Strauss Group: reports third quarter 2016 results

Petach Tikva / IL. (sg) Israel’s Strauss Group Limited announced a strong third quarter 2016 with 5.8 percent organic sales growth and 213 million NIS non-GAAP Ebit, an 11.2 percent growth rate. In the first nine months of 2016 sales grew organically a significant 7.1 percent and Ebit increased substantially to 609 million NIS, a stellar 21.4 percent growth rate.

President and Chief Executive Officer Gadi Lesin: «The strong growth trend at the beginning of this year continued in the past quarter and enabled the Group to achieve excellent results. In Israel, our home base, we continue to post high growth rates, contrary to the prevailing market trend, and despite price reductions of core products and improving our employees working benefits. The international coffee company has increased its sales turnover and improved its operating profit; the international dips and spreads business has continued to grow market share in all geographies of operations as it continues to contend with the challenge of growing the category in the US. Innovation, increased operational efficiency and the strengthening of our competitive positioning in core countries of operations will remain our focus in the coming quarters as we tackle the complexities and challenges that will no doubt accompany a diverse group such as ours».

Third quarter 2016 highlights

• Organic sales growth, excluding foreign exchange effects, was c5.8 percent (c6.1 percent after foreign currency effects). Shekel denominated sales were NIS c2.1 billion compared to NIS c2.0 billion in the corresponding quarter last year.
• Gross profit was NIS c804 million, up c13.0 percent compared to the corresponding period last year (c38.3 percent of sales, up 230 basis points).
• Operating profit (Ebit) was NIS c213 million, up c11.2 percent compared to the corresponding period last year (c10.2 percent of sales, up 50 BPS).
• Net profit attributable to the shareholders of the Company was NIS c92 million, up c7.0 percent compared to the corresponding period last year.
• Cash flow from operating activities totalled NIS c132 million, compared to NIS c60 million in the corresponding period last year.
• Strauss Israel grew c5.2 percent in the third quarter, gaining market share whilst the overall Israeli food and beverage market was up only c0.1 percent according to StoreNext.

First nine months 2016 highlights

• Organic sales growth, excluding foreign exchange effects, was c7.1 percent (c2.9 percent after foreign currency effects). Shekel denominated sales were NIS c5.9 billion compared to NIS c5.7 billion in the corresponding period last year, and reflects a NIS c218 million negative translation difference as a result of the continued strengthening of the NIS versus other currencies in which the Group’s sales derive.
• Gross profit was NIS c2.3 billion, up c6.3 percent compared to the corresponding period last year. Simultaneously the gross margins were up to c38.3 percent compared to c37.1 percent in the corresponding period last year.
• Operating profit (Ebit) was NIS c609 million, up c21.4 percent compared to the corresponding period last year (c10.3 percent of sales, up 160 BPS).
• Net profit attributable to the shareholders of the Company was NIS c277 million, up c26.5 percent compared to the corresponding period last year.
• Cash flow from operating activities totaled NIS c402 million, compared to NIS c90 million in the corresponding period last year.
• Strauss Israel’s sales grew by approximately c4.4 percent, despite a c0.4 percent decline in the overall Israeli food and beverage market according to StoreNext.