Strauss: A slight decrease in revenue and an increase in net...

This morning, the Strauss Group publishes its results for the third quarter of 2020 and for the first nine months of the year.

The Group ended the third quarter of 2020 with revenues of approximately NIS 2.17 billion and the first nine months of the year with revenues of approximately NIS 6.3 billion, an increase of approximately 3.9% and approximately 4.5%, respectively (organically neutralizing the effect currency). Due to currency erosion, the company shows a decrease of 3.1% in revenue in the third quarter and a decrease of 2.2% in revenue in the first nine months of the year compared to the corresponding periods last year.

The effect of exchange rates on the Company’s sales in the third quarter amounted to approximately NIS 163 million, of which approximately NIS 136 million is due to the weakening of the Brazilian real against the shekel, while quantitative sales and market share in Brazil grew.

The effect of the erosion of exchange rates in the first nine months of 2020 amounted to NIS 429 million, of which NIS 351 million was due to the weakening of the Brazilian real against the shekel. Operating profit amounted to NIS 250 million, an increase of 4.8% (currency neutralized), in translation to shekels a decrease of 2.3% compared to the corresponding quarter last year, the operating profit margin is about 11.5% – an increase of about 0.1 % Compared to the corresponding quarter last year.

Net income (attributable to shareholders) amounted to NIS 158 million in the quarter, compared with NIS 153 million in the corresponding quarter – the increase in profit was due to a decrease in the Company’s financing and taxes expenses. The net profit in the first nine months of the year amounted to NIS 464 million, an increase of 4.1% compared with the corresponding period last year.

Group CEO Giora Bar-Dea: “The Strauss Group continues to present strong business performance despite the significant global effects of the Corona crisis on its operations. In the first nine months of 2020 and in the third quarter of the year, the company shows an improvement in activity mainly in channels and categories that are biased towards domestic consumption alongside a significant weakening in categories and channels of consumption outside the home that intensified in the third quarter due to the second closure in Israel.

Managerial stability, business diversity between categories, channels and markets, as well as significantly improved financial strength during the period in question, enable a company that has learned to “live with the corona” and complexity, to show improvement and organic growth in sales, while improving operating profitability and net profit.

During this period, the Group continues to invest significant resources in order to maintain continuity and operational and business while maintaining maximum health and safety of its employees at all sites around the world. Looking ahead, the company continues and even strengthens its investment in the development of categories and industries with growth potential, including milk substitutes of all kinds, health products, fresh food, coffee capsules and deepening the entry into the POE (Point Of Entry category in China).

Moreover, during the period in question, the group continues to invest in the development and upgrade of existing production lines and the establishment of new plants, including the water company’s production plant in China, an innovative warehouse and distribution center in Ukraine, a new natural flavor plant in Kibbutz Bror Hayal and the acquisition of Mitzui’s coffee operations in Brazil.

The company’s financial stability allows it, especially at this time, to look for business opportunities in Israel and around the world in a wide range of activities in order to expand its activities as it sees fit. At the same time, the group continues and even deepens its social investment in supporting corona-affected populations and sees itself as part of the effort to maintain socio-economic resilience in every country in which it operates.

The Strauss Group sums up the period with improved results, against the background of the many and varied challenges in which the second closure in Israel, the erosion of the currency against the shekel and more. In retail activity, Strauss shows an increase in sales mainly in the categories of home consumption products, but at the same time the closure of restaurants, hotels and cafes for extended periods as well as the decline in impulse purchases negatively affected the group’s revenues in most companies.