A considerable improvement was posted in the Group's net profit thanks to income arising from the revaluation of currency hedging transactions (1)
PETACH TIKVA, Israel, Nov. 26, 2014 /PRNewswire/ -- Gadi Lesin, President and Chief Executive Officer of Strauss Group (November 26, 2014): "We have concluded a positive quarter that reflects sales growth in all of the Group's major business areas. The forex challenges that were typical of the last three quarters were met with the right financial response, leading to an improved net profit. We are persevering in the strategy aimed at deepening our international operations, doubling production by Sabra in the US and further expanding our coffee businesses in Brazil and in Romania. In parallel, in light of the challenges posed by the slowdown in the Israeli food market our product innovation efforts continue, coupled with the appropriate operational deployment."
Link to MD&A report
Link to Analysts Presentation
Q3'14 and YTD results conference call today at 17:30 local time / 15:30 UK time / 10:30 a.m. EST
Q3 2014 highlights (1)
- Organic sales growth, excluding the foreign exchange effect, was 7.1%. Shekel sales amounted to NIS 2.1 billion, an increase of 4.8%, and reflected NIS 43 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 811 million (37.9% of sales), an increase of 1.5% compared to the corresponding period last year. Gross margins were down 1.2%.
- Operating profit (EBIT) amounted to NIS 227 million (10.6% of sales), an increase of 6.8% compared to the corresponding period last year. EBIT margins were up 0.2%.
- Earnings per share amounted to NIS 1.12, an increase of 46.8% compared to the corresponding period last year.
- Cash flows from operating activities amounted to NIS 146 million, compared to NIS 211 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) |
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| Third Quarter |
| 2014 | 2013 | Change | Organic Growth excluding FX |
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Total Group Sales (NIS mm) | 2,138 | 2,040 | 4.8% | 7.1% |
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Gross Profit (NIS mm) | 811 | 798 | 1.5% |
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Gross Margins (%) | 37.9% | 39.1% | -120 bps |
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EBITDA (NIS mm) | 280 | 269 | 4.4% |
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EBITDA Margins (%) | 13.1% | 13.2% | -10 bps |
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EBIT (NIS mm) | 227 | 212 | 6.8% |
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EBIT Margins (%) | 10.6% | 10.4% | +20 bps |
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Net Income Attributable to the Company's Shareholders (NIS mm) | 119 | 81 | 47.2% |
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Net Income Margin (Attributable to the Company's Shareholders) (%) | 5.6% | 4.0% | +160 bps |
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EPS (NIS) | 1.12 | 0.76 | 46.8% |
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Operating Cash Flow (NIS mm) | 146 | 211 | -30.7% |
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Capex (NIS mm) (3) | (267) | (129) | 107.7% |
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Net debt (NIS mm) | 1,846 | 1,357 | 36.0% |
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Net debt / annual EBITDA | 1.9x | 1.4x | 0.5x |
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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) 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. |
Non GAAP Adjusted Figures (4) |
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| 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. 2013 |
Sales and EBIT by Operating Segments and Activities |
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Strauss Israel: |
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Health & Wellness | 530 | 0.0% | 0.0% | 59 | (4) | -5.4% | 11.3% | -60 bps |
Fun & Indulgence (5) | 256 | 6.0% | 6.0% | 26 | 3 | 9.2% | 10.0% | +30 bps |
Total Strauss Israel | 786 | 1.9% | 1.9% | 85 | (1) | -1.5% | 10.8% | -40 bps |
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Strauss Coffee: |
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Israel Coffee | 165 | -2.0% | -2.0% | 27 | 5 | 27.0% | 16.8% | +390 bps |
International Coffee (5) | 854 | 8.6% | 13.4% | 86 | 0 | -1.4% | 9.9% | -100 bps |
Total Strauss Coffee | 1,019 | 6.7% | 10.8% | 113 | 5 | 4.4% | 11.0% | -30 bps |
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International Dips & Spreads: |
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Sabra (50%) (5) | 161 | 6.4% | 8.3% | 30 | 5 | 18.6% | 18.8% | +193 bps |
Obela (50%) (5) | 9 | 25.8% | 26.9% | (5) | (1) | 25.0% | NM | NM |
Total International Dips & Spreads | 171 | 7.3% | 9.2% | 25 | 3 | 17.5% | 14.9% | +130 bps |
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Other (5) | 162 | 5.3% | 7.6% | 4 | 8 | NM | NM | NM |
Total Group | 2,138 | 4.8% | 7.1% | 227 | 15 | 6.8% | 10.6% | +20 bps |
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(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. |
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(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 the 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. |
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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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First nine months of 2014 highlights (1)
- Organic sales growth, excluding the foreign exchange effect, was 4.6%. Shekel sales amounted to NIS 6.1 billion, a decrease of 0.1%, reflecting NIS 272 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 2,369 million (39.1% of sales), an increase of 2.3% compared to the corresponding period last year. Gross margins were up 0.9%.
- Operating profit (EBIT) amounted to NIS 603 million (10.0% of sales), a decrease of 1.2% compared to the corresponding period last year. EBIT margins were down 0.1%.
- Earnings per share amounted to NIS 2.69, an increase of 10.8% compared to the corresponding period last year.
- Cash flows from operating activities amounted to NIS 274 million, compared to NIS 450 million in the corresponding period.
- Net debt as at September 30, 2014 amounted to NIS 1,846 million, compared to NIS 1,357 million on September 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) |
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| First nine months |
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| 2014 | 2013 | Change | Organic Growth excluding FX |
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Total Group Sales (NIS mm) | 6,060 | 6,069 | -0.1% | 4.6% |
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Gross Profit (NIS mm) | 2,369 | 2,316 | 2.3% |
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Gross Margins (%) | 39.1% | 38.2% | +90 bps |
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EBITDA (NIS mm) | 765 | 778 | -1.7% |
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EBITDA Margins (%) | 12.6% | 12.8% | -20 bps |
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EBIT (NIS mm) | 603 | 611 | -1.2% |
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EBIT Margins (%) | 10.0% | 10.1% | -10 bps |
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Net Income Attributable to the Company's Shareholders (NIS mm) | 287 | 259 | 11.0% |
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Net Income Margin Attributable to the Company's Shareholders (%) | 4.7% | 4.3% | +40 bps |
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EPS (NIS) | 2.69 | 2.43 | 10.8% |
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Operating Cash Flow (NIS mm) | 274 | 450 |
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Capex (NIS mm) (3) | (524) | (329) | 59.2% |
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Net debt (NIS mm) | 1,846 | 1,357 | 36.0% |
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Net debt / annual EBITDA | 1.9x | 1.4x | 0.5x |
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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) 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 (4) |
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| 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. 2013 |
Sales and EBIT by Operating Segments and Activities |
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Strauss Israel: |
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Health & Wellness | 1,509 | 1.4% | 1.4% | 159 | 10 | 6.6% | 10.5% | +50 bps |
Fun & Indulgence (5) | 780 | 1.8% | 1.8% | 92 | (7) | -7.2% | 11.8% | -110 bps |
Total Strauss Israel | 2,289 | 1.6% | 1.6% | 251 | 3 | 1.1% | 11.0% | -- |
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Strauss Coffee: |
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Coffee Israel | 521 | -1.8% | -1.8% | 81 | 5 | 6.8% | 15.6% | +130 bps |
International Coffee (5) | 2,272 | -5.5% | 5.3% | 211 | (31) | -12.8% | 9.3% | -70 bps |
Total Strauss Coffee | 2,793 | -4.9% | 3.8% | 292 | (26) | -8.1% | 10.4% | -40 bps |
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International Dips & Spreads: |
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Sabra (50%) (5) | 466 | 8.7% | 13.0% | 72 | 13 | 21.8% | 15.6% | +168 bps |
Obela (50%) (5) | 25 | 7.1% | 19.3% | (15) | (2) | 12.2% | NM | NM |
Total International Dips & Spreads | 491 | 8.6% | 13.3% | 57 | 11 | 24.6% | 11.7% | +150 bps |
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Other (5) | 487 | 14.1% | 16.8% | 3 | 4 | NM | 0.7% | +80 bps |
Total Group | 6,060 | -0.1% | 4.6% | 603 | (8) | -1.2% | 10.0% | -10 bps |
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(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. |
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(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 the 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. |
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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. |
Appendix |
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Reconciliations of GAAP to Non GAAP Adjusted Figures |
First nine months |
| 2014 | 2013 |
GAAP sales | 4,051 | 4,154 |
Add back JV sales (accounted for under the equity method) | 2,009 | 1,915 |
Non GAAP sales | 6,060 | 6,069 |
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GAAP EBIT | 493 | 521 |
Minus: Share in income of equity-accounted investees | (170) | (136) |
Plus: JV EBIT (accounted for under the equity method) | 207 | 185 |
Additional adjustments: |
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Non cash equity based compensation | 16 | 14 |
Loss (Profit) from accounting mark-to-market of commodity hedging transactions as at the end of period | (6) | 8 |
Other expenses | 63 | 19 |
Non GAAP Adjusted EBIT according to management reports | 603 | 611 |
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Non GAAP financing expenses, net (including JVs) | (70) | (102) |
Non GAAP taxes on income (including JVs) | (159) | (183) |
Taxes on income in respect of the additional adjustments above | 5 | 19 |
Non GAAP income for the period | 379 | 345 |
Attributable to the Company's shareholders | 287 | 259 |
Non controlling interests | 92 | 86 |
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Reconciliations of GAAP to Non GAAP Adjusted Figures |
Third Quarter |
| 2014 | 2013 |
GAAP sales | 1,415 | 1,402 |
Add back JV sales (accounted for under the equity method) | 723 | 638 |
Non GAAP sales | 2,138 | 2,040 |
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GAAP EBIT | 159 | 185 |
Minus: Share in income of equity-accounted investees | (66) | (49) |
Plus: JV EBIT (accounted for under the equity method) | 81 | 65 |
Additional adjustments: |
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Non cash equity based compensation | 6 | 4 |
Loss from accounting mark-to-market of commodity hedging transactions as at the end of period | 3 | (9) |
Other expenses | 44 | 16 |
Non GAAP Adjusted EBIT according to management reports | 227 | 212 |
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Non GAAP financing expenses, net (including JVs) | (14) | (40) |
Non GAAP taxes on income (including JVs) | (53) | (76) |
Taxes on income in respect of the additional adjustments above | (2) | 15 |
Non GAAP income for the period | 158 | 111 |
Attributable to the Company's shareholders | 119 | 81 |
Non controlling interests | 39 | 30 |
SOURCE Strauss Group