STRAUSS GROUP August 10 th , 2017 Q2 2017 Earnings Presentation - PowerPoint PPT Presentation

STRAUSS GROUP August 10 th , 2017 Q2 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 Q2'16 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

Q2 2017 Financial Highlights NIS mm; Non-GAAP Q2'17 Sales: NIS 2042mm; growth: 5.6% Q2'17 Organic growth excluding FX: 6.2% (1) Q2'17 gross margins: 36.9% (down -100 bps vs. Q1'16) EBIT and EBIT margins: NIS 187mm (up 2.3%); 9.1% (down -30 bps vs. Q2'16) Net income and net margins: NIS 97mm (up 24.9%); 4.8% (down -20 bps vs. Q2'16) EPS: 0.88 (up 20.4% VS. Q2'16) The group declared dividend of NIS 160mm (NIS 1.39 per share) to be paid on September 5th 5

H1 2017 Financial Highlights NIS mm; Non-GAAP YTD 2017 Sales: NIS 4125mm; growth: 8.2% (1) YTD 2017 Organic growth excluding FX: 6.7% YTD 2017 Gross margins: 37.2% (up -110 bps vs. YTD 2016) EBIT and EBIT margins: NIS 410mm (up 3.7%); 9.9% (down -50 bps vs. YTD 2016) Net income and net margins: NIS 213mm (up 15.2%); 5.2% (up 30 bps vs. YTD 2016) EPS: 1.95 (up 13.1% VS. YTD 2016) 6

Strauss Israel – Growth continues beyond F&B market • Solid top line growth of 3.4% in comparison to only 0.8% growth for the F&B market* • Market share at 11.7% • Operating profitability is up 4.4%, sustained by continued efficiency measures and despite the implementation of the employee benefit plan • Innovation continues – new product launches mainly in confectionary; big success for “ Nishnushim ” • New distribution agreements contribute to results • We continue to focus on delivering healthier products with less sugar, salt and fat contents 7 * Source: Storenext

Strauss Coffee – Stellar Top Line Growth of 11.8% • EBIT is up 21.2% • Growth attributed to increased volumes and selling prices in most geographies • Very strong performance in International Coffee sales; 14.8% top line growth • Particularly strong performance in Brazil 3C (1) ; sales grew by 27.5% (24.6% in LC) and EBIT a most impressive 77% growth (LC) as R&G sales are back to usual levels • Positive currency effect – NIS 1 million; mainly impacted by BRL appreciation, NIS 9 million • 3C (1) market share in Brazil R&G is at 24.2% (2) • New launches this quarter include MK Café freeze dry in Poland, Ambassador premium beans and R&G in Russia and Ukraine, new single portion coffee machine and capsules experience in Romania and Nitro cold brew to go in Israel • The coffee capsules production site in Brazil, a JV of 3C (1) and Caffitaly, is now fully operational (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 8

International Dips and Spreads • Sabra recorded a one time charge due to recall – NIS 5.4 million off sales and NIS 11.2 million in other expenses • Towards the end of the quarter sales gradually returned to normal levels (in USD) • Sabra is close to pre recall market share levels; currently at 58.4% for the last 4 weeks ending July 9th • Obela sales in Australia continue to outperform up 31.9% in local currency • Obela is on track to penetrate the European market via the Florentine platform • Sabra continues to be a global market leader and the no. 1 producer of Hummus in North America 9

Strauss Water • A very strong quarter for Strauss Water with continued improvements on all fronts; Sales, EBIT and Cash Flows • Sales up 9.1% during the quarter • Customer service makes significant strides in improving call center and online customer satisfaction • Product innovation continues with the launch of Bubble Plus • Sales of HSW, water JV in China, grew by 52% in Q2 2017 to NIS 127 million up from NIS 84 million in Q2 2016 and by 72% in H1 2017 to NIS 245million up from NIS 143 million in H1 2016 • Net profits at HSW more than doubled (up 108%) to NIS 15 million compared to NIS 7 million in Q2 2016 and up 91% in H1 2017 to NIS 26 million compared to NIS 13 million in H1 2016 10

Shahar Florence Strauss Group C.F.O. 11

Q2 2017 12

Strong rong Sales es Growth wth Co Continues tinues 5.6% % in Q2 les NIS S mm; Non-GAA AAP Q2 2017 17 Cons nsolid olidat ated ed Sales • Organic growth excluding FX : +6.2% Prior to Food Law 2000 2,042 1,949 1,933 1,839 1500 Food Law NIS -16mm Negative translation differences = NIS 13 1000 500 0 Q2'14 Q2'15 Q2'16 Q2'17 13

Q2 2017 Sales by Segment NIS mm; Non-GAAP; % sales contribution 2,500 120% 2,042 2,000 100% 100% 80% 1,500 60% 982 1,000 737 40% 48% 500 36% 20% 178 145 9% 7% - 0% Overall Group Strauss Coffee Strauss Israel Dips & Spreads Other Growth ’ 17 /’ 16 5.6% 11.8% 3.4% -9.5% -0.7% growth excl. Organic ’ 17 /’ 16 FX 6.2% 10.4% 3.4% -4.2% 7.7% 14

Q2 Sales Bridge NIS mm; Non-GAAP; Q2 ’ 16 to Q2 ’ 17 Primarily due to the weakening of the USD (NIS -11mm) 116 5 (13) 2,042 1,933 +6.2% organic growth (1) Group sales, secound Net Organic Growth M&A Effect of Translation Group sales, secound quarter 2016 Differences * quarter 2017 (1) Excluding translation differences 15