Strauss Group President & CEO Shai Babad commented: "The Group continues to deliver growth in most businesses and is concentrating on implementing its strategic plan, which calls for focus on core business, on investments, and on the development of growth engines that will drive the Group forward in the next few years. Our sales growth is accompanied by the constant need to contend with the ongoing uptrend in raw material prices, which is taking a toll on the Group's margins. The food industry is a meaningful part of Israel's civilian "Iron Dome". Strauss has manufacturing sites to the length of the country, from north to south, and together with our farmers, we are committed to food security and to sustaining the strength of Israeli industry."
PETAH TIKVA, Israel, Aug. 29, 2024 /PRNewswire/ -- This morning, Strauss Group (TASE: STRS) published its financial statements, summing up the first half of 2024 with growth in revenues, which totaled NIS 5.3 billion, up 3.2% compared to the corresponding half last year. Operating profit was NIS 355 million, 6.7% of total sales. Operating profit was significantly impacted by the increase in raw material prices, which led to a decline of 6.0% compared to last year. Net profit was NIS 242 million, reflecting an increase of 10.6% compared to the first six months of 2023.
Strauss Group concluded the second quarter of 2024 with revenues of NIS 2.8 billion, up 4.9% compared to the same quarter last year. Operating profit in the quarter was NIS 151 million, down 10.3% compared to the corresponding period, and constituted 5.5% of total quarterly sales. Net income attributable to shareholders of the Company was NIS 83 million, a decline of 2.4% compared to the second quarter of 2023.
Results
H1 2024
H1 2023
Sales
NIS 5,343M
NIS 5,179M
% change
+3.2 %
Operating profit
NIS 355M
NIS 379M
% change
-6.0 %
% of sales
6.7 %
7.3 %
Net profit
NIS 242M
NIS 219M
% change
+10.6 %
Q2 2024 summary by operating segment:
Strauss Israel – revenue growth and higher operating profit.
Strauss Israel delivered revenues of NIS 2,521 million in the first half of 2024, up 3.9% compared to the corresponding half last year, and in the second quarter, revenues were NIS 1,212 million, up 6.3%. Strauss Israel's operating profit in the first half was NIS 250 million, up 5.1%, and in the second quarter, operating profit was NIS 99 million, up 9.5%.
Sales by the Health & Wellness segment in the first six months were NIS 1,485 million, down 0.8% compared to the corresponding period last year, and in the second quarter, sales were NIS 754 million, unchanged in relation to the same quarter last year. Operating profit in the first half was NIS 166 million, up 2.3% compared to the corresponding period, and in the second quarter, operating profit was NIS 92 million, up 18.4% compared to the second quarter of 2023.
Sales by the Fun & Indulgence (Snacks and Confectionery) segment in the first half were NIS 632 million, up 20.9%, and in the second quarter, sales were NIS 271 million, up 24.8% compared to the corresponding quarter last year. In the six-month period, the segment delivered operating profit of NIS 30 million, an increase of 28.5% over the first half last year, and in the second quarter, delivered an operating loss of NIS 12 million. The confectionery operation's market share in the quarter was 26.9%2, a slight increase over the same quarter last year.
The Fun & Indulgence (Israel Coffee) segment concluded the first six months with sales of NIS 404 million, down 0.7% compared to the same period last year, and sales of NIS 187 million in the second quarter, an increase of 10.7% compared to the corresponding period. The segment's operating profit in six-month period was NIS 54 million, up 2.9%, and in the second quarter, operating profit was NIS 19 million, up 35.5%.
Strauss International Coffee – revenue growth
Strauss International Coffee concluded the first half with revenues of NIS 2,159 million, up 2.9% compared to the corresponding period last year, and closed the second quarter with revenues of NIS 1,205 million, up 5.0% compared to the same quarter in 2023. Strauss International Coffee's operating profit was NIS 99 million in the first six months, down 27.5% compared to the corresponding period, and NIS 61 million in the second quarter, down 20.8% compared to the same quarter last year.
The coffee business in Brazil (for 50%) concluded the first six months of 2024 with NIS 1,487 million in revenues, up 5.9%, and revenues of NIS 842 million in the second quarter, an increase of 7.6% compared to last year. The business in Brazil concluded the first half with NIS 51 million in operating profit, down 25% compared to last year, and operating profit of NIS 38 million in the second quarter, down 3.6% compared to the second quarter of 2023.
Três Corações' average value market share in roasted and ground coffee (R&G) in the first half of 2024 reached 32.9%, compared to 33.8% last year.
The coffee business in Russia and Ukraine ended the first half with sales of NIS 312 million, down 7.2%, and sales of NIS 183 million in the second quarter, an increase of 6.8%. Sales by the coffee business in Romania in the half-year period were NIS 105 million, down 6.1%, and in the second quarter, sales were NIS 60 million, down 2.0% compared to the same quarter last year. In Poland, coffee sales in the first half were NIS 205 million, an increase of 21%, and in the second quarter, NIS 102 million, an increase of 13.2%.
Strauss Water – stronger revenue and margins
Strauss Water concluded the first half of 2024 with revenues of NIS 403 million, up 2.9% compared to the corresponding half last year, and revenues of NIS 210 million in the second quarter, up 2.9% compared to the same quarter last year. Operating profit in the first half was NIS 49 million, up 7.6%, and operating profit in the second quarter was NIS 25 million, up 5.3%. The water business in China (for 100%) concluded the first six months with sales of NIS 446 million, up 13.1%, and sales of NIS 230 million in the second quarter, up 12.7% compared to last year. The business in China (for 100%) ended the first half with net profit of NIS 53 million, an increase of 10.4%, and net profit of NIS 26 million in the second quarter, an increase of 11.3% compared to the same quarter last year.
Sabra and Obela – operating break-even
Sabra's sales (for 50%) in the first half of 2024 were NIS 220 million, down 0.6%, and in the second quarter, sales were NIS 110 million, down 5.5% compared to corresponding period last year. Sabra's operating profit in the first half was NIS 4 million, and in the second quarter, the company recorded an operating loss of NIS 2 million.
Obela delivered sales (for 50%) of NIS 37 million in the first six months, down 2.2%, and in the second quarter, Obela's sales were NIS 17 million, down 0.2% compared to last year. Obela recorded an operating loss of NIS 1 million in the half-year period and of NIS 2 million in the quarter.
According to Circana3, Sabra's average market share of the hummus market in the quarter ended June 30, 2024 was 36.6% (Number 1 in the market), compared to 38.5% in the corresponding period last year.
Non GAAP Figures (1)
Second Quarter
2024
2023
Change
Total Group Sales (NIS mm)
2,754
2,625
4.9 %
Organic Sales Growth excluding FX
6.0 %
12.4 %
Gross Profit (NIS mm)
841
839
0.4 %
Gross Margins (%)
30.5 %
31.9 %
-140 bps
EBITDA (NIS mm)
262
275
-4.4 %
EBITDA Margins (%)
9.6 %
10.5 %
-90 bps
EBIT (NIS mm)
151
171
-10.3 %
EBIT Margins (%)
5.5 %
6.5 %
-100 bps
Net Income Attributable to the Company's Shareholders (NIS mm)
83
85
-2.4 %
Net Income Margin Attributable to the Company's Shareholders (%)
3.0 %
3.2 %
-20 bps
EPS (NIS)
0.71
0.72
-2.5 %
Operating Cash Flow (NIS mm)
14
61
Capex (NIS mm) (2)
133
127
Net debt (NIS mm)
3,223
2,977
8.3 %
Net debt / annual EBITDA
2.7x
3.0x
(0.3x)
(1) The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlledbusinesses and do not include share-based payment, mark-to-market at end-of-period of open positions in the Group in respect of financialderivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodityderivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding thoseitems, 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)
