Strauss Group has recently released its financial reports for the first quarter of 2024, showing a revenue increase to approximately 2.6 billion shekels, a rise of about 1.4% compared to the same quarter last year. The operating profit for the quarter amounted to approximately 204 million shekels, representing about 7.8% of total sales but was affected by rising raw materials prices, resulting to a decrease of about 2.4% in operating profit compared to the same quarter last year.
The net profit for the group in the quarter was approximately 159 million shekels, compared to a net profit of approximately 134 million shekels in the same quarter last year. During the first quarter, and as part of implementing the group’s strategy, the group completed the sale of the coffee company in Serbia for a sum of 38.8 million euros. Meanwhile the group’s confectionery operations continue to recovery and market share growth. Additionally, in recent months, the credit rating agency ‘Maalot S&P’ announced an update to Strauss Group’s outlook from negative to stable and reaffirmed the ‘ilAA+’ rating assigned to the group.
Strauss Israel – Increase in Revenue and Operating Profit; Market Share Growth
Strauss Israel concluded the first quarter with revenues of 1,309 million shekels, a growth rate of about 1.7% compared to the corresponding quarter last year. The operating profit of Strauss Israel was 151 million shekels, an increase of about 2.3% from the previous year. Strauss Israel’s operating profit margin was 11.6%. Following the announced reorganization and as part of the company’s strategy, Strauss Israel now also includes coffee operations in Israel, which were previously part of the coffee segment. The sales in the Health and Wellness segment for the quarter were 731 million shekels, a decline of about 1.6%, with an operating profit of 74 million shekels, a decrease of about 12.2% from the same quarter last year. This decline reflects a reclassification of the energy snacks category, which, as part of the changes, was reclassified from the Health & Wellness segment to the Fun & Indulgence segment under the Snacks and Sweets category. Excluding this reclassification, the Health & Wellness segment grew 0.7%.
Sales in the Fun & Indulgence segment for the quarter were 361 million shekels, an increase of about 18.1%, with an operating profit of 42 million shekels, an increase of about 70.9% from the corresponding quarter. The confectionery category market share reached 26.6% in the quarter, a slight increase from the previous quarter. The Israel Coffee segment ended the quarter with net sales of 217 million shekels, a decrease of 8.7% from the corresponding quarter, and an operating profit of 35 million shekels, a decrease of about 8.7%.
Strauss Coffee International – Increase in Revenue and Market Share Growth in Brazil
Strauss Coffee International concluded the quarter with revenues of 954 million shekels, an increase of about 0.3% from the corresponding quarter last year. The international coffee operations ended the quarter with an operating profit of 38 million shekels, a decrease of about 36.3% from the corresponding quarter, among others, due to a significant rise in raw material prices. The operating profit margin from coffee international sales was 4.0%.
The coffee operations in Brazil concluded the quarter with sales of 645 million shekels, an increase of about 3.8%, and an operating profit of 13 million shekels, a decrease of about 56.3% from the corresponding quarter. Coffee operations in Russia and Ukraine concluded the quarter with sales of 129 million shekels, coffee operations in Romania with sales of 45 million shekels and coffee operations in Poland with sales of 103 million shekels. The average market share of Três Corações (value) in the roast and ground (R&G) coffee sector in 2024 reached about 33.1% compared to about 33.7% in the same period last year.
Strauss Water – Improvement in Tope line
Strauss Water concluded the quarter with revenues of 193 million shekels, an increase of about 3% from the corresponding quarter, and an operating profit of 24 million shekels, an increase of about 10.2% from the corresponding quarter last year. The operating profit margin was 12.3%. The water operations in China concluded with good results and revenues of 216 million shekels for the quarter (in 100% terms), a growth of about 12.9% from the corresponding quarter last year, and a net profit of 27 million shekels, up 10.1% from the corresponding quarter last year.
Sabra and Obela – Market Share Increase in the US and Continued Growth Trend
The International Dips and Spreads segment continued its gradual recovery with an improvement in market share in the US and continued revenue growth. Sabra sales for the quarter totaled 110 million shekels (in 50% terms), a growth of about 4.8% from the corresponding quarter last year, and an operating profit of 6 million shekels. The operating profit margin from total sales was 5.0%. Obela sales totaled 20 million shekels, with an operating profit of 1 million shekels.