Strauss Group Publishes its First Half 2010 Results Reporting Sales Growth and Improved Profits and Margins With Strong Operating Cash Flow

By Strauss Group Ltd, PRNE
Monday, August 16, 2010

Strauss Group Sales in the First Half Increased 7.9%, With 17.7% Growth in Operating Profit and 16.0% Growth in net Profit

TEL AVIV, Israel, August 17, 2010 - The Strauss Group (STRS.TA) today reported its results for the first half
and second quarter of 2010.

(Logo:
www.newscom.com/cgi-bin/prnh/20080826/317650 )

Ofra Strauss, Chairperson of Strauss Group, said today, "Strauss Group
continues to grow, making further investment in the development of future
growth drivers for the company.

In the second quarter we opened Sabra's new salad plant in Virginia. This
plant, which resulted from the partnership between Strauss and Frito Lay in
North America, is considered to be the largest, most advanced salad plant in
the world, and will enable Sabra to continue to grow and develop a wide range
of categories and products, while further growing the market in which it
operates."

Ofra Strauss added: "Strauss Group continues the investment in corporate
responsibility which has occurred over the past years, focusing increased
efforts on reducing our environmental footprint. In the past year we made a
significant leap forward in our CSR programs by inaugurating Sabra's advanced
green plant in Virginia, setting measurable CSR objectives in Strauss Israel,
and launching significant projects aimed at reducing greenhouse gas emissions
in our plants in Achihud, Zefat and Nazareth. We won the Israel 2010 Minister
of Environmental Protection Award for Environmental Excellence in recognition
of these actions.

Gadi Lesin, President & CEO of Strauss Group, said today, "Strauss Group
is presenting a strong second quarter with sales growing 4.3% and gross
profit increasing 8.3%. Our net profit to shareholders increased 16.8%. In
the first half Strauss Group sales increased by 7.9%, gross profit increased
by 16.0% and net profits to shareholders increased by 16.0%

"In 2010 Strauss Group has and will continue to invest in its future
growth drivers, Sabra, Strauss Water and coffee, while further enhancing its
leadership position in Israel. In addition the Group is in the process of
formulating our next five-year business strategy ".

    First half Financial Highlights[1]:

    - Sales up 7.9%, totaling NIS 3.3 billion (NIS 3.0 billion
    last year) with quantitative growth in all company activities. Organic
    growth net of exchange rates effect totaled 1.4%

    - Gross profit was up 16.0%, totaling NIS 1.3 billion (39.6%
    of sales) compared to NIS 1.1 billion last year (36.9% of sales)

    - Operating profit up 17.7%, totaling NIS 318 million (9.7% of
    sales) compared to NIS 270 million last year (8.9% of sales)

    - Net profit attributed to shareholders totaled NIS 155
    million, compared to NIS 134 million last year, a 16.0% increase

    - Operating cash flow totaled NIS 186 million, compared to NIS
    280 million last year

    Second Quarter Financial Highlights[2]:

    - Sales up 4.3%, totaling NIS 1.58 billion (NIS 1.51 billion
    last year). Organic growth net of exchange rates effect were down 0.2%

    - Gross profit up 8.3%, totaling NIS 615 million (38.9% of
    sales) compared to NIS 568 million last year (37.5% of sales)

    - Operating profit up 1.2%, totaling NIS 137 million (8.7% of
    sales) compared to NIS 135 million last year (8.9% of sales)

    - Net profit attributed to shareholders up 16.8%, totaling NIS
    63 million compared to NIS 55 million last year.

Main pro-forma data for the first quarter (in NIS million):

                              First Six Months          Second Quarter
                            2010    2009   % Chg     2010    2009    % Chg

    Sales                  3,276   3,036     7.9%   1,580   1,514      4.3%
    Gross Profit           1,299   1,119    16.0%     615     568      8.3%
    Operating Profit (1)     318     270    17.7%     137     135      1.2%
    Profit for the Period    205     175    17.4%      88      80     10.5%
    Net Profit (2)           155     134    16.0%      63      55     16.8%

(1) Before other income (expenses)

(2) Attributed to the shareholders of the Company

Home base

Strauss Group is the second-largest company in the Israeli
food industry and in the first half of 2010 held an 11.4% share of the food
and beverage market in the domestic retail market (on a monthly average in
financial terms, according to StoreNext figures. The Israeli market is the
Group's home market, in which it is active in various categories.

The sales for the entire business of Strauss Group in Israel
include the Health & Wellness and Fun & Indulgence Divisions, the coffee
business in Israel, Max Brenner in Israel and the Tami4 activity.

In the first half of 2010 Strauss Group's sales in Israel
totaled NIS 1,817 million compared to NIS 1,646 million in 2009, an increase
of 10.4%.

In the second quarter of 2010 the Group's sales in Israel
totaled NIS 848 million compared to NIS 776 million in the corresponding
period in 2009, an increase of 9.2%.

Further to the acquisition of Tami4 in the fourth quarter of
2009, the Group has intensified its touch points with the Israeli consumer
and expanded beyond retail and away-from-home (AFH) sales into a direct
interface with the consumer.

The Coffee Sector

In the global coffee business the Group focuses on the
development, manufacture, marketing and sale of branded coffee products in
Israel and in various emerging markets such as Central and Eastern Europe and
Brazil.

Sales

Sales by Strauss's Coffee Sector in the first half of 2010
totaled NIS 1,597 million compared to NIS 1,581 million last year, an
increase of 1.0%. After neutralizing the impact of currency exchange rates,
sales decreased by 1.6%. Organic sales (after neutralizing the acquisition of
businesses and the impact of exchange rate differentials) decreased by 2.6%.

Sales by the sector in the second quarter totaled NIS 770
million
compared to NIS 811 million last year, a decrease of 5.1%. After
neutralizing the impact of currency exchange rates, sales decreased by 3.9%.
Organic sales (after neutralizing the acquisition of businesses and the
impact of exchange rate differentials) decreased by 4.5%.

Sales in the first half and in the quarter were influenced by
the weakness in the various markets in CEE and the increase in the
competition.

Gross profit in the first half increased by 12.0% and totaled
NIS 552 million (34.6% of sales) compared to NIS 493 million (31.2%) last
year. The increase in gross profit was mainly the result of the decrease in
raw material prices compared to last year and of the currency impact in the
various countries.

In the second quarter gross profit decreased by 3.4% and
totaled NIS 254 million (33.0%) compared to NIS 263 million (32.5%) last
year. The decrease in gross profit was mainly due to the drop in sales and
the currency impact.

The operating profit of the Coffee Sector in the first half
increased by 14.2% and totaled NIS 141 million (8.8% of sales) compared to
NIS 123 million (7.8% of sales) last year. The operating profit was
positively influenced mainly by the growth in gross profit in relation to
last year.

In the second quarter the operating profit of the Coffee
Sector totaled NIS 63 million (8.2% of sales) compared to NIS 73 million
(9.0%) last year. The decrease in operating profit was mainly due to the
decrease in gross profit in relation to last year.

The Israel Sector - Strauss Israel

Sales

In the first half of 2010 sales by the Israel Sector totaled
NIS 1,324 million compared to NIS 1,308 million last year, an increase of
1.3%. Sales by the sector in the second quarter totaled NIS 627 million,
similar to last year. Growth in the first half was positively influenced by
the volume increase in most units and the continuing investment in
innovation, and conversely, in the second quarter was negatively influenced
by the timing of Passover (which this year fell in the first quarter and last
year, in the second quarter).

Gross profit in the Israel Sector totaled NIS 560 million in
the first half of 2010 compared to NIS 542 million last year, an increase of
3.2%. The gross profit rate rose from 41.5% to 42.3% this year. In the second
quarter gross profit totaled NIS 269 million compared to NIS 261 million last
year, an increase of 2.7%. The gross profit rate rose from 41.7% to 42.8%.

Most of the improvement in gross profit in the first half and
second quarter is due to the volume growth in sales and to the continued
implementation of streamlining processes in the cost of sales.

Operating profit in Israel in the first half of 2010 increased
by 5.0% and amounted to NIS 156 million. The operating profit margin improved
and amounted to 11.8% compared to 11.4% in the corresponding period last
year.

In the second quarter the operating profit totaled NIS 67
million
compared to NIS 66 million last year, an increase of 0.9%. The
operating profit margin improved and amounted to 10.7% compared to 10.6% in
the corresponding period last year. The growth in the operating profit in
Israel is due to the improvement in gross profit and continued streamlining
processes.

The Sabra Refrigerated Dips Business in the USA

In the first half of 2010 Sabra's sales continued to grow, as
did its market share, and it maintained a leading position in the
refrigerated flavored spreads and dips category.

Sabra's average market share in the first half of this year
was 44.8% compared to an average market share of 37.7% in the corresponding
period last year and an average market share of 41.2% in the fourth quarter
of 2009 (according to IRI data [PS1] published in March 2010).

Sales (100%)- In the first half of 2010 Sabra's sales totaled
NIS 269 million compared to NIS 201 million last year, an increase of 33.6%.
After neutralizing the currency impact, growth amounted to 44.1%.

In the second quarter of the year Sabra's sales totaled NIS
142 million
compared to NIS 107 million last year, an increase of 33.2%.
After neutralizing the currency impact, growth amounted to 42.8%.

The operating profit (100%) - in the first half of 2010
totaled NIS 33 million (12.1% of sales) compared to NIS 32 million last year
(15.8%), an increase of 3.0%.

In the second quarter operating profit totaled NIS 12 million
(8.8% of sales) compared to NIS 18 million last year (16.6%), a decrease of
29.8%. The decrease in operating profit in the quarter is the result of the
opening of the new plant in Virginia and the continued operation of the old
plant in New York.

MAX BRENNER

In the first half of 2010 Max Brenner's sales totaled NIS 49
million
compared to NIS 46 million last year, an increase of 6.0%. After
neutralizing the impact of currency exchange rates, growth in the half
amounted to 9.6%.

In the second quarter of 2010 Max Brenner's sales totaled NIS
23 million
compared to NIS 22 million last year, an increase of 4.3%. After
neutralizing the impact of currency exchange rates, growth in the second
quarter amounted to 8.3%.

After the end of the quarter the Company opened a new
Chocolate Bar in Las Vegas, which joins the 30 Max Brenner Chocolate Bars in
operation around the world: 6 in Israel, 2 in the USA, 2 in the Philippines,
1 in Singapore and 19 in Australia. Other than seven branches that are owned
by the Company, all other branches are operated under franchise.

Toward the end of the year the Company is scheduled to open
another Max Brenner Chocolate Bar in Boston, while continuing to invest in
the development of core infrastructure for the Max Brenner business.

STRAUSS WATER

In 2009 Strauss presented Strauss Water and its strategy.
Strauss Water will lead and manage the Strauss Group's activity in the water
industry and will serve as one of the Group's growth drivers in the coming
years. In this context the Company announced the acquisition of Tana
Industries (Tami4) through its subsidiary, H2Q.

Following the establishment of Strauss Water, the operations
of H2Q and Tami4 were merged with the aim of integrating the technology
developed by H2Q with Tami4's capabilities, in order to serve as the
infrastructure for Strauss Water's activities in Israel and internationally.

Strauss Water's pro-forma sales (assuming that the Tami4
business had been fully consolidated from the beginning of 2009) amounted to
NIS 171 million in the first half of 2010 compared to NIS 145 million last
year, an increase of 18.1%. In the second quarter Strauss Water sales totaled
NIS 88 million compared to NIS 78 million in the corresponding period last
year, an increase of 13.5%.

In 2010 the Company plans to continue to invest in the
development of infrastructure for the global expansion of the water business.

Financial Results:

Sales

In the first half of 2010 the Group's sales amounted to NIS
3,276 million
compared to NIS 3,036 million last year, an increase of 7.9%.
After neutralizing the currency impact, growth amounted to 6.8%. Organic
growth after neutralizing the impact of changes in exchange rates in the half
amounted to 1.4%.

In the second quarter of 2010 the Group's sales amounted to
NIS 1,580 million compared to NIS 1,514 million last year, an increase of
4.3%. After neutralizing the currency impact growth amounted to 5.4% and
organic sales after neutralizing the impact of changes in exchange rates in
the second quarter decreased by 0.2%.

Gross Profit

In the first half of the year the financial accounting gross
profit totaled NIS 1,309 million (39.9%) compared to NIS 1,121 million last
year (36.9%), an increase of 16.7%. The pro -forma gross profit in the half
totaled NIS 1,299 million compared to NIS 1,119 million last year, an
increase of 16.0%, rising from 36.9% to 39.6% of sales.

In the second quarter the financial accounting gross profit
totaled NIS 626 million (39.6%) compared to NIS 565 million last year
(37.3%), an increase of 10.7%. The pro-forma gross profit in the second
quarter amounted to NIS 615 million compared to NIS 568 million last year, an
increase of 8.3%, rising from 37.5% to 38.9% of sales.

The gross profit improved in most of the Group's businesses,
notably Sabra and Strauss Coffee. The gross profit was positively influenced
by the decrease in material costs and by the growth in sales volumes, as well
as by the consolidation of the Tami4 activity for the first time.

The Group has contended with the changes in raw material
prices and exchange rates through operational streamlining in most areas of
its activity and by raising the prices of its products in the coffee business
outside of Israel.

Operating Profit before Other Income (Expenses)

First half:

The financial accounting operating profit (before other
expenses) totaled NIS 322 million (9.8% of sales) compared to NIS 266 million
(8.8%), an increase of 21.0%. The growth in the Group's operating profit is
mainly due to the increase in the gross profit and to maintaining the
operating expenses level.

The pro-forma (pro-forma) operating profit in the first half
of 2010 totaled NIS 318 million (9.7% of sales) compared to NIS 270 million
(8.9%) last year, an increase of 17.7%.

Second quarter:

The financial accounting operating profit (before other
expenses) totaled NIS 145 million (9.2% of sales) compared to NIS 131 million
(8.7%) last year, an increase of 10.1%. The growth in the Group's operating
profit is mainly due to the increase in the gross profit and to maintaining
the operating expenses level.

The pro-forma operating profit in the second quarter totaled
NIS 137 million (8.7% of sales) compared to NIS 135 million (8.9%) last year,
an increase of 1.2%.

The increase in the Group's pro-forma operating profit is
evident in all of the Company's activities. The operating profit in the
Coffee Sector improved by 14.2%, in the Israel Sector - by 5.0%, and in all
other activities there was a significant improvement following the
consolidation of Tami4 for the first time and the continued growth in Sabra's
profits (3.0%).

Income for the Period

In the first half of 2010 the financial accounting income for
the period amounted to NIS 184 million compared to NIS 147 million last year,
an increase of 25.4%. The pro-forma income for the period amounted to NIS 205
million
compared to NIS 175 million last year, an increase of 17.4%. The
increase in profit is mainly the result of the increase in the operating
profit.

In the second quarter of 2010 the financial accounting income
for the period amounted to NIS 75 million compared to NIS 57 million last
year, an increase of 33.0%. The pro-forma income for the period amounted to
NIS 88 million compared to NIS 80 million last year, an increase of 10.5%.
The increase in profit is mainly the result of the increase in the operating
profit.

Income for the Period for the Shareholders of the Company

In the first half the financial accounting income for the
period for the shareholders of the Company totaled NIS 136 million compared
to NIS 112 million last year, an increase of 21.7%. The increase in profit is
due mainly to the increase in the operating profit. The pro-forma income for
the shareholders of the Company totaled NIS 155 million compared to NIS 134
million
last year, an increase of 16.0%.

In the second quarter the financial accounting income for the
period for the shareholders of the Company totaled NIS 52 million compared to
NIS 38 million last year, an increase of 40.7%. The pro-forma income for the
shareholders of the Company in the second quarter totaled NIS 63 million
compared to NIS 55 million last year, an increase of 16.8%.

The increase in the income for the period for the shareholders
of the Company in the half and in the quarter is mainly due to the increase
in the operating profit and the decrease in financing expenses.

Income for the Period for Minority Shareholders

In the first half of 2010 the minority share in the income of
subsidiaries totaled NIS 48 million compared to NIS 35 million in the
corresponding period last year, an increase of 37.1%. The increase in the
minority share is mainly due to the continued growth in the profits of the
Coffee Sector.

In the second quarter the minority share in the income of
subsidiaries totaled NIS 23 million compared to NIS 19 million in the
corresponding period last year, an increase of 18.4%.

Table 1

Following are the condensed financial accounting statements of
income for the quarter and the half ended June 30, 2010 and 2009 (in NIS
millions):

                                            First Half      Second Quarter
                                     2010    2009   % Chg   2010  2009  % Chg

    Sales                           3,276   3,036     7.9  1,580 1,514   4.3
    Cost of sales not including
    impact of hedging transactions  1,977   1,917     3.2    965   946   2.0
    Revaluation of the balance of
    hedging transactions on
    commodities as at the end of
    the period                        (10)     (2)           (11)    3
    Cost of sales                   1,967   1,915     2.8    954   949   0.6
    Gross Income                    1,309   1,121    16.7    626   565  10.7

    Selling and marketing expenses    786     678    16.0    385   344  12.1
    General and administrative
    expenses                          201     177    13.1     96    90   6.1
    Operating income before other
    income (expenses)                 322     266    21.0    145   131  10.1

    Other income (expenses), net      (27)    (27)           (20)  (22)
    Operating Income                  295     239    23.6    125   109  14.6
    Financing income (expenses), net  (29)    (27)    8.9    (21)  (31)-34.4
    Income before taxes on income     266     212    25.4    104    78  34.2
    Taxes on income                   (82)    (65)   25.5    (29)  (21) 37.5
    Effective tax rate               30.8%   30.8%          28.0% 27.3%
    Income for the period             184     147    25.4     75    57  33.0
    Income attributed to the
    shareholders of the Company       136     112    21.7     52    38  40.7
    Income attributed to the minority
    Interest                           48      35    37.1     23    19  18.4

Table 2

Following are the condensed results of business operations
(based on the Company's pro-forma statements) for the quarter and the half
ended June 30, 2010 and 2009 (in NIS millions):

                                            First Half      Second Quarter
                                          2010  2009 % Chg  2010  2009  % Chg

    Sales                                3,276 3,036   7.9 1,580 1,514    4.3
    Cost of sales                        1,977 1,917   3.2   965   946    2.0
    Gross Income                         1,299 1,119  16.0   615   568    8.3

    Selling and marketing expenses         786   678  15.9   385   344   12.0
    General and administrative expenses    195   171  13.7    93    89    4.6
    Operating income - pro-forma           318   270  17.7   137   135    1.2
    Financing income (expenses), net       (29)  (27)  8.9   (21)  (31) -34.4
    Income before taxes on income          289   243  18.7   116   104   11.8
    Taxes on income                        (84)  (68) 22.0   (28)  (24)  16.0
    Income for the period - pro-forma      205   175  17.4    88    80   10.5
    Income attributed to the
    shareholders of the Company            155   134  16.0    63    55   16.8
    Income attributed to the minority       50    41  21.6    25    25    0.3
    interest

Table 3

Following are the condensed results of business operations
(based on the Company's pro-forma statements) of the business sectors for the
quarter and the half ended June 30, 2010 and 2009 (in NIS millions):

                                     First Half
                                  2010           2009         % Chg

    Israel
    Net sales                   1,324           1,308           1.3
    Gross income                  560             542           3.2
    Operating income              156             149           5.0
    Coffee
    Net sales                   1,597           1,581           1.0
    Gross income                  552             493          12.0
    Operating income              141             123          14.2
    Other *
    Net sales                     355             147         141.8
    Gross income                  187              84         120.8
    Operating income               21              (2)            -
    Total
    Net sales                   3,276           3,036           7.9
    Gross income                1,299           1,119          16.0
    Operating income              318             270          17.7
                       Second Quarter
                                 2010            2009         % Chg
    Israel
    Net sales                     627             627             -
    Gross income                  269             261           2.7
    Operating income               67              66           0.9
    Coffee
    Net sales                     770             811          -5.1
    Gross income                  254             263          -3.4
    Operating income               63              73         -13.9
    Other *
    Net sales                     183              76         141.9
    Gross income                   92              44         111.0
    Operating income                7              (4)            -
    Total
    Net sales                   1,580           1,514           4.3
    Gross income                  615             568           8.3
    Operating income              137             135           1.2

Table 4

Consolidated Balance Sheet (in NIS million):

                                       June 30, 2010        June 30, 2009
                                   Millions NIS        % Millions NIS       %

    Cash and Marketable Securities          860      14%         1091     19%
    Accounts Receivables                    954      16%          963     17%
    Other Accounts Receivables              306       5%          237      4%
    Inventory                               677      11%          714     12%
    Investments & Long Term Loans           145       2%          138      2%
    Fixed Assets                           1438      24%         1293     22%
    Intangible Assets                     1,544      26%        1,286     22%
    Other Assets                             37       2%           59      2%
    Total Assets                          5,961                 5,781
    Current Bank Liabilities                450       8%          271      5%
    Accounts Payables                       641      11%          609     11%
    Other Creditors                         606      10%          489      8%
    Long Term Liabilities                 1,600      27%        1,677     29%
    Minority Interest                       864      14%          882     15%
    Group Equity                          1,800      30%        1,853     32%
    Total Liabilities & Equity            5,961                 5,781

[1],[2] First half and second quarter are pro-forma neutralizing the
employees options and one time bonus, hedging transactions, non recurring
other income and expenses

For additional information:

    Investors Contact
    Yaffa Cohen-Ifrah
    Director of Investor Relations
    Strauss Group Ltd.
    Tel: +972-3-6752545
    Mob: +972-54-5772195
    Email: yaffa.cohen-ifrah@strauss-group.com

    www.strauss-group.com

    Media Contact
    Osnat Golan
    Corporate Communications Director
    Strauss Group Ltd.
    Tel: +972-3-6752281
    Mob: +972-52-8288111
    Email: osnat.golan@strauss-group.com
    www.strauss-group.com

Photo:
www.newscom.com/cgi-bin/prnh/20080826/317650

For additional information: Investors Contact: Yaffa Cohen-Ifrahm Director of Investor Relations, Strauss Group Ltd., Tel: +972-3-6752545, Mob: +972-54-5772195, Email: yaffa.cohen-ifrah at strauss-group.com; Media Contact: Osnat Golan, Corporate Communications Director, Strauss Group Ltd., Tel: +972-3-6752281, Mob: +972-52-8288111, Email: osnat.golan at strauss-group.com

YOUR VIEW POINT
NAME : (REQUIRED)
MAIL : (REQUIRED)
will not be displayed
WEBSITE : (OPTIONAL)
YOUR
COMMENT :