PR Newswire | Nov 30, 2021 10:01AM EST

of 2021

11/30 09:00 CST

G. Willi-Food International Reports Its Financial Results for the Third Quarter of 2021 YAVNE, Israel, Nov. 30, 2021

YAVNE, Israel, Nov. 30, 2021 /PRNewswire/ -- G. Willi-Food International Ltd. (NASDAQ: WILC) (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, 2021.

Third Quarter Fiscal Year2021Highlights

* Sales decreased by 5.1% year-over-year to NIS 106.3 million (US$ 32.9 million). * Gross profit decreased by 13.4% year-over-year to NIS 29.5 million (US$ 9.1 million). * Operating profit decreased by 41.7% year-over-year to NIS 8.2 million (US$ 2.5 million). * Total financial expense, net NIS 1.6 million (US$ 0.5 million) compared to Total financial income net on third quarter of 2020 of NIS 14.5 million (US$ 5.4 million). * Income before taxes decreased by 76.9% year-over-year to NIS 6.6 million (US$ 2.0 million). * Net profit decreased by 76.2% year-over-year to NIS 5.2 million (US$ 1.6 million), or 4.9% of sales. * Cash and cash equivalents balance of NIS 219.0 million (US$ 67.8 million) as of September 30, 2021. * Earnings per share of NIS 0.38 (US$ 0.12).

Management Comment

Zwi Williger & Joseph Williger, Co-Chairmen of Willi-Food, commented: "We are pleased to present third quarter 2021 financial results. The Company experienced a decline in sales, mainly resulting from a decrease in working days in September due to Jewish holidays and due to decline in sales in the food industry as a whole.

"As a result of the Covid-19 pandemic, the world is still experiencing disruptions to international commercial shipping, which has led to an increase in the demand for containers and a significant increase in sea freight and commodity prices which affected the company gross margin.

"Despite the challenging environment, the Company has worked to maintain a high level of sales and positive operational parameters for the third quarter of 2021. The Company's strategy for the near future is to improve commercial conditions with its suppliers and customers, develop new products, enter into new categories with potentially high gross profit margins, improve the visibility of its products in the stores and strengthen its brand, supply chain and sufficient inventory.We intend to work hard to achieve the goals we have set for the Company."

Third Quarter Fiscal 2021 Summary

Sales for the third quarter of 2021 decreased by 5.1% to NIS 106.3 million (US$ 32.9 million) from NIS 111.9 million (US$ 34.7 million) in the third quarter of 2020. The decrease is mainly due to decrease in working days in September 2021 due to Jewish holidays and lower sales in the food industry as a whole.

Gross profit for the third quarter of 2021 decreased by 13.4% to NIS 29.5 million (US$ 9.1 million) compared to NIS 34.0 million (US$ 10.5 million) in the third quarter of 2020. Third quarter gross margin decreased by 13.4% to 27.7% compared to gross margin of 30.4% for the same period in 2020. The decrease in gross profit was mainly due to increase costs of the Company's imported products and due to increases in shipping costs

Selling expenses increased by 9.7% to NIS 15.9 million (US$ 4.9 million) compared to NIS 14.5 million (US$ 4.5 million) in the third quarter of 2020 primarily due to an increase in payroll expenses in the logistics and sales departments and due to an increase in advertising and promotion.

General and administrative expenses decreased by 1.3% to NIS 5.4 million (US$ 1.7 million) compared to NIS 5.5 million (US$ 1.7 million) in the third quarter of 2020.

As a result of the foregoing, operating profit for the third quarter of 2021 decreased by 41.7% to NIS 8.2 million (US$ 2.5 million) compared to NIS 14.0 million (US$ 4.3 million) in the third quarter of 2020.

Financial expense, net totaled NIS 1.6 million (USD$ 0.5 million) compared to Financial income, net of NIS 14.5 million (US$ 4.5 million) in the third quarter of 2020. Financial expense, net for the third quarter of 2021 was comprised mainly of exchange rate differences of NIS 4.3 million (US$ 1.3 million), interest and dividend income from the Company's portfolio of securities in the amount of NIS 1.8 million (US$ 0.6 million) and income from revaluation of the Company's portfolio of securities to fair value in the amount of NIS 1.3 million (US$ 0.4 million).

Income before taxes on income for the third quarter of 2021 was NIS 6.6 million (US$ 2.0 million) compared to income before taxes on income of NIS 28.5 million (US$ 8.8 million) in the third quarter of 2020.

Net profit in the third quarter of 2021 was NIS 5.2 million (US$ 1.6 million), or NIS 0.38(US$ 0.12) per share, compared to NIS 21.9 million (US$ 6.8 million), or NIS 1.63(US$ 0.51) per share, in the third quarter of 2020.

Willi-Food ended the third quarter of 2021 with NIS 219.0 million (US$ 67.8 million) in cash and cash equivalents. Net cash from operating activities for the third quarter of 2021 was NIS 38.6 million (US$ 12.0 million). Willi-Food's shareholders' equity as of June 30, 2021 was NIS 568.1 million (US$ 191.0 million).

First Nine Months of Fiscal 2021 Highlights

* Sales decreased by 2.3% year-over-year to NIS 337.3 million (US$ 104.5 million). * Gross profit decreased by 10.8% year-over-year to NIS 102.6 million (US$ 31.8 million). * Operating profit decreased by 26.1% year-over-year to NIS 36.9 million (US$ 11.4 million). * Total financial income increased by 4,571% year-over-year to NIS 17.6 million (US$ 5.4 million). * Income before taxes increased by 8.3% year-over-year to NIS 54.5 million (US$ 16.9 million). * Net profit increased by 10.4% to NIS 42.3 million (US$ 13.1 million), or 12.5% of sales. * Basic earnings per share of NIS 3.05 (US$ 0.94).

First Nine Months Fiscal 2021 Summary

Sales for the nine-month period ending September 30, 2021 decreased by 2.3% to NIS 337.3 million (US$ 104.5 million) compared to NIS 345.2 million (US$ 106.9 million) in the first nine months of 2020. The decrease in the Company's sales is primarily due to the significant increase in demand for the Company's line of products, especially in retail chains, during the outbreak of Covid 19 in the first quarter of 2020.

Gross profit for the period decreased by 10.8% to NIS 102.6 million (US$ 31.8 million) compared to NIS 115.1 million (US$ 35.6 million) for the first nine-month of 2020. Gross margin for the first nine months of 2021 was 30.4% compared to a gross margin of 33.3% for the same period in 2020. The decrease in gross profit was mainly due to increased shipping costs.

Operating profit for the first nine month of 2021 decreased by 26.1% to NIS 36.9 million (US$ 11.4 million) from NIS 49.9 million (US$ 15.0 million) reported in the comparable period of last year primarily due to the decrease of gross profit.

Financial income, net totaled NIS 17.6 million (USD$ 5.4 million) compared to Financial income, net of NIS 0.4 million (US$ 0.1 million) in the first nine-month of 2020. Financial income, net for the first nine-month of 2021 comprised mainly from income from revaluation of the Company's portfolio of securities to fair value in the amount of NIS 13.3 million (US$ 4.1 million), interest and dividend income from the Company's portfolio of securities in the amount of NIS 8.0 million (US$ 2.5 million), minus expenses from exchange rate differences in the amount of NIS 2.7 million (US$ 0.8 million) and other finance expenses in the amount of NIS 1 million (US$ 0.3 million).

Income before taxes for the first nine months of 2021 increased by 8.3% to NIS 54.5 million (US$ 16.9 million) compared to NIS 50.3 million (US$ 15.6 million) in the first nine months of 2020.

Net profit for the first nine months of 2021 increased by 10.4% to NIS 42.3 million (US$ 13.1 million), or NIS 3.05(US$ 0.94) per share, from NIS 38.3 million (US$ 11.9 million), or NIS 2.88(US$ 0.89) per share, in the first nine months of 2020.

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, 2021, U.S. $1.00 equals NIS 3.229. 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, 2021 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 1,600 customers and 3,200 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 Europian Dairies (Gold Frost), 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: impacts of the ongoing COVID-19 pandemic; 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, 2020, filed with the Securities and Exchange Commission on March 25, 2021. 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

(unaudited)

September 30, December 31, September 30, December 31,

2 0 2 1 2 0 2 0 2 0 2 0 2 0 2 1 2 0 2 0 2 0 2 0

NIS US dollars (*)

(in thousands)

ASSETS

Current assets

Cash and cash equivalents 218,980 214,408 201,822 67,817 66,401 62,503

Financial assets carried at fair value 150,153 150,197 154,700 46,501 46,515 47,910 through profit or loss

Trade receivables 131,779 136,748 131,301 40,811 42,350 40,663

Loans to others - 3,650 18,707 - 1,130 5,793

Other receivables and prepaid expenses 3,969 3,646 6,667 1,229 1,129 2,065

Inventories 48,115 56,677 59,514 14,901 17,553 18,431

Current tax assets 4,599 435 3,965 1,424 135 1,228

Total current assets 557,595 565,761 576,676 172,683 175,213 178,593

Non-current assets

Property, plant and equipment 87,868 83,394 83,105 27,212 25,827 25,737

Less -Accumulated depreciation 49,563 46,675 46,460 15,349 14,455 14,388

38,305 36,719 36,645 11,863 11,372 11,349

Right of use asset 4,695 3,208 2,866 1,454 993 888

Financial assets carried at fair value 29,374 9,273 13,700 9,097 2,872 4,242 through profit or loss

Goodwill 36 36 36 11 11 11

Deferred taxes - 1,047 - - 324 -

Total non-current assets 72,410 50,283 53,247 22,425 15,572 16,490

630,005 616,044 629,923 195,108 190,785 195,083

EQUITY AND LIABILITIES

Current liabilities

Current maturities of lease 1,372 1,520 1,393 425 471 431liabilities

Trade payables 22,707 25,325 23,474 7,032 7,843 7,270

Employees Benefits 3,411 3,114 3,437 1,056 964 1,064

Other payables and accrued expenses 25,240 10,509 11,611 7,817 3,255 3,596

Total current liabilities 52,730 40,468 39,915 16,330 12,533 12,361

Non-current liabilities

Lease liabilities 3,466 1,806 1,592 1,073 559 493

Deferred taxes 3,823 - 768 1,184 - 238

Retirement benefit obligation 1,934 1,628 1,905 599 504 590

Total non-current liabilities 9,223 3,434 4,265 2,856 1,063 1,321

Shareholders' equity

Share capital 1,490 1,490 1,490 461 461 461

Additional paid in capital 170,760 170,760 170,760 52,883 52,883 52,883

Capital fund 247 247 247 76 76 76

Treasury shares (628) (628) (628) (194) (194) (194)

Remeasurement of the net liability in (1,322) (1,029) (1,322) (409) (319) (409) respect of defined benefit

Retained earnings 397,505 401,302 415,196 123,105 124,282 128,584

Equity attributable to owners of the 568,052 572,142 585,743 175,922 177,189 181,401 Company

630,005 616,044 629,923 195,108 190,785 195,083

(*) Convenience translation into U.S. dollars.

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Nine months Three months Nine months

ended ended ended

September 30, September 30, September 30,

2 0 2 1 2 0 2 0 2 0 2 1 2 0 2 0 2 0 2 1 2 0 2 0

NIS US dollars (*)

In thousands (except per share and share data)

Sales 337,325 345,189 106,268 111,933 104,467 106,903

Cost of sales 234,705 230,133 76,808 77,902 72,687 71,271

Gross profit 102,620 115,056 29,460 34,031 31,780 35,632

Operating costs and expenses:

Selling expenses 48,706 47,344 15,935 14,522 15,084 14,662

General and administrative expenses 17,179 17,823 5,415 5,483 5,320 5,520

Other income 200 58 63 - 62 18

Total operating expenses 65,685 65,109 21,287 20,005 20,342 20,164

Operating profit 36,935 49,947 8,173 14,026 11,438 15,468

Financial income 21,390 3,689 3,015 14,704 6,624 1,142

Financial expense 3,825 3,313 4,602 231 1,184 1,026

Total financial income (expense) 17,565 376 (1,587) 14,473 5,440 116

Income before taxes on income 54,500 50,323 6,586 28,499 16,878 15,584

Taxes on income 12,216 12,007 1,372 6,582 3,783 3,718

Profit for the period 42,284 38,316 5,214 21,917 13,095 11,866

Earnings per share:

Basic/ diluted earnings per share 3.05 2.88 0.38 1.63 0.94 0.89

Shares used in computation of 13,867,017 13,289,239 13,867,017 13,433,684 13,867,017 13,433,684basic/diluted EPS

Actual number of shares 13,867,017 13,867,017 13,867,017 13,867,017 13,867,017 13,867,017

(*) Convenience translation into U.S. dollars.

G. WILLI-FOOD INTERNATIONAL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Nine months Three months Nine months

ended ended ended

September 30, September 30, September 30,

2 0 2 1 2 0 2 0 2 0 2 1 2 0 2 0 2 0 2 1 2 0 2 0

NIS US dollars (*)

(in thousands)

CASH FLOWS - OPERATING ACTIVITIES

Profit from continuing operations 42,284 38,316 5,214 21,917 13,095 11,866

Adjustments to reconcile net profit to net cash used to 19,524 21,127 (**) 33,372 5,977 (**) 6,046 6,543 continuing operating activities (Appendix A)

Net cash used in continuing operating activities 61,808 59,443 38,586 27,894 19,141 18,409

CASH FLOWS - INVESTING ACTIVITIES

Acquisition of property plant and equipment (4,763) (1,991) (1,130) (1,256) (1,475) (617)

Proceeds from sale (purchase) of marketable securities, net 2,174 (20,669) (12,987) 673 (6,400) (23,195)

Proceeds from sale of property plant and equipment 200 58 63 - 62 18

Proceeds from loans granted to others 18,707 14,000 - - 5,794 4,336

Net cash used in (used to) continuing investing 16,318 (8,602) (14,054) (24,451) 5,054 (2,663) activities

CASH FLOWS - FINANCING ACTIVITIES

Lease liability payments (1,605) (1,334) (601) (507) (497) (413)

Dividend (59,975) - (59,975) - (18,574) -

Shares issue - 42,471 - 42,471 - 13,153

Net cash used in (used to) continuing financing (61,580) 41,137 (60,576) 41,964 (19,071) 12,740 activities

Increase (decrease) in cash and cash equivalents 16,546 91,978 (**) (36,044) 45,407 (**) 5,124 28,486

Cash and cash equivalents at the beginning 201,822 121,860 255,510 168,689 62,503 37,739 of the financial period

Exchange losses (profit) on cash and cash 612 570 (**) (486) 312 (**) 190 176 equivalents

Cash and cash equivalents of the end of the 218,980 214,408 218,980 214,408 67,817 66,401 financial year

(*) Convenience Translation into U.S. Dollars.

(**) Reclassified

G. WILLI-FOOD INTERNATIONAL LTD.

APPENDIX TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

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 2 1 2 0 2 0 2 0 2 1 2 0 2 0 2 0 2 1 2 0 2 0

NIS US dollars (*)

(in thousands)

Decrease (increase) in deferred 3,055 (229) 660 3,153 946 (71) income taxes

Unrealized loss (gain) on marketable (13,301) 2,739 (1,182) (13,532) (4,119) 848 securities

Depreciation and amortization 4,732 4,221 1,631 1,470 1,465 1,308

Capital gain on disposal of property (200) (58) (63) - (62) (18) plant and equipment

Exchange gain (losses) on cash and (612) (**) (570) 486 (**) (312) (190) (176) cash equivalents

Changes in assets and liabilities:

Increase (decrease) in trade 1,586 1,570 4,624 6,271 491 486 receivables and other receivables

Decrease (increase) in inventories 11,399 14,871 10,348 4,585 3,530 4,605

Increase (decrease) in trade and other 12,865 (1,417) 16,868 4,342 3,985 (439) payables, and other current liabilities

Net cash flows from operating activities 19,524 21,127 33,372 5,977 6,046 6,543

B. Significant non-cash transactions:

Nine months Three months Nine months

ended ended ended

September 30, September 30, September 30,

2 0 2 1 2 0 2 0 2 0 2 1 2 0 2 0 2 0 2 1 2 0 2 0

NIS US dollars (*)

(in thousands)

Supplemental cash flow information:

Income tax paid 13,597 16,389 3,839 5,329 4,211 5,076

(*) Convenience Translation into U.S. Dollars.

(**) Reclassified

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) 8-932-1000itsik.b@willi-food.co.il

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SOURCE G. Willi-Food International Ltd.