Strauss Group President & CEO Shai Babad commented: "In the past week, the company announced a transaction to sell its ownership interest in Sabra for NIS 900 million. This transaction represents another step in executing the Group's strategy to focus on core business, better leverage resources, and drive significant initiatives for Strauss. The Group has delivered a quarter of growth across all business segments, despite ongoing challenges posed by rising raw material prices, which continue to put pressure on our margins. I am immensely proud of our dedicated employees, who have ensured business continuity in the face of the war and its repercussions."
PETAH TIKVA, Israel, Nov. 25, 2024 /PRNewswire/ -- This morning, Strauss Group (TASE: STRS) published its financial statements, summing up the third quarter of 2024 with growth in revenues, which totaled NIS 3 billion, up 11.8% compared to the corresponding period last year. Operating profit was NIS 223 million, 7.4% of total sales. Net income attributable to shareholders of the company was NIS 102 million, reflecting a decline of 15.4% compared to the same quarter last year.
Strauss Group concluded the first nine months of 2024 with revenues of NIS 8.3 billion, up 6.1% compared to the same period last year. Operating profit in the nine months was NIS 578 million, down 2.3% compared to the corresponding period, and constituted 6.9% of total sales in the period. Net income attributable to shareholders of the company was NIS 344 million, up 1.3% compared to the corresponding period last year.
Results
Q3 2024
Q3 2023
Sales
NIS 2,991M
NIS 2,675M
% change
+11.8 %
Operating profit
NIS 223M
NIS 212M
% change
+4.2 %
% of sales
7.4 %
8.0 %
Net profit
NIS 102M
NIS 120M
% change
-15.4 %
Over the past few months, the Group has completed several key strategic initiatives as part of executing its strategy. As part of this process, the company announced at the end of last week the sale of its ownership interest in Sabra and Obela for NIS 900 million. Sabra and Obela will be acquired by the global food and beverage company, PepsiCo, the Group's partner in the joint ventures.
Several months ago, Strauss launched a revised strategy for the Group, prioritizing a renewed focus on its core activities, strengthening its home base in Israel, expanding the business in Brazil and continuing to grow the water business internationally, while making further investments in the development of capabilities and boosting robustness and readiness for the future. The company will continue to pursue the implementation of the Group's strategy.
Q3 2024 summary by operating segment:
Strauss Israel – revenue and EBIT growth
In the third quarter, Strauss Israel delivered revenues of NIS 1,371 million, up 9.0% compared to the corresponding period last year. Strauss Israel's operating profit in the quarter was NIS 158 million, up 27.8% versus last year.
Sales by the Health & Wellness segment in the third quarter reached NIS 827 million, up 2.8% compared to the same quarter last year, and operating profit was NIS 120 million, reflecting an increase of 19.5% over last year.
Sales by the Fun & Indulgence (Snacks and Confectionery) segment in the third quarter were NIS 323 million, up 32.6% compared to the corresponding quarter last year, and operating profit was NIS 9 million, an increase of 219.5% compared to an operating loss in the same quarter of 2023.
The Fun & Indulgence (Israel Coffee) segment concluded the third quarter of the year with sales of NIS 221 million, up 5.4% compared to the corresponding period, and operating profit was NIS 29 million, a decline of 6.8% compared to last year.
Strauss International Coffee – revenue and EBIT growth
Strauss International Coffee delivered revenues of NIS 1,259 million in the third quarter of 2024, up 17.8% compared to the same quarter in 2023, and operating profit was NIS 68 million, up 12.6% compared to the same quarter last year.
The coffee company in Brazil, Três Corações (50%) concluded the third quarter with NIS 897 million in revenues, up 25.6% compared to last year, and operating profit of NIS 48 million, reflecting an increase of 61.7% compared to the third quarter of 2023.
The coffee business in Russia summed up the third quarter with revenues of NIS 148 million, up 16.9%. The business in Ukraine concluded the quarter with revenues of NIS 40 million, an increase of 3.3%. In Poland, revenues in the quarter were NIS 104 million, an increase of 15.9%, and the business in Romania delivered NIS 73 million in quarterly revenues, up 26.7% compared to corresponding period last year.
Strauss Water – stronger revenue and margins
Strauss Water concluded the third quarter of 2024 with revenues of NIS 224 million, up 1.6% compared to the corresponding period last year, and operating profit of NIS 26 million, up 23.3% compared to the corresponding period. The water business in China (for 100%) delivered revenues of NIS 213 million in the quarter, up 6.5%, and net profit of NIS 28 million, an increase of 47.4% versus last year.
Sabra and Obela – operating break-even
Sabra's revenues (for 50%) in the third quarter of 2024 were NIS 114 million, up 6.4%, and operating profit was NIS 1 million, a decline of 95.7% compared to the corresponding period last year. Obela delivered revenues (for 50%) of NIS 21 million in the quarter.
Non GAAP Figures (1)
Third Quarter
2024
2023
Change
Total Group Sales (NIS mm)
2,991
2,675
11.8 %
Organic Sales Growth excluding FX
15.4 %
2.8 %
Gross Profit (NIS mm)
911
855
6.5 %
Gross Margins (%)
30.5 %
32.0 %
-150 bps
EBITDA (NIS mm)
332
320
3.3 %
EBITDA Margins (%)
11.1 %
12.0 %
-90 bps
EBIT (NIS mm)
223
212
4.2 %
EBIT Margins (%)
7.4 %
8.0 %
-60 bps
Net Income Attributable to the Company's Shareholders (NIS mm)
102
120
-15.4 %
Net Income Margin Attributable to the Company's Shareholders (%)
3.4 %
4.5 %
-110 bps
EPS (NIS)
0.88
1.04
-15.5 %
Operating Cash Flow (NIS mm)
60
300
-80.0 %
Capex (NIS mm) (2)
158
147
7.5 %
Net debt (NIS mm)
3,286
2,880
14.1 %
Net debt / annual EBITDA
2.7x
2.7x
(0.0x)
(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. 2023
Sales and EBIT by Operating Segments and Activities
Strauss Israel:
Health & Wellness
827
2.8 %
2.8 %
120
19
19.5 %
14.5 %
+200 bps
Fun & Indulgence (Snacks and sweets) (2)
323
32.6 %
32.6 %
9
17
219.5 %
2.8 %
+590 bps
Fun & Indulgence (Coffee Israel)
221
5.4 %
5.4 %
29
(1)
-6.8 %
12.9 %
-170 bps
Total Strauss Israel
1,371
9.0 %
9.0 %
158
35
27.8 %
11.5 %
+170 bps
International Coffee (2)
1,259
17.8 %
28.0 %
68
8
12.6 %
5.4 %
-20 bps
Strauss Water (2)
224
1.6 %
1.4 %
26
5
23.3 %
11.6 %
+210 bps
Other
137
6.1 %
6.1 %
(29)
(37)
-443.9 %
NM
NM
Total Group
2,991
11.8 %
15.4 %
223
11
4.2 %
7.4 %
-60 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 period end 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 and/or the financial derivative is exercised, other income and expenses, net, and the tax effects of excluding those items, unless stated otherwise.
(2) Fun & Indulgence (Snacks and Confectionery) 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
2024
2023
Change
Sales
1,873
1,746
7.3 %
Cost of sales excluding impact of commodity hedges
1,245
1,126
10.5 %
Adjustments for commodity hedges
(25)
41
Cost of sales
1,220
1,167
4.5 %
Gross profit
653
579
12.9 %
% of sales
34.9 %
33.1 %
Selling and marketing expenses
360
369
-2.5 %
General and administrative expenses
127
118
7.7 %
Total expenses
487
487
Share of profit of equity-accounted investees
58
70
-16.4 %
Share of loss of equity-accounted incubator investees
(8)
(6)
33.3 %
Operating profit before other expenses
216
156
39.3 %
% of sales
11.6 %
8.9 %
Other expenses, net
(19)
(3)
Operating profit after other expenses
197
153
28.5 %
Financing expenses, net
(40)
(20)
89.0 %
Income before taxes on income
157
133
19.0 %
Taxes on income
(36)
(33)
9.7 %
Effective tax rate
22.8 %
24.8 %
Income for the period
121
100
22.1 %
Attributable to the Company's shareholders
99
80
23.7 %
Attributable to non-controlling interests
22
20
15.3 %
Non GAAP Figures (1)
First Nine Months
2024
2023
Change
Total Group Sales (NIS mm)
8,334
7,854
6.1 %
Organic Sales Growth excluding FX
6.9 %
7.5 %
Gross Profit (NIS mm)
2,626
2,531
3.8 %
Gross Margins (%)
31.5 %
32.2 %
-70 bps
EBITDA (NIS mm)
912
905
0.7 %
EBITDA Margins (%)
10.9 %
11.5 %
-60 bps
EBIT (NIS mm)
578
591
-2.3 %
EBIT Margins (%)
6.9 %
7.5 %
-60 bps
Net Income Attributable to the Company's Shareholders (NIS mm)
344
339
1.3 %
Net Income Margin Attributable to the Company's Shareholders (%)
4.1 %
4.3 %
-20 bps
EPS (NIS)
2.95
2.91
1.3 %
Operating Cash Flow (NIS mm)
(41)
135
-130.4 %
Capex (NIS mm) (2)
454
348
30.5 %
Net debt (NIS mm)
3,286
2,880
14.1 %
Net debt / annual EBITDA
2.7x
2.7x
(0.0x)
(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 period end 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 and/or the financial derivative is exercised, other income and expenses, net, and the tax effects 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)
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. 2023
Sales and EBIT by Operating Segments and Activities
Strauss Israel:
Health & Wellness
2,312
0.5 %
0.5 %
286
23
8.9 %
12.4 %
+100 bps
Fun & Indulgence (Snacks and sweets) (2)
955
24.6 %
24.6 %
39
23
146.7 %
4.1 %
+200 bps
Fun & Indulgence (Coffee Israel)
625
1.4 %
1.4 %
83
-
-0.6 %
13.2 %
-30 bps
Total Strauss Israel
3,892
5.6 %
5.6 %
408
46
12.8 %
10.5 %
+70 bps
International Coffee (2)
3,418
7.9 %
10.3 %
167
(30)
-15.3 %
4.9 %
-130 bps
Strauss Water (2)
627
2.4 %
2.2 %
75
9
12.6 %
11.9 %
+100 bps
Other
397
1.7 %
1.7 %
(72)
(38)
115.8 %
NM
NM
Total Group
8,334
6.1 %
6.9 %
578
(13)
-2.3 %
6.9 %
-60 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)
First Nine Months
2024
2023
Change
Sales
5,300
5,090
4.1 %
Cost of sales excluding impact of commodity hedges
3,459
3,280
5.4 %
Adjustments for commodity hedges
40
(16)
Cost of sales
3,499
3,264
7.2 %
Gross profit
1,801
1,826
-1.3 %
% of sales
34.0 %
35.9 %
Selling and marketing expenses
1,060
1,045
1.4 %
General and administrative expenses
382
359
6.6 %
Total expenses
1,442
1,404
Share of profit of equity-accounted investees
143
162
-11.9 %
Share of loss of equity-accounted incubator investees
(18)
(23)
-21.7 %
Operating profit before other expenses
484
561
-13.7 %
% of sales
9.1 %
11.0 %
Other income (expenses), net
(82)
58
Operating profit after other expenses
402
619
-35.1 %
Financing expenses, net
(73)
(50)
44.2 %
Income before taxes on income
329
569
-42.1 %
Taxes on income
(36)
(137)
-73.7 %
Effective tax rate
11.0 %
24.1 %
Income for the period
293
432
-32.1 %
Attributable to the Company's shareholders
232
384
-39.5 %
Attributable to non-controlling interests
61
48
27.9 %
Conference call
Strauss Group will host a Zoom conference call in Hebrew on Monday, November 25, 2024 at 14:00 (Israel time) with the participation of company management for a review of the financial statements of the company for the third quarter of 2024. Following is the information for those wishing to join the online conference:
Strauss Group will also host a Zoom conference call in English on Monday, November 25, 2024 at 15:30 (Israel time) with the participation of company management for a review of the financial statements of the company for the third quarter of 2024. Following is the information for those wishing to join the online conference:
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 period end 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 and/or the financial derivative is exercised, other income and expenses, net, and the tax effects of excluding those items, unless stated otherwise.
