Strauss Group Announces a Strong Third Quarter With 5.8% Organic Sales Growth and NIS 213 Million Non-GAAP EBIT, an 11.2% Growth Rate.
In the First Nine Months of 2016 Sales Grew Organically a Significant 7.1% and EBIT Increased Substantially to NIS 609 Million, a Stellar 21.4% Growth Rate (1)
PETACH TIKVA, Israel, Nov. 22, 2016 /PRNewswire/ -- Gadi Lesin, President and CEO of Strauss Group (TASE: STRS) commented: "The strong growth trend at the beginning of this year continued in the past quarter and enabled the Group to achieve excellent results. In Israel, our home base, we continue to post high growth rates, contrary to the prevailing market trend, and despite price reductions of core products and improving our employees working benefits. The international coffee company has increased its sales turnover and improved its operating profit; the international dips and spreads business has continued to grow market share in all geographies of operations as it continues to contend with the challenge of growing the category in the US. Innovation, increased operational efficiency and the strengthening of our competitive positioning in core countries of operations will remain our focus in the coming quarters as we tackle the complexities and challenges that will no doubt accompany a diverse group such as ours."
(1) Data represents the Company's non-GAAP measures, which include the proportionate consolidation of jointly controlled investees (without implementation of IFRS 11) and do not include share-based payment, valuation of the balance of commodity hedging transactions as at end-of-period and other income and expenses, unless stated otherwise.
Q3 2016 highlights (1)
- Organic sales growth, excluding foreign exchange effects, was c5.8% (c6.1% after foreign currency effects)(1). Shekel denominated sales were NIS c2.1 billion compared to NIS c2.0 billion in the corresponding quarter last year.
- Gross profit was NIS c804 million, up c13.0% compared to the corresponding period last year (c38.3% of sales, up 230 basis points).
- Operating profit (EBIT) was NIS c213 million, up c11.2% compared to the corresponding period last year (c10.2% of sales, up 50 BPS).
- Net profit attributable to the shareholders of the Company was NIS c92 million, up c7.0% compared to the corresponding period last year.
- Cash flow from operating activities totaled NIS c132 million, compared to NIS c60 million in the corresponding period last year.
- Strauss Israel grew c5.2% in the third quarter, gaining market share whilst the overall Israeli food and beverage market was up only c0.1% according to StoreNext.
First nine months 2016 highlights (1)
- Organic sales growth, excluding foreign exchange effects, was c7.1% (c2.9% after foreign currency effects)(1). Shekel denominated sales were NIS c5.9 billion compared to NIS c5.7 billion in the corresponding period last year, and reflects a NIS c218 million negative translation difference as a result of the continued strengthening of the NIS versus other currencies in which the Group's sales derive.
- Gross profit was NIS c2.3 billion, up c6.3% compared to the corresponding period last year. Simultaneously the gross margins were up to c38.3% compared to c37.1% in the corresponding period last year.
- Operating profit (EBIT) was NIS c609 million, up c21.4% compared to the corresponding period last year (c10.3% of sales, up 160 BPS).
- Net profit attributable to the shareholders of the Company was NIS c277 million, up c26.5% compared to the corresponding period last year.
- Cash flow from operating activities totaled NIS c402 million, compared to NIS c90 million in the corresponding period last year.
- Strauss Israel's sales grew by approximately c4.4%, despite a c0.4% decline in the overall Israeli food and beverage market according to StoreNext.
(1) Data represents the Company's non-GAAP measures, which include the proportionate consolidation of jointly controlled investees (without implementation of IFRS 11) and do not include share-based payment, valuation of the balance of commodity hedging transactions as at end-of-period and other income and expenses, unless stated otherwise.
| Non GAAP Figures (1) |
|||
| Third Quarter |
|||
| 2016 |
2015 |
Change |
|
| Total Group Sales (NIS mm) |
2,096 |
1,974 |
6.1% |
| Organic Sales Growth excluding FX |
5.8% |
||
| Gross Profit (NIS mm) |
804 |
711 |
13.0% |
| Gross Margins (%) |
38.3% |
36.0% |
+230 bps |
| EBITDA (NIS mm) |
273 |
246 |
11.0% |
| EBITDA Margins (%) |
13.0% |
12.5% |
+50 bps |
| EBIT (NIS mm) |
213 |
192 |
11.2% |
| EBIT Margins (%) |
10.2% |
9.7% |
+50 bps |
| Net Income Attributable to the Company's Shareholders (NIS mm) |
92 |
86 |
7.0% |
| Net Income Margin (Attributable to the Company's Shareholders) (%) |
4.4% |
4.4% |
-- |
| EPS (NIS) |
0.86 |
0.80 |
6.9% |
| Operating Cash Flow (NIS mm) |
132 |
60 |
120.0% |
| Capex (NIS mm) (2) |
-50 |
-54 |
-7.4% |
| Net debt (NIS mm) |
1,640 |
1,813 |
-9.5% |
| Net debt / annual EBITDA |
1.6x |
2.1x |
(0.4x) |
(1) Data represents the Company's non-GAAP measures, which include the proportionate consolidation of jointly controlled investees (without implementation of IFRS 11) and do not include share-based payment, valuation of the balance of commodity hedging transactions as at end-of-period and other income and expenses, unless stated otherwise.
(2) Investments include the acquisition of fixed assets and investment in intangibles.
Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.
| Non GAAP Figures (1) |
||||||||
|
Third Quarter |
||||||||
| Sales (NIS mm) |
Sales Growth vs. Last Year |
Organic Sales Growth excluding FX |
EBIT (NIS mm) |
NIS Change in EBIT |
% Change in EBIT |
EBIT margins |
Change in EBIT margins vs. 2015 |
|
| Sales and EBIT by Operating Segments and Activities |
||||||||
| Strauss Israel: |
||||||||
| Health & Wellness |
526 |
3.8% |
3.8% |
63 |
0 |
0.2% |
12.0% |
-40 bps |
| Fun & Indulgence (2) |
260 |
8.1% |
8.1% |
24 |
1 |
8.4% |
9.3% |
-- |
| Total Strauss Israel |
786 |
5.2% |
5.2% |
87 |
1 |
2.4% |
11.1% |
-30 bps |
| Strauss Coffee: |
||||||||
| Israel Coffee |
179 |
11.4% |
11.4% |
27 |
9 |
47.9% |
14.7% |
+360 bps |
| International Coffee (2) |
776 |
8.5% |
7.3% |
85 |
40 |
86.7% |
10.9% |
+450 bps |
| Total Strauss Coffee |
955 |
9.0% |
8.0% |
112 |
49 |
75.8% |
11.6% |
+440 bps |
| International Dips & Spreads: |
||||||||
| Sabra (50%) (2) |
185 |
-3.4% |
-1.7% |
14 |
-17 |
-55.6% |
7.6% |
-900 bps |
| Obela (50%) (2) |
14 |
44.8% |
9.1% |
-3 |
-1 |
NM |
NM |
NM |
| Total International Dips & Spreads |
199 |
-1.1% |
-1.0% |
11 |
-18 |
-62.2% |
5.6% |
-900 bps |
| Other (2) |
156 |
3.8% |
5.4% |
3 |
-11 |
-74.3% |
NM |
NM |
| Total Group |
2,096 |
6.1% |
5.8% |
213 |
21 |
11.2% |
10.2% |
+50 bps |
(1) Data represent the Company's non-GAAP measures, which include the proportionate consolidation of jointly controlled investees (without implementation of IFRS 11) and do not include share-based payment, valuation of the balance of commodity hedging transactions as at end-of-period and other income and expenses, unless stated otherwise.
(2) Fun & Indulgence figures include Strauss 50% share in the salty snacks business. International Coffee figures include Strauss 50% share in Três Corações Joint Venture (3C) – Brazil - a company jointly held by the Group (50%) and by the São Miguel Group (50%). International D&S figures reflect Strauss 50% share in Sabra and Obela. Other Operations includes Strauss's share in Strauss Water China (50%) until June 30, 2015.
Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.
| Non GAAP Figures (1) |
|||
| First nine months |
|||
| 2016 |
2015 |
Change |
|
| Total Group Sales (NIS mm) |
5,909 |
5,743 |
2.9% |
| Organic Sales Growth excluding FX |
7.1% |
||
| Gross Profit (NIS mm) |
2,263 |
2,129 |
6.3% |
| Gross Margins (%) |
38.3% |
37.1% |
+120 bps |
| EBITDA (NIS mm) |
781 |
671 |
16.3% |
| EBITDA Margins (%) |
13.2% |
11.7% |
+150 bps |
| EBIT (NIS mm) |
609 |
501 |
21.4% |
| EBIT Margins (%) |
10.3% |
8.7% |
+160 bps |
| Net Income Attributable to the Company's Shareholders (NIS mm) |
277 |
219 |
26.5% |
| Net Income Margin Attributable to the Company's Shareholders (%) |
4.7% |
3.8% |
+90 bps |
| EPS (NIS) |
2.58 |
2.05 |
26.4% |
| Operating Cash Flow (NIS mm) |
402 |
90 |
346.7% |
| Capex (NIS mm) (2) |
-163 |
-211 |
-22.7% |
| Net debt (NIS mm) |
1,640 |
1,813 |
-9.5% |
| Net debt / annual EBITDA |
1.6x |
2.1x |
(0.4x) |
(1) Data represent the Company's non-GAAP measures, which include the proportionate consolidation of jointly controlled investees (without implementation of IFRS 11) and do not include share-based payment, valuation of the balance of commodity hedging transactions as at end-of-period and other income and expenses, unless stated otherwise.
(2) Investments include the acquisition of fixed assets and investment in intangibles.
Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.
| Non GAAP Figures (1) |
||||||||
| First nine months |
||||||||
| Sales (NIS mm) |
Sales Growth vs. Last Year |
Organic Sales Growth excluding FX |
EBIT (NIS mm) |
NIS Change in EBIT |
% Change in EBIT |
EBIT margins |
Change in EBIT margins vs. 2015 |
|
| Sales and EBIT by Operating Segments and Activities |
||||||||
| Strauss Israel: |
||||||||
| Health & Wellness |
1,491 |
3.9% |
3.9% |
162 |
21 |
14.7% |
10.9% |
+110 bps |
| Fun & Indulgence (2) |
783 |
5.4% |
5.4% |
86 |
5 |
6.9% |
11.0% |
+10 bps |
| Total Strauss Israel |
2,274 |
4.4% |
4.4% |
248 |
26 |
11.9% |
10.9% |
+70 bps |
| Strauss Coffee: |
||||||||
| Coffee Israel |
526 |
6.6% |
6.6% |
79 |
15 |
22.1% |
14.9% |
+190 bps |
| International Coffee (2) |
2,086 |
1.1% |
12.1% |
196 |
61 |
45.1% |
9.4% |
+290 bps |
| Total Strauss Coffee |
2,612 |
2.2% |
11.0% |
275 |
76 |
37.7% |
10.5% |
+270 bps |
| International Dips & Spreads: |
||||||||
| Sabra (50%) (2) |
547 |
1.6% |
3.2% |
72 |
7 |
9.4% |
13.1% |
+90 bps |
| Obela (50%) (2) |
34 |
27.5% |
20.0% |
-10 |
3 |
NM |
NM |
NM |
| Total International Dips & Spreads |
581 |
2.8% |
4.0% |
62 |
10 |
18.2% |
10.6% |
+130 bps |
| Other (2) |
442 |
-0.4% |
3.8% |
24 |
-4 |
-13.0% |
5.4% |
-80 bps |
| Total Group |
5,909 |
2.9% |
7.1% |
609 |
108 |
21.4% |
10.3% |
+160 bps |
(1) Data represent the Company's non-GAAP measures, which include the proportionate consolidation of jointly controlled investees (without implementation of IFRS 11) and do not include share-based payment, valuation of the balance of commodity hedging transactions as at end-of-period and other income and expenses, unless stated otherwise.
(2) Fun & Indulgence figures include Strauss 50% share in the salty snacks business. International Coffee figures include Strauss 50% share in Três Corações Joint Venture (3C) – Brazil - a company jointly held by the Group (50%) and by the São Miguel Group (50%). International D&S figures reflect Strauss 50% share in Sabra and Obela. Other Operations includes Strauss's share in Strauss Water China (50%) until June 30, 2015.
Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.
Appendix
| Condensed financial accounting (GAAP) |
|||
| First Nine months |
|||
| 2016 |
2015 |
Change |
|
| Sales |
3,972 |
3,881 |
2.3% |
| Cost of sales excluding impact of valuation of balance of commodity hedging transactions |
2,387 |
2,434 |
-1.9% |
| Valuation of balance of commodity hedging transactions as at end of period |
-28 |
3 |
|
| Cost of sales |
2,359 |
2,437 |
-3.2% |
| Gross profit |
1,613 |
1,444 |
11.7% |
| % of sales |
40.6% |
37.2% |
|
| Selling and marketing expenses |
911 |
892 |
2.1% |
| General and administrative expenses |
269 |
237 |
13.7% |
| Total expenses |
1,180 |
1,129 |
|
| Share of profit of equity-accounted investees |
154 |
134 |
15.7% |
| Operating profit before other expenses |
587 |
449 |
30.8% |
| % of sales |
14.8% |
11.6% |
|
| Other expenses, net |
-43 |
-20 |
112.6% |
| Operating profit after other expenses |
544 |
429 |
27.0% |
| Financing expenses, net |
-93 |
-78 |
18.9% |
| Income before taxes on income |
451 |
351 |
28.7% |
| Taxes on income |
-119 |
-94 |
27.1% |
| Effective tax rate |
26.4% |
26.7% |
|
| Income for the period |
332 |
257 |
29.3% |
| Attributable to the Company's shareholders |
242 |
192 |
26.5% |
| Attributable to non-controlling interests |
90 |
65 |
37.6% |
| Condensed financial accounting (GAAP) |
|||
| Third Quarter |
|||
| 2016 |
2015 |
Change |
|
| Sales |
1,378 |
1,365 |
0.9% |
| Cost of sales excluding impact of valuation of balance of commodity hedging transactions |
826 |
880 |
-6.0% |
| Valuation of balance of commodity hedging transactions as at end of period |
-1 |
8 |
|
| Cost of sales |
825 |
888 |
-7.1% |
| Gross profit |
553 |
477 |
15.9% |
| % of sales |
40.1% |
35.0% |
|
| Selling and marketing expenses |
314 |
285 |
10.2% |
| General and administrative expenses |
96 |
75 |
26.5% |
| Total expenses |
410 |
360 |
|
| Share of profit of equity-accounted investees |
51 |
51 |
1.9% |
| Operating profit before other expenses |
194 |
168 |
16.9% |
| % of sales |
14.1% |
12.2% |
|
| Other expenses, net |
-25 |
-14 |
71.1% |
| Operating profit after other expenses |
169 |
154 |
11.7% |
| Financing expenses, net |
-37 |
-25 |
53.4% |
| Income before taxes on income |
132 |
129 |
4.8% |
| Taxes on income |
-31 |
-39 |
-14.1% |
| Effective tax rate |
23.6% |
29.4% |
|
| Income for the period |
101 |
90 |
12.4% |
| Attributable to the Company's shareholders |
69 |
68 |
1.1% |
| Attributable to non-controlling interests |
32 |
22 |
47.9% |
Conference Call and analyst meeting details
The company will host an investor conference at the company's offices, 49 Hasivim St., Petah Tikva today, Tuesday, November 22nd at 14:00 during which management will discuss the financial results.
The company will also host a conference call to discuss Q3 2016 results today, Tuesday, November 22nd, 2016 at 17:30 pm local Israel time / 15:30 pm UK / 10:30 am Eastern time. The conference will be hosted by Gadi Lesin, CEO and Shahar Florence, CFO, and will be followed by a question and answers session.
To participate in the live call please dial one of the following numbers:
From the UK: 0-800-051-8913
From the US: 1-888- 407-2553
From Israel: 03-918-0691
The conference call will be accompanied by a presentation which is available on the Investor Relations section of the company's website:
http://ir.strauss-group.com/phoenix.zhtml?c=92539&p=irol-presentations
Replay Number:
Israel and International +972-3-925-5941
The replay will be available from November 22nd until November 24th, 2016.
For further information please contact:
| Daniella Finn Director of Investor Relations Strauss Group Ltd. 972-54-577-2195 972-3-675-2545 Daniella.Finn@Strauss-Group.com
|
Osnat Golan VP Communications & Digital, Spokesperson Strauss Group Ltd. 972-52-828-8111 972-3-675-2281 Or Gil Messing External Communications Director Strauss Group Ltd. 972-54-252-5272
|
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