Strauss has concluded a strong first quarter of 2016 with 7.7% growth in EBIT and 5.1% growth in net profit. Foreign currency effect led to a 2.6% drop in the Group's Shekel sales; excluding foreign currency effect, the Group's growth was 4.7%.

Strauss Israel concluded a quarter of positive growth contrary to the market's trend. Sabra and Strauss Water continue to post an improvement in the operating profit.

News provided by

Strauss Group

May 23, 2016, 02:11 ET

PETACH TIKVA, Israel, May 23, 2016 /PRNewswire/ -- Gadi Lesin, President and Chief Executive Officer of Strauss Group (TASE: STRS), said today (May 23, 2016): "The first quarter of the year shows positive trends and strong results that have yielded growth in our shareholders' earnings. Innovation and efficiency enhancing moves have enabled Strauss Israel to post positive growth in contrast to the trend in the market, Strauss Water and Sabra also contributed to the ongoing improvement in the Group's operating profit. Although the coffee company has continued to post growth in local currency in Brazil and in the CIS countries, the foreign currency effect on translation into Shekels remains significant. We believe that the measures we are applying in our key countries of operations, including Brazil, the US, Russia, China and Israel will continue to contribute to the bottom line despite the challenges we face in a tough competitive environment."

Q1 2016 highlights(1)

  • Organic sales growth, excluding foreign exchange effects, was 4.7%(1). Shekel sales were NIS 1.9 billion compared to NIS 1.9 billion in the corresponding period last year, and reflected NIS 134 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 726 million, down 0.5% compared to the corresponding period last year. Simultaneously the gross margins were up to 38.6% compared to 37.8% in the corresponding period last year.
  • Operating profit (EBIT) was NIS 213 million (11.3% of sales), up 7.7% compared to the corresponding period last year. EBIT margins were up 1.1%.
  • EPS for shareholders of the Company were NIS 1.00, up 4.9% compared to the corresponding period.
  • Negative Cash flows from operating activities totaled NIS 26 million, compared to negative Cash flows of NIS 150 million in the corresponding period last year.
  • In the first quarter, Strauss Israel's sales grew by approximately 3%, despite a drop of 3% in the Israeli food and beverage market (according to StoreNext), with an increase in market share.

(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)





First Quarter


2016

2015

Change

Total Group Sales (NIS mm)

1,880

1,930

-2.6%

Organic Sales Growth excluding FX

4.7%

1.8%

Gross Profit (NIS mm)

726

729

-0.5%

Gross Margins (%)

38.6%

37.8%

+80 bps

EBITDA (NIS mm)

269

252

6.8%

EBITDA Margins (%)

14.3%

13.0%

+130 bps

EBIT (NIS mm)

213

197

7.7%

EBIT Margins (%)

11.3%

10.2%

+110 bps

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

107

102

5.1%

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

5.7%

5.3%

+40 bps

EPS (NIS)

1.00

0.95

4.9%

Operating Cash Flow (NIS mm)

(26)

(150)

-82.7%

Capex (NIS mm) (2)

(56)

(87)

-35.6%

Net debt (NIS mm)

1,748

1,906

-8.3%

Net debt / annual EBITDA

1.9x

2.0x

(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)










First 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. 2015

Sales and EBIT by Operating Segments and Activities







Strauss Israel:







Health & Wellness

474

4.3%

4.3%

51

6

13.0%

10.7%

+80 bps

Fun & Indulgence (2)

302

0.9%

0.9%

47

0

0.4%

15.7%

--

Total Strauss Israel

776

2.9%

2.9%

98

6

6.6%

12.7%

+50 bps









Strauss Coffee:







Coffee Israel

194

-0.8%

-0.8%

35

(4)

-9.5%

18.1%

 -170 bps

International Coffee (2)

586

-9.9%

11.8%

45

(2)

-5.7%

7.6%

+40 bps

Total Strauss Coffee

780

-7.8%

8.4%

80

(6)

-7.4%

10.2%

--









International Dips & Spreads:







Sabra (50%) (2)

175

0.7%

1.9%

30

10

52.4%

17.4%

+590 bps

Obela (50%) (2)

10

17.8%

30.6%

(3)

2

NM

NM

NM

Total International Dips & Spreads

185

1.6%

3.2%

27

13

90.7%

14.6%

+680 bps









Other (2)

139

-6.4%

-2.1%

8

3

50.6%

5.6%

+210 bps

Total Group

1,880

-2.6%

4.7%

213

16

7.7%

11.3%

+110 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.

Appendix

Condensed financial accounting (GAAP)

First Quarter


2016

2015

Change

Sales

1,321

1,308

1.0%

Cost of sales excluding impact of valuation of balance of commodity hedging transactions

793

812

-2.3%

Valuation of balance of commodity hedging transactions as at end of period

(6)

37

Cost of sales

787

849

-7.3%

Gross profit

534

459

16.2%

% of sales

40.4%

35.1%

Selling and marketing expenses

292

284

2.9%

General and administrative expenses

87

83

3.9%

Total expenses

379

367

Share of profit of equity-accounted investees

51

49

2.8%

Operating profit before other expenses

206

141

45.7%

% of sales

15.6%

10.8%

Other expenses, net

(2)

(3)

-42.5%

Operating profit after other expenses

204

138

47.8%

Financing expenses, net

(30)

(11)

178.7%

Income before taxes on income

174

127

36.8%

Taxes on income

(42)

(36)

16.4%

Effective tax rate

24.1%

28.4%

Income for the period

132

91

44.9%

Attributable to the Company's shareholders

104

72

43.8%

Attributable to non-controlling interests

28

19

49.3%

For further information please contact:


Yaniv Reuven

Osnat Golan

Corporate Controller

VP Communications & Digital, Spokesperson

Strauss Group Ltd.

Strauss Group Ltd.

972-54-577-2195

972-52-828-8111

972-3-675-2422 

972-3-675-2281

[email protected] 

Or

Gil Messing

External Communications Director


Strauss Group Ltd.

972-54-252-5272

SOURCE Strauss Group

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