SODA

SodaStream International Ltd. (SODA)

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SodaStream International Ltd. (SODA)

SodaStream at dbAccess Consumer, Retail, Gaming & Lodging Conference Call

March 06, 2013, 9:20 am ET

Executives

Daniel Birnbaum – Chief Executive Officer

Analysts

William Schmitz Jr. – Deutsche Bank Securities Inc.

Presentation

William Schmitz Jr. – Deutsche Bank Securities Inc.

We are going to get started here with SodaStream. I want to point to the forward-looking statements in the presentation and on our website as there might be some forward-looking statements. Currently there is some – but so we’re going to start here, I’m Will Schmitz from Deutsche Bank and this is Daniel Birnbaum from SodaStream. So we’re going to get started.

Can we just stop the webcast for a second and to take care of this? Israeli labor law. And we won’t do that. So that’s the background for what you hear here. I don’t get it, because I don’t believe in sacrificing human beings for any cause, because the unemployment rate in the PA, in the Palestinian Authority is about 30%. So anyone we fire will not find another job, so we just have to put up with this and hasn’t heard our business by the Bill.

Daniel Birnbaum

Right.

William Schmitz Jr. – Deutsche Bank Securities Inc.

I don’t think we’ve lost a single customer in the world, single retailer including in Europe where they’re pretty lot about this issue. But we just have to put up with this and there’s an ethical decision. We can easily get out of that facility. In fact we’re building a new factory, it’s probably in your Q&A, we are building a new factory within the green line in Israel, a huge, almost one million square foot facility near the Intel facility in Israel, south of Tel Aviv. And if we wanted to we can vacate the one in the West Bank and just transfer the capacity into the Israeli, the new facility. I hope we don’t have to do that. And if we do that, then I would like to try to arrange work permits for those Palestinian employees to be able to work within the green line of Israel. So that’s kind of where we are in that. But it is not, but we are about home carbonation, and I think we should give you the opportunity to ask questions.

William Schmitz Jr. – Deutsche Bank Securities Inc.

So I said it from the business (inaudible).

Daniel Birnbaum

So you would guess I know you did a survey every year that’s already that I guess on the U.S. household penetration, where we do? We’re fielding a survey now it should be ready for the next earnings call, but I can, we estimate that we crossed the 1% household penetration line just by seeing how many gas refills we’re doing in the U.S. and how many soda makers we’re selling in the U.S. So we in Q4, we did it 890,000 gas refills and spared some of the sales in the U.S. alone. So we – that means that we have add about 890,000 users just from the gas and I didn’t buy all of those exchanges. Someone is using SodaStream out there. And then in addition to that, in the previous six months we sold more than 600,000 soda makers. So if you add them together, we cross the 1% household penetration line.

Unidentified Analyst

Gotcha. And did you got target for where you think that could ago.

Daniel Birnbaum

No it’s hard to say where it can go, but what we can do is look at benchmarks out there in other countries. SodaStream is in 45 markets as you know. The highest penetration market is Sweden where we had 25% household penetration. And active by the way, the penetration of non-active is higher than that obviously because no one always uses anything. Okay there’s (inaudible) is 100% loyalty of anything, so the household penetration in Sweden is well over 32%, but active is 25%. So if that – and then there is other markets that have high penetration. Finland is approaching 15%, the Czech Republic is at 10% and we’ve only been there for three and a half years. So this thing can ramp up and the question is how – is what the path to that, how fast and how do execute on that, but there is no reason why the U.S. shouldn’t ramp up into double digit penetration, I can’t say when, but I believe its going to happen.

William Schmitz Jr. – Deutsche Bank Securities Inc.

Great. How about – how are things went so far, there’s been a lot of commentary from Wal-Mart about January being okay, February started a little slow and then got a little bit better, so other thing sort of trending more recently.

Daniel Birnbaum

I haven’t heard that February is not a strong month by the way. Everything we’re getting from sell out data from our customers in the Untied States and not only in the U.S. but everywhere by the way is that, the year is off to a strong start. We had very strong momentum following Q4 and then the Super Bowl came, and the Super Bowl was a positive surprise even for me. I’m an optimist, but I didn’t expect to get banned by CBS, so we ended up with two commercials not one, one on YouTube that got nearly 5 million views for free, and the other one that is at the Super Bowl during the prime time.

Read the rest of this transcript for free on seekingalpha.com