G. Willi-Food international Reports the Results of Third Quarter 2020 Which Show the Highest Ever Quarterly Income Before Tax on Income and Net Profit (Increase by 114.3% and 112.2% Year Over Year)
11/10/2020 - 04:29 AM
YAVNE, Israel , Nov. 10, 2020 /PRNewswire/ -- G. Willi-Food International Ltd. (NASDAQ: WILC) (TASE: WILF) (the "Company " or "Willi-Food "), a global company that specializes in the development, marketing and international distribution of kosher foods, today announced its unaudited financial results for the third quarter ended September 30, 2020 .
Third Quarter Fiscal Year 2020 Highlights
Sales increased by 17.4% year-over-year to NIS 111.9 million (US$ 32.5 million ). Gross profit increased by 14.1% year-over-year to NIS 34.0 million (US$ 9.9 million ). Operating profit of NIS 14.0 million (US$ 4.1 million ), or 12.5% of sales, which represents a 11.8% increase from NIS 12.6 million (US$ 3.6 million ) in the comparable quarter of 2019. Net profit increased by 112.2% year-over-year to NIS 21.9 million (US$ 6.4 million ), or 19.6% of sales. Net cash from operating activities of NIS 28.2 million (US$ 8.2 million ). Cash and securities balance of NIS 364.6 million (US$ 106.0 million ) as of September 30, 2020 . Earnings per share of NIS 1.63 (US$ 0.47) . Management Comment
Zwi Williger & Joseph Williger , Co-Chairmen of Willi-FoodNIS 14.5 million . In part because of this, the Company recorded its highest profit before taxes on income and net profit ever this quarter. The Company's strategy in the near future is to develop new products, enter new categories with the potential for high gross profit, improve the visibility of its products in the stores, and strengthen its brands and supply chain. Our strong performance in the third quarter was driven by our pursuit of this goals. We believe that with our current management team the Company will remain focused on achieving the goals it has set for itself and continue improving its results in the future."
According to retail data analytics provided by StoreNext Ltd[1] , the Company recorded growth of 27.3% in the first nine months of 2020 for "sale out" sales (in other words, sales to the final consumer) compared to an 8.7% average increase for the food and beverage industry as a whole.
Third Quarter Fiscal 2020 Summary
Sales for the third quarter of 2020 increased by 17.4% to NIS 111.9 million (US$ 32.5 million ) from NIS 95.4 million (US$ 27.7 million ) recorded in the third quarter of 2019. Sales increased primarily due to a redirection of resources in favor of sales, increasing the variety of the Company's products and improved inventory management.
Gross profit for the third quarter of 2020 increased by 14.1% to NIS 34.0 million (US$ 9.9 million ) compared to NIS 29.8 million (US$ 8.7 million ) recorded in the third quarter of 2019. The increase in gross profit was due to increase in sales.
Selling expenses increased by 17.9% to NIS 14.5 million (US$ 4.2 million ) compared to NIS 12.3 million (US$ 3.6 million ) in the third quarter of 2019. The increase in selling expenses was primarily due to an increase in payroll expenses in the logistics department as a result of working in two shifts to comply with government workplace restrictions due to the COVID-19 pandemic, and an increase of freight to customers' expenses to support sales growth.
General and administrative expenses increased by 10.5% to NIS 5.5 million (US$ 1.6 million ) compared to NIS 5.0 million (US$ 1.4 million ) in the third quarter of 2019. The increase in general and administrative expenses was primarily due to an increase in payroll expenses.
As a result of the foregoing, operating profit for the third quarter of 2020 increased by 11.8% to NIS 14.0 million (US$ 4.1 million ) compared to NIS 12.6 million (US$ 3.6 million ) in the third quarter of 2019.
Finance income, net totaled NIS 14.5 million (US$ 4.2 million ) compared to NIS 0.8 million (US$ 0.2 million ) in the third quarter of 2019. The increase in finance income, net was primarily due to an increase in interest income and dividends received from the Company's securities portfolio and from revaluation of the Company's securities portfolio to its fair value.
Income before taxes on income for the third quarter of 2020 increased by 114.3% to NIS 28.5 million (US$ 8.3 million ) compared to NIS 13.3 million (US$ 3.9 million ) in the third quarter of 2019.
Net profit in the third quarter of 2020 increased by 112.2% to NIS 21.9 million (US$ 6.4 million ), or NIS 1.63 (US$ 0.47) per share, compared to NIS 10.3 million (US$ 3.0 million ), or NIS 0.78 (US$ 0.23) per share, recorded in the third quarter of 2019.
Willi-Food ended the third quarter of 2020 with NIS 364.6 million (US$ 106.0 million ) in cash and securities. Net cash from operating activities for the third quarter of 2020 was NIS 28.2 million (US$ 8.2 million ). Willi-Food's shareholders' equity at the end of September 2020 was NIS 572.1 million (US$ 166.3 million ).
First Nine Months of Fiscal 2020 Highlights
Sales increased by 17.7% year-over-year to NIS 345.2 million (US$ 100.3 million ). Gross profit increased by 28.0% year-over-year to NIS 115.1 million (US$ 33.4 million ). Operating profit increased by 42.6% year-over-year to NIS 49.9 million (US$ 14.5 million ), or 14.5% of sales. Net profit increased by 2.3% to NIS 38.3 million (US$ 11.1 million ), or 11.1% of sales. Net cash from operating activities of NIS 60 million (US$ 17.4 million ). Earnings per share of NIS 2.88 (US$ 0.84) . First Nine Months of Fiscal 2020 Summary
Willi-Food's sales for the nine-month period ending September 30, 2020 increased by 17.7% to NIS 345.2 million (US$ 100.3 million ) compared to sales of NIS 293.3 million (US$ 85.3 million ) in the first nine months of 2019. Sales increased primarily due to the COVID-19 pandemic, which led to an increase in demand for the Company's products, primarily in retail chains, and due to a redirection of resources in favor of sales, increasing the variety of the Company's products and improved inventory management.
Gross profit for the period increased by 28.0% to NIS 115.1 million (US$ 33.4 million ) compared to gross profit of NIS 89.9 million (US$ 26.1 million ) for the first nine months of 2019. The increase in gross profit was primarily due to the increase in sales.
Gross margin for the first nine months of 2020 was 33.3% compared to a gross margin of 30.6% for the same period in 2019. The increase in gross margin was primarily due to the Company's strategy of selling a more favorable mix of products which generate a higher gross margin.
Operating profit for the first nine months of 2020 increased by 42.6% to NIS 49.9 million (US$ 14.5 million ) from NIS 35.0 million (US$ 10.2 million ) reported in the comparable period of last year primarily due to the increase of gross profit.
Finance income, net totaled to NIS 0.4 million (US$ 0.1 million ) compared to NIS 12.5 million (US$ 3.6 million ) in the first nine months of 2019. At the beginning of the year as a result of the COVID-19 pandemic, capital markets recorded sharp declines and, as a result, the Company suffered a decline in the value of its portfolio of securities in the first quarter of 2020. Since that time, capital markets have recovered somewhat and as a result the Company recorded gains from its portfolio of securities. As of the date of publication of the financial statement, the Company has recognized revenues from its portfolio of securities that amounted to approximately NIS 2.5 million (US$ 0.7 million ) since the beginning of the year.
Income before taxes for the first nine months of 2020 increased by 6.0% to NIS 50.3 million (US$ 14.6 million ) compared to NIS 47.5 million (US$ 13.8 million ) recorded in the first nine months of 2019.
Net profit for the first nine months of 2020 increased by 2.3% to NIS 38.3 million (US$ 11.1 million ), or NIS 2.88 (US$ 0.84) per share, from NIS 37.4 million (US$ 10.9 million ), or NIS 2.83 (US$ 0.82) per share, recorded in the first nine months of 2019.
[1] StoreNext Ltd. has a direct connection to the cash register systems of over 2,200 points of sales, providing information regarding 80% of real time sales data in Israel .
NOTE A: NIS to US$ exchange rate used for convenience only
The convenience translation of New Israeli Shekels (NIS) into U.S. dollars was made at the rate of exchange prevailing on September 30, 2020 , U.S. $1.00 NIS 3 .44 The translation was made solely for the convenience of the reader.
NOTE B: IFRS
The Company's consolidated financial results for the three-month and nine-month period ended September 30, 2020 are presented in accordance with International Financial Reporting Standards ("IFRS").
About G. Willi-Food International Ltd.
G. Willi-Food International Ltd. (http://www.willi-food.com ) is an Israeli-based company specializing in high-quality, great-tasting kosher food products. Willi-Food is engaged directly and through its subsidiaries in the design, import, marketing and distribution of over 600 food products worldwide. As one of Israel's leading food importers, Willi-Food markets and sells its food products to over 1,250 customers and 2,500 selling points in Israel and around the world including large retail and private supermarket chains, wholesalers and institutional consumers. The Company's operating divisions include Willi-Food in Israel and Euro European Dairies, a wholly owned subsidiary who designs, develops and distributes branded kosher, dairy-food products.
FORWARD LOOKING STATEMENT
This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, such as statements regarding trends, demand for our products and expected sales, operating results, and earnings. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements. These risks and other factors include but are not limited to: monetary risks including changes in marketable securities or changes in currency exchange rates- especially the NIS/U.S. Dollar exchange rate, payment default by any of our major clients, the loss of one of more of our key personnel, changes in laws and regulations, including those relating to the food distribution industry, and inability to meet and maintain regulatory qualifications and approvals for our products, termination of arrangements with our suppliers, loss of one or more of our principal clients, increase or decrease in global purchase prices of food products, increasing levels of competition in Israel and other markets in which we do business, changes in economic conditions in Israel , including in particular economic conditions in the Company's core markets, our inability to accurately predict consumption of our products and changes in consumer preferences, our inability to protect our intellectual property rights, our inability to successfully integrate our recent acquisitions, insurance coverage not sufficient enough to cover losses of product liability claims, risks associated with product liability claims and risks associated with the start of credit extension activity. We cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading "Risk Factors" in the Company's Annual Report on Form 20-F for the year ended December 31, 2019 , filed with the Securities and Exchange Commission on March 19, 2020 . These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking information contained in this press release.
G. WILLI-FOOD INTERNATIONAL LTD.
September 30,
December 31
September 30,
December 31
2 0 2 0
2 0 1 9
2 0 1 9
2 0 2 0
2 0 1 9
2 0 1 9
NIS
US dollars (*)
(in thousands)
ASSETS
Current assets
Cash and cash equivalents
214,408
141,685
121,860
62,310
41,176
35,414
Financial assets carried at fair value
150,197
142,443
141,543
43,649
41,396
41,134
Trade receivables
136,748
120,895
133,039
39,741
35,134
38,663
Loans to others
3,650
19,796
17,650
1,061
5,753
5,129
Current tax
435
-
-
126
-
-
Other receivables and prepaid expenses
3,646
4,686
9,360
1,060
1,361
2,719
Inventories
56,677
39,268
71,548
16,471
11,412
20,793
Total current assets
565,761
468,773
495,000
164,418
136,232
143,852
Non-current assets
Property, plant and equipment
83,394
80,637
81,402
24,235
23,434
23,656
Less -Accumulated depreciation
46,675
42,951
43,881
13,564
12,482
12,752
36,719
37,686
37,521
10,671
10,952
10,904
Right of use asset
3,208
2,852
3,860
932
829
1,122
Financial assets carried at fair value through profit or loss
9,273
-
-
2,695
-
-
Goodwill
36
36
36
10
10
10
Deferred taxes
1,047
853
818
304
248
238
Total non-current assets
50,283
41,427
42,235
14,612
12,039
12,274
616,044
510,200
537,235
179,030
148,271
156,126
EQUITY AND LIABILITIES
Current liabilities
Current maturities of lease liabilities
1,520
1,374
1,675
442
399
487
Current tax liabilities
-
3,104
3,750
-
902
1,090
Trade payables
25,325
12,580
24,650
7,360
3,656
7,164
Employees Benefits
3,114
2,766
2,911
905
804
846
Other payables and accrued expenses
10,509
10,244
9,195
3,053
2,977
2,672
Total current liabilities
40,468
30,068
42,181
11,760
8,738
12,259
Non-current liabilities
Lease liabilities
1,806
1,496
2,212
525
435
642
Retirement benefit obligation
1,628
938
1,486
473
273
431
Total non-current liabilities
3,434
2,434
3,698
998
708
1,073
Shareholders' equity
Share capital
1,490
1,425
1,425
433
414
414
Additional paid in capital
170,760
128,354
128,354
49,625
37,301
37,301
Capital fund
247
247
247
72
72
72
Treasury shares
(628)
(625)
(628)
(183)
(182)
(183)
Remeasurement of the net liability in respect of defined benefit
(1,029)
(623)
(1,029)
(299)
(181)
(299)
Retained earnings
401,302
348,920
362,987
116,624
101,401
105,489
Equity attributable to owners of the Company
572,142
477,698
491,356
166,272
138,825
142,794
616,044
510,200
537,235
179,030
148,271
156,126
(*) Convenience translation into U.S. dollars.
G. WILLI-FOOD INTERNATIONAL LTD.
Nine months
Three months
Nine months
ended
ended
ended
September 30,
September 30,
September 30,
2 0 20
2 0 1 9
2 0 20
2 0 1 9
2 0 20
2 0 1 9
NIS
US dollars (*)
In thousands (except per share and share data)
Sales
345,189
293,298
111,933
95,364
100,316
85,236
Cost of sales
230,133
203,443
77,902
65,535
66,880
59,123
Gross profit
115,056
89,855
34,031
29,829
33,436
26,113
Operating costs and expenses:
Selling expenses
47,344
39,540
14,522
12,316
13,758
11,491
General and administrative expenses
17,823
15,295
5,483
4,963
5,180
4,445
Other income
58
-
-
-
17
-
Total operating expenses
65,109
54,835
20,005
17,279
18,921
15,936
Operating profit
49,947
35,020
14,026
12,550
14,515
10,177
Financial income
3,689
15,888
14,704
2,895
1,072
4,617
Financial expense
3,313
3,428
231
2,138
963
996
Total financial income
376
12,460
14,473
757
109
3,621
Income before taxes on income
50,323
47,480
28,499
13,307
14,624
13,798
Taxes on income
12,007
10,037
6,582
2,977
3,489
2,917
Profit for the period
38,316
37,443
21,917
10,330
11,135
10,881
Earnings per share:
Basic/diluted earnings per share
2.88
2.83
1.63
0.78
0.84
0.82
Shares used in computation of
13,289,239
13,217,017
13,433,684
13,217,017
13,289,239
13,217,017
Actual numbers of shares
13,867,017
13,217,017
13,867,017
13,217,017
13,867,017
13,217,017
(*) Convenience translation into U.S. dollars.
G. WILLI-FOOD INTERNATIONAL LTD.
Nine months
Three months
Nine months
ended
ended
ended
September 30,
September 30,
September 30,
2 0 20
2 0 1 9
2 0 20
2 0 1 9
2 0 20
2 0 1 9
NIS
US dollars (*)
(in thousands)
CASH FLOWS - OPERATING ACTIVITIES
Profit from continuing operations
38,316
37,443
21,917
10,330
11,135
10,881
Adjustments to reconcile net profit to net cash used in
(used to) continuing operating activities (Appendix A)
21,697
(15,542)
6,289
8,643
6,305
(4,517)
Net cash used in continuing operating activities
60,013
21,901
28,206
18,973
17,440
6,364
CASH FLOWS - INVESTING ACTIVITIES
Acquisition of property plant and equipment
(1,991)
(1,026)
(1,256)
(440)
(579)
(298)
Proceeds from sale (purchase) of marketable securities, net
(20,669)
7,655
(23,195)
(2,535)
(6,006)
2,225
Proceeds from sale of property plant and equipment
58
-
-
-
17
-
Loans granted to others
-
(29,650)
-
(8,000)
-
(8,617)
Proceeds from loans granted to others
14,000
9,854
-
4,035
4,069
2,864
Net cash used to continuing investing activities
(8,602)
(13,167)
(24,451)
(6,940)
(2,499)
(3,826)
CASH FLOWS - FINANCING ACTIVITIES
Lease liability payments
(1,334)
(711)
(507)
(237)
(388)
(207)
Shares issue
42,471
-
42,471
-
12,343
-
Acquisition of treasury shares
-
(625)
-
-
-
(181)
Net cash used in (used to) continuing financing activities
41,137
(1,336)
41,964
(237)
11,955
(388)
Increase in cash and cash equivalents
92,548
7,398
45,719
11,796
26,896
2,150
Cash and cash equivalents at the beginning of the financial period
121,860
134,287
168,689
129,889
35,414
39,025
Cash and cash equivalents of the end of the financial year
214,408
141,685
214,408
141,685
62,310
41,175
(*) Convenience Translation into U.S. Dollars.
G. WILLI-FOOD INTERNATIONAL LTD.
CASH FLOWS - OPERATING ACTIVITIES:
A. Adjustments to reconcile net profit to net cash from operating activities :
Nine months
Three months
Nine months
ended
ended
ended
September 30,
September 30,
September 30,
2 0 20
2 0 1 9
2 0 20
2 0 1 9
2 0 20
2 0 1 9
NIS
US dollars (*)
(in thousands)
Decrease (increase) in deferred income taxes
(229)
2,030
3,153
485
(67)
590
Unrealized loss (gain) on marketable securities
2,739
(12,196)
(13,532)
(1,927)
796
(3,544)
Depreciation and amortization
4,221
3,461
1,470
1,153
1,227
1,005
Capital gain on disposal of property plant and equipment
(58)
-
-
-
(17)
-
Changes in assets and liabilities:
Decrease (increase) in trade receivables and other receivables
1,570
(22,956)
6,271
235
456
(6,671)
Decrease in inventories
14,871
10,021
4,585
16,603
4,322
2,912
Increase (decrease) in trade and other payables,
(1,417)
4,098
4,342
(7,906)
(412)
1,191
21,697
(15,542)
6,289
8,643
6,305
(4,517)
B. Significant non-cash transactions:
Nine months
Three months
Nine months
ended
ended
ended
September 30,
September 30,
September 30,
2 0 20
2 0 1 9
2 0 2 0
2 0 1 9
2 0 2 0
2 0 1 9
NIS
US dollars (*)
(in thousands)
Supplemental cash flow information:
Income tax paid
16,389
7,686
5,329
3,232
4,763
2,234
(*) Convenience Translation into U.S. Dollars.
This information is intended to be reviewed in conjunction with the Company's filings with the Securities and Exchange Commission.
Company Contact:Yitschak Barabi , Chief Financial Officeritsik.b@willi-food.co.il
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SOURCE G. Willi-Food International Ltd.
