Iglo and Birds Eye owner Nomad Foods today (7 May) lifted its forecasts for annual sales and profitability after strong top-line growth in the first quarter of 2020.
The UK-based, US-listed group said its sales and earnings were ahead of its expectations during the opening three months of the year, boosted by a jump in demand from shoppers.
Stéfan Descheemaeker, Nomad Foods’ CEO, said the company had seen an “unprecedented level of consumer demand for frozen food, driven by the Covid-19 pandemic”.
He added: “This change in consumer behaviour, which began in early March, has continued into the second quarter with in-home consumption the most meaningful driver.”
Nomad’s first-quarter revenue increased 10.5% to EUR683m (US$738.8m). On an organic basis, revenue rose 7.7%, with volume/mix contributing 6.3 percentage points of the growth.
The company’s adjusted EBITDA reached EUR119.9m, against EUR122.1m a year earlier, amid higher spending on advertising and promotions.
On an adjusted basis, profit fell 5% to EUR68m, with an increase in finance costs also playing a part. Reported profit for the period was EUR47.5m, up from EUR22.4m in the first quarter of 2019.
Nevertheless, Nomad now expects its 2020 adjusted EBITDA to be approximately EUR450-460m, versus an earlier estimate of EUR440-445m.
Nomad expects its organic revenue to grow “at a mid-single digit percentage range versus the prior expectation of low-single digit organic revenue growth”.