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Third quarter: Growth and rising profit

from newsmention
14/11/2018

 

Giora Bardea, President and CEO of Strauss Group (November 14, 2018): “Strauss Group continues to deliver strong performance. The company’s sales and profit continue to consistently improve in Israel and in international operations, despite the significant negative impact of changes in foreign currency on shekel results, particularly in the business in Brazil. Our focus remains on innovation based growth, combined with continued investment in productivity across all operations.

 

In Israel, Strauss continues to outpace market growth for the eleventh successive quarter. In the reporting period the company increased its market share to 11.9% of the food and beverage sector. Revenue and market share growth were achieved, among other things, thanks to new product launches in all divisions.

 

We are posting an excellent quarter also in Strauss’s global operations, which account for around half of the Group’s business. The joint venture in Brazil continues to grow, with sales volumes increasing significantly. However, due to negative currency translations that detracted NIS 100 million, growth was not reflected in shekel revenues. The international dips and spreads business is also growing at an impressive rate, as is Strauss Water’s business in Israel and in other countries.”

 


Q3 2018 highlights(1)

·         Organic sales growth, excluding foreign exchange effects, was c2.9%. Shekel sales were NIS c2.2 billion, similar to the corresponding period, and were impacted by negative currency translations amounting to NIS c108 million, mainly as a result of the depreciation of the BRL against the NIS compared to last year. It is noted that as at the publication date of the financial statements the BRL has appreciated against the NIS, regaining c7.3% in value versus the exchange rate at the end of the quarter.

·         Gross profit was NIS c812 million (c37.6% of sales), up c0.3% compared to the corresponding period. Gross margins were up c1.0%.

·         Operating profit (EBIT) was NIS c235 million (c10.9% of sales), up c6.1% compared to the corresponding period last year. EBIT margins were up c0.9%.

·         EPS for shareholders of the Company was NIS c1.25, up c14.8% compared to the corresponding period.

·         Positive cash flows from operating activities totaled NIS c248 million, compared to NIS c181 million in the corresponding period.

 

(1)    Data represent 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.           

 


First nine months 2018 highlights(1)

·         Organic sales growth, excluding foreign exchange effects, was c5.6%. Shekel sales were NIS c6.4 billion compared to NIS 6.3 billion in the corresponding period in 2017; sales were impacted by negative currency translations amounting to NIS c210 million, mainly as a result of the depreciation of the BRL against the NIS compared to last year.

·         Gross profit was NIS c2,458 million (c38.2% of sales), up c4.9% compared to the corresponding period last year. Gross margins were up c1.2%.

·         Operating profit (EBIT) was NIS c696 million (c10.8% of sales), up c10.4% compared to the corresponding period last year. EBIT margins were up c0.8%.

·         EPS for shareholders of the Company was NIS c3.50, up c15.0% compared to the corresponding period.

·         Positive cash flows from operating activities totaled NIS c544 million, compared to NIS c294 million in the corresponding period.

 

(1)    Data represent 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.

 
3q reports table

(1)Data represent 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 intangible assets.

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

 

 

3q reports table

(1)    Data represent 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. Strauss Water figures include Strauss’s share in the joint venture in China, Haier Strauss Water (HSW). Until August 2017 the Company held a 34% stake in the joint venture, and commencing in September 2017, its percentage holding increased to 49% following the acquisition of an additional 15%.

(3)    Commencing in the first quarter of 2018, Company Management has elected to report the results of the Strauss Water segment, formerly presented within the Other Operations segment, separately.

(4)    In the second quarter of 2017 the Company 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. Total figures for International Dips & Spreads were calculated on the basis of the exact figures for Sabra and Obela in NIS thousands.

 

3q reports table

(1)    Data represent 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 

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

 

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

 

3q reports table

(1)    Data represent 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. Strauss Water figures include Strauss’s share in the joint venture in China, Haier Strauss Water (HSW). Until August 2017 the Company held a 34% stake in the joint venture, and commencing in September 2017, its percentage holding increased to 49% following the acquisition of an additional 15%.

(3)    Commencing in the first quarter of 2018, Company Management has elected to report the results of the Strauss Water segment, formerly presented within the Other Operations segment, separately.

(4)    In the second quarter of 2017 the Company 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. Total figures for International Dips & Spreads were calculated on the basis of the exact figures for Sabra and Obela in NIS thousands.

 

3q reports table

3q reports table

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

 

 

Investor Conference Calls

Strauss Group will host an Investor Conference call at the offices of the company in Petach Tikva on Wednesday, November 14, 2018 at 14:00 (Israel time) to review the Financial Statements of the Company for the third quarter.

To listen to the conference in Hebrew, please call 03-918-0685.

Strauss Group will also host an Investor Conference call in English on Wednesday, November 14, 2018 at 17:30 local Israel time (15:30 UK, 10:30 EST) to review the Financial Statements of the Company for the third quarter.

 To participate in the live call in English, please call one of the following numbers as appropriate:

 From the UK: 0-800-917-9141

 From the US: 1-888-407-2553

 From Israel: 03-918-0644

The Financial Statements 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:

 

Daniella Finn

Director of Investor Relations

Strauss Group Ltd.

972-54-577-2195

972-3-675-2545

Daniella.Finn@Strauss-Group.com

 

 

 

Osnat Golan

VP Communications, Digital & Sustainability

Strauss Group Ltd.

972-52-828-8111

972-3-675-2281

Osnat.Golan@Strauss-Group.com

Or

Shlomi Sheffer

External Communications Director

Strauss Group Ltd.

972-50-620-8000

972-3-675-6713

Shlomi.Sheffer@Strauss-Group.com

 

 

 

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