Strauss Group Financial Results

Q2 and YTD 2021 Earnings Presentation | August 17th , 2021

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 contained in the presentation and any other information provided during the presentation (the "Information") does not constitute a basis for investment decisions and does not comprise a recommendation, an opinion or a substitute for the investor's sole discretion. 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 Company is not liable, and will not be held liable, for any damage and/or loss that may be caused as a result of use of the Information.

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)(1).

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.

Coronavirus Update

Group Management is vigilantly managing the event and continues to assess and manage the risks on an ongoing basis in all countries of operations, as this event continues to evolve.
At the date of this report and throughout the quarter in general, the Group's manufacturing facilities have continued to operate. The Group continues to operate closelywith its suppliers and customers to ensure that the supply chain is able to meet demand.
During the quarter the Group continued to invest in developing its brands and to strengthen its partnerships, while exploring various business opportunities and making advance preparations for various challenges that may lie ahead.
Consumer behavior – Elevated at home consumption of food and beverages continues during Q2 2021 in some categories and a significant improvement is noted in the away-from-home (AFH) segment as social distancing measures are lifted in some geographies. Vaccinations in some geographies are more wide spread than in others, however, the spread of the Delta strain in some geographies is on the rise.
Geographies – Above average sales growth in Israel continued, due to increased at and away-from-home consumption following the opening of the economy during Q2. In the US, sales continue to come under pressure due to supply chain constraints; in Brazil, Russia and China sales increased in local currencies in comparison to Q2 2020 as vaccination rates increase albeit at a slower pace.
Product categories – Growth in demand for the Group's products was evident across categories, in Israel dairy continues to be strong and a significant improvement was recorded in the F&I category. Coffee and water sales were strong across geographies. Global dips and spreads are still suffering from supply chain headwinds.
Sales channels – Group's sales to the retail chainswere up aswere AFH sales as economies reopened across the world.

Giora Bardea

Group CEO

Strauss Group

Achievements

Strong growth momentum continues amidst ongoing uncertainty
Successful launch of new water bar and extraordinary growth
Successful follow on investments in Kitchen hub companies
Strong Homebase and continuing to gain momentum
Business continuity results in impressive growth despite challenging times of Covid and military operation guardian of thewalls

Future Focus

Input inflation mitigation
Continue leveraging Kitchen Hub strong momentum
Talent acquisition
Purpose and Strategy
Increased Capex investments in new plants and machinery
Continued successful efficiencycy and productivity programs

Strauss Israel

Achievements

7.7% growth
Ongoing elevated consumption
Strong EBIT growth 10.1%
Market share up 0.3% to 12.4% YTD
Growth across categories; F&I strong rebound
AFH and OTG channel strong improvement
Capacity master plan

Future Focus

investment

• Alpro offering expansion and new plant

• Further mitigation and efficiency as raw

• Continue to develop e-tail and online channel

material headwinds raise their head

• New channels and categories

Strauss Coffee

Achievements

Strong sales growth of 13.9% in local currency
AFH segment continues to improve
Coffee Israel up 22.8% - gradual reopening of the Elite Coffee chain
Aluminum capsules launch in Israel
Sales in 3C (1) up an impressive 13.7% in local currency - higher volume and AFH improvement supported by sales of Mitzui
Improved momentum in Eastern Europe
EBIT up 7.1% but margins eroded as green coffee up sharply
3C (1) market share in Brazil R&G value 30.6%

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

Future Focus

Green coffee price mitigation amidst sharp rises
Increase margins in Brazil
Continue to focus and expand premium offerings
Return to normal selling levels in Poland

7 (2) Source: Nielsen

International Dips & Spreads

Achievements

The Int'l D&S business up 2.2%
Sabra up 8.2% in local currency; Obela up 8.6%
Portability productrebound
New CEO on board

FutureFocus

Supply chain challenges at Sabra continue
Elevated operating expenses associated with with COVID-19 erode margin
Continued efforts to further expand the Hummus category in North America
Key to growth is in future innovation in product quality and offering

Strauss Water

Achievements

Very strong quarter sales up 16.4%
Operating income up 13% (excl. subsidy)
Strong sales momentum and installed base across all regions - Israel, the UK and China;
Very successful launch of Edgewater bar
Haier Strauss Water (HSW), sales up 22.4% in local currency to reach ¥ 345 m
HSW Net income up 11% (excl. subsidy)
HSW continues to lead the online market in China
Production in the new site in China continues to expand

Future Focus

Continue developing markets in Israel Managing supply chain challenges
Streamline production in newplant in China
Develop strong innovation pipeline

Growth and Innovation

Achievements

Successful follow on investments in Kitchen hub companies
20th startup joins the kitchen
Aleph farms raising USD 105m
Upland launch

Future Focus

Continue leveraging Kitchen Hub strong momentum
Product launch in the US – Upland

Ariel Chetrit

Group CFO

Financial Highlights Organic Excluding FX Non GAAP

Q2 2021 YTD 2021

Q2'21 Organic Sales growth : 10.9%

Q2'21 Organic Gross Profit growth: 8.1%

Q2'21 Organic EBIT growth: -3.7%; growth excluding Chinese subsidy* in Q2 2020 1.2%

Q2'21 Organic Net Income growth: -6.2%; growth excluding Chinese subsidy* in Q2 2020 1.9%

YTD Organic growth : 5%

YTD Organic gross profit growth: 1.6%

YTD Organic EBIT growth: 4.1%; growth excluding Chinese subsidy* in Q2 2020 6.5%

YTD Organic Net income growth: 9.8%; growth excluding Chinese subsidy* in Q2 2020 13.8%

* In Q2 2020 EBIT included Chinese government subsidy of NIS 11million

Financial Highlights Reported Non GAAP

Q2'21 Sales: NIS 2132mm; growth: 10%

Q2'21 gross margins: 37.3% (down 110 bps vs. Q2'20)

EBIT and EBIT margins: NIS 212mm (down 5%); 10% (down 150 bps vs. Q2'20)

Net income and net margins: NIS 126mm (down -6.3%); 5.9% (down 100 bps vs. Q2'20)

EPS: 1.08 (down 6.5% VS. Q2'20)

Q2 2021 YTD 2021

YTD 2021 Sales: NIS 4193mm; growth: 2.1%

YTD 2021 Gross margins: 38.3% (down 120 bps vs. YTD 2020)

EBIT and EBIT margins: NIS 501mm (up 1.9%); 11.9% (down 10 bps vs. YTD 2020)

Net income and net margins: NIS 332mm (up 8.7%); 7.9% (up 50 bps vs. YTD 2020)

EPS: 2.86 (up 8.4% VS. YTD 2020)

Q2 2021

Q2 2021 Consolidated Sales NIS mm Non-GAAP

Q2 2021 Sales by Segment

NIS mm; Non-GAAP; % sales contribution

Q2 Sales Bridge NIS mm; Non-GAAP; Q2'20 to Q2' ²¹

Channel Quarterly Sales Development during Pandemic

Sales to the retail channels rose sharply in comparison to Q1 2021 as did sales to the Away From Home channels which show a significant improvement (albeit from depressed levels during Covid Lockdowns) as lockdowns are lifted across geographies

Gross Profit

Q2 Consolidated Gross Profit and Gross Margins

NIS mm; Non-GAAP

Organic Gross Profit Growth excl. FX ⁼

Q2 2021 Gross Profit and Gross Margins

NIS mm; Non-GAAP; % Margin

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

Q2 EBIT Bridge NIS mm; Non-GAAP; Q2'20 to Q2'²¹

Q2 2021 EBIT and EBIT Margins NIS mm; Non-GAAP; % Margin

'21/'20

EBITDA

* Note change in EBITDA due to new IFRS16 rules as of 2019

EBITDA

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

Q2 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).

Note: Q2 2021 figures include Mitzuirevenues

Source: Três Corações Alimentos S.A. Consolidated Interim Financial Statements as of June 30th , 2021.

357 357 319 321 330 340 350 360 FX 8.2% 0.6%

Organic excl.

Sabra Q2 Snapshot NIS mm; Non-GAAP; for 100% share

Sabra Q2 Snapshot \$ mm; Non-GAAP; for 100% share

Sales

EBIT and EBIT Margins

Net Income

Net Debt and Net Debt / EBITDA (LTM)

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

Q2 GAAP and Non-GAAP Financial Highlights, NIS mm

GAAP Adjusted Non-GAAP

	Q2 2021	Q2 2020	% Chg.	Q2 2021	Q2 2020	% Chg.
Sales	1,458	1,333	9.4%	2,132	1,938	10.0%
Gross Profit	595	534	11.6%	795	743	6.9%
GP Margin	40 8%	40 0%		37 3%	38 4%
Operating Profit	207	208	(0.6%)	212	223	(5.0%)
EBIT Margin	2% 14	6% 15		0% 10	5% 11
Net Profit (to SH)	130	126	3.0%	126	135	(6.3%)
NP Margin	8 9%	9 4%		5 9%	6 9%
Operating Cash Flow	106	248		130	292
Capex (1)	(55)	(52)		(72)	(73)
Net debt	1,896	1,900		2,156	2,053
Change in WC (CF)	(82)	86		(119)	61

YTD 2021

YTD GAAP and Non-GAAP Financial Highlights, NIS mm

		GAAP		Adjusted Non-GAAP
	YTD 2021	YTD 2020	% Chg.	YTD 2021	YTD 2020	% Chg.
Sales	2,967	2,878	3.1%	4,193	4,106	2.1%
Gross Profit	1,225	1,169	4.8%	1,607	1,621	(0.9%)
GP Margin	41 3%	40 6%		38 3%	39 5%
Operating Profit	480	447	7.3%	501	491	1.9%
EBIT Margin	2% 16	5% 15		9% 11	0% 12
Net Profit (to SH)	333	282	18.4%	332	306	8.7%
NP Margin	11 2%	9 8%		7 9%	7 4%
Operating Cash Flow	315	369		308	398
Capex (1)	(103)	(100)		(137)	(139)
Net debt	1,896	1,900		2,156	2,053
Change in WC (CF)	(105)	7		(229)	(102)

YTD 2021 Sales by Segment

NIS mm; Non-GAAP; % sales contribution

YTD Sales Bridge NIS mm; Non-GAAP; YTD 2020 to YTD 2021

Gross Profit

YTD 2021 Gross Profit and Gross Margins

NIS mm; Non-GAAP; % Margin

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

YTD EBIT Bridge NIS mm; Non-GAAP; YTD 2020 to YTD 2021

YTD 2021 EBIT and EBIT Margins

NIS mm; Non-GAAP; % Margin

'21/'20

EBITDA

* Note change in EBITDA due to new IFRS16 rules as of 2019

EBITDA

(1)Water EBIT includes net profits from HSW; Q2 2020 water EBIT includes Chinese government subsidy of NIS 11m

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

YTD 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).

Note: Q2 2021 figures include Mitzuirevenues

Source: Três Corações Alimentos S.A. Consolidated Interim Financial Statements as of June 30th , 2021.

Sabra YTD Snapshot NIS mm; Non-GAAP; for 100% share

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

YTD18 YTD19 YTD20 YTD21

0.0%

42 Note: Sabra Dipping Company ("Sabra") is a company jointly held by PepsiCo (50%) and Strauss Group (50%) .

- 5

Net Income

Currencies

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

10.0% 15.0% Change in average exchange rate (1 local currency = x NIS)

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

YTD'21/YTD'20 9.5% 6.3% 7.6% 7.3% -6.7% -7.1% -9.8%

Strauss Israel Non-GAAP Financial Highlights Q2 and YTD 2021 NIS mm

	Strauss Israel (Non GAAP)
	YTD 2021	YTD 2020	% Chg.	Q2 2021	Q2 2020	% Chg.
Revenue:
H&W	1,303	1,235	5.5%	664	618	7.3%
F&I	588	599	(1.7%)	253	233	8.8%
Total Revenue	1,891	1,834	3.1%	917	851	7.7%

Total Gross Profit	753	738	2.0%	362	342	5.5%
Gross Margins	39 8%	40 3%	(0 5%)	39 5%	40 3%	(0 8%)

EBIT:
H&W	164	149	10.0%	88	83	5.5%
Margins	6% 12	1% 12	5% 0	2% 13	4% 13	(0 2%)
F&I	73	73	(0.3%)	20	15	35.8%
Margins	3% 12	2% 12	1% 0	0% 8	4% 6	6% 1
Total EBIT	237	222	6.6%	108	98	10.1%
Margins	12 5%	12 1%	0 4%	11 7%	11 5%	0 2%

EBITDA:
H&W	208	193	7.7%	109	105	3.9%
Margins	16 0%	7% 15	0 3%	16 5%	0% 17	(0 5%)
F&I	105	103	1.6%	37	30	23.8%
Margins	8% 17	2% 17	6% 0	5% 14	7% 12	8% 1
Total EBITDA	313	296	5.6%	146	135	8.2%
Margins	5% 16	2% 16	3% 0	9% 15	9% 15	(0 0%)

YTD 2021 Strauss Israel Sales

NIS mm; Non-GAAP

Q2 2021 Strauss Israel EBIT & EBIT Margins

NIS mm; Non-GAAP

YTD 2021 Strauss Israel EBIT & EBIT Margins

NIS mm; Non-GAAP

Target Milk Price (NIS per liter) Prices exclude Strauss transportation costs

London Sugar Historical & Futures Prices 2015-2021 (\$\T)

London Cocoa Historical & Futures Prices 2015-2021 (GBP\T)

Strauss Coffee Non-GAAP Financial Highlights Q2 and YTD 2021 NIS mm

		Strauss Coffee (Non GAAP)
	YTD 2021	YTD 2020	% Chg.	Q2 2021	Q2 2020	% Chg.
Revenue:
Israel	372	368	1.2%	163	133	22.8%
International	1,227	1,226	0.1%	685	617	10.9%
Total Revenue	1,599	1,594	0.3%	848	750	13.0%

Total Gross Profit	536	565	(5.1%)	264	244	8.7%
Gross Margins	33 5%	35 4%	(1 9%)	31 2%	32 4%	(1 2%)

EBIT:
Israel	85	86	(0.8%)	26	25	7.0%
Margins	23 0%	23 4%	(0 4%)	16 8%	19 2%	(2 6%)
International	91	94	(3.3%)	51	48	7.4%
Margins	4% 7	7% 7	(0 4%)	4% 7	7% 7	(0 3%)
Total EBIT	176	180	(2.2%)	77	73	7.1%
Margins	0% 11	3% 11	(0 3%)	2% 9	7% 9	(0 5%)

EBITDA:
Israel	99	105	(5.5%)	34	35	(3.1%)
Margins	26 6%	28 5%	(1 9%)	20 9%	26 5%	(5 6%)
International	128	131	(2.6%)	68	65	4.9%
Margins	10 4%	10 7%	(0 3%)	10 0%	10 6%	(0 6%)
Total EBITDA	227	236	(3.9%)	102	100	2.0%
Margins	2% 14	8% 14	(0 6%)	1% 12	4% 13	(1 3%)

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

51 Source: Três Corações Alimentos S.A. Consolidated Interim Financial Statements as of June 30th , 2021.

Strauss Coffee Non-GAAP Sales by Geography Q2 and YTD 2021 NIS mm

Strauss Coffee Sales
			% Change				% Change
	YTD 2021	YTD 2020	NIS	Local Currency	Q2 2021	Q2 2020	NIS	Local Currency
Israel	372	368	1.2%	1.2%	163	133	22.8%	22.8%
International:
Três Corações Joint Venture (Brazil) (1)	728	709	2.7%	12.1%	422	366	15.2%	13.7%
CIS	245	260	(5.8%)	7.7%	123	122	0.4%	10.7%
Poland	120	136	(11.7%)	(10.8%)	69	68	1.0%	(0.2%)
Romania	79	71	11.2%	11.0%	41	34	23.6%	23.7%
Serbia	55	50	10.6%	8.5%	30	27	11.0%	9.2%
Total International	1,227	1,226	0.1%	8.3%	685	617	10.9%	12.0%
Total Coffee	1,599	1,594	0.3%	6.5%	848	750	13.0%	13.9%

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 June 30th , 2021.

Q2 2021 Strauss Coffee Sales

NIS mm; Non-GAAP

YTD 2021 Strauss Coffee Sales

NIS mm; Non-GAAP

YTD 2021 Strauss Coffee EBIT & EBIT Margins

NIS mm; Non-GAAP

Robusta Historical & Futures Prices 2015-2021 (\$\T)

Arabica Historical & Futures Prices 2015-2021 (Cent\Lb)

International Dips & Spreads

Strauss D&S Non-GAAP Financial Highlights YTD and Q2 2021 NIS mm; 50% share

Dips & Spreads (Non GAAP)
	YTD 2021	YTD 2020	% Chg.	Q2 2021	Q2 2020	% Chg.
Revenue:
Sabra (50%)	305	337	(9.9%)	160	159	0.6%
Obela (50%)	43	38	12.9%	21	18	16.3%
Total Revenue	347	375	(7.5%)	181	178	2.2%

EBIT:
Sabra (50%)	29	40	(27.1%)	13	21	(34.5%)
Margins	9 6%	11 9%	(2 3%)	8 4%	12 9%	(4 5%)
Obela (50%)	(5)	(3)	NM	(2)	(2)	NM
Margins	NM	NM	NM	NM	NM	NM
Total EBIT	24	37	(35.3%)	11	19	(44.8%)
Margins	6 8%	9 8%	(3 0%)	7% 5	10 6%	(4 9%)

EBITDA:
Total EBITDA	37	50	(26.4%)	17	25	(33.5%)
Margins	6% 10	4% 13	(2 8%)	3% 9	3% 14	(5 0%)