Strauss Group reports third quarter results: 3.2% organic sales growth excluding foreign currency effects(1) and improved operating results by a number of international growth drivers, as Strauss Coffee's results are impacted primarily by significant exchange rate effects in Brazil and Russia(2)

⁽¹⁾

Also excluding the impact of classification of costs following the introduction of the Food Law, as explained in the Board of Directors Report.

⁽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.

⁽³⁾

The dividend per share (DPS) is calculated as at the declaration date and is subject to change as a result of the exercise of options, if any are exercised.

⁽⁴⁾

Operations in Brazil are carried out by the Tres Coracnes joint venture (3C) – Brazil – a company held by the Group (50%) and by the local holding company, Sao Miguel Holding e Investimentos S.A. (50%). (Data reflect Strauss Coffee's share (50%) unless expressly stated otherwise).

⁽⁵⁾

Organic sales growth excluding exchange rate effects, the impact of the Food Law and green coffee export sales by the Tres Coracoes joint venture in Brazil.

(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.

(2)

Also excluding the impact of classification of costs following the introduction of the Food Law, as explained in the Board of Directors Report.

Non GAAP Adjusted Figures ⁽¹⁾

First Nine months

2015

2014

Change

Organic
Sales
Growth
excluding
FX and
Food Law

5,743

6,060

1.9%

Gross Profit (NIS mm)

2,129

2,369

-10.1%

Gross Margins (%)

37.1%

39.1%

 -200 bps

EBITDA (NIS mm)

671

765

-12.2%

EBITDA Margins (%)

11.7%

12.6%

 -90 bps

EBIT (NIS mm)

501

603

-17.0%

EBIT Margins (%)

8.7%

10.0%

 -130 bps

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

219

287

-23.7%

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

3.8%

4.7%

 -90 bps

EPS (NIS)

2.05

2.69

-24.1%

274

Capex (NIS mm) ⁽²⁾

(211)

(455)

-53.6%

Net debt (NIS mm)

1,846

-1.8%

Net debt / annual EBITDA

1.9x

0.2x

(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.

(2)

Investments include the acquisition of fixed assets and investment in intangibles and deferred expenses.

Note:

Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.

Non GAAP Adjusted Figures ⁽¹⁾

First Nine months

Sales (NIS mm)

Sales Growth vs. Last Year

Organic Sales Growth excluding FX and Food Law

EBIT (NIS mm)

NIS Change in EBIT

% Change in EBIT 

EBIT margins

Change in EBIT margins vs. 2014

Strauss Israel:

1,435

-4.9%

-3.0%

141

(18)

-11.3%

9.8%

 -70 bps

Fun & Indulgence ⁽²⁾

743

-4.7%

-2.4%

81

(11)

-12.1%

10.9%

 -90 bps

Total Strauss Israel

2,178

-4.9%

-2.8%

222

(29)

-11.6%

10.2%

 -80 bps

Strauss Coffee:

Coffee Israel 

494

-5.1%

-2.6%

64

(17)

-20.5%

13.0%

 -260 bps

International Coffee ⁽²⁾

2,063

-9.2%

11.5%

135

(76)

-35.9%

6.5%

 -280 bps

2,557

-8.4%

8.4%

199

(93)

-31.6%

7.8%

 -260 bps

International Dips & Spreads:

Sabra (50%) ⁽²⁾

539

15.7%

4.0%

66

(7)

-9.4%

12.2%

 -340 bps

Obela (50%) ⁽²⁾

27

6.0%

15.1%

(13)

2

NM

NM

NM

Total International Dips & Spreads

565

15.2%

4.5%

52

(5)

-9.0%

9.3%

 -240 bps

Other ⁽²⁾

443

-9.2%

-10.4%

28

25

757.0%

6.2%

+550 bps

Total Group

5,743

-5.2%

1.9%

501

(102)

-17.0%

8.7%

(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.

(2)

 Fun & Indulgence figures include Strauss's 50% share in the salty snacks business. International Coffee figures include Strauss's 50% share in the Tres Coracoes joint venture (3C) – Brazil – a company jointly held by the Group (50%) and by the local Sao Miguel Group (50%). International D&S figures reflect Strauss's 50% share in Sabra and Obela. Other Operations includes Strauss's share in Strauss Water China (50%) until June 30, 2015.

Note:

Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.

(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.

(2)

Also excluding the impact of classification of costs following the introduction of the Food Law, as explained in the Board of Directors Report.

Non GAAP Adjusted Figures ⁽¹⁾

Third quarter

2015

2014

Change

Organic
Sales
Growth
excluding FX and
Food Law

Total Group Sales (NIS mm)

1,974

2,138

-7.6%

3.2%

Gross Profit (NIS mm)

711

811

-12.2%

Gross Margins (%)

36.0%

37.9%

 -190 bps

EBITDA (NIS mm)

246

280

-12.0%

EBITDA Margins (%)

12.5%

13.1%

 -60 bps

EBIT (NIS mm)

192

227

-15.4%

EBIT Margins (%)

9.7%

10.6%

 -90 bps

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

86

119

-28.0%

4.4%

5.6%

 -120 bps

EPS (NIS)

0.80

1.12

-28.3%

Operating Cash Flow (NIS mm)

60

146

-58.9%

Capex (NIS mm) ⁽²⁾

(54)

(198)

-72.7%

Net debt (NIS mm)

1,813

1,846

-1.8%

Net debt / annual EBITDA

2.1x

1.9x

0.2x

(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.

(2)

Investments include the acquisition of fixed assets and investment in intangibles and deferred expenses.

Note:

Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.

Non GAAP Adjusted Figures ⁽¹⁾

Third Quarter

Sales (NIS mm)

Sales Growth vs. Last Year

Organic Sales Growth excluding FX and Food Law

EBIT (NIS mm)

NIS Change in EBIT

% Change
in EBIT 

EBIT margins

Change in EBIT margins vs. 2014

Sales and EBIT by Operating Segments and Activities

Strauss Israel:

Health & Wellness

507

-4.5%

-2.6%

63

4

5.3%

12.4%

+110 bps

Fun & Indulgence ⁽²⁾

240

-5.8%

-3.8%

23

(3)

-12.4%

9.3%

 -70 bps

Total Strauss Israel

747

-5.0%

-3.0%

86

1

0.1%

11.4%

+60 bps

Strauss Coffee:

Israel Coffee 

161

-2.2%

0.3%

18

(9)

-35.5%

11.1%

 -570 bps

International Coffee ⁽²⁾

715

-16.2%

12.0%

45

(41)

-46.3%

6.4%

 -350 bps

Total Strauss Coffee

876

-14.0%

9.7%

63

(50)

-43.6%

7.2%

 -380 bps

International Dips & Spreads:

Sabra (50%) ⁽²⁾

192

19.0%

8.9%

32

2

5.1%

16.6%

 -220 bps

Obela (50%) ⁽²⁾

10

3.3%

20.5%

(3)

2

NM

NM

NM

Total International Dips & Spreads

201

18.1%

9.4%

29

4

15.5%

14.6%

 -30 bps

Other ⁽²⁾

150

-7.9%

-6.4%

14

10

264.1%

NM

NM

Total Group

1,974

-7.6%

3.2%

192

(35)

-15.4%

9.7%

 -90 bps

(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.

(2)

Fun & Indulgence figures include Strauss's 50% share in the salty snacks business. International Coffee figures include Strauss's 50% share in the Tres Coracoes joint venture (3C) – Brazil – a company jointly held by the Group (50%) and by the local Sao Miguel Group (50%). International D&S figures reflect Strauss's 50% share in Sabra and Obela.

Note:

 Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. The figures for total International D&S were calculated on the basis of the exact Sabra and Obela figures in NIS thousands.

Reconciliations of GAAP to Non GAAP Adjusted Figures

First Nine months

2015

2014

GAAP sales

4,051

Add back JV sales (accounted for under the equity method) (1)

1,862

2,009

Non GAAP sales

5,743

6,060

GAAP EBIT

429

493

Minus: Share of profits of equity-accounted investees 

(134)

(170)

Plus: JV EBIT (accounted for under the equity method) 

171

207

Additional adjustments:

Non cash equity based compensation 

12

16

Loss (Profit) from accounting mark-to-market of commodity hedging transactions as
at the end of period

3

(6)

Other expenses

20

63

Non GAAP Adjusted EBIT according to management reports

501

603

Non GAAP financing expenses, net (including JVs)

(99)

(70)

Non GAAP taxes on income (including JVs)

(110)

(159)

Taxes on income in respect of the additional adjustments above

(5)

Non GAAP income for the period

287

379

Attributable to the Company's shareholders

219

287

Attributable to Non controlling interests

68

92

Reconciliations of GAAP to Non GAAP Adjusted Figures

Third Quarter

2015

2014

GAAP sales

1,365

1,415

Add back JV sales (accounted for under the equity method) (1)

609

723

Non GAAP sales

1,974

2,138

GAAP EBIT

154

159

Minus: Share of profits of equity-accounted investees 

(51)

(66)

Plus: JV EBIT (accounted for under the equity method) 

64

81

Additional adjustments:

Non cash equity based compensation 

3

6

Loss from accounting mark-to-market of commodity hedging transactions as at the end of period

8

3

Other expenses 

14

44

Non GAAP Adjusted EBIT according to management reports

192

227

Non GAAP financing expenses, net (including JVs)

(35)

(14)

Non GAAP taxes on income (including JVs)

(42)

(53)

Taxes on income in respect of the additional adjustments above

(4)

(2)

Non GAAP income for the period

111

158

Attributable to the Company's shareholders

86

119

Attributable to Non controlling interests

25

39

(1)

Starting the third quarter, excluding sales of Haier Strauss Water JV in China, which are accounted for under the equity method in the Non GAAP figures.

For further information please contact:

Talia Sessler

Investor Relations Director

Strauss Group Ltd.

972-54-577-2195

972-3-675-2545

[email protected]

Osnat Golan

VP Communications & Digital, Spokesperson

Strauss Group Ltd.

972-52-828-8111

972-3-675-2281
 

Or

Gil Messing

External Communications Director

Strauss Group Ltd.

972-54-252-5272