Israel’s SodaStream rose 3.1% on Wall Street last week to a market value of more than $1.5 billion and is safely approaching its all-time high in July 2011, six and a half years ago.
The reason for the jump this time is a second attempt by the company that manufactures and sells sparkling water devices to penetrate the alcoholic beverage market. This is the launch of an alcohol syrup with a concentrated Rizling flavor, which contains about 10% alcohol, which when mixed with soda, it becomes a type of champagne (sparkling wine). The price of a concentrate for making five bottles costs about 4 euros, and according to the company, 76 percent of the tasters thought it was champagne.
The first attempt to penetrate the liquor market was about a year and a half ago, in the form of concentrated beer syrup, which can be added to the soda water of the company’s machines. The beer syrup was marketed in Germany, and its flavor was light beer with 4.5% alcohol.
SodaStream lists only its revenues in its financial statements, the gas systems (indicating new customers joining the company) and the filling of gas and the sale of syrups (indicating repeat customers), so the success of its beer cannot be estimated, but the fact that the syrup was not marketed to other countries -, Does not indicate a lot of success.
In early November, the company reported a successful quarter, with revenue and profit growth rising above analysts’ expectations, and with a year-on-year upgrade.
The growth in revenues stemmed from all of the company’s geographical areas, mainly from Germany, Japan, Canada, Austria and Australia. During the quarter there was an increase of 7.5% in the volume of sales of the gas systems, which amounted to 847 thousand units, alongside an increase of 9.3% in sales of gas filling, to 8.4 million units.
SodaStream posted 32% growth in net profit of $19.8 million, a quarterly record. This compares to a profit of $14.9 million in the parallel quarter. Adjusted profit was 87 cents per share, above analysts’ expectations of 76 cents per share.
In light of the third quarter results, the company raised its profit and revenue forecast for the full year. SodaStream now expects to end 2017 with revenue up 13% to $536 million and a 40% increase in adjusted profit to $2.90 per share.
The outlook is also higher than the market’s forecast of $525.1 million and adjusted earnings of $2.75 per share.
By Dror Raich, Calcalist (in Hebrew)