REG - Edita Food Ind SAE - Edita Report 3Q2024

Edita Food Industries SAEAnnouncement

25/11/2024 16:45

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RNS Number : 5673N  Edita Food Industries S.A.E.  25 November 2024

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Cairo, 25 November 2024

Edita Food Industries Reports 3Q2024 Earnings

 Edita continues strong price-driven growth in Q3, with revenues up 25.5%
year-on-year to EGP 3.9 billion and improved quarter-on-quarter gross margin

 

Highlights of 3Q2024

Summary Income Statement (EGP mn)

 EGP mn        3Q2024  3Q2023  Change  9M2024  9M2023  Change
 Revenue       3,912   3,116   25.5%   11,901  8,754   36.0%
 Gross Profit  1,220   1,034   18.0%   3,593   2,827   27.1%
 % Margin      31.2%   33.2%           30.2%   32.3%
 EBITDA        621     672     -7.6%   1,912   1,783   7.2%
 % Margin      15.9%   21.6%           16.1%   20.4%
 Net Profit    357     425     -15.9%  1,107   1,182   -6.4%
 % Margin      9.1%    13.6%           9.3%    13.5%

 The discussion and analysis in this report are based on the IFRS statements.

 

Results in a Nutshell

Edita Food Industries S.A.E. (EFID.CA on the Egyptian Exchange & EFID.L on
the London Stock Exchange), a leader in the Egyptian packaged snack food
market, announced today its results for the quarter ended 30 September 2024.
Consolidated revenues reached EGP 3.9 billion, reflecting a year-on-year
increase of 25.5%, driven by continuous repricing efforts to overcome the
inflationary environment. Gross profit rose by 18.0% y-o-y, amounting to EGP
1.2 billion, with a gross profit margin of 31.2%. Further down the income
statement, EBITDA recorded EGP 620.7 million, representing a 7.6% decline
compared to the same period last year, with an associated margin of 15.9%. Net
profit for the quarter came in at EGP 357.3 million, down 15.9% y-o-y, with a
margin of 9.1%. On a nine-month basis, revenues grew 36.0% y-o-y to EGP 11.9
billion, while net profit recorded EGP 1.1 billion, with an associated margin
of 9.3%.

 

In the third quarter of 2024, revenue grew by 25.5% y-o-y in 3Q2024, with the
average price per pack rising by 50.0% to EGP 4.72. Moreover, the average
price per ton increased by 43.4% compared to 3Q2023. During this period, the
total number of packs sold decreased by 16.3% y-o-y, amounting to 828 million
packs, primarily driven by lower volumes in the cake and bakery segments.
Smaller segments, including wafers and candy, saw volume growth of over 10%,
while rusks volumes increased by 14%, and biscuit volumes more than doubled
during the period. Delving into the 9M2024 results, the average price per pack
across Edita's portfolio rose by 36.2% y-o-y to EGP 4.00, while the average
price per ton increased by 37.0%. Volumes remained stable during this period,
with 2,977 million packs sold.

 

Edita's gross profit grew by 18.0% y-o-y, reaching EGP 1,220.6 million in
3Q2024, with a margin of 31.2% versus 33.2% in 3Q2023. COGS rose by 27.1%
year-on-year to EGP 2,250.4 million, driven by higher raw material prices and
increased production and manufacturing overhead (MOH) costs amid inflationary
pressures. As a result, MOH as a percentage of sales inched up to 10.1%,
compared to 8.8% last year, reflecting higher operational costs. On a
nine-month basis, gross profit rose by 27.1% y-o-y to EGP 3.6 billion, with a
margin of 30.2% versus 32.3% in 9M2023, largely due to similar cost pressures.

 

 

Total SG&A expenses grew to EGP 646.2 million in 3Q2024, up 57.0% y-o-y,
as a result of Edita's ongoing expansion of its distribution network to
enhance market presence across diverse areas. This increase pushed the
SG&A-to-revenue ratio to 16.5%, compared to 13.2% in 3Q2023. Year-to-date,
SG&A expenses grew by 50.8% to EGP 1.8 billion, accounting for 15.5% of
sales, up from 13.9% in 9M2023.

 

EBITDA for 3Q2024 came in at EGP 620.7 million, marking a 7.6% y-o-y decline,
with an associated margin of 15.9%. For the nine-month period, EBITDA
increased by 7.2% y-o-y to EGP 1.9 billion, with a margin of 16.1% in 9M2023.

 

Net profit totaled EGP 357.3 million in 3Q2024, representing a 15.9% y-o-y
decline, with a net profit margin of 9.1% during the period. Over the first
nine months of 2024, net profit reached EGP 1,106.9 million, with a margin of
9.3%.

 

Gross export sales significantly increased during the quarter, climbing 71.9%
y-o-y to reach EGP 533.1 million. This increase strengthened the contribution
from export sales, which accounted for 13.8% of total revenues, compared to
10.0% last year. The growth was driven by strong demand in key markets such as
Palestine, Libya, Iraq, and Jordan, which together comprised 87% of total
exports.

 

Regionally, Edita Morocco delivered a 239.3% y-o-y growth, reaching EGP 122.3
million in 3Q2024, fueled by enhanced distribution. For the nine-month period,
Edita Morocco's revenues grew by 22.2% y-o-y, totaling EGP 317.2 million.

 

Operational Developments

Throughout the nine-month period, Edita expanded its portfolio and introduced
higher price points across segments, emphasizing strong value propositions.
The company migrated consumers to a higher 10 EGP price point, which was
implemented in the cakes, wafers, and biscuits segments through larger product
sizes and new launches. In wafers, Edita launched vegan options and new
flavors, while in biscuits, it diversified offerings with white chocolate
coatings and spreads, catering to varied consumer preferences. Similarly, the
bakery and salty snacks segments entered the 15 EGP price tier with tailored
high-value offerings.

The candy segment delivered strong results, driven by the successful launch of
innova-tive products like Fakka sizes, a larger family size, and Lollies,
showcasing Edita's ability to adapt to market demand. Meanwhile, the frozen
baked goods segment sustained its growth as Edita strategically refined its
portfolio in response to market feedback. Through its Molto Forni brand, the
company delivers freshly baked croissants, pizzas, pies, and puff pastries,
underscoring its commitment to diversification and convenience.

 

On the industrial operations front, Edita successfully increased its capacity
to better meet market demands. In July 2024, Edita started operating a bakery
line, boosting production capacity by c.30%. Later on, in October 2024, the
company also began operating a cake line, increasing its cake production
capacity by c.28%. Additionally, process efficiency improvements led to a 9%
increase in wafers production. These de-velopments highlight Edita's
commitment to meeting rising consumer demand and further diversifying its
product offerings.

 

Additionally, as part of its diversification strategy and efforts to drive
growth in smaller segments, Edita signed its first toll manufacturing
agreement with Misr Food Additives (MIFAD) in the biscuit segment this
quarter. This partnership will double production capacity for the Oniro brand,
broaden the company's product portfolio, and allow it to capture demand in new
categories within the biscuit market.

Overview of Segment Performance

In 3Q2024, Edita's total revenue amounted to EGP 3.9 billion, reflecting a
25.5% y-o-y growth, primarily driven by price increases across its segments.
Leading this perfor-mance, the cake segment generated EGP 1.9 billion in
revenue, up 27.6% y-o-y. This growth was driven by a 56.1% y-o-y rise in the
average price per pack, offsetting an 18.2% y-o-y decline in volumes. The
bakery segment reported revenues of EGP 1.3 billion, marking an 11.3% y-o-y
increase, with a substantial 54.5% y-o-y increase in price per pack
compensating for a 27.9% y-o-y decline in volumes. Wafers segment revenues
increased by 50.9% y-o-y to EGP 353.7 million, supported by a 36.7% y-o-y rise
in price and a 10.3% y-o-y increase in the number of packs sold. The rusks
segment saw a strong performance with revenues growing by 52.0% y-o-y to EGP
198.8 million during 3Q2024, driven by a 33.4% y-o-y increase in price per
pack and a 14.0% y-o-y rise in volumes. The candy segment saw a 39.2% y-o-y
growth in revenue, reaching EGP 105.2 million, primarily driven by a 26.5%
y-o-y rise in price per pack and a 10.1% y-o-y increase in volumes sold. The
biscuits segment reported the highest growth rate, with revenue surging by
126.4% y-o-y to EGP 34.9 million, thanks to a 105.5% y-o-y rise in volumes and
a 10.1% y-o-y increase in price. The frozen segment generated EGP 14.0 million
in revenue during the period.

 

In 3Q2024, Edita's consolidated gross profit rose to EGP 1.2 billion, marking
an 18.0% y-o-y increase, driven by robust revenue growth and achieving a gross
profit margin (GPM) of 31.2%.

 

On a segment basis, the cakes' gross profit increased by 15.3% y-o-y to EGP
658.7 mil-lion, with a GPM of 34.4%, higher than 29.5% in 2Q2024. The bakery
segment also demonstrated growth, with gross profit rising by 17.6% y-o-y to
EGP 391.7 million and a GPM of 30.3%, an improvement over the 28.7% recorded
in 3Q2023 and above 29.6% in 2Q2024. Wafers also grew, with gross profit
rising 38.3% y-o-y to EGP 99.8 million, while its GPM recorded 28.2% during
the period. The rusks segment booked a 29.6% y-o-y increase in gross profit to
EGP 47.2 million, along with a GPM of 23.8%, margin-ally higher than the 22.4%
in 2Q2024. The candy segment showed impressive growth, with gross profit
increasing 25.4% y-o-y to EGP 29.2 million and a GPM of 27.7%. At the biscuits
segment, gross profit recorded EGP 2.4 million, reflecting a 37.5% y-o-y
decline, with a GPM of 6.8% in 3Q2024.

 

 

Revenue and Gross Profitability by Segment

 EGP mn               3Q2024   3Q2023   Change    9M2024    9M2023   Change
 Cakes
 Revenue              1,913.9  1,499.4  27.6%     6,072.1   4,464.3  36.0%
 Gross Profit         658.7    571.1    15.3%     2,003.2   1,550.0  29.2%
 Gross Profit Margin  34.4%    38.1%    -3.7pts   33.0%     34.7%    -1.7pts
 Bakery
 Revenue              1,291.5  1,160.1  11.3%     3,480.9   2,862.1  21.6%
 Gross Profit         391.7    333.0    17.6%     970.7     864.6    12.3%
 Gross Profit Margin  30.3%    28.7%    1.6pts    27.9%     30.2%    -2.3pts
 Wafers
 Revenue              353.7    234.4    50.9%     1,297.0   782.5    65.8%
 Gross Profit         99.8     72.1     38.3%     391.4     249.9    56.6%
 Gross Profit Margin  28.2%    30.8%    -2.6pts   30.2%     31.9%    -1.8pts
 Rusks
 Revenue              198.8    130.8    52.0%     525.2     382.3    37.4%
 Gross Profit         47.2     36.4     29.6%     121.3     107.0    13.4%
 Gross Profit Margin  23.8%    27.9%    -4.1pts   23.1%     28.0%    -3.7pts
 Candy
 Revenue              105.2    75.6     39.2%     355.9     204.2    74.3%
 Gross Profit         29.2     23.3     25.4%     102.7     54.3     89.2%
 Gross Profit Margin  27.7%    30.8%    -3.1pts   28.9%     26.6%    2.3pts
 Biscuits
 Revenue              34.9     15.4     126.4%    112.6     58.2     93.6%
 Gross Profit         2.4      3.8      -37.5%    16.0      10.1     58.6%
 Gross Profit Margin  6.8%     24.7%    -17.9pts  14.2%     17.3%    -3.1pts
 Frozen
 Revenue              14.0     0.4      N/A       57.5      0.5      N/A
 Gross Profit         (8.3)    (5.7)    45.9%     (11.7)    (8.6)    36.4%
 Gross Profit Margin  -59.6%   -        -         -20.4%    -        -
 Total Revenues*      3,912.0  3,116.2  25.5%     11,901.2  8,754.0  36.0%
 Total Gross Profit*  1,220.6  1,034.1  18.0%     3,593.4   2,827.2  27.1%
 Total GPM            31.2%    33.2%    -2.0pts   30.2%     32.3%    -2.1pts

*Includes contributions from Edita's imports segment

 

 

 

 

 

Segment Volumes and Prices

 EGP                   3Q2024  3Q2023  Change  9M2024  9M2023  Change
 Cakes
 Packs (mn)            482     590     -18.2%  1,820   1,855   -1.9%
 Tons (000s)           14.0    15.2    -7.8%   51.6    51.4    0.5%
 Av. Price (EGP)       3.97    2.54    56.1%   3.34    2.41    38.6%
 Bakery
 Packs (mn)            189     262     -27.9%  556     654     -14.9%
 Tons (000s)           10.3    13.6    -24.2%  30.6    34.6    -11.4%
 Av. Price (EGP)       6.84    4.43    54.5%   6.26    4.38    42.9%
 Wafers
 Packs (mn)            95      86      10.3%   415     307     35.0%
 Tons (000s)           2.1     1.8     14.8%   8.6     6.5     33.8%
 Av. Price (EGP)       3.73    2.73    36.7%   3.13    2.55    22.8%
 Rusks
 Packs (mn)            38      33      14.0%   103     107     -4.0%
 Tons (000s)           1.5     1.3     14.7%   4.2     4.0     3.7%
 Av. Price (EGP)       5.22    3.91    33.4%   5.10    3.57    43.0%
 Candy
 Packs (mn)            15      14      10.1%   54      42      27.5%
 Tons (000s)           0.5     0.8     -33.3%  2.5     2.5     1.0%
 Av. Price (EGP)       6.88    5.44    26.5%   6.64    4.86    36.6%
 Biscuits
 Packs (mn)            8       4       105.5%  28      18      55.1%
 Tons (000s)           0.2     0.1     82.5%   0.9     0.6     32.9%
 Av. Price (EGP)       4.25    3.86    10.1%   4.04    3.24    24.8%
 Frozen
 Packs (mn)            0.3     -       -       1 .3    -       -
 Tons (000s)           0.1     -       -       0.4     -       -
 Av. Price (EGP)       52.84   -       -       45.85   -       -
 Total Packs* (mn)     828     989     -16.3%  2,977   2,983   -0.2%
 Total Tons* (000s)    28.8    32.9    -12.5%  98.8    99.6    -0.8%
 Av. Price/Pack (EGP)  4.72    3.15    50.0%   4.00    2.93    36.2%

*Includes contributions from Edita's imports segment

 

 

 

 

Balance Sheet

The company's total loans and borrowings as at 30 September 2024 stood at EGP
3,116.7 million, up from EGP 2,030.5 million as at 31 December 2023. Total
bank overdrafts recorded EGP 839.1 million as at 30 September 2024 versus EGP
596.7 million recorded at the end of 2023. Cash balance stood at EGP 1,365.9
million as at 30 September 2024, up from EGP 1,356.3 million at year-end 2023.
Edita recorded a net debt of EGP 1,750.9 million as at 30 September 2024
compared to EGP 674.2 million in net debt as at 31 December 2023.

 

Edita booked inventories of EGP 2,935.6 million as at 30 September 2024, up
from EGP 1,867.0 million as at year-end 2023. Meanwhile, trade and notes
receivable stood at EGP 188.9 million as at 30 September 2024, up from EGP
159.6 million as at 31 December 2023.

 

Total CAPEX for the period ending 30 September 2024 amounted to EGP 1,019.5
million, primarily driven by expansion-related investments in the cake and
bakery productions lines, followed by expenses for motor vehicles.

 

Egyptian Accounting Standards Reconciliation to IFRS

Edita's EAS and IFRS financial statements differ in the treatment of
employees' profit share, which is expensed under the IFRS, while the EAS
accounts for them as a distribution and are thus not included on the income
statement. Also, EAS and IFRS differ in the calculation of EBITDA. In 9M2024,
EGP 30.7 million in FX gains and a profit share deduction of EGP 116.6 million
were subtracted from EBITDA, bringing total EAS to IFRS adjustments on EBITDA
to EGP 196.1 million. A reconciliation between Edita's financial statements in
EAS with the IFRS-based financial statements for 9M2024 is provided in the
table below.

 in EGP mn*         9M2024 EAS                     Adjustments  9M2024 IFRS
 Net Sales                              11,901.2                 11,901.2
 COGS (excluding MOH)                   7,067.5                  7,067.5
 MOH                                   1,054.7     (57.8)       1,112.5
 Total                                  8,249.7                  8,307.8
 Gross Profit                           3,651.5     58.1         3,593.41
 Selling & Distribution Exp.            596.9       (30.2)       627.1
 Advertising & Marketing Exp.           436.7                    436.7
 General & Admin. Exp.                  748.8       (28.6)       777.4
 Other Operations Cost                  116.1       0.9          115.1
 Profit from Operations                 1,753.1     116.0        1,637.1
 Profit from Operations Margin         14.7%                    13.8%
 Other Income/Expense                  54.3                     54.3
 Profit before Income Tax               1,661.7     146.9        1,514.8
 Income Tax Expense                     407.9                    407.9
 Net Profit after Tax                   1,253.9     147.0        1,106.9
 EBITDA                                 2,108.2     196.1        1,912.1
 EBITDA Margin                         17.7%                    16.1%

*Figures are based on management accounts for better disclosure on expenses
breakdown

 

 

-Ends-

 

 

 

About Edita Food Industries

Edita, founded in 1996 and headquartered in Egypt, is a leader in the growing
Egyptian packaged snack food market. The Company manufactures, markets and
distributes a range of branded baked snack products including packaged cakes,
bakery, rusks (baked wheat), wafers and biscuits as well as selected
confectionary/candy products. The Company's local brand portfolio includes
household names such as TODO, Molto, Bake Rolz, Bake Stix, Freska, Oniro and
MiMix. The Company also has the exclusive ownership of the international
Hostess brands Twinkies, HOHO's and Tiger Tail in Egypt, Libya, Jordan,
Palestine, Morocco, Algeria, Tunisia, Syria, Lebanon, Iraq, Bahrain, Oman, the
UAE, Kuwait, Qatar and Saudi Arabia; and is party to a technical assistance
and know-how agreement to manufacture 11 additional Hostess brands across its
territories. The Company holds strong number-one market positions in its core
cake and bakery segments as well as in rusks, a leading market position in
candy and a growing market position in the wafers segment. In 3Q2024, the
Company derived 86.2% of its revenue from Egypt and 13.8% from regional export
markets. Learn more at ir.edita.com.eg.

Contacts

Ms. Menna Shams El Din

Chief of Investor Relations & Corporate Affairs Officer

T: +202 3851-6464 | M: +2010 0 154 2428 | menna.shamseldin@edita.com.eg
(mailto:menna.shamseldin@edita.com.eg)

 

Forward-Looking Statements

This communication contains certain forward-looking statements. A
forward-looking statement is any statement that does not relate to historical
facts and events, and can be identified by the use of such words and phrases
as "according to estimates", "aims", "anticipates", "assumes", "believes",
"could", "estimates", "expects", "forecasts", "intends", "is of the opinion",
"may", "plans", "potential", "predicts", "projects", "should", "to the
knowledge of", "will", "would" or, in each case their negatives or other
similar expressions, which are intended to identify a statement as
forward-looking. This applies, in particular, to statements containing
information on future financial results, plans, or expectations regarding
business and management, future growth or profitability and general economic
and regulatory conditions and other matters affecting the Company.

Forward-looking statements reflect the current views of the Company's
management ("Management") on future events, which are based on the assumptions
of the Management and involve known and unknown risks, uncertainties and other
factors that may cause the Company's actual results, performance, or
achievements to be materially different from any future results, performance
or achievements expressed or implied by these forward-looking statements. The
occurrence or non-occurrence of an assumption could cause the Company's actual
financial condition and results of operations to differ materially from, or
fail to meet expectations expressed or implied by, such forward-looking
statements.

The Company's business is subject to a number of risks and uncertainties that
could also cause a forward-looking statement, estimate or prediction to differ
materially from those expressed or implied by the forward-looking statements
contained in this prospectus. The information, opinions and forward-looking
statements contained in this communication speak only as at its date and are
subject to change without notice. The Company does not undertake any
obligation to review, update, confirm or to release publicly any revisions to
any forward-looking statements to reflect events that occur or circumstances
that arise in relation to the content of this communication.

 

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