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G. WILLI-FOOD INTERNATIONAL REPORTS 9.0% INCREASE IN SALES AND A RECORD HIGH ANNUAL SALES IN 2023

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G. Willi-Food International (WILC) reported a 9.0% increase in sales but a 15.9% decrease in gross profit for fiscal year 2023. Operating profit also decreased by 54.9%. The company aims to boost sales by expanding product variety and improving visibility on shelves.
Positive
  • Sales increased by 9.0% to NIS 543.3 million in fiscal year 2023.
  • Gross profit decreased by 15.9% to NIS 120.6 million in 2023.
  • Operating profit decreased by 54.9% to NIS 20.4 million in 2023.
  • Cash and cash equivalents balance stood at NIS 239.6 million as of December 31, 2023.
  • Basic earnings per share were NIS 2.28 for fiscal year 2023.
  • Net cash from operating activities was NIS 33.3 million in 2023.
  • Shareholders' equity at the end of December 2023 was NIS 552.2 million.
Negative
  • Gross profit margins decreased from 28.7% to 22.2% due to increased costs of imported products.
  • General and administrative expenses increased by 8.3% in fiscal year 2023.
  • Operating profit declined primarily due to an increase in cost of sales.

Insights

The financial results of G. Willi-Food International Ltd. demonstrate a mixed performance. While the increase in sales by 9.0% indicates a growing demand for the company's products, the decrease in gross profit by 15.9% and operating profit by 54.9% reflect significant pressure on the company's margins. This dichotomy suggests that while the company has been successful in expanding its market presence, it has done so at the cost of profitability.

One key factor contributing to the decrease in profitability is the increased cost of sales, which could be attributed to the global increase in the prices of goods and the specific regional challenges mentioned, such as the 'Iron swords' war and the Houthi attacks. These geopolitical events have likely led to higher transportation costs, which have eroded gross margins.

The company's cash and cash equivalents balance remains robust, with no debt, which is a strong indicator of financial stability. However, the net cash from operating activities, which stands at NIS 33.3 million (USD 9.2 million), seems relatively low in comparison to the overall sales figures, suggesting that cash conversion may be an area for improvement.

From a market perspective, G. Willi-Food's strategy to expand its product portfolio and improve product visibility has proven effective in driving top-line growth. The company's focus on increasing the variety of products and enhancing shelf presence is a response to consumer demand for diversified kosher food options.

However, the company's ability to improve commercial terms with customers and suppliers will be important in recovering its profit margins. The construction of the new logistics center, expected to complete in 2025, is anticipated to enhance logistics capabilities significantly, which could lead to cost savings and improved operational efficiency.

The company's performance must be analyzed in context with broader industry trends, such as the impact of global supply chain disruptions and increased competition in the kosher food market. The company's resilience in the face of these challenges will be a key determinant of its long-term success.

The impact of geopolitical tensions on G. Willi-Food's supply chain is evident in the financial results. The conflict with Hamas and subsequent regional instability have led to increased transportation costs and delays, which have directly affected the company's cost of goods sold.

Looking ahead, the company's investment in a new logistics center is a strategic move to mitigate these risks. By enhancing its logistics infrastructure, Willi-Food aims to reduce its reliance on volatile shipping routes and improve its supply chain resilience. This investment could also lead to a reduction in lead times and improved inventory management, which are essential for maintaining customer satisfaction and competitive advantage.

It is important to monitor how Willi-Food navigates these supply chain challenges in the coming year, especially as they continue to expand their product offerings and strive for improved profitability.

YAVNE, Israel, March 21, 2024 /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 financial results for the fiscal year ended December 31, 2023.

G. Willi-Food Logo

Fiscal Year 2023 Highlights

  • Sales increased by 9.0% to NIS 543.3 million (US$ 149.8 million) from NIS 498.3 million (USD 1374. million) in fiscal year 2022.
  • Gross profit decreased by 15.9% from fiscal year 2022 to NIS 120.6 million (USD 33.3 million) in 2023.
  • Operating profit decreased by 54.9% from fiscal year 2022 to NIS 20.4 million (USD 5.6 million) in 2023.
  • Cash and cash equivalents balance of NIS 239.6 million (USD 66.1 million) as of December 31, 2023.
  • Basic earnings per share of NIS 2.28 (US$ 0.63).

Management Comment

Zwi Williger Chairmen & Joseph Williger CEO, commented: "We are very pleased to present our fiscal year 2023 financial results with record annual sales. Calendar year 2023 was characterized by an appreciation of the value of the Israeli shekel and worldwide increase of prices of goods worldwide compared to 2022. As a result, the Company experienced a decrease in gross profit. Also in October 7, 2024, the 'Iron swords' war broke out between the State of Israel and the terror organization of Hamas in Gaza, which led to additional military conflicts on other fronts, including repeated attacks on ships in the Red Sea by the Houthis from Yemen, which caused restrictions of sailing on this route. One of the results has been an increase in transport costs of goods from the Far East, as well as significant delays in the arrival of goods from those destinations. Despite these negative effects, the Company increased its sales by expanding the range of its product portfolio and improving the visibility of its products in the stores. In parallel, the Company is working to improve the commercial terms with its customers and suppliers in order to improve its gross profit and operating profit results. The Company is also continuing the construction of the new logistics center which, in our estimation, after its completion will contribute significantly to the company's logistics capabilities and support continued growth both in terms of sales and in improving profit. Our main goals for 2024 are increasing sales by increasing the variety of products offered and by increasing the visibility and presence of our products on the shelves, improving our commercial terms with our customers and suppliers as well as continuing the construction of the new logistics center which is expected to be completed in 2025."

Fiscal 2023 Summary

Revenues for fiscal year 2023 increased by 9.0% to NIS 543.3 million (USD 149.8 million) from NIS 498.3 million (USD 137.4 million) recorded in fiscal year 2022. Sales increased mainly due to increases (i) in the range of the Company's products, (ii) in our inventory levels and its availability for the demand of our products, (iii) in the Company's efforts to improve visibility of the Company's line of products in stores and (iv) in advertising and promotional campaigns.

Gross profit for fiscal year 2023 decreased by 15.7% to NIS 120.6 million (USD 33.3 million), or 22.2% of revenues, from NIS 143.1 million (USD 39.4 million), or 28.7% of revenues, recorded in fiscal year 2022. The decrease in gross profit and gross margins was mainly due to increased costs of the Company's imported products.

Selling expenses for fiscal year 2023 were NIS 74.2 million (USD 20.5 million), or 13.6% of revenues, remaining at the same level compared to NIS 74.1 million (USD 20.4 million), or 14.9% of revenues recorded in fiscal year 2022. The decrease of selling expenses as a percentage of revenues was mainly due to a decrease in advertising costs. 

General and administrative expenses for fiscal year 2023 increased by 8.3% to NIS 26.1 million (USD 7.2 million), or 4.8% of revenues, from NIS 24.1 million (USD 6.6 million), or 4.8% of revenues, recorded in fiscal year 2022. The increase in general and administrative expenses was primarily due to an increase in management compensation, including grants made under the Company's option plan.

Operating profit for fiscal year 2023 decreased by 54.9% to NIS 20.4 million (USD 5.6 million), or 3.7% of revenues, from NIS 45.1 million (USD 12.4 million), or 9.0% of revenues, recorded in fiscal year 2022. The decrease in operating profit was primarily due to an increase in cost of sales.

Financial income, net, for fiscal year 2023 amounted to NIS 18.8 million (USD 5.2 million), compared to NIS 8.9 million (USD 2.5 million) recorded in fiscal year 2022. Financial income, net for fiscal year 2023 comprised mainly of income from interest and dividend income from the Company's portfolio of securities in an amount of NIS 14.3 million (USD 3.9 million) and income from revaluation of the Company's portfolio of securities to fair value in the amount of NIS 5.3 million (USD 1.5 million), offset by expenses from other finance expenses in an amount of NIS 1.5 million (USD 0.4 million). Financial income, net for fiscal year 2022 comprised mainly of income from interest and dividend income from the Company's portfolio of securities in an amount of NIS 9.0 million (USD 2.5 million) and exchange rate differences in an amount of NIS 4.4 million (USD 1.2 million), offset by expenses from revaluation of the Company's portfolio of securities to fair value in an amount of NIS 3.8 million (USD 1.0 million).

Willi-Food ended fiscal year 2023 with NIS 239.6 million (USD 66.1 million) in cash and cash equivalents with no debt. Net cash from operating activities in fiscal year 2023 was NIS 33.3 million (USD 9.2 million). Willi-Food's shareholders' equity at the end of December 2023 was NIS 552.2 million (USD 152.2 million).

NOTE A: NIS to US$ exchange rate used for convenience only
The conversion from New Israeli Shekels (NIS) into U.S. dollars was made at the exchange rate of USD 1.00 to NIS 3.627 as of December 31, 2023. The use of USD is solely for the convenience of the reader.

NOTE B: IFRS
The Company's consolidated financial results for fiscal year ended December 31, 2023 are presented in accordance with International Financial Reporting Standards.

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 650 food products worldwide. As one of Israel's leading food importers, Willi-Food markets and sells its food products to over 1,500 customers and 3,000 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 that designs, develops and distributes branded kosher, dairy-food products.

FORWARD LOOKING STATEMENTS

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 include statements regarding the timing of construction of the Company's new logistics center and its expected benefits. 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: delays in the construction of the Company's new logistics center and the risk that its expected benefits will not be materialized, 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 political, economic and military conditions in Israel, particularly the recent war in Israel, and economic conditions in the Company's core markets, delays and price increases due to the attacks on global shipping routes in the Red Sea, 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, 2023, filed with the Securities and Exchange Commission on March 21, 2024. 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








December 31,

December 31,

2 0 2 3

2 0 2 2

2 0 2 3

2 0 2 2

NIS

US dollars (*)

(in thousands)

ASSETS





Current assets





Cash and cash equivalents

137,466

150,607

37,901

41,524

Financial assets at fair value through profit or loss

102,163

116,762

28,167

32,192

Trade receivables, Net

160,379

165,838

44,218

45,723

Other receivables and prepaid expenses

10,164

4,956

2,802

1,366

Inventories, Net

62,475

71,929

17,225

19,832

Current tax assets

9,497

3,117

2,618

859

Total current assets

482,144

513,209

132,931

141,496






Non-current assets





Property, plant and equipment

122,222

99,216

33,698

27,355

Less -Accumulated depreciation

55,636

51,533

15,339

14,208


66,586

47,683

18,359

13,147






Right of use asset

2,124

3,391

586

935

Financial assets at fair value through profit or loss

46,143

44,113

12,722

12,162

Goodwill

36

36

10

10

Total non-current assets

114,889

95,223

31,677

26,254







597,033

608,432

164,608

167,750

EQUITY AND LIABILITIES





Current liabilities










Current maturities of lease liabilities

1,512

2,194

417

605

Trade payables

21,622

24,842

5,961

6,849

Employees Benefits

4,193

3,756

1,156

1,036

Other payables and accrued expenses

10,854

11,836

2,993

3,264

Total current liabilities

38,181

42,628

10,527

11,754






Non-current liabilities





Lease liabilities

694

1,284

191

354

Deferred taxes

4,868

4,198

1,342

1,156

Retirement benefit obligation

1,055

878

291

242

Total non-current liabilities

6,617

6,360

1,824

1,752






Shareholders' equity





Share capital

1,490

1,490

411

411

Additional paid in capital

172,589

171,550

47,585

47,298

Remeasurement of the net liability in respect of defined benefit

(154)

(195)

(42)

(54)

Capital fund

247

247

68

68

Retained earnings

378,691

386,980

104,408

106,694

Treasury shares

(628)

(628)

(173)

(173)

Equity attributable to owners of the Company

552,235

559,444

152,257

154,244







597,033

608,432

164,608

167,750






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

                                                                                                                                        

 

 

G. WILLI–FOOD INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS








For the year ended

December 31,

For the year ended

December 31,

2 0 2 3

2 0 2 2

2 0 2 3

2 0 2 2

NIS

US dollars (*)

In thousands (except per share and share data)






Sales

543,262

498,325

149,783

137,393

Cost of sales

422,695

355,228

116,541

97,940






Gross profit

120,567

143,097

33,242

39,453

 

Operating costs and expenses:





Selling expenses

74,216

74,106

20,462

20,432

General and administrative expenses

26,110

24,117

7,199

6,649

Other income

(109)

(222)

(30)

(61)

Total operating expenses

100,217

98,001

27,631

27,020






Operating profit

20,350

45,096

5,611

12,433






Financial income

20,363

13,417

5,614

3,699

Financial expense

1,521

4,539

419

1,251

Total Finance income

18,842

8,878

5,195

2,448






Income before taxes on income

39,192

53,974

10,806

14,881

Taxes on income

7,536

12,410

2,078

3,422






Income after taxes on income

31,656

41,564

8,728

11,459











Earnings per share:





Basic / diluted earnings per share

2.28

3.00

0.63

0.83











Shares used in computation of
basic/diluted EPS

13,867,017

13,867,017

13,867,017

13,867,017






Actual number of shares

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











For the year ended

For the year ended


December 31,

December 31,


2 0 2 3

2 0 2 2

2 0 2 3

2 0 2 2


NIS

US dollars (*)


In thousands (except per share and share data)

CASH FLOWS - OPERATING ACTIVITIES






Profit from continuing operations

31,656

41,564

8,728

11,460


Adjustments to reconcile net profit to net cash from continuing
operating activities (Appendix A)

2,052

(27,495)

566

(7,581)


Net cash from continuing operating activities 

33,708

14,069

9,294

3,879














CASH FLOWS - INVESTING ACTIVITIES






Acquisition of property plant and equipment

(4,605)

(**)(6,006)

(1,270)

(1,656)


Acquisition of property plant and equipment under construction

(18,941)

(**)(7,344)

(5,222)

(2,025)


Proceeds from sale of property plant and Equipment

208

351

57

97


Proceeds from sale of marketable securities, net

18,166

21,285

5,009

5,868


Net cash used in (from) continuing investing activities

(5,172)

8,286

(1,426)

2,284








CASH FLOWS - FINANCING ACTIVITIES






Lease liability payments

(2,408)

(2,180)

(664)

(601)


Dividend distribution

(39,945)

(54,906)

(11,012)

(15,138)


Net cash used to continuing financing activities

(42,353)

(57,086)

(11,676)

(15,739)








Decrease in cash and cash equivalents

(13,817)

(34,731)

(3,808)

(9,576)


Cash and cash equivalents at the beginning of the year

150,607

195,718

41,523

53,961


Exchange gains (losses) on cash and cash equivalents

676

(10,380)

186

(2,862)


Cash and cash equivalents at the end of the year 

137,466

150,607

37,901

41,523






















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

(**)          Reclassified

 

 

 

G. WILLI-FOOD INTERNATIONAL LTD.
APPENDIX TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS








For the year ended

For the year ended

December 31,

December 31,

2 0 2 3

2 0 2 2

2 0 2 3

2 0 2 2

NIS

US dollars (*)

In thousands (except per share and share data)






CASH FLOWS - OPERATING ACTIVITIES:

     A.  Adjustments to reconcile net profit to net cash from
          continuing operating activities










Decrease in deferred income taxes

670

2,181

185

601

Unrealized loss (gain) on marketable securities

(5,597)

2,985

(1,543)

823

Loss (gain) of financial liabilities at fair value through profit or loss

-

(13,960)

-

(3,849)

Depreciation and amortization

6,950

6,508

1,916

1,794

Stock based compensation reserve

1,039

790

286

218

Capital gain on disposal of property plant and equipment

(109)

(222)

(30)

(61)

Exchange (losses) gains on cash and cash equivalents

(676)

10,380

(186)

2,862











Changes in assets and liabilities:





Decrease (Increase) in trade receivables and other receivables

7,527

(17,151)

2,075

(4,729)

Decrease (increase) in inventories

9,454

(12,401)

2,607

(3,419)

Increase (decrease) in trade payables, other payables and other 
current liabilities

(3,547)

5,418

(978)

1,494

Cash generated from operations

15,711

(15,472)

4,332

(4,266)

Income tax paid

(13,659)

(12,023)

(3,766)

(3,315)

Net cash flows from (used in) operating activities

2,052

(27,495)

566

(7,581)





















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

 

 

 

Logo: https://mma.prnewswire.com/media/959267/G_Willi_Food_International_Logo.jpg

Company Contact:
G. Willi - Food International Ltd.
Yitschak Barabi, Chief Financial Officer
(+972) 8-932-1000
itsik.b@willi-food.co.il

Cision View original content:https://www.prnewswire.com/news-releases/g-willi-food-international-reports-9-0-increase-in-sales-and-a-record-high-annual-sales-in-2023--302095984.html

SOURCE G. Willi-Food International Ltd.

FAQ

What was the percentage increase in sales for G. Willi-Food International (WILC) in fiscal year 2023?

Sales increased by 9.0% to NIS 543.3 million.

What was the operating profit margin for WILC in fiscal year 2023?

Operating profit was 3.7% of revenues in 2023.

How much cash and cash equivalents did WILC have at the end of December 2023?

Willi-Food ended fiscal year 2023 with NIS 239.6 million in cash and cash equivalents.

What was the basic earnings per share for WILC in fiscal year 2023?

Basic earnings per share were NIS 2.28 for fiscal year 2023.

What was the net cash from operating activities for WILC in fiscal year 2023?

Net cash from operating activities was NIS 33.3 million in 2023.

What was the shareholders' equity at the end of December 2023 for WILC?

Shareholders' equity at the end of December 2023 was NIS 552.2 million.

G Willi-Food International Ltd

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Food Distribution
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