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)
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 |
112 |
97 |
14.0% |
Net Income Margin Attributable to the |
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 |
Sales |
Organic |
EBIT (NIS |
NIS Change |
% Change |
EBIT |
Change in |
|
Sales and EBIT by Operating |
||||||||
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 |
258 |
213 |
21.0% |
Net Income Margin Attributable to the |
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 |
Sales |
Organic |
EBIT (NIS |
NIS |
% Change |
EBIT |
Change in |
|
Sales and EBIT by Operating |
||||||||
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 |
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.
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