Towards the end of 2008, Blue Square Israel Completed an Additional
Step of its Strategy - the Launch of the HD "Mega Bool" Format
& the "Mega" Private label Brand ROSH HA'AYIN, Israel, March 23
/PRNewswire-FirstCall/ -- Blue Square-Israel Ltd. (NYSE and TASE:
BSI) today announced its financial results for the full year and
fourth quarter ended December 31, 2008. NOTE: IFRS - International
Financial Reporting Standard Financial results for the full year
and last three-month period ended December 31, 2008 are presented
in accordance with the International Financial Reporting Standards
("IFRS"). To facilitate comparison, results from the full year and
last three-month period ended December 31, 2007 have been adjusted
in accordance with IFRS, and differ from the results originally
reported. Results for the Full Year 2008 Revenues: The Company's
revenues for 2008 were NIS 7,429 million (U.S. $1,954 million)(a)
compared to NIS 6,982 million in 2007, an increase of 6.4%. The
increase reflects: 1) the opening of 20 new supermarkets in
2007-2008, including the accelerated expansion of the Eden Teva
Market format; 2) the year's 1.1% increase in Same Store Sales,
reflecting the continued growth of Mega In Town countered partially
by declining sales in Shefa Shuk format and Mega stores before
their conversion to the Mega Bool format; and 3) the ongoing
expansion of Bee Group Retail ("Bee Group"), and this year's
consolidation of the full-year results from Naaman Porcelain Ltd.
(TASE:NAMN) ("Naaman") and Vardinon Textile Ltd. (TASE:WRDT)
("Vardinon"), as opposed to the previous year, in which their
revenues were only partially consolidated into the Company's
financial results, increasing 2008 revenues by NIS 133 million.
Gross Profit: Gross profit for 2008 increased by 11.2% to NIS 2,060
million (U.S. $541.8 million) (27.7% of sales) compared to NIS
1,852 million (26.5% of sales) in 2007. The increase reflects
improved supplier terms; a positive influence from raised prices, a
shift in the mix of sales between the Company's formats, and the
expansion of the Bee Group, as mentioned above, which is
characterized by a higher sales gross margin compared to the food
sector. Selling, General, and Administrative Expenses: Selling,
General, and Administrative expenses for 2008 were NIS 1,795
million (U.S. $472 million) (24.2% of sales) compared to NIS 1,563
million (22.4% of sales) in 2007, an increase of 14.8%. The
increase reflects: 1) increased expenses associated with the
opening of new stores and the accelerated development of the Eden
Teva Market format; 2) expenses associated with the launch of the
Mega Bool format; 3) a rise in the operating expenses of existing
stores due to the increase in energy and electricity prices, as
well as an increase in the CPI, which increased CPI-linked expenses
such as rent and municipal taxes; and 4) the rise in expenses of
the Bee Group due to its expansion and the fact that 2008 expenses
included the full-year contributions of Naaman and Vardinon, as
explained above, in contrast to 2007, when only a portion of their
expenses were consolidated into the Company's results. Operating
Income Before Other Expenses (Net) and Revaluation of Investment
Property: Operating income for 2008 before other expenses and
revaluation of investment property was NIS 265 million (U.S. $69.8
million) (3.6% of sales) compared to NIS 289 million (4.1% of
sales) in 2007. The decrease in operating income comes mainly from
the decrease in the profitability of the food retail, mainly from
stores which were converted to the Mega Bool format, and the
increased expenses of Eden Teva Market, which is currently carrying
out an establishment plan. In the Non-Food operations the operating
income decreased due to the negative contribution of the Bee
Group's Dr. Baby format, which opened eight self-operating stores
in 2008. Revaluation of Investment Property: In 2008, the Company's
recorded income of NIS 19.1 million (U.S. $5.0 million) associated
with the increase in value of its investment property compared with
NIS 10.5 million in 2007. The revaluation of Investment Property is
mainly from Hadar Talpiyot mall which is located in Jerusalem, in
which the company holds 50%. Other Expenses (Income), Net: In 2008,
the Company recorded other expenses (net) of NIS 2.5 million (U.S.
$0.7 million) compared with net income of NIS 3.1 million during
2007. This included a NIS 6.0 million (U.S. $1.6 million) expense
associated with the Company's efficiency program, primarily
including the reduction of headcount at the Company's headquarters,
and a provision of NIS 6 million (U.S. $1.6 million) associated
with the reduction of property value and depreciation. The expenses
were countered partially by other income (net) totaling NIS 9
million (U.S. $2.4 million), which derived from the decrease in the
Bee Group's holdings following its reorganization. Operating
Income: Operating income for 2008 was NIS 281.8 million (U.S. $74.1
million) (3.8% of sales) compared to NIS 302.7 million (4.3% of
sales) in 2007, a decline of 6.9%. Financial Expenses (net):
Financial expenses (net) for 2008 were NIS 106 million (U.S. $27.8
million) compared to NIS 57 million in 2007. This increase derived
from the year's increase in the consumer price index compared to
2007, an increase in net financial debt and hedging against a rise
in the consumer price index, mitigated partially by financial
income of NIS 24 million related to revaluations of the Company's
financial instruments. Taxes on Income: Taxes on income for 2008
were NIS 43.8 million (U.S. $11.5 million) (24.9% effective tax
rate compared to a statutory tax rate of 27%) compared to NIS 69.8
million in 2007 (effective tax rate of 28.4% compared to a
statutory tax rate of 29%) in 2007. The decrease in the effective
tax rate derived primarily from the year's decline in the statutory
tax rate. Net Income: Net income for 2008 was NIS 132.4 million
(U.S. $34.8 million) compared to NIS 175.8 million for 2007. The
portion of the net profit attributable to shareholders, as
calculated in accordance with the IFRS, was NIS 104.6 million (U.S.
$27.5 million), or NIS 2.41 per ADS (U.S. $0.63), while the portion
attributable to the share of minority interests was NIS 27.8
million (U.S. $7.3 million). The decrease in net profit derives
from the decrease in operating income and the increase in the
financial expenses, as explained above. More details Supermarkets:
As of December 31, 2008, the Company operated 194 supermarkets in
the following formats: Mega In Town -113; Mega Bool - 36; Mega -
19; Shefa Shuk - 21; Eden Teva Market - 5. EBITDA (Earnings before
Interest, Taxes, Depreciation, and Amortization): EBITDA for 2008
was NIS 427 million (U.S. $112.4 million) (5.8% of sales) compared
to NIS 423 million (6.1% of sales) in 2007. For the fourth quarter
of 2008, the EBITDA (earnings before Interest, Taxes, Depreciation,
and Amortization) was NIS 83 million (U.S. $21.8 million) (4.7% of
sales) compared to NIS 94 million (5.3% of sales) in the fourth
quarter of 2007. In 2003, the Board of Directors has resolved that
dividends will not be distributed in a quarter when the ratio of
financial obligations (as defined by S&P Maalot in its rating
for BSI's debentures issued in 2003) to EBITDA for the prior four
quarters exceeds 3, or if the ratio of the cost of unencumbered
fixed assets to financial obligations is below 1.2. This is in
accordance with definitions established by the rating company
Standard & Poor's Maalot in its rating analysis of the
Company's debentures issued in 2003. According to the Company's
unaudited financial reports as of December 31, 2008, the ratio of
its financial obligations to EBITDA as of the end of 2008 was 3.3,
and the ratio of its unencumbered fixed assets to the financial
obligations was 1.6. Events During the Reporting Period - Dividend:
In October 2008, the Company distributed a cash dividend of NIS
150.0 million. - Successful tender offer: During the fourth
quarter, the Company announced the successful completion of a NIS
150.7 million tender offer for all of the remaining publicly held
shares of BSIP (Blue Square Chain Properties & Investments
Ltd.). As such, the Company now holds 100% ownership and control of
the shares of BSIP. The Company believes that this course will
contribute to the improvement of its overall operating efficiency
and increase its earnings per share for the benefit of shareholder
value. - Launch of Mega Bool (Blue Square's New HD Format) and
"Mega" line of private label products: on December 23rd, the
Company launched Mega Bool, a new HD supermarket format formed
through the conversion of approximately 36 existing Blue
Square-Israel stores (approximately 120,000 square meters),
including approximately 20 large stores from the Mega and Shefa
Shuk formats and 16 smaller stores located within residential
neighborhoods and city centers. In parallel, the Company has also
announced the launch of its new Mega line of private label goods
with the goal of strengthening customer loyalty and recognition of
the Company's format brand area. The Company believes these steps
will make Blue Square-Israel a strong, focused player in Israel's
HD formats, which are currently estimated for one third of all
Israeli retail food sales, while enabling the Company to provide a
comprehensive shopping solution for each type of shopper in each
region in Israel. - Organic and health food markets: During the
fourth quarter, the Company continued its accelerated expansion of
the Eden Teva Market organic/health food format through the opening
of a new branch in Ashdod next to an existing Mega store. The
growth in demand for high-quality organic food at reasonable prices
is evident from the continuously rising sales of this exciting new
format, confirming the desire of consumers to buy healthier
products even in current times. - Bee Group (non-food retailing):
During the fourth quarter, the Company continued with a
re-organization process that will help it capitalize on potential
synergies between Bee Group subsidiaries and to begin functioning
as the Non-Food retailing arm of Blue Square-Israel as a whole. On
March 22, 2009, Bee Group (of which the Company holds 85%) acquired
an additional 8% (approximately) of the shares of Naaman Porcelain
Ltd. (TASE: NAMN) ("Naaman"), thereby increasing its holdings in
Naaman to 68.42%. Results for the Fourth Quarter Revenues: Revenues
for the fourth quarter were NIS 1,753 million (U.S. $461.2
million), compared to NIS 1,784 million in the parallel quarter of
2007 a decrease of 1.7%. Supermarket same store sales (SSS) for the
period decreased by 4.5% compared to the parallel quarter. This is
due primarily to the process of establishing the Mega Bool HD
format, which involved the conversion of approximately 36 stores,
together with a decrease in sales of the Shefa Shuk format and a
decrease in the sales of some Mega stores prior to their conversion
to the Mega Bool format, which was partially offset by the increase
in same store sales (SSS) of Mega In Town stores. The decrease was
mitigated by the opening of ten new stores during the 12-month
period, adding approximately 12,000 square meters to the chain,
contributed to the increase in revenues, and the increased sales of
Bee Group by approximately NIS 5.2 million (U.S. $1.4 million)
during the fourth quarter of 2008 compared to the parallel quarter
of 2007. Gross Profit: Gross profit for the fourth quarter
increased by 2.7% to NIS 490 million (U.S. $128.9 million) (28.0%
of sales) compared to NIS 477 million (26.8% of sales) in the
fourth quarter of 2007. The increase in the gross margin reflected
a change in the mix of sales, including a higher contribution from
formats characterized with relatively high gross margins. Gross
margin was also positively affected by improved supplier agreements
and discounts, together with rising prices. Selling, General, and
Administrative Expenses: Selling, General, and Administrative
expenses for the fourth quarter increased by 8.3% to NIS 446
million (U.S. $117.3 million) (25.4% of revenues) compared to NIS
412 million (23.1% of revenues) in the parallel quarter of 2007.
The increase reflects: 1) increased expenses associated with the
opening of ten new stores and the accelerated development of the
Eden Teva Market format; 2) expenses associated with the launch of
the Mega Bool format; 3) a rise in the operating expenses of
existing stores due to the increase in CPI, which increased
CPI-linked expenses such as rent and municipal taxes; and 4) the
rise in selling and administrative expenses of the Bee Group.
Operating Income Before Other Expenses (Net) and Revaluation of
Investment Property: Operating income for the fourth quarter before
other expenses (net) and revaluation of investment property was NIS
44.3 million (U.S. $11.6 million) (2.5% of sales) compared to NIS
65.8 million (3.2% of sales) in the fourth quarter of 2007. The
decrease derived from the quarter's decrease in sales as compared
to the parallel quarter of 2008 and the rise in operating expenses;
from expenses associated with the accelerated opening of new Eden
Teva Market branches; from expenses associated with the launch of
the Mega Bool format; and from activities associated with the
opening of new stores in the Bee Group's Dr. Baby format, as
explained above; countered partially by the rise in gross margin.
Revaluation of Investment Property: During the fourth quarter of
2008, the Company recorded income of NIS 1.1 million (U.S. $0.3
million) compared with NIS 10.5 million in the parallel period of
2007. Other Expenses, Net: In the fourth quarter of 2008, the
Company recorded other expenses of NIS 11.8 million (U.S. $3.1
million), while in the fourth quarter of 2007 it recorded other
income of NIS 5.4 million. The expenses (net) for the fourth
quarter of 2008 included NIS 6.0 million (U.S. $1.6 million)
associated with the Company's efficiency program primarily
including the reduction of headcount at the Company's headquarters,
and a NIS 6 million (U.S. $1.6 million) provision associated with
the impairment in value and depreciation of fixed assets. Operating
Income: Operating income for the fourth quarter was NIS 33.6
million (U.S. $8.8 million) (1.9% of sales) compared to NIS 81.7
million (4.6% of sales) in the fourth quarter of 2007. Financial
Expenses (net): Financial expenses (net) for the quarter were NIS
7.0 million (U.S. $1.8 million) compared to financial income (net)
of NIS 12.2 million in the parallel quarter of 2007. The transition
from financial income to financial expenses reflects primarily the
decrease in value of financial instruments and hedging against a
rise in the consumer price index, as measured by the Fair Value
method, whose changes in value generated financial expenses of NIS
7.0 million (U.S. $1.8 million) during the fourth quarter of 2008,
compared to financial income of NIS 26.0 million in the fourth
quarter of 2007. Taxes on Income: Taxes on income for the fourth
quarter were NIS 8.4 million (U.S. $2.2 million) (31.6% effective
tax rate compared to a statutory tax rate of 27%) compared to NIS
23.2 million in the fourth quarter of 2007 (effective tax rate of
24.7% compared to a statutory tax rate of 29%) in the parallel
quarter of 2007. The increase in the effective tax rate reflects
primarily the losses of Eden Teva Market and Dr. Baby formats, for
which taxes were not recorded during the period. Net Income: Net
income for the fourth quarter of 2008 was NIS 18.1 million (U.S.
$4.8 million) compared to NIS 70.8 million in the fourth quarter of
2007. The portion of the net profit attributable to shareholders,
as calculated in accordance with the IFRS, was NIS 10.4 million
(U.S. $2.7 million), or NIS 0.24 per ADS (U.S. $0.063), while the
portion attributable to the share of minority interests was NIS 7.7
million (U.S. $2.0 million). The decrease in net income derived
primarily from the rise in operating expenses, decrease in
operating profit and increase in financial expenses, as explained
above. Comments of Management Commenting on the results, Mr. Zeev
Vurembrand, Blue Square's President and CEO said, "With the closing
of 2008, we conclude today a complex and challenging year, due both
to the difficult macroeconomic environment which have impacted our
markets, and to the extensive internal reorganization process that
we have undertaken. During the year, we completed the forming of a
comprehensive new strategy designed to giving us the right
structure for today's competitive and marketplace conditions. As
part of this strategy, during the fourth quarter of 2008 we
announced and launched our new Mega Bool format and Mega private
label brand, both in continuation with the successful new direction
of the Mega In Town format." Mr. Vurembrand continued, "In 2009,
our focus will be to execute successfully additional central
elements of the strategic plan, including: the achievement of a
deeper nationwide penetration of the Mega Bool format and a broader
consumer awareness of its unique marketing concept; an expansion of
our private label line to encompass additional product categories;
the launch of a customer loyalty program through the offering of a
unique membership card; and the continued accelerated development
of the Eden Teva Market format to reach 10 stores by the end of
2009. In addition, we will continue the process of consolidating
the headquarters of Bee Group's subsidiaries with the goal of
giving it a higher level of operating efficiency and capitalizing
on potential operating synergies between the Bee Group and Blue
Square-Israel as a whole." Mr. Vurembrand concluded, "2009 promises
to be a challenging year given today's macro-environment. However,
the completion of the organizational structure positions us in the
most efficient structure for today's spirit of times and to future
yet to come. " NOTE A: Convenience Translation to Dollars The
convenience translation of New Israeli Shekel (NIS) into U.S.
dollars was made at the rate of exchange prevailing at December 31,
2008: U.S. $1.00 equals NIS 3.802. The translation was made solely
for the convenience of the reader. Blue Square is a leading
retailer in Israel. A pioneer of modern food retailing in the
region, Blue Square currently operates 199 supermarkets under
different formats, each offering varying levels of service and
pricing. Forward Looking Statements This press release contains
forward-looking statements within the meaning of safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements may include, but are not limited
to, plans or projections about our business and our future
revenues, expenses and profitability. Forward-looking statements
may be, but are not necessarily, identified by the use of
forward-looking terminology such as "may," "anticipates,"
"estimates," "expects," "intends," "plans," "believes," and words
and terms of similar substance. Forward-looking statements involve
known and unknown risks, uncertainties and other factors that may
cause actual events, results, performance, circumstance and
achievements to be materially different from any future events,
results, performance, circumstance and achievements expressed or
implied by such forward-looking statements. These risks,
uncertainties and other factors include, but are not limited to,
the following: the effect of the recession in Israel on the sales
in our stores and on our profitability; our ability to compete
effectively against low-priced supermarkets and other competitors;
quarterly fluctuations in our operating results that may cause
volatility of our ADS and share price; risks associated with our
dependence on a limited number of key suppliers for products that
we sell in our stores; the effect of an increase in minimum wage in
Israel on our operating results; the effect of any actions taken by
the Israeli Antitrust Authority on our ability to execute our
business strategy and on our profitability; the effect of increases
in oil, raw material and product prices in recent years; the
effects of damage to our reputation or to the reputation to our
store brands due to reports in the media or otherwise; and other
risks, uncertainties and factors disclosed in our filings with the
U.S. Securities and Exchange Commission, including, but not limited
to, risks, uncertainties and factors identified under the heading
"Risk Factors" in our Annual Report on Form 20-F for the year ended
December 31, 2007. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. Except for our ongoing obligations to
disclose material information under the applicable securities laws,
we undertake no obligation to update the forward-looking
information contained in this press release. BLUE SQUARE - ISRAEL
LTD. CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2008 (UNAUDITED)
Convenience translation December 31, December 31, ______________
_____________ 2007 2008 2008 ____ ____ _____________ (Unaudited)
________________________________ NIS U.S. dollars ______________
______________ In thousands ________________________________ A s s
e t s CURRENT ASSETS: Cash and cash equivalents 56,410 95,325
25,072 Marketable securities 199,394 171,849 45,200 Short-term bank
deposit 103,498 206 54 Trade receivables 776,251 729,970 191,996
Other accounts receivable 99,841 87,624 23,047 Income taxes
receivable 23,062 74,446 19,581 Inventories 453,944 497,080 130,742
_________ _________ _________ 1,712,400 1,656,500 435,692 _________
_________ _________ NON-CURRENT ASSETS: Associated companies 4,948
4,915 1,293 Embedded derivative 10,500 5,248 1,380 Prepaid expenses
in respect of operating lease 199,679 192,426 50,612 Other
long-term receivables 48,289 1,554 409 Property, plant and
equipment, net of accumulated depreciation and amortization
1,613,515 1,701,222 447,454 Investment property 315,778 434,232
114,211 Intangible assets and deferred charges, net of accumulated
amortization 280,420 404,422 106,371 Deferred taxes 33,542 44,508
11,706 _________ _________ _________ 2,506,671 2,788,527 733,436
_________ _________ _________ Total assets 4,219,071 4,445,027
1,169,128 _________ _________ _________ BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2008 (UNAUDITED)
Convenience translation December 31, December 31, ______________
_____________ 2007 2008 2008 ____ ____ _____________ (Unaudited)
________________________________ NIS U.S. dollars ______________
______________ In thousands ________________________________
Liabilities and shareholders' equity CURRENT LIABILITIES: Credit
and loans from banks and others 171,010 210,901 55,471 Current
maturities of debentures and convertible debentures 69,859 25,999
6,838 Trade payables 981,188 1,006,386 264,699 Other accounts
payable and accrued expenses *) 427,665 463,292 121,854 Income
taxes payable 2,905 6,933 1,824 Provisions for other liabilities *)
12,337 17,915 4,712 _________ _________ _________ 1,664,964
1,731,426 455,398 _________ _________ _________ NON CURRENT
LIABILITIES: Long-term loans from banks, net of current maturities
248,488 341,586 89,844 Convertible debentures, net of current
maturities *) 193,706 130,525 34,331 Debentures, net of current
maturities *) 749,018 985,844 259,296 Other liabilities 11,646
39,925 10,501 Derivatives instruments 9,968 9,481 2,494 Liabilities
for employee rights, net of amount funded 35,986 49,911 13,128
Deferred taxes 57,615 60,327 15,867 _________ _________ _________
1,306,427 1,617,599 425,461 _________ _________ _________ Total
liabilities 2,971,391 3,349,025 880,859 _________ _________
_________ SHAREHOLDERS' EQUITY: Equity attributable to equity
holders of the Company: Ordinary shares 57,094 57,094 15,017
Additional paid-in capital 1,018,405 1,018,405 267,860 Other
reserves 1,415 (261) (69) Accumulated deficit (107,262) (154,719)
(40,694) _________ _________ _________ 969,652 920,519 242,114
Minority interest 278,028 175,483 46,155 _________ _________
_________ Total equity 1,247,680 1,096,002 288,269 _________
_________ _________ Total liabilities and shareholder's equity
4,219,071 4,445,027 1,169,128 _________ _________ _________ *)
Reclassified BLUE SQUARE - ISRAEL LTD. CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE TWELVE AND THREE MONTHS PERIODS ENDED DECEMBER
31, 2008 (UNAUDITED) Convenience translation for the three Year
Three months months ended ended December 31, ended December 31,
December 31, __________________ __________________ _____________
2007 2008 2007 2008 2008 ______ ______ ______ ______ ______
Unaudited ______________________________________________________
NIS U.S. Dollars
______________________________________________________ In thousands
(except share and per share data)
______________________________________________________ Sales
6,981,984 7,429,121 1,784,147 1,753,324 461,158 Cost of sales
5,129,578 5,369,149 1,306,780 1,263,214 332,250 _________ _________
_________ _________ _________ Gross profit 1,852,406 2,059,972
477,367 490,110 128,908 Selling, general and administrative
expenses 1,563,208 1,794,720 411,583 445,855 117,269 _________
_________ _________ _________ _________ Operating profit before net
gain from adjustment of investment property to fair value and other
expenses and income 289,198 265,252 65,784 44,255 11,639 Other
income 15,835 12,233 15,217 329 87 Other expenses 12,755 14,716
9,784 12,110 3,185 Net gain from adjustment of investment property
to fair value 10,456 19,067 10,456 1,097 289 _________ _________
_________ _________ _________ Operating profit 302,734 281,836
81,673 33,571 8,830 Finance income 60,978 60,700 24,465 19,049
5,010 Finance expenses 118,297 166,295 12,241 26,081 6,860 Share in
profit (losses) of associated companies, net 186 (33) 49 (15) (4)
_________ _________ _________ _________ _________ Income before
taxes on income 245,601 176,208 93,946 26,524 6,976 Taxes on income
69,779 43,806 23,164 8,391 2,207 _________ _________ _________
_________ _________ Net income for the period 175,822 132,402
70,782 18,133 4,769 ========= ========= ========= =========
========= Attributable to: Equity holders of the parent 143,628
104,586 61,142 10,437 2,745 _________ _________ _________ _________
_________ Minority interests 32,194 27,815 9,640 7,696 2,024
_________ _________ _________ _________ _________ Net income per
Ordinary share attributed to Company shareholder's or ADS: Basic
3.39 2.41 1.41 0.24 0.06 _________ _________ _________ _________
_________ Fully diluted Earning (loss) 3.39 1.62 1.16 (0.19) (0.05)
_________ _________ _________ _________ _________ Weighted average
number of shares or ADS used for computation of income per share:
Basic 42,355,339 43,372,819 43,372,819 43,372,819 43,372,819
___________ __________ __________ __________ __________ Fully
diluted 42,355,339 45,037,692 44,793,242 45,037,692 45,037,692 BLUE
SQUARE - ISRAEL LTD. CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE
YEAR ENDED DECEMBER 31, 2008 (UNAUDITED) Convenience translation
for the year Year ended December ended December 31, 31,
____________________ ________________ 2007 2008 2008 ______ ______
______ Unaudited _________________________________________ NIS U.S
dollars _____________________ ___________________ In thousands
(except share and per share data)
_________________________________________ CASH FLOWS FROM OPERATING
ACTIVITIES: Income before taxes on income 245,601 176,208 46,346
Income tax paid (60,903) (94,212) (24,779) Adjustments required to
reflect the cash flows from operating activities (a) 159,080
318,087 83,663 ________ ________ ________ Net cash provided by
operating activities 343,778 400,083 105,230 ________ ________
________ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of
property, plant and equipment, investment property and software
(205,934) (300,694) (79,088) Additional investment in subsidiary
(5,000) (186,403) (49,028) Investment in intangible assets and
deferred charges - (1,383) (363) Proceeds from realization of
investment in subsidiary 394 - - Collection of short-term bank
deposit, net 398,513 101,281 26,639 Payments on account of real
estate (45,825) - - Repayment of long-term receivables 409 1,250
329 Proceeds from sale of property, plant and Equipment,
investments property and software 16,456 8,126 2,137 Proceeds from
of marketable securities 13,340 185,104 48,686 Purchase of
marketable securities (175,258) (169,747) (44,647) Acquisition of
subsidiaries consolidated for the first time (b) (161,876) - -
Interest received 55,170 17,778 4,676 ________ ________ ________
Net cash provided (used) in investing activities (109,611) (
344,688) (90,659) ________ ________ ________ CASH FLOWS FROM
FINANCING ACTIVITIES: Convertible debentures repaid (16,728) -
Dividend paid to shareholders (280,000) (150,000) (39,453) Issuance
of debentures - 121,259 31,894 Dividend paid to minority
shareholders of subsidiaries (50,706) (22,077) (5,807) Receipt of
long-term loans 269,364 231,398 60,862 Repayments of long-term
loans (215,143) (130,571) (34,343) Repayments of credit from trade
payables (1,740) (1,740) (458) Short-term credit from banks, net
3,396 15,689 4,127 Interest paid (72,527) (89,244) (23,473)
________ ________ ________ (364,084) 25,286 (6,651)
______________________________ ________ ________ ________ Net cash
provided (used) in financing activities BLUE SQUARE - ISRAEL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE YEAR ENDED DECEMBER
31, 2008 (CONTINUED) (UNAUDITED) Convenience translation for the
twelve Year months ended ended December 31, December 31,
___________________ ______________ 2007 2008 2008 ______ ______
______ Unaudited ___________________________________ NIS U.S
dollars ___________________________________ In thousands (except
share and per share data) ___________________________________
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (129,917) 30,109
7,920 BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
182,946 53,029 13,948 ________ _______ _______ BALANCE OF CASH AND
CASH EQUIVALENTS AT END OF PERIOD 53,029 81,138 21,868 ========
======= ======= (a) Adjustments required to reflect the cash flows
from operating activities: Income and expenses not involving cash
flows: Depreciation and amortization 132,726 153,882 40,474 Net
gain from adjustment of investment property to fair value (10,456)
(19,067) (5,015) Share in profits losses (gain) of associated
companies (186) 33 9 Amounts charged in respect of employee
share-based payment - 7,969 2,096 Loss (gain) from sale, disposal
of impairment of property, plant and equipment and investment
property (4,927) 5,989 1,575 Loss (gain) from changes in fair value
of derivative financial instruments 1,400 (30,840) ( 8,111) Linkage
differences on long-term loans and other liabilities, net 18,428
71,262 18,743 Capital loss from realization of investments in
subsidiaries 1,520 ( 11,176) (2,940) Increase (decrease) in
liability for employee rights, net (31) 263 69 Decrease in value of
marketable securities deposit and long-term receivables, net 54,252
11,169 2,938 Interest received and interest paid, net 17,357 71,466
18,797 Changes in operating assets and liabilities: Decrease
(increase) in trade receivables and other accounts receivable
(62,176) 50,277 13,223 Decrease (increase) in inventories (16,145)
(43,136) (11,346) Increase (decrease) in trade payables and other
accounts payable 27,318 49,996 13,151 _______ _______ _______
159,080 318,087 83,663 ======= ======= ======= BLUE SQUARE - ISRAEL
LTD. CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE YEAR ENDED
DECEMBER 31, 2008 (CONTINUED) (UNAUDITED) Convenience translation
for the twelve Year months ended ended December 31, December 31,
__________________ ______________ 2007 2008 2008 ______ ______
______ Unaudited __________________________________ NIS U.S dollars
__________________________________ In thousands (except share and
per share data) __________________________________ (b) Acquisition
of subsidiaries consolidated for the first time: Assets and
liabilities assumes at date of acquisition: Working capital
(excluding cash and cash equivalents) (68,933) - Property, plant
and equipment and investment property (32,009) - Deferred taxes,
net 14,703 - Liability for employee rights upon retirement, net
2,663 - Long-term loans and convertible debentures 34,288 -
Intangible assets arising on acquisitions (169,743) - Minority
interest in subsidiary at date of acquisition 55,645 - Embedded
derivative 1,510 - _________ _______ (161,876) - ========= =======
(c) Supplementary information on investing and financing activities
not involving cash flows: Issuance of shares upon conversion of
convertible debentures 255,676 - - ========= ======= =======
Exercise of convertible debentures of subsidiary 2,598 - -
========= ======= ======= Purchasing property, plant and equipment
on credit 5,690 14,797 3,892 ========= ======= ======= BLUE SQUARE
- ISRAEL LTD. SELECTED OPERATING DATA FOR THE YEAR AND THREE MONTHS
PERIODS ENDED DECEMBER 31, 2008 (UNAUDITED) Convenience translation
for the three months For the year For the three ended ended
December months ended December 31 December 31 31,
___________________________________________ 2007 2008 2007 2008
2008 ______ ______ ______ ______ ______ NIS U.S.$
___________________________________________ In millions
___________________________________________ Unaudited
___________________________________________ Sales 6,982 7,429 1,785
1,753 461 Operating income before net gain from adjustment of
investment property to fair value and other expenses and income 289
265 66 44 11.6 EBITDA 423 427 94 83 21.8 EBITDA margin 6.1% 5.8%
5.3% 4.7% 4.7% Increase in same store sales* 1.2% 1.1% 4.8% (4.5%)
NA Number of stores at end of period 185 194 185 194 NA Stores
opened during the period 10 10 3 1 NA Stores closed during the
period 0 1 0 1 NA Total square meters at end of period 342,705
354,531 342,705 354,531 NA Square meters added (less) during the
period, net 19,401 11,826 3,421 (1,737) NA Sales per square meter
19,905 19,898 4,977 4,691 1,232 Sales per employee (in thousands)
937 954 234 230 60.5 Contact: Blue Square-Israel Ltd. Dror Moran,
CFO Toll-free telephone from U.S. and Canada: 888-572-4698
Telephone from rest of world: +972-3-928-2220 Fax: +972-3-928-2299
Email: DATASOURCE: Blue Square Israel Ltd CONTACT: Contact: Blue
Square-Israel Ltd., Dror Moran, CFO, Toll-free telephone from U.S.
and Canada: 888-572-4698, Telephone from rest of world:
+972-3-928-2220, Fax: +972-3-928-2299, Email:
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