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Strauss Group Delivers Yet Another Stellar Quarter

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Strauss Group Delivers Yet Another Stellar Quarter

All Companies in the Group Posted Top and Bottom Line Growth;

3% Sales Growth in the Second Quarter or 6.4% Organic Growth Excluding Foreign Currency Effects;

Net Income Rises 14% to NIS 112 Million(1)

PR Newswire

PETACH TIKVA, Israel, Aug. 7, 2018 /PRNewswire/ -- Giora Bardea, Interim CEO of Strauss Group (TASE: STRS): "Strauss Group delivers another quarter of solid growth, following the trend of previous quarters. The Group reports a strong set of results in Q2 2018 with sales and earnings growth in Strauss Israel and in its global operations.

The results of the Group's operations in Israel reflect continued outperformance versus the domestic food and beverage market, taking the company's market share in Israel to 12% of the food and beverage sector. Most of this revenue growth was achieved thanks to product innovation and diversification, which will be maintained in the future.

Strauss's global operations post another excellent quarter across all businesses: coffee margins expand, the water business in China continues to gain momentum, sales at Sabra in North America are growing and Obela is strengthening its position in Australia and New Zealand. The Group's international activity, which accounts for around half of its revenue, continues to expand, and we plan to maintain this strategy going forward."

Q2 2018 highlights(1)

  • Organic sales growth, excluding foreign exchange effects, was c6.4%. Shekel sales were NIS c2.1 billion compared to NIS 2 billion in the corresponding period in 2017; sales were impacted by a negative currency translation amounting to NIS c53 million, mainly as a result of the depreciation of the BRL against the NIS compared to last year.
  • Gross profit was NIS c813 million (c38.7% of sales), up c8% compared to the corresponding period last year. Gross margins were up c1.8%.
  • Operating profit (EBIT) was NIS c207 million (c9.9% of sales), up c11.2% compared to the corresponding period last year. EBIT margins were up c0.8%.
  • EPS for shareholders of the Company was NIS c0.97, up c10.6% compared to the corresponding period.
  • Positive cash flows from operating activities totaled NIS c190 million, compared to NIS c199 million in the corresponding period last year.

(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       

H1 2018 highlights(1)

  • Organic sales growth, excluding foreign exchange effects, was c7.1%. Shekel sales were NIS c4.3 billion compared to NIS 4.1 billion in the corresponding period in 2017; sales were impacted by a negative currency translation amounting to NIS c104 million, mainly as a result of the depreciation of the BRL against the NIS compared to last year.
  • Gross profit was NIS c1,646 million (c38.5% of sales), up c7.4% compared to the corresponding period last year. Gross margins were up c1.3%.
  • Operating profit (EBIT) was NIS c461 million (c10.8% of sales), up c12.7% compared to the corresponding period last year. EBIT margins were up c0.9%.
  • EPS for shareholders of the Company was NIS c2.25, up c15.3% compared to the corresponding period.
  • Positive cash flows from operating activities totaled NIS c296 million, compared to NIS c113 million in the corresponding period last year.

(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)





Second Quarter


2018

2017

Change

Total Group Sales (NIS mm)

2,103

2,042

3.0%

Organic Sales Growth excluding FX



6.4%

Gross Profit (NIS mm)

813

753

8.0%

Gross Margins (%)

38.7%

36.9%

+180 bps

EBITDA (NIS mm)

264

243

9.2%

EBITDA Margins (%)

12.6%

11.9%

+70 bps

EBIT (NIS mm)

207

187

11.2%

EBIT Margins (%)

9.9%

9.1%

+80 bps

Net Income Attributable to the
Company's Shareholders (NIS mm)

112

97

14.0%

Net Income Margin Attributable to the
Company's Shareholders (%)

5.3%

4.8%

+50 bps

EPS (NIS)

0.97

0.88

10.6%

Operating Cash Flow (NIS mm)

190

199

-4.7%

Capex (NIS mm) (2)

-76

-71

7.0%

Net debt (NIS mm)

2,143

2,138

0.3%

Net debt / annual EBITDA

2.0x

2.2x

(0.2x)

 

(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)











Second 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.
2017

Sales and EBIT by Operating
Segments and Activities









Strauss Israel:









Health & Wellness

536

3.9%

3.9%

56

1

1.9%

10.4%

 -20 bps

Fun & Indulgence (2)

242

9.6%

9.6%

13

2

28.6%

5.8%

+90 bps

Total Strauss Israel

778

5.6%

5.6%

69

3

6.4%

8.9%

--










Strauss Coffee:









Coffee Israel 

158

6.2%

6.2%

18

1

9.8%

11.6%

+40 bps

International Coffee (2)

820

-1.5%

5.3%

89

5

5.1%

10.9%

+70 bps

Total Strauss Coffee

978

-0.3%

5.5%

107

6

5.8%

11.0%

+60 bps










International Dips & Spreads:









Sabra (50%) (2)

178

9.7%

10.0%

20

11

117.5%

11.2%

+570 bps

Obela (50%) (2)

18

21.1%

19.5%

-2

1

NM

NM

NM

Total International Dips & Spreads

197

10.7%

10.8%

18

12

187.4%

9.3%

+570 bps










Strauss Water (2)(3)

150

10.6%

10.5%

17

5

44.9%

11.3%

+270 bps










Other (4)

0

-100.0%

NM

-4

-6

-364.2%

NM

NM

Total Group

2,103

3.0%

6.4%

207

20

11.2%

9.9%

+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.

 

Non GAAP Figures (1)





First Half


2018

2017

Change

Total Group Sales (NIS mm)

4,270

4,125

3.5%

Organic Sales Growth excluding FX



7.1%

Gross Profit (NIS mm)

1,646

1,533

7.4%

Gross Margins (%)

38.5%

37.2%

+130 bps

EBITDA (NIS mm)

575

521

10.7%

EBITDA Margins (%)

13.5%

12.6%

+90 bps

EBIT (NIS mm)

461

410

12.7%

EBIT Margins (%)

10.8%

9.9%

+90 bps

Net Income Attributable to the Company's
Shareholders (NIS mm)

258

213

21.0%

Net Income Margin Attributable to the
Company's Shareholders (%)

6.0%

5.2%

+80 bps

EPS (NIS)

2.25

1.95

15.3%

Operating Cash Flow (NIS mm)

296

113

161.5%

Capex (NIS mm) (2)

-146

-132

10.6%

Net debt (NIS mm)

2,143

2,138

0.3%

Net debt / annual EBITDA

2.0x

2.2x

(0.2x)

 

(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.

(1)    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 Half


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.
2017

Sales and EBIT by Operating
Segments and Activities









Strauss Israel:









Health & Wellness

1,068

6.5%

6.5%

110

2

2.0%

10.3%

 -40 bps

Fun & Indulgence (2)

576

4.2%

4.2%

68

5

8.9%

12.0%

+60 bps

Total Strauss Israel

1,644

5.7%

5.7%

178

7

4.5%

10.9%

 -10 bps










Strauss Coffee:









Coffee Israel 

375

3.7%

3.7%

59

2

5.0%

15.9%

+20 bps

International Coffee (2)

1,589

0.5%

6.8%

167

32

22.4%

10.5%

+190 bps

Total Strauss Coffee

1,964

1.1%

6.4%

226

34

17.3%

11.5%

+160 bps










International Dips & Spreads:









Sabra (50%) (2)

339

10.7%

15.0%

34

6

22.4%

10.1%

+100 bps

Obela (50%) (2)

38

22.6%

22.7%

-5

1

NM

NM

NM

Total International Dips & Spreads

377

11.8%

15.7%

29

6

31.3%

7.9%

+120 bps










Strauss Water (2)(3)

285

9.2%

9.1%

27

9

47.5%

9.4%

+250 bps










Other (4)

0

-100.0%

NM

1

-5

NM

NM

NM

Total Group

4,270

3.5%

7.1%

461

51

12.7%

10.8%

+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.

 

Appendix

Condensed financial accounting (GAAP)

Second Quarter


2018

2017

Change

Sales

1,348

1,288

4.8%

Cost of sales excluding impact of commodity hedges 

808

787

2.9%

Adjustments for commodity hedges

-2

10


Cost of sales

806

797

1.2%

Gross profit

542

491

10.4%

% of sales

40.2%

38.2%


Selling and marketing expenses

325

309

5.2%

General and administrative expenses

103

86

19.0%

Total expenses

428

395


Share of profit of equity-accounted investees

76

50

51.7%

Operating profit before other expenses

190

146

30.5%

% of sales

14.1%

11.3%


Other expenses, net

0

-14


Operating profit after other expenses

190

132

44.9%

Financing expenses, net

-22

-39

-43.0%

Income before taxes on income

168

93

81.4%

Taxes on income

-46

-10

368.4%

Effective tax rate

27.8%

10.8%


Income for the period

122

83

46.7%

Attributable to the Company's shareholders

110

73

51.4%

Attributable to non-controlling interests

12

10

14.2%





 

 

Condensed financial accounting (GAAP)

First Half


2018

2017

Change

Sales

2,794

2,696

3.7%

Cost of sales excluding impact of commodity hedges 

1,664

1,618

2.9%

Adjustments for commodity hedges

-13

19


Cost of sales

1,651

1,637

0.8%

Gross profit

1,143

1,059

8.0%

% of sales

40.9%

39.3%


Selling and marketing expenses

640

627

2.1%

General and administrative expenses

198

179

10.7%

Total expenses

838

806


Share of profit of equity-accounted investees

134

94

42.2%

Operating profit before other expenses

439

347

26.5%

% of sales

15.7%

12.9%


Other expenses, net

2

-7


Operating profit after other expenses

441

340

29.7%

Financing expenses, net

-38

-68

-44.2%

Income before taxes on income

403

272

48.1%

Taxes on income

-113

-40

183.4%

Effective tax rate

28.1%

14.7%


Income for the period

290

232

24.8%

Attributable to the Company's shareholders

263

180

46.4%

Attributable to non-controlling interests

27

52

-49.3%

 

 

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 in Hebrew on Tuesday, August 7, 2018 at 14:00 (Israel time) to review the Financial Statements of the Company for the second quarter.

To participate please dial: 03-918-0664

Strauss Group will also host an Investor Conference call in English on Tuesday, August 7, 2018 at 15:00 local Israel time (13:00 UK, 08:00 EST) to review the Financial Statements of the Company for the second quarter.

 To participate in the live call (in English) please dial one of the following numbers:

 From the UK: 0-800-051-8913

 From the US: 1-866-860-9642

 From Israel: 03-918-0685

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

Daniella.Finn@Strauss-Group.com

Osnat Golan

VP Communications, Digital & Sustainability

Strauss Group Ltd.

972-52-828-8111

972-3-675-2281

Osnat.Golan@Strauss-Group.com

Or

Shlomi Sheffer

External Communications Director

Strauss Group Ltd.

972-50-620-8000

972-3-675-6713

Shlomi.Sheffer@Strauss-Group.com

 

 

Cision View original content:http://www.prnewswire.com/news-releases/strauss-group-delivers-yet-another-stellar-quarter-300692916.html

SOURCE Strauss Group Ltd.

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