Financial Reports

In the first quarter of 2020, the group’s revenues amounted to 2.17 NIS billion, an increase of 8.1% excluding foreign currency effects. the company reports 268 NIS Million operating profit and 171 NIS Million in net profit


Financial Reports
Strauss Group delivers NIS 2.17 billion in revenue in the first quarter of 2020, reflecting 8.1% growth excluding foreign currency effects[1]
25/05/2020

Strauss Group delivers NIS 2.17 billion in revenue in the first quarter of 2020, reflecting 8.1% growth excluding foreign currency effects[1]

Strauss Group delivers NIS 2.17 billion in revenue in the first quarter of 2020, reflecting 8.1% growth excluding foreign currency effects[1]   Growth in shekels was 3.0% following erosion of income due to exchange rate volatility, notably the depreciation of the Brazilian real   Group CEO, Giora Bardea: Strauss Group delivered strong performance in the quarter, growing sales and maintaining profit stability, while, like the rest of the world, having to cope with the effects of COVID-19. The Group has focused its efforts on protecting its people’s health, maintaining business continuity and stability and providing a response to demand, supported by financial management that will allow for flexibility and preparation for a new reality that will be accompanying us in coming months. The diversified structure of the Group’s business promotes resilience but also creates challenges, including the impact volatile exchange rates and restarting businesses harmed by the pandemic. The Group continues to invest in its employees, to build closer relationships with suppliers and retailers, to invest in developing its brands and to reinforce its partnerships, while reviewing various business opportunities and making advance preparations for the challenges that lie ahead.   Strauss Group has wrapped up the first quarter of 2020, which was marked by conflicting effects as a result of the coronavirus pandemic. The company’s income in the quarter was NIS 2.17 billion, reflecting organic growth – excluding foreign currency effects – of approximately 8.1% compared to the Group’s income in the corresponding period last year and attesting to impressive growth in the demand for its products. However, the effect of changes in exchange rates, notably in the coffee company, eroded income so in shekels, quarterly growth was approximately 3.0%.   According to Strauss Group CEO Giora Bardea: “We are today announcing our results for the first quarter, part of which was impacted by the outbreak of COVID-19, impacts which will continue to accompany us at least until the end of the year. As a socially responsible business company, we first and foremost took steps to maintain our production activities, while granting uncompromising priority to the health and safety of our people and the safety of the products we manufacture.   “These times have uniquely enhanced the role of food in people’s lives. The pandemic reminded everyone how vital it is to cultivate a local food industry that is connected to local agriculture, not only in Israel but everywhere in the world. These times emphasize the advantages of being close to your raw materials, and how crucial it is to maintain transportation and supply capabilities for raw materials and food to supermarkets and homes.   “In the first quarter we felt the impact of the coronavirus outbreak in our business in China during most of the period, whereas in other countries of operations the effect was mainly in March, but continued into April and May – months in which most of the countries in the world experienced extended lockdowns. Nevertheless, ultimately we are today announcing an excellent quarter that attests to the Group’s business and financial robustness.   “The Group has assigned dedicated funds as part of its social plan to support those who faced the front line of this crisis, including the company’s front line employees, helping suppliers and regularly supplying food packages to senior citizens and medical teams. These activities were implemented across a number of geographies. The key challenge now is to optimally manage the day after the crisis and to prepare for a potential second outbreak of the virus should it occur, in accordance with our strategy for the following years.   prioritizing activities in order to divert resources in response to social needs resulting from the COVID-19 crisis. At the moment, our major challenge is to optimally manage the exit from the crisis, and, as required, to formulate an outline in preparation for a second wave should there be one, and, of course, adapt the Group’s strategy to accommodate its continued activity in coming years.”   Revenue growth is primarily the result of growth in Strauss’s sales in Israel, as well as growth in Sabra’s sales in the US in March; this sharp increase in sales had a significant effect on the entire quarter. However, several activities, such as sales to the institutional market and food services mainly by the coffee company and Strauss Israel and the closure of the Elite Café chain, had a negative effect on our results. The income of HSW in China dropped by 31.2% in the first quarter, while the income of the coffee business, notably in Brazil, was materially affected by negative translation differences – an effect that has continued, and even intensified, in the second quarter. Exchange rate differences throughout the entire quarter lowered the company’s revenues by approximately NIS 100 million (of which approximately NIS 77 million are due to the depreciation of the Brazilian real against the shekel). This currency erosion is the main reason for the difference in sales growth in local currency and in shekels.   The Group’s non-GAAP gross profit margin in the first quarter of 2020 was NIS 878 million, up 3.9% compared to the corresponding period last year, gross profit margin was 40.5%, an improvement compared to the gross profit margin in the corresponding period, which was 40.1%. The improvement is primarily the result of impressive growth in volumes sold in most of the company’s areas of activity. The company’s non-GAAP operating profit in the quarter was NIS 268 million, down by 0.5% compared to the corresponding period last year. The currency depreciation eroded NIS 8 million from the company’s EBIT of these the BRL eroded NIS 5 million. The main reason for the drop is an increase in marketing and selling expenses and a drop in the profits of HSW in China as a result of COVID-19. Net profit attributable to the shareholders of the company was NIS 171 million – a decrease of 0.3% compared to the corresponding period last year – due to increased tax expenses.   Strauss Israel Strauss Israel’s business in the first quarter was split between two periods: January-February, in which company sales grew substantially, and March, when extraordinary growth rates were recorded due to Passover and the coronavirus outbreak in Israel. The company applied significant operational measures to enable it to continue to manufacture enough food and deliver it to retailers before and during the lockdown, while granting top priority to the safety and hygiene of its people at the various sites, during their transportation to and from work and in the offices, as well as to the safety of the food it manufactures. In the first quarter Strauss Israel’s sales grew by 12.1% to NIS 983 million. With signs of the decision to impose a lockdown emerging in early March and the ensuing stocking up on food products, in addition to Passover sales, in March the company’s sales grew by approximately 22.8% compared to the corresponding period last year. Sales grew across all categories and divisions. The nature of sales and the sales mix changed, such that there was an increase in sales by the food chains, supermarkets and neighborhood grocery stores, while in parallel impulse (on-the-go) consumption, mainly at convenience stores, and the away-from-home (AFH) market, particularly sales to the institutional market – restaurants, hotels, etc., decreased significantly. In 2019, total sales to the institutional and AFH markets accounted for less than 10% of the Group’s sales turnover. Sales of the Health & Wellness segment (which mainly includes the Dairy division and Fresh Foods) in the quarter amounted to NIS 617 million, reflecting 14.5% growth compared to the corresponding period last year. The Fun & Indulgence segment (which mainly includes the Confectionery and Salty Snacks divisions) grew 8.3% in the quarter, with sales amounting to NIS 366 million. Growth is the result of consumers stocking up in preparation for the lockdown as well as the timing of Passover.   Strauss Israel’s gross profit in the quarter was NIS 396 million, reflecting 13.1% growth compared to the corresponding period last year, and the operating profit grew by 11.3% to NIS 124 million.   Strauss Coffee Strauss Coffee’s business in the first quarter was affected by different, opposing effects. Coffee sales in Israel in the first quarter amounted to NIS 235 million, up 6.1% compared to the corresponding period. Sales growth is the result of increased demand due to the impacts of COVID-19; however, this growth was offset by the discontinuation of sales to the institutional market (hotels, restaurants, etc.) and by the discontinuation of the operation of the Elite Café chain. In the international coffee business there are opposite effects as well. For example, the company’s share of sales in Brazil in local currency rose by 3.0% in the past quarter and amounted to NIS 343 million. The increase in local currency sales is the result of growth in volumes by the company, which is the leader of the coffee market in Brazil with a market share of approximately 28.2%. The company estimates that growth will continue and will intensify if the Mitsui transaction, signed during the first quarter, is approved. However, the economic situation in Brazil and the impacts of the global pandemic have led to significant erosion of the Brazilian Real against the shekel (an average of 18.5% in the quarter). This erosion has reduced the company’s revenues by approximately NIS 77 million, meaning that in shekels, income in the quarter was 16.4% lower than in the corresponding period last year, and the company’s EBIT by NIS 5 million. The outbreak of COVID-19 in Brazil is expected to mainly affect business in the second quarter, as the pandemic reached the country relatively late compared to Israel and Europe. As at the middle of the second quarter, the devaluation of the real versus the shekel has continued and even intensified, and is presently approximately 31.1% compared to the average exchange rate in the second quarter of 2019, which is expected to have a greater impact on the company’s second quarter results. In February 2020 the Três Corações joint venture in Brazil[2] established a joint venture with Positive Brands, that manufactures and sells mainly dairy substitute products (plant-based, mainly cashews), with an investment of approximately BRL 39 million (for 50% participation in the JV).   In Russia, Ukraine and Poland sales growth in local currency was recorded, among other things as a result of the impacts of COVID-19, but in Romania and Serbia sales dropped due to intensified competition, which led to a decline in sales prices. Due to the effect of changes in the exchange rate of the shekel against the company’s functional currencies in Eastern Europe, with the exception of Russia and Ukraine, in all countries the company recorded a drop in income in shekels compared to the corresponding period last year.   Sabra and Obela The company’s chilled dips and spreads business delivered 8.8% sales growth in local currency by Sabra, which is active in the US and Canada. The main reason for the increase is the rise in food consumption in the US in general, particularly plant-based products, among other things as a result of the effects of the COVID-19 pandemic in March. The company’s sales in the first quarter amounted to NIS 355 million (reflecting 100%), but following the depreciation of the US dollar against the shekel by an average of 4.1% during the quarter, growth in shekels was approximately 4.4%.   Sabra’s operating profit (reflecting 100%) amounted to NIS 39 million in the quarter compared to NIS 54 million in the corresponding period last year, following a sharp increase in one-time marketing expenses following the advertisement in the American Super Bowl, which took place in early February, as opposed to last year, when marketing expenses were mainly spent in the second half of the year. Obela, which is active in Australia, Mexico, New Zealand and Western Germany, recorded sales of NIS 40 million up 0.9% excluding foreign currency effects, compared to a drop of 9.7% in sales in shekels.   Strauss Water In the first quarter of 2020 sales by Strauss Water (which mainly include sales by Strauss Water Israel) amounted to NIS 144 million, an increase of 0.4% despite the effects of COVID-19, which led to a drop in sales of new machines, mainly during March. Strauss Water’s operating profit was NIS 15 million in the quarter compared to NIS 16 million in the corresponding period last year, mainly as a result of additional costs related to the coronavirus outbreak, as well as a drop in the profits of Strauss Water in China. The company’s operation in China through the joint venture with Chinese household appliance giant Haier, Haier Strauss Water (HSW), was materially affected by COVID-19, which shut down a significant part of business operations in China for the entire first quarter. The company’s sales in the quarter (reflecting 100%) were NIS 106 million compared to sales of NIS 155 million in the corresponding period – a decrease of 31.2%; however, as a result of the impact of the shekel/yuan exchange rate, in local currency the decrease was 26.4%. The company took advantage of the crisis to further strengthen its online sales operation in China, with ecommerce sales offsetting the negative impact of the shutdown of sales centers in China during most of the first quarter. As a result of these efforts, the company’s online market share positioning rose to first place.   Key financial data for the quarters ended March 31 – non-GAAP (NIS millions)*: * Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses and do not include share-based payment, mark-to-market as at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise. Investments include the acquisition of fixed assets and investment in intangible assets. Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.    The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses and do not include share-based payment, mark-to-market as at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise.   Fun & Indulgence figures include Strauss’s 50% share in the salty snacks business. International Coffee figures include Strauss’s 50% share in the Três Corações joint venture (3C) – Brazil – a company jointly held by the Group (50%) and by the local São Miguel Group (50%). International Dips & Spreads figures reflect Strauss’s 50% share in Sabra and Obela. Strauss Water EBIT figures include Strauss’s share in Haier Strauss Water (HSW) in China (49%).   Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. Total figures for International Dips & Spreads were calculated on the basis of the exact figures for Sabra and Obela in NIS thousands.     Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. Conference Call Strauss Group will host a conference call in Hebrew on Monday, May 25, 2020 at 14:00 (Israel time) with the participation of company management to review the financial statements of the company for the first quarter of 2020. To participate in the conference call in Hebrew, dial 03-918-0609. Strauss Group will also host a conference call in English on Monday, May 25, 2020 at 16:00 (Israel time) (14:00 UK, 09:00 EST) with the participation of company management to review the financial statements of the company for the first quarter of 2020. To participate in the conference call in English, please call one of the following numbers as appropriate: UK: 0-800-917-9141 US: 1-866-860-9642 Israel: 03-918-0664   A recording of the calls will subsequently be available on the company’s website at: https://ir.strauss-group.com/company-presentations/conference-call-recordings/   The financial statements for the first quarter of 2020 and the presentation that will accompany the calls will be available prior to the conference calls on the following websites: https://ir.strauss-group.com/company-presentations/quarterly-presentations/ https://ir.strauss-group.com/earning-releases/   For further information please contact: Osnat Golan VP Communications, Digital & Sustainability Strauss Group Ltd. 972-52-828-8111 972-3-675-2281 Osnat.Golan@Strauss-Group.com Daniella Finn Director of Investor Relations Strauss Group Ltd. 972-54-577-2195 972-3-675-2545 Daniella.Finn@Strauss-Group.com   Or   Shlomi Sheffer External Communications Director Strauss Group Ltd. 972-50-620-8000 972-3-675-6713 Shlomi.Sheffer@Strauss-Group.com     [1] The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (without implementation of IFRS 11) and do not include share-based payment, mark-to-market as at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise. [2] Três Corações (3C) – The Três Corações joint venture in Brazil – a company jointly held by the Group (50%) and by a local holding company, São Miguel Holding e Investimentos S.A. (50%). (Data reflect Strauss Coffee’s share (50%) unless expressly stated otherwise).
Strauss Group announces 2019 results with NIS 8.5 billion in revenue, 2.6% organic growth excluding foreign currency effects and a signifi-cant improvement in the Group’s profits
25/03/2020

Strauss Group announces 2019 results with NIS 8.5 billion in revenue, 2.6% organic growth excluding foreign currency effects and a signifi-cant improvement in the Group’s profits

Strauss Group announces 2019 results with NIS 8.5 billion in revenue, 2.6% organic growth excluding foreign currency effects and a signifi-cant improvement in the Group’s profits*   Ofra Strauss, Chairperson of the board: “The Coronavirus crisis with which the entire world is challenged and trying to cope, has posed leadership and social challenges. We are currently focusing entirely on the daily management of this crisis whilst rethinking our priorities. Being a food company has a new meaning these days as a vast majority of our consumers are home-bound. We are working day and night to ensure the delivery of quality products to our consumers around the globe, whilst safeguarding the health of our employees first and foremost. We report today our 2019 results with stellar performance on practically all fronts. This solid base will enable us to maintain a business and financial continuity, ensure the security of all our employees and help the communities we support. Our gratitude is extended to all those who look after the public’s health, government officials, workers unions, the various business associations, and especially to the medical personnel taking care of those who require their services”.   Giora Bardea, CEO of Strauss Group: “The entire world is currently dealing with a global human challenge, the likes of which we have not encountered in years. This crisis is affecting – and is expected to continue to affect – all areas of our lives and requires all of us to make adjustments. At Strauss, we are applying all available measures to continue to produce and supply food to consumers, particularly at a time when people are spending more time at home. This morning, we published the Group’s financial results for 2019. We have delivered another outstanding year but are looking ahead to 2020, which is turning into an extremely challenging one for the global economy. This challenge emphasizes the importance of maintaining and cultivating a vibrant and competitive local industry in Israel that ensures the regular supply of food”.   Strauss Group, the leading Israeli food company, has wrapped up 2019 with stellar results and organic growth in most product categories and geographies. In 2019 the company’s revenues amounted to approximately NIS 8.5 billion, reflecting 2.6% organic growth excluding foreign currency effects. In shekel terms, the company recorded a slight drop of 0.5% in revenues compared to 2018. The main reason for the decrease is the appreciation of the shekel against other currencies, eroding revenues by approximately NIS 235 million, of which NIS 167 million are the result of the depreciation of the Brazilian Real against the shekel.   Giora Bardea, CEO of Strauss Group: “Today we are announcing the Group’s results for 2019, with a strong performance continuing the positive trend achieved over the past few years. The Group has grown in volume and value terms (organic growth), and for the third year in a row has continued to considerably improve its profit, margins and cash flow. Our agility, resilience and financial stability, strong infrastructure, innovation processes and investment in our brands are an important foundation as we continue to tackle diverse challenges.   “At the same time, we are already deep into 2020 and are looking ahead, to what is becoming one of the most challenging years that the global economy has experienced for at least a decade. As an Israeli-global company, at this time we are witnessing the advantages, as well as the challenges, of globalization. As nations join forces to find a solution to coronavirus and share their knowledge, there is hope that we will quickly be able to combat the disease, but world dependency on production in other countries has emphasized the need to simultaneously maintain and develop a strong, vibrant and competitive Israeli industry that ensures the continuous supply of quality food to the local population.   * [1] The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (without implementation of IFRS 11) and do not include share-based payment, mark-to-market as at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise.   “Given our stellar performance in 2019 we are entering 2020 in sound financial position and with robust financial strength. Although this is a continuously developing crisis of which the ramifications are yet to be finalized, we believe we are well positioned to deal with different scenarios following the outbreak of the coronavirus disease in order to continue to meet the growing demand for our products. We hope that the company’s resilience will enable us to maintain strong business continuity.” Further to the trend in recent quarters, the Group continued to improve its profit and profit margins. In 2019 the Group’s non-GAAP gross profit was NIS 3.38 billion, an increase of 3.6% over 2018. The gross profit margin improved considerably, rising from 38% in 2018 to 39.6% in 2019. The main reasons for the increase in gross profit and the gross profit margin are a certain drop in raw material prices, innovation and productivity, as well as a continuous improvement in the Group’s sales mix.   The Group’s operating profit rose in 2019 by 7.9% and amounted to NIS 933 million; the EBIT margin rose to 10.9% compared to 10.1% in 2018. The improvement in the EBIT margin is primarily the result of continuous efficiency enhancement measures applied in Strauss Israel, an improvement in the profitability of Strauss Coffee, growth in Strauss Water’s customer base and an increase in the profits of HSW, which is active in China and the margin expansion at Sabra. On the bottom line, the increase in the gross and operating profit margins was reflected in an increase of 11.8% in net profit attributable to the shareholders of the company, which in 2019 amounted to NIS 547 million.   The coffee company recorded revenues of approximately NIS 3.7 billion in 2019, a drop of 0.1% in organic terms (excluding foreign currency effects) compared to 2018. Exchange rate differences, notably the depreciation of the Brazilian real against the shekel, eroded the company’s revenues by NIS 223 million, such that in shekel terms, revenues decreased by 5.7%. In the Israel geography the coffee company grew by 2.2% in 2019, with revenues rising to NIS 754 million. In the Central European countries, Russia and Ukraine revenues rose whilst in other countries revenues decreased.   The Três Corações joint venture in Brazil[1], a company that is jointly held by Strauss Group and São Miguel, which is owned by the Lima family, recorded revenues of approximately NIS 1.8 billion (the Group’s share – 50%) in 2019, reflecting a drop of 0.1% in local currency (the Brazilian real), but in shekel terms, the decrease was 8.6%. During the year the company grew its market share significantly, increasing from 27.2% in 2018 to 28.3% in 2019. In the first quarter of 2020 the company announced it will acquire the roast and ground coffee business of Mitsui Alimentos for approximately BRL 210 million (reflecting 100%); the deal is expected to close during Q3-2020. In 2019, the acquiree’s revenues were BRL 270 million (approximately NIS 245 million). In February 2020 Três Corações formed a 50/50 joint venture with Positive Brands, a company that manufactures and sells health products in the dairy substitute category (plant-based, mainly cashews) and is the leader in its category, investing BRL 39 million (reflecting 100%).  In addition to growing its market share, in 2019 the company increased its gross and operating profit margins.   In 2019 Strauss Israel, the second-largest food company in Israel, grew its market share from 11.6% to 11.9% according to StoreNext figures. Strauss Israel’s revenues in the year amounted to NIS 3.4 billion, reflecting an increase of 4.1% compared to 2018. Sales growth was mainly achieved thanks to the diversification and innovation that are typical of the company as well as an increase in volumes sold, since the company did not raise the prices of its products in 2019 despite the wave of price increases that was typical of the industry in the year (other than the marginal raising the prices of products that are subject to price control by the government). The leading categories in sales growth were yogurts, milk beverages and salty snacks. [1] Três Corações (3C) – The Três Corações joint venture in Brazil – a company jointly held by the Group (50%) and by a local holding company, São Miguel Holding e Investimentos S.A. (50%). (Data reflect Strauss Coffee’s share (50%) unless expressly stated otherwise).   In 2019 the company prepared for the food labeling reform, which entered into effect in January 2020. Following an ongoing process of product improvement, the company encountered the reform with over 90% of its products (excluding confectionery products) being free of red labels. It is still difficult to assess whether labeling will have a material impact on the scope and nature of the company’s sales in the coming quarters.   The company improved its gross and operating profit margins to 39.7% and 10.8%, respectively, compared to 38.9% and 10.5%, respectively, last year. The main reasons for the increase in margins are continued innovation, improvement of the product mix and continued efficiency enhancement processes that are applied by the company on an ongoing basis. The outbreak of the coronavirus disease in China and its spread to other countries led to increased demand for food in the first quarter of 2020, but it is presently difficult to estimate if and how this will impact the company’s results.   The business of Sabra and Obela, which are active in refrigerated dips and spreads, grew in 2019 as their sales increased. Sabra, which is active in the US and Canada, delivered sales of NIS 1.37 billion (reflecting 100%) in 2019, an increase of 6.4% (in organic terms, excluding foreign currency effects), while Obela, which operates in Mexico, Australia, New Zealand and Western Europe, recorded sales of NIS 172 million in the period – an increase of 11.3% (excluding foreign currency effects).   Translation differences arising from the appreciation of the shekel eroded the companies’ revenues to a level of 1.3% and 3.5%, respectively. Sabra continued to be the largest dips and spreads company in the US, and in 2019 even grew its market share to a record 62.2% compared to 60.1% in 2018. Sabra’s EBIT margin rose considerably and amounted to NIS 157 million (an increase of 35% excluding foreign currency effects), a rate of 11.5%, thanks to market share growth and improved profitability following efficiency enhancement and the disposal of the salsa business at the end of 2018.   Strauss Water, which is active in Israel and the UK and jointly holds HSW (Haier Strauss Water) with Haier Group of China, recorded revenue growth of 6.3% in 2019, with sales amounting to NIS 628 million (excluding HSW revenues). The company also reported a sharp rise of 15.2% in EBIT (including the net profit from HSW). The improvement in revenues and profit is primarily due to an increase in the number of appliances, growth of the customer base in Israel, and efficiency enhancement measures applied in the business in Israel and China.   The company’s sales in China, which are not included in the Group’s non-GAAP reports, increased by 6.5% in 2019 and amounted to NIS 599 million, among other things as a result of the company’s entry to the POE (point-of-entry) market (point-of-entry filtration and purification systems treat the water as it enters the home). HSW’s net profit rose by 18.1% in 2019 and amounted to NIS 72 million, compared to NIS 61 million in 2018.                                         Key financial data for the years ended December 31 – non-GAAP (NIS millions)*:   * Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.   Key financial data for the quarters ended December 31 – non-GAAP (NIS millions)*:   * Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.           The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (without implementation of IFRS 11) and do not include share-based payment, mark-to-market as at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise. Investments include the acquisition of fixed assets and investment in intangible assets   Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.   The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses and do not include share-based payment, mark-to-market as at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise. Fun & Indulgence figures include Strauss’s 50% share in the salty snacks business. International Coffee figures include Strauss’s 50% share in the Três Corações joint venture (3C) – Brazil – a company jointly held by the Group (50%) and by the local São Miguel Group (50%). International Dips & Spreads figures reflect Strauss’s 50% share in Sabra and Obela. Strauss Water EBIT figures include Strauss’s share in Haier Strauss Water (HSW) in China (49%).   Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. Total figures for International Dips & Spreads were calculated on the basis of the exact figures for Sabra and Obela in NIS thousands.     The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses (without implementation of IFRS 11) and do not include share-based payment, mark-to-market as at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise. Investments include the acquisition of fixed assets and investment in intangible assets. Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands.         The data in this document are based on the company's non-GAAP figures, which include the proportionate consolidation of jointly controlled businesses and do not include share-based payment, mark-to-market as at end-of-period of open positions in the Group in respect of financial derivatives used to hedge commodity prices and all adjustments necessary to delay recognition of gains and losses arising from commodity derivatives until the date when the inventory is sold to outside parties, other income and expenses, net, and the tax effect of excluding those items, unless stated otherwise. Fun & Indulgence figures include Strauss’s 50% share in the salty snacks business. International Coffee figures include Strauss’s 50% share in the Três Corações joint venture (3C) – Brazil – a company jointly held by the Group (50%) and by the local São Miguel Group (50%). International Dips & Spreads figures reflect Strauss’s 50% share in Sabra and Obela. Strauss Water EBIT figures include Strauss’s share in Haier Strauss Water (HSW) in China (49%).   Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. Total figures for International Dips & Spreads were calculated on the basis of the exact figures for Sabra and Obela in NIS thousands.   Note: Financial data were rounded to NIS millions. Percentages changes were calculated on the basis of the exact figures in NIS thousands. Strauss Group to Report Full Year and Q4 2019 Results; Conference Call to be held Wednesday, March 25th, 2020 at 16:00 local Israel time / 14:00 UK / 10:00 am EST Strauss Group (TASE: STRS) will host a conference call to discuss Full Year and Q4 2019 results on Wednesday, March 25th, 2020 at 16:00 local Israel time / 14:00 UK / 10:00 am Eastern time.   The conference will be hosted by Giora Bardea, CEO and Ariel Chetrit, CFO, and will be followed by a question and answers session. To participate in the live call please dial one of the following numbers: From the UK:      0-800-051-8913 From the US:      1-866-860-9642 From Israel:        03-918-0691   A recording of the call will be available later on the company’s website at: https://ir.strauss-group.com/company-presentations/conference-call-recordings/ The conference call will be accompanied by a presentation which will be available on the Investor Relations section of our website on Wednesday, March 25th, 2020:   https://ir.strauss-group.com/company-presentations/quarterly-presentations/ Strauss Group's Full Year and Q4 2019 earnings press release and financial statements will be available on March 25th, 2020 following the release, on the Company's website at: https://ir.strauss-group.com/earning-releases/ https://ir.strauss-group.com/financial/   For further information please contact: Osnat Golan VP Communications, Digital & Sustainability Strauss Group Ltd. 972-52-828-8111 972-3-675-2281 Osnat.Golan@Strauss-Group.com Daniella Finn Director of Investor Relations Strauss Group Ltd. 972-54-577-2195 972-3-675-2545 Daniella.Finn@Strauss-Group.com   Or   Shlomi Sheffer External Communications Director Strauss Group Ltd. 972-50-620-8000 972-3-675-6713 Shlomi.Sheffer@Strauss-Group.com    
Três Corações Group acquires Mitsui Alimentos’ roast and ground coffee business in Brazil, strengthening its leadership position of the coffee market in the country
18/02/2020

Três Corações Group acquires Mitsui Alimentos’ roast and ground coffee business in Brazil, strengthening its leadership position of the coffee market in the country

Três Corações Group acquires Mitsui Alimentos’ roast and ground coffee business in Brazil, strengthening its leadership position of the coffee market in the country Tres Coracoes (3C) is a joint venture equally held by Strauss Coffee and the Sao Miguel FIP, owned by the Lima family. Strauss Group CEO, Giora Bardea: “The coffee company is one of Strauss’s four major pillars and will continue to be one of the Group’s key growth drivers in the future both organic and nonorganic.” Strauss Coffee CEO, Zion Balas: “The acquisition of Mitsui Alimentos’ roast and ground coffee business in Brazil follows acquisitions made in Brazil in recent years and establishes our position as the leading coffee company in the country.” Strauss Group today reported to the Tel Aviv Stock Exchange that the 3C joint venture in Brazil has signed a transaction for the acquisition of 100% of the quotas of Mitsui Alimentos Ltda. in Brazil from Mitsui & Co., Ltd. in Japan and Mitsui & Co. (Brasil) S.A. According to the agreement, 3C is to pay BRL 210 million reais (approximately US$ 50 million) for Mitsui Alimentos’s domestic coffee business in Brazil. The 3C joint venture is equally held by Strauss Coffee and the Sao Miguel FIP, owned by the Lima family. Mitsui Alimentos’s roast and ground (R&G) coffee business in Brazil has operated as part the company Mitsui Alimentos since 1974. It holds a 3.8% share of the Brazilian coffee market and is the fifth largest coffee company in the country. Based on the data disclosed to the Company, the 2019 revenue of Mitsui Alimentos totaled 270 million BRL. Following the acquisition, 3C joint venture will further consolidate its position as leader of the coffee market in Brazil. The Brazilian coffee market boasts the highest volumes in the world. Mitsui Alimentos’s coffee green beans export business will remain under the umbrella of Mitsui & Co.,Ltd. The main brand Café Brasileiro in R&G coffee products has a strong position in the interior of São Paulo State and in the Midwest region of Brazil. As a result, the acquisition will strengthen 3C joint venture’s business in these regions. The transaction follows a series of other transactions executed by 3C joint venture in recent years as the leading consolidator in the coffee market in Brazil, which include the acquisition of the brands Fino Grão in 2012, Itamaraty in 2014, Cia Iguaçu in 2016 and Manaus in 2019. The transaction is subject to approval by the Administrative Council for Economic Defense (CADE) (the Brazilian antitrust authority). Strauss Group CEO, Mr. Giora Bardea: “The coffee company is one of Strauss’s four major pillars and will continue to be one of the Group’s key growth drivers in the future. Our excellent partnership with the Lima family is today solidifying 3C joint venture´s leadership in the coffee business in Brazil and is a strategic anchor for the coffee company.” Strauss Coffee CEO, Zion Balas: “The acquisition of Mitsui Alimento’s R&G coffee business in Brazil follows acquisitions made in the country in the past few years and establishes our position as the leading coffee company in Brazil. Strauss Group and its local partners, the Lima family, will continue to develop and grow the 3C joint venture organically as well as through further acquisitions that are relevant and complementary to our core business.” About Grupo 3corações Grupo 3corações is a national leader in the roasted and ground coffee and cappuccino segments, leader in the North and Northeast regions with Café Santa Clara and national vice-leader in soluble coffee. Founded in 1959, in the interior of Rio Grande do Norte, and celebrating 60 years in 2019, the company industrializes and markets more than 25 product brands, including: Café 3 Corações, Santa Clara, Pimpinela, Kimimo, Letícia, Fino Grão, Itamaraty, Iguaçu, Amigo and Cruzeiro. It also produces filter, filter holder, instant coffee, Frisco and Tornado powdered soft drink, Chocolatto chocolate, spices, Claramil, Dona Clara and Kimimo corn derivatives, and Pronto cappuccino. In 2013, the Group launched TRES®, an espresso and multi-drink solution with more than 20 flavors of hot drinks. With 27 Distribution Sales Centers (CDs), seven Manufacturing Plants, 10 Industrial Units, two Green Coffee Purchase and Processing Units (Warehouses), a Corporate Unit - Integrator (CE, SP and MG) - and the School of Services and Flavors, the company is present in more than 400 thousand points of sale in the country, with its own logistical and commercial structure. 3corações also exports coffee from some of its brands to the main markets in Latin America and the United States. About Mitsui Alimentos's roasted and ground coffee operation Café Brasileiro was launched in 1959, in Dracena (State of São Paulo), by a family of Japanese immigrants, owner of the company Yoshioka & Cia. In 1974 Yoshioka became an affiliate of a Japanese company Mitsui & Co.,Ltd., creating Mitsui Alimentos, which since then has been working to solidify the Café Brasileiro brand, characterized by its refined flavor and high quality standard.