SODASTREAM INTERNATIONAL LTD AIRPORT CITY, Israel, May 10, 2017 /PRNewswire/ -- SodaStream International Ltd. (NASDAQ: SODA), the leading manufacturer of home beverage carbonation systems, announced today its results for the quarterly period ended March 31, 2017.
For the quarter ended March 31, 2017:
-- Revenue increased 14.3% to $115.3 million compared to $100.9 million in
the first quarter of 2016
-- EBITDA increased 62.9% to $20.0 million compared to EBITDA of $12.3
million in the first quarter of 2016
-- Net income increased 141.8% to $14.7 million compared to $6.1 million in
the first quarter of 2016
-- Diluted earnings per share increased 129.3% to $0.66 compared to diluted
earnings per share of $0.29 in the first quarter of 2016
"Our first quarter performance represents a very good start to 2017" commented Daniel Birnbaum, Chief Executive Officer of SodaStream. "Sales grew double digits in each of our four geographic regions as investments in marketing fueled strong demand for sparkling water makers. At the same time, gas refill units increased 12% year-over-year, the strongest quarterly gain in several years as a growing number of households are utilizing our home carbonation system to produce sparkling water. Equally important, we translated solid revenue growth into triple digit net income growth and generated our highest ever quarterly operating and free cash flow driven primarily by increased manufacturing efficiencies, meaningful expense leverage and continued working capital optimization. We are confident that we have the right strategies in place to profitably expand our global brand franchise and deliver increased value to our shareholders over the long-term."
First Quarter 2017 Financial Review
Geographical Revenue Breakdown Three Months Ended
------------------------------ ------------------
March 31, March 31,
2016 2017 Increase Increase
---------- ---------- -------- --------
In millions USD %
--------------- ---
Western Europe $62.6 $70.0 $7.4 12%
The Americas 22.9 25.6 2.7 12%
Asia-Pacific 8.8 12.2 3.4 38%
Central & Eastern Europe, Middle East, Africa 6.6 7.5 0.9 15%
--- --- --- ---
Total $100.9 $115.3 $14.4 14%
Product Segment Revenue Breakdown Three Months Ended
--------------------------------- ------------------
March 31, March 31,
2016 2017 Increase Increase
(Decrease) (Decrease)
--------- ---------
In millions USD %
--------------- ---
Sparkling Water Maker Starter Kits $29.6 $40.6 $11.0 37%
Consumables 68.1 72.0 3.9 6%
Other 3.2 2.7 (0.5) (16)%
--- --- ---- ----
Total $100.9 $115.3 $14.4 14%
Product Segment Unit Breakdown
------------------------------
Three Months Ended
------------------
March 31, March 31,
2016 2017 Increase Increase
(Decrease) (Decrease)
--------- ---------
In thousands %
------------ ---
Sparkling Water Maker Starter Kits 575 770 195 34%
CO2 Refills 6,781 7,602 821 12%
Flavors 5,288 5,203 (85) (2)%
Revenue increased by $14.4 million, or 14.3% to $115.3 million from $100.9 million for the same period in 2016. The increase was driven by growth in each of the Company's four geographic regions, partially offset by a negative foreign currency exchange impact mainly due to the weakening of the Euro/U.S. Dollar exchange rate compared to the same period in 2016.
Gross margin increased 200 basis points to 52.7% compared to 50.7% for the same period in 2016. The increase reflects our continued production optimization, the leveraging of our fixed infrastructure for increased production volume and the introduction of the higher margin "Fizzi" machine, partially offset by a higher portion of sparkling water makers in the product mix and changes in foreign currency exchange rates compared to the same period in 2016.
Sales and marketing expenses were $34.8 million, or 30.2% of revenue, compared to $32.7 million, or 32.4% of revenue, in the same period in 2016. The increase in sales and marketing expenses was mainly due to higher advertising and promotion expenses partially offset by decrease in other sales and distribution expenses.
General and administrative expenses were $10.0 million, or 8.7% of revenue, compared to $10.6 million, or 10.5% of revenue, in the same period in 2016. The decrease was mainly due to lower share-based payment expenses.
Operating income increased 100.3% to $15.9 million, or 13.8% of revenue, compared to $7.9 million, or 7.9% of revenue in the same period in 2016.
The net negative impact of foreign currency exchange rate changes, mainly due to the weakening of the Euro / U.S. Dollar rate and the weakening of the U.S. Dollar / Israeli Shekel rate compared to the same period in 2016, was approximately $1.7 million on revenue and $2.0 million on operating income.
Net financial income was $1.1 million compared to net financial expense of $0.9 million in the same period in 2016. The financial income was mainly due to gains from hedging transactions.
Tax expense was $2.2 million with an effective tax rate of 12.9%, compared to $0.9 million with an effective tax rate of 13.1% in the same period in 2016.
Balance Sheet and Cash Flow
At March 31, 2017, the company had cash and bank deposits totaling $94.4 million compared to $57.3 million at December 31, 2016.
Cash flow from operations less all investing activities excluding bank deposits was $29.3 million compared to $4.6 million in the same period in 2016.
Working capital decreased 10.1% or $12.7 million, to $112.1 million, compared to $124.8 million at December 31, 2016. Inventories increased by 5.7% to $93.0 million compared to $88.0 million at December 31, 2016.
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 (Wednesday, May 10, 2017) 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. 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 #1 sparkling water brand in volume in the world and the leading manufacturer and distributor of Sparkling Water Makers. We enable consumers to easily transform ordinary tap water into sparkling water and flavored sparkling water in seconds. By making ordinary water fun and exciting 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. Our products promote health and wellness, are environmentally friendly, cost effective, customizable and fun to use. Our products are available at more than 80,000 individual retail stores across 45 countries. 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 EBITDA which is a non-IFRS measure. EBITDA represents earnings before financial expense (income), income tax, depreciation and amortization. Non-IFRS measures should be considered in addition to results prepared in accordance with IFRS and should not be considered a substitute for the IFRS results. A reconciliation of EBITDA to Net income, the most closely comparable IFRS measure, is included at the end of this press release.
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, 2016 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
2016 2017
---- ----
(Unaudited) (Unaudited)
---------- ----------
Revenue $100,873 $115,292
Cost of revenue 49,701 54,575
------ ------
Gross profit 51,172 60,717
Operating expenses
Sales and marketing 32,671 34,822
General and administrative 10,581 10,035
------ ------
Total operating expenses 43,252 44,857
------ ------
Operating income 7,920 15,860
Financial expense (income), net 910 (1,053)
Income before income taxes 7,010 16,913
Income tax expense 917 2,179
--- -----
Net income for the period 6,093 14,734
===== ======
Net income per share
Basic 0.29 0.68
==== ====
Diluted 0.29 0.66
==== ====
Weighted average number of shares
Basic 21,100 21,550
====== ======
Diluted 21,164 22,323
====== ======
Consolidated Balance Sheets as of
December 31, March 31,
------------ ---------
2016 2017
---- ----
(Audited) (Unaudited)
-------- ----------
(In thousands)
-------------
Assets
Cash and cash equivalents $50,250 $80,403
Bank deposits 7,000 14,000
Inventories 87,986 92,958
Trade receivables,net 87,430 75,769
Other receivables 20,613 20,441
Assets classified as held for sale 1,484 1,484
Derivative financial instruments 2,112 2,720
----- -----
Total current assets 256,875 287,775
Property, plant and equipment 164,628 166,025
Intangible assets 37,582 37,678
Deferred tax assets 4,154 4,527
Other receivables 2,688 3,288
----- -----
Total non-current assets 209,052 211,518
Total assets 465,927 499,293
======= =======
Liabilities
Trade payables 41,643 49,019
Income tax payable 8,312 8,640
Provisions 2,646 2,663
Other current liabilities 22,262 20,912
------ ------
Total current liabilities 74,863 81,234
Employee benefits 2,306 2,420
Other non-current liabilities 73 69
Deferred tax liabilities 5,166 5,225
----- -----
Total non-current liabilities 7,545 7,714
Total liabilities 82,408 88,948
Shareholders' equity
Share capital 3,461 3,528
Share premium 214,609 222,525
Translation reserve (34,161) (30,052)
Retained earnings 199,610 214,344
------- -------
Total shareholders' equity 383,519 410,345
Total liabilities and shareholders' equity $465,927 $499,293
======== ========
Consolidated Statements of Cash Flows
For the three months ended
--------------------------
March 31,
---------
2016 2017
---- ----
(Unaudited)
----------
(In thousands)
Cash flows from operating activities
Net income for the period $6,093 $14,734
Adjustments:
Amortization of intangible assets 907 782
Change in fair value of derivative financial instruments 354 (1,406)
Exchange rate differences on long-term loans and borrowing 843 -
Depreciation of property, plant and equipment 3,469 3,394
Share based payment 1,362 457
Interest expense (income), net 39 (53)
Income tax expense 917 2,179
--- -----
13,984 20,087
Increase in inventories (1,456) (3,464)
Decrease in trade and other receivables 10,732 11,752
Increase (decrease) in trade payables and other liabilities (5,845) 5,337
Increase in employee benefits 5 81
Increase (decrease) in provisions (193) 17
---- ---
17,227 33,810
Interest paid (58) (28)
Income tax received 2 100
Income tax paid (4,134) (2,350)
------ ------
Net cash from operating activities 13,037 31,532
Cash flows from investing activities
Interest received 19 81
Investment in bank deposit, net - (7,000)
Proceeds from investment grants - 2,726
Proceeds from (payment for) derivative financial instruments, net (400) 798
Acquisition of property, plant and equipment (7,568) (5,215)
Acquisition of intangible assets (532) (591)
---- ----
Net cash used in investing activities (8,481) (9,201)
Cash flows from financing activities
Proceeds from exercise of employee share options 10 7,526
Repayments of long-term loans and borrowings (2,295) -
Change in short-term debt (2,861) -
------ ---
Net cash from (used in) financing activities (5,146) 7,526
Net increase (decrease) in cash and cash equivalents (590) 29,857
Cash and cash equivalents at the beginning of the period 34,534 50,250
Effect of exchange rates fluctuations on cash and cash equivalents 488 296
--- ---
Cash and cash equivalents at the end of the period $34,432 $80,403
======= =======
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, 2016 (Unaudited) $62,635 22,912 8,806 6,520 $100,873
March 31, 2017 (Unaudited) $70,022 25,567 12,173 7,530 $115,292
The following tables present the Company's 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,
---------
2016 2017
---- ----
(Unaudited)
----------
Revenue
-------
(in thousands)
-------------
Sparkling Water Maker
starter kits (including
exchange cylinders) $29,581 $40,591
Consumables 68,055 71,969
Other 3,237 2,732
----- -----
Total $100,873 $115,292
======== ========
Three months ended
March 31,
---------
2016 2017
---- ----
(Unaudited)
----------
As a percentage of
Revenue
-------
Sparkling Water Maker starter kits
(including exchange cylinders) 29.3% 35.2%
Consumables 67.5% 62.4%
Other 3.2% 2.4%
--- ---
Total 100.0% 100.0%
----- -----
EBITDA
Three months ended
March 31,
---------
2016 2017
---- ----
(Unaudited)
----------
(In thousands)
-------------
Reconciliation of Net Income to
EBITDA
Net income $6,093 $14,734
Financial expenses (income), net 910 (1,053)
Income tax expense 917 2,179
Depreciation and amortization 4,376 4,176
----- -----
EBITDA 12,296 20,036
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SOURCE SodaStream International
