Strauss Group concluded the first half of 2014 with approximately 3.3% organic growth (excluding the foreign currency effect)
-- Thanks to an improvement in the results of our international growth drivers, in the second quarter the gross profit grew by 2.7%, and the currency effect on sales was estimated at approximately NIS 95 million
-- Taking a multi-year perspective, the Group's Profitability for the half and quarter have continued its trend of improvement
PETACH TIKVA, Israel, Aug. 20, 2014 /PRNewswire/ -- Gadi Lesin, President and Chief Executive Officer of Strauss Group, said today (August 19, 2014): "Strauss posted stable growth excluding the FX effect. The Group is contending with economic challenges in Eastern European markets, notably Russian and Ukraine, while posting continued growth in the international dips and spreads operation and in Strauss Water."
H1 2014 highlights (1)
- Although lower than 2013, which was a record year, taking a multi-year perspective the Company's business results have continued their growth trend.
- Organic sales growth, excluding the impact of foreign exchange, was 3.3%. Sales amounted to NIS 3.9 billion, a decrease of 2.7%, reflecting by NIS 228 million negative translation differences as a result of the continued strengthening of the NIS versus other functional currencies of the Group.
- Gross profit amounted to NIS 1,558 million (39.7% of sales), an increase of 2.7% compared to the corresponding period last year. Gross margins were up 2.0%.
- Operating profit (EBIT) amounted to NIS 376 million (9.6% of sales), a decrease of 5.5% compared to the corresponding period last year. EBIT margins were down 0.3%.
- Earnings per share amounted to NIS 1.57, a decrease of 6.0% compared to the corresponding period last year.
- Cash flows from operating activities amounted to NIS 128 million, compared to NIS 240 million in the corresponding period.
- Net debt as at June 30, 2014 amounted to NIS 1,720 million, compared to NIS 1,403 million on June 30, 2013 and NIS 1,475 million on December 31, 2013.
| (1) |
Based on non-GAAP data, which include the proportionate consolidation of jointly-held partnerships (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 Adjusted Figures (2) |
||||
| First Half |
||||
| 2014 |
2013 |
Change |
Organic |
|
| Total Group Sales (NIS mm) |
3,922 |
4,029 |
-2.7% |
3.3% |
| Gross Profit (NIS mm) |
1,558 |
1,518 |
2.7% |
|
| Gross Margins (%) |
39.7% |
37.7% |
+200 bps |
|
| EBITDA (NIS mm) |
485 |
509 |
-4.9% |
|
| EBITDA Margins (%) |
12.4% |
12.7% |
-30 bps |
|
| EBIT (NIS mm) |
376 |
399 |
-5.5% |
|
| EBIT Margins (%) |
9.6% |
9.9% |
-30 bps |
|
| Net Income Attributable to the |
168 |
178 |
-5.6% |
|
| Net Income Margin Attributable to |
4.3% |
4.4% |
-10 bps |
|
| EPS (NIS) |
1.57 |
1.67 |
-6.0% |
|
| Operating Cash Flow (NIS mm) |
128 |
240 |
||
| Capex (NIS mm) (3) |
(257) |
(201) |
27.9% |
|
| Net debt (NIS mm) |
1,720 |
1,403 |
22.6% |
|
| Net debt / annual EBITDA |
1.7x |
1.6x |
0.1x |
|
| (2) |
Based on non-GAAP data, which include the proportionate consolidation of jointly-held partnerships (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. |
| (3) |
Investments include the acquisition of fixed assets and investment in intangibles and deferred expenses. |
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 Adjusted Figures (4) |
||||||||
| First Half |
||||||||
| Sales |
Sales Growth |
Organic Sales |
EBIT (NIS mm) |
NIS |
% Change |
EBIT |
Change in EBIT |
|
| Sales and EBIT by Operating |
||||||||
| Strauss Israel: |
||||||||
| Health & Wellness |
979 |
2.2% |
2.2% |
100 |
14 |
15.5% |
10.1% |
+110 bps |
| Fun & Indulgence (5) |
524 |
-0.1% |
-0.1% |
66 |
(10) |
-12.2% |
12.6% |
-180 bps |
| Total Strauss Israel |
1,503 |
1.4% |
1.4% |
166 |
4 |
2.5% |
11.0% |
+10 bps |
| Strauss Coffee: |
||||||||
| Coffee Israel |
356 |
-1.7% |
-1.7% |
54 |
0 |
-1.3% |
15.0% |
-- |
| International Coffee (5) |
1,418 |
-12.4% |
0.9% |
125 |
(31) |
-19.1% |
8.9% |
-70 bps |
| Total Strauss Coffee |
1,774 |
-10.4% |
0.1% |
179 |
(31) |
-14.5% |
10.1% |
-50 bps |
| International Dips & Spreads: |
||||||||
| Sabra (50%) (5) |
304 |
9.9% |
15.7% |
42 |
8 |
24.2% |
13.8% |
+160 bps |
| Obela (50%) (5) |
16 |
-1.4% |
15.4% |
(10) |
(1) |
6.8% |
NM |
NM |
| Total International Dips & |
320 |
9.3% |
15.7% |
32 |
8 |
30.9% |
10.0% |
+160 bps |
| Other (5) |
325 |
19.0% |
22.1% |
(1) |
(4) |
-122.8% |
-0.2% |
-120 bps |
| Total Group |
3,922 |
-2.7% |
3.3% |
376 |
(23) |
-5.5% |
9.6% |
-30 bps |
| (4) |
Based on non-GAAP data, which include the proportionate consolidation of jointly-held partnerships (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. |
| (5) |
Fun & Indulgence figures include Strauss 50% share in the salty snacks business. International Coffee figures include Strauss 50% share in Tres Coracoes (3C) – a company jointly held by the Group (50%) and by a local Sao Miguel Group (50%). International D&S figures reflect Strauss 50% share in Sabra and Obela. Other includes Strauss share in Strauss Water China. |
Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.
Q2 2014 highlights (1)
- Although lower than 2013, which was a record year, taking a multi-year perspective the Company's business results have continued their growth trend.
- Organic sales growth, excluding the impact of foreign exchange, was 1.7%. Sales amounted to NIS 1.9 billion, a decrease of 3.3%, reflecting by NIS 95 million negative translation differences as a result of the continued strengthening of the NIS versus other functional currencies of the Group.
- Gross profit amounted to NIS 768 million (39.4% of sales), an increase of 2.3% compared to the corresponding period last year. Gross margins were up 2.2%.
- Operating profit (EBIT) amounted to NIS 172 million (8.9% of sales), a decrease of 6.3% compared to the corresponding period last year. EBIT margins were down 0.2%.
- Earnings per share amounted to NIS 0.64, a decrease of 8.8% compared to the corresponding period last year.
- Cash flows from operating activities amounted to NIS 113 million, compared to NIS 240 million in the corresponding period.
| (1) |
Based on non-GAAP data, which include the proportionate consolidation of jointly-held partnerships (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 Adjusted Figures (2) |
||||
| Second Quarter |
||||
| 2014 |
2013 |
Change |
Organic |
|
| Total Group Sales (NIS mm) |
1,949 |
2,016 |
-3.3% |
1.7% |
| Gross Profit (NIS mm) |
768 |
751 |
2.3% |
|
| Gross Margins (%) |
39.4% |
37.2% |
+220 bps |
|
| EBITDA (NIS mm) |
227 |
239 |
-5.4% |
|
| EBITDA Margins (%) |
11.6% |
11.9% |
-30 bps |
|
| EBIT (NIS mm) |
172 |
185 |
-6.3% |
|
| EBIT Margins (%) |
8.9% |
9.1% |
-20 bps |
|
| Net Income Attributable to the Company's Shareholders (NIS mm) |
69 |
75 |
-8.7% |
|
| Net Income Margin (Attributable to the Company's Shareholders) (%) |
3.5% |
3.7% |
-20 bps |
|
| EPS (NIS) |
0.64 |
0.70 |
-8.8% |
|
| Operating Cash Flow (NIS mm) |
113 |
240 |
-52.9% |
|
| Capex (NIS mm) (3) |
(125) |
(109) |
14.7% |
|
| Net debt (NIS mm) |
1,720 |
1,403 |
22.6% |
|
| Net debt / annual EBITDA |
1.7x |
1.6x |
0.1x |
|
| (2) |
Based on non-GAAP data, which include the proportionate consolidation of jointly-held partnerships (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. |
| (3) |
Investments include the acquisition of fixed assets and investment in intangibles and deferred expenses. |
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 Adjusted Figures (4) |
||||||||
| Second Quarter |
||||||||
| Sales |
Sales Growth |
Organic Sales |
EBIT (NIS mm) |
NIS Change in EBIT |
% Change |
EBIT |
Change in EBIT |
|
| Sales and EBIT by Operating |
||||||||
| Strauss Israel: |
||||||||
| Health & Wellness |
500 |
-0.7% |
-0.7% |
51 |
4 |
7.0% |
10.1% |
+70 bps |
| Fun & Indulgence (5) |
213 |
-4.2% |
-4.2% |
17 |
(4) |
-15.5% |
8.0% |
-100 bps |
| Total Strauss Israel |
713 |
-1.8% |
-1.8% |
68 |
0 |
0.2% |
9.5% |
+20 bps |
| Strauss Coffee: |
||||||||
| Israel Coffee |
151 |
-2.8% |
-2.8% |
13 |
(3) |
-19.1% |
8.4% |
-170 bps |
| International Coffee (5) |
757 |
-9.6% |
1.1% |
76 |
(7) |
-7.2% |
10.1% |
+20 bps |
| Total Strauss Coffee |
908 |
-8.5% |
0.2% |
89 |
(10) |
-9.1% |
9.8% |
-10 bps |
| International Dips & Spreads: |
||||||||
| Sabra (50%) (5) |
162 |
6.1% |
11.1% |
23 |
1 |
3.1% |
14.3% |
-40 bps |
| Obela (50%) (5) |
9 |
27.6% |
41.9% |
(5) |
-- |
-7.5% |
NM |
NM |
| Total International Dips & |
170 |
7.0% |
12.3% |
18 |
1 |
1.9% |
10.5% |
-50 bps |
| Other (5) |
158 |
13.7% |
17.8% |
(3) |
(4) |
260.7% |
NM |
NM |
| Total Group |
1,949 |
-3.3% |
1.7% |
172 |
(13) |
-6.3% |
8.9% |
-20 bps |
| (4) |
Based on non-GAAP data, which include the proportionate consolidation of jointly-held partnerships (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. |
| (5) |
Fun & Indulgence figures include Strauss 50% share in the salty snacks business. International Coffee figures include Strauss 50% share in Tres Coracoes (3C) – a company jointly held by the Group (50%) and by a local Sao Miguel Group (50%). International D&S figures reflect Strauss 50% share in Sabra and Obela. Other includes Strauss share in Strauss Water China. |
Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.
Appendix
| Reconciliations of GAAP to Non GAAP Adjusted Figures |
||
| First Half |
||
| 2014 |
2013 |
|
| GAAP sales |
2,636 |
2,752 |
| Add back JV sales (accounted for under the equity method) |
1,286 |
1,277 |
| Non GAAP sales |
3,922 |
4,029 |
| GAAP EBIT |
334 |
336 |
| Minus: Share in income of equity-accounted investees |
(104) |
(87) |
| Plus: JV EBIT (accounted for under the equity method) |
126 |
120 |
| Additional adjustments: |
||
| Non cash equity based compensation |
10 |
10 |
| Loss (Profit) from accounting mark-to-market of commodity hedging transactions as at the end of period |
(9) |
17 |
| Other expenses |
19 |
3 |
| Non GAAP Adjusted EBIT according to management reports |
376 |
399 |
| Non GAAP financing expenses, net (including JVs) |
(56) |
(62) |
| Non GAAP taxes on income (including JVs) |
(106) |
(107) |
| Taxes on income in respect of the additional adjustments above |
7 |
4 |
| Non GAAP income for the period |
221 |
234 |
| Attributable to the Company's shareholders |
168 |
178 |
| Non controlling interests |
53 |
56 |
| Reconciliations of GAAP to Non GAAP Adjusted Figures |
||
| Second Quarter |
||
| 2014 |
2013 |
|
| GAAP sales |
1,266 |
1,334 |
| Add back JV sales (accounted for under the equity method) |
683 |
682 |
| Non GAAP sales |
1,949 |
2,016 |
| GAAP EBIT |
121 |
119 |
| Minus: Share in income of equity-accounted investees |
(48) |
(56) |
| Plus: JV EBIT (accounted for under the equity method) |
57 |
76 |
| Additional adjustments: |
||
| Non cash equity based compensation |
6 |
5 |
| Loss from accounting mark-to-market of commodity hedging transactions as at the end of period |
29 |
35 |
| Other expenses |
7 |
6 |
| Non GAAP Adjusted EBIT according to management reports |
172 |
185 |
| Non GAAP financing expenses, net (including JVs) |
(38) |
(36) |
| Non GAAP taxes on income (including JVs) |
(41) |
(43) |
| Taxes on income in respect of the additional adjustments above |
3 |
(4) |
| Non GAAP income for the period |
96 |
102 |
| Attributable to the Company's shareholders |
69 |
75 |
| Non controlling interests |
27 |
27 |
For further information please contact:
| Talia Sessler Investor Relations Director Strauss Group Ltd. 972-54-577-2195 972-3-675-2545 |
Osnat Golan VP Communications & Digital, Spokesperson Strauss Group Ltd. 972-52-828-8111 972-3-675-2281 |
| Gil Messing External Communications Director Strauss Group Ltd. 972-54-252-5272 |
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