Strauss Group Announces Results For Third Quarter And First Nine Months Of 2013

  Strauss Group Announces Results For Third Quarter And First Nine Months Of
                                     2013

POSTS 21.4% OPERATING PROFIT GROWTH IN THIRD QUARTER 2013, MAINLY THANKS TO
THE GROUP'S INTERNATIONAL OPERATIONS(1)

Excluding currency effects, organic growth was 5.7%. The Group's shekel sales
in the third quarter of 2013 were impacted as the shekel continued to gain
strength versus the Group's other operating currencies and fell 1.9%.

PR Newswire

TEL AVIV, Israel, Nov. 26, 2013

TEL AVIV, Israel, Nov. 26, 2013 /PRNewswire/ --Gadi Lesin, President and
Chief Executive Officer of the Strauss Group, said today, "The Group's strong
performance in the quarter reflects continued strong operating results by
Strauss international operations, alongside growth in Strauss Israel and smart
cost management. Accelerated investment in innovation and marketing effort in
all activity segments aims to build and anchor the Group's growth drivers and
deliver a better, more diverse product portfolio to our consumers in Israel
and abroad."

Key data on the third quarter of 2013 and as at September 30, 2013^1

  oExcluding the effect of changes in exchange rates, organic sales grew by
    5.7% over last year. Non-GAAP sales totaled NIS 2.0 billion (NIS 2.1
    billion last year), a decrease of 1.9%.

  oNon-GAAP gross profit totaled NIS 798 million (39.1% of sales) compared to
    NIS 737 million in the corresponding quarter last year (35.5% of sales),
    an increase of 8.1%.

  oNon-GAAP operating profit (EBIT) totaled NIS 212 million (10.4% of sales)
    compared to NIS 175 million in the corresponding quarter last year (8.4%
    of sales), an increase of 21.4%, primarily due to the significant growth
    in the profits of the Group's international operations.

  oNon-GAAP net income attributable to the Company's shareholders totaled NIS
    81 million (4.0% of sales) compared to NIS 69 million in the corresponding
    quarter last year (3.3% of sales), an increase of 17.1%.

  oCash flows from operating activities (including partnerships) amounted to
    a positive cash flow of NIS 205 million compared to a positive cash flow
    of NIS 171 million in the corresponding quarter last year.

  oNet credit (including partnerships) as at September 30, 2013 totaled NIS
    1,357 million, compared to NIS 1,623 million on September 30, 2012 and NIS
    1,422 million on December 31, 2012.

Key data on the first nine months of 2013 ^1

  oSales totaled approximately NIS 6.1 billion (approximately NIS 6.1 billion
    in the corresponding period last year), a decrease of 0.2%; excluding the
    currency effect, organic sales grew by 4.7%.

  oNon-GAAP gross profit totaled NIS 2,316 million (38.2% of sales) compared
    to NIS 2,133 million in the corresponding period last year (35.1% of
    sales), an increase of 8.6%.

  oNon-GAAP operating profit (EBIT) totaled NIS 611 million (10.1% of sales)
    compared to NIS 468 million in the corresponding period last year (7.7% of
    sales), an increase of 30.7%, primarily as a result of the significant
    growth in the profits of the Group's international operations.

  oNon-GAAP net income attributable to the Company's shareholders totaled NIS
    259 million (4.3% of sales) compared to NIS 170 million in the
    corresponding period last year (2.8% of sales), an increase of 53.0%.

  oCash flows from operating activities (including partnerships) amounted to
    a positive cash flow of NIS 439 million compared to a positive cash flow
    of NIS 404 million in the corresponding period last year.



   Based on non-GAAP data, which include the proportionate consolidation of
   jointly-held partnerships (without implementation of IFRS 11) and do not
^1 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 nine months ended
September 30, 2013 and 2012 (in NIS millions)*:
                            First Nine Months         Third Quarter
                            2013     2012    % Chg    2013    2012    % Chg
Sales                       6,069    6,079   (0.2)    2,040   2,078   (1.9)
Cost of sales               3,753    3,946   (4.9)    1,242   1,341   (7.4)
Gross profit – non-GAAP     2,316    2,133   8.6      798     737     8.1
% of sales                  38.2%    35.1%            39.1%   35.5%
Selling and marketing       1,383    1,346   2.7      475     449     5.6
expenses
General and administrative  322      319     0.8      111     113     (2.4)
expenses
Operating profit – non-GAAP 611      468     30.7     212     175     21.4
% of sales                  10.1%    7.7%             10.4%   8.4%
Financing expenses, net     (102)    (102)   0.4      (40)    (34)    19.3
Income before taxes on      509      366     39.1     172     141     21.9
income
Taxes on income             (164)    (129)   26.2     (61)    (46)    31.1
Effective tax rate          32.1%    35.1%            34.8%   31.7%
Income for the period –     345      237     45.6     111     95      16.3
non-GAAP
Attributable to:                                                 

The Company's shareholders  259      170     53.0     81      69      17.1
Non-controlling interests   86       67      29.1     30      26      18.5
Following are the condensed results of business operations (based on non-GAAP
management reports) of the major business sectors for the quarter and nine
months ended September 30, 2013 and 2012 (in NIS millions)*:
                            First Nine Months         Third Quarter
                            2013     2012    % Chg   2013    2012    % Chg
Israel
Net sales                   2,254    2,198   2.6      771     743     3.9
Operating profit            248      231     7.3      86      76      13.5
Coffee
Net sales                  2,935    3,081   (4.7)    954     1,049   (9.0)
Operating profit            318      221     43.6     108     86      24.0
International Dips and
Spreads
Net sales                   452      383     18.0     159     140     13.5
Operating profit            46       35      31.8     22      18      20.8
Other
Net sales                   428      417     2.3      156     146     7.1
Operating loss              (1)      (19)             (4)     (5)
Total
Net sales                  6,069    6,079   (0.2)    2,040   2,078   (1.9)
Operating profit            611      468     30.7     212     175     21.4
* 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 nine months ended September 30, 2013 and 2012 (in NIS
millions)*:
                            First Nine Months         Third Quarter
                            2013     2012    % Chg    2013    2012    % Chg
Sales                       4,154    4,266   (2.6)    1,402   1,455   (3.6)
Cost of sales excluding                                          
impact of hedging
                            2,514    2,639   (4.7)    839     900     (6.7)
 transactions
Valuation of balance of
commodity hedging                                          

 transactions as at end   8        (20)             (9)     (5)
of period
Cost of sales               2,522    2,619   (3.7)    830     895     (7.2)
Gross profit                1,632    1,647   (0.9)    572     560     2.2
% of sales                  39.3%    38.6%            40.8%   38.5%
Selling and marketing       986      985     0.2      336     327     2.7
expenses
General and administrative  244      247     (1.2)    85      89      (4.6)
expenses
Operating profit before                                          
other income
                            402      415     (3.2)    151     144     5.4
 (expenses)
% of sales                  9.7%     9.7%             10.8%   9.8%
Other income (expenses),    (17)     51               (15)    59
net
Operating profit after                                           
other income
                            385      466     (17.5)   136     203     (33.3)
 (expenses)
Financing expenses, net     (87)     (86)    1.1      (37)    (30)    23.8
Share in income of          136      28               49      21
equity-accounted investees
Income before taxes on      434      408     6.4      148     194     (24.1)
income
Taxes on income             (149)    (139)   7.7      (63)    (65)    (3.0)
Effective tax rate          34.5%    34.0%            42.7%   33.4%
Income for the period       285      269     5.7      85      129     (34.3)
Attributable to:                                                 

The Company's shareholders  209      203     2.9      58      105     (43.7)
Non-controlling interests   76       66      14.7     27      24      6.9
* 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 Nine Months 2013 First Nine Months 2012   Third Quarter 2013     Third Quarter 2012
                                                      Proportio-                                      Proportio-

                               Propor-                ate conso-               Propor-                ate conso-

                              tionate                lidation                 tionate                lidation

                              consoli-               method (as               consoli-               method (as
                                        Equity                   Equity                 Equity
                       Change dation          Change published         Change dation          Change published
                                        method                   method                 method
                 Equity        method                 before                   method                 before

                 method        (applied               IFRS 11                  (applied               IFRS 11

                               to date)               took                     to date)               took
                                                                                                      effect)
                                                      effect)
Sales            4,154  1,915  6,069    4,266  1,813  6,079      1,402  638    2,040    1,455  623    2,078
Cost of sales
excluding impact                                                                           
of hedging
                 2,514  1,239  3,753    2,639  1,307  3,946      839    403    1,242    900    441    1,341
 transactions
Valuation of
balance of
commodity                                                                                  
hedging
                 8      -      8        (20)   (2)    (22)       (9)    -      (9)      (5)    (1)    (6)
 transactions
as at end of
period
Cost of sales    2,522  1,239  3,761    2,619  1,305  3,924      830    403    1,233    895    440    1,335
Gross profit     1,632  676    2,308    1,647  508    2,155      572    235    807      560    183    743
% of sales       39.3%         38.0%    38.6%         35.5%      40.8%         39.6%    38.5%         35.8%
Selling and
marketing        986    397    1,383    985    361    1,346      336    139    475      327    122    449
expenses
General and
administrative   244    92     336      247    85     332        85     30     115      89     28     117
expenses
Operating profit
before other                                                                               
income
                 402    187    589      415    62     477        151    66     217      144    33     177
 (expenses)
% of sales       9.7%          9.7%     9.7%          7.8%       10.8%         10.6%    9.8%          8.5%
Other income     (17)   (2)    (19)     51     -      51         (15)   (1)    (16)     59     -      59
(expenses), net
Operating profit
after other                                                                                
income
                 385    185    570      466    62     528        136    65     201      203    33     236
 (expenses)
Financing        (87)   (15)   (102)    (86)   (16)   (102)      (37)   (3)    (40)     (30)   (4)    (34)
expenses, net
Share in income
of                                                                                         
equity-accounted
                 136    (136)  -        28     (28)   -          49     (49)   -        21     (21)   -
 investees
Income before    434    34     468      408    18     426        148    13     161      194    8      202
taxes on income
Taxes on income  (149)  (34)   (183)    (139)  (18)   (157)      (63)   (13)   (76)     (65)   (8)    (73)
Effective tax    34.5%         39.1%    34.0%         36.8%      42.7%         46.9%    33.4%         35.8%
rate
Income for the   285    -      285      269    -      269        85     -      85       129    -      129
period
Attributable to:                                                                           

The Company's    209    -      209      203    -      203        58     -      58       105    -      105
shareholders
Non-controlling  76     -      76       66     -      66         27     -      27       24     -      24
interests
Income for the   285    -      285      269    -      269        85     -      85       129    -      129
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 Nine Months       Third Quarter
                                   2013    2012    % Chg   2013  2012  % Chg
Operating profit – according to
proportionate                                                     

 consolidation method – after                                   
other income
                                   570     528     8.1     201   236   (14.9)
 (expenses)
Share-based payment               14      13              4     4
Valuation of balance of commodity
hedging                                                       

 transactions as at end of       8       (22)            (9)   (6)
period
Other expenses (income)            19      (51)            16    (59)
Operating profit – non-GAAP                                       
management
                                   611     468     30.7    212   175   21.4
 reports
Financing expenses, net            (102)   (102)           (40)  (34)
Taxes on income                    (183)   (157)           (76)  (73)
Taxes in respect of adjustments to                            
the above
                                   **19    28              **15  27
 non-GAAP operating profit
Income for the period – non-GAAP   345     237     45.6    111   95    16.3
Attributable to:                                                  

The Company's shareholders         259     170     53.0    81    69    17.1
Non-controlling interests          86      67      29.1    30    26    18.5
* Financial data were rounded off to NIS millions. The percentages change were
calculated on the basis of the exact figures in NIS thousands

** In 2013, includes mainly tax expenses in respect of unfrozen "trapped"
corporate profits. For further information, see Note 4.8 to the financial
statements.



For further information:
Talia Sessler                   Osnat Golan
Investor Relations Director     VP Communications & Digital, Spokesperson
Strauss Group Ltd.              Strauss Group Ltd.
972-54-577-2195                 972-52-828-8111
972-3-675-2545                  972-3-675-2281
talia.sessler@strauss-group.com
                                Gil Messing
                                External Communications Director
                                Strauss Group Ltd.
                                972-54-252-5272





SOURCE Strauss Group