STRAUSS GROUP November 16 th , 2017 Q3 2017 Earnings Presentation - PowerPoint PPT Presentation

STRAUSS GROUP November 16 th , 2017 Q3 2017 Earnings Presentation

Disclaimer 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. . 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 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. (1) In Q3'16 the subsidiary Strauss Water signed a series of share exchange and transfer agreements with companies of the Haier Group, as well as a joint venture agreement, with the aim of restructuring the Haier Strauss Water joint venture in China. The change in respect of the above agreements was reflected in the non- GAAP reports commencing in the third quarter of 2015. For further information, see Note 12.6 to the Consolidated Financial Statements as at December 31, 2015 . 3

Gadi Lesin Strauss Group C.E.O. 4

Q3 2017 Financial Highlights NIS mm; Non-GAAP Q3'17 Sales: NIS 2210mm; growth: 5.5% (1) Q3'17 Organic growth excluding FX: 8.3% Q3'17 gross margins: 36.6% (down -170 bps vs. Q3'16) EBIT and EBIT margins: NIS 221mm (up 3.4%); 10% (down -20 bps vs. Q3'16) Net income and net margins: NIS 125mm (up 34.9%); 5.6% (up 120 bps vs. Q3'16) EPS: 1.09 (up 26.4% VS. Q3'16) 5

Q3 Highlights - Higher sales in S. Coffee , S. Israel & S. Water partially offset by higher material costs in Sabra & S. Israel ; Net income is up 35% Higher sales due to Coffee (Brazil & Russia), S. Israel & S. Water; Lower GP margin due to increased milk and sugar prices in Israel , higher Negative FX effect of 34 M’ ILS (Sabra & Brazil) material costs and overhead in Sabra & higher green coffee prices GP GP margin 811 809 804 798 2,210 2,138 2,096 2,040 711 1,974 5.5% 6.1% 4.8% 39.0% -7.6% 37.9% 38.3% 36.6% 35.9% Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2017 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2017 Higher EBIT due to S. Coffee & S. Water strong growth partially offset by Net income is up 34.9% due to strong EBIT and lower minority following Sabra TPG share acquisition EBIT Net Income 125 Net Income Accounting 227 119 221 212 213 11.2% 10.6% 3.4% 10.0% 92 94 6.8% 192 86 81 10.2% 10.4% 75 -15.4% 69 68 9.7% 58 6.7% 5.6% 5.0% 5.0% 5.6% 5.2% 4.2% 4.4% 4.4% 4.0% Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2017 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2017

YTD 2017 Financial Highlights NIS mm; Non-GAAP YTD 2017 Sales: NIS 6335mm; growth: 7.2% (1) YTD 2017 Organic growth excluding FX: 7.3% YTD 2017 Gross margins: 37% (down -130 bps vs. YTD 2016) EBIT and EBIT margins: NIS 631mm (up 3.6%); 10% (down -30 bps vs. YTD 2016) Net income and net margins: NIS 338mm (up 21.8%); 5.3% (up 60 bps vs. YTD 2016) EPS: 3.04 (up 17.6% VS. YTD 2016) 7

YTD Highlights - Higher volumes partially offset by higher raw materials (except S. water) and higher operating expenses; Net income is up 22% Higher volumes in S. Israel, S. Coffee , S. Water & Obela as well as S. GP down 130 bps due to Sabra recall, Brazil green coffee prices and Coffee higher prices partially offset by Sabra higher milk prices partially offset by S. Water improved productivity 6,335 GP GP margin 2,369 2,342 6,069 6,060 7.2% 2,316 5,909 2,263 2,129 5,743 2.9% -0.1% -5.2% 39.1% 38.2% 38.3% 37.1% 37.0% YTD 2013 YTD 2014 YTD 2015 YTD 2016 YTD 2017 YTD 2013 YTD 2014 YTD 2015 YTD 2016 YTD 2017 Higher EBIT due to strong sales partially offset by higher operating Higher net income +21.8% due to strong EBIT and lower minority expenses in S. Coffee, S. Israel & S. Water and by sabra lower following TPG share acquisition marketing Net Income EBIT 631 609 Net Income Accounting 603 611 338 10.0% 10.1% 501 10.3% 287 277 10.0% 274 259 3.6% 242 8.7% 219 215 209 -1.2% 192 21.4% -17.0% 6.7% 6.1% 5.3% 5.0% 4.9% 4.7% 5.3% 3.8% 4.7% 4.3% Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2017 YTD 2013 YTD 2014 YTD 2015 YTD 2016 YTD 2017

Strauss Israel – 7 th Consecutive Quarter of Growth beyond F&B market • Top line growth of 2.8% during the quarter continues to surpass that of the overall Food & Beverage market which grew a mere 0.3% during the quarter (1) • Market share remains solid at 11.7% with significant improvement in Achla • Gross margins erode predominantly due to higher milk prices and to a lesser extent due to higher sugar prices, although these were somewhat offset but lower other commodity prices, in particular Cocoa • Fun & Indulgence sales slightly lower due to holiday season • Innovation continues – new product launches include Danone Pro with granola, Milky Shot and confectionary items among others • We continue to focus on delivering healthier products with less sugar, salt and fat contents 9 * Source: Storenext

Strauss Coffee – Outstanding Top Line Growth continues 12.2% • Organic top line excluding FX is up an even more significant 14.8% • Growth is attributed mainly to increased volumes in Brazil and Russia and higher selling prices in most geographies • Very strong performance in International Coffee sales; 18.9% top line growth in local currency • Brazil 3C (1) continues to lead growth with a 27.5% increase in local currency; EBIT up an impressive 33.5%, despite continued economic and political unrest • Currency trend turns again – quarter negatively impacted by NIS 21 million; mainly by BRL depreciation of NIS 19 million • 3C (1) market share in Brazil R&G is at 25.2% (2) • Sales in CIS are up 9.9% for the quarter in terms of both value and volume despite a continued competitive environment (1) Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50 %) and by the São Miguel Group ( 50%) (3C) (2) Source: Nielsen 10

International Dips and Spreads • Market conditions for Sabra remain challenging as sales decline 9.2% in Q3 • Impairment of the Salsa operations in the amount of NIS 38 million • Humus market share levels are strong at 58.6% for the last 4 weeks ending October 8 th • Obela operations in Australia continues to outperform and has started selling into New Zealand • In Q3 Obela started selling Humus products in Germany as its first phase in the European penetration • Sabra continues to be a global market leader and the no. 1 producer of Hummus in North America 11