STRAUSS GROUP. November 24 th, Q3 & YTD 2015 Earnings Conference Call

Transcription

1 STRAUSS GROUP November 24 th, 2015 Q3 & YTD 2015 Earnings Conference Call

2 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, 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

3 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 the reporting period 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 is reflected in the non-gaap reports commencing in the third quarter of For further information, see Note 4.3 to the Consolidated Interim Financial Statements as at September 30,

4 Gadi Lesin Strauss Group C.E.O. 4

5 Q3 15 Highlights: Strauss Coffee 12.7% organic excluding FX top-line growth in Q3 15 (1) Sales up NIS 95mm 3C (2) posts ~8% top-line growth in Q3 Top line growth in NIS: -14.0% Negative FX impact (BRL in particular) affecting top line in NIS and gross profit Currency translation impact on coffee sales: NIS 227mm BRL: NIS 145; RUB and UHA: NIS 65mm Further impact on gross profit, given USD appreciation vs. local currencies, impacting Strauss Coffee effective green coffee prices in local currencies Strauss Israel Food Law technically impacting top-line growth (~-2%) Q3 15 top line also reflects less selling days, due to the timing of the holiday season Q3 15 EBIT = NIS 86mm, slightly higher than Q3 14 Relocation to Shoham new logistic and distribution center continues Efficiency measures and cost reductions (1) Figures reflect organic growth in local currency, excluding the impact of Food Law and green coffee export sales. (2) Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). 5

6 Q3 15 Highlights (cont d): Dips and Spreads The Other Segment Further recovery in Sabra s Q3 sales and EBIT margins post recall in April 2015 Sabra maintains clear leading market position in U.S. hummus (60.3% market share YTD) Double digit EBIT margins in Q3 15 Obela is #1 player in hummus in Australia Over 20% top line growth for Obela in Q3 15 (in local currencies) while reducing Obela s operating loss Strauss Water Top-line growth impacted by the restructuring of the JV in China Starting in Q3, the JV in China is no longer proportionally consolidated in the non-gaap figures Improved overall EBIT for the Other segment (D = + NIS 10mm), primarily reflecting improved results in Strauss Water 6

7 Q3 EBIT Bridge NIS mm; Non-GAAP; Q3 14 to Q Mainly a result of the BRL and the RUB depreciation vs. the NIS and the USD. BRL vs. NIS translation difference = ~NIS 15mm 227 (50) 192 Q3'14 EBIT Other Dips & Spreads Strauss Israel Strauss Coffee Q3'15 EBIT 7

8 Q Financial Highlights NIS mm; Non-GAAP Q Sales: NIS 1974mm; growth: -7.6% Q Organic growth excluding FX: 3.2% (1) Q gross margins: 36% (down 190 bps vs. Q3 2014) EBIT and EBIT margins: NIS 192mm (down 15.4%); 9.7% (down 90 bps vs. Q3 2014) Net income and net margins: NIS 86mm (down 28%); 4.4% (down 120 bps vs. Q3 2014) EPS: 0.80 (down 28.3% VS. Q3 2014) The group declared dividend of NIS 100mm (0.93 per share) to be paid on December 10th (1) Also excluding the impact of classification of costs following the introduction of the Food Law, as explained in the Group s MD&A report. 8

9 YTD 2015 (YTD) Financial Highlights NIS mm; Non-GAAP YTD'15 Sales: NIS 5743mm; growth: -5.2% YTD'15 Organic growth excluding FX: 1.9% (1) YTD'15 gross margins: 37.1% (down 200 bps vs. YTD 2014) EBIT and EBIT margins: NIS 501mm (down 17%); 8.7% (down 130 bps vs. YTD'14) Net income and net margins: NIS 219mm (down 23.7%); 3.8% (down 90 bps vs. YTD'14) EPS: 2.05 (down 24.1% VS. YTD'14) (1) Also excluding the impact of classification of costs following the introduction of the Food Law, as explained in the Group s MD&A report. 9

10 Shahar Florence Strauss Group C.F.O. 10

11 Q3 15 & YTD 15 11

12 Q3 GAAP and Non-GAAP Financial Highlights NIS mm GAAP Adjusted Non-GAAP Q3'15 Q3'14 % Chg. Q3'15 Q3'14 % Chg. Sales 1,365 1,415 (3.6%) 1,974 2,138 (7.6%) Gross Profit (12.3%) (12.2%) GP Margin 35.0% 38.5% 36.0% 37.9% Operating Profit (16.6%) (15.4%) EBIT Margin 12.2% 14.2% 9.7% 10.6% Equity accounted investees (23.9%) * -- Net Profit (8.2%) (28.0%) NP Margin 5.0% 5.2% 4.4% 5.6% Operating Cash Flow Capex (1) (42) (168) (54) (198) Net debt 1,634 1,632 1,813 1,846 (1) Capex includes acquisition of fixed assets and investment in intangible assets and deferred expenses. * An immaterial amount was included in non-gaap G&A expenses. 12

13 Q3 Sales Bridge NIS mm; Non-GAAP Primarily Amigo and Itamaraty (Coffee bolt-on acquisitions) Primarily reorganization of Haier Strauss Water JV in China Impacted by the timing of the Jewish holiday season (less selling days) 2,138 Mainly price increases (except for Israel) Primarily volume growth at Sabra (18) (10) Lower volume partially offset by higher green coffee prices (20) New accounting classification of certain S&M expenses from operating expenses to reduction of net sales, following the Food Law (23) (210) Primarily BRL, RUB and UAH, partially offset by USD appreciation vs. NIS 1,974 Group sales, Q Coffee Excluding Green Coffee International Dips & Spreads M&A Green Coffee Export Sales Other Food law Strauss Israel FX effect Group sales, Q Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). 13

14 15/ 14 Organic growth excl. FX and Food Law 15/ 14 Growth Q Sales by Segment NIS mm; Non-GAAP; % sales contribution 2, % 2,000 1,500 1, % 100% 80% 1, % 38% % 8% 0% Overall Group Strauss Coffee Strauss Israel Dips & Spreads Other O 60% 40% 20% -7.6% -14.0% -5.0% 18.1% -7.9% 3.2% 9.7% -3.0% 9.4% -6.4% Also excluding green coffee export sales: +12.7% Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). 14

15 Q3 Consolidated Sales (NIS mm; Non-GAAP) Q3 15 / Q3 14: -7.6% Organic excluding FX and Food Law: +3.2% 2,000 2,015 2,078 2,040 2,138 1,974 1,500 Negative translation differences = NIS 210mm 1, Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 15

16 YTD Consolidated Sales (NIS mm; Non-GAAP) 7,000 YTD 15 / YTD 14: -5.2% Organic excluding FX and Food Law: +1.9% 6,000 5,000 5,629 6,079 6,069 6,060 5,743 4,000 3,000 Negative translation differences = NIS 396mm 2,000 1,000 0 YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 16

17 Q3 14 GP & GM Q Gross Profit and Gross Margins NIS mm; Non-GAAP; % GM % Primarily negative translation differences and higher effective green coffee prices in local currencies, given USD appreciation, which were not fully passed on to consumers % 38.0% Decline in GP is mostly related to Food Law new accounting classification (NIS 16mm/NIS 25mm). No change in PF gross margins. Benefit from milk and energy prices, offset by increase in cocoa, other raw materials and USD appreciation Increase in gross profit due primarily to D&S and Strauss Water % 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% -50 Overall Group Strauss Coffee Strauss Israel Dips & Spreads + Other 0.0% D = -100mm D = -88mm D = -25mm D = 13mm NIS 811 NIS 344 NIS 309 NIS % 33.8% 39.3% 47.1% Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). PF for Food Law: NIS 293mm; 38.1% GM 17

18 Q3 Consolidated Gross Profit and Gross Margins (NIS mm; Non-GAAP) 90.0% % 70.0% 60.0% % % 35.5% 39.1% 37.9% 36.0% 40.0% % % % - Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 0.0% 18

19 YTD Consolidated Gross Profit and Gross Margins (NIS mm; Non-GAAP) 2,500 2,000 2,017 2,133 2,316 2,369 2, % 70.0% 60.0% 1, % 35.8% 35.1% 38.2% 39.1% 37.1% 40.0% 1, % % 10.0% - YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 0.0% 19

20 Q3 14 EBIT & EBIT % Q EBIT and EBIT Margins NIS mm; Non-GAAP; % GM % Negative translation difference, as well as a decline in local currency of Três Corações, CEE+CIS and Israel EBIT, driven by a decline in gross profit which was partially offset by lower operating expenses % Strauss Israel EBIT slightly higher, despite challenging conditions % Higher marketing expenses in Sabra, offset by insurance proceeds and positive translation differences, as well as lower operating losses in Obela 29 Of which Sabra: 32mm (16.6%) Primarily improvement in Strauss Water % 9.4% 0.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% - Overall Group Strauss Coffee Strauss Israel Dips & Spreads Other D = -35mm D = -50mm D = 1mm D = 4mm D = 10mm NIS 227 NIS 113 NIS 85 NIS 25 NIS % 11.0% 10.8% 14.9% 2.4% PF for Food Law: 11.1% (no impact on NIS EBIT) Of which Sabra: 30mm (18.8%) Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). 20

21 Q3 Consolidated EBIT and EBIT Margins (NIS mm; Non-GAAP) % % % % % 8.4% 10.4% 10.6% 9.7% 10.0% % - Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 0.0% 21

22 YTD Consolidated EBIT and EBIT Margins (NIS mm; Non-GAAP) YTD 15 EBIT includes: Provision primarily for Mega Retail: NIS 13mm (11mm Strauss IL; 2mm Strauss Coffee) 20.0% Serbia write-down: NIS 8mm Negative impact of Sabra recall, partially offset by insurance 18.0% proceeds (NIS 10mm which reflect 50% share) recorded in Q % % 7.7% 10.1% 10.0% % 14.0% 12.0% 10.0% 8.0% 6.0% % 2.0% - YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 0.0% 22

23 EBIT and EBIT Margins Sales Sabra Q3 Snapshot NIS mm; Non-GAAP; for 100% share 500 Organic excl. FX: 8.3% Organic excl. FX: 8.9% Q3'11 Q3'12 Q3'13 Q3'14 Q3' % 16.9% 18.8% 16.6% % 19 Q3'11 Q3'12 Q3'13 Q3'14 Q3' % 15.0% 10.0% 5.0% 0.0% Note: Sabra Dipping Company ( Sabra ) is a company jointly held by PepsiCo (50%) and Strauss Group (50%). 23

24 EBIT and EBIT GP and GM Sales Três Corações Alimentos S.A. (Três Corações J.V.) Q3 Snapshot BRL mm for 100% ownership and including inter-company sales +7.7% growth excl. green coffee export sales Q3'13 Q3'14 Q3' % 29.8% 28.6% Q3'13 Q3'14 Q3'15 Margins (1) % 10.3% Q3'13 Q3'14 Q3'15 TRES EBIT after TRES % TRES operating loss in Q3 15: BRL -1mm vs. a loss of BRL 16mm in Q3 14 Note: 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 September 30 th, (1) EBIT before Other Expenses/ Income. 24

25 30/12/ /2/ /4/2012 6/6/ /7/ /9/2012 9/11/2012 3/1/ /2/ /4/ /6/ /7/ /9/ /11/2013 3/1/ /2/ /4/ /6/ /7/ /9/ /11/2014 5/1/ /2/ /4/ /6/ /7/ /9/2015 NY Arabica (USD) and Brazil Arabica (BRL) Indexed since % 100% Brazil: 100% 80% 60% NY: 58% 40% 20% 0% Arabica NY USD Arabica Brazil BRL Brazil Arabica source: CEPEA (Center of Advanced Studies on Applied Economics) Brazil Arabica NY source: FactSet 25

26 Três Corações Joint Venture (1) TRES Campaigns (1) Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) (3C). 26

27 Três Corações Joint Venture (1) TRES Campaigns (1) Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) (3C). 27

28 Q3 14 EBITDA and EBITDA Margins Q EBITDA and EBITDA Margins NIS mm; Non-GAAP; % GM % % 18.0% 16.0% 14.0% 12.0% % % Of which Sabra: 37mm (EBITDA % = 19.3%) % 17.3% Overall Group Strauss Coffee Strauss Israel Other Dips & Spreads 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% D = -34mm D = -51mm D = 3mm D = 7mm D = 7mm NIS 280 NIS 129 NIS 105 NIS 18 NIS % 12.7% 13.3% 16.7% 11.0% Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). Of which Sabra: 33mm (EBITDA % = 20.4%) 28

29 Q3 Consolidated EBITDA and EBITDA Margins (NIS mm; Non-GAAP) % % 16.0% 14.0% % 13.1% 12.5% 12.0% % 10.0% 9.7% 8.0% % % 2.0% - Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 0.0% 29

30 Q3 Net Profit Bridge NIS mm; Non-GAAP; YTD 14 to YTD Q3 14 EPS: (35) Lower net income partially offset by higher effective tax rate (29.2% in Q3 15 vs. 25.7% in Q3 14) Q3 15 EPS: % (21) Significant income from FX hedging revaluations in Q3 14 Capitalized financing costs related to Shoham in Q3 14 Net financing expenses related to revaluations of financial assets and liabilities in Q3 15 vs. net financing income in Q % - Q3'14 Net Profit Negative EBIT growth Increase in financing expenses, net Decrease in taxes Decrease in Minority Interest Q3'15 Net Profit 30

31 Q3 Net Profit, Net Margins and EPS NIS mm; Non-GAAP EPS % 12.0% % % % 5.6% % 10.0% 8.0% 6.0% 4.0% % - Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 0.0% 31

32 YTD Net Profit, Net Margins and EPS NIS mm; Non-GAAP EPS % 5.5% % 2.8% % 4.7% % 5.0% 4.5% 4.0% 3.5% 3.0% % - YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 2.0% 32

33 Net Debt and Net Debt /EBITDA (LTM) (Non-GAAP EBITDA, net debt includes partnerships; NIS mm) 2,000 1,800 1,600 1,690 1,623 1,846 1, x 2.5x 1,400 1,200 1, x 1.9x 1, x 2.1x 2.0x 1.5x x x x Q Q Q Q Q

34 Thank You! For further details please contact: Talia Sessler Director of Investor Relations Phone: Mobile: Talia.sessler@strauss-group.com Save the date Q4 15 Earnings Release on March 21 st,

35 Appendices 35

36 Appendix YTD 15 36

37 YTD GAAP and Non-GAAP Financial Highlights NIS mm GAAP Adjusted Non-GAAP YTD'15 YTD'14 % Chg. YTD'15 YTD'14 % Chg. Sales 3,881 4,051 (4.2%) 5,743 6,060 (5.2%) Gross Profit 1,444 1,629 (11.4%) 2,129 2,369 (10.1%) GP Margin 37.2% 40.2% 37.1% 39.1% Operating Profit (18.8%) (17.0%) EBIT Margin 11.6% 13.6% 8.7% 10.0% Equity accounted investees (21.6%) * -- Net Profit (10.7%) (23.7%) NP Margin 4.9% 5.3% 3.8% 4.7% Operating Cash Flow Capex (1) (159) (331) (211) (455) Net debt 1,634 1,632 1,813 1,846 (1) Capex includes acquisition of fixed assets and investment in intangible assets and deferred expenses. * An immaterial amount was included in Non GAAP G&A expenses. 37

38 YTD Sales Bridge NIS mm; Non-GAAP (52) (60) (63) (65) 6,060 6,140 5,744 (396) 5,743 Group sales, 9 months 2014 Coffee Excluding Green Coffee M&A International Dips & Spreads Other Food Law Strauss Israel Green Coffee Export Sales FX Effect Group sales, 9 months 2015 Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). 38

39 15/ 14 Organic growth excl. FX and Food Law 15/ 14 Growth YTD 2015 Sales by Segment NIS mm; Non-GAAP; % sales contribution 6, % 5,970 5, % 4, % 80% 3,970 2,970 1, ,557 45% 2,178 38% % 8% 0% 60% 40% 20% -30 Overall Group Strauss Coffee Strauss Israel Dips & Spreads Other -5.2% -8.4% -4.9% 15.2% -9.2% 1.9% 8.4% -2.8% 4.5% -10.4% Also excluding green coffee export sales: +12.0% Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). 39

40 YTD 14 GP & GM YTD 2015 Gross Profit and Gross Margins NIS mm; Non-GAAP; % GM 2, % 1,970 2, % 50.0% 1, % 30.0% % % 38.2% % 10.0% -30 Overall Group Strauss Coffee Strauss Israel Dips & Spreads + Other D = -240mm D = -179mm D = -89mm D = 28mm NIS 2369 NIS 994 NIS 922 NIS % 35.6% 40.3% 46.3% 0.0% Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). PF for Food Law: NIS 856 mm; 38.2% GM 40

41 YTD 14 EBIT & EBIT % YTD 2015 EBIT and EBIT Margins NIS mm; Non-GAAP; % GM % % 10.0% % % % 10.2% Of which Sabra: 66mm (12.2%) 4.0% % % 2.0% -30 Overall Group Strauss Coffee Strauss Israel Dips & Spreads Other 0.0% D = -102mm D = -93mm D = -29mm D = -5mm D = 25mm NIS 603 NIS 292 NIS 251 NIS 57 NIS % 10.4% 11.0% 11.7% 0.7% PF for Food Law: 11.2% (no impact on NIS EBIT) Of which Sabra: 72mm (15.6%) Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). 41

42 YTD 14 EBITDA and EBITDA Margins YTD 2015 EBITDA and EBITDA Margins NIS mm; Non-GAAP; % GM % 14.0% % 12.0% 10.0% % % % Of which Sabra: 81mm (EBITDA % = 15.1%) 6.0% 4.0% % 12.2% Overall Group Strauss Coffee Strauss Israel Other Dips & Spreads D = -94mm D = -89mm D = -27mm D = 22mm D = 0mm NIS 765 NIS 343 NIS 308 NIS 45 NIS % 12.3% 13.4% 9.2% 14.2% 2.0% 0.0% Of which Sabra: 83mm (EBITDA % = 17.9%) Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). 42

43 YTD Consolidated EBITDA and EBITDA Margins (NIS mm; Non-GAAP) % % % 12.6% % 14.0% % 12.0% % 10.5% 10.0% % - YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 6.0% 43

44 EBIT and EBIT GP and GM Sales Três Corações Alimentos S.A. (Três Corações J.V.) YTD snapshot BRL mm for 100% ownership and including inter-company sales 14.1% excl. green coffee export sales 1,510 1,731 1,825 YTD'13 YTD'14 YTD' % % 29.6% TRES YTD'13 YTD'14 YTD'15 EBIT after TRES TRES operating loss: YTD 15 ~ BRL 18mm (-1.0% of sales) vs. BRL 46mm in YTD 14 (-2.7% of sales) Margins (1) % % 8.5% YTD'13 YTD'14 YTD'15 Note: 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 September 30 th, (1) EBIT before Other Expenses/ Income. 44

45 EBIT and EBIT Margins Sales Sabra YTD Snapshot NIS mm; Non-GAAP; for 100% share Organic excl. FX: 4.0% 1,200 1, , YTD'11 YTD'12 YTD'13 YTD'14 YTD' % 13.1% 13.9% 12.2% % YTD'11 YTD'12 YTD'13 YTD'14 YTD' % 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% Note: Sabra Dipping Company ( Sabra ) is a company jointly held by PepsiCo (50%) and Strauss Group (50%). 45

46 YTD Net Profit Bridge NIS mm; Non-GAAP; YTD 14 to YTD YTD 14 EPS: % (102) Lower net income with slightly lower effective tax rate (28.7% vs 28.9% in 2014) (29) 39 Significant income from FX hedging revaluations in YTD 14 Capitalized financing costs related to Shoham in YTD 14 Net financing expenses related to revaluations of financial assets and liabilities in YTD 15 vs. net financing income in YTD YTD15 EPS: % - YTD 2014 Net Profit Negative EBIT Increase in Decrease in taxes Decrease in YTD 2015 Net Profit growth financing expenses, Minority Interest net 46

47 Appendix Strauss Group 47

48 Local Currencies vs. the NIS Change in average exchange rate (1 local currency = x NIS) Currency Q1'15/Q1'14 Q2'15/Q2'14 Q3'15/Q3'14 9MON'15/ 9MON'14 USD 12.8% 11.9% 9.4% 11.4% UAH -53.7% -39.8% -37.8% -44.8% RUB -37.0% -26.0% -37.0% -33.3% RSD -11.5% -13.4% -10.4% -11.8% RON -6.0% -10.3% -8.6% -8.3% PLN -7.3% -8.1% -8.4% -7.9% GBP 3.4% 1.8% 1.6% 2.2% EUR -7.1% -9.8% -8.2% -8.3% BRL -6.3% -19.1% -29.5% -18.5% CNY 12.1% 13.9% 7.6% 11.2% NIS 0.0% 0.0% 0.0% 0.0% CAD 0.4% -0.8% -9.0% -3.2% AUD -1.0% -6.8% -14.2% -7.4% MXN -0.1% -5.1% -12.7% -6.0% 48

49 Local Currencies vs. the USD Change in average exchange rate (1 local currency = x USD) Currency Q1'15/Q1'14 Q2'15/Q2'14 Q3'15/Q3'14 9MON'15/ 9MON'14 USD 0.0% 0.0% 0.0% 0.0% UAH -59.0% -46.1% -43.2% -50.5% RUB -44.2% -33.9% -42.5% -40.1% RSD -21.5% -22.6% -18.1% -20.8% RON -16.7% -19.8% -16.5% -17.7% PLN -17.8% -17.8% -16.4% -17.3% GBP -8.4% -9.0% -7.2% -8.2% EUR -17.6% -19.3% -16.1% -17.7% BRL -16.9% -27.7% -35.5% -26.8% CNY -0.6% 1.8% -1.6% -0.2% NIS -11.3% -10.6% -8.6% -10.2% CAD -11.0% -11.3% -16.8% -13.0% AUD -12.2% -16.6% -21.6% -16.9% MXN -11.4% -15.1% -20.2% -15.6% 49

50 Appendix Strauss Israel 50

51 Strauss Israel Non-GAAP Financial Highlights YTD and Q3 (NIS mm) Strauss Israel (Non GAAP) YTD'15 YTD'14 % Chg. Q3'15 Q3'14 % Chg. Revenue: H&W 1,435 1,509 (4.9%) (4.5%) F&I (4.7%) (5.8%) Total Revenue 2,178 2,289 (4.9%) (5.0%) Total Gross Profit (9.7%) (8.2%) Gross Margins 38.2% 40.3% (2.0%) 38.0% 39.3% (1.3%) EBIT: H&W (11.3%) % Margins 9.8% 10.5% (0.7%) 12.4% 11.3% 1.2% F&I (12.1%) (12.4%) Margins 10.9% 11.8% (0.9%) 9.3% 10.0% (0.7%) Total EBIT (11.6%) % Margins 10.2% 11.0% (0.8%) 11.4% 10.8% 0.6% EBITDA: H&W (8.8%) % Margins 12.4% 13.0% (0.5%) 15.1% 13.6% 1.5% F&I (8.0%) (5.6%) Margins 13.9% 14.4% (0.5%) 12.7% 12.7% 0.0% Total EBITDA (8.5%) % Margins 12.9% 13.4% (0.5%) 14.3% 13.3% 1.0% 51

52 Q3 Strauss Israel Sales (NIS mm; Non-GAAP) 900 Q3 15/Q3 14: -5.0%. Excluding Food Law: -3.0% Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 52

53 YTD Strauss Israel Sales (NIS mm; Non-GAAP) 2,400 YTD 15/YTD 14: -4.9%. Excluding Food Law: -2.8% 2,200 2,000 2,161 2,198 2,254 2,289 2,178 1,800 1,600 1,400 1,200 1, YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 53

54 Q3 Strauss Israel EBIT and EBIT Margins (NIS mm; Non-GAAP) % 18.0% 16.0% % % 10.3% 11.2% 10.8% 11.4% 12.0% 10.0% % % % % - Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 0.0% 54

55 YTD Strauss Israel EBIT and EBIT Margins (NIS mm; Non-GAAP) 300 YTD 15 EBIT includes provision primarily for Mega Retail of NIS 11mm 20.0% 18.0% % 14.0% % 10.5% 11.0% 11.0% 10.2% 12.0% 10.0% 8.0% % % 2.0% - YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 0.0% 55

56 Target Milk Price (NIS per liter) Price excluding Strauss transportation costs Milk Price Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Source: Israel Dairy Board (Production and Marketing) website. 56

57 London Cocoa (GBP per Ton) 2,247 (GBP\Ton) (November 10, 2015) 2012 average: GBP 1, average: GBP 1, average: GBP 1, YTD average: GBP 2,059 Current: GBP 2,247 Source: FactSet 57

58 Sugar (USD per Ton) $ 398 ($\Ton) (November 10, 2015) 2012 average: $ average: $ average: $ YTD average: $ 365 Current: $ 398 Source: FactSet 58

59 Appendix Strauss Coffee 59

60 Strauss Coffee Non-GAAP Financial Highlights YTD and Q3 (NIS mm) Strauss Coffee (Non GAAP) YTD'15 YTD'14 % Chg. Q3'15 Q3'14 % Chg. Revenue: Israel (5.1%) (2.2%) International 2,063 2,272 (9.2%) (16.2%) Total Revenue 2,557 2,793 (8.4%) 876 1,019 (14.0%) Total Gross Profit (18.0%) (25.7%) Gross Margins 31.9% 35.6% (3.7%) 29.2% 33.8% (4.6%) EBIT: Israel (20.5%) (35.5%) Margins 13.0% 15.6% (2.5%) 11.1% 16.8% (5.7%) International (35.9%) (46.3%) Margins 6.5% 9.3% (2.7%) 6.4% 9.9% (3.6%) Total EBIT (31.6%) (43.6%) Margins 7.8% 10.4% (2.6%) 7.2% 11.0% (3.8%) EBITDA: Israel (17.9%) (30.9%) Margins 14.6% 16.8% (2.3%) 12.7% 17.9% (5.3%) International (28.7%) (41.8%) Margins 8.8% 11.2% (2.4%) 8.1% 11.7% (3.6%) Total EBITDA (26.0%) (39.3%) Margins 9.9% 12.3% (2.4%) 8.9% 12.7% (3.7%) Strauss Coffee non-gaap figures represent 50% share in Três Corações joint venture (Brazil) Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). 60

61 Strauss Coffee Non-GAAP Sales by Geography YTD and Q3 (NIS mm) Strauss Coffee Sales % Change % Change YTD'15 YTD'14 NIS Local Currency Q3'15 Q3'14 NIS Local Currency Israel (5.1%) (5.1%) (2.2%) (2.2%) International: Três Corações Joint Venture (Brazil) 1,128 1,316 (14.3%) 6.1% (28.3%) 1.6% CIS (7.4%) 45.1% (1.0%) 57.8% Poland (0.9%) 7.5% (5.7%) 2.9% Serbia (10.4%) 1.7% (7.3%) 3.3% Romania % 27.3% % 28.0% Total International 2,062 2,272 (9.2%) 14.0% (16.2%) 14.1% Total Coffee 2,557 2,793 (8.4%) 9.8% 876 1,019 (14.0%) 10.7% Note: Figures were rounded to NIS millions. Totals were calculated on the basis of the exact figures in NIS thousands. Note: Três Corações joint venture (Brazil): a company jointly held by the Group (50%) and by the São Miguel Group (50%) ( 3C ). Strauss Coffee non-gaap figures represent 50% share in Três Corações joint venture (Brazil). 61

62 Q Strauss Coffee Sales (NIS mm; Non-GAAP) 1,200 Organic growth excluding FX, Food Law and green coffee export sales: 12.7% 1, ,022 1, , Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 Strauss Coffee non-gaap figures represent 50% share in Três Corações joint venture (Brazil). 62

63 YTD 2015 Strauss Coffee Sales (NIS mm; Non-GAAP) 3,500 3,000 2,500 2,777 3,081 2,935 2,793 Organic growth excluding FX, Food Law and green coffee export sales: 12.0% 2,557 2,000 1,500 1, YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 Strauss Coffee non-gaap figures represent 50% share in Três Corações joint venture (Brazil). 63

64 Q3 Strauss Coffee EBIT and EBIT Margins (NIS mm; Non-GAAP) % % 16.0% % 12.0% % 8.3% 11.3% 11.0% % 10.0% 8.0% 6.0% 4.0% 2.0% - Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 0.0% Strauss Coffee non-gaap figures represent 50% share in Três Corações joint venture (Brazil). 64

65 YTD Strauss Coffee EBIT and EBIT Margins (NIS mm; Non-GAAP) % Includes provision for Serbia writedown (NIS 8mm), and provision for doubtful debts primarily for Mega Retail (NIS 2mm) 20.0% % % 10.4% 10.0% % 7.2% 7.8% 5.0% - YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 0.0% Strauss Coffee non-gaap figures represent 50% share in Três Corações joint venture (Brazil). 65

66 NY Arabica (USD per lbs.) 1.17 $/lbs. (November 10, 2015) 2012 average: $ average: $ average: $ YTD average: $1.38 Current: $

67 London Robusta (USD per Ton) 1,624 $/Ton (November 10, 2015) 2012 average: $2, average: $1, average: $2, YTD average: $1,774 Current: $1,624 67

68 Appendix Sabra & Obela 68

69 Strauss D&S Non-GAAP Financial Highlights YTD and Q3 (NIS mm); 50% share Dips & Spreads (Non GAAP) YTD'15 YTD'14 % Chg. Q3'15 Q3'14 % Chg. Revenue: Sabra (50%) % % Obela (50%) % % Total Revenue % % EBIT: Sabra (50%) (9.4%) % Margins 12.2% 15.6% (3.4%) 16.6% 18.8% (2.2%) Obela (50%) (13) (15) NM (3) (5) NM Margins NM NM NM NM NM NM Total EBIT (9.0%) % Margins 9.3% 11.7% (2.5%) 14.6% 14.9% (0.3%) EBITDA: Sabra (50%) (2.4%) % Margins 15.1% 17.9% (2.8%) 19.3% 20.4% (1.1%) Obela (50%) (12) (9) NM (2) (5) NM Margins NM NM NM NM NM NM Total EBITDA (0.5%) % Margins 12.2% 14.2% (1.9%) 17.3% 16.7% 0.6% Figures were rounded to NIS millions. Totals were calculated on the basis of the exact figures in NIS thousands. 69

70 Q3 Sabra Sales (Non-GAAP; for 100%; NIS mm) Organic growth excluding FX: 8.9% Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 70

71 YTD Sabra Sales (Non-GAAP; for 100%; NIS mm) 1,200 Organic growth excluding FX: 4.0% 1,000 1, YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 71

72 Q3 Sabra EBIT and EBIT Margins (Non-GAAP; for 100%; NIS mm) 70 Q3 15 includes NIS 20mm in insurance proceeds related to recall (for 100% share), which offset higher marketing expenses post recall 20.0% % % % % 18.0% 16.0% 14.0% 12.0% 10.0% % 8.0% % % 2.0% - Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 0.0% 72

73 YTD Sabra EBIT and EBIT Margins (Non-GAAP; for 100%; NIS mm) % % % % % % 13.9% 15.6% 12.2% 15.0% 10.0% % 5.0% - YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 0.0% 73

74 Humera Sesame Prices Avg. 1, Avg. 2, Avg. 2, YTD Avg. 1,

75 Appendix Strauss Water 75

76 Q3 Strauss Water Non-GAAP Sales (Non-GAAP; NIS mm) 160 Mainly related to the reorganization of HSW JV in China Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 76

77 YTD Strauss Water Non-GAAP Sales (Non-GAAP; NIS mm) 450 Mainly related to the reorganization of HSW JV in China YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 77

78 Appendix Max Brenner 78

79 Q3 Max Brenner Sales (Non-GAAP; NIS mm) 40 Organic growth excluding FX: -5.9% % Q3'11 Q3'12 Q3'13 Q3'14 Q3'15 79

80 YTD Max Brenner Sales (Non-GAAP; NIS mm) 120 Organic growth excluding FX: -3.1% YTD'11 YTD'12 YTD'13 YTD'14 YTD'15 80