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Strauss Group generates 4.5% organic growth in the first nine months of 2020
18/11/2020

Strauss Group generates 4.5% organic growth in the first nine months of 2020

The Strauss Group concludes the first nine months of 2020 with an organic increase in revenue Strauss Group generates revenue of NIS 6.3 billion in the first nine months of 2020, reflecting 4.5% organic growth excluding foreign currency effects[1]; Net profit in the period was NIS 464 million, an increase of 4.1%   The Group’s Q3 sales totaled NIS 2.17 billion, reflecting 3.9% organic growth excluding foreign currency effects   Strauss Group CEO, Giora Bardea: “Strauss Group continues to deliver robust business performance despite the substantial global impacts of the COVID-19 crisis on its activities. In the first nine months and third quarter of 2020 the company recorded an improvement, particularly in product categories suited to at-home consumption, while away-from-home (AFH) categories and channels weakened significantly, trends which grew stronger in the third quarter, among other things as a result of the second lockdown in Israel.   “Managerial stability, business diversity among categories, channels and markets, as well as financial strength, which improved significantly in the period under review, have enabled the company, which has learned to “live with COVID-19” and the accompanying complexities, to deliver organic sales growth, an improvement in the operating profit margin, and an increase in net profit.   “In the reporting period the Group continued to invest substantial resources in maintaining operational and business continuity, while making every effort to protect the health and safety of its employees across all sites worldwide. Looking ahead, the company continues to invest – and has even increased its investments – in the development of categories and business areas that have the potential for growth, including various dairy alternatives, health products, fresh foods, coffee capsules and entry to the POE (point of entry) market – a water treatment solution at the point of entry to homes and buildings – in China.   “Additionally, the Group has continued to invest in the development and upgrade of existing production lines and in the construction of new plants, including the water company’s manufacturing site in China, a modern warehouse and distribution center in Ukraine, Ta’am Hateva’s new production facility at Kibbutz Bror Hayil in Israel, and the completion of the acquisition of Mitsui’s coffee business in Brazil. The company’s financial strength, especially at this time, has enabled it to seek out business opportunities in Israel and other countries across a broad range of activities, with the aim of expanding its business. At the same time, the Group has persevered in its community investment, deepening it to support population groups harmed by the COVID crisis, and considers itself part of the effort to preserve social and economic resilience in all its countries of operations.   A month ago, with great pain and sorrow, we said goodbye to Michael Strauss, son of the founders of Strauss Group. Michael was a business leader and a moral and social compass to all people in the Group and to many in the Israeli economy. We mourn his passing and salute his great contribution to the development of Israel’s flourishing industry and economy.   Strauss Group concluded the period with solid results against the backdrop of numerous, diverse challenges, including the second lockdown in Israel, erosion of currencies against the shekel, and others. In its retail business the company delivered sales growth, particularly in product categories suited to at-home consumption, but in parallel, the closure of restaurants, hotels and cafés for extended periods as well as the drop in impulse purchases have negatively affected the Group’s sales in most companies, the coffee company in particular.   In total, Strauss Group delivered NIS 2.17 billion in revenue in the third quarter, while in the nine-month period revenue was NIS 6.3 billion, reflecting an increase of around 3.9% and 4.5%, respectively (organic, excluding FX), over last year. As a result of the weakening currencies, the company reported a drop of around 3.1% in revenue in the third quarter and of 2.2% in the nine months, compared to the corresponding periods last year.   The foreign currency effect on the company’s sales in the third quarter amounted to approximately NIS 163 million, of which NIS 136 million are the result of the depreciation of the Brazilian real against the shekel. In the first nine months of 2020 the foreign currency effect amounted to approximately NIS 429 million, of which NIS 351 million are due to the weakening of the real against the shekel. Operating profit was NIS 250 million, up 4.8% (excluding FX effects). On translation into shekels this reflects a drop of around 2.3% compared to the corresponding quarter last year. The operating profit (EBIT) margin was 11.5%, up 0.1% compared to the corresponding quarter.   Net profit (attributed to the shareholders of the company) was NIS 158 million in the third quarter compared to NIS 153 million in the corresponding period last year; the increase is the result of a decrease in financing and tax expenses. Net profit in the nine-month period was NIS 464 million, an increase of 4.1% compared to the first nine months of 2019.   Since the beginning of the year Strauss Group has donated over 80 thousand food parcels, and the company in Israel is currently helping thousands of families to buy food products, free of charge, as part of an initiative that began in September and will be maintained with those families through to the end of the year under the slogan “Doing Good Together”. This is in addition to other efforts underway with numerous communities in Israel and around the world. [1] 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 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 Israel The COVID-19 crisis continues to be the major factor that affected Strauss Israel’s business in the third quarter of 2020. Like other food manufacturers in Israel and other countries, Strauss Israel has been impacted by two conflicting trends – the first, significant growth in at-home consumption, and the second, a significant drop in AFH consumption and the consumption of food for special events and parties, mainly sweet and savory snacks. The company has worked to maintain its production capacity in order to meet the high demand for its products, while making maximum efforts to protect the health and safety of its employees. In the third quarter, Strauss Israel’s sales were approximately NIS 953 million, and in the nine months – approximately NIS 2.8 billion, reflecting 6.1% and 8.1% growth, respectively, compared to sales in the corresponding periods last year.   A breakdown according to segment reveals that revenue in the Health & Wellness segment grew by around 10.4% in the quarter, mainly as a result of an increase in purchases of products for at-home consumption – yogurts, dairy desserts, milk beverages, salads and dips and spreads, Yad Mordechai products (honey and sauces), and washed and cut vegetables and fresh foods in general. In the Fun & Indulgence segment sales dropped in the third quarter by 3.2%, mainly as a result of decreasing demand for impulse and on-the-go products – particularly sweet and salty snacks. At the same time, sales of products for home baking such as chocolate tablets rose significantly.   The increase in sales and continuing efficiency and productivity processes led to an 8.6% increase in operating profit in the third quarter, which rose to NIS 106 million, with the EBIT margin rising from 10.9% to 11.1%.   Strauss Coffee In the third quarter, Strauss Coffee demonstrated growth both in local currency sales and in quantities sold in most of the company’s operations. However, business was also affected by the drop in sales to the AFH market, i.e. institutional customers including hotels, cafés and restaurants, as well as the discontinuation of most of the business of the Elite Café chain in Israel during the quarter as a result of the second lockdown. The coffee company’s total revenue in the third quarter was approximately NIS 851 million, up 1.4% (organic) in local currency.   The coffee company in Israel wrapped up the third quarter with approximately NIS 175 million in revenue, down 10.4% compared to the corresponding period last year, mostly as a result of the drop in sales to the AFH market and discontinuation of the activity of the Elite Coffee To Go chain in September. The coffee business in Brazil, carried out through the Três Corações joint venture[2], which is mainly active in the home consumption market, grew by around 10.0% in the quarter in local currency thanks to growth in sales volumes. The company’s market share, which includes the market share of Mitsui’s recently acquired coffee business, was 31.0% of the Brazilian coffee market at the end of the quarter. Overall, the coffee operation in Eastern Europe recorded business growth as well as growth in operating profit in local currency, and an increase in quantities sold. The business in Russia and Ukraine grew by about 5.5% in the quarter as a result of an increase in sales volumes, and in Romania sales grew by around 4.3% in local currency. In Poland and Serbia sales volumes remained effectively unchanged.   Sabra and Obela (100%) In the third quarter, Sabra reported a 2.4% drop in sales in local currency, which amounted to approximately NIS 327 million. In the first nine months, Sabra’s sales totaled approximately NIS 1 billion, reflecting a drop of 1.1% in local currency. The decrease is primarily the result of the impact of the COVID crisis on the company’s sales in the AFH market and lower sales of portability products, which are made to customers such as convenience stores, airports and institutional customers, including restaurants. In parallel, the at-home consumption market grew. The company’s operating profit margin improved in the quarter, rising to 11.5% compared to 7.0% in the corresponding quarter, mainly thanks to a drop in marketing expenses compared to last year as a result of the timing of these expenses. Obela’s business continues to grow and in the third quarter yielded revenue of around NIS 44 million, reflecting an improvement of 10.4% excluding foreign currency effects. In the first nine months, the company’s sales amounted to NIS 120 million, 5.2% organic growth excluding FX effects.   Strauss Water Strauss Water posts another successful quarter, with sales amounting to around NIS 184 million – 10.5% growth arising, among other things, from an increase in the number of appliances sold and growth in the customer base. Operating profit rose 24.2% and amounted to NIS 25 million. The company’s business in China has made a fast recovery from the impacts of the lockdown in the first quarter. Third-quarter sales rose 6.8% in local currency and amounted to approximately NIS 142 million. In the first quarter, HSW’s board of directors approved an investment of approximately 375 million yuan (around NIS 190 million) for the construction of a manufacturing facility for the production and assembly of HSW’s products sold in China. Construction of the site began at the end of March 2020 and is expected to end by the second half of 2021. The company estimates that the plant will improve its competitive position, since in-house manufacturing capabilities allow for greater flexibility in developing and manufacturing innovative and unique products, shorter time-to-market and the launch of high-quality products.   Key financial data for the nine months ended September 30 – 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 quarter ended September 30 – 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 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 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 and do not include share-based payment, mark-to-market 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 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 an online Zoom meeting in Hebrew on Wednesday, November 18, 2020 at 14:00 (Israel time) with the participation of company management to review the financial statements of the company for the third quarter of 2020. Meeting URL: https://straussgroup.zoom.us/j/91354458126?pwd=SDBwS01YM1JNQkswNDJsYzlTMW8rZz09 Meeting ID: 913 5445 8126 Password: 994109 Strauss Group will also host a conference call in English on Wednesday, November 18, 2020 at 16:30 (Israel time) (14:30 UK, 09:30 EST) with the participation of company management to review the financial statements of the company for the third quarter of 2020.   To participate in the conference call in English, please call one of the following numbers as appropriate: UK: 0-800-917-5108 US: 1-888-642-5032 Israel: 03-918-0650   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 third 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, Corporate Brand & 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  
Mrs. Tzipi Ozer Armon was appointed as a director in the board of directors of Strauss Group
29/10/2020

Mrs. Tzipi Ozer Armon was appointed as a director in the board of directors of Strauss Group

Tzipi Ozer Armon was appointed as a director in the board of directors of Strauss Group Tzipi has over 20 years of experience in senior management in a range of industries, including technology, medical devices and drugs. Tzipi will contribute to the Board extensive capabilities and expertise in international management of companies, as well in in the areas of strategy, operations, marketing and R&D. She is currently CEO at Lumenis, a world leader in energy-based medical devices for the surgical, ophthalmological and aesthetic markets. Tzipi joined Lumenis in 2012. During her tenure, she led Lumenis to significant growth and major increases in profitability. At the beginning of 2020, Lumenis was acquired by a private equity fund for over $1 billion. Prior to joining Lumenis, Tzipi managed Teva’s operations in Japan. Previously, she served as Senior Vice President Marking and Sales and SanDisk; as VP at M-Systems, and as VP Strategy and Business Development at Comverse. Her impressive career also includes four years as a strategic consultant for the international strategic consulting firm ATKearney, based in London, UK. Tzipi currently serves as a director of Itamar Medical and of ICL (Israel Chemicals). In the coming days Tzipi will begin an on-boarding process of studying and becoming familiar with the company, during which time she will meet with the managers and people in the company. Tzipi has a BA in economics from Tel Aviv University, and an MBA in finance and marketing from the Kellogg-Recanati Program at Tel Aviv University. With Tzipi joining us, the representation of women on the Strauss Group board is now over 50%.  
Strauss Group reports solid results for half year 2020
17/08/2020

Strauss Group reports solid results for half year 2020

Strauss Group delivers NIS 4.1 billion in revenue in the first half of 2020, reflecting 4.9% organic growth excluding foreign currency effects[1]; Net profit in the half-year was NIS 306 million, up 4.0%   In Q2 the Group delivered NIS 1.94 billion in revenue, reflecting 1.5% organic growth excluding foreign currency effects   Strauss Group CEO, Giora Bardea: “Today we are wrapping up a second quarter that was affected by COVID-19 in its entirety, with solid results achieved in spite of the complex reality. Strauss Group has maintained business stability and financial strength, as reflected in market shares, organic revenue growth, higher gross profit, stronger cash flows and improved cost and structure of debt. “In general, in the past quarter and half-year, an improvement was noted in our various activities in local currency, with businesses catering to in-home consumption benefiting from significant growth, whereas those focusing on away-from-home (AFH) consumption weakened. Following a challenging month in April, we saw a gradual trend of improvement in results in subsequent months, as social and economic restrictions are lifted in most countries. “The strong shekel and ongoing weakening of currencies against the shekel, particularly the Brazilian real, significantly eroded the company’s revenue and profits. “Throughout the crisis, the Group has invested considerably in protecting the safety and health of its employees, in increasing investments in providing help and contributing to the community while maintaining its business operations. This includes new product developments, entry into new categories, acquisitions, ongoing investment in advanced technology and setting up new production sites in Israel and in other countries, as we look forward to emerging from the crisis.”   Strauss Group has wrapped up the second quarter of 2020 with solid results against a backdrop of challenges and positive and negative impacts, most of which are the result of the COVID-19 pandemic. The Group has maintained its high credit rating and has raised capital at attractive interest rates to ensure business continuity. In its retail business the company reported sales growth in most sectors, but the closure of restaurants, hotels and cafés has had a significant negative effect on the Group’s sales in the AFH market, particularly in the coffee business. The depreciation of the Brazilian real against the shekel eroded the company’s revenue. In total, the Group delivered NIS 1.94 billion in revenue in the second quarter, while in the half-year revenue was NIS 4.1 billion, reflecting an increase of around 1.5% and 4.9%, respectively (organic, excluding FX effects) compared to last year. As a result of the weakening currencies, the company reported a drop of around 6.5% in revenue in the quarter and of 1.7% in the half-year, compared to the corresponding periods last year. As mentioned, the main impact on the Group’s revenue in the second quarter was the result of the weakening of the various currencies against the shekel. The foreign currency effect on the company’s sales in the quarter amounted to approximately NIS 164 million, of which NIS 138 million are the result of the depreciation of the Brazilian real against the shekel. In the first half, the foreign currency effect was around NIS 266 million, of which NIS 215 million are due to the weakening of the real against the shekel. In the second quarter, the Group’s gross profit was approximately NIS 743 million, down 9.6% compared to the corresponding period last year, mainly due to the drop in revenue as a result of foreign currency effects. The gross profit margin was 38.4%. Operating profit was NIS 223 million, down 1.6% compared to the corresponding period. The operating profit margin was 11.5%, up 0.5% compared to last year. Net profit (attributed to the shareholders of the company) was NIS 135 million in the quarter compared to NIS 121 million in the corresponding period last year, with the increase attributed to a decrease in tax expenses, which was partially offset by the drop in operating profit. Net profit in the half-year was NIS 306 million, reflecting an increase of 4.0% compared to the first half of 2019.   [1] 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 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.   With the outbreak of COVID-19 the Group formulated a dedicated social program with the aim of helping some of its key stakeholders to cope with the pandemic and its implications. The Group applied a compensation mechanism to strengthen its people who have continued to come in to work despite the complexities involved, with emphasis on “front-line” employees. A loan fund was established to assist the company’s small suppliers. The company also enlarged the scope of its contributions to the community to help populations harmed by the crisis, including donations of food and money to relevant nonprofits as well as through employee volunteering and the distribution of food products to medical teams in Israel, the US, Brazil and Eastern Europe.   Strauss Israel The COVID-19 crisis impacted the activities of Strauss Israel in several ways, from both the operational and business aspects. From the operational aspect, the company invested millions of shekels in protecting and compensating its people, with emphasis on “front-line” employees. The company also increased its manpower quotas for the present time to maximize production capacity and expand its ability to deliver food to all retail customers.   Following the lockdown which began at the end of March and continued until mid-May 2020, demand for products for in-home consumption grew, especially products for cooking and baking at home such as dairy, salads, dips and spreads and chocolate tablets. In parallel, there was a drop in demand for single serve snack products and a shift to larger pack purchases by consumers. The Group’s sales to retail chains grew, among other things in light of a significant increase in online grocery shopping, alongside a drop in sales to the institutional and AFH market (such as hotels, offices, cafés and restaurants). During and after the second quarter (through to the reporting date), demand for the Group’s products has remained high, but has dropped in relation to the demand observed during the outbreak and lockdown phase. In the first half of 2020 the Group held a 12.2% share of the total domestic food and beverage market in Israel (in value terms), compared to 12.0% in the corresponding period in 2019. In parallel, this year the company increased the grant of discounts and campaigns for retailers, and will maintain this policy according to the state of the economy and the implications of the crisis.   In the second quarter Strauss Israel’s sales were approximately NIS 851 million, reflecting 5.9% growth compared to sales in the corresponding period last year. Sales growth was mainly observed in the Health & Wellness segment, in products such as yogurt, dairy desserts, milk beverages, salads and dips and spreads, and washed and cut fresh vegetables. In the Fun & Indulgence segment sales dropped compared to last year, mainly as a result of decreased purchases of salty and sweet snacks, which are usually bought and consumed away from home (“on the go”), a drop in purchases of impulse products and fewer social events such as birthday celebrations and parties. Strauss Israel’s gross profit in the second quarter was approximately NIS 342 million, reflecting an improvement of 8.4% compared to the corresponding period last year, and the operating profit was approximately NIS 98 million.   Strauss Coffee The coffee business results were mixed druing the period and were channel dependant. Sales to the large retail chains rose moderately in the second quarter as consumers in most countries of operations stocked up on basic coffee brands, coffee beans and capsules for home consumption in preparation for lockdowns. Online sales were strong as well. However, sales to the traditional sales channel, which includes stores, groceries and open-air markets, were negatively impacted due to restrictions on opening hours and a drop in customer traffic. Sales to the institutional and AFH market dropped significantly   following discontinuation of the business of hotels, cafés, restaurants, offices and the points of sale of the Elite Café chain in Israel. The coffee company’s total revenue in the past quarter was approximately NIS 750 million, 0.8% less than revenue in the corresponding period last year (organic, excluding currency effects), but the erosion of the Brazilian real against the shekel had a material impact on income translated into shekels, which recorded a drop of 17.9%.   A breakdown by country demonstrates high variance: The business in Brazil grew by around 9.5% in local currency, and in the half-year, the market share of the coffee company in Brazil (Três Corações) was 28.0% compared to 28.3% in the corresponding period. In Poland, 16.9% sales growth in local currency was recorded in the quarter, but the weakening of the zloty negatively impacted sales by approximately NIS 6 million, such that growth in the quarter was 6.4%. In Israel and Romania, where AFH business is significant, revenue dropped, whereas in Russia and Ukraine, where AFH activities are on a small scale, revenue in local currency increased.   Sabra and Obela (100%) Of all of the Group’s businesses, in the second quarter Sabra’s activity suffered significant harm to its supply chain as a result of COVID-19, which made it difficult to fully supply demand for the company’s products. Another impact of the crisis was a reduction in sales to convenience stores, groceries and AFH sales. The company’s total revenue in the second quarter was approximately NIS 319 million, constituting a drop of 9.0% compared to the corresponding period in local currency. It is worth noting that in the second quarter and first half the US hummus market grew, but due to the production shortages experienced by Sabra, the company could not benefit from this growth. Nevertheless, Sabra’s market share in the half-year was 62.6%, higher than its market share in the corresponding half in 2019, which was 61.5%. The weakening of the dollar against the shekel constrained Sabra’s sales by approximately NIS 8 million, meaning that on translation into shekels Sabra recorded a drop of 10.9% in revenue. The operating profit fell by around 31.2% to NIS 41 million as a result of the drop in sales, a change in the sales mix, and the company’s expenses resulting from the adaptation of manufacturing and logistics sites to accommodate the effects of COVID-19. Obela’s sales in the quarter were approximately NIS 36 million compared to NIS 38 million in the corresponding period in 2019, reflecting a drop of 4.0%. However, excluding foreign currency effects, the company delivered 5.1% sales growth.   Strauss Water In the second quarter, Strauss Water’s business in Israel experienced a gradual return to activity levels prior to the crisis and was influenced mainly by growth in the customer base, which was countered by a drop in the number of new appliances. The company’s operation in China in the quarter was affected by the process of emerging from the lockdown, which led to a recovery in sales. The second quarter saw growth in online sales in China.   In total, Strauss Water wrapped up the second quarter with NIS 159 million in revenue, an increase of around 0.7% over last year, in spite of the restrictions on movement and the lockdowns in its countries of operations. Operating profit was approximately NIS 30 million compared to NIS 19 million in the corresponding period, due, among other things, to recognition of a development grant for the construction of the new manufacturing facility in China, which the company began building with an investment of 375 million yuan. The revenue of HSW in China amounted to approximately NIS 139 million in the quarter compared to NIS 141 million in the corresponding period last year, reflecting a slight drop of 1.3%. Excluding the currency impact, sales grew by 4.9%.   Key financial data for the half-year ended June 30 – 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 quarter ended June 30 – 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 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 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 and do not include share-based payment, mark-to-market 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 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, August 17, 2020 at 14:00 (Israel time) with the participation of company management to review the financial statements of the company for the second quarter of 2020. To participate in the conference call in Hebrew, dial 03-918-0685.   Strauss Group will also host a conference call in English on Monday, August 17, 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 second quarter of 2020.   To participate in the conference call in English, please call one of the following numbers as appropriate: UK: 0-800-917-5108 US: 1-888-281-1167 Israel: 03-918-0687   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 second 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, Corporate Brand & 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    
How to fall in love with our food ?
05/08/2020

How to fall in love with our food ?

Michal Benishti, Head of Gastronomy and Nutrition Division at Strauss Group, shares her thoughts about food and explains how the most basic thing turned so complicated and what you can do to live a healthy life while enjoying our food This week, as I often do, I went to my neighborhood shopping center and suddenly It hit me. This shopping center that was packed with all sorts of shops up until a few years back, has turned lately to an all food establishment. Just food. From every kind. Specialty deli, Greek bakery, Italian restaurant, herbs shop, beverage shop and much more. No doubt a culinary festival. combine this with numerous other trends that keep popping up such as “low carbs”, “keto” “gluten free”, “clean eating”, “organic” and so on and you get a society that is obsessed with food on all its layers and formations.   How can one survive all this information and diversity of food and have value from it – mentally and health wise? I suggest 3 new ways to think about our food, enjoy what it has to offer and eat it in a way that is responsible for the world and our body;   1.Variety and moderation. As do all things in life, it’s all about balance. We all know that if we eat a lot of candy it probably won’t be best for our body. But what happens if we only eat super foods? Would that give us strength and immunity forever? Probably not. The key to real health of body and soul is variety and moderation. Eat everything local agriculture has to offer and yet listen to our bodies and not exaggerate. True, it isn’t simple, it takes practice and awareness to our bodies. It’s not some magic formula that promises health if you only eat certain food at certain times. But it is the only way you can combine both worlds – enjoy your food and be nourished by it.   2. Know your food. Knowing your food means know things about it because food matters. It means something. it is a part of our survival on this planet and it also affects our environment and shapes our economy, our society and basically every dimension in our lives. Once we understand its many implications we care where our food comes from, who made it and how. The answer to all those questions will grant us better and deeper understanding with our food. We will feel more connected to our food, be more engaged with it and eat food with a sense of identity and feel something about it. Eventually the result Is that we eat better and more consciously.   3. Food as a source of pleasure and not a “risk factor”. Sometimes it feels like we are only told what not to eat. Don’t eat too much sugar, don’t eat too much salt, don’t eat too much saturated fat. All of these “no’s” take us to a world in which we see food as a risk factor for disease, for poor quality of life, for obesity and so on. This is less than optimal way of looking at our food. I suggest we look at food positively. As an opportunity for enjoyment, to experience different cultures, to improve our health and quality of life. If we look at food in that way, I believe we will have great food and have something more we enjoy doing.   Eventually you can see that there are two kinds of people – those who eat to survive and those who eat to enjoy. Those who see food as a means for survival and those who see food as happiness, joy, wants to understand where food comes from, explore new tastes and a variety of dishes. They also know when to balance, when comes the time to eat a light snack and when to eat something “heavier” because they listen to their bodies. Let’s learn to fall in love with our food and acquire physical health and a healthy relationship with food at the same time– that thing we consume multiple times a day, every day, all our lives.  
5 important guidelines to advance inclusion
05/08/2020

5 important guidelines to advance inclusion

Noga Segev Nadir Talent Management Director, Human Resources.   I’ve practiced Tai Chi for a few years. I remember myself looking at the instructor, listening to his instructions, imitating the movements in what seemed to me like a superb combination of imagination and talent, and feeling good about myself with the achievements of body and soul alike.   All this was true – until the exercises in pairs began. I always found these exercises to be an interruption to the good, meditative order of my movement with myself. Tai Chi pair exercises are a kind of highly-synchronized movement, with a very gentle touch – sort of touching -and-not-really-touching, forehand to backhand. The same movements performed in a pair. When one person moves forward, the other moves back, and vice versa. Only then did I understand, that I had done wrong some of the exercises previously performed alone. Only by gently touching the other could I feel the discomfort in the mirror that was put in front of my blind spots. The same movement took on a whole new meaning with someone else, but with a different challenge and quality. The essence stopped being my own movement with myself, and started being the joint, harmonious creation, which none of us could have created alone. For me, that is the true experience of inclusion. The seemingly liberal person that I am, is so aware of herself, gives each and every one around her an equal chance, and does not judge by external appearance, religion, ethnic origin, gender, etc. But only during moments of gentle contact – not necessarily a tough and conflictual one – I become aware of what I usually don’t experience: my unconscious biases towards those who are like me, my judgmental tendencies which must be pushed aside, the desire for someone to be like me, instead of the willingness to adapt. Only then do I see how open I truly am for creating a new story – together. “Inclusion” means inviting someone over, having them join you inside. And I am not even sure I want to have someone over. Maybe it would be better to create something new together and having both parties keep what is dear and important to them. And if that is true inclusion, how does one promote it in the organization? In the business unit that has a shared purpose? in every place where results play a critical role, as does a focused, goal-oriented language? Strauss’ decade-long journey, which is still underway, has taught me five important guidelines in advancing inclusion. Things that happen in parallel, in the organization as a whole, and in every single person individually. I was tempted to organize them in numbers and put periods at the end, but in fact, they can not be numbered, and they are far from being absolute truths. Patience – there is no swift move, in which a great, orchestrated effort is made, and the result miraculously appears. Awareness and openness are very slowly built, with great effort. One more voice gets to be heard center stage, and then another, and then another. More and more people get a chance to look at their biases and to consciously make a different choice. There are ripple effects, ones that are not often seen, but rather accelerate underwater and emerge when the time comes. Bandwidth – a critical mass needs to be created, working in parallel on processes, awareness, skills, communication, rewards, top-down, bottom-up, sideways… and the list goes on and on… Modesty and openness – understanding that we probably don’t understand is critical. Once we know this, we take careful steps, so that we can manage the cost of making mistakes. This is important, because our mistakes influence people careers and wellbeing. We can not do this without listening to things that are less pleasant. We must assume that we do not have all the answers. Curiosity and a willingness to change – we will not bring here people who are different than us, only to make them like us. So let’s learn, take something from them, change ourselves, and explore further. Different people and communities bring different stories with them. Becoming familiar with these stories creates a common language and value to all those involved. Inclusion outside the comfort zone – inclusion must happen not in those places where it is easy for us to include, but in meaningful places, such as the decision-making table. Are all populations represented in places that are critical to the organization? Can all voices really make an impact? Organizations don’t talk about “diversity and inclusion” these days, but the other way around – “inclusion and diversity”. Diversity happens from the outside inwards; inclusion happens the other way – from the inside outwards. Our existence as a business depends on our ability to truly include – those who consume our products, those who supply to us, those who partner with us, those who work for us and have diverse skills – any one of our stakeholders. Moreover, our existence as a society and as human beings depends on our ability to include. Developing mangers as inclusive leaders is a lot more than “simple” gender balance, or the integration of the Arab-Israelis or people with disability. In today’s world, inclusion is a managerial tool of the utmost importance, in a world where it is very hard to listen, and in a world in which there is a great role for listening. In a world where we are all different and all similar. In a world where wisdom and knowledge are not the privilege of one person alone. In a world where the ability to work with someone who is different than me and the ability to change are key to resilience and success over time. Organizational inclusion is at the end of the day many encounters between people. And in that encounter, in that movement which is almost a dance, in that pair exercise in Tai Chi, something common is created and each one of us learns about himself or herself, and brings all of himself/herself, in all colors, in the delicate interface between the inside and the outside.  
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).
“Behind every cup of coffee there is a coffee grower that put her heart”
05/05/2020

“Behind every cup of coffee there is a coffee grower that put her heart”

95% of the coffee in the world is being produced by small coffee farms. Project “More than a cup” operated by Strauss coffee assists thousands of women coffee growers in developing countries and makes a significant impact on the community. Florence Niyoomahoro, a coffee grower from Rwanda: “Women are the heart and soul. When you invest in women you invest in the entire family” Five thirty in the morning, the outskirts of Rwanda. The sun is slowly rising and painting the night sky in beautiful colors. Florence Niyoomahoro, a coffee grower who owns a small Florence Niyomahoro – President Mayogi Coffee Cooperative coffee farm, wakes up for another day at work. The wobbly wooden shade providing shelter from the rain and the burning sun is in the heart of green fields and tall mountains, around it the coffee grove with the center of her family livelihood. Each coffee tree lies peacefully red coffee cherries which she picks one by one. Difficult work. Exhausting. Coffee is a major part of the average family’s income in Rwanda, and it constitutes a big contribution in a community’s economical strength. The genocide that took place in the country in the 90’s led to women taking charge for economical development. Florence, along with many women like her. Has been growing coffee ever since she remembers herself. She invests the profits directly in her family and in the community’s local economical development. But the difficult work and the lack of knowledge in agricultural methods has caused many women to not know what they are growing in the grove, and some of them didn’t even realize it is a beverage. “traditionally, Rwandan men are the main providers at home”, According to Florence in a special interview we are conducting with her directly from her home in Rwanda.  Florence heads a co-operative of over 300 women coffee growers operating with Strauss Coffee and “Sustainable growers” organization to assist women coffee growers in the country. This project is part of “More than a cup” initiative, developed by Strauss to empower women coffee growers in developing countries. As part of the project, over 13 thousand women and households in Africa, Asia, Central and south America have financial, business and social assistance. “women are very good at what they do”, explains Florence. “women are the heart and soul. When you invest and guide women you basically invest in the whole family”. Florence explains that ever since the program started 2 years ago many years have changed their lives for the better. “this initiative helps us realize the importance of gender equality and it grants us equal access to resources”, she points. “this program has helped me open my mind and see new things. She has dramatically changed the habits of women in this area and the community around us. Women gained tremendous value from the Strauss project, it had a major impact on the community as a whole and these resources eventually return to the community and neighboring communities”.   Some of the women never tasted coffee Rwanda is called the land of the thousand hills, and the local say there isn’t one plateau in the country. “it’s either a mountain or a Ruth Coleman valley”, jokes Ruth Coleman, director of Sustainable Growers, an organization that operates for social welfare and provide professional training for women coffee growers in the country. The organization operates with Strauss Coffee in operating More than a cup. “Rwanda has been working really hard since the horrible genocide, and coffee is a major part in the local economical development”, she explains. “in the past few years we have seen tremendous progress here”. More than a cup started 4 years ago with 10 projects in 8 countries – Uganda, Rwanda, Vietnam, Ethiopia, Honduras, Tanzania, Columbia and El Salvador. Ruth says the project in Rwanda completely changed the situation of women in the country and it had a great impact on the community. “when we started working with the co-operative they didn’t have good coffee processing procedures, the machines were outdated and the women had to work extremely hard to work in the farms”, she says. “at first we served coffee in the events we conducted and some of the women never tasted coffee before. The women truly changed their lives”. Most of the coffee in the world is being produced by small farms. Traditionally, those farms are owned by men and they manage the income. In Rwanda alone that are 400,000 coffee growers. “Coffee here is bought in cash and that is why it’s being controlled by men”, Ruth explains. “this project targets women because when they take the money, 95% of it is being invested back to the family. With men only 30% is being invested in the family, and a major part of the income is being spent on beer. By focusing on women, we guarantee the family as a whole improves and enabling a better future for the children”. Ever since the project in Rwanda is active, an average family increased production from 0.5KG per tree to 2.3 KG per tree and revenue from coffee increased by 100% per family. Women increased sales and enhanced the quality of the coffee Rafi Camhi, business operations and performance excellence manager at Strauss Coffee, explains what led to the development of this special project. “in the world there are over 12 million coffee farms. 95% of them are small coffee growers – less than 5 acres”, Rafi explains. “coffee isn’t industrial. Most of it is hand picked manufactured on a family level that has a few trees behind their house where they grow coffee”. When it comes to the process the coffee undergoes until it reaches our mug there is also a long way. “small coffee growers are at the bottom of the pyramid and the beginning of a very long and complex value chain”, Rafi adds. “growers sell their produce to those who process it and bring to a form that coffee companies can purchase it: dried and pealed coffee beans with constant quality and taste. The more the coffee growers could sell high level produce and better-quality coffee their income will increase. Our project is meant to provide them with the knowledge, tools and physical infrastructure to get that”. Rafi says that in addition to working on improving coffee quality there are also activities meant to create gender balance in managing the coffee farm. The impact is crucial in where the project is operated and there is still a long way to go. “we understand we can’t fix the coffee world by ourselves and save all millions of farmers”, Rafi says. “but to the best of our abilities, where we touch, we make a significant impact”. Revenues increased by 70% Dr. Anneke Fermont is the director of sustainability at Kyagalanyi, another organization operating in cooperation with Strauss on more than a cup in Uganda. “all of the coffee here is produces by small coffee growers and sometimes it is very challenging to improve coffee productivity”, she explains in an interview. “farmers need to feed their families and send children to school and there is a competition on resources. It is very hard for farmers to invest the money in coffee to increase their income”. Dr. Fremont explains that since they started operating the project revenues of the farmers increased. “in the project we operate in the western Nile we have increased productivity by 50% and sometime up to 70%”. Anneke   Beth Nagudi, a coffee grower from Uganda participating in the project, said that “the gender project has brought unity in my family. My husband used to drink a lot and there was a lot of fighting. When I joined the gender cluster, I asked that my husband also participate. Now, we openly discuss our finances together and my husband has stopped drinking. I have a vision to improve our quality of life. We invested in fertilizer for coffee and in cabbage seeds to plant as an intercrop in our stumped coffee. We used our savings to buy clothes for our children and pay school fees. We decided to invest our coffee income from into buying land and a cow”. 15% of the world’s coffee farms are owned by women, and yet 70% of the coffee farmers in the world are women in the fields. The women coffee growers, as in many fields, are the ones moving local economies and empowering their communities. “it is important to remember how much work is being invested, how much these farmers put their heart and soul to produce every cup of coffee”, Ruth Coleman reminds us. “you can’t take our coffee cup for granted. Every time you drink a cup of coffee you need to thank the farmer that produced it”.
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.