The company delivered revenue growth in most businesses in
Israel and Internationally
Suspension of manufacturing operations at the confectionery
division and at Sabra negatively impacted growth and led to profit
and margin erosion
The Confectionery Division, which resumed manufacturing in late
2022, has reached a 24%2 market share, close to
pre-recall levels
PETAH TIKVA, Israel,
March 23,
2023 /PRNewswire/ -- This morning, Strauss Group
(TASE: STRS) announced its financial results for the full year 2022
with revenue growth countered by profit and margin erosion. The
company's results demonstrate growth in most categories, including
the coffee business in Brazil and
Eastern Europe, the water business
in Israel and China, and most of Strauss's business
categories in Israel.
Revenues were impacted by the recall in the confectionery
division and the partial suspension of production in Sabra for
several months in 2022. Sabra's dips and spreads manufacturing site
in Virginia and the confectionery
plant in Nof Hagalil resumed production during 2022 and have
regained market share since. In March
2023, the confectionery division's market share reached an
average of 24%2, which is close to market share prior to
the recall, while Sabra's share of US hummus market was 31.2% at
the end of 2022 and was up to 37.6% in recent weeks, compared to
61.6% before the shutdown3.
The Group's revenue in 2022 grew 6.5% to NIS 9.5 billion (organic, excluding foreign
currency effects). Gross profit was down 12.3% and amounted to
NIS 2.8 billion, with the gross
margin falling to 29.8% compared to 36.9% in 2021. Gross profit and
margin erosion was largely due to the recall in the confectionery
division, the adjustment plan in the Sabra plant and the rising
prices of green coffee, raw milk, packaging materials and energy.
This led to erosion of the Company's operating profit, which
dropped 61.4% compared to 2021 to NIS 379
million, and to a decline of 72.9% in net profit, which
dropped to NIS 174 million.
Ofra Strauss, Chairperson of
Strauss Group: "2022 was a year in which we dealt with internal
and external challenges, whilst investing in the group's
infrastructure as a foundation for our future resilience. During
the past year, our commitment and values were a compass that guided
our path. It was crystal clear to us that we are a company that
places the health and safety of our consumers and people above
anything else.
"A company that handles the challenges of the present and builds
the future with a long-term vision. The strategy that we launched
at the beginning of 2022 included adjustments that the company is
required to make and capabilities that it is required to build over
the next ten years. This includes investing in production sites
infrastructures and in new technologies, nurturing the skills of
the company's employees and making organizational changes as per
our strategy.
"This is an opportunity to thank Giora
Bardea who recently retired from the role of CEO of the
group after 5 years, for his leadership, the ongoing management and
for preparing the group for the future; and I would like to wish
Shai all the best in these future endeavors.
"In the past few months, we made changes in the Group's
management. We are investing in innovation, upgrading our
production sites and continuously adapting ourselves to fulfill
emerging expectations, while maintaining our commitment to improve
our positive impact on people and on the environment."
Shai Babad, Strauss Group
CEO: "Strauss delivered growth that is the result of the strong
performance by the international coffee business, Strauss Water,
the food division, the dairies and salty snacks in Israel. Sabra in the US and the confectionery
division in Israel have resumed
production and are consistently growing their market shares.
"In Q4 2022, and even more so as we entered 2023, the Group
continued to implement its strategy, with three managerial focus
areas: Recover, Transform, Perform.
"In November 2022, we signed an
update to the partnership agreement in Brazil and its extension for another 20 years.
In December 2022, we approved an
investment for the construction of another plant for the production
of water bars in China. In
January 2023, we announced the
expansion of the water business in the UK through a partnership
with the global water treatment company, Culligan International,
and in February, 2023 , we terminated Obela's business in
Europe."
"At the end of 2022, Strauss Group parted ways with Giora Bardea, who stepped down from his post
after five years as CEO and almost 30 years at Strauss Group. This
is an opportunity for me to thank him personally for the way he
introduced me to the position, and for his personal and
professional support during my first months as CEO."
Strauss Israel ended 2022 with NIS 3.5 billion in sales, down 8.9%. The Company
delivered sales growth in all divisions, especially in dairies,
food, and salty snacks, which offset the drop in sales by the
confectionery division.
In 2022, Strauss Israel continued to launch new products to a
variety of communities, including new Danone Pro products, Pro
beverages, expansion of the Alpro offering of drinks in the
plant-based world, Danone Multi for the Third Age, and other
product variation launches throughout the year in the various
divisions.
Strauss Coffee's business in Israel grew 6.9%
in 2022 to NIS 778 million, thanks to
increased sales to the retail market and AFH channel. However,
operating profit and the operating margin eroded, mainly due to the
increase in green coffee prices as well as higher energy and
packaging material costs.
Sales by the coffee company in Brazil grew in 2022 to NIS 2.66 billion (50% ownership), an increase of
43.7% in local currency, largely the result of higher sales prices
as well as the weakening of the shekel against the Brazilian real.
The coffee business in Eastern
Europe also delivered double-digit growth in local currency
in all countries where the company is active: Russia-Ukraine, Poland, Romania and Serbia.
Sabra concluded 2022 with sales of NIS 328 million (50% ownership), a decline of
46.9% in local currency due to the shutdown of the plant in
Virginia from April until resuming
production in August. Obela ended the year with NIS 87 million in revenue (50% ownership), up
7.3% in local currency.
Strauss Water delivered another strong year with
6.7% organic sales growth, with sales rising to NIS 785 million thanks to growth in the customer
base and in sales of new appliances. In 2022, sales in China[4]
rose 7.8%, mainly due to growth in the number of points of sale,
despite lockdowns during part of the year due to renewed COVID-19
outbreaks. In December, HSW's board of directors decided to build a
second manufacturing site in China.
Non GAAP Figures (1)
|
|
Four Quarter
|
|
|
2022
|
2021
|
Change
|
Total Group Sales (NIS
mm)
|
2,460
|
2,262
|
8.7 %
|
Organic Sales Growth
excluding FX
|
3.5 %
|
12.6 %
|
|
Gross Profit (NIS
mm)
|
735
|
795
|
-7.6 %
|
Gross Margins
(%)
|
29.9 %
|
35.1 %
|
-520bps
|
EBITDA (NIS
mm)
|
168
|
271
|
-37.9 %
|
EBITDA Margins
(%)
|
6.8 %
|
12.0 %
|
-520bps
|
EBIT (NIS
mm)
|
64
|
179
|
-64.6 %
|
EBIT Margins
(%)
|
2.6 %
|
7.9 %
|
-530bps
|
Net Income Attributable
to the Company's Shareholders (NIS mm)
|
26
|
103
|
-76.1 %
|
Net Income Margin
(Attributable to the Company's Shareholders) (%)
|
1.0 %
|
4.6 %
|
-360bps
|
EPS (NIS)
|
0.21
|
0.89
|
-76.1 %
|
Operating Cash Flow
(NIS mm)
|
388
|
379
|
2.4 %
|
Capex (NIS mm)
(2)
|
148
|
129
|
14.7 %
|
Net debt (NIS
mm)
|
2,322
|
1,696
|
36.9 %
|
Net debt / annual
EBITDA
|
3.0x
|
1.3x
|
1.7x
|
(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)
|
|
|
|
|
|
|
|
|
|
|
Four
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. 2020
|
Sales and EBIT by
Operating Segments and Activities
|
|
|
|
|
|
|
|
|
Strauss
Israel:
|
|
|
|
|
|
|
|
|
Health &
Wellness
|
715
|
5.2 %
|
5.2 %
|
68
|
-12
|
-14.7 %
|
9.6 %
|
-220
bps
|
Fun & Indulgence
(2)
|
162
|
-44.2 %
|
-44.2 %
|
-53
|
-74
|
-357.2 %
|
-33.1 %
|
-4030
bps
|
Total Strauss
Israel
|
877
|
-9.6 %
|
-9.6 %
|
15
|
-86
|
-85.3 %
|
1.7 %
|
-870
bps
|
|
|
|
|
|
|
|
|
|
Strauss
Coffee:
|
|
|
|
|
|
|
|
|
Israel
Coffee
|
183
|
0.2 %
|
0.2 %
|
6
|
-29
|
-83.4 %
|
3.2 %
|
-1610
bps
|
International Coffee
(2)
|
1,087
|
42.2 %
|
25.8 %
|
76
|
31
|
74.9 %
|
7.1 %
|
+140 bps
|
Total Strauss
Coffee
|
1,270
|
34.1 %
|
21.3 %
|
82
|
2
|
3.8 %
|
6.5 %
|
-190
bps
|
|
|
|
|
|
|
|
|
|
International Dips
& Spreads:
|
|
|
|
|
|
|
|
|
Sabra (50%)
(2)
|
94
|
-30.0 %
|
-50.3 %
|
-25
|
-18
|
-278.9 %
|
-27.4 %
|
+320 bps
|
Obela (50%)
(2)
|
25
|
9.9 %
|
10.1 %
|
-1
|
0
|
-36.9 %
|
NM
|
NM
|
Total International
Dips & Spreads
|
119
|
-24.2 %
|
-30.5 %
|
-26
|
-18
|
266.0 %
|
-22.3 %
|
-1770
bps
|
|
|
|
|
|
|
|
|
|
Strauss
Water
|
193
|
3.1 %
|
3.2 %
|
23
|
1
|
5.9 %
|
12.0 %
|
+30
bps
|
|
|
|
|
|
|
|
|
|
Other (2)(3)
|
1
|
NM
|
NM
|
-30
|
-14
|
88.2 %
|
NM
|
NM
|
Total
Group
|
2,460
|
8.7 %
|
3.5 %
|
64
|
-115
|
-64.6 %
|
2.6 %
|
-530
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)
|
|
|
|
|
Year
|
|
2022
|
2021
|
Change
|
Total Group Sales (NIS
mm)
|
9,501
|
8,752
|
8.6 %
|
Organic Sales Growth
excluding FX
|
6.5 %
|
7.4 %
|
|
Gross Profit (NIS
mm)
|
2,834
|
3,230
|
-12.3 %
|
Gross Margins
(%)
|
29.8 %
|
36.9 %
|
-710
bps
|
EBITDA (NIS
mm)
|
774
|
1,329
|
-41.8 %
|
EBITDA Margins
(%)
|
8.1 %
|
15.2 %
|
-710
bps
|
EBIT (NIS
mm)
|
379
|
980
|
-61.4 %
|
EBIT Margins
(%)
|
4.0 %
|
11.2 %
|
-720
bps
|
Net Income Attributable
to the Company's Shareholders (NIS mm)
|
174
|
639
|
-72.9 %
|
Net Income Margin
Attributable to the Company's Shareholders (%)
|
1.8 %
|
7.3 %
|
-550
bps
|
EPS (NIS)
|
1.49
|
5.50
|
-73.0 %
|
Operating Cash Flow
(NIS mm)
|
479
|
991
|
-51.6 %
|
Capex (NIS mm)
(2)
|
435
|
328
|
32.6 %
|
Net debt (NIS
mm)
|
2,322
|
1,696
|
36.9 %
|
Net debt / annual
EBITDA
|
3.0x
|
1.3x
|
1.7x
|
(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)
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
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. 2021
|
Sales and EBIT
by
Operating Segments and
Activities
|
Strauss
Israel:
|
|
|
|
|
|
|
|
|
Health &
Wellness
|
2,784
|
3.6 %
|
3.6 %
|
280
|
-61
|
-17.6 %
|
10.1 %
|
-260
bps
|
Fun & Indulgence
(2)
|
712
|
-38.0 %
|
-38.0 %
|
-302
|
-412
|
-374.0 %
|
-42.5 %
|
-5210
bps
|
Total Strauss
Israel
|
3,496
|
-8.9 %
|
-8.9 %
|
-22
|
-473
|
-104.9 %
|
-0.6 %
|
-1230
bps
|
|
|
|
|
|
|
|
|
|
Strauss
Coffee:
|
|
|
|
|
|
|
|
|
Coffee
Israel
|
778
|
6.9 %
|
6.9 %
|
97
|
-58
|
-37.3 %
|
12.5 %
|
-880
bps
|
International Coffee
(2)
|
4,026
|
45.3 %
|
37.9 %
|
363
|
166
|
84.8 %
|
9.0 %
|
+190 bps
|
Total Strauss
Coffee
|
4,804
|
37.3 %
|
31.7 %
|
460
|
108
|
30.9 %
|
9.6 %
|
-50
bps
|
|
|
|
|
|
|
|
|
|
International Dips
& Spreads:
|
|
|
|
|
|
|
|
|
Sabra (50%)
(2)
|
328
|
-45.0 %
|
-46.9 %
|
-104
|
-139
|
-402.3 %
|
-31.6 %
|
-3030
bps
|
Obela (50%)
(2)
|
87
|
2.1 %
|
7.3 %
|
-7
|
-1
|
27.9 %
|
NM
|
NM
|
Total International
Dips & Spreads
|
415
|
-39.0 %
|
-40.7 %
|
-111
|
-140
|
-478.2 %
|
-26.9 %
|
-3120
bps
|
|
|
|
|
|
|
|
|
|
Strauss
Water
|
785
|
6.7 %
|
7.0 %
|
97
|
5
|
6.0 %
|
12.4 %
|
-10
bps
|
|
|
|
|
|
|
|
|
|
Other
(2)(3)
|
1
|
NM
|
NM
|
-45
|
-101
|
-179.8 %
|
NM
|
NM
|
Total
Group
|
9,501
|
8.6 %
|
6.5 %
|
379
|
-601
|
-61.4 %
|
4.0 %
|
-720
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)
|
Four
Quarter
|
|
2022
|
2021
|
Change
|
Sales
|
1,565
|
1,561
|
0.3 %
|
Cost of sales excluding
impact of commodity hedges
|
1,053
|
956
|
10.2 %
|
Adjustments for
commodity hedges
|
29
|
11
|
|
Cost of
sales
|
1,082
|
967
|
11.8 %
|
Gross
profit
|
483
|
594
|
-18.6 %
|
% of sales
|
30.9 %
|
38.0 %
|
|
Selling and marketing
expenses
|
347
|
363
|
-4.4 %
|
General and
administrative expenses
|
111
|
107
|
3.7 %
|
Total
expenses
|
458
|
470
|
-2.6 %
|
Share of profit of
equity-accounted investees
|
-5
|
42
|
-113.9 %
|
Share of profit (loss)
of equity-accounted incubator investees
|
-15
|
-4
|
232.4 %
|
Operating profit
before other expenses
|
5
|
162
|
-97.0 %
|
% of sales
|
0.3 %
|
10.4 %
|
|
Other expenses,
net
|
-20
|
-5
|
|
Operating profit
after other expenses
|
-15
|
157
|
-110.1 %
|
Financing expenses,
net
|
-16
|
-33
|
-51.9 %
|
Income before taxes
on income
|
-31
|
124
|
-125.9 %
|
Taxes on
income
|
10
|
-22
|
-145.1 %
|
Effective tax
rate
|
30.6 %
|
17.6 %
|
|
Income for the
period
|
-21
|
102
|
-121.8 %
|
Attributable to the
Company's shareholders
|
-32
|
87
|
-137.1 %
|
Attributable to
non-controlling interests
|
11
|
15
|
-30.0 %
|
Condensed financial
accounting (GAAP)
|
Year
|
|
2022
|
2021
|
Change
|
Sales
|
6,105
|
6,074
|
0.5 %
|
Cost of sales excluding
impact of commodity hedges
|
4,104
|
3,642
|
12.7 %
|
Adjustments for
commodity hedges
|
25
|
10
|
|
Cost of
sales
|
4,129
|
3,652
|
13.1 %
|
Gross
profit
|
1,976
|
2,422
|
-18.4 %
|
% of sales
|
32.4 %
|
39.9 %
|
|
Selling and marketing
expenses
|
1,359
|
1,344
|
1.1 %
|
General and
administrative expenses
|
425
|
420
|
1.2 %
|
Total
expenses
|
1,784
|
1,764
|
1.1 %
|
Share of profit of
equity-accounted investees
|
80
|
192
|
-58.8 %
|
Share of profit (loss)
of equity-accounted incubator investees
|
-26
|
71
|
-136.9 %
|
Operating profit
before other expenses
|
246
|
921
|
-73.3 %
|
% of sales
|
4.0 %
|
15.2 %
|
|
Other expenses,
net
|
-54
|
-5
|
|
Operating profit
after other expenses
|
192
|
916
|
-79.1 %
|
Financing expenses,
net
|
-41
|
-80
|
-48.5 %
|
Income before taxes
on income
|
151
|
836
|
-82.0 %
|
Taxes on
income
|
-34
|
-156
|
-78.1 %
|
Effective tax
rate
|
22.7 %
|
18.6 %
|
|
Income for the
period
|
117
|
680
|
-82.9 %
|
Attributable to the
Company's shareholders
|
64
|
609
|
-89.6 %
|
Attributable to
non-controlling interests
|
53
|
71
|
-25.9 %
|
Conference Call
Strauss Group will host a Zoom conference call in Hebrew on
Thursday, March 23, 2023 at 14:00
(Israel time) with the
participation of company management to review the financial
statements of the company for the fourth quarter and full year of
2022. Following is information for those wishing to join the
conference:
Meeting URL:
https://go-live-il.zoom.us/j/82891659796?pwd=djlaYzVUOThzVHBuNzFpNjRYSEdMdz09
Strauss Group will also host a Zoom conference call in English
on Thursday, March 23, 2023 at 16:30
(Israel time) with the
participation of company management to review the financial
statements of the company for the fourth quarter and full year of
2022.
Meeting URL:
https://strauss-group.zoom.us/j/97423028214?pwd=bnpySVlmT1UzV1N6ckdINDlkU1REQT09
Password: 080156
A recording of the calls will subsequently be available on the
company's website at:
http://ir.strauss-group.com/phoenix.zhtml?c=92539&p=irol-conferencecalls
The financial statements of the company for the fourth quarter
and full year 2022 and the presentation that will accompany the
conferences will be available prior to the conference calls on the
following websites:
http://www.tase.co.il
http://www.magna.isa.gov.il
http://ir.strauss-group.com/phoenix.zhtml?c=92539&p=irol-irhome
[1] Organic, excluding foreign currency effects
[2] Source: StoreNext, based on a report published in February 2023
[3] Source: IRI
[4] Reported separately
For further information, please contact:
Osnat
Golan
VP Communications,
Corporate Brand & Sustainability
Strauss Group
Ltd.
972-52-828-8111
972-3-675-2281
Osnat.Golan@Strauss-Group.com
|
Daniella
Finn
Director of Investor
Relations
Strauss Group
Ltd.
972-54-426-2636
972-3-675-2545
Daniella.Finn@Strauss-Group.com
|
|
Shlomi Sheffer
External
Communications Director
Strauss Group
Ltd.
972-50-620-8000
972-3-675-6713
Shlomi.Sheffer@Strauss-Group.com
|
View original
content:https://www.prnewswire.com/news-releases/strauss-group-posts-a-6-5-sales-growth1-for-fy-2022-and-revenues-of-nis-9-5-billion-net-profit-declines-73-to-nis-174-million-301779604.html
SOURCE Strauss Group Ltd.