Strauss Group Announces Results For Third Quarter And First Nine Months Of 2013

News provided by

Strauss Group

27 Nov, 2013, 14:17 GMT

- POSTS 21.4% OPERATING PROFIT GROWTH IN THIRD QUARTER 2013, MAINLY THANKS TO THE GROUP'S INTERNATIONAL OPERATIONS(1)

- Excluding currency effects, organic growth was 5 .7%. The Group's shekel sales in the third quarter of 2013 were impacted as the shekel continued to gain strength versus the Group's other operating currencies and fell 1.9%.

TEL AVIV, Israel, Nov. 27, 2013 /PRNewswire/ -- Gadi Lesin, President and Chief Executive Officer of the Strauss Group, said today, "The Group's strong performance in the quarter reflects continued strong operating results by Strauss international operations, alongside growth in Strauss Israel and smart cost management. Accelerated investment in innovation and marketing effort in all activity segments aims to build and anchor the Group's growth drivers and deliver a better, more diverse product portfolio to our consumers in Israel and abroad."

Key data on the third quarter of 2013 and as at September 30, 2013(1)

  • Excluding the effect of changes in exchange rates, organic sales grew by 5.7% over last year. Non-GAAP sales totaled NIS 2.0 billion (NIS 2.1 billion last year), a decrease of 1.9%.
  • Non-GAAP gross profit totaled NIS 798 million (39.1% of sales) compared to NIS 737 million in the corresponding quarter last year (35.5% of sales), an increase of 8.1%.
  • Non-GAAP operating profit (EBIT) totaled NIS 212 million (10.4% of sales) compared to NIS 175 million in the corresponding quarter last year (8.4% of sales), an increase of 21.4%, primarily due to the significant growth in the profits of the Group's international operations.
  • Non-GAAP net income attributable to the Company's shareholders totaled NIS 81 million (4.0% of sales) compared to NIS 69 million in the corresponding quarter last year (3.3% of sales), an increase of 17.1%.
  • Cash flows from operating activities (including partnerships) amounted to a positive cash flow of NIS 205 million compared to a positive cash flow of NIS 171 million in the corresponding quarter last year.
  • Net credit (including partnerships) as at September 30, 2013 totaled NIS 1,357 million, compared to NIS 1,623 million on September 30, 2012 and NIS 1,422 million on December 31, 2012.

Key data on the first nine months of 2013(1)

  • Sales totaled approximately NIS 6.1 billion (approximately NIS 6.1 billion in the corresponding period last year), a decrease of 0.2%; excluding the currency effect, organic sales grew by 4.7%.
  • Non-GAAP gross profit totaled NIS 2,316 million (38.2% of sales) compared to NIS 2,133 million in the corresponding period last year (35.1% of sales), an increase of 8.6%.
  • Non-GAAP operating profit (EBIT) totaled NIS 611 million (10.1% of sales) compared to NIS 468 million in the corresponding period last year (7.7% of sales), an increase of 30.7%, primarily as a result of the significant growth in the profits of the Group's international operations.
  • Non-GAAP net income attributable to the Company's shareholders totaled NIS 259 million (4.3% of sales) compared to NIS 170 million in the corresponding period last year (2.8% of sales), an increase of 53.0%.
  • Cash flows from operating activities (including partnerships) amounted to a positive cash flow of NIS 439 million compared to a positive cash flow of NIS 404 million in the corresponding period last year.



(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





Following are the condensed results of business operations (based on the Company's non-GAAP management reports) for the quarter and nine months ended September 30, 2013 and 2012 (in NIS millions)*:



First Nine Months

Third Quarter


2013

2012

% Chg

2013

2012

% Chg

Sales

6,069

6,079

(0.2)

2,040

2,078

(1.9)

Cost of sales

3,753

3,946

(4.9)

1,242

1,341

(7.4)

Gross profit – non-GAAP

2,316

2,133

8.6

798

737

8.1

% of sales

38.2%

35.1%


39.1%

35.5%


Selling and marketing expenses

1,383

1,346

2.7

475

449

5.6

General and administrative expenses

322

319

0.8

111

113

(2.4)

Operating profit – non-GAAP

611

468

30.7

212

175

21.4

% of sales

10.1%

7.7%


10.4%

8.4%


Financing expenses, net

(102)

(102)

0.4

(40)

(34)

19.3

Income before taxes on income

509

366

39.1

172

141

21.9

Taxes on income

(164)

(129)

26.2

(61)

(46)

31.1

Effective tax rate

32.1%

35.1%


34.8%

31.7%


Income for the period – non-GAAP

345

237

45.6

111

95

16.3

Attributable to:

The Company's shareholders


259


170


53.0


81


69


17.1

Non-controlling interests

86

67

29.1

30

26

18.5




Following are the condensed results of business operations (based on non-GAAP management reports) of the major business sectors for the quarter and nine months ended September 30, 2013 and 2012 (in NIS millions)*:



First Nine Months

Third Quarter


2013

2012

%  Chg

2013

2012

%  Chg

Israel







Net sales

2,254

2,198

2.6

771

743

3.9

Operating profit

248

231

7.3

86

76

13.5

Coffee







Net sales 

2,935

3,081

(4.7)

954

1,049

(9.0)

Operating profit

318

221

43.6

108

86

24.0

International Dips and Spreads







Net sales

452

383

18.0

159

140

13.5

Operating profit

46

35

31.8

22

18

20.8

Other







Net sales

428

417

2.3

156

146

7.1

Operating loss

(1)

(19)


(4)

(5)


Total







Net sales  

6,069

6,079

(0.2)

2,040

2,078

(1.9)

Operating profit

611

468

30.7

212

175

21.4

* 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 condensed financial accounting statements of income (GAAP) for the quarter and nine months ended September 30, 2013 and 2012 (in NIS millions)*:



First Nine Months

Third Quarter


2013

2012

% Chg

2013

2012

% Chg

Sales

4,154

4,266

(2.6)

1,402

1,455

(3.6)

Cost of sales excluding impact of hedging

   transactions


2,514


2,639


(4.7)


839


900


(6.7)

Valuation of balance of commodity hedging

   transactions as at end of period


8


(20)



(9)


(5)


Cost of sales

2,522

2,619

(3.7)

830

895

(7.2)

Gross profit

1,632

1,647

(0.9)

572

560

2.2

% of sales

39.3%

38.6%


40.8%

38.5%


Selling and marketing expenses

986

985

0.2

336

327

2.7

General and administrative expenses

244

247

(1.2)

85

89

(4.6)

Operating profit before other income

   (expenses)


402


415


(3.2)


151


144


5.4

% of sales

9.7%

9.7%


10.8%

9.8%


Other income (expenses), net

(17)

51


(15)

59


Operating profit after other income

   (expenses)


385


466


(17.5)


136


203


(33.3)

Financing expenses, net

(87)

(86)

1.1

(37)

(30)

23.8

Share in income of equity-accounted investees

136

28


49

21


Income before taxes on income

434

408

6.4

148

194

(24.1)

Taxes on income

(149)

(139)

7.7

(63)

(65)

(3.0)

Effective tax rate

34.5%

34.0%


42.7%

33.4%


Income for the period

285

269

5.7

85

129

(34.3)

Attributable to:

The Company's shareholders


209


203


2.9


58


105


(43.7)

Non-controlling interests

76

66

14.7

27

24

6.9


* 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 Nine Months 2013

First Nine Months 2012

Third Quarter 2013

Third Quarter 2012


Equity

method

Change

Proportionate

consolidation

method

(applied to date)

Equity

method

Change

Proportioate

consolidation

method (as

published before

IFRS 11 took

effect)

Equity

method

Change

Proportionate

consolidation

method (applied

to date)

Equity

method

Change

Proportionate

consolidation

method (as

published before

IFRS 11 took effect)

Sales

4,154

1,915

6,069

4,266

1,813

6,079

1,402

638

2,040

1,455

623

2,078

Cost of sales excluding impact of hedging

   transactions


2,514


1,239


3,753


2,639


1,307


3,946


839


403


1,242


900


441


1,341

Valuation of balance of commodity hedging

   transactions as at end of period


8


-


8


(20)


(2)


(22)


(9)


-


(9)


(5)


(1)


(6)

Cost of sales

2,522

1,239

3,761

2,619

1,305

3,924

830

403

1,233

895

440

1,335

Gross profit

1,632

676

2,308

1,647

508

2,155

572

235

807

560

183

743

% of sales

39.3%


38.0%

38.6%


35.5%

40.8%


39.6%

38.5%


35.8%

Selling and marketing expenses

986

397

1,383

985

361

1,346

336

139

475

327

122

449

General and administrative expenses

244

92

336

247

85

332

85

30

115

89

28

117

Operating profit before other income

   (expenses)


402


187


589


415


62


477


151


66


217


144


33


177

% of sales

9.7%


9.7%

9.7%


7.8%

10.8%


10.6%

9.8%


8.5%

Other income (expenses), net

(17)

(2)

(19)

51

-

51

(15)

(1)

(16)

59

-

59

Operating profit after other income

   (expenses)


385


185


570


466


62


528


136


65


201


203


33


236

Financing expenses, net

(87)

(15)

(102)

(86)

(16)

(102)

(37)

(3)

(40)

(30)

(4)

(34)

Share in income of equity-accounted

   investees


136


(136)


-


28


(28)


-


49


(49)


-


21


(21)


-

Income before taxes on income

434

34

468

408

18

426

148

13

161

194

8

202

Taxes on income

(149)

(34)

(183)

(139)

(18)

(157)

(63)

(13)

(76)

(65)

(8)

(73)

Effective tax rate

34.5%


39.1%

34.0%


36.8%

42.7%


46.9%

33.4%


35.8%

Income for the period

285

-

285

269

-

269

85

-

85

129

-

129

Attributable to:

The Company's shareholders


209


-


209


203


-


203


58


-


58


105


-


105

Non-controlling interests

76

-

76

66

-

66

27

-

27

24

-

24

Income for the period

285

-

285

269

-

269

85

-

85

129

-

129


     * Financial data were rounded off to NIS millions. The percentages change were calculated on the basis of the exact figures in NIS thousands







Additional adjustments to the non-GAAP management reports (share-based payment, valuation of hedging transactions, other expenses and taxes referring to these adjustments)*:



First Nine Months

Third Quarter


2013

2012

% Chg

2013

2012

% Chg

Operating profit – according to proportionate

   consolidation method – after other income

   (expenses)



570



528



8.1



201



236



(14.9)

Share-based payment  

14

13


4

4


Valuation of balance of commodity hedging

   transactions as at end of period


8


(22)



(9)


(6)


Other expenses (income)

19

(51)


16

(59)


Operating profit – non-GAAP management

   reports


611


468


30.7


212


175


21.4

Financing expenses, net

(102)

(102)


(40)

(34)


Taxes on income

(183)

(157)


(76)

(73)


Taxes in respect of adjustments to the above

   non-GAAP operating profit


**19


28



**15


27


Income for the period – non-GAAP

345

237

45.6

111

95

16.3

Attributable to:

The Company's shareholders


259


170


53.0


81


69


17.1

Non-controlling interests

86

67

29.1

30

26

18.5

* Financial data were rounded off to NIS millions. The percentages change were calculated on the basis of the exact figures in NIS thousands

** In 2013, includes mainly tax expenses in respect of unfrozen "trapped" corporate profits. For further information, see Note 4.8 to the financial statements.





For further information:




Talia Sessler

Osnat Golan

Investor Relations Director

VP Communications & Digital, Spokesperson

Strauss Group Ltd.

Strauss Group Ltd.

972-54-577-2195

972-52-828-8111

972-3-675-2545

972-3-675-2281

talia.sessler@strauss-group.com



Gil Messing


External Communications Director


Strauss Group Ltd.


972-54-252-5272