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Strauss Group Announces Results For Second Quarter And First Half 2013



    Strauss Group Announces Results For Second Quarter And First Half 2013

POSTS 4.2% SALES GROWTH AND 48.0% OPERATING PROFIT GROWTH IN SECOND QUARTER
2013, MAINLY THANKS TO THE GROUP'S INTERNATIONAL OPERATIONS (1)

Sales grew in all segments of the Group's activity; strong growth in Strauss
Israel sales, which rose by 6.2% compared to the corresponding quarter last
year

Strauss Coffee and the International Dips and Spreads Operation continued to
show strong results as the assimilation of streamlining processes and
accelerated investments in innovation continued

PR Newswire

TEL AVIV, Israel, Aug. 20, 2013

TEL AVIV, Israel, Aug. 20, 2013 /PRNewswire/ -- Gadi Lesin, President and
Chief Executive Officer of the Strauss Group (TASE: STRS), said today, "The
Group continued to post strong performance in the quarter and top-line growth
in all activity segments, particularly Strauss Israel. Focused strategy,
innovation, investment in strengthening our brands and smart cost management
also led to significant growth in the Group's operating and net profit."

Implementation of IFRS 11 – Joint Arrangements

Commencing in the first quarter of 2013 Strauss Group has applied IFRS 11 –
Joint Arrangements. The significance of the standard is that businesses which
are jointly controlled by Strauss and a partner are no longer presented
according to Strauss's relative holding in the entity, but in a separate row
("Income of equity-accounted investees" in the statements of income and in the
other statements in the relevant section). The reporting method does not alter
the Group's profit. As this is a change in reporting method only, and in light
of the fact that the Group's non-GAAP reports and the manner in which
Management measures the results of operations of subsidiaries and the jointly
owned companies have remained unchanged, the Group continues to present the
activity segments in the identical manner in which they were presented in
prior periods.

Key data on the second quarter of 2013 and as at June 30, 2013 ^ (1)

  o Sales totaled NIS 2.0 billion (NIS 1.9 billion last year), an increase of
    4.2%; excluding the impact of changes in exchange rates, organic sales
    grew by 8.2% over last year.
  o Non-GAAP gross profit totaled NIS 751 million (37.2% of sales) compared to
    NIS 665 million in the corresponding quarter last year (34.3% of sales),
    an increase of 13.0%.
  o Non-GAAP operating profit (EBIT) totaled NIS 185 million (9.1% of sales)
    compared to NIS 125 million in the corresponding quarter last year (6.4%
    of sales), an increase of 48.0%. The growth was primarily due to the
    significant growth in the profits of the Group's international operations.
  o Non-GAAP net income attributable to the Company's shareholders totaled NIS
    75 million (3.7% of sales) compared to NIS 35 million in the corresponding
    quarter last year (1.8% of sales), an increase of 117.2%.
  o Cash flows from operating activities (non-GAAP) amounted to a positive
    cash flow of NIS 236 million compared to a positive cash flow of NIS 250
    million in the corresponding quarter last year.
  o Net credit (non-GAAP) as at June 30, 2013 totaled NIS 1,403 million
    (compared to NIS 1,679 million on June 30, 2012 and NIS 1,422 million on
    December 31, 2012).

Key data on the first half of 2013 and as at June 30, 2013 ^(1)

  o Sales totaled NIS 4.0 billion (NIS 4.0 billion in the corresponding half
    last year), an increase of 0.7%; excluding the impact of changes in
    exchange rates, organic sales grew by 4.3%.
  o Non-GAAP gross profit totaled NIS 1,518 million (37.7% of sales) compared
    to NIS 1,396 million in the corresponding half last year (34.9% of sales),
    an increase of 8.8%.
  o Non-GAAP operating profit (EBIT) totaled NIS 399 million (9.9% of sales)
    compared to NIS 293 million in the corresponding half last year (7.3% of
    sales), an increase of 36.3%, primarily as a result of the significant
    growth in the profits of the Group's international operations.
  o Non-GAAP net income attributable to the Company's shareholders totaled NIS
    178 million (4.4% of sales) compared to NIS 100 million in the
    corresponding half last year (2.5% of sales), an increase of 77.9%.
  o Cash flows from operating activities (non-GAAP) amounted to a positive
    cash flow of NIS 234 million compared to a positive cash flow of NIS 233
    million in the corresponding half last year.
  o Net credit (non-GAAP) as at June 30, 2013 totaled NIS 1,403 million
    (compared to NIS 1,679 million on June 30, 2012 and NIS 1,422 million on
    December 31, 2012).

^(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

Following are the condensed results of business operations (based on the
Company's non-GAAP management reports) for the quarter and the half ended June
30, 2013 and 2012 (in NIS millions)*:

 

                                    First Half        Second Quarter
                                    2013  2012  % Chg 2013  2012  % Chg
Sales                               4,029 4,001 0.7   2,016 1,936 4.2
Cost of sales                       2,511 2,605 (3.6) 1,265 1,271 (0.5)
Gross profit – non-GAAP             1,518 1,396 8.8   751   665   13.0
% of sales                          37.7% 34.9%       37.2% 34.3%
Selling and marketing expenses      908   897   1.2   461   441   4.4
General and administrative expenses 211   206   2.6   105   99    7.3
Operating profit – non-GAAP         399   293   36.3  185   125   48.0
% of sales                          9.9%  7.3%        9.1%  6.4%
Financing expenses, net             (62)  (68)  (9.2) (36)  (28)  26.7
Income before taxes on income       337   225   49.9  149   97    54.2
Taxes on income                     (103) (83)  23.5  (47)  (39)  19.8
Effective tax rate                  30.7% 37.3%       31.7% 40.8%
Income for the period – non-GAAP    234   142   65.7  102   58    77.9
Attributable to:                                                   

The Company's shareholders          178   100   77.9  75    35    117.2
Non-controlling interests           56    42    35.9  27    23    18.1

 

Following are the condensed results of business operations (based on non-GAAP
management reports) of the major business sectors for the quarter and the half
ended June 30, 2013 and 2012 (in NIS millions)*:

 

                               First Half         Second Quarter
                               2013  2012  %  Chg 2013  2012  %  Chg
Israel
Net sales                      1,483 1,455 1.9    727   683   6.2
Operating profit               162   155   4.2    68    63    6.9
EBITDA                         200   192   4.0    87    81    6.1
Coffee
Net sales                      1,981 2,032 (2.5)  992   984   0.9
Operating profit               210   135   56.2   99    58    71.6
EBITDA                         247   173   43.2   116   79    48.3
International Dips and Spreads
Net sales                      293   243   20.6   159   131   22.0
Operating profit               24    17    43.2   17    14    28.0
EBITDA                         34    27    28.7   22    19    20.4
Other
Net sales                      272   271   0.8    138   138   1.3
Operating profit (loss)        3     (14)         1     (10)
EBITDA                         28    13    130.2  14    5     245.2
Total
Net sales                      4,029 4,001 0.7    2,016 1,936 4.2
Operating profit               399   293   36.3   185   125   48.0
EBITDA                         509   405   26.3   239   184   31.1

 

* Financial data were rounded off to NIS millions. The percentages change were
calculated on the basis of the exact figures in NIS thousands.

 

Following are the condensed financial accounting statements of income (GAAP)
for the quarter and the half ended June 30, 2013 and 2012 (in NIS millions)*:

 

                                         First Half         Second Quarter
                                         2013  2012  % Chg  2013  2012  % Chg
Sales                                    2,752 2,811 (2.1)  1,334 1,343 (0.7)
Cost of sales excluding impact of                                        
hedging
                                         1,675 1,740 (3.7)  821   848   (3.2)
   transactions
Valuation of balance of commodity                                  
hedging
                                         17    (16)         35    (14)
   transactions as at end of period
Cost of sales                            1,692 1,724 (1.9)  856   834   2.6
Gross profit                             1,060 1,087 (2.5)  478   509   (6.1)
% of sales                               38.5% 38.7%        35.8% 37.9%
Selling and marketing expenses           650   658   (1.1)  331   323   2.9
General and administrative expenses      159   158   0.7    79    76    4.3
Operating profit before other income                                     

   (expenses)                            251   271   (7.7)  68    110   (39.3)
% of sales                               9.1%  9.7%         5.0%  8.2%
Other income (expenses), net             (2)   (8)          (5)   1
Operating profit after other income                                      

   (expenses)                            249   263   (5.3)  63    111   (44.0)
Financing expenses, net                  (50)  (56)  (12.7) (29)  (22)  24.0
Share in income (losses) of                                        
equity-accounted
                                         87    7            56    9
   investees
Income before taxes on income            286   214   34.3   90    98    (8.2)
Taxes on income                          (86)  (74)  17.2   (30)  (32)  (5.1)
Effective tax rate                       30.2% 34.6%        33.9% 32.8%
Income for the period                    200   140   43.5   60    66    (9.7)
Attributable to:                                                         

The Company's shareholders               151   98    53.5   43    41    2.1
Non-controlling interests                49    42    19.2   17    25    (29.2)

 

* Financial data were rounded off to NIS millions. The percentages change were
calculated on the basis of the exact figures in NIS thousands.

 

Following are the adjustments to the Company's non-GAAP management reports
(NIS millions)*:

- Adjustments for IFRS 11 – change from the equity method in the GAAP report
to the proportionate consolidation method (according to the segmental
information based on the Group's management accounting (non-GAAP) and internal
reports):

 

                 First Half 2013              First Half 2012           Second Quarter 2013          Second Quarter 2012
                                                            Proportion-                                            Proportion-
                                                            ate conso-                                             ate conso-
                               Propor-tionate               lidation                  Propor-tionate               lidation
                               consoli-dation               method (as                consoli-dation               method (as
                               method                       published                 method                       published
                               (applied to                  before                    (applied to                  before
                 Equity        date)          Equity        IFRS 11     Equity        date)          Equity        IFRS 11
                 method Change                method Change took        method Change                method Change took
                                                            effect)                                                effect)
Sales            2,752  1,277  4,029          2,811  1,190  4,001       1,334  682    2,016          1,343  593    1,936
Cost of sales
excluding impact                                                                                                    
of hedging
                 1,675  836    2,511          1,740  865    2,605       821    444    1,265          848    423    1,271
   transactions
Valuation of
balance of
commodity                                                                                                           
hedging
                 17     -      17             (16)   -      (16)        35     -      35             (14)   -      (14)
   transactions
as at end of
period
Cost of sales    1,692  836    2,528          1,742  865    2,589       856    444    1,300          834    423    1,257
Gross profit     1,060  441    1,501          1,087  325    1,412       478    238    716            509    170    679
% of sales       38.5%         37.3%          38.7%         35.3%       35.8%         35.5%          37.9%         35.1%
Selling and
marketing        650    258    908            658    239    897         331    130    461            323    118    441
expenses
General and
administrative   159    62     221            158    57     215         79     31     110            76     28     104
expenses
Operating profit
before other                                                                                                        
income
                 251    121    372            271    29     300         68     77     145            110    24     134
   (expenses)
% of sales       9.1%          9.2%           9.7%          7.5%        5.0%          7.2%           8.2%          6.9%
Other income     (2)    (1)    (3)            (8)    -      (8)         (5)    (1)    (6)            1      -      1
(expenses), net
Operating profit
after other                                                                                                         
income
                 249    120    369            263    29     292         63     76     139            111    24     135
   (expenses)
Financing        (50)   (12)   (62)           (56)   (12)   (68)        (29)   (7)    (36)           (22)   (6)    (28)
expenses, net
Share in income
of                                                                                                                  
equity-accounted
                 87     (87)   -              7      (7)    -           56     (56)   -              9      (9)    -
   investees
Income before    286    21     307            214    10     224         90     13     103            98     9      107
taxes on income
Taxes on income  (86)   (21)   (107)          (74)   (10)   (84)        (30)   (13)   (43)           (32)   (9)    (41)
Effective tax    30.2%         35.0%          34.6%         37.7%       33.9%         42.6%          32.8%         38.4%
rate
Income for the   200    -      200            140    -      140         60     -      60             66     -      66
period
Attributable to:                                                                                                    

The Company's    151    -      151            98     -      98          43     -      43             41     -      41
shareholders
Non-controlling  49     -      49             42     -      42          17     -      17             25     -      25
interests
Income for the   200    -      200            140    -      140         60     -      60             66     -      66
period

 

* Financial data were rounded off to NIS millions. The percentages change were
calculated on the basis of the exact figures in NIS thousands.

 

-       Additional adjustments to the non-GAAP management reports (share-based
payment, valuation of hedging transactions, other expenses and taxes referring
to these adjustments)*:

 

                                              First Half       Second Quarter
                                              2013  2012 % Chg 2013 2012 % Chg
Operating profit – according to proportionate                             

   consolidation method – after other income                              

   (expenses)                                 369   292  26.8  139  135  3.4
Share-based payment                           10    9          5    5
Valuation of balance of commodity hedging                            

   transactions as at end of period           17    (16)       35   (14)
Other expenses (income)                       3     8          6    (1)
Operating profit – non-GAAP management                                    

   reports                                    399   293  36.3  185  125  48.0
Financing expenses, net                       (62)  (68)       (36) (28)
Taxes on income                               (107) (84)       (43) (41)
Taxes in respect of adjustments to the above                         

   non-GAAP operating profit                  4     1          (4)  2
Income for the period – non-GAAP              234   142  65.7  102  58   77.9
Attributable to:                                                          

The Company's shareholders                    178   100  77.9  75   35   117.2
Non-controlling interests                     56    42   35.9  27   23   18.1

 

* Financial data were rounded off to NIS millions. The percentages change were
calculated on the basis of the exact figures in NIS thousands.

For further information:

                                Osnat Golan

                                VP Communications & Digital, Spokesperson
Talia Sessler
                                Strauss Group Ltd.
Investor Relations Director
                                972-52-8288111
Strauss Group Ltd.
                                972-3-6752281
972-54-5772195
                                 
972-3-6752545
                                Gil Messing
talia.sessler@strauss-group.com
                                External Communications Director
 
                                Strauss Group Ltd.

                                972-54-2525272

 

SOURCE Strauss Group

Website: http://www.strauss-group.com
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