Strauss Group: Reports Q3 and 9M-2023 Financial Results

Petach Tikva / IL. (sg) Israel’s Strauss Group Limited published its financial statements for the third quarter and first nine months of 2023, summing up the quarter with NIS 2,675 million in revenue and cumulative revenue of NIS 7,854 million since the beginning of the year. Strauss sales grew 7.3 percent compared to the corresponding quarter and 11.5 percent in the first nine months compared to the corresponding period last year, as the growth trend in the Group’s business in Israel, China, Brazil and the US continues.

Gross profit in the third quarter was NIS 855 million (32 percent of sales), and operating profit was NIS 212 million (8 percent of sales). Since the beginning of the year, Strauss delivered gross profit of NIS 2,531 million (32.2 percent of sales) and operating profit of NIS 591 million (7.5 percent of sales). Net income attributable to shareholders in the quarter was NIS 120 million, and in the nine months – NIS 339 million.

Group CEO Shai Babad: «Since the beginning of the war in Israel we have maintained business continuity. Our dedicated people are working across the country to keep on providing food and beverages and ensuring the food security of the residents of Israel. We have set up a dedicated fund for the farmers of the Gaza envelope, communities around the Gaza strip, and are also donating and helping the families that were evacuated as well as our soldiers and reservists. Our heart goes out to the families of the murdered and abducted, and we wish the wounded a speedy recovery. The quarterly results reflect our ongoing focus on implementing the Group’s strategy, productivity measures and innovation.»

Development per Segment

Strauss Israel: Strauss Israel delivered revenues of NIS 1,048 million in the third quarter, up 20 percent compared to the corresponding period last year. Strauss Israel’s operating profit was NIS 93 million. Health + Wellness sales were NIS 804 million, up 10 percent, and operating profit was NIS 101 million, reflecting 53 percent growth compared to the same quarter last year.

According to StoreNext figures, in the third quarter Strauss’s share of the total food and beverage market was in Israel 12.0 percent, compared to a market share of 10.5 percent in the corresponding period.

The Fun + Indulgence segment’s revenues in the third quarter rose by 70 percent compared to the corresponding period last year, amounting to NIS 244 million. Despite the increase, the Company recorded an operating loss of NIS 8 million following high operating expenses along with the gradual return to market, rising raw material prices, notably sugar and cocoa, and the weakening of the shekel. In the third quarter, the confectionery market share was 24.5 percent[1], a slight increase over the prior quarter.

Strauss Coffee: Strauss Coffee posted revenues of NIS 1,278 million in the third quarter, reflecting a slight drop of 2 percent versus the same quarter last year, among other things as a result of the decline in the coffee company in Russia. Strauss Coffee ended the third quarter with operating profit of NIS 90 million, down 37 percent compared to last year, the result of exchange rates, green coffee prices and the effects of the war in Russia last year.

In Israel, the coffee company’s revenues in the third quarter were NIS 210 million, up 5 percent compared to the corresponding period last year. Operating profit was NIS 30 million, an increase of 29 percent versus last year.

The international coffee business outside Israel delivered NIS 1,068 million in revenue in the third quarter, down 3.6 percent, and operating profit was NIS 60 million, a decline of 50 percent compared to the corresponding period. The coffee operation in Brazil delivered revenues of NIS 713 in the quarter, up 2 percent over last year, and most of the businesses in Eastern Europe also delivered growth.

Três Corações’s average value market share of the Brazilian roast + ground (R+G) coffee market in the first nine months of 2023 was 33.7 percent, compared to 32.5 percent in the corresponding period last year.

Strauss Water: Strauss Water continued to grow in the third quarter as revenues reached an all-time record high of NIS 221 million, up 5 percent versus NIS 210 million in the corresponding period last year. Operating profit in the quarter was NIS 21 million, down 17 percent compared to last year, the result of the effects of inflation and exchange rates, among others. The water business in China delivered solid results with revenues of NIS 200 million in the third quarter (for 100 percent ownership), up 22 percent, and NIS 19 million in net profit (100 percent ownership), up 22 percent compared to the same quarter last year.

International Dips + Spreads: The International Dips + Spreads segment continued to recover gradually as market shares in the US improved and revenues maintained their growth trend. Sales in the third quarter were NIS 127 million (for 50 percent ownership), up 23 percent versus last year, and operating profit was NIS 32 million due to a one-time insurance refund, compared to an operating loss of NIS 37 million in the corresponding period last year.

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