Strauss Posts Yet Another Strong Set of Annual Results With Sales Growth Up 6.9% for 2017, or 8% Excluding Foreign Currency Effects; Net Income Rises an Impressive 23.7% for the Year Due to Excellent Results at Strauss Coffee, Strauss Israel And Str

March 14, 2018 | By forimmediaterelease.net - | Filed in: Press Releases.

PETACH TIKVA, Israel, March 14, 2018 /PRNewswire/ — Gadi Lesin, President and CEO of Strauss Group (TASE: STRS) “Strauss Group continues to present solid results in all key parameters. In the fourth quarter of 2017 sales grew a stellar 10.2% excluding FX translation, and net income rose by 34%. These excellent results were attained, among other things, by implementing strategic moves which enhanced the Group’s operational and managerial flexibility whilst focusing on core assets, by increasing our investment in innovation, signing new distribution agreements and expanding our geographical reach. Alongside the strong performance of Strauss Israel, Strauss Coffee and Strauss Water, 2017 was a challenging year for Sabra, our dips and spreads business in North America, which nevertheless succeeded in returning to close to pre-recall selling and market share levels.”

2017 highlights (1)

  • Organic sales growth, excluding foreign currency effects, was c8%. Shekel sales were NIS c8.5 billion compared to NIS 7.9 billion in the corresponding period last year; sales were impacted by a negative currency translation amounting to NIS c49 million as a result of the continued appreciation of the NIS in comparison to other currencies.
  • Gross profit was NIS c3,116 million (c36.7% of sales), up c4.6% compared to the corresponding period last year. Gross margins were down c0.8%.
  • Operating profit (EBIT) was NIS c780 million (c9.2% of sales), up c4.8% compared to the corresponding period last year. EBIT margins were down c0.2%.
  • EPS for shareholders of the Company was NIS c3.7, up c18.8% compared to the corresponding period.
  • Cash flow from operating activities totalled NIS c622 million, compared to NIS c762 million last year.

(1) Based on the Company’s non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, unless stated otherwise.

Non GAAP Figures (1)

Year

2017

2016

Change

Total Group Sales (NIS mm)

8,492

7,943

6.9%

Organic Sales Growth excluding FX

8.0%

Gross Profit (NIS mm)

3,116

2,980

4.6%

Gross Margins (%)

36.7%

37.5%

 -80 bps

EBITDA (NIS mm)

1,018

975

4.4%

EBITDA Margins (%)

12.0%

12.3%

 -30 bps

EBIT (NIS mm)

780

744

4.8%

EBIT Margins (%)

9.2%

9.4%

 -20 bps

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

415

335

23.7%

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

4.9%

4.2%

+70 bps

EPS (NIS)

3.70

3.12

18.8%

Operating Cash Flow (NIS mm)

622

762

-18.4%

Capex (NIS mm) (2)

-268

-239

12.1%

Net debt (NIS mm)

2,080

1,428

45.6%

Net debt / annual EBITDA

2.0x

1.5x

0.5x

(1) Based on the Company’s non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, unless stated otherwise.

(2) Investments include the acquisition of fixed assets and investment in intangibles.

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

Non GAAP Figures (1)

Year

Sales (NIS mm)

Sales
Growth vs. Last Year

Organic
Sales
Growth excluding
FX 

EBIT (NIS mm)

NIS
Change in EBIT

% Change
in EBIT 

EBIT margins

Change in
EBIT
margins vs. 2016

Sales and EBIT by Operating
Segments and Activities

Strauss Israel:

Health & Wellness

2,068

5.7%

5.7%

222

9

4.2%

10.8%

 -10 bps

Fun & Indulgence (2)

1,063

5.6%

5.6%

106

5

5.8%

10.0%

Total Strauss Israel

3,131

5.6%

5.6%

328

14

4.5%

10.5%

 -10 bps

Strauss Coffee:

Coffee Israel 

704

4.5%

4.5%

104

17

19.0%

14.8%

+180 bps

International Coffee (2)

3,396

13.2%

12.4%

289

17

6.4%

8.5%

 -60 bps

Total Strauss Coffee

4,100

11.6%

11.0%

393

34

9.4%

9.6%

 -20 bps

International Dips & Spreads:

Sabra (50%) (2)

622

-6.3%

0.2%

30

-29

-49.5%

4.8%

 -410 bps

Obela (50%) (2)

70

32.8%

23.9%

-11

1

NM

NM

NM

Total International Dips & Spreads

692

-3.4%

2.2%

19

-29

-59.9%

2.8%

 -380 bps

Other (2)

569

-3.5%

7.7%

40

17

73.0%

6.9%

+300 bps

Total Group

8,492

6.9%

8.0%

780

36

4.8%

9.2%

 -20 bps

(1) Based on the Company’s non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, 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 figures include Strauss’s share in the joint venture in China, Haier Strauss Water (HSW). Until August the Company held a 34% stake in the joint venture, and commencing in September, its percentage holding increased to 49% following the acquisition of an additional 15%.

(3) During the period, the Group sold the Max Brenner operation.

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.

Q4 2017 highlights(1)

  • Organic sales growth, excluding foreign currency effects, was c10.2%. Shekel sales were NIS c2.2 billion compared to NIS 2 billion in the corresponding period last year, and include a NIS c53 million negative translation effect as a result of the weakening of the Brazilian Real versus the NIS.
  • Gross profit was NIS c774 million (c35.9% of sales), up c8% compared to the corresponding period last year. Gross margins were up c0.6%.
  • Operating profit (EBIT) was NIS c149 million (c6.9% of sales), up c10.4% compared to the corresponding period last year. EBIT margins were up c0.3%.
  • EPS for shareholders of the company was NIS c0.67, up c26% compared to the corresponding period.
  • Cash flows from operating activities totalled NIS c328 million, compared to NIS c360 million last year.

(1) Based on the Company’s non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, unless stated otherwise.

 Non GAAP Figures (1)

Fourth Quarter

2017

2016

Change

Total Group Sales (NIS mm)

2,157

2,034

6.0%

Organic Sales Growth excluding FX

10.2%

Gross Profit (NIS mm)

774

717

8.0%

Gross Margins (%)

35.9%

35.3%

+60 bps

EBITDA (NIS mm)

214

194

10.6%

EBITDA Margins (%)

9.9%

9.5%

+40 bps

EBIT (NIS mm)

149

135

10.4%

EBIT Margins (%)

6.9%

6.6%

+30 bps

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

77

58

34.0%

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

3.6%

2.8%

+80 bps

EPS (NIS)

0.67

0.53

26.0%

Operating Cash Flow (NIS mm)

328

360

-8.9%

Capex (NIS mm) (2)

-79

-76

3.9%

Net debt (NIS mm)

2,080

1,428

45.6%

Net debt / annual EBITDA

2.0x

1.5x

0.5x

(1) Based on the Company’s non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, unless stated otherwise.

(2) Investments include the acquisition of fixed assets and investment in intangibles.

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

Non GAAP Figures (1)

Fourth Quarter

Sales (NIS mm)

Sales
Growth vs. Last Year

Organic
Sales
Growth
excluding FX 

EBIT (NIS mm)

NIS
Change in EBIT

% Change
in EBIT 

EBIT margins

Change in
EBIT
margins vs. 2016

Sales and EBIT by Operating
Segments and Activities

Strauss Israel:

Health & Wellness

514

10.2%

10.2%

52

1

1.3%

10.2%

 -90 bps

Fun & Indulgence (2)

254

13.6%

13.6%

17

2

23.5%

6.9%

+60 bps

Total Strauss Israel

768

11.3%

11.3%

69

3

5.1%

9.0%

 -60 bps

Strauss Coffee:

Israel Coffee 

167

13.9%

13.9%

20

12

132.7%

12.2%

+620 bps

International Coffee (2)

918

0.4%

5.3%

59

-17

-21.8%

6.4%

 -190 bps

Total Strauss Coffee

1,085

2.3%

6.5%

79

-5

-5.9%

7.3%

 -70 bps

International Dips & Spreads:

Sabra (50%) (2)

147

25.9%

37.3%

-2

11

87.3%

NM

+1000 bps

Obela (50%) (2)

21

13.0%

20.1%

-2

-1

NM

NM

NM

Total International Dips & Spreads

168

24.1%

34.8%

-4

10

74.4%

NM

+830 bps

Other (2)

136

-8.4%

9.5%

5

6

451.2%

3.0%

+380 bps

Total Group

2,157

6.0%

10.2%

149

14

10.4%

6.9%

+30 bps

(1) Based on the Company’s non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, including adjustments required for deferral of profit or loss from commodity derivatives until the inventory is sold to external parties, and other income and expenses, net, 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 figures include Strauss’s share in the joint venture in China, Haier Strauss Water (HSW). Until August the Company held a 34% stake in the joint venture, and commencing in September, its percentage holding increased to 49% following the acquisition of an additional 15%.

(3) During the period, the Group sold the Max Brenner operation.

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

Condensed financial accounting (GAAP)

Year

2017

2016

Change

Sales

5,480

5,282

3.7%

Cost of sales excluding impact of commodity hedges 

3,323

3,179

4.5%

Adjustments for commodity hedges

31

0

Cost of sales

3,354

3,179

5.5%

Gross profit

2,126

2,103

1.1%

% of sales

38.8%

39.8%

Selling and marketing expenses

1,259

1,234

2.0%

General and administrative expenses

388

367

5.6%

Total expenses

1,647

1,601

Share of profit of equity-accounted investees

162

178

-8.9%

Operating profit before other expenses

641

680

-5.7%

% of sales

11.7%

12.9%

Other expenses, net

-9

-49

Operating profit after other expenses

632

631

0.3%

Financing expenses, net

-117

-109

8.7%

Income before taxes on income

515

522

-1.5%

Taxes on income

-99

-134

-27.1%

Effective tax rate

19.1%

25.8%

Income for the period

416

388

7.4%

Attributable to the Company’s shareholders

342

272

25.8%

Attributable to non-controlling interests

74

116

-35.6%

Condensed financial accounting (GAAP)

Fourth Quarter

2017

2016

Change

Sales

1,385

1,310

5.7%

Cost of sales excluding impact of commodity hedges 

850

792

7.4%

Adjustments for commodity hedges

13

28

Cost of sales

863

820

5.3%

Gross profit

522

490

6.4%

% of sales

37.7%

37.4%

Selling and marketing expenses

324

323

0.1%

General and administrative expenses

113

98

15.1%

Total expenses

437

421

Share of profit of equity-accounted investees

42

24

78.9%

Operating profit before other expenses

127

93

37.4%

% of sales

9.2%

7.0%

Other expenses, net

-2

-6

Operating profit after other expenses

125

87

45.3%

Financing expenses, net

-27

-16

78.5%

Income before taxes on income

98

71

38.1%

Taxes on income

-22

-15

40.9%

Effective tax rate

22.1%

21.7%

Income for the period

76

56

37.3%

Attributable to the Company’s shareholders

68

30

128.6%

Attributable to non-controlling interests

8

26

-66.2%

Investor Conference

Strauss Group will host an Annual and Fourth Quarter 2017 Investor Conference at the Tel Aviv Stock Exchange on Wednesday, March 14, 2018 at 14:00 (Israel time) to review the Financial Statements of the Company for the year and quarter.

Strauss Group will also host an Investor Conference call in English on Wednesday, March 14, 2018 at 17:00 Israel time (UK – 15:00, US Eastern Standard Time –11:00) to review the Financial Statements of the Company for the year and quarter.

To join the conference in English, please call:

UK: 0-800-917-5108

US: 1-888-668-9141

Israel: 03-918-0609

The Financial Statements for the fourth quarter and full-year of 2017 and Investors Presentation are posted on the Group’s Investor Relations website at:

http://ir.strauss-group.com/phoenix.zhtml?c=92539&p=irol-irhome

For further information please contact:

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SOURCE Strauss Group

Related Links

https://www.strauss-group.com/


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