Strauss Group Financial Results

Q1 2024 Earnings Presentation | May 27th , 2024

Disclaimer

GAAP to Non-GAAP Reconciliations

This presentation does not constitute an offering to purchase or sell securities of Strauss Group Ltd. (the "Company") or an offer for the receipt of such offerings. The presentation's sole purpose is to provide information. The Information provided in the presentation concerning the analysis of the Company's activity is only an extract, and in order to receive a complete picture of the Company's activity and the risks it faces, one should review the Company's reports to the Israel Securities Authority and the Tel Aviv Stock Exchange.

The presentation may contain forward-looking statements as defined in the Israeli Securities Law, 5728-1968. All forward-looking statements in this presentation are made based on the Company's current expectations, evaluations and forecasts, and actual results may differ materially from those anticipated, in whole or in part, as a result of different factors including, but not limited to, changes in market conditions and in the competitive and business environment, regulatory changes, currency fluctuations or the occurrence of one or more of the Company's risk factors. In addition, forward-looking forecasts and evaluations are based on information in the Company's possession while preparing the presentation. The Company does not undertake any obligation to update forward-looking forecasts and evaluations made herein to reflect events and/or circumstances that may occur after this presentation was prepared.

In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), the Company provides non-GAAP operating results which include the results of jointly controlled entities as if they were proportionately consolidated. Strauss Group has a number of jointly controlled companies: the Três Corações joint venture (3C) - Brazil (a company jointly held by Strauss Group (50%) and by the São Miguel Group (50%) in Brazil), Sabra Dipping Company (a 50%/50% JV with PepsiCo in the U.S. and Canada), Strauss Frito-Lay Ltd. (a 50%/50% JV with PepsiCo Frito-Lay in Israel) and PepsiCo Strauss Fresh Dips & Spreads International (a 50%/50% JV with PepsiCo outside the U.S. and Canada).

In addition, non-GAAP figures exclude any share-based payments, mark to market of commodity hedging transactions as at end-of-period, other expenses or income and taxes referring to these adjustments.

Company Management believes that these measures provide investors with transparency by helping to illustrate the underlying financial and business trends relating to the Company's results of operations and financial position and comparability between current and prior periods. Management uses these measures to establish and monitor budgets and operational goals and to evaluate the performance of the Company. Please see the GAAP to non-GAAP reconciliation tables in the Company's MD&A Report for a full reconciliation of the Company's GAAP to non-GAAP results.

Shai Babad

Group CEO

OUR BRANDS' IMPCAT ON OUR COMMUNITES DURING THE WAR

Soda production line at Tami4 back to operations

Thousands of donations to soldiers and evacuated families

Honoring 11 bereaved families with their loved ones on chocolate bars

Special coffee from cafes impacted by the war

OUR Q1 PERFORMANCE

	Gross profit	EBIT	Net profit
2,589m Net Sales	874m Gross	204m EBIT	159m Net Profit
-0.7% Organic Growth	33.7% Gross Margin	7.8% EBIT Margin	6.2% Net Margin
1.4% Sales vs 23'	4.3% Gross vs 23'	-2.4% EBIT vs 23'	18.7% Net vs 23'

Q1 PERFORMANCE BY BUSINESSES

Sales	1,309m	954m	193m	2,589m
vs 2023	1,287m	951m	188m	2,554m
EBIT	151m	38m	24m	204m
vs 2023	148m	60m	21m	208m
% EBIT	11.6%	4.0%	12.3%	7.8%

* HSW 100% Of total shares

* * Israel including UK and ROW; Israel EBIT includes net income from HSW proportion

* * * EBIT for Strauss Water; Net for HSW

WHERE WE WANT TO GO

UPDATED STRATEGY – DOUBLE DOWN ON THE CORE

FUTURE READY & RESILIENT

HOW WE PLAN TO GET THERE

RENEW THE CORE

Optimize core categories & brands in Israel with a focus on snacking
▪▪▪ Optimize and maintain R&G leadership in Brazil
Optimize and increase portfolio offering of water solutions

EXPAND & BUILD

▪▪▪ Build plant -based solutions & Innovation around the core in Israel
Expand Non -R&G and beyond coffee in Brazil through M&As and organic growth
Grow China and enter new geographies in Water

TRANSFORM

Embark on a journey of Performance transformation
▪▪▪ Maintain values while adopting a high performance culture
Optimize portfolio to focus on the core

Ariel Chetrit

Group CFO

Q1 Highlights – Strauss Group

Strauss Group

• Group Net sales grew 1.4% (-0.7% organic excluding FX effect). Growth is mainly attributed to the F&I segment in Israel following confectionery strong results, as well as an increase in market share and the solid performance of Strauss Water, offset byweakness in Coffee mainly in Brazil, Israel and Russia.

The NIS continued to weaken against major currencies during the quarter mainly the BRL (56M) and the PLN (10M), offset by a negative impact of the RUB (-22) million, with total net contribution of NIS52 million to Net sales.
Input inflation this quarter was mostly in Cocoa +143%, green coffee with Robusta at an all time high +59%.
During the quarter credit rating company S&P upgraded its outlook for Strauss to Stable from Negative and reiterated the company's credit rating of AAil+

14

Strauss Israel

Strauss Israel net sales increased by 1.7% driven by the Confectionery turnaround and was offset by a decline in Coffee Israel; Growthwas driven by a price increase of 3.4%
H&W segment was down 1.6% due to the reclassification of the Energy category, excluding this change, H&W was up 0.7%. H&W performance during the quarter was driven by the Dairy and the Food segments with market share growth as well as pricing. Sales of the Energy category totoled NIS16 million during Q1.
H&W EBIT margin was 10.2% down from 11.4% in Q1'23 mainly due to higher marketing expenses and continued input inflation
F&I Sales were up 18.1% as sales normalize to pre-recall level; F&I EBIT was up c71% to NIS42 million following the continued recovery of Confectionery
Coffee Israel was down c9% due to volume decrease on the back of higher pricing and due to the war effect
Strauss Israel grewin market share in the first quarterto 12.2% vs 11.9% in Q1'23
An average price increase of 1.7% for the company's products in Israel was announced during January; In May the company raised prices of its dairy products

Q1 Highlights

Coffee International

International Coffee sales were down 4.5% in local currency during the first quarter led by Brazil and Russia due to lower volumes following price hikes
Sales in Brazil were down by 4.3% in local currency to BRL880 million mainly due to lower volumes; Top line was aided by tailwind FX effects of NIS56 million, as a result of the strengthening of the BRL against the NIS
R&G market share in Brazil declined to 33.1% from 33.7% last year
Brazil EBIT declined 58.6% to BRL18.2 million as a result of the decline in sales and higher expenses
Poland had a strong quarter with sales up14.8% on higher volumes and pricing; In Russia sales were down 9.6% following a strong quarterin the corresponding quarterlast year
In February 2024, Serbia Coffee was sold to Atlantic Grupa for EUR38.8 million

Q1 Highlights

Sales grew3% in the first quarter mainly due to higherinstalled base
Haier Strauss Water (HSW) sales grew13% in local currency to reach ¥421m (100% share), mainly due to better mix ; Market share continued to improve during the quarter
Higher profit up 10.2% and higher profitability of 12.3% (up from 11.5%) over last year was mainly due to improved profits of HSW

Financial Highlights Reported Non GAAP

Q1 2024

Q1'24 Sales: NIS 2,589mm Sales growth: 1.4%, Organic Sales growth: -0.7%

Q1'24 Gross margin: 33.7% (90 bps up vs. Q1'23)

EBIT and EBIT margins: NIS 204mm (down -2.4%); 7.8% (-30 bps down vs. Q1'23)

Net income and Net margins: NIS 159mm (up 18.7%); 6.2% (90 bps up vs. Q1'23)

Q1 2024

Sales NIS mm; Non-GAAP

19 * Category reclassification - Strauss Israel includes Coffee Israel as well as coffee HQ related cost allocations

Q1 Sales Bridge NIS mm; Non-GAAP; Q1'23 to Q1' 24

Gross Profit NIS mm; Non-GAAP

Q1 2024 Gross Profit by Segments

NIS mm; Non-GAAP; % Margin

EBIT and EBIT Margins NIS mm; Non-GAAP

Q1 EBIT Bridge NIS mm; Non-GAAP; Q1'23 to Q1'²⁴

Q1 2024 EBIT and EBIT Margins NIS mm; Non-GAAP; % Margin

Notes: (1) Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) (3C) (2) Water EBIT includes net profits

from HSW

EBITDA and EBITDA margins NIS mm; Non-GAAP

EBITDA Growth

excl. FX ⁼

EBITDA and EBITDA margins NIS mm; Non-GAAP

Q1'23

EBITDA and

Três Corações Alimentos S.A. (Três Corações J.V.)

Q1 Snapshot | BRL mm for 100% ownership and including inter-company sales

Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) (3C).

Source: Três Corações Alimentos S.A. Consolidated Interim Financial Statements as of March 31st , 2024.

(*) EBIT before Other Expenses/ Income.

Sabra Q1 Snapshot \$ mm; Non-GAAP; for 100% share

Sales

EBIT and EBIT Margins

Net Income NIS mm; Non-GAAP (attributed to the Company's shareholders)

Organic Net Income Growth excl. FX ⁼

Net Income NIS mm; Non-GAAP (attributed to the Company's shareholders)

Net Debt and Net Debt / EBITDA (LTM)

Non-GAAP EBITDA, net debt includes partnerships; NIS mm

(1) Capex includes acquisitions of fixed assets and investment in intangible assets (excluding income from sale of fixed assets)

Q1 GAAP and Non-GAAP Financial Highlights, NIS mm

	GAAP			Adjusted Non-GAAP
	2024 Q1	2023 Q1	% Chg.	2024 Q1	2023 Q1	% Chg.
Sales	1,726	1,713	0.8%	2,589	2,554	1.4%
Profit Gross	565	660	(14.5%)	874	837	4.3%
GPMargin	32.7%	38.6%		33.7%	32.8%
Operating Profit	117	246	(52.7%)	204	208	(2.4%)
EBITMargin	6.8%	14.4%		7.8%	8.1%
Profit (to Net SH)	51	231	77.9%	159	134	18.7%
NPMargin	3.0%	13.5%		6.2%	5.3%
Operating Flow Cash	25	(55)		(115)	(226)
Capex (1)	(137)	(106)		(167)	(125)
Net debt	2,326	2,358		2,789	2,787
WC Change (CF) in	(93)	(266)		(282)	(489)

Currencies

Change in average exchange rate (1 local currency = x NIS)

Local Currencies vs. the NIS Local Currencies vs. the USD

Change in average exchange rate (1 local currency = x USD)

Strauss Israel Q1 2024 NIS mm Non-GAAP Financial Highlights

2024 2023 % Q1 Q1 Revenue: H&W 743 731 306 361 F&I 217 238 Coffee Israel 1,309 Revenue 1,287 Total Profit 498 478 4.2% Gross 38.0% 37.1% GrossMargins EBIT: H&W 74 85 (12.2%) 10.2% 11.4% (1.2%) Margins 24 42 F&I 11.5% 7.9% 3.6% Margins Coffee 35 39 Israel (0.0%) 16.3% 16.3% Margins Total EBIT 148 151 11.6% 11.5% Margins EBITDA: H&W 99 109 13.6% 14.6% Margins 42 F&I 61 16.8% 13.8% Margins Coffee 46 50 Israel 21.3% 21.0% Margins 206 EBITDA 201	Strauss	Israel (Non GAAP)
			Chg.

			(1.6%)
			18.1%
			(8.7%)
	Total		1.7%

			0.9%



			70.9%

			(8.7%)

			2.3%
			0.1%

			(8.6%)
			(1.0%)
			44.4%
			3.1%
			(7.5%)
			0.3%
	Total		2.8%

Margins 16.3% 16.3% (0.0%) (1) Energy snacks were reclassified in Q1 ²⁴ to F&I, previously part of H&W

Strauss Israel Sales; NIS mm; Non-GAAP

Strauss Israel EBIT and EBIT Margins; NIS mm; Non-GAAP

Target Milk Prices| 2012-2024 (ILS per Liter)

London Sugar Historical & Futures Prices | 2017-2024 (\$\T)

London Cocoa Historical & Futures Prices | 2017-2024 (GBP\T)

Strauss Coffee Intl. Q1 2024 NIS mm Non-GAAP Financial Highlights

Strauss Coffee	International (Non	GAAP)
	2024 Q1	2023 Q1	% Chg.
Total Revenue	954	951	0.3%
Total Profit Gross	230	233	(1.4%)
GrossMargins	24.1%	24.5%	(0.4%)
EBIT:
Total EBIT	38	60	(36.3%)
Margins	4.0%	6.3%	(2.3%)
EBITDA:
Total EBITDA	61	82	(25.1%)
Margins	6.4%	11.1%	(4.7%)

Note: (1) Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) (3C)

Source: Três Corações Alimentos S.A. Consolidated Interim Financial Statements as of March 31st, 2024

Strauss Coffee Intl. Q1 2024 NIS mm Non-GAAP Sales by Geography

Coffee International Sales
			Change %
	2024 Q1	2023 Q1	NIS	Local Currency
Venture Três Corações Joint (Brazil) (1)	645	621	3.8%	(4.7%)
& Ukraine Russia	129	165	(21.7%)	(9.6%)
Poland	103	79	29.8%	14.8%
Romania	45	51	(12.3%)	(15.4%)
Serbia	21	35	(40.6%)	(43.1%)
Other	11	--
Total International	954	951	0.3%	(4.5%)