Strauss Group Ltd Ord

Hello everyone and thank you for joining us today. Welcome to Strauss Group's second quarter 2026 results earnings call. On our call today, management will provide a review of the results followed by a questions and answers session. You are encouraged to post your questions to the Q&A function in the Zoom. As a reminder, This online Zoom earnings call is being recorded Wednesday, August 12, 2026. A recording of this call will be available on the company's website a few hours after the call. With me today are Mr. Shai Babad, Strauss Group's President and CEO, and Mr. Tobi Fischbein, the Group's CFO, and myself, Avshalom Shimi, Head of Investor Relations. I would like to remind everyone that this online webinar may contain projections of other forward-looking statements regarding future events or future performance of the company. These statements are only predictions and may change as time passes. Strauss Group does not assume any obligation to update this information, actual events or results. It may differ materially from those projected, including as a result of changing industry and market trends, Shai, the floor is yours. Thank you very, very much, Avshi. Thank you very much, everybody, for joining us today for this earning calls for the second quarter of 2026 and the first half of 2026. And with that, let's start. Avshi?

Thank you. So we'll start with the highlights of the quarter. So as you can see, there is a very, very strong growth of the EBIT and the net profit of the company for 2026 for the second quarter and for the first half as well, with more than 40% increase to 363 million shekels in EBIT and to almost 200 million shekels in net profit, which actually multiplies the net profit. With that, we also see a decrease in revenues. The decrease in revenues is mainly, 5% of it is mainly due to currencies. And the other decrease is due to the decrease in green coffee prices, which was transferred to the consumers and after reducing prices in Brazil mainly, but also in Central Eastern Europe. When we look volume-wise, there is a strong mid-single-digit growth of volume in the first quarter and also in the second quarter, which shows that our organic growth path is solid and strong. In addition, we continue to focus very much on our core brands and the growth of our core brands, investing on our core brands. and we also announced a dividend distribution of 180 million which will be distributed shortly which is equivalent to 2.7% yield on an annual basis. So here you can see the general results as I mentioned before the decrease in revenues mainly due to the strengthening of the shekel and the reduction of Coffee Prices, mainly in Brazil. But on the other hand, we saw that there is a strong volume growth of mid-single digits across our business. When we look at the EBIT and the net profit and the free cash flow, we can see substantial improvement. This, we can see, is the new platform of profits that the business now is holding. We published our strategy three and a half years ago. saying that we want to get into a new platform of profit of approximately 10% margins and a productivity of between 300 to 400 million. And we can see from those results that all the action that we took along the years implementing our strategy with doubling down on core categories, with the portfolio optimization, with the productivity activity that we have done in the company, we see now that this is taking its turn and with that, We see the substantial improvement in the results. We also see a good translation between the EBIT into the net profit and that most of the additional EBIT that we encountered in Q2 to 2026 actually made its way and was transferred to the net profit and to the free cash flow. And we do see this as a solid platform that we can also look ahead and forecast that this is the new platform that we want to continue to have when it comes to our margins and when it comes to our Ibit, Ibeda and Net Profit. Next. When we look about Israel, so we see the major improvement in funding indulgements, the turnaround that we've done in the confectionary Here I should note that there is a from the 62 million that you see here in EBIT half of it approximately is through to insurance money that we have received a one-timer but even taking that out we see that the funding endorsements is getting back to an 8% margin and by the end of the year I believe we can get to a 10% margin here and with the continued improvement since the COCO prices that we are seeing now are higher than the COCO prices that we'll see in H2 of 2026. This is with zero relation to the coca prices in the market. It's due to our hedging policy and our hedging quantities that we have for the next and also for the next year and therefore we know that we will see continuous improvement in funding indulgences for the rest of the year. We see here a little bit of a decrease in revenues in health and wellness. Here we should note that we used to distribute third party products such as our oranges of Primor and the spicy herbs of the avi which we stopped distributing and taking out the distribution that we took out Comparing apples to apples, also here there's growth in revenues, and of course continued growth in the EBIT. When we look at coffee, here also in the revenues, we had Elite Coffee To Go, which was our coffee chain, which we closed towards the end of last year, and therefore if you take that out, you see the gap here of the decrease. and Yael Nevo. Thank you. Dairies that are growing substantially outside of Israel, mainly with protein products and functional products and we have put a lot of initiatives in increasing our innovations there and launches of new products that we have done in the market in order to go with the trend and to promote our growth and here you can see just an example of part of our brands and how we did whether it's a diversified innovation, it's an improvement innovation with improving the product with fiber, with collagen, with protein, reducing sugar, and whether it's with our new launches of new yogurts under the Danone brand from our new factory of plant-based. Next. There was a survey held in Israel for the top 100 brands from all sectors, not just the food and beverage sector, the FNCG sectors, from all sectors, What are the top 100 brands in Israel? And out of the top 100, 9 of our brands made it to the top 100 list, with 3 of our brands making it to the top 20, and one of our brands, Yotvita, making it to the top 10 for the first time. And this is just a proof of the solid work that we are doing in investing in our brands and in growing our brands.

Thanks.