In This Article:
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Organic Growth: 6% in Q2 2024.
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Strauss Israel Segment Growth: More than 6% due to confectionery recovery and pricing actions.
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Coffee Segment Growth: Over 7% organically, driven by pricing adjustments.
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Water Sales Growth in Israel: 3% increase in sales despite war impact.
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China Water Business Growth: Double-digit growth of more than 13%.
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Gross Profit: Maintained at similar levels to Q2 2023 despite increased cocoa and coffee prices.
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Net Profit: Maintained at similar levels to Q2 2023, aided by tax incentives.
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EBIT Impact: Acknowledged a loss of ILS27 million due to derivatives in cocoa purchasing.
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Dividend and Loan from China: ILS80 million distributed, including ILS50 million loan and ILS30 million dividend.
Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Strauss Group Ltd (XTAE:STRS) reported an organic growth of 6% in Q2 2024, driven by strong performance in core categories.
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The company has successfully regained market share in its confectionery business, reaching pre-recall levels.
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Strauss Group Ltd's water business in Israel and China continues to show growth, with double-digit growth in China.
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The Israeli Competition Authority approved the sale of a factory, aligning with the company's portfolio optimization strategy.
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Strauss Group Ltd is seeing positive results from its productivity efforts, which are expected to improve margins once commodity prices stabilize.
Negative Points
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The ongoing war in Israel has negatively impacted certain product categories, such as salty snacks and fresh salads.
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Cocoa and coffee prices have significantly increased, affecting the company's margins, particularly in the confectionery and coffee segments.
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In Brazil, the company experienced a planned reduction in market share due to price increases in response to rising green coffee prices.
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The Sabra business continues to face challenges, including overcapacity and struggles to regain market share.
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One-time derivatives losses of ILS27 million impacted the company's EBIT, primarily due to high cocoa prices.
Q & A Highlights
Q: The negative operating profit in Fun & Indulgence, was that solely due to commodity prices? What measures are in place to reduce volatility in commodity prices? A: Yes, it was primarily due to high cocoa prices, which increased by 240%. We cannot adjust prices to match such an increase. However, we believe cocoa prices will decline, and our productivity efforts will help stabilize margins.