Strauss Group concludes the third quarter of 2014 with 7.1% organic sales growth excluding FX effect and 6.8% growth in EBIT.

A considerable improvement was posted in the Group's net profit thanks to income arising from the revaluation of currency hedging transactions (1)

Gadi Lesin, President and Chief Executive Officer of Strauss Group (November 26, 2014): "We have concluded a positive quarter that reflects sales growth in all of the Group's major business areas. The forex challenges that were typical of the last three quarters were met with the right financial response, leading to an improved net profit. We are persevering in the strategy aimed at deepening our international operations, doubling production by Sabra in the US and further expanding our coffee businesses in Brazil and in Romania. In parallel, in light of the challenges posed by the slowdown in the Israeli food market our product innovation efforts continue, coupled with the appropriate operational deployment."

Q3 2014 highlights (1)

  • Organic sales growth, excluding the foreign exchange effect, was 7.1%. Shekel sales amounted to NIS 2.1 billion, an increase of 4.8%, and reflected NIS 43 million negative translation differences as a result of the continued strengthening of the NIS versus other functional currencies of the Group.
  • Gross profit amounted to NIS 811 million (37.9% of sales), an increase of 1.5% compared to the corresponding period last year. Gross margins were down 1.2%.
  • Operating profit (EBIT) amounted to NIS 227 million (10.6% of sales), an increase of 6.8% compared to the corresponding period last year. EBIT margins were up 0.2%.
  • Earnings per share amounted to NIS 1.12, an increase of 46.8% compared to the corresponding period last year.
  • Cash flows from operating activities amounted to NIS 146 million, compared to NIS 211 million in the corresponding period.

(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)    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. 

(3)    Investments include the acquisition of fixed assets and investment in intangibles and deferred expenses.

Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.

 (4)    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.

(5)    Fun & Indulgence figures include Strauss 50% share in the salty snacks business. International Coffee figures include Strauss 50% share in Três Corações (3C) - a company jointly held by the Group (50%) and by the local São Miguel Group (50%). International D&S figures reflect Strauss 50% share in Sabra and Obela. Other includes Strauss share in Strauss Water China.

Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.

First nine months of 2014 highlights (1)

  • Organic sales growth, excluding the foreign exchange effect, was 4.6%. Shekel sales amounted to NIS 6.1 billion, a decrease of 0.1%, reflecting NIS 272 million negative translation differences as a result of the continued strengthening of the NIS versus other functional currencies of the Group.
  • Gross profit amounted to NIS 2,369 million (39.1% of sales), an increase of 2.3% compared to the corresponding period last year. Gross margins were up 0.9%.
  • Operating profit (EBIT) amounted to NIS 603 million (10.0% of sales), a decrease of 1.2% compared to the corresponding period last year. EBIT margins were down 0.1%.
  • Earnings per share amounted to NIS 2.69, an increase of 10.8% compared to the corresponding period last year.
  • Cash flows from operating activities amounted to NIS 274 million, compared to NIS 450 million in the corresponding period.
  • Net debt as at September 30, 2014 amounted to NIS 1,846 million, compared to NIS 1,357 million on September 30, 2013 and NIS 1,475 million on December 31, 2013.

(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)    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.

(3)    Investments include the acquisition of fixed assets and investment in intangibles and deferred expenses.

Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.

(4)    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.

(5)    Fun & Indulgence figures include Strauss 50% share in the salty snacks business. International Coffee figures include Strauss 50% share in Três Corações (3C) - a company jointly held by the Group (50%) and by the local São Miguel Group (50%). International D&S figures reflect Strauss 50% share in Sabra and Obela. Other includes Strauss share in Strauss Water China.

Note: Financial data were rounded off to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.

Appendix

For further information please contact:

Talia Sessler

Investor Relations Director

Strauss Group Ltd.

972-54-577-2195

972-3-675-2545

talia.sessler@strauss-group.com

Osnat Golan

VP Communications & Digital, Spokesperson

Strauss Group Ltd.

972-52-828-8111

972-3-675-2281

Or

Gil Messing

External Communications Director

Strauss Group Ltd.

972-54-252-5272

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