Subjects: ERN, CCA, ACC
Strauss Group Delivers Yet Another Quarter of Growth and Rising Profit
PETACH TIKVA, Israel, Nov. 14, 2018 /PRNewswire/ -- Giora Bardea, President and CEO of Strauss Group (TASE: STRS): "Strauss Group continues to deliver strong performance. The company's sales and profit continue to consistently improve in Israel and in international operations, despite the significant negative impact of changes in foreign currency on shekel results, particularly in the business in Brazil. Our focus remains on innovation based growth, combined with continued investment in productivity across all operations.
"In Israel, Strauss continues to outpace market growth for the eleventh successive quarter. In the reporting period the company increased its market share to 11.9% of the food and beverage sector. Revenue and market share growth were achieved, among other things, thanks to new product launches in all divisions.
"We are posting an excellent quarter also in Strauss's global operations, which account for around half of the Group's business. The joint venture in Brazil continues to grow, with sales volumes increasing significantly. However, due to negative currency translations that detracted NIS 100 million, growth was not reflected in shekel revenues. The international dips and spreads business is also growing at an impressive rate, as is Strauss Water's business in Israel and in other countries."
Q3
2018 highlights(1)
- Organic sales growth, excluding foreign exchange effects, was c2.9%. Shekel sales were NIS c2.2 billion, similar to the corresponding period, and were impacted by negative currency translations amounting to NIS c108 million, mainly as a result of the depreciation of the BRL against the NIS compared to last year. It is noted that as at the publication date of the financial statements the BRL has appreciated against the NIS, regaining c7.3% in value versus the exchange rate at the end of the quarter.
- Gross profit was NIS c812 million (c37.6% of sales), up c0.3% compared to the corresponding period. Gross margins were up c1.0%.
- Operating profit (EBIT) was NIS c235 million (c10.9% of sales), up c6.1% compared to the corresponding period last year. EBIT margins were up c0.9%.
- EPS for shareholders of the Company was NIS c1.25, up c14.8% compared to the corresponding period.
- Positive cash flows from operating activities totaled NIS c248 million, compared to NIS c181 million in the corresponding period.
(1) Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, unless stated otherwise.
First nine months 2018 highlights(1)
- Organic sales growth, excluding foreign exchange effects, was c5.6%. Shekel sales were NIS c6.4 billion compared to NIS 6.3 billion in the corresponding period in 2017; sales were impacted by negative currency translations amounting to NIS c210 million, mainly as a result of the depreciation of the BRL against the NIS compared to last year.
- Gross profit was NIS c2,458 million (c38.2% of sales), up c4.9% compared to the corresponding period last year. Gross margins were up c1.2%.
- Operating profit (EBIT) was NIS c696 million (c10.8% of sales), up c10.4% compared to the corresponding period last year. EBIT margins were up c0.8%.
- EPS for shareholders of the Company was NIS c3.50, up c15.0% compared to the corresponding period.
- Positive cash flows from operating activities totaled NIS c544 million, compared to NIS c294 million in the corresponding period.
(1) Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, unless stated otherwise.
Non GAAP Figures (1) | |||
Third Quarter | |||
2018 | 2017 | Change | |
Total Group Sales (NIS mm) | 2,158 | 2,210 | -2.4% |
Organic Sales Growth excluding FX | 2.9% | ||
Gross Profit (NIS mm) | 812 | 809 | 0.3% |
Gross Margins (%) | 37.6% | 36.6% | +100 bps |
EBITDA (NIS mm) | 294 | 283 | 3.6% |
EBITDA Margins (%) | 13.6% | 12.8% | +80 bps |
EBIT (NIS mm) | 235 | 221 | 6.1% |
EBIT Margins (%) | 10.9% | 10.0% | +90 bps |
Net Income Attributable to the | 144 | 125 | 15.1% |
Net Income Margin Attributable to the | 6.6% | 5.6% | +100 bps |
EPS (NIS) | 1.25 | 1.09 | 14.8% |
Operating Cash Flow (NIS mm) | 248 | 181 | 37.3% |
Capex (NIS mm) (2) | (82) | (57) | 43.9% |
Net debt (NIS mm) | 1,974 | 2,285 | -13.6% |
Net debt / annual EBITDA | 1.8x | 2.3x | (0.5x) |
(1) Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, unless stated otherwise.
(2) Investments include the acquisition of fixed assets and investment in intangible assets.
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) | ||||||||
Third Quarter | ||||||||
Sales | Sales | Organic | EBIT | NIS | % Change | EBIT | Change in | |
Sales and EBIT by Operating | ||||||||
Strauss Israel: | ||||||||
Health & Wellness | 575 | 4.2% | 4.2% | 62 | 0 | 0.5% | 10.9% | -40 bps |
Fun & Indulgence (2) | 262 | 2.4% | 2.4% | 28 | 2 | 4.8% | 10.3% | +20 bps |
Total Strauss Israel | 837 | 3.6% | 3.6% | 90 | 2 | 1.6% | 10.7% | -20 bps |
Strauss Coffee: | ||||||||
Coffee Israel | 176 | 0.7% | 0.7% | 31 | 4 | 14.3% | 17.4% | +210 bps |
International Coffee (2) | 792 | -11.7% | 0.8% | 80 | (15) | -14.9% | 10.1% | -40 bps |
Total Strauss Coffee | 968 | -9.7% | 0.9% | 111 | (11) | -8.4% | 11.4% | +10 bps |
International Dips & Spreads: | ||||||||
Sabra (50%) (2) | 175 | 4.2% | 4.0% | 14 | 11 | 307.8% | 8.0% | +590 bps |
Obela (50%) (2) | 20 | 12.9% | 18.0% | (2) | 1 | NM | NM | NM |
Total International Dips & Spreads | 196 | 5.1% | 5.2% | 12 | 12 | NM | 6.0% | +590 bps |
Strauss Water (2)(3) | 157 | 9.4% | 9.3% | 18 | 9 | 101.3% | 11.5% | +520 bps |
Other (4) | 0 | NM | NM | 4 | 2 | 56.7% | NM | NM |
Total Group | 2,158 | -2.4% | 2.9% | 235 | 14 | 6.1% | 10.9% | +90 bps |
(1) Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, unless stated otherwise.
(2) Fun & Indulgence figures include Strauss's 50% share in the salty snacks business. International Coffee figures include Strauss's 50% share in the Três Corações joint venture (3C) ? Brazil ? a company jointly held by the Group (50%) and by the local São Miguel Group (50%). International D&S figures reflect Strauss's 50% share in Sabra and Obela. Strauss Water figures include Strauss's share in the joint venture in China, Haier Strauss Water (HSW). Until August 2017 the Company held a 34% stake in the joint venture, and commencing in September 2017, its percentage holding increased to 49% following the acquisition of an additional 15%.
(3) Commencing in the first quarter of 2018, Company Management has elected to report the results of the Strauss Water segment, formerly presented within the Other Operations segment, separately.
(4) In the second quarter of 2017 the Company sold the Max Brenner operation.
Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. Total figures for International Dips & Spreads were calculated on the basis of the exact figures for Sabra and Obela in NIS thousands.
Non GAAP Figures (1) | |||
First Nine Months | |||
2018 | 2017 | Change | |
Total Group Sales (NIS mm) | 6,428 | 6,335 | 1.5% |
Organic Sales Growth excluding FX | 5.6% | ||
Gross Profit (NIS mm) | 2,458 | 2,342 | 4.9% |
Gross Margins (%) | 38.2% | 37.0% | +120 bps |
EBITDA (NIS mm) | 869 | 804 | 8.2% |
EBITDA Margins (%) | 13.5% | 12.7% | +80 bps |
EBIT (NIS mm) | 696 | 631 | 10.4% |
EBIT Margins (%) | 10.8% | 10.0% | +80 bps |
Net Income Attributable to the | 402 | 338 | 18.8% |
Net Income Margin Attributable to the | 6.2% | 5.3% | +90 bps |
EPS (NIS) | 3.50 | 3.04 | 15.0% |
Operating Cash Flow (NIS mm) | 544 | 294 | 85.2% |
Capex (NIS mm) (2) | (228) | (189) | 20.6% |
Net debt (NIS mm) | 1,974 | 2,285 | -13.6% |
Net debt / annual EBITDA | 1.8x | 2.3x | (0.5x) |
(1) Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, unless stated otherwise.
(2) Investments include the acquisition of fixed assets and investment in intangibles assets.
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 | Sales | Organic | EBIT | NIS | % Change | EBIT margins | Change in | |
Sales and EBIT by Operating | ||||||||
Strauss Israel: | ||||||||
Health & Wellness | 1,643 | 5.7% | 5.7% | 172 | 2 | 1.4% | 10.5% | -40 bps |
Fun & Indulgence (2) | 838 | 3.6% | 3.6% | 96 | 7 | 7.7% | 11.5% | +50 bps |
Total Strauss Israel | 2,481 | 5.0% | 5.0% | 268 | 9 | 3.5% | 10.8% | -20 bps |
Strauss Coffee: | ||||||||
Coffee Israel | 551 | 2.7% | 2.7% | 90 | 6 | 8.0% | 16.4% | +80 bps |
International Coffee (2) | 2,381 | -3.9% | 4.6% | 247 | 17 | 7.2% | 10.3% | +100 bps |
Total Strauss Coffee | 2,932 | -2.7% | 4.4% | 337 | 23 | 7.4% | 11.5% | +110 bps |
International Dips & Spreads: | ||||||||
Sabra (50%) (2) | 515 | 8.4% | 11.1% | 48 | 17 | 53.6% | 9.4% | +280 bps |
Obela (50%) (2) | 58 | 19.1% | 21.0% | (7) | 2 | NM | NM | NM |
Total International Dips & Spreads | 573 | 9.4% | 12.0% | 41 | 18 | 82.0% | 7.2% | +290 bps |
Strauss Water (2)(3) | 442 | 9.2% | 9.2% | 45 | 18 | 65.4% | 10.1% | +340 bps |
Other (4) | 0 | -100.0% | NM | 5 | (3) | -38.0% | NM | NM |
Total Group | 6,428 | 1.5% | 5.6% | 696 | 65 | 10.4% | 10.8% | +80 bps |
(1) Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, unless stated otherwise.
(2) Fun & Indulgence figures include Strauss's 50% share in the salty snacks business. International Coffee figures include Strauss's 50% share in the Três Corações joint venture (3C) ? Brazil ? a company jointly held by the Group (50%) and by the local São Miguel Group (50%). International D&S figures reflect Strauss's 50% share in Sabra and Obela. Strauss Water figures include Strauss's share in the joint venture in China, Haier Strauss Water (HSW). Until August 2017 the Company held a 34% stake in the joint venture, and commencing in September 2017, its percentage holding increased to 49% following the acquisition of an additional 15%.
(3) Commencing in the first quarter of 2018, Company Management has elected to report the results of the Strauss Water segment, formerly presented within the Other Operations segment, separately.
(4) In the second quarter of 2017 the Company sold the Max Brenner operation.
Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. Total figures for International Dips & Spreads were calculated on the basis of the exact figures for Sabra and Obela in NIS thousands.
Appendix
Condensed financial accounting (GAAP) | |||
Third Quarter | |||
2018 | 2017 | Change | |
Sales | 1,411 | 1,399 | 0.8% |
Cost of sales excluding impact of commodity hedges | 856 | 855 | 0.1% |
Adjustments for commodity hedges | 13 | (1) | |
Cost of sales | 869 | 854 | 1.8% |
Gross profit | 542 | 545 | -0.7% |
% of sales | 38.4% | 39.0% | |
Selling and marketing expenses | 314 | 308 | 1.9% |
General and administrative expenses | 86 | 96 | -10.6% |
Total expenses | 400 | 404 | |
Share of profit of equity-accounted investees | 66 | 26 | 149.5% |
Operating profit before other expenses | 208 | 167 | 24.2% |
% of sales | 14.7% | 12.0% | |
Other expenses, net | (2) | - | |
Operating profit after other expenses | 206 | 167 | 23.7% |
Financing expenses, net | (25) | (22) | 14.2% |
Income before taxes on income | 181 | 145 | 25.2% |
Taxes on income | (38) | (37) | 3.4% |
Effective tax rate | 20.8% | 25.2% | |
Income for the period | 143 | 108 | 32.5% |
Attributable to the Company's shareholders | 129 | 94 | 35.7% |
Attributable to non-controlling interests | 14 | 14 | 9.8% |
Condensed financial accounting (GAAP) | |||
First Nine Months | |||
2018 | 2017 | Change | |
Sales | 4,205 | 4,095 | 2.7% |
Cost of sales excluding impact of commodity hedges | 2,520 | 2,473 | 1.9% |
Adjustments for commodity hedges | 0 | 18 | |
Cost of sales | 2,520 | 2,491 | 1.2% |
Gross profit | 1,685 | 1,604 | 5.1% |
% of sales | 40.1% | 39.2% | |
Selling and marketing expenses | 954 | 935 | 2.0% |
General and administrative expenses | 284 | 275 | 3.3% |
Total expenses | 1,238 | 1,210 | |
Share of profit of equity-accounted investees | 200 | 120 | 65.9% |
Operating profit before other expenses | 647 | 514 | 25.8% |
% of sales | 15.4% | 12.6% | |
Other expenses, net | - | (7) | |
Operating profit after other expenses | 647 | 507 | 27.7% |
Financing expenses, net | (63) | (90) | -29.7% |
Income before taxes on income | 584 | 417 | 40.2% |
Taxes on income | (151) | (77) | 97.7% |
Effective tax rate | 25.9% | 18.3% | |
Income for the period | 433 | 340 | 27.2% |
Attributable to the Company's shareholders | 392 | 274 | 42.7% |
Attributable to non-controlling interests | 41 | 66 | -37.3% |
Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.
Investor Conference Calls
Strauss Group will host an Investor Conference call at the offices of the company in Petach Tikva on Wednesday, November 14, 2018 at 14:00 (Israel time) to review the Financial Statements of the Company for the third quarter.
To listen to the conference in Hebrew, please call 03-918-0685.
Strauss Group will also host an Investor Conference call in English on Wednesday, November 14, 2018 at 17:30 local Israel time (15:30 UK, 10:30 EST) to review the Financial Statements of the Company for the third quarter.
To participate in the live call in English, please call one of the following numbers as appropriate:
From the UK: 0-800-917-9141
From the US: 1-888-407-2553
From Israel: 03-918-0644
The Financial Statements and Investors Presentation are posted on the Group's Investor Relations website at:
http://ir.strauss-group.com/phoenix.zhtml?c=92539&p=irol-irhome
For further information please contact:
Daniella Finn Director of Investor Relations Strauss Group Ltd. 972-54-577-2195 972-3-675-2545
| Osnat Golan VP Communications, Digital & Sustainability Strauss Group Ltd. 972-52-828-8111 972-3-675-2281 Or Shlomi Sheffer External Communications Director Strauss Group Ltd. 972-50-620-8000 972-3-675-6713
|
SOURCE Strauss Group Ltd
These press releases may also interest you
|
News published on and distributed by:
