Strauss Group (STRS) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenues rose 15.5% year-over-year to NIS 2,990 million, driven by price increases, innovation, and strong growth in Brazil, Poland, Romania, and Israel.

• EBIT declined by 11.2% to NIS 181 million, pressured by significant raw material cost inflation, especially in green coffee and cocoa, and a NIS 49 million non-recurring cocoa derivatives loss.

• Net profit dropped 54.8% year-over-year to NIS 73 million, impacted by higher tax provisions, currency effects, and the derivatives loss.

• The company remains on track with its long-term strategic goals, investing in new plant-based and dairy facilities in Israel, and received an AA/ilAA+ stable rating from Maalot S&P.

• Paid NIS 200 million dividend and announced an additional NIS 160 million, affirming commitment to shareholder returns.

Financial highlights

• Net sales: NIS 2,990 million (+15.5% YoY; +20.9% ex-FX); pro forma growth (excluding divested units) reached approximately 23%.

• EBIT: NIS 181 million (-11.2% YoY; margin 6.0%); excluding a NIS 49 million non-recurring cocoa derivatives loss, EBIT increased by more than 10%.

• Net profit attributable to shareholders: NIS 73 million (-54.8% YoY); EPS: NIS 0.62.

• Free cash flow: -NIS 495 million, mainly due to higher working capital needs in Brazil.

• EBITDA: NIS 282 million (-11.1% YoY); EBITDA margin: 9.4%.

Outlook and guidance

• Management expects continued strong performance in Brazil if coffee prices remain stable and is focused on productivity, innovation, and supply chain resilience to offset commodity inflation.

• New plant-based product lines and expanded production capacity in Israel are anticipated to drive growth in the second half of 2025.

• Long-term targets include 5% CAGR sales growth (2024–2026), 10–12% EBIT margin by 2026, and NIS 300–400 million run-rate savings by 2026.

• CAPEX expected at 5–7% of sales through 2026.

• The company is maintaining its long-term profit and margin targets, with adjustments possible depending on future raw material price trends.