Strauss Group Announces Results For First Quarter 2013
TEL AVIV, Israel, May 28, 2013 /PRNewswire/ --
Posts Strong Operating Profit Due to Solid Performance by Strauss Coffee's International Operations
The Group's sales in the first quarter totaled NIS 2.0 billion and were impacted by the erosion of the average exchange rate of the Brazilian Real versus the Shekel;
The Group posted a record non-GAAP operating profit, which amounted to NIS 214 million
Gadi Lesin, President and Chief Executive Officer of the Strauss Group, commented, "Strauss's international activity continued to prove its strength in the quarter, expanding profit despite a significant negative impact from changes in relevant currency exchange rates. Our home market in Israel also maintained its positive performance. Overall, the Group posted strong operating results thanks mainly to the improvement in the international coffee business as well as the dips and spreads segment, and as a result of the continued implementation of streamlining processes across all of the Group's businesses. At the same time, we are continuing to invest in the Group's future growth drivers and in innovation in all areas of our activity. Our goal remains to continue to deliver real added value to consumers, while enhancing our strength as a leading Group."
Key data on the first quarter of 2013[1]
Commencing in the first quarter of 2013, the Strauss Group retroactively applied IFRS 11 - Joint Arrangements. The significance of the standard is that businesses which are jointly controlled by Strauss and a partner are no longer presented according to Strauss's relative holding in the entity, but in a separate row ("Income of equity-accounted investees" in the statements of income and in the other statements in the relevant section). The reporting method does not alter the Group's profit. As this is a change in reporting method only, and in light of the fact that the Group's non-GAAP reports and the manner in which Management measures the results of operations of subsidiaries have remained unchanged, the Group continues to present the activity segments in the identical manner in which they were presented in prior periods.
- Sales totaled NIS 2.0 billion (compared with NIS 2.1 billion last year), a decrease of 2.5%; excluding the negative impact of changes in exchange rates, organic sales grew by 0.1% over the last year.
- Non-GAAP gross profit totaled NIS 767 billion (38.1% of sales) compared to NIS 731 billion in the corresponding quarter last year (35.4% of sales), an increase of 4.9%.
- Non-GAAP operating profit (EBIT) totaled NIS 214 million (10.6% of sales) compared to NIS 168 million in the corresponding quarter last year (8.1% of sales), an increase of 27.5%. The growth was primarily due to the significant growth in the profits of International Coffee and International Dips and Spreads.
- Non-GAAP net income attributable to the Company's shareholders totaled NIS 103 million (5.1% of sales) compared to NIS 65 million in the corresponding quarter last year (3.2% of sales), an increase of 57.2%.
- Cash flows from operating activities (GAAP) amounted to a negative cash flow of NIS 25 million compared to a negative cash flow of NIS 86 million in the corresponding quarter last year.
- Net credit (GAAP) as at March 31, 2013 totaled NIS 1,306 million (compared to NIS 1,471 million on March 31, 2012 and NIS 1,199 million on December 31, 2012.
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1. Based on non-GAAP data, which 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.
ANALYSIS OF FINANCIAL RESULTS
Following are the condensed financial accounting statements of income (GAAP) for the quarters ended March 31, 2013 and 2012 (in NIS millions)*:
First Quarter
2013 2012 % Chg
Sales 1,418 1,468 (3.4)
Cost of sales excluding impact of hedging transactions 854 892 (4.2)
Valuation of balance of commodity hedging
transactions as at end of period (18) (2)
Cost of sales 836 890 (6.0)
Gross profit 582 578 0.6
% of sales 41.1% 39.4%
Selling and marketing expenses 319 335 (5.0)
General and administrative expenses 80 82 (2.6)
Operating profit before other income (expenses) 183 161 14.0
% of sales 12.9% 11.0%
Other income (expenses), net 3 (9)
Operating profit after other income (expenses) 186 152 23.1
Financing expenses, net (21) (34) (36.5)
Share in income (losses) of equity-accounted investees 31 (2)
Income before taxes on income 196 116 70.5
Taxes on income (56) (42) 34.4
Effective tax rate 28.5% 36.1%
Income for the period 140 74 90.9
Attributable to:
The Company's shareholders 108 57 90.4
Non-controlling interests 32 17 92.7
* Financial data were rounded off to NIS millions. The percentages change were calculated on the basis of the exact figures in NIS thousands
Following are the adjustments to the Company's non-GAAP management reports (NIS millions):
- Adjustments for IFRS 11 (change from the equity method in the GAAP report to the proportionate consolidation method (according to the segmental information based on the Group's management accounting (non-GAAP) and internal reports):
First Quarter - 2013 First Quarter - 2012
Proportionate
consolidation
Proportionate method (as
consolidation reported
method before IFRS 11
Equity (applied to Equity had become
method Change date) method Change effective)
Sales 1,418 595 2,013 1,468 597 2,065
Cost of sales
excluding impact
of hedging
transactions 854 392 1,246 892 442 1,334
Valuation of
balance of
commodity
hedging
transactions as
at end of period (18) - (18) (2) - (2)
Cost of sales 836 392 1,228 890 442 1,332
Gross profit 582 203 785 578 155 733
% of sales 41.1% (2.1%) 39.0% 39.4% (3.9%) 35.5%
Selling and
marketing
expenses 319 128 447 335 121 456
General and
administrative
expenses 80 31 111 82 29 111
Operating profit
before other
income
(expenses) 183 44 227 161 5 166
% of sales 12.9% (1.7%) 11.3% 11.0% (2.9%) 8.0%
Other income
(expenses), net 3 - 3 (9) - (9)
Operating profit
after other
income
(expenses) 186 44 230 152 5 157
Financing
expenses, net (21) (5) (26) (34) (6) (40)
Share in income
(losses) of
equity-accounted
investees 31 (31) - (2) 2 -
Income before
taxes on income 196 8 204 116 1 117
Taxes on income (56) (8) (64) (42) (1) (43)
Effective tax
rate 28.5% 2.7% 31.2% 36.1% 1.0% 37.1%
Income for the
period 140 - 140 74 - 74
Attributable to:
The Company's
shareholders 108 - 108 57 - 57
Non-controlling
interests 32 - 32 17 - 17
Additional adjustments to the non-GAAP management reports (share-based payment, valuation of hedging transactions, other expenses and taxes referring to these adjustments):
First Quarter
2013 2012 % Change
Operating profit - according to proportionate
consolidation method - after other income
(expenses) 230 157 46.8
Share-based payment 5 4
Valuation of balance of commodity hedging
transactions as at end of period (18) (2)
Other (income) expenses (3) 9
Operating profit - non-GAAP 214 168 27.5
Financing expenses, net (26) (40)
Taxes on income (64) (43)
Taxes in respect of adjustments to the above
non-GAAP operating profit 8 (1)
Income for the period - non-GAAP 132 84 57.4
Attributable to:
The Company's shareholders 103 65 57.2
Non-controlling interests 29 19 57.8
Following are the condensed results of business operations (based on non-GAAP management reports) for the quarters ended March 31, 2013 and 2012 (in NIS millions):
First Quarter
2013 2012 % Change
Sales 2,013 2,065 (2.5)
Cost of sales 1,246 1,334 (6.6)
Gross profit - non-GAAP 767 731 4.9
% of sales 38.1% 35.4%
Selling and marketing expenses 447 456 (1.8)
General and administrative expenses 106 107 (1.8)
Operating profit - non-GAAP 214 168 27.5
% of sales 10.6% 8.1%
Financing expenses, net (26) (40) (34.3)
Income before taxes on income 188 128 46.8
Taxes on income (56) (44) 26.7
Effective tax rate 29.9% 34.6%
Income for the period - non-GAAP 132 84 57.4
Attributable to:
The Company's shareholders 103 65 57.2
Non-controlling interests 29 19 57.8
Following are the condensed results of business operations (based on non-GAAP management reports) of the major business sectors for the quarters ended March 31, 2013 and 2012 (in NIS millions):
First Quarter
2013 2012 % Change
Israel
Net sales 756 772 (2.0)
Operating profit 94 92 2.4
EBITDA 113 111 2.5
Coffee
Net sales 989 1,048 (5.6)
Operating profit 111 77 44.7
EBITDA 131 94 39.0
International Dips and Spreads
Net sales 134 112 18.9
Operating profit 7 3 104.7
EBITDA 12 8 47.9
Other
Net sales 134 133 0.3
Operating profit (loss) 2 (4) (132.1)
EBITDA 14 8 72.3
Total
Net sales 2,013 2,065 (2.5)
Operating profit 214 168 27.5
EBITDA 270 221 22.3
For further information:
Talia Sessler
Investor Relations Director
Strauss Group Ltd.
+972-54-5772195
+972-3-6752545
talia.sessler@strauss-group.com
Osnat Golan
VP Communications & Digital, Spokesperson
Strauss Group Ltd.
+972-52-8288111
+972-3-6752281
Gil Messing
External Communications Director
Strauss Group Ltd.
+972-54-2525272
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