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Report Date : |
12.10.2013 |
IDENTIFICATION DETAILS
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Name : |
EMILIA COSMETICS
LTD. |
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Formerly known as: |
PHARMAGIS LTD |
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Registered Office : |
P.O. Box 336 (2069205), 6 Hamada Street,
Industrial Zone, Yokneam Illit 2069200 |
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Country : |
Israel |
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Financials as on: |
30.06.2013 |
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Date of Incorporation : |
04.05.1971 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturers, exporters and marketers of personal care products, cosmetics, toiletries and cleaning products, i.e.
soaps, shampoos and conditioners, laundry detergents, sun care products, and
all-purpose household detergents. |
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No. of Employees : |
260 employees |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March, 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
israel - ECONOMIC OVERVIEW
Israel has a technologically advanced market economy. Its major
imports include crude oil, grains, raw materials, and military equipment. Cut
diamonds, high-technology equipment, and pharmaceuticals are among the leading
exports. Israel usually posts sizable trade deficits, which are covered by
tourism and other service exports, as well as significant foreign investment
inflows. The global financial crisis of 2008-09 spurred a brief recession in
Israel, but the country entered the crisis with solid fundamentals - following
years of prudent fiscal policy and a resilient banking sector. The economy has
recovered better than most advanced, comparably sized economies. In 2010,
Israel formally acceded to the OECD. Israel's economy also has weathered the
Arab Spring because strong trade ties outside the Middle East have insulated
the economy from spillover effects. Natural gasfields discovered off Israel's
coast during the past two years have brightened Israel''s energy security
outlook. The Leviathan field was one of the world''s largest offshore natural
gas finds this past decade, and production from the Tama field is expected to
meet all of Israel''s natural gas demand beginning mid-2013. In mid-2011,
public protests arose around income inequality and rising housing and commodity
prices. The government formed committees to address some of the grievances but
has maintained that it will not engage in deficit spending to satisfy populist
demands.
|
Source
: CIA |
EMILIA COSMETICS
LTD.
Telephone 972
73 201 03 51
Fax 972
4 673 40 12
P.O. Box 336 (2069205)
6 Hamada Street
Industrial Zone
Yokneam Illit 2069200 Israel
Originally incorporated as a Private Limited Company, registered as such
as per file No. 51-057031-0 on the 04.05.1971.
Originally registered under the name of PHARMAGIS LTD., which changed to
PHARMADEAL LTD. on the 21.06.1977, which changed again to the first name on the
30.3.1981 and on the 16.07.1987 name changed to CARELINE (PHARMAGIS) LTD.
Converted into a public limited company and registered as such as per
file No. 52-003649-2 on the 22.01.1990.
Subject’s shares were listed for trade on the Tel Aviv Stock Exchange.
On the 30.6.1996 subject was acquired by AGIS INDUSTRIES (1983) LTD.,
following which its shares were de-listed from trade and at a later date
subject re-converted into a private limited company (keeping latter
registration number).
In 2003, NATURAL FORMULA LTD. was acquired and merged into subject.
Following the acquisition of subject by EMILIA Group from PERRIGO Group,
on the 11.04.2010 name changed to ZOHAR COSMETICS (M.O.F) LTD., which changed
to the present name on the 16.07.2013.
Authorized share capital NIS 30,000,000.00, divided into -
30,000,000
ordinary shares of NIS 1.00 each,
of which 19,408,500 shares amounting to NIS 19,408,500.00 were issued.
Subject is fully owned by EMILIA DEVELOPMENT (O.F.G) LTD., a public
limited company, whose shares are traded on the Tel Aviv Stock Exchanges, controlled
(84.1%) by Oded Feller.
On November 1st 2009 former owner of subject, PERRIGO ISRAEL
PHARMACEUTICALS LTD. (a wholly-owned subsidiary of PERRIGO COMPANY INC. of the
USA) signed an agreement to sell subject to EMILIA Group for NIS 183 million.
The transaction was completed in May 2012 (see more below).
1. Oded Feller, Chairman of
EMILIA DEVELOPMENT,
2. Ms. Limor Domenitz
Gishri, General Manager of EMILIA DEVELOPMENT,
3. Ms. Tamar Gottlieb,
4. Lior Som.
Alon Tavor.
Manufacturers, exporters and marketers of personal care
products, cosmetics, toiletries and cleaning products, i.e. soaps, shampoos and
conditioners, laundry detergents, sun care products, and all-purpose household
detergents.
In the framework of its activity, subject accompanies the production
process from its development, testing, packages design and certification.
Subject focuses on manufacturing for 'private label' and 'store brand',
following the sale of its own brands to SANO (see CHARACTER).
35% of sales in 2012 are for export (32% in 2011), predominantly to the
USA.
Having several tens of customers. Among main customers: SANO (46% of
sales in 2012), SUPERPHARM (largest drugstore chain, for their private label
“Life”).
Among foreign clients: WALMART (USA, 16% of sales in 2012), HENKEL
(Germany), and others.
Among local suppliers: EFAL CHEMICAL INDUSTRIES, OROKIA ISRAEL, PETRUS
CHEMICALS & MATERIALS, Y.S. ASHKENAZI AGENCIES, ZIFRONI CHEMICALS, ZIV
CHEMICALS, HUBERMAN & SONS, TAVIT 2000, ORDA PRINT, ZOHAR DALIA, D.P.L.
IMDUSTRIES.
Operating from office premises, in 6 Hamada Street, Industrial Zone,
Yokneam Illit (or Yoqneam Illit), and from an owned plant, on an area of 46,000
sq. meters, in the Industrial Zone, Yerucham.
Having 260 employees serving subject and marketing subsidiary as of end
of 2012 (had 269 employees in the end of 2011).
Financial data is included in the consolidated B/S of parent company, by
EMILIA DEVELOPMENT (O.F.G) LTD., which shows:
NIS
(thousands)
31.12.2012 30.06.2013
ASSETS
Current assets
Cash and cash
equivalents 47,496 86,996
Deposits and other
financial assets 49,581 60,820
Customers 55,842 56,471
Other debtors 6,717 7,439
Stock 67,381 75,856
227,017 287,582
Non-current assets
Financial assets 113,805 60,132
Investments in
subsidiaries 30,462 31,336
Fixed assets (net) 36,342 34,558
Other non-current
assets 9,548 9,290
190,157 135,316
417,174 422,898
======= =======
LIABILITIES
Current liabilities 123,230 126,024
Non-current liabilities 114,488 104,052
Equity 179,456 192,822
417,174 422,898
======= =======
EMILIA DEVELOPMENT current market value US$ 45.4 million.
According to parent company EMILIA financial statements on the
Cosmetics, Detergents and Toiletries segment, which practically comprises of
subject (and subsidiaries):
Total assets as of 30.06.2012 were NIS 185.7 million (NIS 179.7 million
as of 31.12.2012).
Total liabilities: NIS 133.4 million.
Financial data released on subject close to the above deal completion
date:
Fixed assets (net): NIS 23.172 million as of 27.02.2010).
Equity: NIS 85.9 million as of 27.02.2010. Equity was evaluated in
EMILIA’s financial statements after the adjustments to the SANO deal at NIS
74.5 million as of 31.03.2010.
Subject has a credit line of NIS 90 million (of which as of 30.06.2013
NIS 37.9 million utilized), from 2 commercial banks. Subject meets all its
financial covenants.
Subject is an “Approved Enterprise” and such entitled for State’s
benefits. The Israeli Investment Centre (IIC) approved investments of US$ 8
million and additional US$ 9 million for enlarging subject’s plant in Yerucham.
In May 2003, IIC approved additional US$ 2.7 million investment plan for
the expansion of subject's plant.
In June 2012, subject received from the IIC a NIS 1.6 million grant for
the expansion of subject's plant.
There are 9 charges for unlimited amounts registered on the company's
assets (financial assets, fixed assets and equipment), in favor of the State of
Israel and Bank Leumi Le'Israel Ltd. (last 6 charges placed March-July 2012).
Subject's 2010 sales were NIS 213,300,000, making a gross profit of
NIS 13,100,000, and an operating loss of NIS 13,800,000.
Subject ended 2010 with a net loss of NIS 14,205,000.
Subject's 2011 sales were NIS 203,200,000, making a gross profit of
NIS 27,800,000, and an operating profit of NIS 6,700,000.
Subject ended 2011 with a net profit of NIS 1,765,000.
Subject's 2012 sales were NIS 212,000,000, making a gross profit of
NIS 33,200,000, and an operating profit of NIS 8,700,000.
Subject ended 2012 with a net profit of NIS 5,589,000.
Sales by EMILIA's Cosmetics Toiletries and Detergents Segment in the
first 6 months of 2013 were NIS 107,104,000, making a pretax profit of NIS
3,596,000.
EMILIA DEVELOPMENT (O.F.G) LTD.
Consolidated
Statement of Income
NIS
(thousands)
Year
ended 31.12
2010 2011 2012
Total revenues 219,651 229,266 249,929
Profits before income
tax 17,456 9,415 28,221
Net income 15,574 9,350 21,010
======= ======= =======
EMILIA DEVELOPMENT consolidated first 6 months of 2013 revenues were
NIS 106,048,000 (2.6% increase
compared to the parallel period in 2012), making a pretax profit of NIS
16,469,000 and a net income of NIS 13,854,000.
EMILIA DISTRIBUTION & MARKETING LTD., 100%, operating a wholesale
store.
EMILIA PERSONAL CARE INC., 100%, USA, marketing subject’s goods in USA.
EMILIA DEVELOPMENT (O.F.G) LTD., an investment company publicly traded on TASE, controlled
by Oded Feller. The company has
investment in the financial and industrial fields, including:
PALZIV EIN HANATZIV ACS LTD., 25%,
ZOHAR INDUSTRIES (M.O.F) LTD., 100%,
MAXIMA AIR SEPARATION LTD., 13.5%, publicly traded on the Tel Aviv Stock
Exchange, current market value US$ 47.5 million,
ALBANY BONDED WAREHOUSES (1982) LTD., 100%.
Also hold 7.3% in the TENE Investment Fund, which is holds shares (in
several levels of investments) in several industrial companies.
CHEMOVIL LTD., controlled by Oded Feller, importers, wholesale
distributors, transporters and storage of raw materials to the industry.
CHEMOVIL Group includes, among others:
DEPOTCHEM (1989) LTD., importers and marketers of industrial and
agricultural chemicals and allied products for the industry.
CAESAREA POLYMER INDUSTRIES LTD., BULK CHEMICALS LTD., CHEMINTER LTD.,
CHEMOTHAL LTD., ISRAEL ENERGY (ENEREL) LTD., TABIB THE TOXIC WASTE TREATMENT
& DISPOSAL CO. LTD.
Oded Feller holds other companies, including investment and real estate
firms.
Bank Leumi Le’Israel Ltd., Tel Aviv Central Branch (No. 800), Tel Aviv.
Union Bank of Israel Ltd., Tel Aviv Main Branch (No. 033), Tel Aviv.
In November 2010, as part of the transaction of subject's acquisition by
EMILIA Group from PERRIGO Group (see also below), where subject acquired 50% of
subsidiary DAN-AGIS LTD., the sale of 50% of DAN-AGIS to DANSHAR (who holds the
remaining 50%) was completed. In this framework, a legal dispute rose, which
went to arbitration. In one claim, subject had to pay a total of NIS 255,000.
In another claim of DANSHAR against subject for NIS 3.5 million, the
arbitrator ruled that subject does not have to pay anymore that it had.
In April 2012 subject was summoned to the hearing in Ministry of
Environment regarding claimed that its sewerage does not meet its license. In
parallel, subject implemented a waste treatment plan, reducing its sewerage by
50%.
Apart from that, nothing unfavorable learned (please refer to NOTE
below).
Subject's officials refused to update data.
In November 2009 parent company EMILIA signed an agreement to acquire
subject from PERRIGO ISRAEL Group (originally for NIS 205 million, sum later
changed, as below). According to the agreement, certain activities of PERRIGO
subsidiaries will also be transferred to subject, and practically include the
activities in the consumer and styling products of PERRIGO of 100% subsidiary
AGIS DISTRIBUTION as well as the 50% in the distribution arm DAN-AGIS LTD.
The main part of the transaction –of selling subject's shares-
took place on the 26.02.2010, paying to PERRIGO NIS 141 million for the shares,
including a return of NIS 54 million for redemption of subject’s liabilities
for PERRIGO Group. The deal completion was delayed due to couple of reasons.
First, a controversy regarding the final selling sum and went into arbitration,
who accepted EMILIA claim that subject’s equity has been reduced between the
deal signing and deal completion – by NIS 22 million. In May 2012 EMILIA paid
further NIS 42 million to PERRIGO for certain further IP rights (was delayed
also due to a conflict).
On 17.11.2009, prior to the above deal completion, EMILIA signed an
agreement with SANO BRUNO’S ENTERPRISES LTD., according to which SANO will
acquire from subject the intellectual property (IP) of the brands Careline, Necca, Natural Formula, Skin Guard, and more, for NIS 85
million.
These above brands are well-known in the local market in the
personal-care products segments (SANO estimated the turnover of the brands
acquired stands at NIS 240 million annually). The first part of the transaction
with took place in March 2010 and was finally completed in May 2012, when SANO
paid the reminder of the purchase sum (the deal was delayed due to the reasons
mentioned before). According to the agreement with SANO, subject will continue to
manufacture the brands on a “private label” basis (as well as top other
clients) at the Yerucham plant for 5 years at least.
A main motive for subject’s acquisition was EMILIA Group’s desire to
take advantage of the synergy with (then) EMILIA 50% subsidiary ZOHAR DALIA,
manufacturers and marketers of detergents intermediates, soaps and cleaning
products. In that aspect, EMILIA had intentions to gain full ownership of ZOHAR
DALIA, buying the reminder 50% from Kibbutz Dalia, however, Kibbutz Dalia
resisted and eventually, after a dispute, in August 2012 EMILIA sold its
holdings (50%) in ZOHAR DALIA to Kibbutz Dalia for NIS 61 million.
Oded Feller is a well-known businessman. Mr. Feller served as the
President of the Haifa and North of Israel Chamber of Industry and Trade since
mid 2004. EMILIA is one of the Oded Feller’s 2 main holding companies, the
other one being the CHEMOVIL Group (see above OTHER COMPANIES). CHEMOVIL LTD.,
operating since 1959, is a well-known leading company in its field, enjoying a good
reputation in its field. CHEMOVIL's annual sales reported to be NIS 250
million. The Group deals, besides chemicals, in the areas of waste water
treatment and flour mills operation.
In August 2012 it was reported that subject will manufacture a private
label of personal care for SHUFERSAL, local largest supermarket chain, of 13
products, under the name 'Senses'.
In April 2013 EMILIA (together with TENE Investment Fund) realized their
holdings in CAESAR-STONE SDOT-YAM LTD. (2.6% directly by EMILIA, some 20% by
TENE) for a total of NIS 59 million.
In September 2013 subject reported that it ceased receiving haulage
services from sister company CHEMOTHAL, following CHEMOTHAL's sale of its
haulage equipment. Subject reached an agreement with the new supplier (who
acquired the said equipment from CHEMOTHAL) for services, at similar
conditions.
The local cleaning and detergents market is estimated at NIS 350
million. The market is mainly combined from toilet cleaning products (over
30%), floor cleaning products (over 20%) and bleaching products (around 20%).
Most of the market (80-85%) is controlled by local manufacturers (large part by
international brands such as subject) and the rest from import. Some 65% of
sales are to the large marketing chains.
According to surveys, the local cosmetics and personal care market was estimated at US$ 2.1 billion (excluding
duty-free sales, which are significant) in 2011, 5% up from 2010. In addition,
local cosmetics industry sales for export are valued at further NIS 1 billion.
60% of the sales are of body care and make-up, the rest are perfumes.
Good for trade engagements.
Maximum unsecured credit recommended US$ 1,000,000.
NOTE:
According to the Registrar of Companies subject has a "Law
Violating Company" Status.
As part of the Registrar efforts in the last period to collect fees and
supervision on meeting all duties by Companies’ law, such status notes have
been added to the registry. Registration as a "Law Violating
Company" is done due certain violation by the subject company for not
meeting the Registrar of Companies regulations promptly, mainly for not
paying Registrar fees, and/or not submitting annual reports on time. The
sanctions and penalties against the company in such case include fines up to
NIS 250,000, not allowing the company to register new charges on its favor, not
allow registration a charge on its assets (which may deprive the company from
taking new loans at their banks), cannot make changes in the Registrar, and
more.
It should be noted that this may not necessarily be connected to the
company's business activities and financial standing (although in many cases
there is a connection, it is most likely not so in subject's case;
It is also possible that there is a technical or administrative problem, as
such things also happen).
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.16 |
|
|
1 |
Rs.97.77 |
|
Euro |
1 |
Rs.82.78 |
INFORMATION DETAILS
|
Report Prepared
by : |
SDA |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
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NB |
New Business |
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This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.