CEO.CA Chairman's Briefing

PETACH TIKVA, Israel, Aug. 10, 2017 /PRNewswire/ -- Gadi Lesin, President and CEO of Strauss Group (TASE: STRS) (August 10, 2017): "The past quarter has delivered the first fruits of the implementation of the Group's strategy focusing on our core businesses, as we attained the full control of the coffee and water companies following minority acquisitions; increasing our holding in the joint venture in China and sold Max Brenner. These strong results are proof of the significant value these moves have delivered to the Group and to its shareholders. The business in Israel continues to outperform the Food & Beverage market, and the laudable achievements of Strauss Coffee and Strauss Water have positively impacted the bottom line, in spite of the continued effect of the recall by Sabra. We believe that the strategic changes implemented in our portfolio over the past year will continue to reflect positively on the group, enabling us to face the challenges which lie ahead in the global and local markets."

Q2 2017 highlights⁽¹⁾

• Organic sales growth, excluding foreign exchange effects, was c6.2%. Shekel sales were NIS c2 billion compared to NIS 1.9 billion in the corresponding period in 2016; sales were impacted by a negative currency translation amounting to NIS c13 million mainly as a result of the continued strengthening of the average exchange of the NIS against the USD compared to the corresponding period last year.
• Gross profit was NIS c753 million (c36.9% of sales), up c2.7% compared to the corresponding period last year. Gross margins were down c1%.
• Operating profit (EBIT) was NIS c187 million (c9.1% of sales), up c2.3% compared to the corresponding period last year. EBIT margins were down c0.3%.
• EPS for shareholders of the Company was NIS c0.91, up c24.9% compared to the corresponding period.
• Positive cash flows from operating activities totaled NIS c199 million, compared to NIS c296 million in the corresponding period last year.

(1)    Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, reflects all adjustments necessary to delay recognition of profit or loss arising from commodity derivatives until the date when the inventory is sold to outside parties and other income and expenses, unless stated otherwise.

H1 2017 highlights⁽¹⁾

• Organic sales growth, excluding foreign exchange effects, was c6.7%. Shekel sales were NIS c4.1 billion compared to NIS 3.8 billion in the corresponding period in 2016; sales were impacted by a positive currency translation amounting to NIS c38 million mainly as a result of the continued strengthening of the average exchange of the Brazilian Real against the NIS compared to the corresponding period last year.
• Gross profit was NIS c1,533 million (c37.2% of sales), up c5.1% compared to the corresponding period last year. Gross margins were down c1.1%.
• Operating profit (EBIT) was NIS c410 million (c9.9% of sales), up c3.7% compared to the corresponding period last year. EBIT margins were down c0.5%.
• EPS for shareholders of the Company was NIS c1.99, up c15.2% compared to the corresponding period.
• Positive cash flows from operating activities totaled NIS c113 million, compared to NIS c270 million in the corresponding period last year.

(1)    Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, reflects all adjustments necessary to delay recognition of profit or loss arising from commodity derivatives until the date when the inventory is sold to outside parties and other income and expenses, unless stated otherwise.

(1)    Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, reflects all adjustments necessary to delay recognition of profit or loss arising from commodity derivatives until the date when the inventory is sold to outside parties and other income and expenses, unless stated otherwise.

(2)    Investments include the acquisition of fixed assets and investment in intangible assets.

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

(1)    Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, reflects all adjustments necessary to delay recognition of profit or loss arising from commodity derivatives until the date when the inventory is sold to outside parties and other income and expenses, 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 D&S figures reflect Strauss's 50% share in Sabra and Obela. Other Operations figures include Strauss's 34% share in the joint venture in China, Haier Strauss Water (HSW).

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.

(1)    Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, reflects all adjustments necessary to delay recognition of profit or loss arising from commodity derivatives until the date when the inventory is sold to outside parties and other income and expenses, unless stated otherwise.

(2)    Investments include the acquisition of fixed assets and investment in intangibles assets.

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

(1)    Data represent the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (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, reflects all adjustments necessary to delay recognition of profit or loss arising from commodity derivatives until the date when the inventory is sold to outside parties and other income and expenses, 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 D&S figures reflect Strauss's 50% share in Sabra and Obela. Other Operations figures include Strauss's 34% share in the joint venture in China, Haier Strauss Water (HSW).

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.

Appendix

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

Investor Conference Calls

Strauss Group will host an Investor Conference call in Hebrew on Thursday, August 10, 2017 at 14:00 (Israel time) to review the Financial Statements of the Company for the second quarter.

To participate please dial: 03-918-0688

Strauss Group will also host an Investor Conference call in English on Thursday, August 10, 2017 at 17:30 local Israel time (15:30 UK, 10:30 Eastern time) to review the Financial Statements of the Company for the second quarter.

To participate in the live call please dial one of the following numbers:

From the UK: 0-800-917-5108

From the US: 1-888-407-2553

From Israel: 03-918-0687

The Financial Statements and Investors Presentation are posted on the Group's Investor Relations website at:

http://ir.strauss-group.com/phoenix.zhtml?c=92539&p=irol-irhome

For further information please contact:

View original content:http://www.prnewswire.com/news-releases/strauss-groups-second-quarter-results-demonstrate-a-strong-performance-in-the-groups-core-businesses1-300502513.html

SOURCE Strauss Group