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.

G. Willi-Food International Ltd. logo (PRNewsfoto/G. Willi-Food International Ltd.)

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-Food, commented: "We are pleased to present very strong third quarter 2020 financial results, which show stable growth in Company sales and a significant improvement in all operational profit parameters. We also very pleased that in the third quarter the Company recorded significant gains in part from revaluating its portfolio of securities to its fair value which led to finance income, net of NIS 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 equals 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.
CONDENSED CONSOLIDATED BALANCE SHEETS



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
through profit or loss

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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



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
basic/diluted EPS

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.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



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.
APPENDIX TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


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,
and other current liabilities

(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:
G. Willi - Food International Ltd.
Yitschak Barabi, Chief Financial Officer
(+972) 8-932-1000
itsik.b@willi-food.co.il

 

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