SodaStream loses its Nasdaq fizz despite robust 2Q

The home carbonated-beverages systems maker lost one-third of its value last week despite an earlier rebound.

Trader looks at market graph 311 (R) (photo credit: REUTERS/Tony Gentile)
Trader looks at market graph 311 (R)
(photo credit: REUTERS/Tony Gentile)
Home carbonated-beverages systems maker SodaStream International Ltd. lost one-third of its value last week despite a rebound on Friday. The share price rose 5.1 percent on Friday to $47.89, giving a market cap of $880 million, down from its peak value of $1.4 billion last month.
The fall in market cap came despite a strong financial report for the second quarter and higher full-year guidance.
SodaStream published its financial report for the second quarter on Thursday.
Revenue rose 38% to 53.3 million euros from 38.5 million euros. Revenue in the Americas rose 136%, and revenue in Western Europe rose 22%. Revenue from soda makers rose 36%, and consumables revenue rose 54%. Sales of flavor units nearly doubled to 6.1 million euros, and sales of CO2 canisters rose 34% to 3.2 million euros. Net profit more than doubled to 5.1 million euros for the second quarter, from 2.1 euros million for the corresponding quarter last year. Adjusted net profit rose to 6.1 million euros from 2.3 million euros, beating the analysts’ consensus.
SodaStream raised its full year guidance for 2011 to 30% revenue growth from 160.7 million euros in 2010 and 60% growth in net profit from 9.7 million euros last year.
Cash flow from operations rose to 1.6 million euros for the second quarter from 1.3 million euros for the corresponding quarter. The company had 74.8 million euros in cash and cash equivalents at the end of June, up from 52.9 million euros at the end of 2010, mainly due to the 33.1 million euros raised in the secondary offering in June.
SodaStream’s future depends on sales of disposable products: the CO2 canisters for the carbonated beverage systems. Sales of the canisters accounted for 55% of total revenue in the second quarter, up from 50% in the corresponding quarter.
The second factor is sales in the US, which the company describes as strong. The company sells through 7,000 retail outlets owned by 16 chains, and the number is expected to grow. Sales in the Americas rose to 21.9% of total revenue in the first half from 12.9% in the first half of last year. But the penetration remained flat at 21.4%, so the potential is still high. The US has 110 million households that consume an average of 118 liters of soda a year.
SodaStream sold an average of four CO2 canisters and eight flavor-concentrate canisters per US consumer in the second quarter, compared with three CO2 canisters and four flavor- concentrate canisters per European consumer.
Eighty-two percent of US buyers of the company’s systems last year became active users, buying the CO2 canisters, and 71% bought the flavor-concentrate canisters.