Strauss Group posts 1.3% organic sales growth, excluding foreign currency effects(1), and net profit erosion(2)

(1)

Also excluding the impact of classification of costs following the introduction of the Food Law, as explained in the Board of Directors Report.

(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.

(3)

Tres Coracoes (3C) – Brazil – a company jointly held by the Group (50%) and by a local holding company, Sao Miguel Holding e Investimentos S.A. (50%).

Non GAAP Adjusted Figures ⁽¹⁾

First Half

2015

2014

Organic Sales Growth
excluding FX and Food Law

3,769

3,922

1.3%

Gross Profit (NIS mm)

1,418

1,558

-9.0%

Gross Margins (%)

37.6%

39.7%

 -210 bps

EBITDA (NIS mm)

425

485

-12.3%

EBITDA Margins (%)

11.3%

12.4%

 -110 bps

EBIT (NIS mm)

309

376

-17.9%

EBIT Margins (%)

8.2%

9.6%

 -140 bps

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

133

168

-20.6%

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

3.5%

4.3%

 -80 bps

1.24

1.57

30

Capex (NIS mm) ⁽²⁾

(157)

(257)

-38.9%

Net debt (NIS mm)

1,833

1,720

6.6%

Net debt / annual EBITDA

1.8x

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⁾

First Half

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

Strauss Israel:

928

-5.2%

-3.3%

78

(22)

-21.3%

8.4%

 -170 bps

Fun & Indulgence ⁽²⁾

503

-4.2%

-1.7%

58

(8)

-12.0%

11.6%

1,431

-4.8%

-2.7%

136

(30)

-17.6%

9.5%

 -150 bps

Strauss Coffee:

Coffee Israel 

333

-6.4%

-3.5%

46

(8)

-12.8%

14.0%

 -100 bps

International Coffee ⁽²⁾

1,348

-5.0%

11.4%

90

(35)

-28.9%

6.6%

 -230 bps

1,681

-5.2%

7.9%

136

(43)

-24.1%

8.1%

 -200 bps

International Dips & Spreads:

Sabra (50%) ⁽²⁾

347

14.0%

1.4%

34

(8)

-19.9%

9.7%

 -410 bps

Obela (50%) ⁽²⁾

17

7.6%

12.4%

(11)

(1)

NM

NM

NM

Total International Dips & Spreads

364

13.7%

1.9%

23

(9)

-28.3%

6.3%

 -370 bps

Other ⁽²⁾

293

-9.8%

-12.8%

14

15

-2282.0%

4.6%

+480 bps

Total Group

3,769

-3.9%

1.3%

309

(67)

-17.9%

8.2%

 -140 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.

(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⁾

Second Quarter

2014

Change

Organic Sales Growth
excluding FX and Food Law

Total Group Sales (NIS mm)

1,839

1,949

-5.7%

0.6%

Gross Profit (NIS mm)

689

768

-10.5%

Gross Margins (%)

37.4%

39.4%

 -200 bps

EBITDA (NIS mm)

173

227

-23.5%

EBITDA Margins (%)

9.4%

11.6%

 -220 bps

EBIT (NIS mm)

112

172

-35.3%

EBIT Margins (%)

6.1%

8.9%

 -280 bps

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

31

69

-54.0%

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

1.7%

3.5%

 -180 bps

EPS (NIS)

0.29

0.64

-54.3%

Operating Cash Flow (NIS mm)

180

113

59.7%

Capex (NIS mm) ⁽²⁾

(70)

(125)

-44.0%

Net debt (NIS mm)

1,833

1,720

6.6%

Net debt / annual EBITDA

2.0x

1.8x

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⁾

Second Quarter

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

474

-5.2%

-3.4%

33

(18)

-34.3%

7.0%

 -310 bps

Fun & Indulgence ⁽²⁾

204

-4.7%

-1.7%

11

(6)

-33.8%

5.5%

 -250 bps

Total Strauss Israel

678

-5.0%

-2.9%

44

(24)

-34.2%

6.6%

 -290 bps

Strauss Coffee:

Israel Coffee 

137

-9.3%

-6.7%

7

(6)

-39.1%

5.6%

 -280 bps

International Coffee ⁽²⁾

698

-7.7%

11.1%

43

(33)

-44.5%

6.1%

 -400 bps

Total Strauss Coffee

835

-8.0%

7.6%

50

(39)

-43.8%

6.0%

 -380 bps

International Dips & Spreads:

Sabra (50%) ⁽²⁾

173

6.9%

-4.3%

14

(9)

-40.6%

7.9%

 -640 bps

Obela (50%) ⁽²⁾

8

-5.3%

-0.9%

(5)

0

NM

NM

NM

Total International Dips & Spreads

182

6.3%

-4.2%

9

(9)

-50.8%

4.9%

 -560 bps

Other ⁽²⁾

144

-8.7%

-12.5%

9

12

529.4%

NM

NM

Total Group

1,839

-5.7%

0.6%

112

(60)

-35.3%

6.1%

 -280 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

First Half

2015

2014

GAAP sales

2,636

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

1,253

1,286

Non GAAP sales

3,769

3,922

GAAP EBIT

275

334

Minus: Share of profits of equity-accounted investees

(83)

(104)

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

107

126

Additional adjustments:

Non cash equity based compensation 

9

10

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

(5)

(9)

Other expenses

6

19

Non GAAP Adjusted EBIT according to management reports

309

376

Non GAAP financing expenses, net (including JVs)

(64)

(56)

Non GAAP taxes on income (including JVs)

(68)

(106)

Taxes on income in respect of the additional adjustments above

(1)

7

Non GAAP income for the period

176

221

Attributable to the Company's shareholders

133

168

Attributable to Non controlling interests

43

53

Reconciliations of GAAP to Non GAAP Adjusted Figures

Second Quarter

2015

2014

GAAP sales

1,208

1,266

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

631

683

Non GAAP sales

1,839

1,949

GAAP EBIT

137

121

Minus: Share of profits of equity-accounted investees

(34)

(48)

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

45

57

Additional adjustments:

Non cash equity based compensation 

5

6

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

(44)

29

Other expenses 

3

7

Non GAAP Adjusted EBIT according to management reports

112

172

Non GAAP financing expenses, net (including JVs)

(46)

(38)

Non GAAP taxes on income (including JVs)

(26)

(41)

Taxes on income in respect of the additional adjustments above

7

3

Non GAAP income for the period

47

96

Attributable to the Company's shareholders

31

69

Attributable to Non controlling interests

16

27

Talia Sessler

Investor Relations Director

Strauss Group Ltd.

972-54-577-2195

972-3-675-2545

[email protected]

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