Strauss Group posts 1.3% organic sales growth, excluding foreign currency effects(1), and net profit erosion(2)
PETACH TIKVA, Israel, Aug. 20, 2015 /PRNewswire/ -- Gadi Lesin, President and Chief Executive Officer of Strauss Group (STRS.TA), said today (August 20, 2015): "A combination of macroeconomic events in several companies and regions and a number of specific events (recall of hummus cases by Sabra in the US, the debt settlement with Mega Retail in Israel and an impairment provision in Serbia) have led to erosion of the Group's operating and net profit, compared to a strong corresponding quarter. The Group is implementing streamlining measures along the entire value chain, including production, supply chain and cost cutting at the corporate center. In parallel, the Group continues to implement its global expansion strategy, which includes completion of the restructuring of the Haier Strauss Water joint venture in China and the continued development of the TRES solution, under which Tres Coracoes joint venture in Brazil(3) is active in the single portion multi-beverage machines and capsules segment."
Link to Q2'15 conference call details
H1 2015 highlights (2)
- Organic sales growth, excluding the foreign exchange effects, was 1.3% (1). Shekel sales were NIS 3.8 billion compared to NIS 3.9 billion in the corresponding quarter last year, and reflected NIS 185 million negative translation differences as a result of the continued strengthening of the NIS versus other functional currencies of the Group.
- Gross profit was NIS 1,418 million (37.6% of sales), down 9.0% compared to the corresponding period last year. Gross margins were down 2.1%.
- Operating profit (EBIT) was NIS 309 million (8.2% of sales), down 17.9% compared to the corresponding quarter last year. EBIT margins were down 1.4%.
- EPS for shareholders of the company was NIS 1.24 per share, down 21.2% compared to the corresponding period.
- Cash flows from operating activities totaled NIS 30 million, compared to NIS 128 million last year.
| (1) Also excluding the impact of classification of costs following the introduction of the Food Law, as explained in the Board of Directors Report. |
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| (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. |
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| (3) Tres Coracoes (3C) – Brazil – a company jointly held by the Group (50%) and by a local holding company, Sao Miguel Holding e Investimentos S.A. (50%). |
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|
Non GAAP Adjusted Figures (1) |
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| First Half |
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|
2015 2014 |
Change |
Organic Sales Growth excluding FX and Food Law |
||
| Total Group Sales (NIS mm) |
3,769 |
3,922 |
-3.9% |
1.3% |
| Gross Profit (NIS mm) |
1,418 |
1,558 |
-9.0% |
|
| Gross Margins (%) |
37.6% |
39.7% |
-210 bps |
|
| EBITDA (NIS mm) |
425 |
485 |
-12.3% |
|
| EBITDA Margins (%) |
11.3% |
12.4% |
-110 bps |
|
| EBIT (NIS mm) |
309 |
376 |
-17.9% |
|
| EBIT Margins (%) |
8.2% |
9.6% |
-140 bps |
|
| Net Income Attributable to the Company's Shareholders (NIS mm) |
133 |
168 |
-20.6% |
|
| Net Income Margin Attributable to the Company's Shareholders (%) |
3.5% |
4.3% |
-80 bps |
|
| EPS (NIS) |
1.24 |
1.57 |
-21.0% |
|
| Operating Cash Flow (NIS mm) |
30 |
128 |
-76.6% |
|
| Capex (NIS mm) (2) |
(157) |
(257) |
-38.9% |
|
| Net debt (NIS mm) |
1,833 |
1,720 |
6.6% |
|
| Net debt / annual EBITDA |
2.0x |
1.8x |
0.3x |
|
| (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. |
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| (2) Investments include the acquisition of fixed assets and investment in intangibles and deferred expenses. |
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| Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. |
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|
Non GAAP Adjusted Figures (1) |
||||||||
| First Half |
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| Sales (NIS |
Sales |
Organic |
EBIT (NIS |
NIS |
% Change |
EBIT margins |
Change in |
|
| Sales and EBIT by Operating Segments and Activities |
||||||||
| Strauss Israel: |
||||||||
| Health & Wellness |
928 |
-5.2% |
-3.3% |
78 |
(22) |
-21.3% |
8.4% |
-170 bps |
| Fun & Indulgence (2) |
503 |
-4.2% |
-1.7% |
58 |
(8) |
-12.0% |
11.6% |
-100 bps |
| Total Strauss Israel |
1,431 |
-4.8% |
-2.7% |
136 |
(30) |
-17.6% |
9.5% |
-150 bps |
| Strauss Coffee: |
||||||||
| Coffee Israel |
333 |
-6.4% |
-3.5% |
46 |
(8) |
-12.8% |
14.0% |
-100 bps |
| International Coffee (2) |
1,348 |
-5.0% |
11.4% |
90 |
(35) |
-28.9% |
6.6% |
-230 bps |
| Total Strauss Coffee |
1,681 |
-5.2% |
7.9% |
136 |
(43) |
-24.1% |
8.1% |
-200 bps |
| International Dips & Spreads: |
||||||||
| Sabra (50%) (2) |
347 |
14.0% |
1.4% |
34 |
(8) |
-19.9% |
9.7% |
-410 bps |
| Obela (50%) (2) |
17 |
7.6% |
12.4% |
(11) |
(1) |
NM |
NM |
NM |
| Total International Dips & Spreads |
364 |
13.7% |
1.9% |
23 |
(9) |
-28.3% |
6.3% |
-370 bps |
| Other (2) |
293 |
-9.8% |
-12.8% |
14 |
15 |
-2282.0% |
4.6% |
+480 bps |
| Total Group |
3,769 |
-3.9% |
1.3% |
309 |
(67) |
-17.9% |
8.2% |
-140 bps |
| (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. |
| (2) |
Fun & Indulgence figures include Strauss 50% share in the salty snacks business. International Coffee figures include Strauss 50% share in Tres Coracoes Joint Venture (3C) – Brazil - a company jointly held by the Group (50%) and by the 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 2015 highlights (1)
- Organic sales growth, excluding the foreign exchange effects, was 0.6% (2). Shekel sales were NIS 1.8 billion compared to NIS 1.9 billion in the corresponding quarter last year, and reflected NIS 118 million negative translation differences as a result of the continued strengthening of the NIS versus other functional currencies of the Group.
- Gross profit was NIS 689 million (37.4% of sales), down 10.5% compared to the corresponding period last year. Gross margins were down 2.0%.
- Operating profit (EBIT) was NIS 112 million (6.1% of sales), down 35.3% compared to the corresponding quarter last year. EBIT margins were down 2.8%.
- EPS for shareholders of the company was NIS 0.29 per share, down 54.3% compared to the corresponding period.
- Cash flows from operating activities totaled NIS 180 million, compared to NIS 113 million last year.
| (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. |
||||
| (2) Also excluding the impact of classification of costs following the introduction of the Food Law, as explained in the Board of Directors Report.
|
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|
Non GAAP Adjusted Figures (1) |
||||
| Second Quarter |
||||
| 2015 |
2014 |
Change |
Organic Sales Growth |
|
| Total Group Sales (NIS mm) |
1,839 |
1,949 |
-5.7% |
0.6% |
| Gross Profit (NIS mm) |
689 |
768 |
-10.5% |
|
| Gross Margins (%) |
37.4% |
39.4% |
-200 bps |
|
| EBITDA (NIS mm) |
173 |
227 |
-23.5% |
|
| EBITDA Margins (%) |
9.4% |
11.6% |
-220 bps |
|
| EBIT (NIS mm) |
112 |
172 |
-35.3% |
|
| EBIT Margins (%) |
6.1% |
8.9% |
-280 bps |
|
| Net Income Attributable to the Company's Shareholders (NIS mm) |
31 |
69 |
-54.0% |
|
| Net Income Margin (Attributable to the Company's Shareholders) (%) |
1.7% |
3.5% |
-180 bps |
|
| EPS (NIS) |
0.29 |
0.64 |
-54.3% |
|
| Operating Cash Flow (NIS mm) |
180 |
113 |
59.7% |
|
| Capex (NIS mm) (2) |
(70) |
(125) |
-44.0% |
|
| Net debt (NIS mm) |
1,833 |
1,720 |
6.6% |
|
| Net debt / annual EBITDA |
2.0x |
1.8x |
0.3x |
|
| (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. |
||||||||
| (2) 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 (1) |
||||||||
| Second Quarter |
||||||||
| Sales (NIS |
Sales |
Organic |
EBIT (NIS |
NIS Change in EBIT |
% Change |
EBIT margins |
Change in |
|
| Sales and EBIT by Operating Segments and Activities |
||||||||
| Strauss Israel: |
||||||||
| Health & Wellness |
474 |
-5.2% |
-3.4% |
33 |
(18) |
-34.3% |
7.0% |
-310 bps |
| Fun & Indulgence (2) |
204 |
-4.7% |
-1.7% |
11 |
(6) |
-33.8% |
5.5% |
-250 bps |
| Total Strauss Israel |
678 |
-5.0% |
-2.9% |
44 |
(24) |
-34.2% |
6.6% |
-290 bps |
| Strauss Coffee: |
||||||||
| Israel Coffee |
137 |
-9.3% |
-6.7% |
7 |
(6) |
-39.1% |
5.6% |
-280 bps |
| International Coffee (2) |
698 |
-7.7% |
11.1% |
43 |
(33) |
-44.5% |
6.1% |
-400 bps |
| Total Strauss Coffee |
835 |
-8.0% |
7.6% |
50 |
(39) |
-43.8% |
6.0% |
-380 bps |
| International Dips & Spreads: |
||||||||
| Sabra (50%) (2) |
173 |
6.9% |
-4.3% |
14 |
(9) |
-40.6% |
7.9% |
-640 bps |
| Obela (50%) (2) |
8 |
-5.3% |
-0.9% |
(5) |
0 |
NM |
NM |
NM |
| Total International Dips & Spreads |
182 |
6.3% |
-4.2% |
9 |
(9) |
-50.8% |
4.9% |
-560 bps |
| Other (2) |
144 |
-8.7% |
-12.5% |
9 |
12 |
529.4% |
NM |
NM |
| Total Group |
1,839 |
-5.7% |
0.6% |
112 |
(60) |
-35.3% |
6.1% |
-280 bps |
| (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. |
| (2) |
Fun & Indulgence figures include Strauss 50% share in the salty snacks business. International Coffee figures include Strauss 50% share in Tres Coracoes Joint Venture (3C) – Brazil - a company jointly held by the Group (50%) and by the 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 |
||
| 2015 |
2014 |
|
| GAAP sales |
2,516 |
2,636 |
| Add back JV sales (accounted for under the equity method) |
1,253 |
1,286 |
| Non GAAP sales |
3,769 |
3,922 |
| GAAP EBIT |
275 |
334 |
| Minus: Share of profits of equity-accounted investees |
(83) |
(104) |
| Plus: JV EBIT (accounted for under the equity method) |
107 |
126 |
| Additional adjustments: |
||
| Non cash equity based compensation |
9 |
10 |
| Loss (Profit) from accounting mark-to-market of commodity hedging transactions as at the end of period |
(5) |
(9) |
| Other expenses |
6 |
19 |
| Non GAAP Adjusted EBIT according to management reports |
309 |
376 |
| Non GAAP financing expenses, net (including JVs) |
(64) |
(56) |
| Non GAAP taxes on income (including JVs) |
(68) |
(106) |
| Taxes on income in respect of the additional adjustments above |
(1) |
7 |
| Non GAAP income for the period |
176 |
221 |
| Attributable to the Company's shareholders |
133 |
168 |
| Attributable to Non controlling interests |
43 |
53 |
| Reconciliations of GAAP to Non GAAP Adjusted Figures |
||
| Second Quarter |
||
| 2015 |
2014 |
|
| GAAP sales |
1,208 |
1,266 |
| Add back JV sales (accounted for under the equity method) |
631 |
683 |
| Non GAAP sales |
1,839 |
1,949 |
| GAAP EBIT |
137 |
121 |
| Minus: Share of profits of equity-accounted investees |
(34) |
(48) |
| Plus: JV EBIT (accounted for under the equity method) |
45 |
57 |
| Additional adjustments: |
||
| Non cash equity based compensation |
5 |
6 |
| Loss from accounting mark-to-market of commodity hedging transactions as at the end of period |
(44) |
29 |
| Other expenses |
3 |
7 |
| Non GAAP Adjusted EBIT according to management reports |
112 |
172 |
| Non GAAP financing expenses, net (including JVs) |
(46) |
(38) |
| Non GAAP taxes on income (including JVs) |
(26) |
(41) |
| Taxes on income in respect of the additional adjustments above |
7 |
3 |
| Non GAAP income for the period |
47 |
96 |
| Attributable to the Company's shareholders |
31 |
69 |
| Attributable to Non controlling interests |
16 |
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 |
| Or |
|
| Gil Messing External Communications Director Strauss Group Ltd. 972-54-252-5272 |
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