Strauss Group concludes 2014 with 4.2% organic sales growth excluding foreign currency impacts and 12.6% growth in net profit, thanks in part to income from the revaluation of currency hedging transactions [1]
PETACH TIKVA, Israel, March 23, 2015 /PRNewswire/ -- Gadi Lesin, President and Chief Executive Officer of Strauss Group (TASE: STRS.TA), said today (March 23, 2015): "Strauss Group has posted good annual results despite complex local and global challenges. Along with record results in two of the Group's key international growth drivers – the coffee company in Brazil (Tres Coracoes Joint Venture)(2)(3) and the dips and spreads company in the U.S. and Canada (Sabra) – we coped with a political and economic crisis in Russia and Ukraine and a food market suffering a considerable slowdown in our home market, Israel. Strauss continues to implement a strategy aimed at deepening operations abroad while simultaneously tailoring the company to accommodate the changes and challenges in the Israeli food market. In addition, today we reported that the coffee company had filed a confidential draft prospectus with the SEC."
FY 2014 and Q4'14 results conference call today at 17:30 local time / 15:30 UK time / 11:30 a.m. EDT
2014 highlights (1)
- Organic sales growth, excluding the foreign exchange effect, was 4.2%. Shekel sales were NIS 8.1 billion, similar to last year, and reflected NIS 333 million negative translation differences as a result of the continued strengthening of the NIS versus other functional currencies of the Group.
- Gross profit was NIS 3,119 million (38.3% of sales), up 0.1% compared to last year. Gross margins were up 0.1%.
- Operating profit (EBIT) was NIS 746 million (9.2% of sales), down 3.1% compared to last year. EBIT margins were down 0.2%.
- EPS for shareholders of the company was NIS 3.47 per share, up 12.1% compared to last year. The growth in EPS was mainly due to a decrease in the company's net financing expenses, primarily reflecting income from hedges on the dollar against the ruble and on the dollar versus the shekel, thus partially offsetting the impact of the devaluation of the ruble on the cost of sales. The increase in profit also reflects a decrease in tax expenses.
- Cash flows from operating activities were NIS 561 million, compared to NIS 716 million in 2013.
(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) Tres Coracoes Joint Venture (3C) – Brazil (a company jointly held by the Group (50%) and by the Sao Miguel Group (50%)).
(3) Record results in the coffee company in Brazil refer to results of operations in domestic currency (BRL).
| Non GAAP Adjusted Figures (1) |
|||||
| Full Year |
|||||
| 2014 |
2013 |
Change |
Organic Growth excluding FX |
||
| Total Group Sales (NIS mm) |
8,140 |
8,143 |
0.0% |
4.2% |
|
| Gross Profit (NIS mm) |
3,119 |
3,114 |
0.1% |
||
| Gross Margins (%) |
38.3% |
38.2% |
+10 bps |
||
| EBITDA (NIS mm) |
964 |
993 |
-2.9% |
||
| EBITDA Margins (%) |
11.8% |
12.2% |
-40 bps |
||
| EBIT (NIS mm) |
746 |
769 |
-3.1% |
||
| EBIT Margins (%) |
9.2% |
9.4% |
-20 bps |
||
| Net Income Attributable to the Company's Shareholders (NIS mm) |
371 |
329 |
12.6% |
||
| Net Income Margin Attributable to the Company's Shareholders (%) |
4.6% |
4.0% |
+60 bps |
||
| EPS (NIS) |
3.47 |
3.09 |
12.1% |
||
| Operating Cash Flow (NIS mm) |
561 |
716 |
|||
| Capex (NIS mm) (2) |
(564) |
(482) |
17.0% |
||
| Net debt (NIS mm) |
1,688 |
1,475 |
14.4% |
||
| Net debt / annual EBITDA |
1.8x |
1.5x |
0.3x |
||
| (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 off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. |
|||||
| Non GAAP Adjusted Figures (1) |
||||||||
| Full year 2014 |
||||||||
| Sales |
Sales |
Organic Sales Growth excluding FX |
EBIT |
NIS Change in EBIT |
% Change in EBIT |
EBIT margins |
Change in EBIT margins vs. 2013 |
|
| Sales and EBIT by Operating Segments and Activities |
||||||||
| Strauss Israel: |
||||||||
| Health & Wellness |
1,974 |
-0.7% |
-0.7% |
203 |
3 |
1.6% |
10.3% |
+20 bps |
| Fun & Indulgence (2) |
998 |
-1.5% |
-1.5% |
112 |
(3) |
-2.8% |
11.2% |
-20 bps |
| Total Strauss Israel |
2,972 |
-0.9% |
-0.9% |
315 |
0 |
0.0% |
10.6% |
+10 bps |
| Strauss Coffee: |
||||||||
| Coffee Israel |
689 |
-3.6% |
-3.6% |
101 |
13 |
14.8% |
14.7% |
+240 bps |
| International Coffee (2) |
3,136 |
-2.9% |
7.5% |
247 |
(68) |
-21.8% |
7.9% |
-190 bps |
| Total Strauss Coffee |
3,825 |
-3.0% |
5.3% |
348 |
(55) |
-13.8% |
9.1% |
-110 bps |
| International Dips & Spreads: |
||||||||
| Sabra (50%) (2) |
644 |
13.9% |
14.6% |
90 |
17 |
22.6% |
14.0% |
+100 bps |
| Obela (50%) (2) |
39 |
14.2% |
22.6% |
(15) |
1 |
-6.8% |
NM |
NM |
| Total International Dips & Spreads |
683 |
13.9% |
15.0% |
75 |
18 |
31.2% |
11.0% |
+150 bps |
| Other (2) |
660 |
10.0% |
12.3% |
8 |
14 |
NM |
1.2% |
+230 bps |
| Total Group |
8,140 |
0.0% |
4.2% |
746 |
(23) |
-3.1% |
9.2% |
-20 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 50% share in the salty snacks business. International Coffee figures include Strauss 50% share in Tres Coracoes Joint Venture (3C) – Brazil - a company jointly held by the Group (50%) and by the Sao Miguel Group (50%). International D&S figures reflect Strauss 50% share in Sabra and Obela. Other includes Strauss share in Strauss Water China. |
||||||||
| Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. |
||||||||
Q4 2014 highlights (1)
- Organic sales growth, excluding the foreign exchange effect, was 2.8%. Shekel sales were NIS 2.1 billion, up 0.3%, and reflected NIS 60 million negative translation differences as a result of the continued strengthening of the NIS versus other functional currencies of the Group.
- Gross profit was NIS 750 million (36.1% of sales), down 6.0% compared to the corresponding period last year. Gross margins were down 2.4%.
- Operating profit (EBIT) was NIS 143 million (6.8% of sales), down 10.1% compared to the corresponding period last year. EBIT margins were down 0.8%.
- EPS was NIS 0.78 per share, up 18.2% compared to the corresponding period. The growth in EPS was mainly due to a decrease in the company's net financing expenses, primarily reflecting income from hedges on the dollar against the ruble and on the dollar versus the shekel, thus partially offsetting the impact of the devaluation of the ruble on the cost of sales. The increase in profit also reflects a decrease in tax expenses.
- Cash flows from operating activities were NIS 287 million, compared to NIS 266 million in the corresponding period in 2013.
- Net debt as at December 31, 2014 was NIS 1,688 million, compared to NIS 1,475 million on December 30, 2013.
(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.
| Non GAAP Adjusted Figures (1) |
||||||
| Q4 |
||||||
| 2014 |
2013 |
Change |
Organic Growth excluding FX |
|||
| Total Group Sales (NIS mm) |
2,080 |
2,074 |
0.3% |
2.8% |
||
| Gross Profit (NIS mm) |
750 |
798 |
-6.0% |
|||
| Gross Margins (%) |
36.1% |
38.5% |
-240 bps |
|||
| EBITDA (NIS mm) |
199 |
215 |
-7.3% |
|||
| EBITDA Margins (%) |
9.6% |
10.4% |
-80 bps |
|||
| EBIT (NIS mm) |
143 |
158 |
-10.1% |
|||
| EBIT Margins (%) |
6.8% |
7.6% |
-80 bps |
|||
| Net Income Attributable to the Company's Shareholders (NIS mm) |
84 |
70 |
18.4% |
|||
| Net Income Margin (Attributable to the Company's Shareholders) (%) |
4.0% |
3.4% |
+60 bps |
|||
| EPS (NIS) |
0.78 |
0.66 |
18.2% |
|||
| Operating Cash Flow (NIS mm) |
287 |
266 |
8.1% |
|||
| Capex (NIS mm) (2) |
(109) |
(153) |
-28.7% |
|||
| Net debt (NIS mm) |
1,688 |
1,475 |
14.4% |
|||
| Net debt / annual EBITDA |
1.8x |
1.5x |
0.3x |
|||
| (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 off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. |
||||||
| Non GAAP Adjusted Figures (1) |
||||||||
| Q4 2014 |
||||||||
| Sales |
Sales Growth vs. |
Organic Sales Growth |
EBIT |
NIS Change in EBIT |
% Change |
EBIT margins |
Change in EBIT margins |
|
| Sales and EBIT by Operating Segments and Activities |
||||||||
| Strauss Israel: |
||||||||
| Health & Wellness |
465 |
-6.8% |
-6.8% |
44 |
(7) |
-13.1% |
9.5% |
-70 bps |
| Fun & Indulgence (2) |
218 |
-11.7% |
-11.7% |
20 |
4 |
23.9% |
9.2% |
+260 bps |
| Total Strauss Israel |
683 |
-8.4% |
-8.4% |
64 |
(3) |
-4.1% |
9.4% |
+40 bps |
| Strauss Coffee: |
||||||||
| Israel Coffee |
168 |
-8.7% |
-8.7% |
20 |
8 |
65.1% |
11.9% |
+530 bps |
| International Coffee (2) |
864 |
4.8% |
13.8% |
36 |
(37) |
-51.3% |
4.2% |
-470 bps |
| Total Strauss Coffee |
1,032 |
2.4% |
9.4% |
56 |
(29) |
-34.9% |
5.4% |
-310 bps |
| International Dips & Spreads: |
||||||||
| Sabra (50%) (2) |
178 |
30.1% |
19.5% |
18 |
4 |
25.9% |
10.1% |
-34 bps |
| Obela (50%) (2) |
14 |
29.5% |
28.9% |
(1) |
3 |
-82.3% |
NM |
NM |
| Total International Dips & Spreads |
192 |
30.1% |
20.1% |
18 |
7 |
59.2% |
9.0% |
+160 bps |
| Other (2) |
173 |
0.1% |
0.9% |
5 |
10 |
NM |
NM |
NM |
| Total Group |
2,080 |
0.3% |
2.8% |
143 |
(15) |
-10.1% |
6.8% |
-80 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 50% share in the salty snacks business. International Coffee figures include Strauss 50% share in Tres Coracoes Joint Venture (3C) – Brazil - a company jointly held by the Group (50%) and by the Sao Miguel Group (50%). International D&S figures reflect Strauss 50% share in Sabra and Obela. Other includes Strauss share in Strauss Water China. |
||||||||
| Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. |
||||||||
| Reconciliations of GAAP to Non GAAP Adjusted Figures |
||
| Full Year |
||
| 2014 |
2013 |
|
| GAAP sales |
5,415 |
5,605 |
| Add back JV sales (accounted for under the equity method) |
2,725 |
2,538 |
| Non GAAP sales |
8,140 |
8,143 |
| GAAP EBIT |
545 |
610 |
| Minus: Share in income of equity-accounted investees |
(219) |
(175) |
| Plus: JV EBIT (accounted for under the equity method) |
256 |
228 |
| Additional adjustments: |
||
| Non cash equity based compensation |
21 |
18 |
| Loss (Profit) from accounting mark-to-market of commodity hedging transactions as at the end of period |
22 |
(12) |
| Other expenses |
121 |
100 |
| Non GAAP Adjusted EBIT according to management reports |
746 |
769 |
| Non GAAP financing expenses, net (including JVs) |
(83) |
(134) |
| Non GAAP taxes on income (including JVs) |
(165) |
(198) |
| Taxes on income in respect of the additional adjustments above |
(9) |
8 |
| Non GAAP income for the period |
489 |
445 |
| Attributable to the Company's shareholders |
371 |
329 |
| Non controlling interests |
118 |
116 |
| Reconciliations of GAAP to Non GAAP Adjusted Figures |
||
| Q4 |
||
| 2014 |
2013 |
|
| GAAP sales |
1,364 |
1,451 |
| Add back JV sales (accounted for under the equity method) |
716 |
623 |
| Non GAAP sales |
2,080 |
2,074 |
| GAAP EBIT |
52 |
89 |
| Minus: Share in income of equity-accounted investees |
(49) |
(39) |
| Plus: JV EBIT (accounted for under the equity method) |
49 |
43 |
| Additional adjustments: |
||
| Non cash equity based compensation |
5 |
4 |
| Loss from accounting mark-to-market of commodity hedging transactions as at the end of period |
28 |
(20) |
| Other expenses |
58 |
81 |
| Non GAAP Adjusted EBIT according to management reports |
143 |
158 |
| Non GAAP financing expenses, net (including JVs) |
(13) |
(32) |
| Non GAAP taxes on income (including JVs) |
(6) |
(15) |
| Taxes on income in respect of the additional adjustments above |
(14) |
(11) |
| Non GAAP income for the period |
110 |
100 |
| Attributable to the Company's shareholders |
84 |
70 |
| Non controlling interests |
26 |
30 |
| For further information please contact: |
|
| Talia Sessler Investor Relations Director Strauss Group Ltd. 972-54-577-2195 972-3-675-2545 |
Osnat Golan VP Communications & Digital, Spokesperson Strauss Group Ltd. 972-52-828-8111 972-3-675-2281 Or Gil Messing Externat Communications Director Strauss Group Ltd. 972-54-252-5272 |
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