SODASTREAM INTERNATIONAL LTD AIRPORT CITY, Israel, May 10, 2016 /PRNewswire/ -- SodaStream International Ltd. (NASDAQ: SODA), the world's leading manufacturer of home beverage carbonation systems, announced today its results for the three-month period ended March 31, 2016.
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For the first quarter ended March 31, 2016:
-- Revenue increased 10.4% to $100.9 million compared to Adjusted revenue*
of $91.3 million in the first quarter of 2015
-- EBITDA increased 61.7% to $12.3 million compared to Adjusted EBITDA* of
$7.6 million in the first quarter of 2015
-- Net income was $6.1 million compared to Adjusted net income* of $8.4
million in the first quarter of 2015, which included a financial income
of $5.7 million related to currency gains that were unusual in their
magnitude.
-- Diluted earnings per share was $0.29 compared to Adjusted diluted
earnings per share* of $0.40 in the first quarter of 2015
"Our first quarter results demonstrate that our growth plan, which centers on repositioning the SodaStream brand around sparkling water and building a stronger, more efficient organization, has started to take hold," commented Daniel Birnbaum, Chief Executive Officer of SodaStream. "Sales exceeded our expectations driven by strong gains in Europe as our new messaging fueled increased demand for sparkling water makers, gas refills and our enhanced flavor line in turnaround markets like France and the Nordics, while we experienced continued growth in our established countries of Germany, Austria and Switzerland. At the same time, our operating performance reflects the benefits from the consolidation of our manufacturing and logistics activities into our new state-of-the-art facility in Lehavim. We move forward focused on continuing to execute our growth plan including in the U.S. where our efforts are concentrated on developing the right marketing message and enhancing our in-store presence. We are confident that the work we are doing will lead to increased profitability and greater shareholder value over the long-term."
First Quarter 2016 Financial Review
(The financial review relates to the Non-IFRS Consolidated Statements of Operations)
Geographical Revenue Breakdown Three Months Ended
------------------------------ ------------------
March 31, March 31,
2015* 2016 Increase Increase
(decrease) (decrease)
--------- ---------
In millions USD %
--------------- ---
Western Europe $54.6 $62.6 $8.0 15%
The Americas 22.8 22.9 0.1 1%
Asia-Pacific 9.0 8.8 (0.2) (2%)
Central & Eastern Europe, Middle East, Africa 4.9 6.6 1.7 32%
--- --- --- ---
Total $91.3 $100.9 $9.6 10%
Product Segment Revenue Breakdown Three Months Ended
--------------------------------- ------------------
March 31, March 31,
2015* 2016 Increase Increase
---------- ---------- -------- --------
In millions USD %
--------------- ---
Sparkling Water Maker Starter Kits $ **26.2 $29.6 $3.4 13%
Consumables **62.4 68.1 5.7 9%
Other **2.7 3.2 0.5 22%
----- --- --- ---
Total $91.3 $100.9 $9.6 10%
*The comparable first quarter 2015 data relates to the Adjusted non-IFRS measures. See "Non IFRS Financial Measures" and related reconciliations included elsewhere in this press release.
**Reclassified.
Product Segment Unit Breakdown
------------------------------
Three Months Ended
------------------
March 31, March 31,
2015 2016 Increase Increase
---------- ---------- -------- --------
In thousands %
------------ ---
Sparkling Water Maker Starter Kits 518 575 57 11%
CO2 Refills 6,046 6,781 735 12%
Flavors 4,922 5,288 366 7%
Revenue increased by $9.6 million, or 10.4% to $100.9 million from Adjusted revenue* of $91.3 million driven by solid gains mainly in Germany, France, and the Czech Republic partially offset by a negative foreign currency exchange impact mainly due to the weakening of the Euro/U.S. Dollar exchange rate, Australian Dollar/U.S. Dollar, and the Canadian Dollar/U.S. Dollar compared to the same period last year.
Gross margin decreased to 50.7% compared to Adjusted gross margin* of 52.3% for the same period in 2015 mainly due to changes in foreign currency exchange rates compared to the same period last year.
Sales and marketing expenses were $32.7 million, or 32.4% of revenue, compared to $32.5 million, or 35.5% of the Adjusted revenue* in the same period last year. The slight increase in sales and marketing expenses was mainly due to higher advertising and promotion expenses offset by decrease in other sales and distribution expenses.
General and administrative expenses for the first quarter 2016 were $10.6 million, or 10.5% of revenue, compared to $11.6 million, or 12.7% of Adjusted revenue* in the same period last year.
Operating income increased 116.3% to $7.9 million, or 7.9% of revenue, compared to Adjusted operating profit* of $3.7 million, or 4.0% of Adjusted revenue* in the same period last year.
The net negative impact of foreign currency exchange rate changes compared to the same period last year was approximately $2.8 million on revenue and $2.0 million on operating income.
Net financial expense was $0.9 million compared to financial income of $5.7 million in the same period in 2015, which relates to currency gains that were unusual in their magnitude
Tax expense was $0.9 million reflecting an effective tax rate of 13.1%, compared to $1.0 million, or an effective tax rate of 13.8% in the first quarter 2015.
Balance Sheet and Cash Flow
Cash and cash equivalents were $34.4 million, similar to their value as of December 31, 2015.
Cash flow from operating activities less cash flow for investment activities ("free cash flow"), was $4.6 million compared to negative free cash flow of $11.5 million in the same period last year.
Bank debt decreased 11.7% to $32.5 million compared to $36.8 million as of December 31, 2015.
Working capital was $141.6 million similar to its value as of December 31, 2015. Inventories increased by 2.0% to $115.2 million compared to $112.9 million as of December 31, 2015.
Conference Call and Management Commentary
Detailed CFO commentary and a supplemental slide presentation have been furnished as Exhibits 99.2 and 99.3 to the Form 6-K furnished to the Securities and Exchange Commission and will be posted on the company's website, http://sodastream.investorroom.com.
The company has scheduled a conference call for 8:30 a.m. Eastern Standard Time (U.S. time) today (Tuesday, May 10, 2016) to review the company's financial results. The conference call will be broadcast over the Internet as a "live" listen only Webcast. To listen, please go to http://sodastream.investorroom.com. To listen, please go to http://sodastream.investorroom.com. Listeners are urged to login approximately 20 minutes before the conference call is scheduled to begin in order to register, as well as download and install any necessary audio software. An archive of the Webcast will be available for 30 days after the call.
About SodaStream International
SodaStream is the world's leading manufacturer and distributor of Sparkling Water Makers, which enable consumers to easily transform ordinary tap water into sparkling water and flavored sparkling water in seconds. By making ordinary water more exciting and fun to drink, SodaStream helps consumers drink more water. Sparkling Water Makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated soft drinks. The products promote health and wellness, are environmentally friendly, cost effective, and are customizable and fun to use. Products are available at more than 70,000 retail stores across 45 countries, including approximately 13,000 retail stores in the United States. To learn more about how SodaStream makes water exciting and follow SodaStream on Facebook, Twitter, Pinterest, Instagram and YouTube, visit http://www.sodastream.com.
Non-IFRS Financial Measures
This press release contains certain non-IFRS measures, including Adjusted revenue, Adjusted gross margin, Adjusted operating income, Adjusted net income, Adjusted EBITDA, and Adjusted diluted earnings per share ("Adjusted diluted EPS").
Adjusted EBITDA represents earnings before financial expense (income), income tax, depreciation and amortization, and further eliminates the effect of restructuring costs. Adjusted revenue, Adjusted gross margin, Adjusted operating income, Adjusted net income and Adjusted diluted EPS eliminate the effect of restructuring costs.
The company believes that the Adjusted revenue, Adjusted gross margin, Adjusted operating income, Adjusted net income, Adjusted EBITDA and Adjusted diluted EPS, as described above, should be considered in evaluating the company's performance. Adjusted revenue, Adjusted operating income, Adjusted net income, Adjusted EBITDA and Adjusted diluted EPS exclude restructuring costs because most of this charge is a non-cash expense that does not reflect the performance of the company's underlying business and operations. Adjusted EBITDA facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structures (affecting financial expenses (income), net), tax positions (such as the impact of changes in effective tax rates) and the age and depreciation charges and amortization of fixed and intangible assets, respectively (affecting relative depreciation and amortization expense, respectively).
These measures should be considered in addition to results prepared in accordance with IFRS and should not be considered a substitute for the IFRS results. The non-IFRS measures included in this press release have been reconciled to the IFRS results.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include information about possible or assumed future results of our business and financial condition, as well as the results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "expect," "predict," "potential," or the negative of these terms or other similar expressions: Such statements are based on management's current beliefs and expectations and involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: our ability to maintain or expand sales in our target markets, including the United States; our ability to maintain or continue to develop our presence in retail networks; our ability to develop and implement production and operating infrastructure to effectively support our growth; the success of our marketing campaigns and media spending in terms of increased sales or increased product and brand name awareness; our ability to maintain our customer base in markets where we have an established presence; the risks associated with our reliance on exclusive arrangements for the distribution of our beverage carbonation systems and consumables in each of the markets in which we use third-party distributors; our ability to compete effectively with other companies which currently offer, or may offer in the future, competing products; our ability to maintain margins due to decline in product selling price and/or rising costs; potential product liability claims if any component of our beverage carbonation systems is misused; our ability to protect our intellectual property rights; our being found to have a dominant position in certain markets which may place limits on our ability to operate; risks associated with our being a multinational corporation, including fluctuations in currency exchange rates; our potential exposure to greater than anticipated tax liabilities; our products being subject to extensive governmental regulation in the markets in which we operate; adverse conditions in the global economy which could negatively impact our customers' demand for our products; and other factors discussed under the heading "Risk Factors" in the Annual Report on the Form 20-F for the year ended December 31, 2015 and other documents filed with or furnished to the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contact:
Brendon Frey
ICR
Phone: + 1 203-682-8200
brendon.frey@icrinc.com
Consolidated Statements of Operations
In thousands (other than per share amounts)
For the three months ended March 31
2015 2016
---- ----
(Unaudited) (Unaudited)
---------- ----------
Revenue $90,344 $100,873
Cost of revenue 44,893 49,701
------ ------
Gross profit 45,451 51,172
Operating expenses
Sales and marketing 32,461 32,671
General and administrative 11,641 10,581
Total operating expenses 44,102 43,252
------ ------
Operating income 1,349 7,920
Interest expense, net 34 39
Other financial expense
(income), net (5,702) 871
------ ---
Total financial expense
(income), net (5,668) 910
------ ---
Income before income taxes 7,017 7,010
Income tax expense 970 917
--- ---
Net income for the period 6,047 6,093
===== =====
Net income per share
Basic 0.29 0.29
==== ====
Diluted 0.29 0.29
==== ====
Weighted average number of
shares
Basic 21,017 21,100
====== ======
Diluted 21,050 21,164
====== ======
Consolidated Balance
Sheets as of
December 31, March 31,
------------ ---------
2015 2016
---- ----
(Audited) (Unaudited)
-------- ----------
(In thousands)
-------------
Assets
Cash and cash
equivalents $34,534 $34,432
Inventories 112,973 115,189
Trade receivables 76,566 71,192
Other receivables 29,099 25,945
Derivative financial
instruments 631 677
--- ---
Total current assets 253,803 247,435
Property, plant and
equipment 155,294 162,103
Intangible assets 42,095 42,248
Deferred tax assets 1,106 2,036
Other receivables 431 437
--- ---
Total non-current
assets 198,926 206,824
Total assets 452,729 454,259
======= =======
Liabilities
Loans and borrowings 11,917 9,288
Trade payables 50,549 48,099
Income tax payable 7,505 5,364
Provisions 2,407 2,214
Other current
liabilities 18,118 15,764
------ ------
Total current
liabilities 90,496 80,729
Loans and borrowings 24,905 23,221
Employee benefits 2,152 2,218
Provisions 156 171
Deferred tax
liabilities 832 835
--- ---
Total non-current
liabilities 28,045 26,445
Total liabilities 118,541 107,174
Shareholders' equity
Share capital 3,414 3,418
Share premium 205,527 206,895
Translation reserve (29,993) (24,561)
Retained earnings 155,240 161,333
------- -------
Total shareholders'
equity 334,188 347,085
Total liabilities and
shareholders' equity $452,729 $454,259
======== ========
Consolidated Statements of Cash Flows
For the three months ended
--------------------------
March 31,
---------
2015 2016
---- ----
(Unaudited)
----------
(In thousands)
Cash flows from operating activities
Net income for the period $6,047 $6,093
Adjustments:
Amortization of intangible assets 929 907
Change in fair value of derivative financial instruments (3,806) 354
Exchange rate differences on short-term loans and borrowing (957) -
Exchange rate differences on long-term loans and borrowing (3,900) 843
Depreciation of property, plant and equipment 3,014 3,469
Restructuring costs 2,313 -
Share based payment 1,133 1,362
Interest expense, net 34 39
Income tax expense 970 917
--- ---
5,777 13,984
Decrease (increase) in inventories 1,484 (1,456)
Decrease in trade and other receivables 23,858 10,732
Decrease in trade payables and other liabilities (28,932) (5,845)
Increase in employee benefits 106 5
Decrease in provisions (377) (193)
---- ----
1,916 17,227
Interest paid (41) (58)
Income tax received 250 2
Income tax paid (2,056) (4,134)
------ ------
Net cash from operating activities 69 13,037
Cash flows from investing activities
Interest received 7 19
Proceeds from investment grants 2,252 -
Proceeds from (payment for) derivative financial instruments, net 909 (400)
Acquisition of property, plant and equipment (13,741) (7,568)
Acquisition of intangible assets (990) (532)
---- ----
Net cash used in investing activities (11,563) (8,481)
Cash flows from financing activities
Proceeds from exercise of employee share options 10 10
Repayments of long-term loans and borrowings (10,684) (2,295)
Change in short-term debt 17,430 (2,861)
------ ------
Net cash from financing activities 6,756 (5,146)
Net decrease in cash and cash equivalents (4,738) (590)
Cash and cash equivalents at the beginning of the period 46,880 34,534
Effect of exchange rates fluctuations on cash and cash equivalents (1,579) 488
------ ---
Cash and cash equivalents at the end of the period $40,563 $34,432
======= =======
Information about revenue in reportable segments
Western Europe The Americas Asia-Pacific Central & Total
Eastern Europe,
Middle East,
Africa
------
(In thousands)
-------------
Three months ended:
March 31, 2015 (Unaudited) * $54,635 22,795 8,965 4,949 $91,344
March 31, 2016 (Unaudited) 62,635 22,912 8,806 6,520 100,873
EBITDA
Three months ended
March 31,
---------
2015* 2016
---- ----
(Unaudited)
----------
(In thousands)
-------------
Reconciliation of Net Income
to EBITDA
Net income $6,047 $6,093
Financial expenses (income),
net (5,668) 910
Income tax expense 970 917
Depreciation and
amortization 3,943 4,376
----- -----
EBITDA 5,292 12,296
Restructuring 2,313 -
----- ---
7,605 12,296
EBITDA
*The comparable first quarter 2015 data relates to the Adjusted non-IFRS measures. See "Non IFRS Financial Measures"
and related reconciliations included elsewhere in this press release.
The following tables present the Company's adjusted revenue, by
product type for the periods presented, as well as such revenue
by product type as a percentage of total revenue:
Three months ended
March 31,
---------
2015* 2016
---- ----
(Unaudited)
----------
Revenue
-------
(in thousands)
-------------
Sparkling Water
Maker starter
kits (including
exchange
cylinders) $ **26,246 $29,581
Consumables **62,441 68,055
Other **2,657 3,237
------- -----
Total $91,344 $100,873
======= ========
Three months ended
March 31,
---------
2015* 2016
---- ----
(Unaudited)
----------
As a percentage of
Revenue
-------
Sparkling Water Maker starter kits (including exchange cylinders) 28.7% 29.3%
Consumables 68.4% 67.5%
Other 2.9% 3.2%
--- ---
Total 100.0% 100.0%
----- -----
*The comparable first quarter 2015 data relates to the Adjusted non-IFRS measures. See "Non IFRS Financial Measures" and related reconciliations included elsewhere in this press release.
**Reclassified.
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SOURCE SodaStream International Ltd.
