PR Newswire | Nov 10, 2020 04:30AM EST

Show the Highest Ever Quarterly Income Before Tax on Income and Net Profit (Increase by 114.3% and 112.2% Year Over Year)

11/10 03:29 CST

G. Willi-Food international Reports the Results of Third Quarter 2020 Which Show the Highest Ever Quarterly Income Before Tax on Income and Net Profit (Increase by 114.3% and 112.2% Year Over Year)Sales up 17.4% and operating profit up 11.8% in third quarter 2020 compared to same period 2019 YAVNE, Israel, Nov. 10, 2020

YAVNE, Israel, Nov. 10, 2020 /PRNewswire/ --G. Willi-Food International Ltd.(NASDAQ: WILC) (TASE: WILF) (the "Company" or "Willi-Food"), a global company that specializes in the development, marketing and international distribution of kosher foods, today announced its unaudited financial results for the third quarter ended September 30, 2020.

Third Quarter Fiscal Year 2020 Highlights

* Sales increased by 17.4% year-over-year to NIS 111.9 million (US$ 32.5 million). * Gross profit increased by 14.1% year-over-year to NIS 34.0 million (US$ 9.9 million). * Operating profit of NIS 14.0 million (US$ 4.1 million), or 12.5% of sales, which represents a 11.8% increase from NIS 12.6 million (US$ 3.6 million) in the comparable quarter of 2019. * Net profit increased by 112.2% year-over-year to NIS 21.9 million (US$ 6.4 million), or 19.6% of sales. * Net cash from operating activities of NIS 28.2 million (US$ 8.2 million). * Cash and securities balance of NIS 364.6 million (US$ 106.0 million) as of September 30, 2020. * Earnings per share of NIS 1.63 (US$ 0.47).

Management Comment

Zwi Williger & Joseph Williger, Co-Chairmen of Willi-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 150,197 142,443 141,543 43,649 41,396 41,134through profit or loss

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 1,520 1,374 1,675 442 399 487liabilities

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 (1,029) (623) (1,029) (299) (181) (299)respect of defined benefit

Retained earnings 401,302 348,920 362,987 116,624 101,401 105,489

Equity attributable to owners of the 572,142 477,698 491,356 166,272 138,825 142,794Company

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 13,289,239 13,217,017 13,433,684 13,217,017 13,289,239 13,217,017basic/diluted EPS

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 21,697 (15,542) 6,289 8,643 6,305 (4,517)(used to) continuing operating activities (Appendix A)

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 (6,006) 2,225 (23,195) (2,535)

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) (2,499) (3,826) (24,451) (6,940)

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) 11,955 (388) 41,964 (237)

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 121,860 134,287 168,689 129,889 35,414 39,025financial period

Cash and cash equivalents of the end of the financial 214,408 141,685 214,408 141,685 62,310 41,175year

(*) 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 operatingactivities:

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 (58) - - - (17) -equipment

Changes in assets and liabilities:

Decrease (increase) in trade receivables and 1,570 (22,956) 6,271 235 456 (6,671)other receivables

Decrease in inventories 14,871 10,021 4,585 16,603 4,322 2,912

Increase (decrease) in trade and other payables, (1,417) 4,098 4,342 (7,906) (412) 1,191and other current liabilities

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 flowinformation:

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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SOURCE G. Willi-Food International Ltd.