Blue Square - Israel ltd. Reports Financial Results for the Third Quarter & First Nine Months of 2008

1st 9 Months: Revenues Up 9.2% to NIS 5.7B, Gross Profit Up 14.2% to NIS 1.6B



ROSH HA'AYIN, Israel, November 20  /PRNewswire-FirstCall/ -- Blue Square-Israel Ltd. (NYSE and TASE: BSI) today announced unaudited results for the third quarter and nine months ended September 30, 2008.

NOTE: IFRS - International Financial Reporting Standard

Financial results for the three-month and nine-month periods ended September 30, 2008 reported in this release are presented in accordance with International Financial Reporting Standards ("IFRS"). To facilitate comparison, the comparison results from the three-month and nine-month periods ended September 30, 2007, as well as those for the year ended December 31, 2007, have been adjusted to bring them into accordance with IFRS, and differ from the results originally reported.

Tender Offer for BSIP (Blue Square Chain Properties & Investments Ltd.) Shares Completed and BSIP Delisted from the TASE

After the end of the quarter, the Company announced that it had successfully completed the tender offer for BISP shares. The company purchased all of BSIP shares held by the public (20%) for an aggregate consideration of NIS 150.7 million. BSIP was delisted from the Tel Aviv Stock Exchange (TASE) and is now held fully (100%) by the Company. The Company believes this step will improve the Company's decision-making agility and operating efficiency, and that it will increase the Company's earnings per share for the benefit of shareholder value. For additional information, please refer to the Company's Immediate Report and SEC filings.

Results for the Third Quarter

Revenues: Revenues for the third quarter increased by 6.2% to NIS 1,936.2 million (U.S. $566.0 million)(a) compared to NIS 1,823.5 million in the third quarter of 2007. The increase reflected the addition of approximately 17,000 square meters of selling space through the opening of 12 new supermarkets during the twelve month period; the success of the Mega In Town format, and the ongoing expansion of Bee Group Retail ("Bee Group") (formerly Kfar Ha'Shaashuim), including the consolidation of the revenues of Naaman Porcelain Ltd. (TASE:NAMN) ("Naaman") since the fourth quarter of 2007.

During the third quarter, the Company's Same Store Sales increased by 0.6% as compared on a year-over-year basis with the third quarter of 2007. This relatively minor increase derived from the combination of the growth in revenues of the Mega In Town format and the decrease of revenues of the Shefa Shuk format.

Gross Profit: Gross profit for the third quarter increased by 12.2% to NIS 538.8 million (U.S. $157.5 million) compared to NIS 480.2 million in the third quarter of 2007. Gross margin for the period increased to 27.8% compared to 26.3% in the parallel quarter of 2007, reflecting improved agreements with suppliers; the success of the Mega In Town format; the reduction in the proportion of hard discount sales; and the higher gross margin of Bee Group Retail.

Selling, General, and Administrative Expenses: Selling, General, and Administrative expenses for the quarter increased by 16.5% to NIS 478.8 million (U.S. $140.0 million) compared to NIS 411.1 million in the third quarter of 2007. The increase reflects the expenses of opening 12 new stores during the previous 12 months and the operating expenses of Naaman, whose results were consolidated into the Company's financial reports for the first time in the fourth quarter of 2007.

Other Income (Expenses): The Company recorded other income of NIS 11.8 million (U.S. $3.5 million) during the third quarter. This reflected a capital gain taken in relation to the reorganization of several of the Company's non-food holdings by Bee Group, the company through which Blue Square manages its non-food retail operations.

Operating Income: Operating income for the third quarter increased by 6.5% to NIS 71.1 million (U.S. $20.8 million) from NIS 66.7 million in the third quarter of 2007. Operating margin for the period was 3.7%, unchanged as compared to the third quarter of 2007. This reflects the period's increased revenues, mitigated partially by the Company's activities to accelerate the expansion of Eden Teva Market and to build the Bee Group's new format for babies and infants (the Dr. Baby chain).

EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) : EBITDA for the quarter was NIS 104.3 million (U.S. $30.5 million) compared to NIS 103.6 million in the third quarter of 2007. EBITDA margin for the period was 5.4% compared to 5.7% in the third quarter of 2007.

Financial Expenses (net): Financial expenses (net) for the quarter were NIS 50.1 million (U.S. $14.7 million) compared to financial income (net) of NIS 1.9 million in the third quarter of 2007. Financial expenses were impacted by the decrease in the value of financial instruments as measured by the Fair Value method, whose changes in value were recorded as a financial expense of NIS 7.0 million (U.S. $2.0 million ) in the third quarter of 2008. This compared to financial income of NIS 26.0 million recorded in the parallel quarter of 2007. In addition, the Company's total financial debt was significantly higher at the end of the third quarter of 2008 as compared to its balance at the end of the third quarter of 2007.

Taxes on Income: Taxes on income for the quarter were NIS 8.9 million (U.S. $2.6 million), an increase of 85.4% compared to NIS 4.8 million in the third quarter of 2007, resulting in an effective tax rate of 42.7% compared to 7.0% in the parallel quarter of 2007. This reflected the Company's adoption of the IFRS, under which the Company did not record tax liability or benefits from the revaluation of its financial instruments to Fair Value. During the third quarter of 2008, the Company recorded financial expenses, while in the parallel period of 2007, it recorded financial income. The effect was mitigated partially by the decrease in the Israeli corporate tax rate from 29% in 2007 to 27% in 2008.

Net Income: Net income for the third quarter of 2008 was NIS 12.0 million (U.S. $3.5 million) compared to NIS 63.6 million in the third quarter of 2007. The portion of the net profit attributable to shareholders, as calculated in accordance with the IFRS, was NIS 6.5 million (U.S. $1.9 million), or NIS 0.15 per ADS (U.S. $0.04), while the portion attributable to the share of minority interests was NIS 5.5 million (U.S. $1.6 million). The reduction in net income derived primarily from the increase in the Company's financing expenses, as explained above.

Dividend

During the third quarter, the Company declared a cash dividend of NIS 150.0 million. Following the dividend declaration, on September 25, 2008 the conversion ratio of 5.9% convertible debentures issued in August 2003 was adjusted, making each NIS 20.095 par value of convertible debentures convertible into one ordinary share of the Company. The dividend was distributed on October 7, 2008.

  Recent Strategic Progress:

  - Mega Bool - Blue Square's New Hard Discount Format: on
    October 28th, the Company announced that it would launch "Mega Bool",
    a new hard discount supermarket format, during December 2008.
    Preparations for Mega Bool include the conversion of 36-38 existing
    Mega and Shefa Shuk stores of various sizes, representing
    approximately 120,000 square meters (approximately one third of the
    Company's supermarket floorspace).

  - Private Label: The Company plans to launch an extensive line
    of private label goods in December 2008, and intends to expand it to
    an even broader variety of products in the future.

  - Eden Teva (organic and health food markets): With the goal
    of establishing Blue Square as the clear leader of Israel's emerging
    organic/health food sector, during the quarter, the Company opened two
    additional Eden Teva supermarkets, doubling the chain's selling space
    to approximately 6,200 square meters. The Company plans to expand the
    chain to approximately 10 stores nationwide over the next two years.

  - Bee Group (non-food retailing): During the third quarter,
    the Company announced that it had increased its holdings in Bee Group
    to 85%, and that it had obtained an option to acquire full control of
    Bee Group. Management views Bee Group as a growth engine for the
    Company, and the acquisition as a major step in the continuing
    implementation of its plan to be a major player in Israel's
    non-food sector.


  Results for the First Nine Months


Revenues: The Company's revenues for the first nine months of 2008 increased by 9.2% to NIS 5,675.8 million (U.S. $1,659.1 million) (a) compared to NIS 5,197.8 million in the first nine months of 2007. The increase reflects: 1) the addition of approximately 17,000 square meters of selling space through the opening of 12 new supermarkets during the twelve month period; 2) the period's 3.1% increase in Same Store Sales; and 3) the ongoing expansion of Bee Group since the fourth quarter of 2007.

Gross Profit: Gross profit for the first nine months increased by 14.2% to NIS 1,569.9 million (U.S. $458.9 million) compared to NIS 1,375.0 million in the first nine months of 2007. Gross margin for the period increased to 27.7% compared to 26.5% in the parallel period of 2007, reflecting the factors detailed above.

Selling, General, and Administrative Expenses: Selling, General, and Administrative expenses for the first nine months of 2008 increased by 17.1% to NIS 1,348.9 million (U.S. $394.3 million) compared to NIS 1,151.6 million in the first nine months of 2007. The increase reflects the operation expenses of opening 12 new stores during the previous 12 months; the operating expenses of Naaman, whose results were consolidated into the Company's financial reports for the first time in the fourth quarter of 2007; and an increase in the operating expenses of existing branches due to the rising costs of electricity and expenses linked to Israel's CPI, such as rent and municipal taxes.

Other Income (Expenses): The Company recorded other income of NIS 12.5 million (U.S. $3.6 million) during the first nine months of 2008. This reflected a capital gain taken in relation to the merger of several of the Company's non-food holdings into the Bee Group, the company through which Blue Square manages its non-food retail operations.

Revaluation of Investment Property: In compliance with the IFRS Accounting Standard, the Company now adjusts the value of its investment property on a quarterly basis in accordance with Fair Market Value. In the first nine months of 2008, the Company's revaluation of three assets resulted in non-cash income of NIS 18.0 million (U.S. $5.3 million).

Operating Income: Operating income for the first nine months of 2008 increased by 12.3% to NIS 248.3 million (U.S. $72.6 million) from NIS 221.1 million in the first nine months of 2007. The increase reflects the factors described above. Operating margin for the period increased to 4.4% from 4.3% in the first nine months of 2007. Excluding the income derived from other income (primarily capital gains), the revaluation of investment property and non-cash expenses related to employee stock-based compensation, operating margin for the first nine months of 2008 was 4.0%.

EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization): EBITDA for the first nine months of 2008 increased by 5.1% to NIS 344.3 million (U.S. $100.7 million) compared to NIS 328.0 million in the first nine months of 2007. EBITDA margin for the period was 6.1% compared to 6.3% in the parallel period of 2007.

Financial Expenses (net): Financial expenses (net) for the first nine months of 2008 were NIS 98.6 million (U.S. $28.8 million) compared to NIS 69.5 million in the first nine months of 2007. This increase derived primarily from the period's 5.0% increase in the "Known" price index, compared to its 2.8% increase in the parallel period of 2007. In addition, it reflects the increase in net financial debt compared to the first nine months of 2007, which contributed to an increase of NIS 97 million in financial expenses for the first nine months of 2008 compared to NIS 45 million in the parallel period of 2007. This was mitigated partially by financial income of NIS 7 million related to the revaluation of the Company's financial instruments during the reporting period, as compared to NIS 25 million of financial expenses in the parallel period of 2007.

Taxes on Income: Taxes on income for the first nine months of 2008 were NIS 35.4 million (U.S. $10.3 million), a decrease of 24.0% compared to NIS 46.6 million in the first nine months of 2007, resulting in an effective tax rate of 23.7% compared to 30.7% for the first nine months of 2007. This reduction reflected:

1) The Company's adoption of the IFRS, under which the Company did not record tax liability or benefits from the revaluation of its financial instruments to Fair Value. During the first nine months of 2008, the Company recorded financial income, while in the parallel period of 2007, it recorded financial expenses.

2) The period's 5.0% increase in the CPI and its affect on the Company's taxable income and loans in light of Amendment #20 to the Income Tax Law (Adjustments for Inflation), which was enacted on February 26, 2008. Amendment #20, which is to be applied beginning in the 2008 tax year, discontinues the adjustment of income and assets according to inflation when computing tax liability.

3) The change in Israeli corporate tax rate from 29% in 2007 to 27% in 2008.

Net Income: Net income for the first nine months of 2008 was NIS 114.3 million (U.S. $33.4 million), an increase of 8.8% compared to NIS 105.0 million for the first nine months of 2007. The portion of the net profit attributable to shareholders, as calculated in accordance with the IFRS, was NIS 94.1 million (U.S. $27.5 million), or NIS 2.17 per ADS (U.S. $0.63), while the portion attributable to the share of minority interests was NIS 20.1 million (U.S. $5.9 million).

Comments of Management

Commenting on the results, Mr. Zeev Vurembrand, Blue Square's President and CEO said, "The third quarter was a period of major strategic progress during which we brought together our multi-year strategy, securing Blue Square's early lead of the emerging organic sector, and, through the expansion of our holdings in Bee Group Retail, establishing Blue Square as one of Israel's strongest players in the non-food arena. Our financial results reflect the investments we have been making to actualize these plans according to an accelerated schedule. During the third quarter alone, we doubled the size of our Eden Teva organic chain, and perfected our plan for the concept and fourth quarter launch of our unique new 'Mega Bool' hard-discount chain, which will include about 120,000 square meters, or approximately one third of our supermarket floorspace. Structurally, we extended our control of Bee Group Retail and concluded the process of delisting BSIP, steps that will streamline our decision-making processes and maximize our flexibility in rapidly changing markets."

Mr. Vurembrand continued, "Each of these investments is an important component within a comprehensive plan aimed at securing our competitive positioning over the long-term. Although the increased expenses have impacted our short-term profitability, we believe that they will repay us in the future. We look forward to reporting our progress in the quarters ahead."

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 September 30, 2008: U.S. $1.00 equals NIS 3.421. 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 194 supermarkets under different formats, each offering varying levels of service and pricing.

This press release may contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, with respect to the Company's business, financial condition, prospects and operating results. These statements are based on current expectations and projections that involve a number of risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including risk of market acceptance, the effect of economic conditions, the impact of competitive pricing, supply constraints, the effect of the Company's accounting policies, as well as certain other risks and uncertainties which are detailed in the Company's Annual Report on Form 20-F and other filings with the Security and Exchange Commission. Forward-looking statements speak only as of the date on which they are made and the Company undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made.

                          BLUE SQUARE - ISRAEL LTD.
                     INTERIM CONSOLIDATED BALANCE SHEET
                          AS OF SEPTEMBER 30, 2008


                                                             Convenience
                                                             translation
                                                               September
                         December 31,     September 30,              30,
                                      _____________________
                             2007        2007      2008            2008
                         ____________ _________ ___________  ____________
                          (Audited)        (Unaudited)
                         ____________ ____________________________________
                                               NIS           U.S.  dollars
                         _________________________________ _______________
                                           In thousands
                         _________________________________________________


        A s s e t s


  CURRENT ASSETS:
  Cash and cash
  equivalents                56,410    459,248    313,738         91,709
  Marketable securities     199,394    146,161    176,964         51,729
  Short-term bank deposit   103,498    201,502        650            190
  Trade receivables         776,251    795,535    896,191        261,968
  Other accounts
  receivable                 99,841    200,104    408,558        119,427
  Income taxes receivable    23,062     27,109     67,339         19,684
  Inventories               453,944    453,832    511,755        149,592
                          _________  _________  _________        _______
  Total current assets    1,712,400  2,283,491  2,375,195        694,299
                          _________  _________  _________        _______
  NON-CURRENT ASSETS:
  Associated companies        4,948      4,899      4,930          1,441
  Embedded derivative        10,500          -        850            248
  Prepaid expenses in
  respect of operating
  lease                     199,679    201,177    195,186         57,055
  Other long-term
  receivables                48,289      2,373      4,158          1,215
  Property, plant and
  equipment, net of
  accumulated
  depreciation and
  amortization            1,613,515  1,541,089  1,673,245        489,110
  Investment property       315,778    302,487    409,297        119,643
  Intangible assets and
  deferred charges, net
  of accumulated
  amortization              280,420    120,310    345,116        100,882
  Deferred taxes             33,542     32,560     36,695         11,019
     Total non-current    _________  _________  _________        _______
  assets                  2,506,671  2,204,895  2,669,477        780,613
                          _________  _________  _________        _______

  Total assets            4,219,071  4,488,386  5,044,672      1,474,912
                          =========  =========  =========      =========


                          BLUE SQUARE - ISRAEL LTD.
                     INTERIM CONSOLIDATED BALANCE SHEET
                          AS OF SEPTEMBER 30, 2008


                                                               Convenience
                                                               translation
                                                                 September
                         December 31,     September 30,                30,
                                      _____________________
                             2007        2007      2008              2008
                         ____________ _________ ___________   ____________
                          (Audited)        (Unaudited)
                         ____________ ____________________________________
                                               NIS           U.S.  dollars
                         _________________________________ _______________
                                           In thousands
                         _________________________________________________

   Liabilities and
   shareholders' equity


  CURRENT LIABILITIES:
  Credit and loans from
  banks and others         171,010    131,458     213,739           62,479
  Current maturities of
  debentures and convertible
  debentures                69,859     69,841      21,501            6,285
  Trade payables           976,278  1,124,377   1,197,281          349,980
  Other accounts payable
  and accrued expenses     444,912    536,352     650,136          190,043
  Income taxes payable       2,905      1,124       5,846            1,709
  Dividend payable               -    260,000     150,000           43,847
  Total current          _________  _________    _________         _______
  liabilities            1,664,964  2,123,152   2,238,503          654,343
                         _________  _________   __________         _______

  NON CURRENT LIABILITIES:
  Long-term loans from
  banks, net of current
  maturities               248,488    203,044      340,614          99,566
  Convertible debentures,
  net of current
  maturities               169,897    175,465      134,320          39,263
  Debentures, net of
  current maturities       772,827    772,146    1,009,180         294,996
  Other liabilities         11,646      9,475       34,218          10,002
  Derivatives instruments    9,968      7,407        6,316           1,846
  Liabilities for employee
  rights, net of amount
  funded                    35,986     33,063       39,125          12,606
  Deferred taxes            57,615     40,392       54,864          16,037
  Total long-term        _________  _________    _________         _______
  liabilities            1,306,427  1,240,992    1,618,637         474,316
                         _________  _________    _________         _______

  Total liabilities      2,971,391  3,364,144    3,857,140       1,129,243
                         _________  _________    _________       _________

  SHAREHOLDERS' EQUITY:
  Equity attributable
  to equity holders of
  the Company:
  Ordinary shares           57,094     57,094       57,094          16,689
  Additional paid-in
  capital                1,018,405  1,018,405    1,018,405         297,692
  Other reserves             1,415         79        1,176             344

  Accumulated deficit     (107,262)  (167,975)    (161,407)        (48,058)
                          _________  _________    _________        ________
                           969,652    907,603      915,268         266,667

  Minority interest        278,028    216,639      272,264          79,586
                          _________  _________    _________        ________

  Total equity           1,247,680  1,124,242    1,187,532         346,253
                         __________ __________   __________        ________
  Total liabilities and
  shareholder's equity   4,219,071  4,488,386    5,044,672       1,474,912
                        ==========  ==========   ==========      ==========


                       BLUE SQUARE - ISRAEL LTD.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
       FOR THE NINE AND THREE MONTHS PERIODS ENDED SEPTEMBER 30, 2008
                          BLUE SQUARE - ISRAEL LTD.


                             Year ended     For the nine months
                              December      ended September 30
                                31         ____________________
                               2007         2007         2008
                             ___________   _________  _________
                             (Audited)           (Unaudited)
                             ___________   ____________________
                                              NIS
                             __________________________________
                        In thousands (except share and per share data)
                       _______________________________________________


  Sales                      6,981,984   5,197,837   5,675,797
  Cost of sales              5,129,578   3,822,798   4,105,935
                            __________   _________   _________

  Gross profit               1,852,406   1,375,039   1,569,862

  Selling, general and
  administrative expenses    1,563,208   1,151,625   1,348,865
                            __________   _________   _________
  Operating profit before net
  gain from adjustment of
  investment property to fair
  value and other expenses and
  income                       289,198    223,414      220,997

  Other income                  15,835        618       12,458
  Other expenses                12,775      2,971        3,160
  Net gain from adjustment of
  investment property to fair
  value                         10,456          -       17,970
                              ________     _______     ________

  Operating profit             302,734    221,061      248,265

  Finance income                50,279     43,392       41,651
  Finance expenses             107,598    112,935      140,214
  Share in profit (losses) of
  associated companies, net        186        137          (18)
                              ________    ________     _________
  Income before taxes on
  income                       245,601    151,655      149,684
  Taxes on income               69,779     46,615       35,415
                              ________    ________     _________

  Net income for the period    175,822    105,040      114,269
                              ========    ========     =========
  Attributable to:
  Equity holders of the parent 143,628     82,486       94,149
                              ________    ________     _________
  Minority interests            32,194     22,554       20,120
                              ________    ________     _________
  Net income per Ordinary
  share attributed to Company
  shareholder's or ADS:
  Basic                           3.39       1.96         2.17
                              ________    ________     _________
  Fully diluted                   3.39       1.96         1.85
                              ________    ________     _________
  Weighted average number of
  shares or ADS used for
  computation of income per
  share:
  Basic                     42,355,339  42,012,451  43,372,819
                            __________  __________  ____________
  Fully diluted             42,355,339  42,012,451  45,037,693
                            __________  __________  ____________


                          BLUE SQUARE - ISRAEL LTD.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
       FOR THE NINE AND THREE MONTHS PERIODS ENDED SEPTEMBER 30, 2008
                          BLUE SQUARE - ISRAEL LTD. cont.


                                                           Convenience
                                                         translation(a)
                                                              for the
                               For the three              three months
                               months                         ended
                             ended September 30           September 30
                           ____________________
                              2007        2008                  2008
                           _________  _________          _____________
                                (Unaudited)
                           ____________________
                                    NIS                   U.S. dollars
                           ____________________          _____________
                       In thousands (except share and per share data)


  Sales                     1,823,522   1,936,236             565,985
  Cost of sales             1,343,356   1,397,451             408,492
                           __________  __________            _________

  Gross profit                480,166     538,785             157,493

  Selling, general and
  administrative expenses     411,103     478,815             139,963
                           __________  __________            _________
  Operating profit before net
  gain from adjustment of
  investment property to fair
  value and other expenses and
  income                       69,063      59,970              17,530

  Other income                    273      11,841               3,461
  Other expenses                2,601         734                 214
  Net gain from adjustment of
  investment property to fair
  value                             -           -                   -
                            _________     _______             _________

  Operating profit             66,735     71,078               20,777

  Finance income               40,360     10,738                3,139
  Finance expenses             38,433     60,874               17,794
  Share in profit (losses) of
  associated companies, net      (262)        (1)                   -
                            __________   ________             _________
  Income before taxes on
  income                       68,400     20,940                6,122
  Taxes on income               4,767      8,941                2,614
                           __________   ________             _________
  Net income for the
  period                       63,633     11,999                3,508
                           ==========   ========             =========
  Attributable to:
  Equity holders of the
  parent                       57,351      6,536                1,911
                           __________   ________             _________
  Minority interests            6,282      5,463                1,597
                           __________   ________             _________
  Net income per Ordinary
  share attributed to Company
  shareholder's or ADS:
  Basic                          1.32       0.15                 0.04
                            _________   ________             _________
  Fully diluted                  0.66       0.15                 0.04
                            _________   ________             _________
  Weighted average number of
  shares or ADS used for
  computation of income per
  share:

  Basic                    43,362,460 43,372,819           43,372,819
                           __________ __________           __________
  Fully diluted            44,988,066 43,372,819           43,372,819
                           __________ __________           __________




                          BLUE SQUARE - ISRAEL LTD.
                           SELECTED OPERATING DATA
                  FOR THE NINE MONTH AND THREE MONTH PERIOD
                        ENDED SEPTEMBER 30, 2008
                                 (UNAUDITED)


                                                             Convenience
                                                            translation(a)
                            For the nine    For the three    for the three
                            months ended    months ended     months ended
                            September 30    September 30     September 30
                           _______________ _______________ _______________
                            2007    2008    2007    2008        2008
                            NIS      NIS     NIS     NIS       U.S.$
                           _______ _______ _______ _______ _______________
                                       (Unaudited)           (Unaudited)
                           _______________________________________________

  Sales (in millions)       5,198   5,676   1,936   1,824            566

  Operating profit (in
  millions)                   221     248      67      71             21

  EBITDA (in millions)        328     344     104      104            31

  EBITDA margin               6.3%    6.1%    5.7%    5.4%          5.4%

  Increase (decrease) in      0.0%    3.1%    0.8%    0.6%            NA
  same store sales*

  Number of stores at end
  of period                   182     194     182     194             NA
  Stores opened during the
  period                        7       9       2       4             NA
  Stores closed during the
  period                        -       -       -       -             NA

  Total square meters at
  end of period           339,280 356,268  339,280 356,268            NA
  Square meters added
  during the period, net   15,980  12,918    5,650   5,375            NA

  Sales per square meter   14,929  15,234    5,112   5,015         1,466

  Sales per employee (in      702     724      235     235            69
  thousands)

  * Compared with the same period in the prior fiscal year.

   Contact:
   Blue Square-Israel Ltd.
   Dror Moran, CFO
   Toll-free telephone from U.S. and Canada: 888-572-4698
   Telephone from rest of world: [phone]
   Fax: [phone]
   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:

[phone], Fax: [phone], Email: 

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