Yahoo Finance Strauss Group Reports Results for the Third Quarter and First Nine Months of 2023: Quarterly revenues were up c7% to NIS 2.7 billion, with operating profit totaling NIS 212 million and net profit rising to NIS 120 million
Strauss delivered growth across most of the Group's segments – in Israel, China, the US and Brazil
Strauss Group CEO Shai Babad: "Since the beginning of the war in Israel we have maintained business continuity. Our dedicated people are working across the country to keep on providing food and beverages and ensuring the food security of the residents of Israel. We have set up a dedicated fund for the farmers of the Gaza envelope, communities around the Gaza strip, and are also donating and helping the families that were evacuated as well as our soldiers and reservists. Our heart goes out to the families of the murdered and abducted, and we wish the wounded a speedy recovery.
"The quarterly results reflect our ongoing focus on implementing the Group's strategy, productivity measures and innovation."
PETAH TIKVA, Israel, Nov. 30, 2023 /PRNewswire/ -- This morning, Strauss Group (TASE: STRS) published its financial statements for the third quarter and first nine months of 2023, summing up the quarter with NIS 2,675 million in revenue and cumulative revenue of NIS 7,854 million since the beginning of the year. Strauss sales grew 7.3% compared to the corresponding quarter and 11.5% in the first nine months compared to the corresponding period last year, as the growth trend in the Group's business in Israel, China, Brazil and the US continues.
Results | Q3 2023 | Q3 2022 | First 9 months 2023 | First 9 months 2022 |
Sales | NIS 2,675M | NIS 2,493M | NIS 7,854M | NIS 7,041M |
% change | +7.3 % | +11.5 % | ||
Operating profit | NIS 212M | NIS 111M | NIS 591M | NIS 315M |
% change | +93.2 % | + 87.6 % | ||
% of sales | 8.0 % | 4.4 % | 7.5 % | 4.5 % |
Net profit | NIS 120M | NIS 35M | NIS 339M | NIS 148M |
% change | +236.7 % | +128.9 % |
Gross profit in the third quarter was NIS 855 million (32% of sales), and operating profit was NIS 212 million (8% of sales). Since the beginning of the year, Strauss delivered gross profit of NIS 2,531 million (32.2% of sales) and operating profit of NIS 591 million (7.5% of sales). Net income attributable to shareholders in the quarter was NIS 120 million, and in the nine months – NIS 339 million.
Segments:
Strauss Israel
Strauss Israel delivered revenues of NIS 1,048 million in the third quarter, up 20% compared to the corresponding period last year. Strauss Israel's operating profit was NIS 93 million. Health & Wellness sales were NIS 804 million, up 10%, and operating profit was NIS 101 million, reflecting 53% growth compared to the same quarter last year.
According to StoreNext figures, in the third quarter Strauss's share of the total food and beverage market was in Israel 12.0%, compared to a market share of 10.5% in the corresponding period.
The Fun & Indulgence segment's revenues in the third quarter rose by 70% compared to the corresponding period last year, amounting to NIS 244 million. Despite the increase, the Company recorded an operating loss of NIS 8 million following high operating expenses along with the gradual return to market, rising raw material prices, notably sugar and cocoa, and the weakening of the shekel. In the third quarter, the confectionery market share was 24.5%[1], a slight increase over the prior quarter.
Strauss Coffee
Strauss Coffee posted revenues of NIS 1,278 million in the third quarter, reflecting a slight drop of 2% versus the same quarter last year, among other things as a result of the decline in the coffee company in Russia. Strauss Coffee ended the third quarter with operating profit of NIS 90 million, down 37% compared to last year, the result of exchange rates, green coffee prices and the effects of the war in Russia last year.
In Israel, the coffee company's revenues in the third quarter were NIS 210 million, up 5% compared to the corresponding period last year. Operating profit was NIS 30 million, an increase of 29% versus last year.
The international coffee business outside Israel delivered NIS 1,068 million in revenue in the third quarter, down 3.6%, and operating profit was NIS 60 million, a decline of 50% compared to the corresponding period. The coffee operation in Brazil delivered revenues of NIS 713 in the quarter, up 2% over last year, and most of the businesses in Eastern Europe also delivered growth.
Três Corações's average value market share of the Brazilian roast & ground (R&G) coffee market in the first nine months of 2023 was 33.7%, compared to 32.5% in the corresponding period last year.
Strauss Water
Strauss Water continued to grow in the third quarter as revenues reached an all-time record high of NIS 221 million, up 5% versus NIS 210 million in the corresponding period last year. Operating profit in the quarter was NIS 21 million, down 17% compared to last year, the result of the effects of inflation and exchange rates, among others. The water business in China delivered solid results with revenues of NIS 200 million in the third quarter (for 100% ownership), up 22%, and NIS 19 million in net profit (100% ownership), up 22% compared to the same quarter last year.
International Dips & Spreads
The International Dips & Spreads segment continued to recover gradually as market shares in the US improved and revenues maintained their growth trend. Sales in the third quarter were NIS 127 million (for 50% ownership), up 23% versus last year, and operating profit was NIS 32 million due to a one-time insurance refund, compared to an operating loss of NIS 37 million in the corresponding period last year.
Non GAAP Figures (1) | ||||
Third Quarter | ||||
2023 | 2022 | Change | ||
Total Group Sales (NIS mm) | 2,675 | 2,493 | 7.3 % | |
Organic Sales Growth excluding FX | 2.8 % | 7.0 % | ||
Gross Profit (NIS mm) | 855 | 746 | 14.7 % | |
Gross Margins (%) | 32.0 % | 29.9 % | +210 bps | |
EBITDA (NIS mm) | 320 | 211 | 52.6 % | |
EBITDA Margins (%) | 12.0 % | 8.4 % | +360 bps | |
EBIT (NIS mm) | 212 | 111 | 93.2 % | |
EBIT Margins (%) | 8.0 % | 4.4 % | +360 bps | |
Net Income Attributable to the Company's Shareholders (NIS mm) | 120 | 35 | 236.7 % | |
Net Income Margin (Attributable to the Company's Shareholders) (%) | 4.5 % | 1.4 % | +310 bps | |
EPS (NIS) | 1.04 | 0.31 | 236.4 % | |
Operating Cash Flow (NIS mm) | 300 | 75 | 294.9 % | |
Capex (NIS mm) (2) | 147 | 111 | 32.4 % | |
Net debt (NIS mm) | 2,880 | 2,517 | 14.4 % | |
Net debt / annual EBITDA | 2.7x | 3.0x | (0.3x) | |
(1) The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses and do not include share-based payment, mark-to-market at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise.
(2) Investments include the acquisition of fixed assets, investment in intangible assets and proceeds from the sale of fixed assets.
Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. | ||||
Non GAAP Figures (1) | ||||||||
Third Quarter | ||||||||
Sales (NIS mm) | Sales Growth vs. Last Year | Organic Sales Growth excluding FX | EBIT (NIS mm) | NIS Change in EBIT | % Change in EBIT | EBIT margins | Change in EBIT margins vs. 2022 | |
Sales and EBIT by Operating Segments and Activities | ||||||||
Strauss Israel: | ||||||||
Health & Wellness | 804 | 10.4 % | 10.4 % | 101 | 35 | 53.4 % | 12.5 % | +350 bps |
Fun & Indulgence (2) | 244 | 70.2 % | 70.2 % | -8 | 69 | 90.0 % | -3.1 % | +5020 bps |
Total Strauss Israel | 1,048 | 20.2 % | 20.2 % | 93 | 104 | 966.2 % | 8.9 % | +1010 bps |
Strauss Coffee: | ||||||||
Israel Coffee | 210 | 5.0 % | 5.0 % | 30 | 6 | 29.5 % | 14.6 % | +280 bps |
Total Strauss Coffee | 1,278 | -2.3 % | -9.0 % | 90 | -56 | -37.4 % | 7.1 % | -400 bps |
International Dips & Spreads: | ||||||||
Sabra (50%) (2) | 108 | 31.4 % | 19.4 % | 35 | 71 | 199.0 % | 32.4 % | +7540 bps |
Obela (50%) (2) | 19 | -6.6 % | -15.8 % | -3 | -2 | -126.2 % | NM | NM |
Total International Dips & Spreads | 127 | 23.6 % | 12.0 % | 32 | 69 | 188.0 % | 25.2 % | +6060 bps |
Strauss Water | 221 | 5.5 % | 4.6 % | 21 | -5 | -17.4 % | 9.5 % | -270 bps |
Other (2)(3) | 1 | NM | NM | -24 | -11 | 85.7 % | NM | NM |
Total Group | 2,675 | 7.3 % | 2.8 % | 212 | 101 | 93.2 % | 8.0 % | +360 bps |
(1) The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses and do not include share-based payment, mark-to-market at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise.
(2) Fun & Indulgence figures include Strauss's 50% share in the salty snacks business. International Coffee figures include Strauss's 50% share in the Três Corações joint venture (3C) – Brazil – a company jointly held by the Group (50%) and by the local São Miguel Group (50%). International Dips & Spreads figures reflect Strauss's 50% share in Sabra and Obela. Strauss Water EBIT figures include Strauss's share in Haier Strauss Water (HSW) in China (49%).
Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. Total figures for International Dips & Spreads were calculated on the basis of the exact figures for Sabra and Obela in NIS thousands. | ||||||||
Non GAAP Figures (1) | |||
First Nine Months | |||
2023 | 2022 | Change | |
Total Group Sales (NIS mm) | 7,854 | 7,041 | 11.5 % |
Organic Sales Growth excluding FX | 7.5 % | 7.6 % | |
Gross Profit (NIS mm) | 2,531 | 2,099 | 20.6 % |
Gross Margins (%) | 32.2 % | 29.8 % | +240 bps |
EBITDA (NIS mm) | 905 | 606 | 49.7 % |
EBITDA Margins (%) | 11.5 % | 8.6 % | +290 bps |
EBIT (NIS mm) | 591 | 315 | 87.6 % |
EBIT Margins (%) | 7.5 % | 4.5 % | +300 bps |
Net Income Attributable to the Company's Shareholders (NIS mm) | 339 | 148 | 128.9 % |
Net Income Margin Attributable to the Company's Shareholders (%) | 4.3 % | 2.1 % | +220 bps |
EPS (NIS) | 2.91 | 1.27 | 128.6 % |
Operating Cash Flow (NIS mm) | 135 | 91 | 47.6 % |
Capex (NIS mm) (2) | 348 | 287 | 21.3 % |
Net debt (NIS mm) | 2,880 | 2,517 | 14.4 % |
Net debt / annual EBITDA | 2.7x | 3.0x | (0.3x) |
(1) The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses and do not include share-based payment, mark-to-market at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise.
(2) Fun & Indulgence figures include Strauss's 50% share in the salty snacks business. International Coffee figures include Strauss's 50% share in the Três Corações joint venture (3C) – Brazil – a company jointly held by the Group (50%) and by the local São Miguel Group (50%). International Dips & Spreads figures reflect Strauss's 50% share in Sabra and Obela. Strauss Water EBIT figures include Strauss's share in Haier Strauss Water (HSW) in China (49%).
Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. Total figures for International Dips & Spreads were calculated on the basis of the exact figures for Sabra and Obela in NIS thousands. | |||
Non GAAP Figures (1) | ||||||||
First Nine Months | ||||||||
Sales (NIS mm) | Sales Growth vs. Last Year | Organic Sales Growth excluding FX | EBIT (NIS mm) | NIS Change in EBIT | % Change in EBIT | EBIT margins | Change in EBIT margins vs. 2022 | |
Sales and EBIT by Operating Segments and Activities | ||||||||
Strauss Israel: | ||||||||
Health & Wellness | 2,301 | 11.2 % | 11.2 % | 263 | 51 | 23.9 % | 11.4 % | +120 bps |
Fun & Indulgence (2) | 767 | 39.4 % | 39.4 % | 16 | 265 | 106.4 % | 2.1 % | +4730 bps |
Total Strauss Israel | 3,068 | 17.1 % | 17.1 % | 279 | 316 | 857.3 % | 9.1 % | +1050 bps |
Strauss Coffee: | ||||||||
Coffee Israel | 617 | 3.7 % | 3.7 % | 83 | -8 | -8.9 % | 13.5 % | -190 bps |
International Coffee (2) | 3,167 | 7.7 % | -0.2 % | 197 | -90 | -31.2 % | 6.2 % | -360 bps |
Total Strauss Coffee | 3,784 | 7.1 % | 0.4 % | 280 | -98 | -25.8 % | 7.4 % | -330 bps |
International Dips & Spreads: | ||||||||
Sabra (50%) (2) | 329 | 41.0 % | 28.2 % | 28 | 107 | 136.2 % | 8.6 % | +4230 bps |
Obela (50%) (2) | 58 | -6.1 % | -12.6 % | -6 | 0 | 0.7 % | NM | NM |
Total International Dips & Spreads | 387 | 31.1 % | 19.9 % | 22 | 107 | 126.0 % | 5.7 % | +3440 bps |
Strauss Water | 613 | 3.5 % | 3.1 % | 66 | -8 | -10.0 % | 10.9 % | -160 bps |
Other (2)(3) | 2 | NM | NM | -56 | -41 | 274.4 % | NM | NM |
Total Group | 7,854 | 11.5 % | 7.5 % | 591 | 276 | 87.6 % | 7.5 % | +300 bps |
(1) The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses and do not include share-based payment, mark-to-market at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise.
(2) Fun & Indulgence figures include Strauss's 50% share in the salty snacks business. International Coffee figures include Strauss's 50% share in the Três Corações joint venture (3C) – Brazil – a company jointly held by the Group (50%) and by the local São Miguel Group (50%). International Dips & Spreads figures reflect Strauss's 50% share in Sabra and Obela. Strauss Water EBIT figures include Strauss's share in Haier Strauss Water (HSW) in China (49%).
Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. Total figures for International Dips & Spreads were calculated on the basis of the exact figures for Sabra and Obela in NIS thousands. | ||||||||
Condensed financial accounting (GAAP) | |||
Third Quarter | |||
2023 | 2022 | Change | |
Sales | 1,746 | 1,608 | 8.6 % |
Cost of sales excluding impact of commodity hedges | 1,126 | 1,076 | 4.7 % |
Adjustments for commodity hedges | 41 | 0 | |
Cost of sales | 1,167 | 1,076 | 8.5 % |
Gross profit | 579 | 532 | 8.6 % |
% of sales | 33.1 % | 33.1 % | |
Selling and marketing expenses | 369 | 348 | 6.2 % |
General and administrative expenses | 118 | 101 | 16.5 % |
Total expenses | 487 | 449 | 8.5 % |
Share of profit of equity-accounted investees | 70 | 14 | 431.2 % |
Share of profit (loss) of equity-accounted incubator investees | -6 | -13 | -49.0 % |
Operating profit before other expenses | 156 | 84 | 85.0 % |
% of sales | 8.9 % | 5.2 % | |
Other expenses, net | -3 | -3 | |
Operating profit after other expenses | 153 | 81 | 87.7 % |
Financing expenses, net | -20 | -31 | -33.5 % |
Income before taxes on income | 133 | 50 | 162.8 % |
Taxes on income | -33 | -12 | 167.2 % |
Effective tax rate | 24.8 % | 24.4 % | |
Income for the period | 100 | 38 | 161.3 % |
Attributable to the Company's shareholders | 80 | 27 | 197.6 % |
Attributable to non-controlling interests | 20 | 11 | 73.8 % |
Condensed financial accounting (GAAP) | |||
First Nine Months | |||
2023 | 2022 | Change | |
Sales | 5,090 | 4,540 | 12.1 % |
Cost of sales excluding impact of commodity hedges | 3,280 | 3,051 | 7.5 % |
Adjustments for commodity hedges | -16 | -4 | |
Cost of sales | 3,264 | 3,047 | 7.1 % |
Gross profit | 1,826 | 1,493 | 22.3 % |
% of sales | 35.9 % | 32.9 % | |
Selling and marketing expenses | 1,045 | 1,012 | 3.3 % |
General and administrative expenses | 359 | 314 | 14.1 % |
Total expenses | 1,404 | 1,326 | 5.9 % |
Share of profit of equity-accounted investees | 162 | 86 | 90.6 % |
Share of profit (loss) of equity-accounted incubator investees | -23 | -12 | 102.1 % |
Operating profit before other expenses | 561 | 241 | 132.7 % |
% of sales | 11.0 % | 5.3 % | |
Other expenses, net | 58 | -34 | |
Operating profit after other expenses | 619 | 207 | 198.8 % |
Financing expenses, net | -50 | -25 | 100.8 % |
Income before taxes on income | 569 | 182 | 212.3 % |
Taxes on income | -137 | -44 | 213.2 % |
Effective tax rate | 24.1 % | 24.1 % | |
Income for the period | 432 | 138 | 212.0 % |
Attributable to the Company's shareholders | 384 | 96 | 299.8 % |
Attributable to non-controlling interests | 48 | 42 | 12.9 % |
Conference Call
Strauss Group will host a Zoom conference call in Hebrew on Thursday, November 30, 2023 at 14:00 (Israel time) with the participation of company management to review the financial statements of the company for the third quarter of 2023. Following is the information for those wishing to join the online conference:
Meeting URL: https://strauss-group.zoom.us/j/98385104798?pwd=OHE0alp4cWVSUElCdFl2dzFyZVJVQT09
Passcode: 558919
Strauss Group will also host a Zoom conference call in English on Thursday, November 30, 2023 at 15:30 (Israel time) with the participation of company management to review the financial statements of the company for the third quarter of 2023.
Meeting URL: https://strauss-group.zoom.us/j/95173480575?pwd=NkhkNWVuVDZuenMwRXFuUVd2MkZFQT09
Passcode: 215694
A recording of the calls will subsequently be available on the company's website at: https://ir.strauss-group.com/company-presentations/conference-call-recordings/
The financial statements of the company for the second quarter of 2023 and the presentation that will accompany the conferences will be available prior to the conference calls on the following websites:
http://www.magna.isa.gov.il
http://ir.strauss-group.com/phoenix.zhtml?c=92539&p=irol-irhome
For further information, please contact:
Liron Ben Yaakov Head of Communications and Public Relations Strauss Group Ltd. 972-54-609-1600 972-3-675-2584 | Daniella Finn Director of Investor Relations Strauss Group Ltd. 972-54-577-2195 972-3-675-2545 |
Telem Yahav Head of Content & Digital Strategy Strauss Group Ltd. 972-52-257-9939 972-3-675-6713 |
[1] According to the StoreNext report published on November 6, 2023. StoreNext measures consumption in the barcoded FMCG market.
SOURCE Strauss Group Ltd.
