G. Willi-Food International Ltd. (the "Company" or "Willi-Food"), a global company that specializes in the development, marketing and international distribution of kosher foods, today announced its financial results for the fiscal year ended December 31, 2013.
Fiscal 2013 Highlights
Sales increased 17.3% from fiscal 2012 to NIS 336.0 million (US$ 96.8 million)Gross profit increased 21.2% from fiscal 2012 to NIS 83.7 million (US$ 24.1 million), or 24.9% of salesOperating income increased 24.5% from fiscal 2012 to NIS 29.2 million (US$ 8.4 million), or 8.7% of salesIncome before taxes increased 30.1% from fiscal 2012 to NIS 41.3 million (US$ 11.9 million), or 12.3% of salesNet income increased 32.5% from fiscal 2012 to NIS 31.8 million (US$ 9.2 million), or 9.5% of salesEarnings per share of NIS 2.45 (US$ 0.71) increased 32.5% compared to earnings per share of NIS 1.85 (US$ 0.53) in fiscal 2012Cash, securities balance and loan to C.D-B.A Holdings (Designated) (2013) Ltd. ("Newco") (net of short-term bank debt) of NIS 214.4 million (US$ 61.8 million) as of December 31, 2013
Willi-Food's operating divisions include Willi-Food, a distributor of a broad variety of kosher foods, and its wholly-owned Gold Frost, a designer, developer and distributor of branded kosher innovative dairy food products.
Fiscal 2013 Results
Sales for fiscal 2013 increased by 17.3% to NIS 336.0 million (US$ 96.8 million) from NIS 286.5 million (US$ 82.5 million) in fiscal 2012. Sales increased in fiscal 2013 due to our increased marketing efforts and the growing demand from domestic and international customers for our quality kosher products. In addition, we continued to benefit from a shift in behavior in Israel as cost-conscious consumers recognize our products as a viable alternative to higher cost leading brands.
Gross profit for fiscal 2013 increased by 21.2% to NIS 83.7 million (US$ 24.1 million) compared to NIS 69.0 million (US$ 19.9 million) recorded in fiscal 2012. Fiscal 2013 gross margin was 24.9% compared to gross margin of 24.1% for fiscal 2012. The improvement in gross margin was the result of a favorable mix of product revenue during the year as sales of higher gross margin products increased faster than sales of lower gross margin products.
Mr. Zwi Williger, Chairman of Willi-Food commented, "We are very pleased to report a strong year, with organic sales growth of 17.3%, gross profit growth of 21.2%, operating income growth of 24.5% and net income growth of 32.5% as our customer base continues to expand and market demand for our products continues to increase. Despite the pressure imposed on the Company by the supermarket chains to reduce prices and despite the well-known pressures in commodity costs imposed worldwide, we continued to gain traction with new customers while product sales to existing customers also continued to grow."
Willi-Food's operating income for fiscal 2013 increased by 24.5% to NIS 29.2 million (US$ 8.4 million) compared to NIS 23.5 million (US$ 6.8 million) recorded in fiscal 2012. Selling expenses increased by 21.5% from 2012, primarily due to an increase in promotional expenses as well as vehicles and transport expenses, each of which increased due to the growth in sales. Selling expenses as a percentage of sales increased in fiscal 2013 to 10.5% compared to 10.0% in fiscal 2012. General and administrative expenses increased by 16.1% from fiscal 2012, primarily due to an increase in management profit-related bonuses. General and administrative expenses as a percentage of sales in fiscal 2013 were 5.8%, approximately the same percentage as in fiscal 2012.
Willi-Food's income before taxes for fiscal 2013 increased by 30.1% to NIS 41.3 million (US$ 11.9 million) compared to NIS 31.8 million (US$ 9.2 million) recorded in fiscal 2012.
Willi-Food's net income for fiscal 2013 increased by 32.5% to NIS 31.8 million (US$ 9.2 million), or NIS 2.45 (US$ 0.75) per share, from NIS 24.0 million (US$ 6.9 million), or NIS 1.85 (US$ 0.53) per share, recorded in fiscal 2012.
Willi-Food ended 2013 with NIS 214.4 million (US$ 61.8 million) in cash, securities and loan to Newco net from short-term debt. Willi-Food's shareholders' equity at the end of December 2013 was NIS 365.8 million (US$ 105.4 million).
Business Outlook
Mr. Williger continued, "Our strong performance in 2013 was driven by expanded sales volume of our higher-margin products to new and existing customers. With sales increases in all of our business segments, we were able to achieve the highest sales and gross profit in the Company's history. The broad-based strength of our business enabled us to deliver record results, both on the top and bottom lines. We have significantly expanded our product lines and continue to deliver improved margins. As we see consumer demand for kosher foods continuing to increase, we are confident that our focused marketing strategy and the introduction of higher-margin products targeted to health-conscious and kosher consumers will continue to support our growth in 2014."
"Due to increased awareness in Israel of the rising food prices, customers have realized that they can obtain food products from us of comparable or better quality than those of the leading brands but at more affordable prices, causing our customer base and the demand for our products to increase," Mr. Williger noted. "Our financial results have significantly improved over the last six quarters as a direct result of our strategy to organically grow our customer base and product line, while at the same time expanding our margins. We implemented our plan to increase the awareness of our products by initiating promotional activities that created broad awareness of our new and old products, broadening our customer base. This plan has helped us achieve our goals to strengthen our position in the market due to our broad range of quality food products. We intend to reinvest in the development of the Company in order to maximize profitability and increase long-term value for our shareholders. Moreover, we are pleased to consistently deliver significantly higher margins than those generated by most of the other companies in our industry, as we are able to differentiate our Company through our success by becoming a high margin business in a low margin industry."
Furthermore, Mr. Williger added, "About two weeks ago, my brother Joseph and I signed an agreement to sell to Emblaze, which is traded on the London Stock Exchange, our controlling stake in Willi-Food Investments Ltd., the controlling shareholder of the Company. We view this sale as an opportunity for the Company to continue its accelerated development in the food sector, both in Israel and outside Israel and possibly to expand into additional activities. Both my brother and I will continue to manage the Company, together with the Company's personnel and the management of Emblaze, in order to continue to develop the Company."
"We believe we are well positioned to continue our expansion and the recent financial results certainly confirm our belief in our strategy," concluded Mr. Williger. "We are constantly focusing on looking to meet the demands of consumers for new kosher products, and we have the infrastructure in place and development expertise to develop and deliver these products. At the same time, we remain focused on maximizing long-term profitability and creating additional value for our shareholders."
