Investor Relations

Press Releases

SodaStream Reports Fourth Quarter And Fiscal 2017 Results
Q4 Revenue Increased 20% to $157.7 Million
Q4 Operating Income Increased 36% to an All-Time Record $25.7 Million
Q4 Diluted EPS Increased 58% to $1.13
Company Finished Q4 with Cash & Financial Investments of $155.2

AIRPORT CITY, Israel, Feb. 14, 2018 /PRNewswire/ -- SodaStream International Ltd. (NASDAQ: SODA), the leading manufacturer of home beverage carbonation systems, announced today its results for the quarter and year ended December 31, 2017.

SodaStream Logo. (PRNewsFoto/SodaStream International Ltd.)

For the fourth quarter ended December 31, 2017:

  • Revenue increased 19.6% to $157.7 million, compared to $131.8 million in the fourth quarter of 2016
  • Operating income increased 36.4% to $25.7 million, compared to $18.8 million in the fourth quarter of 2016
  • Net income increased 63.2% to an all-time record of $25.5 million, compared to $15.6 million in the fourth quarter of 2016
  • Diluted earnings per share (EPS) increased 58.1% to $1.13 compared to $0.71 in the fourth quarter of 2016

For the year ended December 31, 2017, compared to full year 2016 results:

  • Revenue increased 14.1% to $543.4 million compared to $476.1 million in 2016
  • Operating income increased 49.4% to an all-time record of $81.4 million, compared to $54.5 million in 2016
  • Net income increased 67.3% to an all-time record $74.4 million, compared to $44.5 million in 2016
  • Diluted EPS increased 59.4% to $3.29 compared to $2.07 in 2016

"Our fourth quarter performance represents a terrific finish to an outstanding year for SodaStream," commented Daniel Birnbaum, Chief Executive Officer of SodaStream. "Throughout 2017 we successfully executed our growth plan aimed at expanding household penetration and increasing usage of our home carbonation system which translated into mid-teens revenue growth, record net income, and strong cash generation. These results underscore the strength of our brand and product offering and showcase the power of our business model. The work we've done bolstering our organization, improving our systems and processes, and enhancing our manufacturing capabilities has provided us with a much stronger foundation to capitalize on the many growth opportunities that still lie ahead and continue creating value for our shareholders."

Fourth Quarter 2017 Financial Review


Geographical Revenue Breakdown


Three Months Ended










December 31,
2016



December 31,
2017



Increase
(decrease)



Increase

(decrease)




In millions USD



%


Western Europe


$

74.8



$

89.0



$

14.2




18.9

%

The Americas



36.1




43.5




7.4




20.7

%

Asia-Pacific



14.9




19.4




4.5




30.6

%

Central & Eastern Europe, Middle East, Africa



6.0




5.8




(0.2)




(4.6)

%

Total


$

131.8



$

157.7



$

25.9




19.6

%

 

Product Segment Revenue Breakdown


Three Months Ended










December 31,
2016



December 31,
2017



Increase



Increase




In millions USD



%


Sparkling Water Maker Starter Kits


$

56.7



$

71.5



$

14.8




26.1

%

Consumables



74.0




84.7




10.7




14.4

%

Other



1.1




1.5




0.4




38.2

%

Total


$

131.8



$

157.7



$

25.9




19.6

%


 

 

Product Segment Unit Breakdown


Three Months Ended










December 31,
2016



December 31,
2017



Increase

(decrease)



Increase

(decrease)





In thousands



%


Sparkling Water Maker Starter Kits



941




1,181




240




25.5

%


CO2 Refills



7,413




8,248




835




11.3

%


Flavors



5,235




4,651




(584)




(11.2)

%


Revenue increased $25.9 million, or 19.6%, to $157.7 million compared to $131.8 million in the same period in 2016 driven by growth in most of the Company's geographic regions, primarily Germany, Canada, Australia and the U.S. Changes in foreign currency exchange rates ("FX") positively impacted revenue by approximately $8.0 million, mainly driven by the strengthening of the Euro/U.S. Dollar exchange rate.

Gross margin increased 140 basis points to 53.8% compared to 52.4% for the same period in 2016. The increase reflects continued production optimization, the leveraging of fixed infrastructure costs on increased production volume, the introduction of higher margin sparkling water makers, partially offset by a higher portion of sparkling water makers in the product mix. The positive FX impact on revenue was partially offset by an adverse impact of the weakening of the U.S. Dollar/Israeli Shekel exchange rate compared to the same period in 2016. The net positive FX impact on gross profit was approximately $3.9 million.

Sales and marketing expenses were $44.7 million, or 28.3% of revenue, compared to $39.0 million, or 29.6% of revenue, in the same period in 2016. Advertising and promotion expenses increased by $4.6 million to $22.6 million, or 14.3% of revenue, compared to $18.0 million, or 13.7% of revenue, in the same period in 2016. Sales team, distribution and logistics expenses were $22.1 million, or 14.0% of revenue, compared to $21.0 million, or 15.9% of revenue, in the same period in 2016.

General and administrative expenses increased $3.4 million to $14.5 million, or 9.2% of revenue, compared to $11.1 million, or 8.5% of revenue, in the same period in 2016.

Operating income increased 36.4% to $25.7 million, or 16.3% of revenue, compared to $18.8 million, or 14.3% of revenue, in the fourth quarter of 2016. Changes in FX positively impacted operating income by approximately $1.3 million. The positive FX impact on gross profit compared to the same period in 2016 was mainly offset by an adverse impact on operating expenses from the strengthening of the Euro/U.S. Dollar exchange rate.

Net financial income was $1.4 million compared to net financial expense of $0.8 million in the same period in 2016.

Tax expense was $1.5 million with an effective tax rate of 5.7%, compared to $2.4 million with an effective tax rate of 13.2% in the same period in 2016. The decrease in the effective tax rate is mainly due to agreements with tax authorities in certain jurisdictions. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act which had an immaterial impact on the Company's tax results.

Net income was $25.5 million, or $1.13 per diluted share, based on 22.7 million weighted shares outstanding compared to net income of $15.6 million, or $0.71 per diluted share, based on 22.0 million weighted shares outstanding in the same period in 2016.

Balance Sheet Review

At December 31, 2017, the Company had cash and financial investments totaling $155.2 million compared to $57.3 million at December 31, 2016.

Cash flow from operations less investing activities, excluding financial investments, was $14.3 million compared to $11.6 million in the same period in 2016. During the fourth quarter of 2017, the Company invested $50.0 million in short-term investments.

Working capital increased 6.0% to $132.3 million compared to $124.8 million at December 31, 2016. Inventories increased 10.3% to $97.1 million compared to $88.0 million at December 31, 2016.

Full year 2017 financial review


Geographical Revenue Breakdown


Year Ended










December 31,
2016



December 31,
2017



Increase



Increase




In millions USD



%


Western Europe


$

286.5



$

325.3



$

38.8




13.5

%

The Americas



114.8




127.4




12.6




11.0

%

Asia-Pacific



49.6




61.9




12.3




24.8

%

Central & Eastern Europe, Middle East, Africa



25.2




28.8




3.6




14.3

%

Total


$

476.1



$

543.4



$

67.3




14.1

%

 

Product Segment Revenue Breakdown


Year Ended










December 31,
2016



December 31,
2017



Increase
(decrease)



Increase
(decrease)




In millions USD



%


Sparkling Water Maker Starter Kits


$

170.8



$

212.3



$

41.5




24.3

%

Consumables



297.0




323.5




26.5




8.9

%

Other



8.3




7.6




(0.7)




(7.7)

%

Total


$

476.1



$

543.4



$

67.3




14.1

%

 

Product Segment Unit Breakdown


Year Ended










December 31,
2016



December 31,
2017



Increase

(decrease)



Increase

(decrease)





In thousands



%


Sparkling Water Maker Starter Kits



2,941




3,657




716




24.3

%


CO2 Refills



29,407




32,518




3,111




10.6

%


Flavors



21,957




20,289




(1,668)




(7.6)

%


Revenue increased 14.1% to $543.4 million from $476.1 million in the same period in 2016. The increase was driven by growth in all geographical regions, primarily Germany, Canada, Australia and Japan. Changes in foreign currency exchange rates ("FX") positively impacted revenue by approximately $7.6 million, mainly driven by the strengthening of the Euro/U.S. Dollar exchange rate.

Gross margin increased 180 basis points to 53.3% compared to 51.5% in the same period in the prior year. The increase reflects continued production optimization, the leveraging of fixed infrastructure costs on increased production volume and the introduction of higher margin sparkling water makers, partially offset by a higher portion of sparkling water makers in the product mix and changes in FX compared to the same period in 2016.

Changes in FX negatively impacted gross profit by $1.2 million, mainly driven by the strengthening of the Israeli Shekel against the U.S. Dollar compared to the same period in 2016.

Sales and marketing expenses were $159.2 million, or 29.3% of revenue, compared to $144.7 million, or 30.4% of revenue, in the same period in 2016. The increase in sales and marketing expenses was mainly due to higher advertising and promotion expenses. Advertising and promotion expenses increased by $11.8 million to $76.7 million, or 14.1% of revenue, compared to $64.9 million, or 13.6% of revenue, in the same period in 2016. Sales team, distribution and logistics expenses were $82.5 million, or 15.2% of revenue, compared to $79.8 million and 16.8% of revenue, in the same period in 2016.

General and administrative expenses were $49.1 million, or 9.0% of revenue, compared to $43.5 million, or 9.1% of revenue in 2016.

Operating income increased 49.4% to $81.4 million, or 15.0% of revenue, compared to $54.5 million, or 11.4% of revenue in the same period in 2016. Changes in FX negatively impacted operating income by approximately $4.0 million. In addition to the net negative FX impact on gross profit in the amount of $1.2 million, there was a negative impact due to the strengthening of the Euro/U.S. Dollar rate and its effect on operating expenses compared to the same period in 2016.

Net financial income was $1.4 million compared to net financial expense of $2.1 million in the same period in 2016.

Tax expense was $8.3 million, reflecting an effective tax rate of 10.1%, compared to $7.9 million, or an effective tax rate of 15.1%, in the same period in 2016.

Net income was $74.4 million, or $3.29 per diluted share, based on 22.6 million weighted shares outstanding, compared to net income of $44.5 million, or $2.07 per diluted share, based on 21.5 million weighted shares outstanding in the same period in 2016.

Guidance

For 2018, the Company currently expects full year revenue to increase approximately 12% over 2017 revenue of $543.4 million, of which approximately 2% is expected to result from the acquisition of the Company's French distributor.

Operating income for 2018 is currently expected to increase approximately 10% over 2017 operating income of $81.4 million, or approximately 20% excluding the increase in share-based payment expense in 2018 compared to 2017.

Diluted earnings per share is currently expected to increase approximately 5% over 2017 diluted earnings per share of $3.29, or approximately 15%, excluding the increase in share-based payment expense in 2018 compared to 2017.

For 2018, the Company currently projects share-based payment expense to increase approximately $9 million over 2017 due to new employee options and restricted stock units expected to be granted by the Company during the first half of 2018. The increase is being driven by the number of new grants and the higher average share price compared with the previous year. Based on IFRS guidelines, close to 60% of the cost associated with new grants of options and restricted stock units is required to be expensed in the first year following the grant date.

Conference Call and Management Commentary

A supplemental slide presentation has been furnished as part of today's report of a foreign private issuer on a Form 6-K and will be posted on the Company's website at http://sodastream.investorroom.com.

The Company has scheduled a conference call for 8:30 AM Eastern Standard Time (U.S. time) today (Wednesday, February 14, 2018) to review the Company's financial results. 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 is the #1 sparkling water brand in volume in the world and the leading manufacturer and distributor of Sparkling Water Makers. We enable consumers to easily transform ordinary tap water into sparkling water and flavored sparkling water in seconds. By making ordinary water fun and exciting to drink, SodaStream helps consumers drink more water. Sparkling Water Makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated soft drinks. Our products promote health and wellness, are environmentally friendly, cost effective, customizable and fun to use. Our products are available at more than 80,000 individual retail stores across 45 countries. To learn more about how SodaStream makes water exciting and follow SodaStream on Facebook, Twitter, Pinterest, Instagram and YouTube, visit http://www.sodastream.com.

Non-IFRS Financial Measures

This press release contains EBITDA and Adjusted EBITDA, which are non-IFRS measures, see page 10 below.

EBITDA is a non-IFRS measure, which represents earnings before financial expense (income), income tax, depreciation and amortization. Adjusted EBITDA is a non-IFRS measure, which is calculated in the same way as EBITDA, and further eliminates the effect of impairment of other intangible assets. We believe that EBITDA and Adjusted EBITDA, as described above, should be considered in evaluating the Company's operations. Both measures facilitate operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structures (affecting financial expenses (income), net), tax positions (such as the impact on periods or companies of changes in effective tax rates) and the age and depreciation charges and amortization of fixed and intangible assets, respectively (affecting relative depreciation and amortization expense, respectively). Adjusted EBITDA is useful to an investor in evaluating our operating performance because it excludes unusual costs associated with non-recurring events and without regard to non-cash items.

Non-IFRS measures should be considered in addition to results prepared in accordance with IFRS and should not be considered a substitute for the IFRS results. A reconciliation of EBITDA and Adjusted EBITDA to Net income, the most closely comparable IFRS measure, is included at the end of this press release. In addition, EBITDA and Adjusted EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include information about possible or assumed future results of our business and financial condition, as well as the results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "expect," "predict," "potential," or the negative of these terms or other similar expressions: 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 maintain or expand sales in our target markets, including the United States; our ability to maintain or continue to develop 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 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; our ability to maintain margins due to decline in product selling price and/or rising costs; potential product liability claims if any component of our 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 to operate; risks associated with our being a multinational corporation, including 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 discussed under the heading "Risk Factors" in the Annual Report on the Form 20-F for the year ended December 31, 2016 and other documents filed with or furnished to the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact:
Brendon Frey
ICR
Phone: + 1 203-682-8200
brendon.frey@icrinc.com

 

Consolidated Statements of Operations






In thousands (other than per share amounts)





















For the year ended



For the three months ended




December 31,



December 31,




2016



2017



2016



2017




(Audited)



(Unaudited)



(Unaudited)


Revenue


$

476,065



$

543,371



$

131,800



$

157,659


Cost of revenue



231,087




253,512




62,802




72,784



















Gross profit



244,978




289,859




68,998




84,875



















Operating expenses

















Sales and marketing



144,657




159,225




39,021




44,692


General and administrative



43,522




49,117




11,139




14,484


Other expenses, net



2,327




142




-




-



















Total operating expenses



190,506




208,484




50,160




59,176



















Operating income



54,472




81,375




18,838




25,699



















Financial expense (income), net



2,120




(1,354)




806




(1,376)




































Income before income tax



52,352




82,729




18,032




27,075



















Income tax expense



7,886




8,340




2,384




1,545




































Net income for the period



44,466




74,389




15,648




25,530




























Net income per share

 

















Basic


$

2.10



$

3.41



$

0.73



$

1.16


Diluted


$

2.07



$

3.29



$

0.71



$

1.13



















Weighted average number of shares

















Basic



21,183




21,808




21,297




22,012


Diluted



21,516




22,577




21,978




22,676




 


Consolidated Balance Sheets as of










December 31,



December 31,




2016



2017




(Audited)



(Unaudited)




(In thousands)


Assets









Cash and cash equivalents


$

50,250



$

85,168


Financial investments



7,000




70,000


Inventories



87,986




97,088


Trade receivables ,net



87,430




124,352


Other receivables



20,613




19,250


Assets classified as held for sale



1,484




-


Derivative financial instruments



2,112




404


Total current assets



256,875




396,262











Property, plant and equipment



164,628




171,543


Intangible assets



37,582




38,365


Deferred tax assets



4,154




6,435


Other receivables



2,688




4,260


Total non-current assets



209,052




220,603











Total assets



465,927




616,865











Liabilities









Derivative financial instruments



-




215


Trade payables



41,643




61,215


Income tax payable



8,312




14,350


Provisions



2,646




2,602


Other current liabilities



22,262




30,461


Total current liabilities



74,863




108,843











Employee benefits



2,306




2,403


Other non-current liabilities



73




164


Deferred tax liabilities



5,166




4,279


Total non-current liabilities



7,545




6,846











Total liabilities



82,408




115,689











Shareholders' equity









Share capital



3,461




3,599


Share premium



214,609




234,406


Translation reserve



(34,161)




(10,738)


Retained earnings



199,610




273,909


Total shareholders' equity



383,519




501,176











Total liabilities and shareholders' equity


$

465,927



$

616,865


 


Consolidated Statements of Cash Flows
















For the year ended



For the three months ended




December 31,



December 31,




2016



2017



2016



2017




(Audited)



(Unaudited)



(Unaudited)


Cash flows from operating activities

















Net income for the period


$

44,466



$

74,389



$

15,648



$

25,530



















Adjustments:

















Depreciation of property, plant and equipment



16,012




19,336




5,086




4,338


Amortization of intangible assets



3,439




2,952




843




737


Impairment of other intangible assets



1,830




-




-




-


Change in fair value of derivative financial instruments



(448)




1,629




(1,074)




182


Other expenses, net



-




142




-




-


Exchange rate differences on long-term loans and
borrowing



287




-




(355)




-


Share based payment



4,801




5,225




1,288




1,768


Interest expense (income), net



523




(421)




154




(186)


Income tax expense



7,886




8,340




2,384




1,545





78,796




111,592




23,974




33,914


Decrease (increase) in inventories



22,352




(6,644)




10,527




5,764


Increase in trade and other receivables



(9,375)




(30,845)




(11,990)




(26,592)


Increase (decrease) in trade payables and other liabilities



(3,970)




26,466




(5,237)




8,821


Increase (decrease) in employee benefits



123




287




(92)




72


Increase (decrease) in provisions



239




(44)




(255)




281





88,165




100,812




16,927




22,260


Interest paid



(616)




(135)




(188)




(41)


Income tax received



348




101




141




23


Income tax paid



(5,965)




(5,962)




(740)




(2,726)


Net cash from operating activities



81,932




94,816




16,140




19,516



















Cash flows from investing activities

















Interest received



93




556




33




228


Proceeds from (investment in) bank deposits



(7,000)




7,000




-




-


Investment in financial Investments



-




(70,000)




-




(50,000)


Proceeds from investment grants



2,828




6,227




-




2,324


Proceeds from sale of property, plant and equipment



-




2,281




-




691


Proceeds from (payment for) derivative
financial instruments, net



(1,033)




294




10




(800)


Acquisition of property, plant and equipment



(25,987)




(21,165)




(4,159)




(7,062)


Acquisition of intangible assets



(1,982)




(2,260)




(457)




(629)


Net cash used in investing activities



(33,081)




(77,067)




(4,573)




(55,248)



















Cash flows from financing activities

















Proceeds from exercise of employee share options



4,328




14,710




2,410




3,960


Repayments of long-term loans and borrowings



(34,248)




-




(16,555)




-


Change in short-term debt



(2,861)




-




-




-


Net cash from (used in) financing activities



(32,781)




14,710




(14,145)




3,960



















Net increase (decrease) in cash and cash equivalents



16,070




32,459




(2,578)




(31,772)


Cash and cash equivalents at the beginning of the period



34,534




50,250




53,857




116,629


Effect of exchange rates fluctuations on cash and cash equivalents



(354)




2,459




(1,029)




311



















Cash and cash equivalents at the end of the period


$

50,250



$

85,168



$

50,250



$

85,168


 

The following tables present the Company's revenue, by

region and product type for the periods presented, as well as such revenue

by region and product type as a percentage of total revenue:




Year Ended



Three Months Ended




December 31,



December 31,




2016



2017



2016



2017




(Audited)



(Unaudited)



(Unaudited)



(Unaudited)




Revenue (in thousands)















Western Europe


$

286,512



$

325,315



$

74,837



$

88,977


The Americas



114,747




127,370




36,053




43,503


Asia-Pacific



49,614




61,902




14,880




19,428


Central & Eastern Europe, Middle East & Africa



25,192




28,784




6,030




5,751


Total


$

476,065



$

543,371



$

131,800



$

157,659




















 



Year Ended



Three Months Ended




December 31,



December 31,




2016



2017



2016



2017




(Audited)





(Unaudited)



(Unaudited)



(Unaudited)




As a percentage of revenue















Western Europe



60.2

%



59.9

%



56.8

%



56.4

%

The Americas



24.1

%



23.4

%



27.4

%



27.6

%

Asia-Pacific



10.4

%



11.4

%



11.3

%



12.3

%

Central & Eastern Europe, Middle East & Africa



5.3

%



5.3

%



4.5

%



3.7

%

Total



100.0

%



100.0

%



100.0

%



100.0

%




















 



Year Ended



Three Months Ended




December 31,



December 31,




2016



2017



2016



2017




(Audited)



(Unaudited)



(Unaudited)



(Unaudited)




Revenue (in thousands)















Sparkling Water Maker starter kits (including exchange
cylinders)


$

170,790



$

212,293



$

56,700



$

71,502


Consumables



297,011




323,449




73,997




84,633


Other



8,264




7,629




1,103




1,524


Total


$

476,065



$

543,371



$

131,800



$

157,659




















 



Year Ended



Three Months Ended




December 31,



December 31,




2016



2017



2016



2017




(Audited)




(Unaudited)



(Unaudited)



(Unaudited)




As a percentage of revenue















Sparkling Water Maker starter kits (including exchange
cylinders)



35.9

%



39.1

%



43.0

%



45.3

%

Consumables



62.4

%



59.5

%



56.2

%



53.7

%

Other



1.7

%



1.4

%



0.8

%



1.0

%

Total



100.0

%



100.0

%



100.0

%



100.0

%




















 

Reconciliation of Net income to EBITDA and Adjusted
EBITDA
















Year Ended



Three Months Ended




December 31,



December 31,




2016



2017



2016



2017





(Unaudited)




(Unaudited)



(Unaudited)



(Unaudited)




(In thousands)
















Reconciliation of Net Income to EBITDA and Adjusted
EBITDA














Net income


$

44,466



$

74,389



$

15,648



$

25,530



Financial expense (income), net



2,120




(1,354)




806




(1,376)



Income tax expense



7,886




8,340




2,384




1,545



Depreciation and amortization



19,451




22,288




5,929




5,075



EBITDA


$

73,923



$

103,663



$

24,767



$

30,774



Impairment of other intangible assets



1,830




-




-




-



 

Adjusted EBITDA


$

75,753



$

103,663



$

24,767



$

30,774























 

SOURCE SodaStream International Ltd.