Strauss Group Reports Results for the Full Year and Fourth Quarter of 2023
Revenues in 2023 grew to
PETAH TIKVA, Israel,
The past year was very complex and challenging on the national level. I am extremely proud of Strauss employees throughout the country, who continued to produce and market food and beverages, and did it all with a sense of mission, national responsibility, devotion to our consumers and to maintaining business continuity. We continue to pray for the safe return of all the hostages soon and strengthen the soldiers of the IDF and the security forces."
Results |
Q4 2023 |
Q4 2022 |
FY 2023 |
FY 2022 |
Sales |
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% change |
+9.6 % |
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+11 % |
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Operating profit |
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% change |
+184.9 % |
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+103.9 % |
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% of sales |
6.7 % |
2.6 % |
7.3 % |
4.0 % |
Net profit |
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% change |
+304.4 % |
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+154 % |
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Operating profit for 2023 was
The Group's strategy update
This morning, Strauss is publishing the Group's strategy update for 2024-2026. Strategy highlights include strengthening and renewing the core, a series of transformation and portfolio optimization processes as well as the building infrastructure and planting the seeds for future growth drivers. The goal of these strategic moves is to continue the organic annual revenue growth of c5% and increase the Group's margins to 10-12% in 2026. Strauss is working to expand its existing business in
Israel
In Israel, Strauss plans to continue to strengthen its snacking business by targeting new audiences and communities.
In addition, Strauss is working to expand its existing businesses in
In order to carry out the Group's strategy in
Strauss together with its joint venture partner (Sao Miguel), will continue to maintain 3corações's position as the largest coffee company in
3corações non-R&G business in
3corações will also strive to improve profitability in
Water
In the water business, in addition to ongoing improvement in quality, it is the Group's intention to broaden its existing categories to provide a response to diverse new audiences and communities, and to expand the range of solutions while further developing and solidifying existing geographies and penetrating new geographies.
Transformation
In order to implement the strategy, Strauss intends to strengthen its financial and business standing. The transformation process includes a series of efficiency processes that are expected to yield savings of
Highlights of the strategy
- Annual organic sales growth of 5% between 2024-2026
- Improve the Group's profit margin to 10-12% margin in 2026
- CAPEX record investments in plants and infrastructure in
Israel of 5-7% of revenues - Productivity processes that will yield savings of NIS 300-400 million as of 2026
- A new manufacturing facility in
Israel , to become operational in 2025, for the plant-based category - Maintain leading position in coffee in
Brazil and improve profitability - M&A in
Brazil and expand non-R&G revenues - New production plant in
China and improved competitive position inChina - Expand product offering in the water business
- Review entry into new geographies in the water business
2023 summary by business segments
Strauss's market share in the confectionery category continues to grow and reached 25.4%[2] in the quarter, a slight increase over the prior quarter.
In Israel, coffee revenues were
International Dips & Spreads
The International Dips & Spreads segment maintained the course of gradual recovery with an improvement in market share in the US and an ongoing uptrend in revenues. Sales by Sabra-Obela in 2023 amounted to
In the beginning of 2024, the Company announced the appointment of
Non GAAP Figures (1) |
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Four Quarter |
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2023 |
2022 |
Change |
Total Group Sales (NIS mm) |
2,695 |
2,460 |
9.6 % |
Organic Sales Growth excluding FX |
4.6 % |
3.5 % |
|
Gross Profit (NIS mm) |
852 |
735 |
15.9 % |
Gross Margins (%) |
31.6 % |
29.9 % |
+170 bps |
EBITDA (NIS mm) |
287 |
168 |
69.5 % |
EBITDA Margins (%) |
10.6 % |
6.8 % |
+380 bps |
EBIT (NIS mm) |
181 |
64 |
184.9 % |
EBIT Margins (%) |
6.7 % |
2.6 % |
+410 bps |
Net Income Attributable to the Company's Shareholders (NIS mm) |
100 |
26 |
304.4 % |
Net Income Margin (Attributable to the Company's Shareholders) (%) |
3.7 % |
1.0 % |
+270 bps |
EPS (NIS) |
0.86 |
0.21 |
304.2 % |
Operating Cash Flow (NIS mm) |
726 |
388 |
82.1 % |
Capex (NIS mm) (2) |
159 |
148 |
7.4 % |
Net debt (NIS mm) |
-480 |
-195 |
146.2 % |
Net debt / annual EBITDA |
2.0x |
3.0x |
1.0x |
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(1) The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled |
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(2) Investments include the acquisition of fixed assets, investment in intangible assets and proceeds from the sale of fixed assets. |
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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) |
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Four Quarter |
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Sales (NIS mm) |
Sales Growth vs. Last Year |
Organic Sales Growth excluding FX |
EBIT |
NIS Change in EBIT |
% Change in EBIT |
EBIT margins |
Change in EBIT margins vs. 2022 |
Sales and EBIT by Operating Segments and Activities |
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Health & Wellness |
765 |
6.9 % |
6.9 % |
92 |
24 |
35.3 % |
12.1 % |
+250 bps |
Fun & Indulgence (2) |
241 |
49.3 % |
49.3 % |
11 |
64 |
121.1 % |
4.7 % |
+3780 bps |
Total |
1,006 |
14.8 % |
14.8 % |
103 |
88 |
600.4 % |
10.3 % |
+860 bps |
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Israel Coffee |
176 |
-4.2 % |
-4.2 % |
24 |
18 |
311.1 % |
13.7 % |
+1050 bps |
International Coffee (2) |
1,194 |
9.9 % |
0.3 % |
51 |
-25 |
-34.0 % |
4.2 % |
-290 bps |
Total |
1,370 |
7.9 % |
-0.3 % |
75 |
-7 |
-9.4 % |
5.5 % |
-100 bps |
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International Dips & Spreads: |
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Sabra (50%) (2) |
103 |
9.2 % |
0.5 % |
-10 |
15 |
-63.8 % |
-9.1 % |
+1830 bps |
Obela (50%) (2) |
23 |
-9.6 % |
-18.5 % |
2 |
3 |
-674.0 % |
NM |
NM |
Total International Dips & Spreads |
126 |
5.3 % |
-3.7 % |
-8 |
18 |
-70.9 % |
-6.2 % |
+1610 bps |
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|
192 |
-0.4 % |
-1.2 % |
24 |
1 |
0.7 % |
12.1 % |
+10 bps |
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Other (2)(3) |
1 |
NM |
NM |
-13 |
17 |
-55.7 % |
NM |
NM |
|
2,695 |
9.6 % |
4.6 % |
181 |
117 |
184.9 % |
6.7 % |
+410 bps |
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(1) The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly |
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(2) Fun & Indulgence figures include Strauss's 50% share in the salty snacks business. International Coffee figures include Strauss's 50% |
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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) |
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Year |
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|
2023 |
2022 |
Change |
Total Group Sales (NIS mm) |
10,549 |
9,501 |
11.0 % |
Organic Sales Growth excluding FX |
6.8 % |
6.5 % |
|
Gross Profit (NIS mm) |
3,383 |
2,834 |
19.4 % |
Gross Margins (%) |
32.1 % |
29.8 % |
+230 bps |
EBITDA (NIS mm) |
1,192 |
774 |
54.0 % |
EBITDA Margins (%) |
11.3 % |
8.1 % |
+320 bps |
EBIT (NIS mm) |
772 |
379 |
103.9 % |
EBIT Margins (%) |
7.3 % |
4.0 % |
+330 bps |
Net Income Attributable to the Company's Shareholders (NIS mm) |
439 |
174 |
154.0 % |
Net Income Margin Attributable to the Company's Shareholders (%) |
4.2 % |
1.8 % |
+240 bps |
EPS (NIS) |
3.77 |
1.49 |
153.7 % |
Operating Cash Flow (NIS mm) |
861 |
479 |
79.5 % |
Capex (NIS mm) (2) |
507 |
435 |
16.6 % |
Net debt (NIS mm) |
2,400 |
2,322 |
-120.7 % |
Net debt / annual EBITDA |
2.0x |
3.0x |
1.0x |
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(1) The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly |
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(2) Fun & Indulgence figures include Strauss's 50% share in the salty snacks business. International Coffee figures include Strauss's |
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Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. |
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Non GAAP Figures (1) |
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Year |
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|
Sales (NIS mm) |
Sales Growth vs. Last Year |
Organic Sales Growth excluding FX |
EBIT |
NIS Change in EBIT |
% Change in EBIT |
EBIT margins |
Change in EBIT margins vs. 2022 |
Sales and EBIT by Operating Segments and Activities |
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Health & Wellness |
3,066 |
10.1 % |
10.1 % |
355 |
75 |
26.7 % |
11.6 % |
+150 bps |
Fun & Indulgence (2) |
1,008 |
41.6 % |
41.6 % |
27 |
329 |
109.1 % |
2.7 % |
+4520 bps |
Total |
4,074 |
16.5 % |
16.5 % |
382 |
404 |
1843.2 % |
9.4 % |
+1000 bps |
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Coffee Israel |
793 |
1.8 % |
1.8 % |
107 |
10 |
10.3 % |
13.5 % |
+100 bps |
International Coffee (2) |
4,361 |
8.3 % |
0.0 % |
248 |
-115 |
-31.8 % |
5.7 % |
-330 bps |
Total |
5,154 |
7.3 % |
0.2 % |
355 |
-105 |
-22.8 % |
6.9 % |
-270 bps |
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International Dips & Spreads: |
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Sabra (50%) (2) |
432 |
31.9 % |
20.5 % |
19 |
123 |
118.3 % |
4.4 % |
+3630 bps |
Obela (50%) (2) |
81 |
-7.1 % |
-14.3 % |
-5 |
2 |
29.2 % |
NM |
NM |
Total International Dips & Spreads |
513 |
23.7 % |
13.1 % |
14 |
125 |
112.9 % |
2.8 % |
+2970 bps |
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|
805 |
2.6 % |
2.1 % |
90 |
-7 |
-7.4 % |
11.2 % |
-120 bps |
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Other (2)(3) |
3 |
NM |
NM |
-69 |
-24 |
52.9 % |
NM |
NM |
|
10,549 |
11.0 % |
6.8 % |
772 |
393 |
103.9 % |
7.3 % |
+330 bps |
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(1) The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly |
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(2) Fun & Indulgence figures include Strauss's 50% share in the salty snacks business. International Coffee figures include Strauss's |
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Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. |
Condensed financial accounting (GAAP) |
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Four Quarter |
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|
2023 |
2022 |
Change |
Sales |
1,705 |
1,565 |
9.0 % |
Cost of sales excluding impact of commodity hedges |
1,095 |
1,053 |
4.0 % |
Adjustments for commodity hedges |
-7 |
29 |
|
Cost of sales |
1,088 |
1,082 |
0.6 % |
Gross profit |
617 |
483 |
27.7 % |
% of sales |
36.2 % |
30.9 % |
|
Selling and marketing expenses |
345 |
347 |
-0.8 % |
General and administrative expenses |
112 |
111 |
1.3 % |
Total expenses |
457 |
458 |
-0.3 % |
Share of profit of equity-accounted investees |
35 |
-5 |
-673.3 % |
Share of profit (loss) of equity-accounted incubator investees |
-11 |
-15 |
-24.7 % |
Operating profit before other expenses |
184 |
5 |
3630.9 % |
% of sales |
10.8 % |
0.3 % |
|
Other expenses, net |
12 |
-20 |
|
Operating profit after other expenses |
196 |
-15 |
1336.0 % |
Financing expenses, net |
-44 |
-16 |
167.0 % |
Income before taxes on income |
152 |
-31 |
576.6 % |
Taxes on income |
-30 |
10 |
-405.3 % |
Effective tax rate |
19.6 % |
30.6 % |
|
Income for the period |
122 |
-21 |
652.2 % |
Attributable to the Company's shareholders |
104 |
-32 |
422.1 % |
Attributable to non-controlling interests |
18 |
11 |
77.4 % |
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Condensed financial accounting (GAAP) |
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Year |
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|
2023 |
2022 |
Change |
Sales |
6,795 |
6,105 |
11.3 % |
Cost of sales excluding impact of commodity hedges |
4,375 |
4,104 |
6.6 % |
Adjustments for commodity hedges |
-23 |
25 |
|
Cost of sales |
4,352 |
4,129 |
5.4 % |
Gross profit |
2,443 |
1,976 |
23.6 % |
% of sales |
35.9 % |
32.4 % |
|
Selling and marketing expenses |
1,390 |
1,359 |
2.3 % |
General and administrative expenses |
471 |
425 |
10.8 % |
Total expenses |
1,861 |
1,784 |
4.3 % |
Share of profit of equity-accounted investees |
197 |
80 |
148.0 % |
Share of profit (loss) of equity-accounted incubator investees |
-34 |
-26 |
31.6 % |
Operating profit before other expenses |
745 |
246 |
202.8 % |
% of sales |
11.0 % |
4.0 % |
|
Other expenses, net |
70 |
-54 |
|
Operating profit after other expenses |
815 |
192 |
325.7 % |
Financing expenses, net |
-94 |
-41 |
126.7 % |
Income before taxes on income |
721 |
151 |
380.2 % |
Taxes on income |
-167 |
-34 |
390.9 % |
Effective tax rate |
23.2 % |
22.7 % |
|
Income for the period |
554 |
117 |
377.1 % |
Attributable to the Company's shareholders |
488 |
64 |
668.0 % |
Attributable to non-controlling interests |
66 |
53 |
25.4 % |
Conference Call
Meeting URL: https://strauss-group.zoom.us/j/94130688409?pwd=RWFISHFSTTNQbHRHZVE0RUYyZVZSQT09
Password: 150959
Meeting URL: https://strauss-group.zoom.us/j/98519654985?pwd=MzFiSDN5Z01YTFBUZjJMQTVuSGxqdz09
Password: 249850
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/
For further information, please contact :
Director of Investor Relations 972-54-577-2195 972-3-675-2545 Daniella.Finn@Strauss-Group.com
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Director of Communications and PR 972-54-609-1600 972-3-675-2584 liron.ben-yaakov@Strauss-Group.com
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Telem Yahav
Director of 972-52-257-9939 972-3-675-6713 |
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[1] The data in this document are based on the Company's non-GAAP figures, which include the proportionate consolidation of jointly controlled entities 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, other net income and expenses, and the tax effect of excluding those items, unless stated otherwise.
[2] According to the StoreNext report published on
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