Strauss Group reports fourth quarter 2015 results: 4.2% organic sales growth excluding foreign currency effects[1] and operating profit up 11.3%

News provided by

Strauss Group

21 Mar, 2016, 06:58 GMT

In Israel, Strauss delivers quarterly sales growth surpassing market growth while continuing to cut prices

Group results continue to reflect a significant FX impact, particularly in Brazil and Russia, leading to a 6.1% drop in annual shekel-denominated sales[2]

PETACH TIKVA, Israel, March 21, 2016 /PRNewswire/ -- Gadi Lesin, President and Chief Executive Officer of Strauss Group (TASE: STRS), said today (March 21, 2016): "As a leading player in a number of significant international markets, we are impacted – positively and negatively – by world macroeconomic trends, and continue to evaluate our business on a long term perspective that has delivered substantial value to the Group over the past decade. Strauss continues to implement its global growth strategy and will continue to invest in innovation and efficiencies throughout the value chain, across the Group and its geographic markets."

Link to MD&A report
Link to Analyst Presentation
Link to Q4'15 conference call details

(1) Also excluding the impact of classification of costs following the introduction of the Food Law, as explained in the MD&A.

(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.

2015 highlights(1)

  • Organic sales growth, excluding foreign exchange effects, was 2.5%(2). Shekel sales were NIS 7.6 billion compared to NIS 8.1 billion in the corresponding period last year, and reflected NIS 635 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 2,829 million (37.0% of sales), down 9.3% compared to the corresponding period last year. Gross margins were down 1.3%.
  • Operating profit (EBIT) was NIS 659 million (8.6% of sales), down 11.6% compared to the corresponding period last year. EBIT margins were down 0.6%.
  • EPS for shareholders of the Company were NIS 2.73, down 21.4% compared to the corresponding period.
  • Cash flows from operating activities totaled NIS 516 million, compared to NIS 561 million 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.

(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)







Full Year

2015

2014

Change

Organic
Sales
Growth
excluding
FX and Food Law

Total Group Sales (NIS mm)

7,642

8,140

-6.1%

2.5%

Gross Profit (NIS mm)

2,829

3,119

-9.3%

Gross Margins (%)

37.0%

38.3%

-130 bps

EBITDA (NIS mm)

891

964

-7.5%

EBITDA Margins (%)

11.7%

11.8%

-10 bps

EBIT (NIS mm)

659

746

-11.6%

EBIT Margins (%)

8.6%

9.2%

-60 bps

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

293

371

-21.1%

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

3.8%

4.6%

-80 bps

EPS (NIS)

2.73

3.47

-21.4%

Operating Cash Flow (NIS mm)

516

561

-8.0%

Capex (NIS mm) (2)

(279)

(564)

-50.5%

Net debt (NIS mm)

1,655

1,688

-2.0%

Net debt / annual EBITDA

1.9x

1.8x

0.1x





(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)


Full year 2015

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

1,898

-3.8%

-1.8%

188

(15)

-7.6%

9.9%

-40 bps

Fun & Indulgence (2)

968

-3.0%

-0.7%

93

(19)

-16.8%

9.6%

-160 bps

Total Strauss Israel

2,866

-3.6%

-1.5%

281

(34)

-10.9%

9.8%

-80 bps









Strauss Coffee:







Coffee Israel

647

-6.1%

-4.3%

84

(17)

-16.4%

13.1%

-160 bps

International Coffee (2)

2,785

-11.2%

12.4%

184

(63)

-25.5%

6.6%

-130 bps

Total Strauss Coffee

3,432

-10.3%

8.8%

268

(80)

-22.8%

7.8%

-130 bps









International Dips & Spreads:







Sabra (50%) (2)

711

10.4%

1.7%

94

3

3.8%

13.2%

-80 bps

Obela (50%) (2)

41

4.4%

16.5%

(13)

2

NM

NM

NM

Total International Dips & Spreads

752

10.0%

2.5%

80

5

7.3%

10.7%

-30 bps









Other (2)

592

-10.3%

-9.9%

30

22

288.6%

5.0%

+380 bps

Total Group

7,642

-6.1%

2.5%

659

(87)

-11.6%

8.6%

-60 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 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. 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.











Q4 2015 highlights(1)

  • Organic sales growth, excluding foreign exchange effects, was 4.2%(2). Shekel sales were NIS 1.9 billion compared to NIS 2.1 billion in the corresponding quarter last year, and reflected NIS 236 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 700 million (36.8% of sales), down 6.7% compared to the corresponding period last year. Gross margins were up 0.7%.
  • Operating profit (EBIT) was NIS 158 million (8.3% of sales), up 11.3% compared to the corresponding quarter last year. EBIT margins were up 1.5%.
  • EPS for shareholders of the company were NIS 0.69, down 12.4% compared to the corresponding period.
  • Cash flows from operating activities totaled NIS 426 million, compared to NIS 287 million 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.

(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)






Q4 2015

2015

2014

Change

Organic
Sales
Growth
excluding
FX and
Food Law

Total Group Sales (NIS mm)

1,899

2,080

-8.7%

4.2%

Gross Profit (NIS mm)

700

750

-6.7%

Gross Margins (%)

36.8%

36.1%

+70 bps

EBITDA (NIS mm)

220

199

10.5%

EBITDA Margins (%)

11.6%

9.6%

+200 bps

EBIT (NIS mm)

158

143

11.3%

EBIT Margins (%)

8.3%

6.8%

+150 bps

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

74

84

-12.0%

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

3.9%

4.0%

-10 bps

EPS (NIS)

0.69

0.78

-12.4%

Operating Cash Flow (NIS mm)

426

287

48.4%

Capex (NIS mm) (2)

(68)

(109)

-37.6%

Net debt (NIS mm)

1,655

1,688

-2.0%

Net debt / annual EBITDA

1.9x

1.8x

0.1x



(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)










Q4 2015

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

463

-0.2%

2.1%

47

3

5.8%

10.1%

+60 bps

Fun & Indulgence (2)

225

3.1%

5.2%

12

(8)

-38.1%

5.5%

-370 bps

Total Strauss Israel

688

0.9%

3.1%

59

(5)

-7.9%

8.6%

-80 bps









Strauss Coffee:







Israel Coffee

153

-9.2%

-8.6%

20

0

0.3%

13.1%

+120 bps

International Coffee (2)

722

-16.4%

14.3%

49

13

35.4%

6.7%

+250 bps

Total Strauss Coffee

875

-15.3%

9.4%

69

13

23.1%

7.8%

+240 bps









International Dips & Spreads:







Sabra (50%) (2)

172

-3.6%

-4.7%

28

10

57.0%

16.4%

+630 bps

Obela (50%) (2)

14

1.5%

19.0%

(0)

0

NM

NM

NM

Total International Dips & Spreads

187

-3.2%

-3.2%

28

10

61.4%

15.0%

+600 bps









Other (2)

149

-13.3%

-7.6%

2

(3)

-56.1%

NM

NM

Total Group

1,899

-8.7%

4.2%

158

15

11.3%

8.3%

+150 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 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.

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.












Appendix

Reconciliations of GAAP to Non GAAP Adjusted Figures

Full Year

2015

2014

GAAP sales

5,183

5,415

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

2,459

2,725

Non GAAP sales

7,642

8,140



GAAP EBIT

585

545

Minus: Share of profits of equity-accounted investees

(198)

(219)

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

237

256

Additional adjustments:

Share-based payment and liability plan

15

21

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

(22)

22

Other expenses, net

42

121

Non GAAP Adjusted EBIT according to management reports

659

746



Non GAAP financing expenses, net (including JVs)

(126)

(83)

Non GAAP taxes on income (including JVs)

(153)

(165)

Taxes on income in respect of the additional adjustments above

5

(9)

Non GAAP income for the period

385

489

Attributable to the Company's shareholders

293

371

Attributable to Non controlling interests

92

118






Reconciliations of GAAP to Non GAAP Adjusted Figures

Q4

2015

2014

GAAP sales

1,302

1,364

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

597

716

Non GAAP sales

1,899

2,080



GAAP EBIT

156

52

Minus: Share of profits of equity-accounted investees

(64)

(49)

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

66

49

Additional adjustments:

Share-based payment and liability plan

3

5

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

(25)

28

Other expenses, net

22

58

Non GAAP Adjusted EBIT according to management reports

158

143



Non GAAP financing expenses, net (including JVs)

(27)

(13)

Non GAAP taxes on income (including JVs)

(43)

(6)

Taxes on income in respect of the additional adjustments above

10

(14)

Non GAAP income for the period

98

110

Attributable to the Company's shareholders

74

84

Attributable to Non controlling interests

24

26



(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

talia.sessler@strauss-group.com

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