Strauss Group April 2015
Disclaimer This presentation does not constitute an offer for investment or an invitation to purchase or subscribe for any securities of Strauss Group Ltd. (the " Company "). In particular, this presentation does not constitute a "public offering". This presentation does not purport to be all-inclusive or to contain all information that may be relevant in making any decision concerning an investment in the securities of the Company. This presentation was prepared primarily as a summary for your convenience only and does not reflect all data on the Company and its activity, and it does not replace the need to review the Company's public reports. The information contained in this presentation is incomplete, and everything contained herein is subject to the contents of the Company’s relevant reports and should not be considered a representation or guarantee, including for the completeness or accuracy of the information contained herein. This presentation may include forward-looking information that is based on estimates and assumptions by Company management as at the date of its preparation, which, although the Company believes are reasonable, are by nature uncertain. The realization or non-realization of such forward-looking information is influenced, inter alia , by the risk factors that are typical of the Company's activity, and by developments in the economic environment and in external factors influencing the Company's activity, which cannot be assessed in advance and are beyond the Company's control. The Company disclaims any intention or obligation to update or revise any such forward-looking statements or estimates and makes no commitment to update this presentation. 2
GAAP to Non – GAAP Reconciliations In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), the Company provides non-GAAP adjusted 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: Três Corações (a 50%/50% JV with a local group named São Miguel Holding e Investimentos S.A. 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), PepsiCo Strauss Fresh Dips & Spreads International (a 50%/50% JV with PepsiCo outside the U.S. and Canada) and Haier Strauss Water (a 50%/50% JV with Haier in China). In addition, non-GAAP adjusted 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. The Company's management believes that these measures provide investors with transparency by helping illustrate the underlying financial and business trends relating to the Company's results of operations and financial condition and comparability between current and prior periods. Management uses the measures to establish and monitor budgets and operational goals and to evaluate the performance of the Company. Please see the "GAAP to Non-GAAP Adjusted Reconciliation" tables in the Company's MD&A report for a full reconciliation of the Company's GAAP to non-GAAP adjusted results. 3
01 03 Strauss Group Strauss at a Glance Coffee 02 04 Strauss Israel Sabra 4
01 03 Strauss Group Strauss at a Glance Coffee 02 04 Strauss Israel Sabra 5
We are a branded, multi-category and innovative food & beverage group 6
Strauss Group Financial Snapshot Non-GAAP; NIS mm 2014 Sales: NIS 8,140mm (USD 2,278mm (1) ) 5 Year Sales CAGR: 5.0% 5 Year Constant Currency Organic Sales CAGR: 6.2% 2014 Gross Margins: 38.3% 2014 EBITDA and EBITDA Margins: NIS 964mm; 11.8% Margin 2014 EBIT and EBIT Margins: NIS 746mm; 9.2% Margin Excluding Greenfield Operations (2) : 10.1% Margin 2014 Net Profit and Net Margins: NIS 371mm, 4.6% Net debt / 2014 EBITDA: 1.8x ; Net Debt: NIS 1,688mm Note: 5 Year CAGRs based on 2009-2014. (1) Conversion from NIS to USD based on USD 1 = NIS 3.57 (2014 avg.) (2) Excludes Other (Strauss Water, Max Brenner and HQ) and Obela. 7
2014 Sales by Category NIS mm; Non GAAP; % sales contribution 3,825 47% 1,402 974 17% 793 548 12% 10% 282 205 111 7% 3% 3% 1% Coffee Dairy Dips & Spreads Confectionary & Water Other Health Salty Snacks Max Brenner and Fresh pastry and Wellness Vegies 5 Year CAGRs 2.7% 1.7% 16.4% NM 3.5% 8.4% 0.5% 2.0% Note: Figures were rounded off to NIS millions. Growth was calculated on the basis of the exact figures in NIS thousands. 8
2014 Sales by Geography NIS mm; Non GAAP; % sales contribution 4,500 60% 4,128 4,000 51% 50% 3,500 3,000 40% 2,500 30% 2,000 1,781 1,500 20% 22% 1,000 727 722 635 10% 500 9% 9% 147 8% 2% - 0% Israel Brazil North America C.E.E. CIS ROW CAGRs 5 Year 3.2% 22.2% (-7.6%) NM 9.4% 4.2% Note: figures for Israel include Strauss 50% share in the salty snacks business; figures for Brazil reflect Strauss 50% share in 3C (our JV with Sao Miguel Group in Brazil); figures for North America and ROW include Strauss 50% share in Sabra and Obela and Strauss Water China. 9
We strive to be #1 or a strong #2 everywhere we play 10
We are a Partner to Some of the World's Leading Consumer-Facing Brands 11
Sales Bridge NIS mm; Non GAAP; FY 2013 to FY 2014 RUB/NIS & UHA/NIS: NIS 156mm BRL/NIS: NIS 154mm 18 61 89 190 (28) 8.1% 10.1% 15.0% (0.9%) (333) 5.6% 8,143 8,140 2013 Sales Coffee Dips & Spreads Other Green Coffee Strauss Israel FX effect* 2014 Sales Excluding Green Coffee Note: Figures were rounded off to NIS millions. Totals were calculated on the basis of the exact figures in NIS thousands. 12
Growth of Israeli F&B Market and Strauss Sales in Israel StoreNext and Strauss Public Filings 3.5% 4.0% 3.2% 3.0% 2.0% 1.0% 0.0% -1.0% -0.4% -2.0% -1.6% -3.3% -3.0% -4.0% 2012 2013 2014 2014 Strauss 2014 Strauss Sales - StoreNext Actual Sales in Israel 13
EBIT Bridge NIS mm; Non GAAP; FY 2013 to FY 2014 International Coffee: -68mm Israel: +13mm 0 14 18 (55) 769 746 2013 EBIT Dips & Spreads Other Strauss Israel Strauss Coffee 2014 EBIT Note: Figures were rounded off to NIS millions. Totals were calculated on the basis of the exact figures in NIS thousands. 14
CIS: USD-RUB Exchange Rate 15
Net Profit Bridge NIS mm; Non GAAP; FY 2013 to FY 2014 Lower effective tax rate (26.2% in 2014 vs. 29.8% in 2013) due to profit mix for tax purposes and tax income from deferred taxes • Strengthening of the USD vs. all hedged recognized for the first time in currencies (primarily the RUB and the NIS). 2014 EPS: some of the Group’s subsidiaries. • CPI increase of 1.9% 2013 vs. 0.1% in 2014 3.47 in addition to decrease in the balance of CPI loans in 2014 . 380 370 (2) 16 360 2013 EPS: 350 3.09 340 51 330 371 320 (23) 4.6% 310 329 300 4.0% 290 280 2013 Net Profit Negative EBIT Decrease in Decrease in taxes Increase in Minority 2014 Net Profit growth financing expenses, Interest net 16
This Presentation will Focus on Three Main Businesses: Strauss Israel, Strauss Coffee and Sabra 20.0% 18.0% Strauss Israel; 2.5%; 13.2%; 391 16.0% 2014 EBITDA Margin Sabra; 14.0% 26.8%; 16.1%; 104 12.0% 10.0% 8.0% Strauss Coffee; 7.4%; 10.9%; 417 6.0% 4.0% 2.0% 0.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% (5Y LC Sales CAGR; 2014 EBITDA %; 2014 EBITDA (NIS mm)) 5 Year Local Currency Sales CAGR 17
01 03 Strauss Group Strauss at a Glance Coffee 02 04 Strauss Israel Sabra 18
Strauss Israel Financial Snapshot Non-GAAP; NIS mm 2014 Sales: NIS 2,972mm (USD 832mm (1) ) 5 Year Sales CAGR: 2.5% 2014 Gross Margins: 40.2% 2014 EBITDA and EBITDA Margins: NIS 391mm; 13.2% Margin Note: 5 Year CAGRs based on 2009-2014 (1) Conversion from NIS to USD based on USD 1 = NIS 3.57 (2014 avg.) 19
In Israel, Strauss is an iconic company and the second largest F&B company with an overall 11.6% value market share Source: StrorNext for 2014. 20
Strauss Market Share and Market Position in Israel Selected Categories, value market share for 2014 ~70% of Strauss products in Israel hold the #1 market position 69.0% 63.4% 60.5% 44.6% 40.1% 35.2% 33.9% 31.0% #1 #1 #1 #1 #1 #2 #2 #2 (1) (2) Dairy Milk Drinks Chocolate Yogurt Sweet Snacks Salty Snacks Chilled Salads Chewing Gum Desserts Tablets Market Size (NIS mm) 524mm 381mm 1,024mm 425mm 514mm 948mm 738mm 220mm Source: StoreNext for 2014. (1) Including functional drinks. (2) Including children's chocolate. 21
FY Strauss Israel Sales (NIS mm; Non GAAP) 3,500 3,000 3,000 2,972 2,901 2,840 2,500 2,000 1,500 1,000 500 - 2011 2012 2013 2014 22
Exceptionally strong H2 ’ 13 in both F&I and H&W Fun & Indulgence and Health & Wellness H2 Sales (NIS mm; Non GAAP) 510 488 490 474 470 468 470 F&I Sales 450 430 410 390 370 350 H2'11 H2'12 H2'13 H2'14 1,029 1,050 995 978 1,000 959 H&W Sales 950 900 850 800 750 700 650 H2'11 H2'12 H2'13 H2'14 23
FY Strauss Israel EBIT and EBIT Margins (NIS mm; Non GAAP) 350 20.0% 0.0% 18.0% 300 315 315 16.0% 302 297 250 14.0% 12.0% 10.6% 200 10.6% 10.5% 10.2% 10.0% 150 8.0% 6.0% 100 4.0% 50 2.0% - 0.0% 2011 2012 2013 2014 24
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