UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2015
Commission File Number: 001-34929
SodaStream International Ltd.
(Translation of Registrant’s Name
into English)
Gilboa Street, Airport City
Ben Gurion Airport 70100, Israel
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files
or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F R Form
40-F £
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Yes £ NoR
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Yes £ NoR
EXPLANATORY NOTE
On August 5, 2015, SodaStream International
Ltd. (the “Company”) issued a press release announcing its second quarter results for the period ending June 30, 2015. A
copy of the press release is furnished as Exhibit 99.1 herewith.
In conjunction with the conference call
being held on August 5, 2015, the Company also is releasing commentary from its Chief Financial Officer and a PowerPoint presentation
with additional information, furnished as Exhibit 99.2 and Exhibit 99.3, respectively.
Other than as indicated below, the information
in this Form 6-K (including in Exhibits 99.1, 99.2 and 99.3) shall not be deemed “filed” for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of
that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act.
The condensed consolidated balance sheets,
the International Financial Reporting Standards information contained in the condensed consolidated statements of operations and
the condensed consolidated statement of cash flows contained in the press release attached as Exhibit 99.1 to this Report on Form
6-K are hereby incorporated by reference into the Company’s Registration Statements on Form S-8 (File Nos. 333-195578, 333-190655
and 333-170299).
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
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SODASTREAM INTERNATIONAL LTD.
(Registrant)
|
|
| Date: August 5, 2015 |
By: |
/s/ Dotan
Bar-Natan |
|
| |
|
Dotan Bar-Natan |
|
| |
|
Head of Legal Department |
|
| |
EXHIBIT INDEX
| Exhibit |
Description |
| |
|
| 99.1 |
Press release dated August 5, 2015. |
| 99.2 |
Commentary from the Chief Financial Officer of the Registrant. |
| 99.3 |
PowerPoint presentation with additional information. |
| |
|
Exhibit 99.1
SODASTREAM REPORTS SECOND QUARTER FISCAL
2015 RESULTS
AIRPORT CITY, Israel – August
5, 2015 - SodaStream International Ltd. (NASDAQ: SODA), the leading manufacturer of home beverage carbonation systems, announced
today its results for the three and six month periods ended June 30, 2015.
For the second quarter ended June 30, 2015,
on an adjusted basis*
| · | Adjusted revenue was $101.7 million compared to $141.2 million in the second quarter 2014; Adjusted
revenue on a constant currency basis was $118.6 million |
| · | Adjusted operating income was $4.5 million compared to $11.2 million in the second quarter 2014;
Adjusted operating income on a constant currency bases was $9.0 million. |
| · | Adjusted EBITDA was $8.9 million compared to $14.5 million in the second quarter 2014 |
| · | Adjusted net income was $3.5 million compared to $9.2 million in the second quarter 2014 |
| · | Adjusted diluted earnings per share were $0.17 compared to $0.43 in the second quarter 2014 |
| · | CO2 refills reached an all-time quarterly record of 6.9 million |
*Adjusted revenue, Adjusted operating income,
Adjusted net income and Adjusted diluted earnings per share are non-IFRS financial measures that eliminate the effect of restructuring
costs, which include $2.6 million of pre-tax charges incurred as part of the Company’s restructuring and growth plan announced
on October 29, 2014. The charges were related to activities associated with discontinued products, which decreased revenue by $1.8
million and increased cost of revenue by $0.3 million. An additional expense of $0.5 million was associated with the transition
to the new plant in Southern Israel which increased cost of revenue. Adjusted EBITDA represents earnings before financial income,
income tax, depreciation and amortization, and further eliminates the effect of restructuring costs.
“Our second quarter performance
was in-line with our expectations. As we previously discussed, the first half of 2015 would be a challenging period due to implementation
of our global restructuring and growth plan combined with changes in foreign currency exchange rates. That said, we are proud
to have achieved an all-time record of CO2 refills, which is a testimony of our consumers’ loyalty and our overall Q2 performance
masks the ongoing strength of our business in key markets led by Germany, Switzerland and Austria” said Daniel Birnbaum,
Chief Executive Officer of SodaStream. “We are making tremendous progress toward repositioning as a “water brand”
behind a health and wellness positioning. Our new portfolio of better-for-you sparkling water flavors is currently rolling out
to retailers around the world and we are testing a new marketing campaign “Sparkling Waters – Made by You”,
including TV in several cities in the United States. At the same time the consolidation of our production activities into our
new state-of-the-art plant in Lehavim continues ahead of schedule. We are confident that our new strategic direction supported
by a terrific and unique product portfolio and marketing plan, will fuel increased household penetration and user activity and
deliver sustainable growth and increased profitability in the years ahead.”
Second Quarter 2015 Financial Review
(The financial review relates to the Non-IFRS Consolidated Statements
of Operations. All USD values are in accordance with IFRS unless stated otherwise.)
| Geographical Revenue Breakdown | |
| | |
| | |
| |
| Adjusted Revenue | |
Three Months Ended | | |
| | |
| |
| | |
June 30, 2014 | | |
June 30, 2015 | | |
(Decrease) | | |
(Decrease) | |
| | |
In Millions USD | | |
% | |
| Western Europe | |
$ | 77.7 | | |
$ | 65.1 | | |
$ | (12.6 | ) | |
| (16 | )% |
| The Americas | |
| 40.9 | | |
| 23.1 | | |
| (17.8 | ) | |
| (44 | )% |
| Asia-Pacific | |
| 12.2 | | |
| 9.1 | | |
| (3.1 | ) | |
| (26 | )% |
| Central & Eastern Europe, Middle East, Africa | |
| 10.4 | | |
| 4.4 | | |
| (6.0 | ) | |
| (58 | )% |
| Total | |
$ | 141.2 | | |
$ | 101.7 | | |
$ | (39.5 | ) | |
| (28 | )% |
| Product Segment Revenue Breakdown | |
| | |
| | |
| |
| Adjusted Revenue | |
Three Months Ended | | |
| | |
| |
| | |
June 30, 2014 | | |
June 30, 2015 | | |
(decrease) | | |
(decrease) | |
| | |
In millions USD | | |
% | |
| Sparkling Water Maker Starter Kits | |
$ | 45.8 | | |
$ | 29.7 | | |
$ | (16.1 | ) | |
| (35 | )% |
| Consumables | |
| 90.8 | | |
| 68.3 | | |
| (22.5 | ) | |
| (25 | )% |
| Other | |
| 4.6 | | |
| 3.7 | | |
| (0.9 | ) | |
| (21 | )% |
| Total | |
$ | 141.2 | | |
$ | 101.7 | | |
$ | (39.5 | ) | |
| (28 | )% |
| Product Segment Unit Breakdown | |
Three Months Ended | | |
| | |
| |
| | |
June 30, 2014 | | |
June 30, 2015 | | |
Increase
(decrease) | | |
Increase
(decrease) | |
| | |
In thousands | | |
% | |
| Sparkling Water Maker Starter Kits | |
| 785 | | |
| 491 | | |
| (294 | ) | |
| (37 | )% |
| CO2 Refills | |
| 6,507 | | |
| 6,939 | | |
| 432 | | |
| 7 | % |
| Flavors | |
| 9,297 | | |
| 5,075 | | |
| (4,222 | ) | |
| (45 | )% |
The decrease in Adjusted revenue compared
to the second quarter 2014 was mainly due to changes in foreign currency exchange rates which reduced revenue by $16.9 million.
Since the same period a year ago, several foreign currencies have weakened versus the U.S. dollar including the Euro by 19%, the
Australian Dollar by 17% and the Swedish Krona by 22%. Second quarter 2015 results also reflect lower demand for sparkling water
makers and flavors mainly in the U.S. and France.
Gross margin for the second quarter 2015
(before the impact of restructuring costs) was 50.3% compared to 50.5% for the same period in 2014. Second quarter 2015 gross margin
benefitted from higher share of CO2 refills in product mix, offset by the negative impact from changes in foreign currency exchange
rates versus the same period last year.
Sales and marketing expenses for the second
quarter 2015 totaled $35.1 million, or 34.5% of Adjusted revenue, compared to $46.9 million, or 33.3% for the comparable period
in the prior year. The decrease was primarily attributable to lower advertising and promotion expenses, which decreased $7.5 million
to 13.3% of Adjusted revenue from 14.9% of revenue in the same period in 2014, and lower distribution costs due to the lower sales
volume. Selling and marketing expenses also decreased versus the same period last year due to the changes in foreign currency rates,
mainly the weakening of the Euro/U.S. Dollar average exchange rate by 19% and the Israeli Shekel/U.S. Dollar average exchange rate
by 11% versus the same period last year.
General and administrative expenses for
the second quarter 2015 were $11.5 million, or 11.3% of Adjusted revenue, compared to $13.1 million, or 9.3% of revenue in the
comparable period of last year. The decrease was mainly due to a decrease in share-based payment expenses.
Operating income (before the impact of
restructuring costs) decreased to $4.5 million, or 4.5% of Adjusted revenue, compared to $11.2 million, or 8.0% of revenue, in
the second quarter 2014. The decrease in operating income was driven primarily by the decrease in revenue and the negative impact
from changes in foreign currency exchange rates, offset by lower operating expenses, mainly a reduction in advertising and promotion
expenses.
The net negative impact on operating income
from changes in foreign currency exchange rates in comparison with the same period in 2014 was approximately $4.5 million.
Net financial expense was $0.6 million
compared to net financial expense of $0.9 million in the same period in 2014. Financial expense in the second quarter 2015 was
derived mainly from an increase in the value of Euro denominated bank loans.
Tax expense was $0.4 million with an effective
tax rate of 29.5%, compared to $1.1 million with an effective tax rate of 10.6% in the second quarter 2014.
Balance Sheet Review
Cash and cash equivalents at June 30, 2015
were $33.4 million compared to $46.9 million at December 31, 2014. The decrease is primarily attributable to the investment in
the Company’s new production facility.
The Company had $39.3 million of bank debt
at June 30, 2015 mainly for financing the investment in its new production facility, compared to $43.9 million of bank debt at
December 31, 2014.
Working capital at June 30, 2015, after
the impact of the restructuring, decreased by 7.9% to $146.2 million compared to $158.8 million at December 31, 2014. Inventories
at June 30, 2015 decreased by 7.0% to $128.8 million compared to $138.4 million at December 31, 2014.
Conference Call and Management Commentary
Detailed CFO commentary and a supplemental
slide presentation have been filed as part of today’s 6-K and will be posted on the Company’s website, http://sodastream.investorroom.com
.
The Company has scheduled a conference
call for 8:30 AM Eastern Standard Time (U.S. time) today (Wednesday, August 5, 2015) to review the Company’s financial results.
The conference call will be broadcast over the Internet as a “live” listen only Webcast. To listen, please go to:
http://sodastream.investorroom.com . Listeners are urged to login approximately 20 minutes before the conference call
is scheduled to begin in order to register, as well as download and install any necessary audio software. An archive of the Webcast
will be available for 30 days after the call.
About SodaStream International
SodaStream is the world's leading manufacturer
and distributor of Sparkling Water Makers, which enable consumers to easily transform ordinary tap water into sparkling water and
flavored sparkling water in seconds. By making ordinary water more exciting and fun to drink, SodaStream helps consumers drink
more water. Sparkling Water Makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated
soft drinks. The products promote health and wellness, are environmentally friendly, cost effective, and are customizable and fun
to use. Products are available at more than 70,000 retail stores across 45 countries, including approximately 13,000 retail stores
in the United States. To learn more about how SodaStream makes water exciting and follow SodaStream on Facebook, Twitter, Pinterest,
Instagram and YouTube, visit http://www.sodastream.com .
Non-IFRS Financial Measures
This press release contains certain non-IFRS
measures, including Adjusted revenue, Adjusted net income, Adjusted EBITDA, and Adjusted diluted earnings per share (“Adjusted
diluted EPS”).
Adjusted EBITDA represents earnings before
financial expense (income), income tax, depreciation and amortization, and further eliminates the effect of restructuring costs.
Adjusted revenue, Adjusted net income and Adjusted diluted earnings per share eliminate the effect of restructuring costs.
The Company believes that the Adjusted
revenue, Adjusted net income, Adjusted EBITDA and Adjusted diluted EPS, as described above, should be considered in evaluating
the Company’s operations. Adjusted revenue, Adjusted net income, Adjusted EBITDA and Adjusted diluted EPS exclude restructuring
costs because most of this charge is a non-cash expense that does not reflect the performance of the Company’s underlying
business and operations. Adjusted EBITDA facilitates operating performance comparisons from period to period and company to company
by backing out potential differences caused by variations in capital structures (affecting financial expenses (income), net), tax
positions (such as the impact on periods or companies of changes in effective tax rates) and the age and depreciation charges and
amortization of fixed and intangible assets, respectively (affecting relative depreciation and amortization expense, respectively).
These measures should be considered in
addition to results prepared in accordance with IFRS, but should not be considered a substitute for the IFRS results. The non-IFRS
measures included in this press release have been reconciled to the IFRS results.
Forward Looking Statements
This release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include information about possible or
assumed future results of our business and financial condition, as well as the results of operations, liquidity, plans and objectives.
In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,”
“continue,” “anticipate,” “intend,” “should,” “plan,” “expect,”
“predict,” “potential,” or the negative of these terms or other similar expressions: Such statements are
based on management's current beliefs and expectations and involve a number of known and unknown risks and uncertainties that could
cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed
or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks
relating to: our ability to maintain or expand sales in our target markets, including the United States; our ability to maintain
or continue to develop our presence in retail networks; our ability to develop and implement production and operating infrastructure
to effectively support our growth; the success of our marketing campaigns and media spending in terms of increased sales or increased
product and brand name awareness; our ability to maintain our customer base in markets where we have an established presence; the
risks associated with our reliance on exclusive arrangements for the distribution of our beverage carbonation systems and consumables
in each of the markets in which we use third-party distributors; our ability to compete effectively with other companies which
currently offer, or may offer in the future, competing products; our ability to maintain margins due to decline in product selling
price and/or rising costs; potential product liability claims if any component of our beverage carbonation systems is misused;
our ability to protect our intellectual property rights; our being found to have a dominant position in certain markets which may
place limits on our ability to operate; risks associated with our being a multinational corporation, including fluctuations in
currency exchange rates; our potential exposure to greater than anticipated tax liabilities; our products being subject to extensive
governmental regulation in the markets in which we operate; adverse conditions in the global economy which could negatively impact
our customers' demand for our products; and other factors discussed under the heading “Risk Factors” in the Annual
Report on the Form 20-F for the year ended December 31, 2014 and other documents filed with or furnished to the Securities
and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the company undertakes
no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contact:
Brendon Frey
ICR
Phone: + 1 203-682-8200
brendon.frey@icrinc.com
Consolidated Statements of Operations
In thousands (other than per share amounts)
| | |
For the six months ended | | |
For the three months ended | |
| | |
June 30, | | |
June 30, | |
| | |
2014 | | |
2015 | | |
2014 | | |
2015 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| Revenues | |
$ | 259,343 | | |
$ | 190,178 | | |
$ | 141,171 | | |
$ | 99,834 | |
| Cost of revenues | |
| 126,240 | | |
| 96,200 | | |
| 69,914 | | |
| 51,307 | |
| | |
| | | |
| | | |
| | | |
| | |
| Gross profit | |
| 133,103 | | |
| 93,978 | | |
| 71,257 | | |
| 48,527 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating expenses | |
| | | |
| | | |
| | | |
| | |
| Sales and marketing | |
| 93,087 | | |
| 67,579 | | |
| 46,941 | | |
| 35,118 | |
| General and administrative | |
| 26,427 | | |
| 23,097 | | |
| 13,072 | | |
| 11,456 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total operating expenses | |
| 119,514 | | |
| 90,676 | | |
| 60,013 | | |
| 46,574 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating income | |
| 13,589 | | |
| 3,302 | | |
| 11,244 | | |
| 1,953 | |
| | |
| | | |
| | | |
| | | |
| | |
| Interest expense, net | |
| 333 | | |
| 126 | | |
| 286 | | |
| 92 | |
| Other financial expense (income), net | |
| 792 | | |
| (5,202 | ) | |
| 620 | | |
| 500 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total financial expense (income), net | |
| 1,125 | | |
| (5,076 | ) | |
| 906 | | |
| 592 | |
| | |
| | | |
| | | |
| | | |
| | |
| Income before income taxes | |
| 12,464 | | |
| 8,378 | | |
| 10,338 | | |
| 1,361 | |
| | |
| | | |
| | | |
| | | |
| | |
| Income tax expense | |
| 1,443 | | |
| 1,371 | | |
| 1,095 | | |
| 401 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net income for the period | |
$ | 11,021 | | |
$ | 7,007 | | |
$ | 9,243 | | |
$ | 960 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net income per share | |
| | | |
| | | |
| | | |
| | |
| Basic | |
$ | 0.53 | | |
$ | 0.33 | | |
$ | 0.44 | | |
$ | 0.05 | |
| Diluted | |
$ | 0.52 | | |
$ | 0.33 | | |
$ | 0.43 | | |
$ | 0.05 | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 20,933 | | |
| 21,025 | | |
| 20,958 | | |
| 21,032 | |
| Diluted | |
| 21,274 | | |
| 21,095 | | |
| 21,271 | | |
| 21,138 | |
| Consolidated Balance Sheets as of | |
| | |
| |
| | |
| | |
| |
| | |
December 31, | | |
June 30, | |
| | |
2014 | | |
2015 | |
| | |
(Audited) | | |
(Unaudited) | |
| | |
(In thousands) | |
| Assets | |
| | |
| |
| Cash and cash equivalents | |
$ | 46,880 | | |
$ | 33,418 | |
| Inventories | |
| 138,392 | | |
| 128,756 | |
| Trade receivables | |
| 94,217 | | |
| 69,361 | |
| Other receivables | |
| 34,789 | | |
| 30,098 | |
| Derivative financial instruments | |
| 1,035 | | |
| 2,641 | |
| Total current assets | |
| 315,313 | | |
| 264,274 | |
| | |
| | | |
| | |
| Property, plant and equipment | |
| 124,817 | | |
| 144,416 | |
| Intangible assets | |
| 44,389 | | |
| 43,240 | |
| Deferred tax assets | |
| 2,506 | | |
| 3,872 | |
| Other receivables | |
| 273 | | |
| 442 | |
| Total non-current assets | |
| 171,985 | | |
| 191,970 | |
| | |
| | | |
| | |
| Total assets | |
| 487,298 | | |
| 456,244 | |
| | |
| | | |
| | |
| Liabilities | |
| | | |
| | |
| Loans and borrowings | |
| 9,239 | | |
| 17,658 | |
| Derivative financial instruments | |
| 491 | | |
| - | |
| Trade payables | |
| 67,011 | | |
| 39,278 | |
| Income tax payable | |
| 11,740 | | |
| 11,801 | |
| Provisions | |
| 2,469 | | |
| 2,706 | |
| Other current liabilities | |
| 27,882 | | |
| 30,835 | |
| Total current liabilities | |
| 118,832 | | |
| 102,278 | |
| | |
| | | |
| | |
| Loans and borrowings | |
| 34,645 | | |
| 21,639 | |
| Employee benefits | |
| 2,174 | | |
| 1,965 | |
| Other non-current liabilities | |
| 122 | | |
| 161 | |
| Deferred tax liabilities | |
| 750 | | |
| 718 | |
| Total non-current liabilities | |
| 37,691 | | |
| 24,483 | |
| | |
| | | |
| | |
| Total liabilities | |
| 156,523 | | |
| 126,761 | |
| | |
| | | |
| | |
| Shareholders’ equity | |
| | | |
| | |
| Share capital | |
| 3,400 | | |
| 3,405 | |
| Share premium | |
| 198,918 | | |
| 201,497 | |
| Translation reserve | |
| (14,908 | ) | |
| (25,791 | ) |
| Retained earnings | |
| 143,365 | | |
| 150,372 | |
| Total shareholders’ equity | |
| 330,775 | | |
| 329,483 | |
| | |
| | | |
| | |
| Total liabilities and shareholders’ equity | |
$ | 487,298 | | |
$ | 456,244 | |
| Consolidated Statements of Cash Flows | |
| | |
| | |
| | |
| |
| | |
| | |
| | |
| | |
| |
| | |
For the six months ended | | |
For the three months ended | |
| | |
June 30, | | |
June 30, | |
| | |
2014 | | |
2015 | | |
2014 | | |
2015 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| Cash flows from operating activities | |
| | | |
| | | |
| | | |
| | |
| Net income for the period | |
$ | 11,021 | | |
$ | 7,007 | | |
$ | 9,243 | | |
$ | 960 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjustments: | |
| | | |
| | | |
| | | |
| | |
| Amortization of intangible assets | |
| 1,261 | | |
| 1,858 | | |
| 749 | | |
| 929 | |
| Change in fair value of derivative financial instruments | |
| 264 | | |
| (3,840 | ) | |
| (144 | ) | |
| (34 | ) |
| Exchange rate differences on Short-term loans and borrowing | |
| - | | |
| (1,340 | ) | |
| - | | |
| (383 | ) |
| Exchange rate differences on long-term loans and borrowing | |
| - | | |
| (3,235 | ) | |
| - | | |
| 665 | |
| Depreciation of property, plant and equipment | |
| 6,091 | | |
| 6,470 | | |
| 2,467 | | |
| 3,456 | |
| Restructuring costs | |
| - | | |
| 4,533 | | |
| - | | |
| 2,220 | |
| Share based payment | |
| 4,537 | | |
| 2,431 | | |
| 2,231 | | |
| 1,298 | |
| Interest expense, net | |
| 333 | | |
| 126 | | |
| 286 | | |
| 92 | |
| Income tax expense | |
| 1,443 | | |
| 1,371 | | |
| 1,095 | | |
| 401 | |
| | |
| 24,950 | | |
| 15,381 | | |
| 15,927 | | |
| 9,604 | |
| Decrease (increase) in inventories | |
| (3,945 | ) | |
| 5,056 | | |
| (1,477 | ) | |
| 3,572 | |
| Decrease (increase) trade and other receivables | |
| 13,853 | | |
| 19,223 | | |
| (10,854 | ) | |
| (4,635 | ) |
| Increase (decrease) in trade payables | |
| (29,587 | ) | |
| (26,818 | ) | |
| (5,515 | ) | |
| 3,147 | |
| Increase (decrease) in employee benefits | |
| 19 | | |
| (115 | ) | |
| 129 | | |
| (221 | ) |
| Increase in provisions and other liabilities | |
| 1,766 | | |
| 4,456 | | |
| 5,631 | | |
| 3,800 | |
| | |
| 7,056 | | |
| 17,183 | | |
| 3,841 | | |
| 15,267 | |
| Interest paid | |
| (329 | ) | |
| (165 | ) | |
| (293 | ) | |
| (124 | ) |
| Income tax received | |
| 710 | | |
| 266 | | |
| 347 | | |
| 16 | |
| Income tax paid | |
| (3,939 | ) | |
| (3,205 | ) | |
| (3,257 | ) | |
| (1,149 | ) |
| Net cash from operating activities | |
| 3,498 | | |
| 14,079 | | |
| 638 | | |
| 14,010 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cash flows from investing activities | |
| | | |
| | | |
| | | |
| | |
| Interest received | |
| 27 | | |
| 39 | | |
| 22 | | |
| 32 | |
| Proceeds from investment grants | |
| - | | |
| 2,252 | | |
| - | | |
| - | |
| Proceeds from (payment for) derivative financial instruments, net | |
| (1,248 | ) | |
| 1,743 | | |
| (588 | ) | |
| 834 | |
| Acquisition of property, plant and equipment | |
| (28,211 | ) | |
| (28,585 | ) | |
| (12,527 | ) | |
| (14,844 | ) |
| Acquisition of intangible assets | |
| (2,546 | ) | |
| (1,851 | ) | |
| (2,183 | ) | |
| (861 | ) |
| Net cash used in investing activities | |
| (31,978 | ) | |
| (26,402 | ) | |
| (15,276 | ) | |
| (14,839 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Cash flows from financing activities | |
| | | |
| | | |
| | | |
| | |
| Proceeds from exercise of employee share options | |
| 741 | | |
| 153 | | |
| 288 | | |
| 143 | |
| Repayments of long-term loans and borrowings | |
| - | | |
| (12,352 | ) | |
| - | | |
| (1,668 | ) |
| Change in short-term debt | |
| 23,167 | | |
| 12,340 | | |
| 14,611 | | |
| (5,090 | ) |
| Net cash from (used in) financing activities | |
| 23,908 | | |
| 141 | | |
| 14,899 | | |
| (6,615 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net decrease in cash and cash equivalents | |
| (4,572 | ) | |
| (12,182 | ) | |
| 261 | | |
| (7,444 | ) |
| Cash and cash equivalents at the beginning of the period | |
| 40,885 | | |
| 46,880 | | |
| 36,052 | | |
| 40,563 | |
| Effect of exchange rates fluctuations on cash and cash equivalents | |
| (69 | ) | |
| (1,280 | ) | |
| (69 | ) | |
| 299 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cash and cash equivalents at the end of the period | |
$ | 36,244 | | |
$ | 33,418 | | |
$ | 36,244 | | |
$ | 33,418 | |
| Information about Adjusted revenue in reportable segments | |
| | |
| |
| | |
| | |
| | |
| | |
| | |
| |
| | |
Western Europe | | |
The Americas | | |
Asia-Pacific | | |
Central & Eastern Europe, Middle East, Africa | | |
Total | |
| | |
(In thousands) | |
| Six months ended: | |
| | |
| | |
| | |
| | |
| |
| June 30, 2014 (Unaudited) | |
$ | 140,216 | | |
| 75,637 | | |
| 24,131 | | |
| 19,359 | | |
$ | 259,343 | |
| June 30, 2015 (Unaudited) | |
| 119,733 | | |
| 45,864 | | |
| 18,043 | | |
| 9,358 | | |
$ | 192,998 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Three months ended: | |
| | | |
| | | |
| | | |
| | | |
| | |
| June 30, 2014 (Unaudited) | |
$ | 77,666 | | |
| 40,879 | | |
| 12,225 | | |
| 10,401 | | |
$ | 141,171 | |
| June 30, 2015 (Unaudited) | |
$ | 65,098 | | |
| 23,069 | | |
| 9,078 | | |
| 4,409 | | |
$ | 101,654 | |
The following tables present the Company’s
Adjusted revenue, by
product type for the periods presented,
as well as such revenue
by product type as a percentage of total
revenue:
| | |
Six months ended | | |
Three months ended | |
| | |
June 30, | | |
June 30, | |
| | |
2014 | | |
2015 | | |
2014 | | |
2015 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| | |
Adjusted revenue | |
| | |
(in thousands) | |
| | |
| | |
| | |
| | |
| |
| Sparkling Water Maker starter kits (including exchange cylinders) | |
$ | 78,070 | | |
$ | 57,265 | | |
$ | 45,846 | | |
$ | 29,735 | |
| Consumables | |
| 173,623 | | |
| 131,251 | | |
| 90,699 | | |
| 68,261 | |
| Other | |
| 7,650 | | |
| 4,482 | | |
| 4,626 | | |
| 3,658 | |
| Total | |
$ | 259,343 | | |
$ | 192,998 | | |
$ | 141,171 | | |
$ | 101,654 | |
| | |
Six months ended | | |
Three months ended | |
| | |
June 30, | | |
June 30, | |
| | |
2014 | | |
2015 | | |
2014 | | |
2015 | |
| | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
| | |
As a percentage of adjusted revenue | |
| | |
| | |
| | |
| | |
| |
| Sparkling Water Maker starter kits (including exchange cylinders) | |
| 30.1 | % | |
| 29.7 | % | |
| 32.5 | % | |
| 29.3 | % |
| Consumables | |
| 66.9 | % | |
| 68.0 | % | |
| 64.2 | % | |
| 67.2 | % |
| Other | |
| 3.0 | % | |
| 2.3 | % | |
| 3.3 | % | |
| 3.5 | % |
| Total | |
| 100.0 | % | |
| 100.0 | % | |
| 100.0 | % | |
| 100.0 | % |
The following table provides
a reconciliation of Non-IFRS to IFRS
financial data for the three months ended June 30, 2015:
| | |
Non-IFRS | | |
Restructuring | | |
IFRS | |
| | |
In Thousands USD | |
| Revenue | |
$ | 101,654 | | |
$ | (1,820 | ) | |
$ | 99,834 | |
| Cost of revenue | |
| 50,548 | | |
| 759 | | |
| 51,307 | |
| Gross profit | |
| 51,106 | | |
| (2,579 | ) | |
| 48,527 | |
| Operating income | |
| 4,532 | | |
| (2,579 | ) | |
| 1,953 | |
| Net income for the period | |
$ | 3,539 | | |
$ | (2,579 | ) | |
$ | 960 | |
| Net income per share | |
| | | |
| | | |
| | |
| Basic and diluted (in USD) | |
| 0.17 | | |
| (0.12 | ) | |
| 0.05 | |
| EBITDA | |
| | |
| | |
| | |
| |
| | |
Six months ended | | |
Three months ended | |
| | |
June 30, | | |
June 30, | |
| | |
2014 | | |
2015 | | |
2014 | | |
2015 | |
| | |
(Unaudited) | |
| | |
(In thousands) | |
| | |
| | |
| | |
| | |
| |
| Reconciliation of Net Income to EBITDA | |
| | | |
| | | |
| | | |
| | |
| Net income | |
$ | 11,021 | | |
$ | 7,007 | | |
$ | 9,243 | | |
$ | 960 | |
| Financial expenses (income), net (*) | |
| 1,125 | | |
| (5,076 | ) | |
| 906 | | |
| 592 | |
| Income tax expense (tax benefit) | |
| 1,443 | | |
| 1,371 | | |
| 1,095 | | |
| 401 | |
| Depreciation and amortization | |
| 7,352 | | |
| 8,328 | | |
| 3,216 | | |
| 4,385 | |
| EBITDA | |
$ | 20,941 | | |
$ | 11,630 | | |
$ | 14,460 | | |
$ | 6,338 | |
| Restructuring | |
| - | | |
| 4,892 | | |
| - | | |
| 2,579 | |
| Adjusted EBITDA | |
| 20,941 | | |
| 16,522 | | |
| 14,460 | | |
| 8,917 | |
(*) Starting in Q1 2015, the
Company presents EBITDA excluding total financial expense (income), net, as opposed to 2014 in which EBITDA was presented excluding
only interest expense. Three months ended June 30, 2014 and six months ended June 30, 2014 EBITDA were also adjusted to exclude
total financial expense.
Exhibit 99.2
SodaStream International Ltd.
Chief Financial Officer’s Commentary
Second Quarter 2015
Restructuring
During the second quarter of 2015, the
Company recorded pre-tax charges of $2.6 million as part of the restructuring and growth plan it announced on October 29, 2014.
$2.1 million was associated with discontinued products, which decreased revenue by $1.8 million and increased cost of revenue by
$0.3 million and $0.5 million was associated with the transition to the new plant in Southern Israel and increased cost of revenue.
The following table provides a reconciliation
of Non-IFRS to IFRS financial data for the three months ended June 30, 2015:
| | |
Non-IFRS | | |
Restructuring | | |
IFRS | |
| | |
In Thousands USD | |
| Revenue | |
$ | 101,654 | | |
$ | (1,820 | ) | |
$ | 99,834 | |
| Cost of revenue | |
| 50,548 | | |
| 759 | | |
| 51,307 | |
| Gross profit | |
| 51,106 | | |
| (2,579 | ) | |
| 48,527 | |
| Operating income | |
| 4,532 | | |
| (2,579 | ) | |
| 1,953 | |
| Net income for the period | |
$ | 3,539 | | |
$ | (2,579 | ) | |
$ | 960 | |
| Net income per share | |
| | | |
| | | |
| | |
| Basic and diluted (in USD) | |
| 0.17 | | |
| (0.12 | ) | |
| 0.05 | |
Revenue
Second quarter revenue before the impact
of the restructuring decreased 28.0% to $101.7 million from $141.2 million in the second quarter 2014. Changes in foreign currency
exchange rates negatively impacted revenue by $16.9 million, primarily reflecting the weakening of the Euro/U.S. dollar exchange
rate by 19%, the Australian Dollar/U.S. Dollar by 17% and the Swedish Krona/U.S. Dollar by 22% versus the same period last year.
| Geographical Revenue Breakdown | |
| | |
| | |
| |
| Adjusted Revenue | |
Three Months Ended | | |
| | |
| |
| | |
June 30, 2014 | | |
June 30, 2015 | | |
(Decrease) | | |
(Decrease) | |
| | |
In Millions USD | | |
% | |
| Western Europe | |
$ | 77.7 | | |
$ | 65.1 | | |
$ | (12.6 | ) | |
| (16 | )% |
| The Americas | |
| 40.9 | | |
| 23.1 | | |
| (17.8 | ) | |
| (44 | )% |
| Asia-Pacific | |
| 12.2 | | |
| 9.1 | | |
| (3.1 | ) | |
| (26 | )% |
| Central & Eastern Europe, Middle East, Africa | |
| 10.4 | | |
| 4.4 | | |
| (6.0 | ) | |
| (58 | )% |
| Total | |
$ | 141.2 | | |
$ | 101.7 | | |
$ | (39.5 | ) | |
| (28 | )% |
On a constant currency basis the Adjusted
revenue comparison is as follows:
| Geographical Revenue Breakdown - currency neutral | |
| | |
| | |
| |
| Adjusted Revenue | |
Three Months Ended | | |
| | |
| |
| | |
June 30, 2014 | | |
June 30, 2015 - at Q2-2014 rates | | |
Increase
(Decrease) | | |
Increase
(Decrease) | |
| | |
In Millions USD | | |
% | |
| Western Europe | |
$ | 77.7 | | |
$ | 79.4 | | |
$ | 1.7 | | |
| 2 | % |
| The Americas | |
| 40.9 | | |
| 23.6 | | |
| (17.3 | ) | |
| (42 | )% |
| Asia-Pacific | |
| 12.2 | | |
| 10.5 | | |
| (1.7 | ) | |
| (14 | )% |
| Central & Eastern Europe, Middle East, Africa | |
| 10.4 | | |
| 5.1 | | |
| (5.3 | ) | |
| (51 | )% |
| Total | |
$ | 141.2 | | |
$ | 118.6 | | |
$ | (22.6 | ) | |
| (16 | )% |
The following table sets forth each region’s
contribution to total Adjusted revenue and a comparison with the second quarter 2014(in percentage):
| Region |
|
Portion of the Adjusted revenue in three months ended |
|
| |
|
June 30, 2014 |
|
|
June 30, 2015 |
|
| The Americas |
|
|
29.0 |
% |
|
|
22.7 |
% |
| Western Europe |
|
|
54.9 |
% |
|
|
64.0 |
% |
| Asia-Pacific |
|
|
8.7 |
% |
|
|
8.9 |
% |
| Central & Eastern Europe, Middle East & Africa |
|
|
7.4 |
% |
|
|
4.4 |
% |
| Total |
|
|
100.0 |
% |
|
|
100.0 |
% |
The Americas revenue decrease was mainly
due to lower demand for sparkling water makers and flavors in the U.S., which is partially due to the product transition as part
of the company’s current brand repositioning and growth plan. The decrease in Western Europe revenue was mainly due to changes
in foreign currency exchange rates. Excluding the foreign currency exchange impact, Western Europe revenue increased approximately
2% due to increased sales in Germany, Austria and Switzerland partially offset by declines in France and the Nordics. Asia-Pacific
revenue decreased primarily due to changes in foreign currency exchange rates combined with lower sales in South Korea. The decrease
in CEMEA revenue was due to lower sales in Czech Republic.
Sparkling water maker unit sales decreased
37% to 491,000 from 785,000 in the same period in 2014 mainly due to decreases in the U.S and France partially offset by increases
in Germany, Austria and Switzerland. CO2 refill unit sales increased 7% to a record of 6.9 million and flavor unit sales decreased
45% to 5.1 million.
Gross Margin
Gross margin for the second quarter 2015
(before the impact of restructuring costs) was 50.3% compared to 50.5% for the same period in 2014. Second quarter 2015 gross margin
was negatively impacted primarily by the unfavorable changes in foreign currency exchange rates offset by higher share of CO2 refills
in product mix.
Sales and Marketing
Sales and marketing expenses for the second
quarter 2015 totaled $35.1 million, or 34.5% of Adjusted revenue, compared to $46.9 million, or 33.3% for the comparable period
in the prior year. The decrease in the expenses was primarily attributable to lower advertising and promotion expenses, mainly
in the U.S., which decreased 61.0% compared to the second quarter 2015, and lower distribution costs due to the lower sales volume.
Selling and marketing expenses also decreased versus the same period last year due to the changes in foreign currency exchange
rates, mainly the weakening of the Euro/U.S. Dollar rate and the Israeli Shekel/U.S. Dollar rate versus the same period last year.
Selling expenses within sales and
marketing amounted to $21.6 million, or 21.3% of Adjusted revenue, compared to $25.9 million or 18.4% of revenue in the
second quarter 2014. Advertising and promotion expenses decreased $7.5 million to $13.5 million, or 13.3% of Adjusted revenue
in the quarter, compared to $21.0 million or 14.9% of revenue in the second quarter 2014.
General and Administrative
General and administrative expenses for the second quarter 2015
were $11.5 million, or 11.3% of Adjusted revenue, compared to $13.1 million, or 9.3% of revenue in the second quarter 2014. The
decrease was mainly due to a decrease in share-based payment expenses.
Operating Income
Operating income (before the impact of
restructuring costs) decreased to $4.5 million, or 4.5% of Adjusted revenue, compared to $11.2 million, or 8.0% of revenue, in
the second quarter 2014. Operating income was negatively impacted from changes in foreign currency exchange rates by approximately
$4.5 million.
Tax Expense
Tax expense was $0.4 million with an effective
tax rate of 29.5%, compared to $1.1 million with an effective tax rate of 10.6% in the second quarter 2014.
Net Income
Second quarter 2015 net income on an IFRS
basis was $1.0 million, or $0.05 per diluted share, based on 21.1 million weighted shares outstanding compared to net income on
IFRS basis of $9.2 million, or $0.43 per diluted share, based on 21.3 million weighted shares outstanding in the second quarter
2014.
Earnings per Share
Second quarter 2015 Adjusted diluted earnings
per share were $0.17 compared to $0.43 in the second quarter 2014.
Foreign Currency Impact
Changes in foreign currency exchange rates
("FX") had a negative impact on revenue of $16.9 million mainly due to the said weakening in the Euro, the Australian
dollar and the Swedish Krona exchange rate against the U.S. dollar compared to their rates in the second quarter of 2014. Conversely,
FX had a positive impact on cost of revenue and operating expenses during the second quarter 2015, as approximately 76% of costs
and expenses in the second quarter were denominated in currencies other than the U.S. dollar, mainly the Israeli Shekel, which
decreased in value by 10.6% against the U.S. dollar compared to its average rate in the same period in 2014. As a result, FX had
an overall net negative impact of approximately $4.5 million on operating income.
Balance Sheet
As of June 30, 2015, the Company had cash
and cash equivalents and bank deposits of $33.4 million compared to $46.9 million at December 31, 2014. The decrease is primarily
attributable to the investments in the Company’s new production facility. As of June 30, 2015, the Company had $39.3 million
of bank debt mainly for financing the investments in the new production facility, compared to $43.9 million of bank debt as of
December 31, 2014.
Working capital at June 30, 2015, after the impact of the restructuring,
decreased 7.9% to $146.2 million compared to $158.8 million at December 31, 2014. Inventories at June 30, 2015 decreased 7.0% to
$128.8 million compared to $138.4 million at December 31, 2014
First Half 2015
Restructuring
During the first half of 2015, the Company
recorded pre-tax charges of $4.9 million as part of the restructuring and growth plan it announced on October 29, 2014 relating
to activities associated with discontinued products, which decreased revenue by $2.8 million and increased cost of revenue by $1.6
million, and $0.5 million associated with the transition to the new plant in Southern Israel.
The following table provides a reconciliation
of Non-IFRS to IFRS financial data for the six months ended June 30, 2015:
| | |
Non-IFRS | | |
Restructuring | | |
IFRS | |
| | |
In Thousands USD | |
| Revenue | |
$ | 192,998 | | |
$ | (2,820 | ) | |
$ | 190,178 | |
| Cost of revenue | |
| 94,128 | | |
| 2,072 | | |
| 96,200 | |
| Gross profit | |
| 98,870 | | |
| (4,892 | ) | |
| 93,978 | |
| Operating income | |
| 8,194 | | |
| (4,892 | ) | |
| 3,302 | |
| Net income for the period | |
$ | 11,899 | | |
$ | (4,892 | ) | |
$ | 7,007 | |
| Net income per share | |
| | | |
| | | |
| | |
| Diluted (in USD) | |
| 0.56 | | |
| (0.23 | ) | |
| 0.33 | |
Revenue
First half revenue before the impact of
the restructuring decreased 25.6% to $193.0 million from $259.3 million in the first half 2014. Changes in foreign currency exchange
rates negatively impacted revenue by $30.3 million, primarily reflecting the weakening of the Euro/U.S. dollar exchange rate by
18.7%, the Australian Dollar/U.S. Dollar by 14.5% and the Swedish Krona/U.S. Dollar by 22.1% versus the same period last year.
| Geographical Revenue Breakdown | |
| | |
| | |
| |
| Adjusted Revenue | |
Six Months Ended | | |
| | |
| |
| | |
June 30, 2014 | | |
June 30, 2015 | | |
(Decrease) | | |
(Decrease) | |
| | |
In Millions USD | | |
% | |
| Western Europe | |
$ | 140.2 | | |
$ | 119.7 | | |
$ | (20.5 | ) | |
| (14.6 | %) |
| The Americas | |
| 75.6 | | |
| 45.9 | | |
| (29.7 | ) | |
| (39.4 | %) |
| Asia-Pacific | |
| 24.1 | | |
| 18.0 | | |
| (6.1 | ) | |
| (25.2 | %) |
| Central & Eastern Europe, Middle East, Africa | |
| 19.4 | | |
| 9.4 | | |
| (10.0 | ) | |
| (51.7 | %) |
| Total | |
$ | 259.3 | | |
$ | 193.0 | | |
$ | (66.3 | ) | |
| (25.6 | %) |
On a constant currency basis the Adjusted
revenue comparison is as follows:
| Geographical Revenue Breakdown - currency neutral | |
| | |
| | |
| |
| Adjusted Revenue | |
Six Months Ended | | |
| | |
| |
| | |
June 30, 2014 | | |
June 30, 2015* | | |
Increase
(Decrease) | | |
Increase
(Decrease) | |
| | |
In Millions USD | | |
% | |
| Western Europe | |
$ | 140.2 | | |
$ | 145.2 | | |
$ | 5.0 | | |
| 3.6 | % |
| The Americas | |
| 75.6 | | |
| 46.8 | | |
| (28.8 | ) | |
| (38.1 | %) |
| Asia-Pacific | |
| 24.1 | | |
| 20.5 | | |
| (3.6 | ) | |
| (14.9 | %) |
| Central & Eastern Europe, Middle East, Africa | |
| 19.4 | | |
| 10.8 | | |
| (8.6 | ) | |
| (44.3 | %) |
| Total | |
$ | 259.3 | | |
$ | 223.3 | | |
$ | (36.0 | ) | |
| (13.9 | %) |
* At Q1-2014 and Q2-2014 rates
The following table sets forth each region’s
contribution to total Adjusted revenue and a comparison with the first half 2014
(in percentage):
| Region |
|
Portion of the Adjusted revenue in six months ended |
|
| |
|
June 30, 2014 |
|
|
June 30, 2015 |
|
| Western Europe |
|
|
54.0 |
% |
|
|
62.1 |
% |
| The Americas |
|
|
29.2 |
% |
|
|
23.8 |
% |
| Asia-Pacific |
|
|
9.3 |
% |
|
|
9.3 |
% |
| Central & Eastern Europe, Middle East & Africa |
|
|
7.5 |
% |
|
|
4.8 |
% |
| Total |
|
|
100.0 |
% |
|
|
100.0 |
% |
The Americas revenue decrease was mainly
due to lower demand for sparkling water makers and flavors in the U.S., which is partially due to the product transition as part
of the company’s current brand repositioning and growth plan. The decrease in Western Europe revenue was mainly due to the
impact from changes in foreign currency exchange rates. Excluding the foreign currency exchange impact, Western Europe revenue
increased approximately 3.6% due to increased sales in Germany, Austria and Switzerland partially offset by declines in France
and the Nordics. Asia-Pacific revenue decreased primarily due to changes in foreign currency exchange rates and a decrease in sales
in South Korea. The decrease in CEMEA revenue was due to lower sales in Czech Republic and Israel.
Sparkling water maker unit sales decreased
27% to 1.0 million from 1.4 million in the same period in 2014 mainly due to the decrease in the U.S and France partially offset
by an increase in Germany, Austria and Switzerland. CO2 refill unit sales increased 5% to a record of 13.0 million and flavor unit
sales decreased 44% to 10.0 million.
Gross Margin
First half gross margin (before the impact of restructuring
costs) was 51.2% this year compared to 51.3% in the prior year. First half 2015 gross margin was positively impacted primarily
by higher share of CO2 refills in product mix offset by unfavorable changes in foreign currency exchange rates.
Sales & Marketing
Sales and marketing expenses decreased
by 27.4% to $67.6 million, or 35.0% of Adjusted revenue, compared to $93.1 million, or 35.9% of revenue in first half 2014.
Selling expenses within the sales and marketing expenses amounted
to $41.5 million or 21.5% of revenue, compared to $50.7 million or 19.5% of revenue in the first half of 2014. Advertising and
promotion expenses were $26.1 million or 13.5% of Adjusted revenue in the first half of 2015, compared to $42.4 million or 16.4%
of revenue in the first half of 2014.
General & Administrative
General and administrative expenses for
the first half of 2015 were $23.1 million, or 12.0% of Adjusted revenue, compared to $26.4 million, or 10.2% of revenue in 2014.
The decrease was mainly due to a decrease in share-based payment expenses.
Operating Income
Operating income (before the impact of
restructuring costs) decreased to $8.2 million, or 4.2% of Adjusted revenue compared to $13.6 million or 5.2% of revenue in the
first half of 2014. Operating income was negatively impacted from changes in foreign currency exchange rates by approximately $7.1
million.
Tax Expense
Tax expense was $1.4 representing an effective tax rate of 16.4%
compared to $1.4 million or an effective tax rate of 11.6% in the first half of 2014.
Net Income
First half 2015 net income on an IFRS basis
was $7.0 million, or $0.33 per diluted share, based on 21.1 million weighted shares outstanding, compared to net income of $11.0
million, or $0.52 per diluted share, based on 21.3 million weighted shares outstanding in the first half of 2014.
Earnings per Share
First half 2015 Adjusted diluted earnings
per share were $0.56 compared to $0.52 in the first half 2014.
Foreign Currency Impact
Changes in foreign currency exchange rates
("FX") had a negative impact on revenue of $30.3 million mainly due to the said weakening in the Euro, the Australian
dollar and the Swedish Krona exchange rates against the U.S. dollar compared to the same period last year. Conversely, FX had a
positive impact on cost of revenue and operating expenses during the first half of 2015, as approximately 75% of costs and expenses
were denominated in currencies other than the U.S. dollar, mainly the Israeli Shekel, which decreased in value by 11.2% against
the U.S. dollar compared to its average rate in the same period in 2014. As a result, FX had an overall net negative impact of
approximately $7.1 million on operating income.
Exhibit 99.3
Quarterly Results % Change Y/Y Total Revenues (1) $101.7million - 28% Soda Maker Units 491,000 - 37% Flavor Units 5.1million - 45% CO 2 Refill Units 6.9 million +7% Net Income Non - IFRS (1) $3.5 million - 62% EPS (2) Non - IFRS (1) $0.17 - 60% Net Income IFRS $1.0 million - 90% EPS (2) IFRS $0.05 - 88% Financial Highlights Q2 2015 (1) Excluding impact of restructuring. (2) Based on 2
1.1 million weighted shares outstanding in Q2 2015 and 21.3 million weighted shares outstanding in Q2 2014
Quarterly Revenue 2009 - 2015 (in $ Million) Quarterly Revenue Change 27.9 31.6 35.9 40.9 39.1 50.0 54.5 64.9 58.5 69.1 75.7 85.7 87.9 103.0 112.5 132.9 117.6 132.4 144.6 168.1 118.2 141.2 125.9 126.5 91.3 101.7 - 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015
Quarterly Soda Maker Unit Sales 2009 - 2015 (in thousands ) Quarterly Soda Maker Units Change 184 203 285 385 297 463 449 712 592 634 717 767 683 764 940 1,111 776 935 1,196 1,542 604 785 818 1,018 518 491 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015
Quarterly Refill Unit Sales 2009 - 2015 (in millions) Quarterly CO 2 Refill Units Change 1.9 2.1 2.2 2.3 2.3 2.5 2.8 2.7 2.9 3.4 3.6 3.4 3.7 4.2 4.3 4.3 4.8 5.5 5.8 5.4 5.8 6.5 6.4 6.3 6.0 6.9 - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015
Quarterly Flavor Unit Sales 2009 - 2015 (in millions) Quarterly Flavor Units Change 1.4 1.7 2.0 2.2 3.0 3.1 4.1 3.7 3.8 6.1 4.4 4.6 5.8 7.2 7.7 7.4 7.7 8.5 8.3 9.8 8.4 9.3 7.6 6.1 4.9 5.1 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015
Consolidated Statements of Operations Q 2 - 2015 vs. Q 2 - 2014 2014 2015 Reported Reported (Unadjusted) Restructuring Adjusted (Unadjusted) Restructuring Adjusted (Audited) (Audited) (Audited) (Unaudited) (Unaudited) (Unaudited) Revenue $141,171 $0 $141,171 $99,834 $1,820 $101,654 Cost of revenue 69,914 0 69,914 51,307 (759) 50,548 Gross profit 71,257 71,257 48,527 2,579 51,106 Operating expenses Sal
es and marketing 46,941 46,941 35,118 35,118 General and administrative 13,072 13,072 11,456 0 11,456 Other income, net 0 0 0 0 0 Total operating expenses 60,013 0 60,013 46,574 0 46,574 Operating income 11,244 0 11,244 1,953 2,579 4,532 Interest expense (income), net 286 286 92 92 Other financial expense (income), net 620 620 500 500 Total financial expense (income), net 906 906 592 592 Income before income taxes 10,338 0 10,338 1,361 2,579 3,940 Income tax expense 1,095 1,095 401 401 Net income for the period $9,243 $0 $9,243 $960 $2,579 $3,539 Net income per share Basic $0.44 $0.44 $0.05 $0.12 $0.17 Diluted $0.43 $0.43 $0.05 $0.12 $0.17 Weighted average number of shares Basic 20,958 20,958 21,032 21,032 Diluted 21,271 21,271 21,138 21,138
Consolidated Statements of Operations H1 - 2015 vs. H1 - 2014 2014 2015 Reported Reported (Unadjusted) Restructuring Adjusted (Unadjusted) Restructuring Adjusted (Audited) (Audited) (Audited) (Unaudited) (Unaudited) (Unaudited) Revenue $259,343 $0 $259,343 $190,178 $2,820 $192,998 Cost of revenue 126,240 0 126,240 96,200 (2,072) 94,128 Gross profit 133,103 133,103 93,978 4,892 98,870 Operating expense
s Sales and marketing 93,087 93,087 67,579 67,579 General and administrative 26,427 26,427 23,097 23,097 Other income, net 0 0 0 0 0 Total operating expenses 119,514 0 119,514 90,676 0 90,676 Operating income 13,589 0 13,589 3,302 4,892 8,194 Interest expense (income), net 333 333 126 126 Other financial expense (income), net 792 792 (5,202) (5,202) Total financial expense (income), net 1,125 1,125 (5,076) (5,076) Income before income taxes 12,464 0 12,464 8,378 4,892 13,270 Income tax expense 1,443 1,443 1,371 1,371 Net income for the period $11,021 $0 $11,021 $7,007 $4,892 $11,899 Net income per share Basic $0.53 $0.53 $0.33 $0.23 $0.57 Diluted $0.52 $0.52 $0.33 $0.23 $0.56 Weighted average number of shares Basic 20,933 20,933 21,025 21,025 Diluted 21,274 21,274 21,095 21,095
The New Lehavim Plant, July 2015
Lehavim Plastics Factory, July 2015
Lehavim Plastics Factory, July 2015
Lehavim Assembly Factory, July 2015
Lehavim Assembly Factory, July 2015
Construction of the Lehavim Warehouse & Logistics Center, July 2015
Construction of the Lehavim Warehouse & Logistics Center, July 2015
Waters Launch: First In - Store Displays, July 2015 Shufersol , Israel Home Center, Israel
Waters Launch: First In - Store Displays, July 2015 Shufersal Glilot , Israel
NY City Blitz, July 2015
New York City Blitz, July 2015
New York City Blitz, July 2015
New York City Blitz, July 2015
New York City Blitz, July 2015
San Francisco City Blitz, July 2015
San Francisco City Blitz, July 2015
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