Intrinsic value of Nomad Foods Limited - NOMD

Previous Close

$20.23

  Intrinsic Value

$38.40

stock screener

  Rating & Target

str. buy

+90%

Previous close

$20.23

 
Intrinsic value

$38.40

 
Up/down potential

+90%

 
Rating

str. buy

We calculate the intrinsic value of NOMD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.10
  5.09
  5.08
  5.08
  5.07
  5.06
Revenue, $m
  2,654
  2,818
  2,989
  3,166
  3,352
  3,545
  3,747
  3,957
  4,177
  4,407
  4,648
  4,899
  5,162
  5,437
  5,725
  6,027
  6,343
  6,674
  7,020
  7,384
  7,764
  8,164
  8,582
  9,021
  9,482
  9,965
  10,471
  11,003
  11,560
  12,145
Variable operating expenses, $m
  2,246
  2,357
  2,472
  2,592
  2,717
  2,848
  2,984
  3,126
  3,275
  3,430
  3,138
  3,308
  3,486
  3,672
  3,866
  4,070
  4,283
  4,506
  4,740
  4,986
  5,243
  5,513
  5,795
  6,092
  6,403
  6,729
  7,071
  7,430
  7,806
  8,201
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,246
  2,357
  2,472
  2,592
  2,717
  2,848
  2,984
  3,126
  3,275
  3,430
  3,138
  3,308
  3,486
  3,672
  3,866
  4,070
  4,283
  4,506
  4,740
  4,986
  5,243
  5,513
  5,795
  6,092
  6,403
  6,729
  7,071
  7,430
  7,806
  8,201
Operating income, $m
  408
  461
  517
  574
  635
  697
  763
  831
  903
  977
  1,509
  1,591
  1,676
  1,766
  1,859
  1,957
  2,060
  2,167
  2,280
  2,398
  2,521
  2,651
  2,787
  2,930
  3,079
  3,236
  3,400
  3,573
  3,754
  3,944
EBITDA, $m
  1,405
  1,492
  1,582
  1,676
  1,774
  1,877
  1,983
  2,095
  2,211
  2,333
  2,460
  2,593
  2,732
  2,878
  3,031
  3,190
  3,357
  3,533
  3,716
  3,908
  4,110
  4,321
  4,543
  4,775
  5,019
  5,275
  5,543
  5,824
  6,119
  6,429
Interest expense (income), $m
  0
  110
  122
  135
  149
  164
  179
  195
  211
  228
  246
  265
  284
  305
  326
  349
  372
  397
  423
  450
  478
  507
  538
  571
  605
  641
  678
  718
  759
  802
  848
Earnings before tax, $m
  299
  339
  381
  425
  471
  519
  568
  620
  675
  731
  1,244
  1,306
  1,371
  1,439
  1,510
  1,585
  1,663
  1,745
  1,830
  1,920
  2,014
  2,113
  2,216
  2,325
  2,438
  2,558
  2,683
  2,814
  2,952
  3,096
Tax expense, $m
  81
  92
  103
  115
  127
  140
  153
  167
  182
  197
  336
  353
  370
  389
  408
  428
  449
  471
  494
  518
  544
  570
  598
  628
  658
  691
  724
  760
  797
  836
Net income, $m
  218
  248
  278
  310
  344
  379
  415
  453
  492
  534
  908
  954
  1,001
  1,051
  1,103
  1,157
  1,214
  1,274
  1,336
  1,402
  1,470
  1,542
  1,618
  1,697
  1,780
  1,867
  1,958
  2,054
  2,155
  2,260

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,522
  6,924
  7,343
  7,780
  8,235
  8,710
  9,206
  9,723
  10,264
  10,829
  11,419
  12,037
  12,683
  13,359
  14,067
  14,808
  15,584
  16,397
  17,249
  18,141
  19,077
  20,058
  21,087
  22,165
  23,297
  24,483
  25,728
  27,034
  28,404
  29,841
Adjusted assets (=assets-cash), $m
  6,522
  6,924
  7,343
  7,780
  8,235
  8,710
  9,206
  9,723
  10,264
  10,829
  11,419
  12,037
  12,683
  13,359
  14,067
  14,808
  15,584
  16,397
  17,249
  18,141
  19,077
  20,058
  21,087
  22,165
  23,297
  24,483
  25,728
  27,034
  28,404
  29,841
Revenue / Adjusted assets
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
Average production assets, $m
  2,715
  2,883
  3,057
  3,239
  3,429
  3,627
  3,833
  4,048
  4,274
  4,509
  4,755
  5,012
  5,281
  5,562
  5,857
  6,165
  6,489
  6,827
  7,182
  7,553
  7,943
  8,351
  8,780
  9,229
  9,700
  10,194
  10,712
  11,256
  11,826
  12,425
Working capital, $m
  -255
  -271
  -287
  -304
  -322
  -340
  -360
  -380
  -401
  -423
  -446
  -470
  -496
  -522
  -550
  -579
  -609
  -641
  -674
  -709
  -745
  -784
  -824
  -866
  -910
  -957
  -1,005
  -1,056
  -1,110
  -1,166
Total debt, $m
  2,261
  2,508
  2,765
  3,034
  3,313
  3,605
  3,909
  4,227
  4,559
  4,906
  5,268
  5,648
  6,044
  6,459
  6,894
  7,349
  7,825
  8,324
  8,847
  9,396
  9,970
  10,572
  11,204
  11,866
  12,561
  13,289
  14,054
  14,856
  15,697
  16,579
Total liabilities, $m
  4,004
  4,251
  4,509
  4,777
  5,056
  5,348
  5,652
  5,970
  6,302
  6,649
  7,012
  7,391
  7,787
  8,203
  8,637
  9,092
  9,568
  10,068
  10,591
  11,139
  11,713
  12,316
  12,947
  13,610
  14,304
  15,033
  15,797
  16,599
  17,440
  18,323
Total equity, $m
  2,517
  2,673
  2,834
  3,003
  3,179
  3,362
  3,553
  3,753
  3,962
  4,180
  4,408
  4,646
  4,896
  5,157
  5,430
  5,716
  6,015
  6,329
  6,658
  7,003
  7,364
  7,742
  8,139
  8,556
  8,992
  9,451
  9,931
  10,435
  10,964
  11,519
Total liabilities and equity, $m
  6,521
  6,924
  7,343
  7,780
  8,235
  8,710
  9,205
  9,723
  10,264
  10,829
  11,420
  12,037
  12,683
  13,360
  14,067
  14,808
  15,583
  16,397
  17,249
  18,142
  19,077
  20,058
  21,086
  22,166
  23,296
  24,484
  25,728
  27,034
  28,404
  29,842
Debt-to-equity ratio
  0.900
  0.940
  0.980
  1.010
  1.040
  1.070
  1.100
  1.130
  1.150
  1.170
  1.200
  1.220
  1.230
  1.250
  1.270
  1.290
  1.300
  1.320
  1.330
  1.340
  1.350
  1.370
  1.380
  1.390
  1.400
  1.410
  1.420
  1.420
  1.430
  1.440
Adjusted equity ratio
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  218
  248
  278
  310
  344
  379
  415
  453
  492
  534
  908
  954
  1,001
  1,051
  1,103
  1,157
  1,214
  1,274
  1,336
  1,402
  1,470
  1,542
  1,618
  1,697
  1,780
  1,867
  1,958
  2,054
  2,155
  2,260
Depreciation, amort., depletion, $m
  997
  1,030
  1,065
  1,102
  1,140
  1,179
  1,220
  1,263
  1,309
  1,356
  951
  1,002
  1,056
  1,112
  1,171
  1,233
  1,298
  1,365
  1,436
  1,511
  1,589
  1,670
  1,756
  1,846
  1,940
  2,039
  2,142
  2,251
  2,365
  2,485
Funds from operations, $m
  1,215
  1,278
  1,344
  1,412
  1,483
  1,558
  1,635
  1,716
  1,801
  1,889
  1,859
  1,956
  2,057
  2,163
  2,274
  2,390
  2,512
  2,639
  2,772
  2,912
  3,059
  3,213
  3,374
  3,543
  3,720
  3,906
  4,101
  4,305
  4,520
  4,745
Change in working capital, $m
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -37
  -38
  -40
  -42
  -44
  -46
  -49
  -51
  -54
  -56
Cash from operations, $m
  1,230
  1,294
  1,360
  1,429
  1,501
  1,576
  1,655
  1,736
  1,822
  1,911
  1,882
  1,980
  2,082
  2,190
  2,302
  2,419
  2,542
  2,671
  2,806
  2,947
  3,095
  3,251
  3,414
  3,585
  3,764
  3,952
  4,149
  4,356
  4,574
  4,802
Maintenance CAPEX, $m
  -511
  -543
  -577
  -611
  -648
  -686
  -725
  -767
  -810
  -855
  -902
  -951
  -1,002
  -1,056
  -1,112
  -1,171
  -1,233
  -1,298
  -1,365
  -1,436
  -1,511
  -1,589
  -1,670
  -1,756
  -1,846
  -1,940
  -2,039
  -2,142
  -2,251
  -2,365
New CAPEX, $m
  -162
  -168
  -175
  -182
  -190
  -198
  -206
  -215
  -225
  -235
  -246
  -257
  -269
  -281
  -295
  -309
  -323
  -338
  -355
  -372
  -390
  -408
  -428
  -449
  -471
  -494
  -518
  -544
  -570
  -599
Cash from investing activities, $m
  -673
  -711
  -752
  -793
  -838
  -884
  -931
  -982
  -1,035
  -1,090
  -1,148
  -1,208
  -1,271
  -1,337
  -1,407
  -1,480
  -1,556
  -1,636
  -1,720
  -1,808
  -1,901
  -1,997
  -2,098
  -2,205
  -2,317
  -2,434
  -2,557
  -2,686
  -2,821
  -2,964
Free cash flow, $m
  558
  583
  609
  636
  664
  693
  723
  754
  787
  822
  735
  772
  811
  852
  895
  939
  986
  1,035
  1,086
  1,139
  1,195
  1,254
  1,315
  1,380
  1,447
  1,518
  1,592
  1,670
  1,752
  1,838
Issuance/(repayment) of debt, $m
  233
  247
  257
  268
  280
  292
  304
  318
  332
  347
  363
  379
  397
  415
  435
  455
  477
  499
  523
  548
  575
  602
  632
  662
  695
  729
  764
  802
  841
  883
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  233
  247
  257
  268
  280
  292
  304
  318
  332
  347
  363
  379
  397
  415
  435
  455
  477
  499
  523
  548
  575
  602
  632
  662
  695
  729
  764
  802
  841
  883
Total cash flow (excl. dividends), $m
  791
  830
  866
  904
  943
  984
  1,027
  1,072
  1,119
  1,168
  1,097
  1,151
  1,208
  1,267
  1,329
  1,394
  1,462
  1,534
  1,609
  1,687
  1,770
  1,856
  1,947
  2,042
  2,142
  2,247
  2,357
  2,472
  2,593
  2,720
Retained Cash Flow (-), $m
  -150
  -155
  -162
  -169
  -176
  -183
  -191
  -200
  -209
  -218
  -228
  -238
  -249
  -261
  -273
  -286
  -300
  -314
  -329
  -345
  -361
  -379
  -397
  -416
  -437
  -458
  -480
  -504
  -529
  -555
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  641
  675
  704
  735
  767
  801
  836
  872
  911
  950
  869
  913
  958
  1,006
  1,056
  1,108
  1,163
  1,220
  1,280
  1,343
  1,408
  1,477
  1,550
  1,626
  1,705
  1,789
  1,876
  1,968
  2,064
  2,166
Discount rate, %
  6.60
  6.93
  7.28
  7.64
  8.02
  8.42
  8.84
  9.29
  9.75
  10.24
  10.75
  11.29
  11.85
  12.45
  13.07
  13.72
  14.41
  15.13
  15.88
  16.68
  17.51
  18.39
  19.31
  20.27
  21.29
  22.35
  23.47
  24.64
  25.87
  27.17
PV of cash for distribution, $m
  601
  590
  571
  548
  522
  493
  462
  429
  394
  359
  283
  253
  223
  195
  167
  142
  118
  97
  78
  61
  48
  36
  27
  19
  14
  9
  6
  4
  3
  2
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Nomad Foods Limited manufactures and distributes frozen foods primarily in the United Kingdom, Italy, Germany, Sweden, France and Norway. It offers frozen food products, such as fish, vegetables, poultry, and ready meals. The company sells its products directly or through distribution arrangements to supermarkets and large food retail chains under the Birdseye, Iglo, and Findus brands. The company also sells its products in Austria, Belgium, Finland, Greece, Hungary, Ireland, Portugal, Switzerland, Denmark, The Netherlands, and Spain. Nomad Foods Limited is headquartered in Feltham, the United Kingdom.

FINANCIAL RATIOS  of  Nomad Foods Limited (NOMD)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

NOMD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NOMD stock intrinsic value calculation we used $2497 million for the last fiscal year's total revenue generated by Nomad Foods Limited. The default revenue input number comes from 0001 income statement of Nomad Foods Limited. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NOMD stock valuation model: a) initial revenue growth rate of 6.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.6%, whose default value for NOMD is calculated based on our internal credit rating of Nomad Foods Limited, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Nomad Foods Limited.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NOMD stock the variable cost ratio is equal to 85.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NOMD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Nomad Foods Limited.

Corporate tax rate of 27% is the nominal tax rate for Nomad Foods Limited. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NOMD stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NOMD are equal to 102.3%.

Life of production assets of 0 years is the average useful life of capital assets used in Nomad Foods Limited operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NOMD is equal to -9.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2367.70114943 million for Nomad Foods Limited - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 175.870 million for Nomad Foods Limited is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Nomad Foods Limited at the current share price and the inputted number of shares is $3.6 billion.

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