision for uncertain tax positions is made based on management's estimates which include judgments with regard
to the amounts expected to be paid to the relevant tax authority. The factors considered in estimating the provision
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
provisions are made on the basis of a probability-weighted average of potential outcomes. Given the inherent
uncertainties in assessing the outcomes of these exposures, the Company could in future periods experience
adjustments to these provisions.
The principal considerations for our determination that performing procedures relating to provisions for uncertain tax
positions is a critical audit matter are the significant judgments by management when identifying and determining
provisions, and the estimation required due to the complexity of tax legislation across various jurisdictions, and ongoing
discussions with local tax authorities. This in turn led to a high degree of auditor judgment, subjectivity, and effort in
performing procedures and evaluating evidence related to the identification, quantification and probability assessment
of uncertain tax positions. Additionally, the audit effort involved the use of professionals with specialized skill and
knowledge.
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, recognition and measurement of the provisions for uncertain tax positions, and
controls addressing completeness of the uncertain tax exposures. These procedures also included, among others, (i)
testing the completeness, accuracy and relevance of the information used in the identification of uncertain tax
exposures and in estimating the provision for uncertain tax positions; (ii) assessing the method for estimating the
provisions for uncertain tax positions; (iii) evaluating management’s assessment of the probability-weighted average of
potential outcomes and amounts expected to be paid to the relevant tax authorities; (iv) assessing whether the
uncertain tax positions remain appropriate to recognize when considering the tax laws in the relevant jurisdiction; and
F-2
(v) evaluating the status and results of tax audits and progress of discussions with the relevant tax authorities.
Professionals with specialized skill and knowledge were used to assist in the evaluation of the completeness of the
uncertain tax exposures identified, and the recognition and measurement of those exposures, including evaluating the
reasonableness of management’s determination of the probability-weighted average of potential outcomes.
/s/ PricewaterhouseCoopers LLP
London, United Kingdom
February 29, 2024
We have served as the Company’s or its predecessor's auditor since 2006.
F-3
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
Current tax receivable
Indemnification assets
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
Translation reserve
Other reserves
Retained earnings
Total equity
December 31,
2023
December 31,
2022
Notes
€m
€m
13
13
12
18
33
16
19
17
2, 18
2
33
21
23
20
33
20
22
21
23
33
16
24
25
27
28
2,105.0
2,468.2
563.7
7.1
0.7
106.9
5,251.6
412.9
446.4
263.4
40.7
0.5
1.2
1,165.1
6,416.7
769.8
189.5
35.1
21.4
12.2
1,028.0
2,113.7
158.3
0.5
1.4
97.8
425.1
2,796.8
3,824.8
2,591.9
1,426.1
31.4
101.0
(24.6)
1,058.0
2,591.9
2,101.6
2,457.6
542.9
8.1
0.2
100.4
5,210.8
369.7
457.1
261.7
5.1
1.8
19.9
1,115.3
6,326.1
695.4
183.0
36.1
22.6
3.7
940.8
2,142.3
132.1
1.1
1.3
56.6
445.7
2,779.1
3,719.9
2,606.2
1,596.7
13.8
89.3
19.8
886.6
2,606.2
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Consolidated Statements of Profit or Loss
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 year
Earnings per share:
Basic earnings per share
Diluted earnings per share
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
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3,044.5
2,939.7
2,606.6
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858.7
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(391.2)
(356.3)
(72.5)
(48.7)
340.4
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253.6
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321.0
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236.7
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181.0
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€1.43
€1.43
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€1.02
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29
All profits are attributable to the owners of the Parent Company.
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Consolidated Statements of Comprehensive Income
Profit for the year
Other comprehensive (loss)/income:
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
Notes
€m
€m
€m
192.7
249.8
181.0
Actuarial (losses)/gains on defined benefit pension plans
22
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108.1
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Total comprehensive income for the period
11, 16
6.3
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82.0
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143.8
48.7
130.7
380.5
27.8
53.7
234.7
All comprehensive income is attributable to the owners of the Parent Company.
The accompanying notes are an integral part of these consolidated financial statements.
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113351_Body.indd 106
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113351_Body.indd 106
4/10/24 11:57 AM
4/10/24 11:57 AM
4/9/24 9:33 AM
4/9/24 9:33 AM
113351_Body.indd 107
113351_Body.indd 107
4/9/24 9:33 AM
4/9/24 9:33 AM
Consolidated Statements of Changes in Equity (continued)
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Balance at December 31, 2021
Profit for the year
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Total comprehensive income for the period
Deferred hedging gains transferred to the carrying value of
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Balance as of December 31, 2022
26
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113351_Body.indd 107
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4/9/24 9:33 AM
4/9/24 9:33 AM
Consolidated Statements of Changes in Equity (continued)
Consolidated Statements of Cash Flows
Share capital
and capital
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Translation
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2,591.9
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1,596.7
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886.6
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Balance at December 31, 2022
Profit for the year
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Total comprehensive income for the year
Deferred hedging gains transferred to the carrying value of
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Reclassification of awards for settlement of tax liabilities
Total transactions with owners, recognized directly in
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Balance as of December 31, 2023
Total Equity
€m
2,606.2
192.7
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143.8
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Business combinations, net of cash acquired
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Year ended
December 31,
Year ended
December 31,
Year ended
December 31,
2023
€m
2022
€m
2021
€m
591.2
(67.6)
—
(92.8)
430.8
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124.8
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306.3
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Note
31
14
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19
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Other financing cash flows
Net cash (used in)/provided by financing activities
Net increase/(decrease) 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
The accompanying notes are an integral part of these consolidated financial statements.
(76.8)
(78.7)
(660.0)
F-9
The accompanying notes are an integral part of these consolidated financial statements.
113351_Body.indd 108
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4/9/24 9:33 AM
F-10
Consolidated Statements of Cash Flows
Cash generated from operations before tax and exceptional items
Note
31
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Business combinations, net of cash acquired
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Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
€m
591.2
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(65.2)
—
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(80.2)
430.8
303.8
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(6.5)
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(108.1)
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366.8
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(18.7)
(36.7)
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214.4
(139.3)
382.5
11.0
254.2
The accompanying notes are an integral part of these consolidated financial statements.
F-10
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 Luna Tower, Waterfront Drive, Road Town, Tortola, British Virgin
Islands. The Company is domiciled for tax in the United Kingdom.
Nomad Foods Limited (NYSE: NOMD) is Europe's leading frozen foods company. Nomad'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. Nomad 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 the International Financial Reporting Standards issued by the International Accounting
Standards Board.
The consolidated financial statements were approved for issuance by the Board of Directors of Nomad
Foods Limited on February 28, 2024.
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 are
appropriate under the circumstances, such as supply chain disruptions, high inflation and the ongoing conflict between
Ukraine and Russia. Actual results could differ from these estimates. The Directors, at the time of approving these
financial statements, have a reasonable expectation that the Company has adequate resources to continue in operational
existence for at least 12 months from the date of signing these financial statements given the cash funds available and the
current forecast cash outflows. In preparing cash flow forecasts, management considers severe but plausible downside
scenarios taking into consideration the Company's key risks, including the current economic climate which may adversely
impact the Company. Having considered these risks 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.
Reclassification of current tax receivable
The Company's current tax receivable was previously presented within "Trade and other receivables" in the
Statement of Financial Position. However, management considers it to be more relevant to present this is a separate line
in the statement of financial position. Comparatives as at December 31, 2022, have been reclassified to conform to the
current year presentation.
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, and have been adopted in
these financial statements with no material impact to results. The amendments 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.
Change in the functional currency of a foreign operation
The functional currency of our entities in Croatia changed from the Croatian Kuna to the Euro on January 1,
2023, when Croatia adopted the Euro as its currency. Assets and liabilities were converted using the official rate of
exchange on this date, which was €1:HRK7.53450. The resulting converted amounts will be used as the historical cost for
non-monetary items. Exchange differences arising from the translation of the entities into Euro before the change in
functional currency were recognized in other comprehensive income. The cumulative translation difference at December
31, 2022 was €0.2 million and this will remain in the translation reserve.
F-11
Recently issued and not yet adopted accounting pronouncements under IFRS
In December 2021, the OECD released a framework for Pillar Two Model Rules which will introduce a
global minimum corporate tax rate of 15% applicable to multinational enterprise groups with global revenue over €750
million, with an expected application date of 1 January 2024. Nomad has reviewed this legislation, is monitoring the status
of implementation of the model rules in the UK as well as in the EU and other jurisdictions, and has performed calculations
based on the financial statements for the years ended December 31, 2022 and 2023 and concluded that the tax charge
would not be materially affected by the application of the legislation, based on our current facts and circumstances, as all
of the material jurisdictions in which the group operates have a statutory tax rate of 15% or above. The Company has
applied the exemption to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar 2
income taxes.
All other recently issued and not yet adopted accounting standards have been considered. Adoption of
these will not have a material effect on the reporting entity’s financial position or results of operations.
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.
3)
Material 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.
F-12
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, 2023 of £1:€1.15 (December 31, 2022: £1:€1.13). 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, 2023 is £1:€1.15 (year ended
December 31, 2022: £1:€1.17, year ended December 31, 2021: £1:€1.16).
Foreign exchange gains and losses that relate to these assets and
liabilities are presented in the Consolidated Statement of Comprehensive Income.
F-13
iii)
Net investment in foreign operations
Exchange differences arising from the translation of foreign operations and
of any related qualifying hedges are presented in the Consolidated Statement of
Comprehensive Income. 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 at least annually for impairment.
3.6
Other intangible assets
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. This accounting treatment is considered
annually. 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.
F-14
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.
ii)
Allocation of impairment losses
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.
F-15
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.
iii)
Depreciation
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 20 years
Computer equipment 3 to 5 years
The assets’ residual values and useful lives are reviewed on an annual
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.
F-16
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.
3.11
Founder Preferred Shares
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 were 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 intended that any future
Founder Preferred Shares Annual Dividend Amount would 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.
Founder Preferred Share Annual Dividend Amount that have been issued have been
deducted from the Founder Preferred Shares Dividend reserve. Following the end of the period in which
dividends are payable the excess has been transferred to retained earnings 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 Consolidated 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.
F-17
To assist in managing operating cash flow, we may enter into non-recourse
factoring arrangements with certain receivables whereby we sell specific accounts
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
Consolidated Statement of Financial Position and as a financing activity within the
Consolidated 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.
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 debt discounts and transaction fees
Discounts on issuance of debt as well as directly
attributable transaction fees paid on the establishment of loan facilities are
capitalized and amortized over the life of the debt. In the event a
modification is considered to extinguish the original debt, any remaining
debt discounts and transaction fees are expensed in the Statement of
Profit or Loss.
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.
F-18
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, interest rate 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 used beforehand with the impact of the change presented in the
Statement of Changes in Equity.
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 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.
F-19
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.
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 Company may invest surplus cash positions in short-term investments
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 which are treated as a reduction
in revenue, 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 a significant reversal will not occur. 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 payment terms are made in line with market practice and accruals are typically settled within
twelve months of the sale.
F-20
3.15
Share based payments
The Nomad Foods Long-term Incentive Plan known as 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.
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 with market performance conditions are 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.
See Note 8(b) for further information on the Company’s share-based payment
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.
F-21
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 or those recognized directly in equity, in which case it is recognized within
the Statement of Other Comprehensive Income or Statement of Changes in Equity.
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 and where management assesses that
the risk of an exposure crystallizing is probable, a provision 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.
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
Dividends
Dividends are included in the financial statements in the year in which they are approved.
3.20
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.
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.
4)
Critical accounting estimates and judgments
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.
F-22
Key Judgments
Judgments are made in the process of applying accounting policies. Those judgments which are considered
key are listed below.
a)
Business Combinations
Business combinations are recognized using the acquisition method. At the acquisition
date, the Company is required to recognize separately 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.
b)
Discounts and trade promotions
Management uses 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 uses judgment when identifying and determining whether it is appropriate to
provide for uncertain tax positions and for how long provisions for uncertain tax positions are retained,
based on assessment as to whether it is probable that a risk would crystallize or not. 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 applies 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 applies 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 has 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. In forming these estimates, management has taken into account the
impact and potential future impact of supply chain disruptions, high inflation as well as the ongoing conflict between
Ukraine and Russia. Management will continue to assess the impact of future developments in relation to these matters
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, management will focus on the impact of a long-term conflict in Ukraine. While we do not have
any direct operations or sales in either Russia or Ukraine, these countries are responsible for many commonly used raw
materials and resources such as fish, wheat and energy. The ongoing conflict and economic sanctions have seen
considerable reductions in the availability or increase in cost of such raw materials and resources. At this time it is not
possible to predict the extent or nature of future impacts on our business although we expect the current conflict to
continue for some time.
a)
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 bespoke
agreements that are governed by a combination of observable and unobservable performance conditions.
F-23
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 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. It is impracticable to disclose the extent of the possible
effects of estimation uncertainty, however, it is reasonably possible that outcomes within the next financial
year from these agreements are materially different in aggregate to those estimated.
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, 2023 is disclosed in Note 18 and the
balance classified as a trade term payable is disclosed in Note 21.
b)
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. Note 22 in Item 18 contains additional details on the schemes and obligation,
including a sensitivity analysis over other key assumptions.
c)
Provisions for uncertain tax positions
The Company operates in many different jurisdictions and in some of these there are
certain tax matters which are under discussion with local tax authorities, including as part of tax audits.
Management considers these tax audits and discussions with local tax authorities as well as the local tax
legislation relative to their tax positions in those jurisdictions when identifying uncertain tax positions. 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, and management assesses that the risk of an
exposure crystallizing is probable, a provision for uncertain tax positions is made based on management's
estimates which include judgments 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, the Company
could in future periods experience adjustments to these provisions. The factors considered in estimating the
provision 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 provisions are made on the basis of a probability-weighted
average of potential outcomes. Given the inherent uncertainties in assessing the outcomes of these
exposures, the Company could in future periods experience adjustments to these provisions.
F-24
Other estimates
a)
Carrying value of goodwill and indefinite life brands
The Company's goodwill and indefinite life 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 the Company has one reporting and operating segment. Determining whether goodwill and
indefinite life brands are impaired requires an estimation of the value in use. The review is performed using
a discounted cash flow model to calculate the value in use of the Frozen segment. 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. This requires us to make assumptions
and estimates regarding historical information, future plans and external sources. 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.
(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.
c)
Fair value of derivative financial instruments.
Note 33 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 33.
F-25
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 3.20, as the key measure of the
segment’s results, which is considered non-IFRS financial information.
Segment Adjusted EBITDA
Profit for the year
Taxation
Net financing costs
Depreciation and amortization
Acquisition purchase price adjustments
Exceptional items
Other add-backs
Adjusted EBITDA
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
Note
€m
€m
€m
192.7
249.8
60.9
86.8
95.0
—
72.5
27.1
535.0
71.2
54.4
88.6
—
48.7
11.7
524.4
181.0
55.7
106.0
71.6
8.4
45.3
18.7
486.7
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 €26.1 million (2022: €8.6 million, 2021: €5.8 million) and elimination of non-operating M&A related costs,
professional fees and transaction costs of €1.0 million (2022: €3.1 million, 2021: €12.9 million). We exclude these costs
because we do not believe they are indicative of our normal operating costs, can vary significantly in amount and
frequency, and are unrelated to our underlying operating performance.
No information on segment assets or liabilities is presented to the CODM.
Product information
Management considers the products it sells belong to one category, being "Frozen".
F-26
Geographical information
External revenue by geography
United Kingdom
Germany
Italy
France
Sweden
Croatia (1)
Austria
Norway
Serbia (1)
Spain
Switzerland
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
€m
869.4
397.2
377.8
209.3
138.1
136.3
126.9
124.2
117.5
82.7
80.4
806.2
385.4
408.5
192.4
149.4
122.7
122.0
126.6
108.2
78.6
80.1
758.3
396.3
417.9
188.6
148.1
16.1
129.3
121.7
13.6
75.1
74.4
Rest of Europe
Total external revenue by geography
384.7
3,044.5
359.6
2,939.7
267.2
2,606.6
(1) Sales included from acquisition date of September 30, 2021.
Non-current assets by geography
United Kingdom
Germany
Italy
Serbia
Croatia
Ireland
Norway
Sweden
Rest of Europe
Total non-current assets by geography
December 31,
2023
December 31,
2022
€m
€m
159.5
134.9
64.5
55.1
50.3
34.2
25.5
22.3
71.8
140.1
139.0
63.4
50.3
41.8
35.4
28.6
22.1
70.4
618.1
591.1
Non-current assets exclude deferred tax assets, goodwill and brands which are not bound to one
geographical area.
F-27
6)
Operating profit
Operating profit is stated after charging:
Staff costs
Depreciation of property, plant and equipment
Impairment of intangible assets
Amortization of intangible assets
Expense relating to low value and short-term leases
Exchange losses
Research & development expenditure
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
Note
€m
€m
€m
8
12
13
13
421.8
87.3
—
7.7
9.1
14.2
20.9
386.1
79.8
5.8
8.8
9.9
38.3
19.3
340.6
63.4
1.7
8.2
6.1
27.0
19.2
Inventories recognized as an expense within cost of goods sold
2,053.4
1,949.8
1,694.3
7)
Exceptional items
Exceptional items are made up as follows:
Distribution network integration (1)
Fortenova Acquisition integration costs (2)
Findus Switzerland integration costs (3)
Brexit (4)
Business Transformation program (5)
Information Technology Transformation program (6)
Factory optimization (7)
Settlement of legacy matters (8)
Impairment of customer relationships (9)
Release of indemnification assets (10)
Total exceptional items
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
€m
—
4.3
—
—
68.4
0.6
—
2.2
9.5
8.2
—
37.0
4.4
3.5
(0.8)
(28.9)
—
—
72.5
5.8
7.0
48.7
—
3.5
6.2
5.3
18.8
4.2
4.9
(2.6)
—
5.0
45.3
We do not consider these items to be indicative of our ongoing operating performance.
(1)
Distribution network integration
In 2022, the Company restructured its sales operations in northern Italy, replacing direct sales
to thousands of customers with a streamlined distributor network. The program consisted of expenses
relating to restructuring and new systems and was completed in 2023.
(2)
Fortenova Acquisition integration costs
The Company completed the acquisition of the Fortenova Group’s Frozen Food Business
Group on September 30, 2021, following which the Company began an integration project which was
completed in 2023. 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
(3)
Findus Switzerland integration costs
The Company completed the acquisition of Findus Switzerland on December 31, 2020,
following which the Company commenced an integration project which was completed in 2022. Integration
expenses incurred related to external consultancy costs, organizational structure alignment to Nomad
design and roll-out of the Nomad ERP system.
(4)
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.
(5)
Business Transformation program
In 2020, the Company launched the first phase of a multi-year, enterprise-wide transformation
and optimization program which continued to progress in the current year. Over the next few years,
additional transformation phases will be implemented. Progress of the project is ongoing, there remain
certain phases to 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 incurred to date consist of restructuring, severance and transformational project
costs, including business technology transformation initiative costs and related professional fees.
(6)
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
made, the program moved 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 included 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. The program was completed in 2023.
(7)
Factory optimization
In 2018, the Company initiated a three-year factory optimization program. The focus of the
program was to develop a new suite of standard manufacturing and supply chain processes, that provides 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 was extended for an additional year through to its
completion in 2022.
(8)
Settlement of legacy matters
A net income of €0.8 million has been recognized associated with the release of acquired
provisions relating to periods prior to acquisition by the Company and other gains or charges associated
with items that were originally recognized as exceptional (year ended December 31, 2022: net income of
€28.9 million, year ended December 31, 2021: net income of €2.6 million).
F-29
The 2022 net income includes €27.9 million recognized as the Company received favorable
rulings on a series of registration tax claims in relation to an acquisition in 2010, prior to the formation of the
Company in 2014. As a result, the Company received a refund of the payments made in 2013 and 2018 in
addition to interest. Income has been recognized net of associated professional fees.
(9)
Impairment of customer relationships
An impairment of intangible fixed assets expense has been recognized in the year ended
December 31, 2022 relating to our food service customer relationships in Sweden.
(10)
Release of indemnification assets
The charges for the release of indemnification assets relates to the release of shares held in
escrow associated with the acquisition of the Findus Group in 2015.
Tax impact of exceptional items
The tax impact of the exceptional items amounts to a credit of €17.3 million in the year ended December 31,
2023 (year ended December 31, 2022: €5.8 million, year ended December 31, 2021: €8.4 million).
Cash flow impact of exceptional items
Included in the Consolidated Statements of Cash Flows for the year ended December 31, 2023 is €67.6
million of cash outflows (year ended December 31, 2022: net cash outflows of €40.8 million, year ended December 31,
2021: cash outflows of €48.8 million) 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,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
3,968
4,129
8,097
4,189
3,892
8,081
3,310
2,193
5,503
The increase in the average number of employees in the table above for the year ended December 31,
2022 compared with the year ended December 31, 2021 is primarily due to the full year impact of including the Fortenova
Acquisition which was acquired on September 30, 2021.
F-30
The table below discloses the Company’s aggregate payroll costs of these persons. Payroll costs exclude
long term management incentive scheme and share based payment costs, but includes bonus costs.
Wages and salaries
Social security costs
Other pension costs
Total payroll costs
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
€m
330.5
73.8
17.5
421.8
293.6
72.9
19.6
386.1
266.4
56.1
18.1
340.6
(b)
Share based payments
The Company's discretionary share award scheme, the LTIP, enables the Company’s
Compensation Committee to make grants in the form of rights over ordinary shares (“Awards”), to any
Director or employee of the Company. However, it is the Committee’s current intention that Awards be
granted only to senior management also serving as a director, 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 Directors' 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 thirteen months from the date of grant or the date of
the Company’s next annual meeting of shareholders.
On June 30, 2021, after the Company's annual general meeting of shareholders, the then
current Non-Executive Directors were granted 24,759 restricted share award at a share price of $28.27. The
Non-Executive Directors restricted share awards identified above vested on July 1, 2022 and 13,817 were
issued. Of the total 24,759 number of shares vesting, 3,537 shares have not yet been issued and 7,405
shares were held back from issue by the Company as settlement towards personal tax liabilities arising on
the vested shares.
On July 1, 2022, after the Company's annual general meeting of shareholders, the then
current Non-Executive Directors were granted 29,676 restricted stock awards at a share price of $20.22.
These Non-Executive Directors restricted share awards vested on July 6, 2023 and 18,450 were issued. Of
the total 29,676 number of shares vesting, 11,226 shares were held back from issue by the Company as
settlement towards personal tax liabilities arising on the vested shares.
On July 6, 2023, after the Company's annual general meeting of shareholders, the current
Non-Executive Directors were granted 35,082 restricted stock awards at a share price of $17.10.
The total charge for Non-Executive Directors' grants within the Consolidated Statement of
Profit or Loss for the year ended December 31, 2023 for stock compensation awards was €0.6 million (year
ended December 31, 2022: €0.6 million; year ended December 31, 2021: €0.8 million).
F-31
Directors' and Senior Management Share Awards
As part of its long term incentive initiatives, the Company has outstanding awards over
2,503,002 ordinary shares granted to certain members of its management team (the “Management Share
Awards”) as of the following award dates:
January 1,
2018 Award
January 1,
2019 Award
January 1,
2020 Award
January 1,
2021 Award
January 1,
2022 Award
Other
Awards
Total
Number of awards
outstanding at
January 1, 2022
New awards
granted in the
period
431,790
152,695
645,093
787,277
—
—
2,016,855
—
—
—
—
964,518
176,000
1,140,518
—
Forfeitures in the
period
Awards vested and
issued in the period (237,800)
Number of awards
outstanding at
December 31, 2022 193,990
—
(46,920) (103,728)
(69,768)
—
—
—
—
—
—
(220,416)
(237,800)
152,695
598,173
683,549
894,750
176,000
2,699,157
January 1,
2018 Award
January 1,
2019 Award
January 1,
2020 Award
January 1,
2021 Award
January 1,
2022 Award
January 1,
2023 Award
Other
Awards
Total
Number of awards
outstanding at
January 1, 2023
New awards
granted in the
period
193,990
152,695
598,173
683,549
894,750
—
176,000
2,699,157
—
—
—
—
—
1,209,137
87,000
1,296,137
—
—
(11,735)
Forfeitures in the
period
Awards lapsed in
the period
Awards vested and
issued in the period (193,990) (152,695) (414,859)
Number of awards
outstanding at
December 31, 2023
(171,579)
—
—
—
—
—
(77,949) (164,156) (205,329) (100,000)
(559,169)
—
—
—
—
—
—
—
—
(171,579)
(761,544)
605,600
730,594
1,003,808
163,000
2,503,002
The 2018 award had 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 vested on January 1,
2022.
F-32
For the 2019, 2020, 2021 and 2022 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, 173,293 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 had vesting conditions based on three-year cumulative EBITDA and Net Sales, and
Company share price performance measures. One third of the total share award was assigned to each type
of performance measure. All shares were subject to a holding period of an additional year and required that
the participants to the scheme were still actively employed during the entire four year period, through
January 1, 2023.
For the 2020, 2021 and 2022 Management Share Awards, the awards will vest upon 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 share
price tranche is worth 25% of the total award. Specific information on each grant is further included below.
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.
All shares vested, subject to satisfaction of the award conditions, on January 1, 2023.
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.
All shares vest, subject to satisfaction of the award conditions, on January 1, 2024.
In January 2022, 1,140,518 restricted share awards were granted as part of the 2022
Management Share Award and two new restricted share award plans ("Other awards"). The performance
period associated with the awards began either on January 1, 2022 or January 1, 2023. All shares vest,
subject to satisfaction of a range of award conditions from January 2025 to January 2026, with the majority
of shares vesting January 1, 2025, subject to certain Company performance conditions.
In the first quarter 2023, a revision to the January 1, 2021 and 2022 Management Share
Award schemes occurred, resulting in changes to how EBITDA performance is used to measure the number
of shares able to vest over the entire scheme. This change resulted in it being more likely that the
performance measure would be achieved during the period. The incremental fair value granted as a result
of the modifications made to the January 1, 2021 and 2022 Management Share Awards was $9.0 million
(€8.5 million) and $11.4 million (€10.8 million), respectively.
In September 2023, 1,209,137 restricted share awards were granted as part of the 2023
Management Share Award. The performance period associated with the awards began on January 1, 2023.
All shares vest, subject solely to the satisfaction of Company cumulative EBITDA performance conditions,
on January 1, 2026. Also in the year, 87,000 restricted share awards were granted ("Other awards"). The
performance period associated with these awards began on January 1, 2023 and vests on January 1, 2026,
subject to certain Company performance conditions.
In March 2022, 237,800 restricted shares granted as part of the 2018 Management Share
Awards vested as a result of the satisfaction of the applicable EBITDA Performance Condition (based on a
share price of $25.17 at time of vesting), resulting in the issuance of 137,810 ordinary shares to participants
in the LTIP (net of 99,990 ordinary shares held back from issue by the Company as settlement towards
personal tax liabilities arising on the vested ordinary shares).
In January 2023, the remaining 193,990 restricted shares granted as part of the 2018
Management Share Awards vested as a result of the satisfaction of the previously achieved applicable
Share Price Performance Condition (based on a share price of $17.24), resulting in the issuance of 110,781
ordinary shares to participants in the LTIP (net of 83,209 ordinary shares held back from issue by the
Company as settlement towards personal tax liabilities arising on the vested ordinary shares).
F-33
In January 2023, 152,695 restricted shares granted as part of the 2019 Management Share
Awards vested as a result of the satisfaction of the applicable EBITDA Performance Condition (based on a
share price of $17.24 at time of vesting), resulting in the issuance of 79,575 ordinary shares to participants
in the LTIP (net of 73,120 ordinary shares held back from issue by the Company as settlement towards
personal tax liabilities arising on the vested ordinary shares).
In February 2023, 414,859 restricted shares granted as part of the 2020 Management
Share Awards vested as a result of the satisfaction of the applicable EBITDA Performance Condition (based
on a share price of $17.77 at time of vesting), resulting in the issuance of 222,780 ordinary shares to
participants in the LTIP (net of 192,079 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, 2023 related to the directors' and senior management share awards
is €23.5 million (year ended December 31, 2022: €7.5 million: year ended December 31, 2021: €4.3
million).
The Company calculated the cost of the 2020, 2021 and 2022 Management Share Awards
based upon their fair 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, as well as expected exercise period and the payment of dividends by the Company. For the
2023 Management Share Award, the Monte Carlo model was not required as there were no market
conditions associated with share price. The inputs and assumptions underlying the Monte Carlo models for
all awards outstanding as of the valuation date are now as follows:
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, 2021
award
January 1, 2022
award *
January 1, 2023
award *
$
$
25.42
—
$
$
25.39
—
$
$
17.24
—
3.00 years
30.0 %
— %
0.24 %
14.0 %
35.0 %
3.00 years
28.0 %
— %
1.15 %
14.0 %
35.0 %
3.00 years
N/A
N/A
N/A
18.0 %
75.0 %
*Note: The table above does not include details on Other awards granted in 2022 and 2023 that only
require continued employment over the vesting period and have only non-company wide specific
performance conditions.
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, owing to the age of the Company at the time of issue.
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:
• 2021 award - $16.0 million (€15.1 million)
• 2022 award - $19.0 million (€17.9 million)
• 2023 award - $7.5 million (€7.0 million)
• Other awards - $3.8 million (€3.4 million)
F-34
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,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
€m
3.5
11.6
0.3
15.4
1.8
3.5
0.3
5.6
2.2
2.4
0.3
4.9
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.
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
Reversal of impairment loss on short term investments
Net financing gain recognized on debt transactions (a)
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 (b)
Cross-currency interest rate swaps: cash flow hedges, transfer from
equity (c)
Net impairment loss on short-term investments
Net pension interest costs
Other interest expense (d)
Amortization of debt discounts and 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 (e)
Financing costs incurred in amendment of terms of debt (f)
Finance costs
Net finance costs
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
2
2
2
2
2
2
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
€m
5.8
0.3
16.7
—
22.8
0.6
—
2.3
9.2
12.1
0.1
—
—
—
0.1
(123.8)
(79.8)
(59.8)
32.7
—
(4.6)
(3.5)
(6.4)
(3.0)
(1.0)
—
18.8
—
(2.8)
—
(2.7)
—
—
—
(109.6)
(86.8)
(66.5)
(54.4)
1.6
(8.6)
(1.7)
—
(2.0)
(4.0)
(13.7)
(17.9)
(106.1)
(106.0)
(a) Net income in 2023 of €16.7 million has been recognized from the repricing of debt in September 2023, as detailed in
Note 20, representing a modification gain net of transaction costs. Net income in 2022 of €2.3 million has been recognized
as a consequence of the refinancing on November 8, 2022, also detailed in Note 20. Of this income in 2022, income of
€10.2 million relates to the recognition of deferred gains on cross currency interest rate swaps where the hedged cash
flows are no longer expected to occur. This is offset in part by €2.3 million of associated expenses, a non-cash €4.3 million
loss on settlement as well as a charge of €1.3 million from the write-off of deferred transaction costs.
(b) Includes the unwinding of discounting on lease liabilities.
F-35
(c) As part of the refinancing on November 8, 2022 as detailed in Note 32, €23.5 million of the cash flow hedge reserve
relating to the portion of the refinanced USD debt for which cash flows are still expected to occur is being released to the
Statement of Profit or Loss in alignment to the original hedged cash flows. (2022: €3.9 million, 2021: nil).
(d) Other interest expense includes interest on tax relating to legacy tax audits.
(e) Net fair value losses on derivatives held at fair value through profit or loss in 2021 included a one-off non-cash charge
of €7.8 million for changes to cross currency interest rate swaps as disclosed in Note 20.
(f) Charges of €17.9 million have been recognized as a consequence of the refinancing in June 2021, as disclosed in Note
20. 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
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
Note
€m
€m
€m
(60.7)
(4.5)
(65.2)
5.2
(0.9)
4.3
16
(69.9)
(117.5)
5.8
0.6
(64.1)
(116.9)
(4.4)
(2.7)
(7.1)
116.3
(55.1)
61.2
(55.7)
Total tax expense
(60.9)
(71.2)
Reconciliation of effective tax rate:
Profit before tax
Tax charge at the standard UK corporation tax rate 23.5% (2022: 19.0%;
2021: 19.0%)
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,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
€m
253.6
321.0
236.7
(59.6)
(3.5)
0.8
(11.7)
5.7
12.8
(0.9)
—
(4.5)
(60.9)
(61.0)
(16.3)
(0.2)
(3.1)
(2.5)
8.8
(2.7)
—
5.8
(45.0)
22.7
0.1
2.5
(1.5)
(52.5)
(55.1)
72.5
0.6
(71.2)
(55.7)
The Company is resident in the United Kingdom for tax purposes. The effective tax rate for the year ended
December 31, 2023 was 24.0% (year ended December 31, 2022: 22.2%). The change is principally caused by the
increase in the corporation tax rate in the United Kingdom.
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. Provisions for uncertain tax positions 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
F-36
quantified and management assesses that the risk of that exposure crystallizing is probable, 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 tax 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, 2023, the current tax payable of €189.5 million and deferred tax assets of €106.9 million includes
provisions for uncertain tax positions of €125.7 million. As of December 31, 2022, the current tax payable of €183.0 million
and deferred tax assets of €100.4 million included provisions for uncertain tax positions of €152.9 million.
The UK statutory rate of corporation tax increased from 19% to 25% with effect from April 1, 2023. The
change was substantively enacted on May 24, 2021 and the increase gave rise to a substantial one-off deferred tax
expense in 2021. The average UK statutory rate of corporation tax was 23.5% for the year ended December 31, 2023
(year ended December 31, 2022: 19.0%; year ended December 31, 2021: 19.0%).
F-37
The tax (benefit)/expense relating to components of other comprehensive income is as follows:
Year ended December 31, 2023
Remeasurement of post-employment benefit liabilities
Net investment hedge
Cash flow hedges
Other comprehensive loss/(income)
Current tax
Deferred tax
Year ended December 31, 2022
Remeasurement of post-employment benefit liabilities
Net investment hedge
Cash flow hedges
Other comprehensive (income)/loss
Current tax
Deferred tax
Year ended December 31, 2021
Remeasurement of post-employment benefit liabilities
Net investment hedge
Cash flow hedges
Other comprehensive loss/(income)
Current tax
Deferred tax
Before tax
Tax benefit
After tax
Note
€m
€m
€m
26.7
(11.7)
58.7
73.7
20.4
(11.7)
40.2
48.9
(6.3)
—
(18.5)
(24.8)
—
(24.8)
(24.8)
16
Before tax
Tax charge
After tax
Note
€m
€m
€m
(108.1)
15.8
(67.8)
(160.1)
(82.0)
15.8
(64.5)
(130.7)
26.1
—
3.3
29.4
—
29.4
29.4
16
Before tax
Tax charge
After tax
€m
€m
€m
(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
Amounts recognized directly in equity
Aggregate current and deferred tax arising in the reporting period is not recognized in either net profit or loss or other
comprehensive income but is directly credited to equity. These relate to the payment of employer taxes on shares issued
under management share awards.
Current tax benefit
Deferred tax (charge)/benefit
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
€m
0.3
(1.5)
(1.2)
0.3
2.0
2.3
—
—
—
F-38
12)
Property, plant and equipment
Owned property, plant and equipment (i)
Right-of-use assets (ii)
Property, plant and equipment
December 31,
2023
December 31,
2022
€m
€m
501.6
62.1
563.7
493.9
49.0
542.9
(i)
Owned property, plant and equipment
Land and
buildings
€m
Plant and
equipment
Computer
equipment
€m
€m
Total
€m
Cost
Balance at December 31, 2021
Additions
Transfer to intangible assets (note 13)
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2022
Additions
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2023
Accumulated depreciation and impairment
Balance at December 31, 2021
Depreciation
Transfer to intangible assets (note 13)
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2022
Depreciation
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2023
Net book value December 31, 2021
Net book value December 31, 2022
Balance at December 31, 2023
Assets under construction
216.7
13.6
—
(0.1)
(4.2)
226.0
14.2
494.2
57.0
—
(5.3)
(17.3)
528.6
49.1
19.7
1.8
(1.7)
(5.6)
—
14.2
4.3
(1.8)
(1.9)
(0.3)
0.8
239.2
40.5
10.3
—
—
(2.2)
48.6
10.5
1.4
577.2
191.3
44.3
—
(4.6)
(11.5)
219.5
47.1
0.1
18.3
9.6
3.1
(0.1)
(5.6)
(0.2)
6.8
2.1
(1.5)
(1.0)
(0.2)
0.3
57.9
176.2
177.4
181.3
0.8
266.4
302.9
309.1
310.8
0.1
8.8
10.1
7.4
9.5
730.6
72.4
(1.7)
(11.0)
(21.5)
768.8
67.6
(4.0)
2.3
834.7
241.4
57.7
(0.1)
(10.2)
(13.9)
274.9
59.7
(2.7)
1.2
333.1
489.2
493.9
501.6
Additions for the year ended December 31, 2023 include assets under construction of €43.9 million (year
ended December 31, 2022: €31.0 million).
F-39
Security
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,
2023
December 31,
2022
€m
€m
42.8
19.2
0.1
62.1
35.0
13.9
0.1
49.0
Additions to right-of-use assets during the year ended December 31, 2023 were €31.7 million (year ended
December 31, 2022: €10.8 million).
Lease liabilities are included within loans and borrowings in Note 20. 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 Consolidated
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,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
€m
19.8
7.7
0.1
27.6
15.2
6.8
0.1
22.1
10.9
5.5
0.2
16.6
F-40
13)
Goodwill and Intangibles
Cost
Balance at December 31, 2021
Acquisitions through business combinations
Additions
Transfer from property, plant and equipment (note 12)
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2022
Additions
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2023
Accumulated amortization and impairment
Balance at December 31, 2021
Amortization
Impairment
Transfer from property, plant and equipment (note 12)
Disposals
Effect of movements in foreign exchange
Balance at December 31, 2022
Amortization
Balance at December 31, 2023
Net book value December 31, 2021
Net book value December 31, 2022
Net book value December 31, 2023
Goodwill
Brands
Computer
software
Customer
relationships
€m
€m
€m
€m
Total
€m
2,099.4
2,422.1
2.0
—
—
—
0.2
—
—
—
—
3.5
2,101.6
2,425.6
—
—
3.4
—
—
4.5
2,105.0
2,430.1
42.9
—
11.3
1.7
(0.1)
(0.3)
55.5
13.9
(0.1)
—
69.3
35.3
4,599.7
—
—
—
—
—
2.0
11.3
1.7
(0.1)
3.4
35.3
4,618.0
—
—
—
13.9
(0.1)
7.9
35.3
4,639.7
Goodwill
Brands
Computer
software
Customer
relationships
€m
€m
€m
€m
Total
€m
—
—
—
—
—
—
—
—
—
6.8
1.1
—
—
—
—
7.9
0.6
8.5
2,099.4
2,415.3
2,101.6
2,417.7
2,105.0
2,421.6
24.0
5.1
—
0.1
(0.1)
(0.4)
28.7
5.3
34.0
18.9
26.8
35.3
13.8
44.6
2.6
5.8
—
—
—
22.2
1.8
24.0
8.8
5.8
0.1
(0.1)
(0.4)
58.8
7.7
66.5
21.5
4,555.1
13.1
4,559.2
11.3
4,573.2
Amortization of €7.7 million (2022: €8.8 million; 2021: €8.2 million) is included in ‘other operating expenses’
in the Consolidated Statement of Profit or Loss. The Impairment charge for the year was nil (2022: impairment of
customer relationships of €5.8 million; 2021: impairment of computer software €1.7 million) is included in exceptional
items 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, as set out above, and indefinite life brand values of €2,420.9 million
(December 31, 2022: €2,416.4 million) have been allocated to the Frozen segment, which 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 the carrying values. The review is performed using the discounted cash flows model
whereby a comparison of the carrying values to the value in use is made. 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.
F-41
Key assumptions
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 2024 to 2028. Beyond 2028 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.
Future cash flows make assumptions over consumers' responses to price increases which are
inherently less predictable in times of high inflation. Specific risks considered are set out in Item
3D: Key Information - Risk Factors.
In relation to the ongoing conflict in Ukraine, management assume that there are no further
material changes to economic sanctions and tariffs impacting the availability and cost of raw
materials and resources. Specific risks regarding the conflict are set out in Item 3D: Key
Information - Risk Factors.
The impact of climate change on future cash flows has been considered in future cash flows.
Specific risks considered are set out in Item 3D: Key Information - Risk Factors.
Profit margins: projected margins reflect historical performance.
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 10.4% (2022: 8.3%) was applied to the cash
flows. This discount rate has been calculated using a capital asset pricing model using
observable market data for comparable companies as well as 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% (2022: 1.0%). These rates do not reflect the long-term assumptions used by the
Company for investment planning and exclude expectations of future inflation.
Sensitivity to changes in assumptions
Impairment was not required in either the year ended December 31, 2023, or December 31, 2022. 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 or indefinite-
lived intangible assets.
14)
Acquisitions
(a)
Purchase consideration - cash outflow
Cash flows include post-transaction payments for the settlement of contingent consideration for the
Fortenova Acquisition which completed in 2021.
Outflow of cash for business combinations, net
of cash acquired
Net cash consideration (received)/paid
Less cash acquired
Net (inflow)/outflow of cash - investing activities
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
€m
€m
€m
—
—
—
(0.4)
—
(0.4)
640.9
(43.6)
597.3
F-42
Class of
shares held
Ownership
15)
Investments
The following are the Company's significant investments as of December 31, 2023.
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
Activity
Country of
incorporation
Holding
England
Holding
England
Holding
Holding/
Finance
Finance
Finance
England
England
England
Luxembourg
Management
England
Trading
England
Country of tax
residence
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
Luxembourg
United
Kingdom
United
Kingdom
United
Kingdom
Republic of
Ireland
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
England
Republic of
Ireland
Germany
Germany
Netherlands Netherlands
Belgium
Portugal
Austria
Italy
Sweden
Germany
Germany
Germany
Austria
Sweden
Sweden
France
France
Spain
Belgium
Portugal
Austria
Italy
Sweden
Germany
Germany
Germany
Austria
Sweden
Sweden
France
France
Spain
Denmark
Denmark
Finland
Norway
Norway
Sweden
Finland
Norway
Norway
Sweden
Switzerland
Switzerland
Croatia
Croatia
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
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Serbia
Serbia
Ordinary
F-43
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%
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)
Trading
Trading
Bosnia &
Herzegovina
Croatia
Bosnia &
Herzegovina
Croatia
Ordinary
Ordinary
Trading
Hungary
Hungary
Ordinary
100%
100%
100%
Trading
Slovenia
Slovenia
Ordinary
100%
Trading
Montenegro Montenegro
Ordinary
Ledo Sh.p.k.
FRIKOM BEOGRAD DOOEL Cucer
Sandevo
Trading
Trading
Kosovo
North
Macedonia
Kosovo
North
Macedonia
Ordinary
Ordinary
16)
Deferred tax assets and liabilities
Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
100%
100%
100%
Property, plant and equipment
Intangible assets
Employee benefits
Tax value of loss carry forwards
Derivative financial instruments
Other
Tax assets/(liabilities)
December 31, 2023
December 31, 2022
Assets
Liabilities
€m
€m
Total
€m
Assets
Liabilities
€m
€m
Total
€m
8.8
7.9
17.8
51.1
8.6
12.7
(38.2)
(29.4)
(376.1)
(368.2)
—
—
(0.7)
(10.1)
17.8
51.1
7.9
2.6
6.2
29.9
13.0
43.8
0.1
7.4
(39.9)
(33.7)
(384.6)
(354.7)
—
—
(8.9)
(12.3)
13.0
43.8
(8.8)
(4.9)
106.9
(425.1)
(318.2)
100.4
(445.7)
(345.3)
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 €78.5
million (December 31, 2022: €65.2 million). These deferred tax assets had not been recognized as the likelihood of
recovery is not probable.
F-44
Movement in deferred tax during the year:
Opening
balance Jan 1,
2023
Recognized
in Statement of
Profit or Loss
Recognized
in Other
Comprehensive
Income
Recognized
directly in
equity
Movement
in foreign
exchange
Closing balance
Dec 31, 2023
€m
€m
€m
€m
€m
€m
(33.7)
(354.7)
13.0
43.8
(8.8)
(4.9)
(345.3)
4.2
(13.5)
(0.1)
6.9
(1.7)
8.5
4.3
—
—
6.3
—
18.5
—
24.8
—
—
(1.5)
—
—
—
(1.5)
0.1
—
0.1
0.4
(0.1)
(1.0)
(0.5)
(29.4)
(368.2)
17.8
51.1
7.9
2.6
(318.2)
Opening
balance Jan 1,
2022
Recognized
in Statement of
Profit or Loss
Recognized
in Other
Comprehensive
Income
Recognized
directly in
equity
€m
€m
€m
€m
Movement
in foreign
exchange
€m
Closing balance
Dec 31, 2022
€m
(25.5)
(349.1)
36.4
40.4
(5.3)
(6.2)
(309.3)
(8.7)
(4.8)
1.0
4.8
(0.5)
1.1
(7.1)
—
—
(26.1)
—
(3.3)
—
(29.4)
—
—
2.0
—
—
—
2.0
0.5
(0.8)
(0.3)
(33.7)
(354.7)
13.0
(1.4)
43.8
0.3
0.2
(8.8)
(4.9)
(1.5)
(345.3)
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
17)
Inventories
Raw materials and consumables
Work in progress
Finished goods and goods for resale
Total inventories
December 31,
2023
December 31,
2022
€m
€m
125.6
67.0
253.8
446.4
134.2
64.6
258.3
457.1
As at December 31, 2023, the carrying value of inventory includes a hedge accounting basis adjustment
which reduces the value of inventory by €0.4 million (year ended December 31, 2022: reduction of €8.4 million). This has
been applied to the three inventory categories above.
During the year ended December 31, 2023, €13.6 million (year ended December 31, 2022: €11.5 million,
year ended December 31, 2021: €8.3 million) was charged to the Consolidated Statement of Profit or Loss for the write
down of inventories.
F-45
18)
Trade and other receivables
Current assets
Trade receivables
Prepayments and accrued income
Other receivables
Total current trade and other receivables
Non-current assets
Other receivables
Total non-current trade and other receivables
Total trade and other receivables
December 31,
2023
December 31,
2022
€m
€m
208.3
16.0
39.1
263.4
7.1
7.1
211.2
15.9
34.6
261.7
8.1
8.1
270.5
269.8
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, 2023
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, 2022
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
392.6
40.5
4.6
2.3
4.2
444.2
(0.1)
(0.9)
(0.2)
(0.3)
(3.0)
(4.5)
392.5
39.6
4.4
2.0
1.2
439.7
(231.4)
208.3
Gross
€m
Impaired
€m
Net
€m
391.0
41.3
5.8
2.8
5.0
445.9
(0.2)
(0.1)
(0.3)
(0.1)
(2.6)
(3.3)
390.8
41.2
5.5
2.7
2.4
442.6
(231.4)
211.2
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.
The Company has previously entered into facilities with third-party banks/credit providers in which the
Company 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. No trade receivables have been derecognized at
the period end (December 31, 2022: € nil)
F-46
Liabilities related to contracts with customers
The Company has recognized the following liabilities related to contracts with customers:
Trade terms liabilities reported within trade receivables
Trade terms liabilities reported within trade and other payables (Note 21)
Total trade terms liabilities
Significant changes to trade terms
Year ended
December 31,
2023
Year ended
December 31,
2022
€m
€m
(231.4)
(231.4)
(75.5)
(63.4)
(306.9)
(294.8)
No significant changes to trade terms occurred in the year ended December 31, 2023.
Revenue recognized in relation to trade terms
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, 2023 relating to performance obligations that were satisfied in the
prior year was €21.5 million (2022: €19.0 million).
19)
Cash and cash equivalents
December 31,
2023
December 31,
2022
Note
€m
€m
Cash and cash equivalents in the Statement of Financial Position
Bank overdraft
Cash and cash equivalents per Consolidated Statement of Cash Flows
21
412.9
(13.2)
399.7
369.7
(2.9)
366.8
‘Cash and cash equivalents’ comprise cash balances and deposits. 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 Consolidated Statement of Cash Flows.
20)
Loans and borrowings
The repayment profile of the syndicated and other loans held by the Company is as follows:
Current liabilities
Syndicated loans
Lease liabilities
Less capitalized debt discounts and borrowing costs to be amortized within 1 year
Total due in less than one year
Non-current liabilities
Syndicated loans
2028 fixed rate senior secured notes
Lease liabilities
Less capitalized debt discounts and borrowing costs to be amortized in 2-5 years
Less capitalized debt discounts and borrowing costs to be amortized in more than 5 years
Total due after more than one year
Total borrowings
December 31,
2023
December 31,
2022
€m
€m
6.5
21.4
(6.5)
21.4
1,287.6
800.0
57.4
(26.6)
(4.7)
2,113.7
2,135.1
6.7
22.3
(6.4)
22.6
1,333.5
800.0
44.3
(25.4)
(10.1)
2,142.3
2,164.9
Syndicated loans includes the Senior U.S. Dollar debt of $700.0 million (€656.7 million) (the “Senior USD
Loan”) and Senior EUR debt of €130.0 million (a "Senior EUR Loan") both repayable in November 2029, as well as the
Senior EUR debt of €553.2 million (a "Senior EUR Loan") repayable in June 2028. The Senior USD Loan includes an
annual amortization repayment, equivalent to 1.0% of the original issuance value or $7.0 million (€6.3 million) in October
each year beginning in 2023 until maturity. The Senior EUR Loans are repayable only upon maturity. As required under
F-47
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.
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
includes a pricing structure linked to environmental impact metrics during the life of the facility, this covers areas of
sourcing, packaging and carbon emissions.
Charges of €17.9 million were 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.
On November 8, 2022, the Company amended and restated the Senior Facilities Agreement to issue both a
$700.0 million (€700.6 million) term loan bearing interest at a rate per annum equal to the term SOFR rate plus 3.75% with
a 0.5% floor and a €130.0 million term loan bearing interest at a rate per annum equal to EURIBOR plus 3.5% with a zero
floor, both due November 10, 2029. The net proceeds from these loans were used to repay and extinguish the Company's
existing Senior Secured U.S. Dollar term loan due in 2024 in full, and for transaction expenses and general corporate
purposes. The new term loans were issued at a discount of €31.3 million, which together with eligible transaction costs of
€5.1 million have been capitalized and will be amortized over the life of the debt. On November 10, the Company closed
out its existing cross currency interest rate swaps and has entered into a number of new 5-year cross-currency and
interest rate swaps for the new Term Loans, as detailed in Note 32.
A net income of €2.3 million has been recognized as a consequence of the refinancing activities in 2022 as
detailed in Note 10.
F-48
On September 22, 2023 the Company completed a repricing of its $693.0 million term loan due 2029 which
reduced the interest rate from SOFR plus 3.75% to SOFR plus 3.0%. There are no changes to the maturity of the Term
Loan as a result of this repricing. The repricing represents a modification of a financial liability, such that a modification
gain of €17.2 million has been recognized, representing the difference between the remaining original contractual cash
flows and the modified cash flows, both discounted at the original effective interest rate. Eligible transaction costs
associated with the modification of €2.4 million have been added to the loan carrying amount and amortized over the
remaining loan term. The carrying amount of the loan is revised to reflect the new cash outflows at the date of
modification.
In addition to the Revolving Credit Facility, the Company also has an aggregate of €12.3 million
(December 31, 2022: nil) available through other revolving credit facilities. As at December 31, 2023 €2.7 million
(December 31, 2022: €1.8 million) of the revolving credit facilities have been utilized for issuance of letters of credit and
bank guarantees.
Guarantees and secured assets
The senior loans, Senior Secured Notes and any drawn balances of the Revolving Credit Facility are
secured with equal ranking against assets of the Company and specified subsidiaries.
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 2023 the amount repaid was
nil relating to the calculation performed at the end of 2022. Based on the calculation performed for December 31, 2023,
there will be no excess cash flow repayment in 2024.
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, 2023 Findus
Sverige AB has granted floating charges over certain assets in favor of PRI in an amount of SEK 300 million (€27.0
million) (December 31, 2022: €27.0 million) and Nomad Foods Limited has issued a parent guarantee to PRI which will
not exceed SEK 640 million (€57.6 million) (December 31, 2022: SEK 640 million (€57.5 million)).
F-49
21)
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,
2023
December 31,
2022
€m
€m
400.6
186.2
75.5
30.6
20.1
43.6
13.2
769.8
0.5
0.5
770.3
433.3
126.4
63.4
25.0
18.3
26.1
2.9
695.4
1.1
1.1
696.5
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, 2023, there was no material usage of the programs (December 31, 2022: nil). The cash outflows in respect
of these arrangements will be recognized within operating cash flows.
22)
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, 2023 was €14.1
million (year ended December 31, 2022: €13.4 million, year ended December 31, 2021: €10.2 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-Italy
Net employee benefit obligations-Switzerland
Net employee benefit obligations-Austria
Net employee benefit obligations-total of other countries
Total net employee benefit obligations
F-50
December 31,
2023
December 31,
2022
€m
€m
90.7
49.8
4.0
3.3
3.0
7.5
158.3
69.4
45.4
4.0
3.4
2.8
7.1
132.1
The net obligation of €7.5 million (December 31, 2022: €7.1 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 Consolidated 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, 2023
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, 2022
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
58.8
203.1
261.9
(110.0)
151.9
6.4
—
6.4
—
6.4
Defined
benefit
retirement
plans
Post-
employment
medical
benefits
and other
benefits
€m
€m
54.0
179.3
233.3
(107.6)
125.7
6.4
—
6.4
—
6.4
Total
€m
65.2
203.1
268.3
(110.0)
158.3
Total
€m
60.4
179.3
239.7
(107.6)
132.1
F-51
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:
Present value of defined
benefit obligation
Fair value of plan assets
Net defined benefit
obligation
2023
€m
2022
€m
2023
€m
2022
€m
2023
€m
2022
€m
239.7
352.6
(107.6)
(108.4)
132.1
244.2
6.2
3.8
10.0
—
(3.5)
(3.5)
—
(1.0)
(1.0)
3.4
4.6
8.0
6.2
2.8
9.0
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 loss/(gain) arising from:
–
–
demographic assumptions
financial assumptions
–
experience adjustment
Loss on plan assets, excluding interest
income
Exchange adjustments
Other
Contributions by employer
Contributions by members
Benefits paid
Other movements
3.4
8.1
11.5
0.5
15.8
9.8
—
1.8
(1.8)
(118.4)
7.7
—
(3.5)
27.9
(116.0)
—
1.0
—
3.2
(10.4)
(10.1)
(1.4)
—
(10.8)
(6.9)
—
—
—
0.6
(1.1)
(0.5)
(1.9)
(1.0)
4.5
—
1.6
—
—
—
4.4
(0.7)
3.7
(1.4)
(3.2)
2.7
—
(1.9)
0.5
15.8
9.8
0.6
0.7
(1.8)
(118.4)
7.7
4.4
(4.2)
27.4
(112.3)
(1.9)
—
(5.9)
(1.4)
(9.2)
(1.4)
—
(7.4)
—
(8.8)
Balance at December 31
268.3
239.7
(110.0)
(107.6)
158.3
132.1
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 gains recognized is as follows:
Cumulative amount of actuarial gains 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
F-52
Year ended
December 31,
2023
Year ended
December 31,
2022
€m
€m
45.1
71.8
December 31,
2023
December 31,
2022
€m
€m
36.7
35.1
23.0
15.2
110.0
37.6
34.8
23.1
12.1
107.6
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, 2023
Discount rate
Inflation rate
Rate of increase in salaries
Rate of increase for pensions in payment
Germany
Sweden
Austria
Switzerland
Italy
3.35 %
2.20 %
3.00 %
3.20 %
1.60 %
2.60 %
1.00%-2.20%
2.00 %
3.90 %
5.00 %
5.00 %
—
1.75 %
1.25 %
1.75 %
—
3.04 %
2.30 %
3.23 %
—
Defined benefit
retirement plans
December 31, 2022
Discount rate
Inflation rate
Rate of increase in salaries
Rate of increase for pensions in payment
Germany
Sweden
Austria
Switzerland
Italy
3.80 %
2.20 %
2.80 %
4.00 %
2.00 %
3.00 %
1.00%-2.20%
2.00 %
3.20 %
5.00 %
5.00 %
—
1.95 %
1.25 %
1.75 %
—
3.50 %
2.50 %
3.38 %
—
Defined benefit
retirement plans
In valuing the liabilities of the pension fund at December 31, 2023 and December 31, 2022, 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 23
Austria: AVÖ 2018 - P
Switzerland: BVG 2020 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. The average life expectancy of an individual retiring at the end of the year is not a relevant assumption for
Italy as all defined benefit liabilities are settled at, or before, the time of retirement.
December 31, 2023 (years)
Retiring at the end of the year:
Male
Female
December 31, 2022 (years)
Retiring at the end of the year:
Male
Female
Germany
Sweden
Austria
Switzerland
Italy
21
25
22
24
24
26
22
24
Germany
Sweden
Austria
Switzerland
Italy
21
25
22
24
23
26
22
24
N/A
N/A
N/A
N/A
F-53
The history of experience adjustments from inception of the Company for the employee benefit plans is as
follows:
Present value of defined benefit obligations
Fair value of plan assets
Recognized liability in the scheme
Experience losses on plan liabilities
Experience losses/(gains) on plan assets
Net defined benefit obligation - sensitivity analysis
December 31,
2023
December 31,
2022
December 31,
2021
€m
€m
€m
261.9
(110.0)
151.9
9.8
0.6
233.3
(107.6)
125.7
7.7
4.4
341.5
(108.4)
233.1
1.8
(9.6)
The effect of a 1 percentage point movement in the most significant assumptions for the year ended
December 31, 2023 is as follows:
Discount rate
Inflation rate
Rate of increase in salaries
Rate of increase for pensions in payment
Increase
Decrease
€m
€m
(32.7)
27.5
6.5
27.8
41.3
(21.8)
(5.5)
(20.4)
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, 2024 are €7.5 million. The weighted
average duration of the defined benefit obligations is 15.2 years.
F-54
23)
Provisions
Balance at December 31, 2021
Additional provision in the period
Release of provision
Utilization of provision
Foreign exchange
Balance at December 31, 2022
Additional provision in the period
Release of provision
Utilization of provision
Balance at December 31, 2023
Analysis of total provisions:
Current
Non-current
Total
Restructuring
Restructuring
Provisions
related to
other taxes
€m
€m
Other
€m
Total
€m
5.6
2.6
(0.6)
(2.5)
(0.3)
4.8
21.9
(6.3)
(7.7)
12.7
7.9
0.9
—
(0.1)
—
8.7
—
(1.0)
(0.1)
28.7
2.4
(3.4)
(3.4)
(0.4)
23.9
4.6
(3.0)
(9.3)
42.2
5.9
(4.0)
(6.0)
(0.7)
37.4
26.5
(10.3)
(17.1)
7.6
16.2
December 31,
2023
36.5
December 31,
2022
€m
€m
35.1
1.4
36.5
36.1
1.3
37.4
The €12.7 million (2022: €4.8 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.
Provisions relating to other taxes
The €7.6 million (2022: €8.7 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 €1.1 million (December 31, 2022: €2.8 million) of contingent liabilities acquired as
part of the Goodfella’s Pizza acquisition, €2.8 million (December 31, 2022: €2.8 million) of obligations in Italy, €6.1 million
(December 31, 2022: €4.3 million) for asset retirement obligations, €0.6 million (December 31, 2022: €0.9 million) of pre-
acquisition related liabilities related to the acquisition date liabilities of Aunt Bessie's Limited, €2.8 million (December 31,
2022: €2.2 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-55
24)
Share capital and capital reserve, Founder Preferred Shares Dividend amount and Dividends
Share capital and capital reserve
Comprised of share capital and share premium.
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:
As at
December 31,
2023
As at
December 31,
2022
€m
€m
n/a
n/a
n/a
n/a
163,167,134 (December 31, 2022: 172,550,253) Ordinary Shares with nil nominal value
1,453.4
1,613.2
Nil (December 31, 2022: 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
Ordinary Shares
Balance at December 31, 2021
Shares issued in the year
Shares repurchased in the year
Balance at December 31, 2022
Shares converted from Founder Preferred Shares
Shares issued in the year
Shares repurchased in the year
Balance at December 31, 2023
—
10.6
1,453.4
1,623.8
(27.3)
(27.1)
1,426.1
1,596.7
Issued and
Repurchased
Ordinary shares
(number in
millions)
173.6
0.2
(1.2)
172.6
1.5
0.4
(11.3)
163.2
Note 8(b) sets out the Non-Executive Directors' and Directors' and Senior Management Restricted share
awards.
Note 26 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. During 2021, 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.
F-56
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 attributable transaction costs of €0.1 million
were incurred. During 2022, a further 1,160,547 ordinary shares were repurchased and canceled in open market
transactions at an average price of $26.23 for aggregate gross costs of $30.5 million (€26.8 million) under this
authorization. Directly attributable transaction costs were immaterial. During 2023, a further 11,314,705 ordinary shares
were repurchased and canceled in open market transactions at an average price of $16.33 for aggregate gross costs of
$185.0 million (€170.9 million) under this authorization. Directly attributable costs of €0.2 million were incurred.
On November 6, 2023, the Company's Board of Directors authorized a new share repurchase program to
purchase up to an aggregate of $500.0 million of the Company’s ordinary shares. 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. This new program replaces the
previous authorization which was established in August 2021 and finished at the end of 2023. The new program will expire
at the end of 2026.
From January 1, 2024 to February 27, 2024, the Company has repurchased an additional 447,962 ordinary
shares in open market transactions for $7.8 million (€7.1 million) under its previously announced share repurchase
program authorized by Nomad’s Board of Directors in November 2023.
Listing and share transaction costs
As at December 31, 2023, 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 €27.3 million and are
disclosed as a deduction directly against the capital reserve.
At December 31, 2021
Share transaction costs
At December 31, 2022
Share transaction costs
At December 31, 2023
€m
27.1
—
27.1
0.2
27.3
Founder Preferred Shares Annual Dividend Amount
As of December 31, 2022, each of the Founder Entities held 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 were intended to
incentivize the Founders to achieve Nomad’s objectives. In addition to providing long term capital, the Founder Preferred
Shares were 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 were 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 conferred 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.
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
F-57
b.
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
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 26 for further information on the Founder Preferred Shares Dividends issued.
The Founder Preferred Shares converted into Ordinary Shares on a 1-for-1 basis on January 3, 2023.
Dividends
A dividend of $0.15 per share for the quarter ended December 31, 2023 was approved by the Board of
Directors on January 29, 2024 and paid February 26, 2024. As this was approved after the date of the Consolidated
Statement of Financial Position, the dividend of $24.4 million (€22.4 million) has not been recorded as a liability in these
consolidated financial statements.
25)
Share-based compensation reserve
The Company's discretionary share award scheme, the LTIP, enables the Company’s Compensation
Committee to make grants in the form of rights over ordinary shares (“Awards”), to any Director or employee of the
Company. However, it is the Committee’s current intention that Awards be granted only to senior management, including
senior management also serving as a director, 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 Directors'
and Directors' and Senior Management Restricted share awards.
Balance as of January 1
Non-Executive Directors' 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
2023
€m
2022
€m
2021
€m
13.8
0.6
23.5
(0.3)
(6.2)
31.4
6.9
0.6
7.5
(0.4)
(0.8)
13.8
8.3
0.8
4.3
(0.7)
(5.8)
6.9
F-58
26)
Founder Preferred Shares Dividend Reserve
The Founder Preferred Shares converted on a 1-for-1 basis into Ordinary Shares on January 3, 2023. A
summary of the key terms of the Founder Preferred Shares is set out in Note 24.
The Founder Preferred Shares Annual Dividend Amount was 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.
The Preferred Shares Annual Dividend amount was 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 multiplied by 140,220,619
Preferred Share Dividend Equivalent (the “Preferred Share Dividend Equivalent”). The Preferred Share Dividend
Equivalent was 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.
Dividends on the Founder Preferred Shares were payable until the Founder Preferred Shares were
converted into Ordinary Shares effective as of January 3, 2023.
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, 2022, 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. As no further dividends are payable, the remaining reserve as of December 31, 2022 was
released directly to retained earnings.
27)
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 on net investment hedges (1)
Total presented in Other Comprehensive Income
Balance as of December 31
Year ended December 31,
2023
€m
2022
€m
2021
€m
89.3
—
89.3
11.7
—
11.7
101.0
105.1
—
105.1
(15.8)
—
(15.8)
89.3
84.7
1.6
86.3
31.7
(12.9)
18.8
105.1
(1) Losses on net investment hedges are offset by nil gains on GBP net investments included within the foreign currency
translation adjustments (2022: nil , 2021: gains of €24.6 million).
The translation reserve as at December 31, 2023 and as at December 31, 2022 did not include any
balances relating to continuing hedging relationships. The translation reserve as at December 31, 2023 included €50.8
million (December 31, 2022: €50.8 million) relating to a discontinued hedging relationship in respect of GBP net
investments.
F-59
28)
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 32.
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
Balance as of December 31, 2020
(4.5)
(20.0)
(24.5)
Reallocation for IFRS 9 changes to policy
2.8
—
2.8
Balance as of January 1, 2021 (restated)
Change in fair value of hedging instrument
recognized in OCI for the year
Transferred to the carrying value of inventory
Reclassified from OCI to net finance costs
Deferred tax
Balance as of December 31, 2021
Change in fair value of hedging instrument
recognized in OCI for the year
Transferred to the carrying value of inventory
Reclassified from OCI to net finance costs
Deferred tax
Balance as of December 31, 2022
Change in fair value of hedging instrument
recognized in OCI for the year
Transferred to the carrying value of inventory
Reclassified from OCI to net finance costs
Deferred tax
(1.7)
(20.0)
(21.7)
73.3
—
(64.1)
(2.4)
5.1
101.3
—
(92.2)
(2.1)
12.1
(30.3)
—
(8.7)
10.3
9.3
27.6
—
(11.1)
5.8
57.3
(55.2)
—
(1.0)
6.9
(22.5)
(4.2)
—
8.9
82.6
27.6
(64.1)
(13.5)
10.9
158.6
(55.2)
(92.2)
(3.1)
19.0
(52.8)
(4.2)
(8.7)
19.2
Balance as of December 31, 2023
(16.6)
(10.9)
(27.5)
—
(4.4)
(4.4)
2.4
—
1.7
(0.1)
(0.4)
0.1
—
1.3
(0.2)
0.8
1.9
—
0.9
(0.7)
2.9
(24.5)
(1.6)
(26.1)
85.0
27.6
(62.4)
(13.6)
10.5
158.7
(55.2)
(90.9)
(3.3)
19.8
(50.9)
(4.2)
(7.8)
18.5
(24.6)
F-60
29)
Earnings per share
Basic earnings per share
Profit for the year attributable to equity owners of the parent (€m)
Weighted average Ordinary Shares, Founder Preferred Shares and shares
issuable solely after the passage of time (number)
Basic earnings per share (€’s)
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
192.7
249.8
181.0
170,573,002
174,279,621
178,070,770
1.13
1.43
1.02
For the year ended December 31, 2023, basic earnings per share is calculated by dividing the profit
attributable to the shareholders of the Company of €192.7 million (year ended December 31, 2022: €249.8 million, year
ended December 31, 2021: €181.0 million) by the weighted average number of Ordinary Shares of 170,537,002
(December 31, 2022: 172,779,621, year ended December 31, 2021: 176,570,770), Founder Preferred Shares of nil
(December 31, 2022: 1,500,000, year ended December 31, 2021: 1,500,000) and shares to be issued in future years as
performance conditions have been met of 36,000 (December 31, 2022: nil, year ended December 31, 2021: nil).
Diluted earnings per share
Profit for the year attributable to equity owners of the parent (€m)
Weighted average Ordinary Shares, Founder Preferred Shares, shares
issuable solely after the passage of time, potential ordinary shares and
contingently issuable shares (number)
Diluted earnings per share (€’s)
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
192.7
249.8
181.0
171,203,914
174,279,621
178,070,770
1.13
1.43
1.02
The number of shares in the diluted earnings per share calculation includes an estimate of 87,656 potential
ordinary shares, calculated using the treasury method, on long term incentive plans contingent on service only
(December 31, 2022: nil, year ended December 31, 2021: nil) and contingently issuable shares of 543,256 (December 31,
2022: nil, year ended December 31, 2021: nil). There are no adjustments to the profit for the year attributable to equity
owners of the parent for any year presented.
30)
Reconciliation of liabilities arising from financing 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 20)
Financial
payables
(Note 21)
Derivatives: (Net) Fair
value of forward
foreign exchange and
currency swap
contracts FVTPL
Derivatives: (Net)
Fair value of cross
currency interest
rate swaps
€m
€m
€m
€m
Opening balance January 1, 2023
2,164.9
Cash inflow (1)
Cash outflow (1)
Interest accretion (2)
Exchange movement
Fair value changes
Other non-cash adjustments
Cash
Cash
Cash
Non-cash
Non-cash
Non-cash
6.0
(46.0)
3.4
(22.8)
—
29.6
Closing balance December 31, 2023
2,135.1
26.1
—
(101.2)
120.4
(0.4)
—
(1.3)
43.6
—
—
—
—
—
—
—
—
56.4
7.6
(0.8)
—
—
28.6
—
91.8
F-61
Cash / non-
cash
Total loans and
borrowings
(Note 20)
Financial
payables
(Note 21)
Derivatives: (Net) Fair
value of forward
foreign exchange and
currency swap
contracts FVTPL
Derivatives: (Net)
Fair value of cross
currency interest
rate swaps
€m
€m
€m
€m
Opening balance January 1, 2022
Cash inflow (1)
Cash outflow
Interest accretion (2)
Exchange movement
Fair value changes
Other non-cash adjustments
Cash
Cash
Cash
Non-cash
Non-cash
Non-cash
2,227.4
799.3
(947.9)
2.3
60.9
—
22.9
Closing balance December 31, 2022
2,164.9
19.7
—
(68.5)
77.5
(0.3)
—
(2.3)
26.1
0.4
0.3
—
—
—
(0.7)
—
—
20.6
139.1
—
—
—
(103.3)
—
56.4
(1) Cash flows from cross currency and interest rate swaps are part of effective cash flow hedging relationships. The part
of cash flows from cross currency and interest rate swaps related to payment of interest is presented within interest paid in
the Consolidated Statement of Cash Flows. The part of cash flows from cross currency and interest rate swaps related to
repayment of loan principal is presented within (payment)/proceeds on settlement of derivatives in the Consolidated
Statement of Cash Flows.
(2) Interest accretion includes interest on lease liabilities.
31)
Cash flows from operating activities
Cash flows from operating activities
Profit for the year
Adjustments for:
Exceptional items
Non-cash fair value purchase price adjustment of inventory
Share based payments expense
Depreciation and amortization
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
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
(Decrease)/increase in employee benefit and other provisions
Year ended
December 31,
2023
Year ended
December 31,
2022
Year ended
December 31,
2021
Note
€m
€m
€m
192.7
249.8
181.0
7
5
6
10
11
72.5
—
24.1
95.0
1.2
86.8
60.9
48.7
—
8.1
88.6
0.8
54.4
71.2
533.2
521.6
18.8
0.3
42.1
(3.2)
(61.7)
(38.3)
5.6
(2.4)
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
Cash generated from operations before tax and exceptional items
591.2
424.8
F-62
32)
Financial risk management
Overall risk management policy
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.The Company has an exposure to interest rate risk arising principally on changes in US dollar and euro
interest rates on its borrowings. To manage the risk, the Group currently fixes 75% of its borrowings through fixed-interest-
rate loans and interest rate derivatives.
The Company’s transactional foreign currency risk is primarily driven by its US dollar denominated
purchases. The Company has a policy approved by the Board for hedging its non-functional currency forecast
transactions for up to 24 months. The hedging policy target is to achieve 90% of forecast transactional foreign currency
exposure for the current financial year.
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 33.
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 27 and 28 respectively. The Company's accounting policy for hedge accounting is
disclosed within Note 3.
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.
On July 29, 2021 the Company extended its CCIRS used to hedge the foreign currency and interest rate
risk on its previous 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 was 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 were also extinguished. A
change in fair value of the CCIRS arose as a consequence of the transaction, which the Company wrote-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, were 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 was then released on a
straight line basis until May 2022.
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
led to some ineffectiveness in the hedging relationship until they were closed out on November 8, 2022.
F-63
On November 10, 2022, to align with the Company's refinancing of its U.S. Dollar denominated Term Loans
as detailed in Note 20, the Company closed out its existing cross currency interest rate swaps and entered into a number
of new 5-year cross-currency and interest rate swaps for the new Term Loans. The cash flow hedge reserve associated
with this hedging relationship on November 8, 2022 included unrealized gains of €45.6 million. As a significant portion of
the U.S. Dollar interest rate cash-flows will continue to occur, the gains relating to this portion of €35.2 million was kept in
the reserve and is being reclassified to the Statement of Profit or Loss in alignment to the original hedged cash flows,
which end in May 2024. The remaining cash flow hedge reserve along with a portion of the cost of hedging reserve have
been released to the Statement of Profit or Loss as presented in Note 10 as the hedged cash flows will no longer occur.
In October 2023, our CCIRS were amended, effective October 10, 2023 to align more closely with the
amended cash flows of our USD term loan following the repricing in September 2023, as detailed in Note 20. The
amendment is considered to represent a modification of the existing swaps. In accordance with the risk management
strategy and hedging documentation, the cash flow hedging relationship will continue. A change in fair value of the CCIRS
of €0.2 million arose as a consequence of the transaction, which the Company wrote-off immediately.
As at December 31, 2023, the Company has $693.0 million (December 31, 2022: $700.0 million) of U.S.
Dollar SOFR floating rate debt. The Company uses cross currency interest rate swaps to convert this into €693.6 million
(December 31, 2022: €700.6 million) of debt with a fixed rate of interest and designated as a cash flow hedge.
In addition, the Company has interest rate swaps, where in exchange for receiving cash flows matching the
payments of principal and interest due under the €130.0 million (December 31, 2022: €130.0 million) Senior EUR debt, the
Company pays fixed amounts of interest and principal. These swaps have been designated as a cash flow hedge.
There was no material ineffectiveness during 2023 (2022:no material ineffectiveness) in relation to the cash
flow hedges using cross currency interest rate swaps and interest rate swaps.
The effects of the cash flow hedging instruments on the Company's financial position and performance are
as follows:
All amounts stated in €m, unless otherwise stated
USD - cross currency interest rate swaps
Carrying amount of liability
Notional amount (USD million)
Maturity date
Change in fair value of outstanding hedging instruments since January 1
Change in value of hedged item used to assess effectiveness
Weighted average hedged rate of outstanding hedging instruments - currency
Weighted average hedged rate of outstanding hedging instruments - interest
All amounts stated in €m, unless otherwise stated
EUR - interest rate swaps
Carrying amount of (liability)/asset
Notional amount (EUR)
Maturity date
Change in fair value of outstanding hedging instruments since January 1
Change in value of hedged item used to assess effectiveness
Weighted average hedged rate for the year (or since inception)
December 31,
2023
December 31,
2022
(89.0)
$693.0
9/22/2027
(24.8)
24.8
1.00
6.0 %
(56.6)
$700.0
10/10/2027
(36.0)
36.0
1.00
6.7 %
December 31,
2023
December 31,
2022
(2.8)
€130.0
10/10/2027
(3.3)
3.3
6.7 %
0.2
€130.0
10/10/2027
0.2
(0.2)
6.7 %
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 the timing or amount of the forecast transaction changes from what was
originally estimated. There was no material ineffectiveness during 2023 (2022: no material ineffectiveness) in relation to
the forward foreign exchange contracts.
F-64
The effects of the foreign currency hedging instruments on the Company's financial position and
performance are as follows:
As at December 31, 2023
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 assets
Carrying amount of liabilities
0.6
(5.0)
0.1
(1.7)
0.9
(3.8)
—
—
(4.6)
(0.2)
0.3
(2.9)
Notional amount
348.0
62.5
372.6
122.7
5.6
101.5
Fair value losses/(gains) of outstanding
hedging instruments since January 1
Weighted average hedge rate for the year
5.0
1.10
2.8
1.24
7.7
1.13
3.1
0.09
(0.1)
0.10
0.2
N/A
As at December 31, 2022
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 assets
Carrying amount of liabilities
Notional amount
Fair value losses/(gains) of outstanding
hedging instruments since January 1
Weighted average hedge rate for the year
7.4
(3.0)
288.6
6.2
1.09
2.1
(0.1)
44.3
(6.7)
1.30
6.4
—
194.9
2.4
—
58.2
0.5
—
9.8
(9.0)
1.16
(4.4)
0.09
(0.6)
0.10
1.1
(0.6)
45.9
(0.6)
N/A
The fair value gains or losses on the hedge item is the same and opposite direction as on the hedging
instrument for all years presented.
Gains 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 nil (2022: €0.2 million, 2021: €0.6 million).
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 nil (2022: €0.1 million, 2021: €14.3 million).
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.
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.
F-65
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, 2023, 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 a liability of
€6.2 million (2022: €6.9 million asset). All forecast transactions are still expected to occur. As at
December 31, 2023, 87.5% (2022: 99.0%) of forecast future U.S. Dollar payments to the end of
2024 were hedged through the use of forward contracts and existing cash. As at December 31,
2023, 35.7% of forecast future U.S. Dollar payments to the end of 2025 were hedged. All forward
contracts have been designated as cash flow hedges and have a maturity within the next 24
months.
The fair value of the Euro forward contracts with reference to non-Euro functional currencies as at
December 31, 2023, is a liability of €9.6 million (2022: €9.7 million). As at December 31, 2023,
73.1% (2022: 62.1%) of forecast future net Euro payments to the end of 2024 were hedged
through the use of forward contracts and existing cash. As at December 31, 2023, 31.0% of
forecast future Euro payments to the end of 2025 were hedged. All forward contracts have been
designated as cash flow hedges and have a maturity within the next 24 months.
Sensitivity analysis
The Company is sensitive to changes in primarily the following currency pairs:
1) EUR/USD
2) GBP/EUR
3) SEK/EUR
These impact the valuation of our financial instruments. The table below illustrates the
hypothetical sensitivity of the Company’s reported profit and closing equity to a 5% 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
2023
€m
2022
€m
2023
€m
2022
€m
5% increase in the value of the Euro against
Pound Sterling (2022: 5%)
5% increase in the value of the Euro against
U.S. Dollar (2022: 5%)
5% increase in the value of the Euro against
Swedish Krona (2022: 5%)
(2.1)
(1.9)
(13.7)
(6.8)
0.9
0.4
(2.0)
(12.9)
(10.8)
(2.5)
4.8
2.1
A 5% decrease in the value of the Euro against the currencies identified in the table above would
result in an equal and opposite movement to the values disclosed in the table above. This
analysis is for illustrative purposes.
F-66
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 in 2021 and replaced by alternative reference indexes (SONIA and
SOFR). The new reference rate is reflected in the Company’s latest issuance of U.S. Dollar term
loan and related cross currency interest rate swaps, which use SOFR as the benchmark.
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.
Sensitivity analysis During 2023, six month EURIBOR rates increased from 2.7% to 3.9% (2022: increased from 0%
to 2.7%). Within the Euro denominated senior loans, there is a EURIBOR floor of 0%.
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 €5.6 million (2022: €5.1 million), subject
to the EURIBOR floor of 0% and after taking into consideration the portion of the borrowings that
are on fixed interest rate or are synthetically converted into fixed interest rate using interest rate
derivatives.
Credit risk
Description
Mitigation
Liquidity risk
Description
Mitigation
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 19 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.
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. We manage our exposure to credit risk through credit analysis and
monitoring procedures, and sometimes use letters of credit, prepayments and guarantees. Credit
limits are set for customers and regularly monitored to mitigate ongoing payment risk.
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. The Company also has an aggregate of €12.3 million available
through other revolving credit facilities. Currently €2.7 million of the facilities are utilized for letters
of credit, overdrafts, customs bonds and bank guarantees.
F-67
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 to the extent that they hedge currency 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
$7.0 million (€6.3 million) which began in October 2023. 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, 2023, no excess cash flow will be repayable in
2024 (2022: nil repayable in 2023).
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:
2023
Borrowings-principal
Borrowings-interest
Forward contracts Sell
Forward contracts Buy
Cross Currency Interest Rate Swaps Pay
Cross Currency Interest Rate Swaps
Receive
Interest Rate Swaps Pay
2024
€m
2025
€m
2026
€m
6.3
117.5
722.3
(711.3) (301.6)
6.3
98.6
307.2
47.3
48.9
6.3
92.2
—
—
48.4
2027
€m
6.3
92.7
—
—
713.6
2028
€m
1,359.5
91.1
—
—
—
Over 5
years
€m
725.4
52.9
—
—
—
Total
€m
2,110.1
545.0
1,029.5
(1,012.9)
858.2
(55.4)
(47.9)
(45.0)
(646.7)
8.9
8.8
8.8
8.8
—
—
—
5.0
—
—
—
26.1
(795.0)
35.3
(32.7)
74.8
Interest Rate Swaps Receive
(9.7)
(7.9)
(7.5)
(7.6)
Lease Liabilities
15.3
12.4
8.8
7.2
Trade and other payables excluding non-
financial liabilities
Total
719.1
860.3
—
124.8
—
112.0
—
174.3
—
1,455.6
—
804.4
719.1
3,531.4
F-68
2022
Borrowings-principal
Borrowings-interest
Forward contracts Sell
Forward contracts Buy
2023
€m
2024
€m
2025
€m
2026
€m
2027
€m
Over 5
years
€m
Total
€m
6.6
6.6
6.6
6.6
6.6
2,107.1
2,140.1
103.0
117.3
107.5
105.2
104.8
160.5
623.6
(641.7)
—
—
—
—
—
—
—
—
Cross Currency Interest Rate Swaps Pay
50.5
54.2
53.6
53.1
718.2
Cross Currency Interest Rate Swaps
Receive
Interest Rate Swaps Pay
(58.9)
(59.9)
(53.2)
(51.8) (675.3)
8.1
8.9
8.8
8.8
8.8
Interest Rate Swaps Receive
(7.7)
(9.4)
(8.8)
(8.7)
(8.7)
—
—
—
—
—
—
698.3
623.6
(641.7)
929.6
(899.1)
43.4
(43.3)
72.7
22.1
12.9
652.2
—
8.1
—
6.4
—
3.3
19.9
—
—
652.2
757.8
130.6
122.6
119.6
157.7
2,287.5
3,575.8
Lease Liabilities
Trade and other payables excluding non-
financial liabilities
Total
33)
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'.
2023
Assets
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
Liabilities
Financial
assets at
amortized
cost
Financial
Assets at
Fair Value
through
profit or loss
Derivatives
designated
in hedge
relationships
Financial
liabilities at
amortized
cost
€m
€m
€m
€m
Total
€m
226.9
—
275.1
—
—
137.8
—
1.9
—
—
—
—
226.9
1.9
412.9
Trade and other payables excluding non-financial
liabilities
Derivative financial instruments
Loans and borrowings
Total
—
—
—
—
—
—
—
(719.1)
(110.0)
—
(719.1)
(110.0)
—
(2,135.1)
(2,135.1)
502.0
137.8
(108.1)
(2,854.2)
(2,322.5)
F-69
2022
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
Total
Fair values
Financial
assets at
amortized
cost
Financial
Assets at Fair
Value
through
profit or loss
Derivatives
designated
in hedge
relationships
Financial
liabilities at
amortized
cost
€m
€m
€m
€m
Total
€m
230.8
—
330.0
—
—
—
—
—
39.7
—
—
—
—
20.1
—
—
—
—
230.8
20.1
369.7
—
(652.2)
(652.2)
(60.3)
—
(60.3)
—
(2,164.9)
(2,164.9)
560.8
39.7
(40.2)
(2,817.1)
(2,256.8)
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.
(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’.
F-70
(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
The carrying value of cash and cash equivalents is deemed to equal fair value. When measured at fair
value, the Company has classified these as level 1 instruments. All our cash and cash equivalents are held in highly rated
financial institutions.
(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”.
(v)
Interest bearing loans and liabilities
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.
Senior EUR/USD loans
Other external debt
2028 fixed rate senior secured notes
Less capitalized debt discounts and borrowing costs
Fair value
Carrying value
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
€m
1,314.5
0.3
752.8
—
2,067.6
€m
1,316.2
0.2
681.2
—
1,997.6
€m
1,293.8
0.3
800.0
(37.8)
2,056.3
€m
1,340.0
0.2
800.0
(41.9)
2,098.3
Derivatives
Interest Rate Swaps
Forward foreign exchange contracts
Total assets
Cross Currency Interest Rate Swaps
Interest Rate Swaps
Forward foreign exchange contracts
Total liabilities
Total
Offsetting of derivatives
As at
December 31,
2023
As at
December 31,
2022
€m
€m
—
1.9
1.9
(89.0)
(2.8)
(18.2)
(110.0)
(108.1)
0.2
19.9
20.1
(56.6)
—
(3.7)
(60.3)
(40.2)
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.
The following table sets out the carrying amounts of recognized financial instruments that are subject to the
above agreements.
F-71
As at Dec 31, 2023
Derivatives - assets
Derivatives - liabilities
As at Dec 31, 2022
Derivatives - assets
Derivatives - liabilities
34)
Commitments
Gross amount
of financial
instruments as
presented upon
balance sheet
Related
financial
instruments
that are offset
€m
€m
Net amount
€m
1.9
(110.0)
(1.9)
1.9
—
(108.1)
Gross amount
of financial
instruments as
presented upon
balance sheet
Related
financial
instruments
that are offset
€m
€m
Net amount
€m
20.1
(60.3)
(12.2)
12.2
7.9
(48.1)
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,
2023
As at
December 31,
2022
€m
€m
2.4
3.0
0.4
0.2
6.0
2.2
2.1
0.6
0.2
5.1
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.
35)
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
36)
Related parties
Founder Preferred Shares
As at
December 31,
2023
As at
December 31,
2022
€m
€m
14.3
8.1
22.4
11.1
11.2
22.3
The Founder Preferred Shares converted into Ordinary Shares on a 1-for-1 basis on January 3, 2023.
The conditions of the Founder Preferred Shares Annual Dividend Amount in 2020 were met and further
details relating to these dividends are set out in Note 26.
F-72
Advisory Services Agreements
Effective as of January 1, 2022, the Company entered into an Amended and Restated Advisory Services
Agreement (the "Agreement") with Mariposa Capital ("Mariposa"), LLC, an affiliate of Sir Martin, and TOMS Capital LLC
("TOMS"), an affiliate of Mr. Gottesman. Pursuant to the terms of the Amended and Restated Advisory Services
Agreement, Mariposa and TOMS provide high-level strategic advice and guidance to the Company. Under the terms of the
Agreement, Mariposa and TOMS are entitled to receive an aggregate annual fee equal to $4.0 million, payable in
quarterly installments. The initial Agreement is for one year, subject to automatic renewals 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 excluding reimbursed expenses incurred under the ordinary course of business of €1.9 million
and €1.9 million were paid to Mariposa and TOMS respectively in the year ended December 31, 2023 (year ended
December 31, 2022: €1.9 million and €1.9 million respectively).
Since 2020, the Company has utilized 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 TOMS Capital LLC (of which Mr. Gottesman is the founder and managing
partner). In November 2023, the agreement was amended so that a guaranteed minimum annualized fee of up to
£130,000 (€150,000) would be received by the working capital solutions specialist (previously all ongoing fees associated
with this service were received by the working capital solutions specialist directly from our suppliers utilizing the service).
Furthermore, a setup fee of less than €0.1 million has been incurred to allow the platform to be used on the Company's
new ERP platform. These amendments and fees are not considered to be material to either party.
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.
Non-executive Directors continue to receive fees for their services as board members and to certain
committees and are settled through payroll. Directors' fees are payable quarterly in arrears. Total Non-executive Directors'
fees for the year ended December 31, 2023 was €0.3 million (year ended December 31, 2022: €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 2,503,002 (year ended December 31, 2022:
2,699,157) 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).
37)
Significant events after the Consolidated Statement of Financial Position date
Details of shares repurchased by the Company under the share repurchase program, as well as dividends
declared and paid, after December 31, 2023 can be found in Note 24.
On February 2, 2024, the Company closed on the repricing of its existing EUR denominated Term Loan B of
€130.0 million principal due 2029 (the “Term Loan”), subject to customary closing conditions. Following the closing, the
margin on the Term Loan will be reduced by 75 basis points to EURIBOR plus 2.75%. There are no changes to the
maturity of the Term Loan as a result of this repricing.
F-73
Effective as of January 1, 2022, the Company entered into an Amended and Restated Advisory Services
Agreement (the "Agreement") with Mariposa Capital ("Mariposa"), LLC, an affiliate of Sir Martin, and TOMS Capital LLC
("TOMS"), an affiliate of Mr. Gottesman. Pursuant to the terms of the Amended and Restated Advisory Services
Agreement, Mariposa and TOMS provide high-level strategic advice and guidance to the Company. Under the terms of the
Agreement, Mariposa and TOMS are entitled to receive an aggregate annual fee equal to $4.0 million, payable in
quarterly installments. The initial Agreement is for one year, subject to automatic renewals 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 excluding reimbursed expenses incurred under the ordinary course of business of €1.9 million
and €1.9 million were paid to Mariposa and TOMS respectively in the year ended December 31, 2023 (year ended
December 31, 2022: €1.9 million and €1.9 million respectively).
Since 2020, the Company has utilized 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 TOMS Capital LLC (of which Mr. Gottesman is the founder and managing
partner). In November 2023, the agreement was amended so that a guaranteed minimum annualized fee of up to
£130,000 (€150,000) would be received by the working capital solutions specialist (previously all ongoing fees associated
with this service were received by the working capital solutions specialist directly from our suppliers utilizing the service).
Furthermore, a setup fee of less than €0.1 million has been incurred to allow the platform to be used on the Company's
new ERP platform. These amendments and fees are not considered to be material to either party.
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.
Non-executive Directors continue to receive fees for their services as board members and to certain
committees and are settled through payroll. Directors' fees are payable quarterly in arrears. Total Non-executive Directors'
fees for the year ended December 31, 2023 was €0.3 million (year ended December 31, 2022: €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 2,503,002 (year ended December 31, 2022:
2,699,157) 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).
37)
Significant events after the Consolidated Statement of Financial Position date
Details of shares repurchased by the Company under the share repurchase program, as well as dividends
declared and paid, after December 31, 2023 can be found in Note 24.
On February 2, 2024, the Company closed on the repricing of its existing EUR denominated Term Loan B of
€130.0 million principal due 2029 (the “Term Loan”), subject to customary closing conditions. Following the closing, the
margin on the Term Loan will be reduced by 75 basis points to EURIBOR plus 2.75%. There are no changes to the
maturity of the Term Loan as a result of this repricing.
Advisory Services Agreements
Item 19.
Exhibits
The following exhibits are filed as part of this annual report:
EXHIBIT INDEX
Incorporation by Reference
Exhibit
No.
1.1
Exhibit Description
Amended and Restated Memorandum and Articles of
Association.
2.1 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.
Indenture, dated as of June 24, 2021 by and among
the Company, the guarantors named therein and
Deutsche Trustee Company Limited, as trustee.
Supplemental Indenture, dated as of July 9, 2021 by
and among the Company, the guarantors named
therein and Deutsche Trustee Company Limited, as
trustee.
2.2
2.3
2.4
Description of Securities.
4.1
4.2
4.3
4.4
4.5
4.6
4.7
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 originally between Nomad
Foods Limited, Credit Suisse AG, London Branch,
Deutsche Bank Company Limited and certain entities
named therein.
Amendment and Restatement Agreement, dated
September 15, 2023, relating to a Senior Facilities
Agreement, originally dated July 3, 2014, as amended
and restated from time to time, including pursuant to
the Amendment and Restatement Agreements, dated
December 20, 2017, June 15, 2018 and November 8,
2022 for Nomad Foods Limited originally with Credit
Suisse AG, London Branch (and subsequently
transferred to Citibank Europe Plc, UK Branch
pursuant to the terms of a global resignation and
appointment deed dated January 15, 2024.
Amendment Agreement by and among the Company
and Citibank Europe Plc, UK Branch as agent on
behalf of certain other finance parties thereto relating
to that certain Senior Facilities Agreement originally
dated July 3, 2014 (as amended and restated from
time to time, including pursuant to amendment and
restatement agreements dated May 3, 2017, June 22,
2021, November 8, 2022, September 15, 2023 and
February 2, 2024).
Nomad Foods Limited Amended and Restated Long-
Term 2015 Incentive Plan.
Nomad Foods Limited Long Term 2015 Incentive Plan
Restricted Share Unit Agreement.
Nomad Foods Limited Long Term 2015 Incentive Plan
Award Agreement for Performance Share Units.
Nomad Foods Limited Long Term 2015 Incentive Plan
Award Agreement for Performance Share Units and
Restricted Share Units.
Filed with
this
Annual
Report
Exhibit
No.
99.1
Period
Covered or
Date of
Filing
1/14/2016
4.1
11/24/2015
Form
6-
K (001-37669)
F-1 (333-20818
1)
6-K
(001-37669)
6-K
(001-37669)
20-F
(001-37669)
6-K
(001-37669)
99.2
6/24/2021
99.1
7/12/2021
2.3
2/23/2023
99.2
5/3/2017
6-K
(001-37669)
99.1
9/18/2023
6-K
(001-37669)
99.1
2/5/2024
20-F
(001-37669)
20-F
(001-37669)
4.4
4.5
2/27/2020
2/27/2020
X
X
F-73
F-74
113351_Body.indd 173
113351_Body.indd 173
4/10/24 11:57 AM
4/10/24 11:57 AM
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:
February 29, 2024
SIGNATURES
NOMAD FOODS LIMITED
By: /s/ Samy Zekhout
Name: Samy Zekhout
Title: Chief Financial Officer
Exhibit
No.
4.8
4.9
4.10
4.11
Exhibit Description
Amended and Restated Service Agreement between
the Company and Stéfan Descheemaeker, dated May
1, 2020.
Service Agreement, dated as of February 15, 2018,
between the Company and Samy Zekhout.
Amendment to Service Agreement, dated as of June 1,
2023, between the Company and Samy Zekhout.
Amended and Restated Advisory Services Agreement,
dated as of January 1, 2022, among Nomad Foods
Limited, Mariposa Capital, LLC and TOMS Capital
LLC.
4.12
Form of Indemnification Agreement
8.1
List of Significant Subsidiaries.
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
97
Policy Relating to Recovery of Erroneously Awarded
Compensation
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
Incorporation by Reference
Exhibit
No.
99.1
Period
Covered or
Date of
Filing
5/5/2020
Filed with
this
Annual
Report
4.7
3/22/2018
Form
6-K
(001-37669)
20-F
(001-37669)
20-F
(001-37669)
4.8A
3/3/2022
(d)(E)
SC TO-I
(005-89365)
8/11/2020
X
X
X
X
X
X
X
X
X
X
X
X
X
X
113351_Body.indd 174
113351_Body.indd 174
4/10/24 11:57 AM
4/10/24 11:57 AM
F-75
F-76
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:
February 29, 2024
SIGNATURES
NOMAD FOODS LIMITED
By: /s/ Samy Zekhout
Name: Samy Zekhout
Title: Chief Financial Officer
F-76
Annual Report 2023 Corporate Information
Independent Registered Public
Accounting Firm
PriceWaterhouseCoopers LLP
London, UK
Investor Relations
investors@nomadfoods.com
+44 (0) 208 918 3200
Transfer Agent
Computershare
By Regular Mail:
Computershare
P.O. Box 43006
Providence, RI 02940-3006
UNITED STATES
By Overnight Delivery:
If you would like a free copy of
Computershare
the annual report please e-mail
150 Royall Street Suite 101
investors@nomadfoods.com
or write to:
Canton, MA 02021
UNITED STATES
Investor Relations:
Nomad Foods
Forge
43 Church Street West
Woking, Surrey
GU21 6HT
England
International Telephone:
1 (781) 575 3100
Toll Free:
(877) 373 6374
Shareholder website:
www.computershare.com/investor
Board of Directors
and Executive Officers
Sir Martin Ellis Franklin, KGCN
Founder
Co-Chairman and
Non-Executive Director
Noam Gottesman
Founder
Co-Chairman and
Non-Executive Director
Ian G.H. Ashken
Independent Non-Executive Director
Stéfan Descheemaeker
Chief Executive Officer and Director
James E. Lillie
Independent Non-Executive Director
Stuart M. MacFarlane
Independent Non-Executive Director
Shareholder online inquiries:
Victoria Parry
https://www-us.computershare.com/investor/Contact
Independent Non-Executive Director
Securities Listing
Amit Pilowsky
Independent Non-Executive Director
Our shares of common stock are listed on the NYSE
Melanie Stack
Ticker symbol: NOMD
Independent Non-Executive Director
Samy Zekhout
Chief Financial Officer and Director
Nomad Foods Annual Report 2023 181
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