Willi-Food(WILC) - 2025 Q1 - Quarterly Report

Executive Summary & Highlights This section provides an overview of the company's Q1 2025 financial performance and strategic initiatives Q1 2025 Performance Overview G. Willi-Food International reported strong financial results for Q1 2025, with significant year-over-year increases in gross profit (28.8%) and operating profit (71.7%), driven by sales growth and improved commercial terms Key Financial Metrics (NIS millions) | Metric | Q1 2025 (NIS millions) | Q1 2024 (NIS millions) | YoY Change (%) | | :----- | :--------------------- | :--------------------- | :------------- | | Sales | 144.8 | 136.0 | 6.5% | | Gross Profit | 44.6 | 34.7 | 28.8% | | Operating Profit | 20.0 | 11.6 | 71.7% | | Net Profit | 19.5 | 18.6 | 5.1% | | Basic EPS | 1.41 | 1.34 | 5.2% | | Cash & Cash Equivalents (as of March 31, 2025) | 234.0 | N/A | N/A | Management Commentary & Strategic Initiatives Management expressed satisfaction with the company's growth trajectory in sales and profitability, highlighting ongoing efforts to expand the product portfolio, strengthen shelf presence, improve commercial terms, and invest in a new logistics center for future expansion into new categories - The company continues to expand its product portfolio while simultaneously working to strengthen the shelf presence of traditional core products[5] - Efforts are underway to improve commercial terms with both suppliers and customers to further enhance profitability[6] - Investment in a new logistics center is expected to be completed by the end of the year, aiming to become a key growth engine for business expansion, particularly into new categories like chilled and frozen products[6] Detailed Financial Review - First Quarter Fiscal 2025 This section provides an in-depth analysis of the company's sales, profitability, balance sheet, and cash flow performance for Q1 2025 Sales Performance Sales for Q1 2025 increased by 6.5% year-over-year, reaching NIS 144.8 million, primarily due to higher inventory levels and improved product availability Sales Data (NIS millions) | Metric | Q1 2025 (NIS millions) | Q1 2024 (NIS millions) | YoY Change (%) | | :----- | :--------------------- | :--------------------- | :------------- | | Sales | 144.8 | 136.0 | 6.5% | - The increase in sales was attributed to higher inventory levels and improved product availability for customers[8] Profitability Analysis This section details the company's gross profit, operating expenses, operating profit, and net profit performance for Q1 2025 Gross Profit Gross profit and margins significantly improved in Q1 2025 due to better commercial terms and a focus on a more profitable product mix Gross Profit Data (NIS millions) | Metric | Q1 2025 (NIS millions) | Q1 2024 (NIS millions) | YoY Change (%) | Q1 2025 Margin | Q1 2024 Margin | | :----- | :--------------------- | :--------------------- | :------------- | :------------- | :------------- | | Gross Profit | 44.6 | 34.7 | 28.8% | 30.8% | 25.5% | - Increases in gross profit and gross margins were driven by efforts to improve commercial terms with customers and suppliers and a focus on selling a more profitable product portfolio[9] Operating Expenses Operating expenses saw increases in selling and general & administrative categories, primarily driven by higher salaries, distribution costs, and management compensation provisions Operating Expenses (NIS millions) | Metric | Q1 2025 (NIS millions) | Q1 2024 (NIS millions) | YoY Change (%) | Q1 2025 % of Revenue | Q1 2024 % of Revenue | | :----- | :--------------------- | :--------------------- | :------------- | :------------------- | :------------------- | | Selling Expenses | 17.1 | 16.5 | 3.9% | 11.8% | 12.1% | | G&A Expenses | 7.6 | 6.6 | 15.4% | 5.2% | 4.8% | - Selling expenses increased mainly due to higher salary and distribution expenses[10] - General and administrative expenses increased primarily due to the provision for compensation based on profit to senior management[11] Operating Profit Operating profit increased substantially in Q1 2025, primarily driven by the significant improvement in gross profit Operating Profit Data (NIS millions) | Metric | Q1 2025 (NIS millions) | Q1 2024 (NIS millions) | YoY Change (%) | Q1 2025 Margin | Q1 2024 Margin | | :----- | :--------------------- | :--------------------- | :------------- | :------------- | :------------- | | Operating Profit | 20.0 | 11.6 | 71.7% | 13.8% | 8.5% | - The increase in operating profit was primarily due to the increase in gross profit[12] Financial Income & Net Profit Net financial income decreased in Q1 2025, while net profit and basic EPS showed modest growth Financial Income and Net Profit (NIS millions) | Metric | Q1 2025 (NIS millions) | Q1 2024 (NIS millions) | YoY Change (%) | | :----- | :--------------------- | :--------------------- | :------------- | | Financial Income, Net | 5.2 | 11.5 | -54.8% | | Income Before Taxes | 25.1 | 23.1 | 8.7% | | Net Profit | 19.5 | 18.6 | 4.8% | | Basic EPS | 1.41 | 1.34 | 5.2% | - Financial income, net for Q1 2025 comprised mainly of NIS 2.3 million from revaluation of securities and NIS 2.8 million from interest and dividend income from securities[13] Balance Sheet & Liquidity Highlights The company maintained a strong liquidity position with NIS 234.0 million in cash and securities and reported shareholders' equity of NIS 603.0 million at the end of Q1 2025 Liquidity and Equity Highlights (NIS millions) | Metric | Amount (NIS millions) | | :----- | :-------------------- | | Cash and Securities (as of March 31, 2025) | 234.0 | | Shareholders' Equity (as of March 31, 2025) | 603.0 | Cash Flow Summary Net cash generated from operating activities for Q1 2025 was NIS 0.3 million Operating Cash Flow (NIS millions) | Metric | Q1 2025 (NIS millions) | | :----- | :--------------------- | | Net Cash from Operating Activities | 0.3 | Company Information & Disclosures This section provides background on G. Willi-Food International, outlines forward-looking statements, and details financial reporting standards About G. Willi-Food International Ltd. G. Willi-Food International Ltd. is an Israeli-based global company specializing in the development, marketing, and international distribution of over 650 high-quality kosher food products, serving a wide range of customers in Israel and worldwide - G. Willi-Food International Ltd. is an Israeli-based company specializing in high-quality, great-tasting kosher food products[19] - The company is engaged in the design, import, marketing, and distribution of over 650 food products worldwide[19] - Willi-Food markets and sells its products to over 1,500 customers and 3,000 selling points in Israel and globally, including large retail and private supermarket chains, wholesalers, and institutional consumers[19] - Operating divisions include Willi-Food in Israel and Euro European Dairies, a wholly owned subsidiary for branded kosher, dairy-food products[19] Forward-Looking Statements & Risk Factors This section outlines forward-looking statements regarding future performance and strategic initiatives, along with various known and unknown risks and uncertainties that could materially affect actual results, including monetary risks, operational challenges, and geopolitical conditions - Risks include the inability to improve commercial terms with customers and suppliers, delays in the construction of the new logistics center, and the risk that its expected benefits will not materialize[20] - Monetary risks include changes in marketable securities or currency exchange rates, especially the NIS/U.S. Dollar exchange rate[20] - Operational and external risks encompass payment default by major clients, loss of key personnel, changes in laws and regulations, termination of supplier arrangements, increasing competition, and changes in political, economic, and military conditions in Israel, including the recent war[20] - Additional risks include delays and price increases due to attacks on global shipping routes in the Red Sea, and the inability to accurately predict consumption and changes in consumer preferences[20] Notes on Financial Reporting The financial results are presented in accordance with IFRS, with U.S. dollar translations provided solely for convenience using the exchange rate prevailing on March 31, 2024 - The convenience translation of New Israeli Shekels (NIS) into U.S. dollars was made at the rate of exchange prevailing on March 31, 2024, with U.S. $1.00 equal to NIS 3.718[17] - The Company's consolidated financial results are presented in accordance with International Financial Reporting Standards ("IFRS")[18] Condensed Consolidated Financial Statements This section presents the company's condensed consolidated balance sheets, statements of operations, and cash flows for the reported periods Condensed Consolidated Balance Sheets The balance sheet reflects the company's financial position, including assets, liabilities, and equity, as of March 31, 2025 Condensed Consolidated Balance Sheets (NIS) | | March 31, 2025 | March 31, 2024 | December 31, 2024 | | :--- | :--- | :--- | :--- | | ASSETS | | | | | Current assets | | | | | Cash and cash equivalents | 116,870 | 134,850 | 122,938 | | Financial assets at fair value through profit or loss | 117,120 | 109,571 | 123,189 | | Trade receivables, Net | 172,919 | 154,565 | 171,331 | | Other receivables and prepaid expenses | 7,287 | 13,552 | 7,384 | | Inventories, Net | 123,152 | 74,882 | 98,234 | | Current tax assets | - | 6,759 | 744 | | Total current assets | 537,348 | 494,179 | 523,820 | | Non-current assets | | | | | Property, plant and equipment | 179,515 | 128,936 | 168,217 | | Less -Accumulated depreciation | 59,679 | 56,876 | 58,349 | | | 119,836 | 72,060 | 109,868 | | Right of use asset | 4,838 | 3,376 | 4,814 | | Financial assets at fair value through profit or loss | 50,332 | 46,159 | 47,842 | | Goodwill | 36 | 36 | 36 | | Total non-current assets | 175,042 | 121,631 | 162,560 | | Total Assets | 712,390 | 615,810 | 686,380 | | EQUITY AND LIABILITIES | | | | | Current liabilities | | | | | Current maturities of lease liabilities | 1,939 | 1,760 | 2,179 | | Trade payables | 35,047 | 20,728 | 28,203 | | Employees Benefits | 5,904 | 4,769 | 4,532 | | Other payables and accrued expenses | 52,916 | 18,617 | 25,015 | | Total current liabilities | 95,806 | 45,874 | 59,929 | | Non-current liabilities | | | | | Lease liabilities | 2,730 | 1,588 | 2,521 | | Deferred taxes | 9,706 | 6,287 | 9,888 | | Retirement benefit obligation | 1,102 | 1,055 | 1,102 | | Total non-current liabilities | 13,538 | 8,930 | 13,511 | | Shareholders' equity | | | | | Share capital | 1,491 | 1,490 | 1,491 | | Additional paid in capital | 173,614 | 172,789 | 173,062 | | Remeasurement of the net liability in respect of defined benefit | (256) | (154) | (256) | | Capital fund | 247 | 247 | 247 | | Retained earnings | 428,578 | 387,262 | 439,024 | | Treasury shares | (628) | (628) | (628) | | Equity attributable to owners of the Company | 603,046 | 561,006 | 612,940 | | Total Equity and Liabilities | 712,390 | 615,810 | 686,380 | Condensed Consolidated Statements of Operations This statement details the company's revenues, costs, and expenses, leading to net profit for the three months ended March 31, 2025 Condensed Consolidated Statements of Operations (NIS) | | Three months ended March 31, 2025 (NIS) | Three months ended March 31, 2024 (NIS) | | :--- | :--- | :--- | | Sales | 144,843 | 136,036 | | Cost of sales | 100,215 | 101,385 | | Gross profit | 44,628 | 34,651 | | Operating costs and expenses: | | | | Selling expenses | 17,111 | 16,475 | | General and administrative expenses | 7,558 | 6,550 | | Operating profit | 19,959 | 11,626 | | Financial income | 5,491 | 12,303 | | Financial expense | (320) | (822) | | Total financial income | 5,171 | 11,481 | | Income before taxes on income | 25,130 | 23,107 | | Taxes on income | (5,625) | (4,554) | | Profit for the period | 19,505 | 18,553 | | Earnings per share: | | | | Basic earnings per share | 1.41 | 1.34 | | Diluted earnings per share | 1.39 | 1.34 | | Shares used in computation of basic EPS | 13,877,447 | 13,867,017 | | Shares used in computation of diluted EPS | 13,988,885 | 13,867,017 | | Actual number of shares | 13,877,447 | 13,867,017 | Condensed Consolidated Statements of Cash Flows This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025 Condensed Consolidated Statements of Cash Flows (NIS) | | Three months ended March 31, 2025 (NIS) | Three months ended March 31, 2024 (NIS) | | :--- | :--- | :--- | | CASH FLOWS - OPERATING ACTIVITIES | | | | Profit from continuing operations | 19,505 | 18,553 | | Adjustments to reconcile net profit to net cash from continuing operating activities (Appendix A) | (19,194) | (14,781) | | Net cash from continuing operating activities | 311 | 3,772 | | CASH FLOWS - INVESTING ACTIVITIES | | | | Acquisition of property plant and equipment | (529) | (2,393) | | Acquisition of property plant and equipment under construction | (10,769) | (4,321) | | Proceeds from sale of marketable securities, net | 5,140 | 623 | | Net cash from continuing investing activities | (6,158) | (6,091) | | CASH FLOWS - FINANCING ACTIVITIES | | | | Lease liability payments | (580) | (719) | | Net cash used in continuing financing activities | (580) | (719) | | Decrease in cash and cash equivalents | (6,427) | (3,038) | | Cash and cash equivalents at the beginning of the year | 122,938 | 137,466 | | Exchange gains on cash and cash equivalents | 359 | 422 | | Cash and cash equivalents at the end of the year | 116,870 | 134,850 | Appendix to Condensed Consolidated Statements of Cash Flows This appendix provides detailed adjustments reconciling net profit to net cash from operating activities Appendix to Condensed Consolidated Statements of Cash Flows (NIS) | | Three months ended March 31, 2025 (NIS) | Three months ended March 31, 2024 (NIS) | | :--- | :--- | :--- | | A. Adjustments to reconcile net profit to net cash from continuing operating activities: | | | | Increase (decrease) in deferred income taxes | (182) | 1,419 | | Unrealized loss (gain) on marketable securities | (1,561) | (8,047) | | Depreciation and amortization | 1,855 | 1,849 | | Stock based compensation reserve | 552 | 200 | | Exchange gains on cash and cash equivalents | (359) | (422) | | Changes in assets and liabilities: | | | | Decrease in trade receivables and other receivables | 1,469 | 7,682 | | Increase in inventories | (24,918) | (12,407) | | Increase (decrease) in trade payables, other payables and other current liabilities | 6,166 | (2,537) | | Cash generated from operations | (16,978) | (12,263) | | Income tax paid | (2,216) | (2,518) | | Net cash flows used in operating activities | (19,194) | (14,781) |