SodaStream Reports Record Fourth Quarter Results Revenues Increased 32% to Euro 66.1 Million

Adjusted Net Income Increased 21% to Euro 5.1 Million

Adjusted Diluted EPS was Euro 0.25 or $0.32*

AIRPORT CITY, Israel, Feb. 29, 2012 /PRNewswire/ -- SodaStream International Ltd. (NASDAQ: SODA), a leading manufacturer of home beverage carbonation systems announced today its results for the three and twelve month periods ended December 31, 2011.

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Fourth Quarter Fiscal 2011 Highlights

  • Revenues increased 32% to Euro 66.1 million
  • Americas revenues increased 70% to Euro 24.6 million
  • Adjusted diluted earnings per share was Euro 0.25 or $0.32*
  • Unit sales of soda makers increased 8% to 767,000
  • Unit sales of flavors increased 24% to 4.6 million
  • Unit sales of CO2 refills increased 27% to 3.4 million

Full Year Fiscal 2011 Highlights

  • Revenues increased 39% to Euro 222.7 million
  • Americas revenues increased 105% to Euro 64.7 million
  • Adjusted diluted earnings per share was Euro 1.23 or $1.60*
  • Unit sales of soda makers increased 41% to 2.7 million
  • Unit sales of flavors increased 36% to 18.9 million
  • Unit sales of CO2 refills increased 29% to 13.3 million

"This has been a defining year for SodaStream with strong top and bottom line growth in each of the four quarters, driven by robust soda maker and consumable sales," commented Daniel Birnbaum, CEO of SodaStream.  "Our U.S. business experienced strong growth in 2011 driven by our launch of new products, retail expansion, and ramped up marketing efforts, including our first TV commercial.  The U.S. is now our largest single market with sales growth at 104% for the year, unit sales of soda makers up 113% and CO2 refills and flavors up 98% and 132%, respectively. This is a clear indication that consumers are embracing our brand as we continue to bring our revolution to every household in America.

Worldwide, we recently entered new markets in Japan and Brazil and are experiencing accelerated growth in France, Australia, and the U.K.  The recent acquisition of our Nordics business enables us to further grow in this important region as well," stated Mr. Birnbaum.  "Looking ahead, we continue to invest in product innovation and strategic partnerships, consumer education and brand building, retail and geographic expansion, and capacity increase ahead of demand. With these key components in place, we look to 2012 and beyond with great anticipation."

Results for the Three Months Ended December 31, 2011:

Total revenues for the fourth quarter of 2011 were Euro 66.1 million, $85.7 million as per a convenience translation*, an increase of 32.1% compared to Euro 50.0 million reported in the fourth quarter of 2010. Revenues for Western Europe and the Americas increased 20.5% and 70.2%, respectively, compared to the fourth quarter of 2010. (See table with geographic breakdown below)

During the fourth quarter of 2011, revenues of soda maker starter kits, which include a soda maker, a CO2 cylinder and a bottle, increased 24.4% to Euro 31.4 million and revenues of consumables increased 37.8% to Euro 32.6 million. On a unit basis, soda maker starter kits increased 7.7% to 767,000, CO2 refills increased 26.6% to 3.4 million, and flavors increased 24.2% to 4.6 million.

Gross margin for the fourth quarter of 2011 was 57.3%, compared to 54.3% for the same period in 2010.  This increase was primarily due to the growing portion of higher-margin U.S. sales, leveraging the fixed portion of the production costs to achieve higher revenue, and a positive currency exchange rate impact.

Sales and marketing expenses for the fourth quarter of 2011 totaled Euro 28.1 million compared to Euro 18.9 million for the comparable period last year. The increase is primarily due to an increase in marketing spending to capitalize on new distribution opportunities, mainly in the United States. As a percentage of revenues, sales and marketing expenses excluding advertising and promotions decreased to 17.4% for the fourth quarter of 2011 compared to 20.3% for the fourth quarter of 2010.

General and administrative expenses for the fourth quarter of 2011 were Euro 5.7 million, compared to Euro 4.6 million in the comparable period of last year. General and administrative expenses for the three months ended December 31, 2011 include Euro 1.0 million of non-cash share-based compensation expense (the "Share-Based Compensation Expense") while general and administrative expenses for the three months ended December 31, 2010 include Euro 0.7 million of the Share-Based Compensation Expense and Euro 88,000 related to a previous management fee that was cancelled effective as of November 2010.

Adjusted general and administrative expenses exclude the Share-Based Compensation Expense as well as the discontinued management fees. Such adjusted general and administrative expenses were Euro 4.7 million or 7.1% of revenues for the fourth quarter of 2011, and Euro 3.9 million or 7.8% of revenues for the comparable period of 2010.

Net income for the three months ended December 31, 2011 was Euro 4.1 million, or Euro 0.20 ($0.26 per the convenience translation) per fully diluted share based on 20.8 million weighted average shares, compared to net income of Euro 3.5 million, or Euro 0.21 per fully diluted share based on 17.1 million weighted average shares, in the comparable period in 2010. Excluding the Share-Based Compensation Expense and the discontinued management fees, Adjusted net income (as defined below) for the fourth quarter of 2011 was Euro 5.1 million, or Euro 0.25 ($0.32 per the convenience translation) per fully diluted share, compared to Adjusted net income of Euro 4.3 million, or Euro 0.25 per fully diluted share, in the fourth quarter of 2010.

Adjusted EBITDA (as defined below) for the fourth quarter of 2011 totaled Euro 6.9 million, compared to Euro 6.2 million for the comparable period in 2010. Adjusted EBITDA margin was 10.5% for the fourth quarter of 2011 as compared to 12.3% for the comparable period in 2010.

Cash flow used in operating activities during the fourth quarter of 2011 was Euro 3.1 million, compared to Euro 1.9 million during the comparable quarter of 2010.  

*As of December 31, 2011, the Euro to U.S. Dollar exchange rate was: Euro 1.00 equaled $1.2973

Balance Sheet

As of December 31, 2011, cash and cash equivalents and bank deposits increased to Euro 57.2 million from Euro 52.9 million as of December 31, 2010. The increase is attributable mainly to the Euro 33.1 million raised from the secondary offering that closed on April 19, 2011, less cash used for operating activities (mainly increase in working capital), capital investments and debt repayment. As of December 31, 2011, loans and borrowings were Euro 3.1 million, compared to Euro 6.8 million as of December 31, 2010. Working capital as of December 31, 2011 was Euro 60.3 million, an increase of 122.1%, compared to Euro 27.2 million as of December 31, 2010, primarily due to an increase in inventory and accounts receivable.

Change in Reporting Currency

Beginning with the first quarter ending March 31, 2012, the Company will change its reporting currency to the U.S. dollar (USD).  To date, the Company has presented its annual and quarterly consolidated balance sheets and related consolidated statements of operations and cash flows in Euro (EUR).  The change in reporting currency is to better reflect the importance of the U.S. market for the Company's current and future business plans.

In accordance with IFRS, the financial statements for comparative periods will be translated (restated) into the new reporting currency using the exchange rate as of January 1, 2012.

Full Year 2012 Guidance

The Company expects full year 2012 revenue to increase approximately 28% over 2011 revenue of Euro 222.7 million ($289.0 million per the convenience translation of 1.2973).  The Company also expects net income to increase by approximately 42% as compared with its net income of Euro 21.2 million ($27.5 million per the convenience translation of 1.2973) reported in 2011. This guidance includes a share-based payment expense of approximately Euro 4.1 million in 2012 compared to share-based payment expense of Euro 4.2 million in 2011. On an adjusted basis, excluding the share-based payment expense, 2012 net income is expected to increase approximately 35% over the Adjusted net income of Euro 25.3 million ($32.9 million per the convenience translation of 1.2973) reported in 2011. 

Conference Call and Management Commentary

Detailed CFO commentary and a supplemental slide presentation have been filed as part of today's 6-K and will be posted on the Company's website, http://sodastream.investorroom.com.

The Company has scheduled a conference call for 8:30 AM Eastern Standard Time (U.S. time) today (Wednesday, February 29, 2012) to review the Company's financial results.  The conference call will be broadcast over the Internet as a "live" listen only Webcast.  To listen, please go to: http://sodastream.investorroom.com.  Listeners are urged to login approximately 20 minutes before the conference call is scheduled to begin in order to register, as well as download and install any necessary audio software.  An archive of the Webcast will be available for 30 days after the call.

About SodaStream International

SodaStream manufactures beverage carbonation systems which enable consumers to easily transform ordinary tap water instantly into carbonated soft drinks and sparkling water. Soda makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated soft drinks and sparkling water. Our products are environmentally friendly, cost effective, promote health and wellness, and are customizable and fun to use. In addition, our products offer convenience by eliminating the need to carry bottles home from the supermarket, to store bottles at home or to regularly dispose of empty bottles. Our products are available at more than 50,000 retail stores in 42 countries around the world.  For more information on SodaStream, please visit the Company's website: www.sodastream.com.

Non-IFRS Financial Measures

This press release contains certain non-IFRS measures, including Adjusted net income ("Adjusted net income"), Adjusted Earnings Before Interest, Income Tax, Depreciation and Amortization ("Adjusted EBITDA"), and Adjusted diluted earnings per share ("Adjusted diluted EPS").

Adjusted net income represents net income calculated in accordance with IFRS as adjusted for the impact of the Share-Based Compensation Expense and for the impact of the discontinued management fees. Adjusted EBITDA represents earnings before interest, income tax, depreciation and amortization, and further eliminates the effect of the Share-Based Compensation Expense and of the discontinued management fees. Adjusted diluted EPS represents earnings per share calculated in accordance with IFRS as adjusted for the impact of the Share-Based Compensation Expense and for the impact of the discontinued management fees.

The Company believes that the Adjusted net income, Adjusted EBITDA and Adjusted diluted EPS, which excludes the Share-Based Compensation Expense and the discontinued management fees, should be considered in evaluating the Company's operations since they provide a clearer indication of the Company's operating results going forward.

These measures should be considered in addition to results prepared in accordance with IFRS, but should not be considered a substitute for the IFRS results. The non-IFRS measures included in this press release have been reconciled to the IFRS results in the tables below.

Forward Looking Statements

This release contains forward-looking statements, which express the current beliefs and expectations of management. Such statements are based on management's current beliefs and expectations and involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: our ability to expand into our target markets, including the United States; our ability to continue to develop or maintain our presence in retail networks; our ability to develop and implement production and operating infrastructure to effectively support our growth; the success of our marketing campaigns and media spending in terms of increased sales or increased product and brand name awareness; our ability to maintain our customer base in markets where we have an established presence; the risks associated with our reliance on exclusive arrangements for the distribution of our beverage carbonation systems and consumables in each of the markets in which we use third-party distributors; our ability to compete effectively with other companies which currently offer, or may offer in the future, competing products; potential product liability claims if any component of our beverage carbonation systems is misused; our ability to protect our intellectual property rights; our being found to have a dominant position in certain markets which may place limits on our ability operate; risks associated with our being subject to fluctuations in currency exchange rates; our potential exposure to greater than anticipated tax liabilities; our products being subject to extensive governmental regulation in the markets in which we operate; adverse conditions in the global economy which could negatively impact our customers' demand for our products; and other factors detailed in documents we file from time to time with the United States Securities and Exchange Commission.  Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Company Contact:
Yonah Lloyd
Executive Director, Corporate Development and Communication
SodaStream International Ltd.
Phone: +972-3-976-2462
yonahl@sodastream.com

Investor Contacts (US):
Brendon Frey
ICR
Phone: + 1 203-682-8200
brendon.frey@icrinc.com


Consolidated Balance Sheets as of




In thousands







Convenience




translation into




U.S. Dollar


Dec-31

Dec-31

Dec-31


2010

2011

2011


(Audited)

(Unaudited)

(Unaudited)

Assets





euro    

euro

$

Cash and cash equivalents

52,900

26,801

34,769

Bank deposits

-

30,436

39,485

Inventories

38,523

59,065

76,625

Trade receivables(*)

32,017

45,057

58,452

Other receivables(*)

6,792

15,466

20,064

Derivative financial instruments

836

248

322

Assets classified as available-for-sale

629

645

837

Total current assets

131,697

177,718

230,554





Property, plant and equipment

21,548

35,793

46,434

Intangible assets

13,405

19,547

25,358

Deferred tax assets

1,248

900

1,168

Other receivables

167

173

224

Total non-current assets

36,368

56,413

73,184





Total assets

168,065

234,131

303,738





Liabilities





euro    

euro

$

Loans and borrowings

6,753

3,088

4,006

Derivative financial instruments

406

-

-

Trade payables

30,425

36,524

47,383

Income tax payable

6,376

7,069

9,171

Provisions

515

306

397

Other current liabilities

13,911

16,242

21,071

Total current liabilities

58,386

63,229

82,028





Employee benefits

768

1,154

1,497

Provisions

379

396

514

Deferred tax liabilities

410

553

717

Total non-current liabilities

1,557

2,103

2,728





Total liabilities

59,943

65,332

84,756





Shareholders' equity








Share capital

2,286

2,496

3,238

Share premium

91,870

129,963

168,601

Translation reserve

(53)

1,134

1,471

Retained earnings

14,019

35,206

45,672

Total shareholders' equity

108,122

168,799

218,982





Total liabilities and shareholders' equity

168,065

234,131

303,738


euro    

euro

$