Strauss Group Announces Results For Second Quarter And First Half 2013

TEL AVIV, Israel, Aug. 20, 2013 /PRNewswire/ -- Gadi Lesin, President and Chief Executive Officer of the Strauss Group (TASE: STRS), said today, "The Group continued to post strong performance in the quarter and top-line growth in all activity segments, particularly Strauss Israel. Focused strategy, innovation, investment in strengthening our brands and smart cost management also led to significant growth in the Group's operating and net profit."

Implementation of IFRS 11 – Joint Arrangements

Commencing in the first quarter of 2013 Strauss Group has applied IFRS 11 – Joint Arrangements. The significance of the standard is that businesses which are jointly controlled by Strauss and a partner are no longer presented according to Strauss's relative holding in the entity, but in a separate row ("Income of equity-accounted investees" in the statements of income and in the other statements in the relevant section). The reporting method does not alter the Group's profit. As this is a change in reporting method only, and in light of the fact that the Group's non-GAAP reports and the manner in which Management measures the results of operations of subsidiaries and the jointly owned companies have remained unchanged, the Group continues to present the activity segments in the identical manner in which they were presented in prior periods.

Key data on the second quarter of 2013 and as at June 30, 2013 ⁽¹⁾

• Sales totaled NIS 2.0 billion (NIS 1.9 billion last year), an increase of 4.2%; excluding the impact of changes in exchange rates, organic sales grew by 8.2% over last year.
• Non-GAAP gross profit totaled NIS 751 million (37.2% of sales) compared to NIS 665 million in the corresponding quarter last year (34.3% of sales), an increase of 13.0%.
• Non-GAAP operating profit (EBIT) totaled NIS 185 million (9.1% of sales) compared to NIS 125 million in the corresponding quarter last year (6.4% of sales), an increase of 48.0%. The growth was primarily due to the significant growth in the profits of the Group's international operations.
• Non-GAAP net income attributable to the Company's shareholders totaled NIS 75 million (3.7% of sales) compared to NIS 35 million in the corresponding quarter last year (1.8% of sales), an increase of 117.2%.
• Cash flows from operating activities (non-GAAP) amounted to a positive cash flow of NIS 236 million compared to a positive cash flow of NIS 250 million in the corresponding quarter last year.
• Net credit (non-GAAP) as at June 30, 2013 totaled NIS 1,403 million (compared to NIS 1,679 million on June 30, 2012 and NIS 1,422 million on December 31, 2012).

Key data on the first half of 2013 and as at June 30, 2013⁽¹⁾

• Sales totaled NIS 4.0 billion (NIS 4.0 billion in the corresponding half last year), an increase of 0.7%; excluding the impact of changes in exchange rates, organic sales grew by 4.3%.
• Non-GAAP gross profit totaled NIS 1,518 million (37.7% of sales) compared to NIS 1,396 million in the corresponding half last year (34.9% of sales), an increase of 8.8%.
• Non-GAAP operating profit (EBIT) totaled NIS 399 million (9.9% of sales) compared to NIS 293 million in the corresponding half last year (7.3% of sales), an increase of 36.3%, primarily as a result of the significant growth in the profits of the Group's international operations.
• Non-GAAP net income attributable to the Company's shareholders totaled NIS 178 million (4.4% of sales) compared to NIS 100 million in the corresponding half last year (2.5% of sales), an increase of 77.9%.
• Cash flows from operating activities (non-GAAP) amounted to a positive cash flow of NIS 234 million compared to a positive cash flow of NIS 233 million in the corresponding half last year.
• Net credit (non-GAAP) as at June 30, 2013 totaled NIS 1,403 million (compared to NIS 1,679 million on June 30, 2012 and NIS 1,422 million on December 31, 2012).

⁽¹⁾Based on non-GAAP data, which include the proportionate consolidation of jointly-held partnerships (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, and other income and expenses, unless stated otherwise

Following are the condensed results of business operations (based on the Company's non-GAAP management reports) for the quarter and the half ended June 30, 2013 and 2012 (in NIS millions)*:

Following are the condensed results of business operations (based on non-GAAP management reports) of the major business sectors for the quarter and the half ended June 30, 2013 and 2012 (in NIS millions)*:

* Financial data were rounded off to NIS millions. The percentages change were calculated on the basis of the exact figures in NIS thousands.

Following are the condensed financial accounting statements of income (GAAP) for the quarter and the half ended June 30, 2013 and 2012 (in NIS millions)*:

* Financial data were rounded off to NIS millions. The percentages change were calculated on the basis of the exact figures in NIS thousands.

Following are the adjustments to the Company's non-GAAP management reports (NIS millions)*:

- Adjustments for IFRS 11 – change from the equity method in the GAAP report to the proportionate consolidation method (according to the segmental information based on the Group's management accounting (non-GAAP) and internal reports):

* Financial data were rounded off to NIS millions. The percentages change were calculated on the basis of the exact figures in NIS thousands.

-       Additional adjustments to the non-GAAP management reports (share-based payment, valuation of hedging transactions, other expenses and taxes referring to these adjustments)*:

* Financial data were rounded off to NIS millions. The percentages change were calculated on the basis of the exact figures in NIS thousands.

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SOURCE Strauss Group