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SodaStream International Reports Record Fourth Quarter And Full Year Revenue

Image: 
SodaStream logo
Date: 
1 March, 2011
Subtitle: 
Fourth Quarter Revenues Increased 59% to Euro 50.0 Million; Fiscal 2010 Revenues Increase 53% to Euro 160.7 Million; Fourth Quarter Diluted Earnings Per Share was Euro 0.21
Abstract: 

 

AIRPORT CITY, Israel – SodaStream International Ltd. (NASDAQ: SODA), a leading manufacturer of home beverage carbonation systems, announced today its results for the three and twelve month periods ended December 31, 2010.

 

 

AIRPORT CITY, Israel – SodaStream International Ltd. (NASDAQ: SODA), a leading manufacturer of home beverage carbonation systems, announced today its results for the three and twelve month periods ended December 31, 2010.

 

Fourth Quarter Financial Highlights

Revenues increased 59% to euro 50.0 million

Americas revenues increased 238% to euro 14.5 million

Western Europe revenues increased 24% to euro 25.4 million

Diluted earnings per share was euro 0.21 or $0.28

Soda maker unit sales increased 85% to 712,000

 

Fiscal 2010 Financial Highlights

Revenues increased 53% to euro 160.7 million

Americas revenues increased 189% to euro 31.6 million

Western Europe revenues increased 34% to euro 99.7 million

Adjusted net income increased 69% to euro 13.0 million

Soda maker unit sales increased 82% to 1.9 million

 

Commenting on the results, Daniel Birnbaum, Chief Executive Officer of SodaStream International said, “We delivered a strong fourth quarter performance to conclude an exciting and successful year for our Company. These results underscore the progress we have achieved in expanding our global business, particularly in the United States. Through increased marketing & advertising and initiating distribution with several key retailers, we significantly broadened awareness of our brand and products and generated strong consumer demand in the U.S. We also experienced solid sales growth in our other regions driven by our growing installed base and product launches. Importantly, our strong top-line performance helped us achieve record earnings in 2010.

“We began 2011 with positive momentum across our business and significant growth opportunities ahead of us.  In the near-term, our priorities are to further penetrate the U.S. with additional distribution and ongoing marketing efforts aimed at creating new customers and repeat purchases of our consumables portfolio. Over time, this business model has proven to be highly profitable in developed markets and we are optimistic that we can replicate our success in the U.S. and other new markets throughout Western Europe, CEMEA and Asia Pacific. We have a great deal of confidence in the future of SodaStream and believe we have the capability to grow this business for many years to come.”

Results for the Three Months Ended December 31, 2010:

Total revenues for the fourth quarter of 2010 were euro 50.0 million, $66.3 million as per a convenience translation, an increase of 58.5% compared to euro 31.5 million reported in the fourth quarter of 2009.  Revenues increased in each geographical region, with revenues for Western Europe and the Americas increasing 24.2% and 238.0%, respectively, compared to the fourth quarter of 2009. (See table with geographic breakdown below)

During the fourth quarter of 2010, the Company sold 712,000 soda makers as compared to 385,000 during the fourth quarter of 2009, an 85.1% increase, and sold 2.5 million CO2 refills during the fourth quarter of 2010 compared to 2.1 million CO2 refills in the fourth quarter of 2009.

Gross margin for the fourth quarter of 2010 slightly decreased to 54.3%, compared to 54.9% in the comparable period in 2009. This decrease was mainly due to the growing portion of soda maker starter kit sales in the revenue mix, as part of management’s strategy to increase market penetration. Gross margin was up from 53.7% for the first nine months of 2010.

Sales and marketing expenses for the fourth quarter of 2010 totaled euro 18.9 million, or 37.9% of revenues, compared to euro 9.3 million, or 29.4% of revenues, for the comparable period last year. The increase is primarily due to investments in the Company’s sales & distribution platform and an increase in marketing spend to capitalize on new distribution opportunities, mainly in the United States.

General and administrative expenses for the fourth quarter of 2010 were euro 4.6 million, compared to euro 3.1 million in the comparable period of last year.  General and administrative expenses for the three months ended December 31, 2010 include euro 684,000 of non-cash share-based compensation expense (the “Share-Based Compensation”) and euro 88,000 related to a discontinued management fee expense paid to Fortissimo Capital (the “Fortissimo Payments”). This compares to Shared-Based Compensation of euro 67,000 and euro 145,000 of the Fortissimo Payments for the three months ended December 31, 2009.  Adjusted general and administrative expenses exclude the Shared-Based Compensation as well as the Fortissimo Payments, the latter was cancelled effective as of November 2010. Such adjusted general and administrative expenses were euro 3.9 million or 7.8% of revenues for the fourth quarter 2010, and euro 2.9 million or 9.2% of revenues for the comparable period of 2009.

Net income for the three months ended December 31, 2010 was euro 3.5 million, or 21 euro cents, $0.28 per the convenience translation, per fully diluted share based on 17.1 million weighted average shares, compared to net income of euro 4.2 million, or 32 euro cents per fully diluted share based on 13.3 million weighted average shares, in the comparable period in 2009.  Excluding the Shared-Based Compensation and the Fortissimo Payments, adjusted net income (as defined below) for the fourth quarter of 2010 was euro 4.3 million, or 25 euro cents, $0.33 per the convenience translation per fully diluted share, compared to adjusted net income of euro 4.4 million, or 34 euro cents per fully diluted share in the fourth quarter of 2009.

Adjusted EBITDA for the fourth quarter of 2010 totaled euro 6.2 million, compared to euro 5.9 million for the comparable period in 2009.  Adjusted EBITDA margin was 12.3% for the fourth quarter of 2010 as compared to 18.7% for the comparable period in 2009.

Cash flow used in operating activities during the fourth quarter of 2010 was euro 1.9 million, compared to euro 8.3 million generated from operating activities during the comparable quarter of 2009.  The decrease in operating cash flow was mainly due to an increase in working capital, particularly with respect to inventory in the Americas and Western Europe, to support the Company’s growth.

Results for the twelve months ended December 31, 2010:

Total revenues for the twelve months ended December 31, 2010 increased 53.0% to euro 160.7 million or $213.2 million per the convenience translation, compared to euro 105.0 million for the comparable period in 2009.  Sales increased in each geographical region year-over-year, with revenues for Western Europe and the Americas increasing 34.0% and 188.9%, respectively, compared to the same period in 2009.

For the full year, the Company sold 1,922,000 soda makers compared to 1,057,000 in 2009, an 81.9% increase, and sold 9.8 million CO2 refills during 2010 compared to 8.2 million CO2 refills in 2009.

Gross margin for 2010 decreased to 53.9% compared to 55.6% for the corresponding period last year. This decrease was mainly due to the growing portion of soda maker starter kits in the revenue mix, which have lower gross margins than consumable products.

Sales and marketing expenses for the year ended December 31, 2010 totaled euro 57.1 million, or 35.5% of revenues, compared to euro 34.7 million, or 33.0% for the comparable period last year.

General and administrative expenses for year ended December 31, 2010 totaled euro 18.5 million compared to euro 13.1 million for the comparable period in 2009.  Included in general and administrative expenses for 2010 was Shared-Based Compensation of euro 1.0 million and euro 2.3 million of the Fortissimo Payments. This compares to Shared-Based Compensation of euro 163,000 and euro 461,000 of the Fortissimo Payments for the comparable period last year. Adjusted general and administrative expenses for 2010, excluding the Shared-Based Compensation and the Fortissimo Payments, were euro 15.2 million, or 9.5% of revenues, compared to euro 12.5 million, or 11.9% of revenue for 2009.

Net income for the year ended December 31, 2010 was euro 9.7 million, or 69 euro cents, $0.92 per the convenience translation, per fully diluted share based on 14.7 million weighted average shares, compared to net income of euro 7.1 million, or 57 euro cents per fully diluted share based on 13.2 million weighted average shares, for the comparable period in 2009. As of December 31, 2010, the Company had 20.2 million shares outstanding on a fully diluted basis. Adjusted net income for the year ended December 31, 2010 increased 69.4% to euro 13.0 million, or 92 euro cents, $1.22 per the convenience translation, per fully diluted share, compared to euro 7.7 million or 62 euro cents per fully diluted share for the year ended December 31, 2009.

Adjusted EBITDA for the year ended December 31, 2010 totaled euro 18.8 million, compared to euro 13.2 million for the prior year period. Adjusted EBITDA margin for the year ended December 31, 2010 was 11.7% compared to 12.6% for the comparable period last year.

Cash flow used in operating activities during the year ended December 31, 2010 was euro 8.2 million, compared to euro 11.5 million generated during the year ended December 31, 2009.  As with the fourth quarter, the decrease in operating cash flow was mainly due to an increase in working capital, particularly with respect to inventory in the Americas and Western Europe to support the Company’s growth, as well as tax payments made with respect to previous years.

Guidance

The Company expects 2011 revenue to increase approximately 25% over 2010 revenue of euro 160.7 million.  The Company also expects net income to increase approximately 40% over the net income of euro 9.7 million reported in 2010. This guidance includes a share-based payment expense of approximately euro 3.7 million in 2011. On an adjusted basis, excluding the share-based payment expense, fiscal 2011 net income is expected to be approximately euro 17 million.

Balance Sheet

As of December 31, 2010, cash and cash equivalents increased to euro 52.9 million from cash and cash equivalents of euro 4.2 million as of December 31, 2009. The increase is primarily attributable to the euro 69.9 million in net proceeds the Company received from its initial public offering that was completed on November 8, 2010. As of December 31, 2010, loans and borrowings (no outstanding shareholders’ loans) totaled euro 6.8 million, compared to euro 24.5 million (including shareholders’ loans) as of December 31, 2009. Working capital as of December 31, 2010 was euro 27.2 million, an increase of approximately 434%, compared to  euro 5.1 million as of December 31, 2009, primarily due to an increase in inventory and accounts receivable reflecting demand and revenues’ growth.

Conference Call

The Company has scheduled a conference call for 8:30 AM Eastern Standard Time (United States) on Tuesday, March 1, 2011, to review the Company’s financial results, market trends, and future outlook.  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 manufactures home beverage carbonation systems, which enable consumers to easily transform ordinary tap water instantly into carbonated soft drinks and sparkling water. Soda makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated soft drinks and sparkling water. Our products are environmentally friendly, cost effective, promote health and wellness, and are customizable and fun to use. In addition, our products offer convenience by eliminating the need to carry bottles home from the supermarket, to store bottles at home or to regularly dispose of empty bottles. Our products are available at more than 40,000 retail stores in 41 countries around the world.  For more information on SodaStream, please visit the Company's website: www.sodastream.com.

Non-IFRS Financial Measures

This press release contains certain non-IFRS measures, including Adjusted net income (“Adjusted net income”), and Adjusted Earnings Before Interest, Income Tax, Depreciation and Amortization (“Adjusted EBITDA”).

Adjusted net income represents net income calculated in accordance with IFRS as adjusted for the impact of the Share-Based Compensation and for the impact of the Fortissimo Payments. Adjusted EBITDA represents earnings before interest, income tax, depreciation and amortization, and further eliminates the effect of the Share-Based Compensation and of the Fortissimo Payments.

The Company believes that the adjusted net income and adjusted EBITDA, which excludes the Share-Based Compensation and the Fortissimo Payments, should be considered in evaluating the Company’s operations since they provide a clearer indication of the Company’s operating results going forward.

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 in the tables below.

Forward Looking Statement

This release contains forward-looking statements, which express the current beliefs and expectations of management. 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 expand into our target markets, including the United States; our ability to continue to develop or maintain 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 home 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; potential product liability claims if any component of our home 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 operate; risks associated with our being subject to 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 detailed in documents we file from time to time with the United States Securities and Exchange Commission.  Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

 

TO VIEW THE FULL PRESS RELEASE INCLUDING FINANCIAL TABLES PLEASE CLICK HERE

 

Company Contact:

Yonah Lloyd

Executive Director – Corporate Development and Communication

SodaStream International Ltd.

Phone: +972-3-976-2462

yonahl@sodastream.com

Investor Contacts (US):

Brendon Frey / Joe Teklits

ICR

Phone: + 1 203-682-8200

brendon.frey@icrinc.com / joseph.teklits@icrinc.com