Strauss Group Reports 2008 Results With Sixth Consecutive Year of Growth in Sales and Profit

TEL AVIV, Israel - Financial Highlights:

Annual 2008

- Annual Group sales reached NIS 6.2 billion, an increase of
5%; Organic growth, net of exchange rate impacts, totaled 7.6%.

- Reported annual operating profit totaled NIS 480 million,
compared to NIS 499 million last year; Operating profit, on a pro-forma
basis, totaled NIS 522 million compared to NIS 512 million in 2007.

- Reported annual net profit reached NIS 462 million, compared
to NIS 248 million last year; Annual net profit, on a pro-forma basis,
reached NIS 285 million, compared to NIS 274 million last year.

Fourth Quarter

- Sales in Q4 totaled NIS 1.56 billion, a decrease of 0.5%;
Organic growth, net of exchange rate impacts, totaled 5.4%.

- Q4 reported operating profit reached NIS 100 million,
compared to NIS 99 million in 2007; Operating profit for Q4, on a
pro-forma[1] basis, totaled NIS 101 million compared to NIS 111 million
last year

- Q4 reported net profit reached NIS 73 million, compared to
NIS 42 million in Q4 2007; Net profit, on a pro-forma basis, totaled
NIS 56 million compared to NIS 59 million in Q4 2007.

The Strauss Group (STRS.TA) today reported its results for the fourth
quarter and full year 2008.

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Ofra Strauss, Chairperson of Strauss Group, said today,
“Throughout 2008 Strauss continued to grow and expand, primarily outside of
Israel, while navigating a highly complex and challenging year. In parallel
to this strong growth and geographic expansion, we continued to strengthen
our core foundations and enhance our long term strength and sustainability,
which is ever more relevant and critical in the current environment.”

Erez Vigodman, President & CEO of Strauss Group, said today,
“This year we continued to grow and drive profitability for the sixth year in
a row, while managing the unprecedented macro challenges the year brought,
developing and enhancing both our core business and financial strength. We
focused and optimized the activities in Israel, while continuing to grow and
expand overseas, this, while building infrastructure and forging major
partnerships, to support our continuous and rapid growth of both the global
coffee company as well as the Sabra operations in North America.

In addition, this year we further equipped the organization to
navigate the macro economic challenges expected in 2009, granting us the
resources to identify potential opportunities in the current market.”

Main data for the full year and fourth quarter (NIS millions):

Full Year Fourth Quarter
2008 2007 % Chg 2008 2007 % Chg

Sales 6,245.9 5,960.9 4.8 1,564.2 1,572.5 -0.5
Financial accounting gross 2,276.5 2,234.9 1.9 568.3 577.2 -1.5
profit
Pro-forma operating profit 521.9 512.2 1.9 100.8 111 -9.2
Financial accounting operating 480.3 499.0 -3.7 99.6 99.2 0.4
profit (1)
Pro-forma net profit (2) 284.9 273.8 4.1 56.1 58.9 -4.8
Financial accounting net 461.5 247.8 86.2 73 41.9 74.2
profit (2)

(1) Before other income (expenses)

(2) Attributed to the shareholders of the Company

Sales

In 2008 Strauss Group sales increased 4.8% totaling NIS
6,245.9 million, compared to NIS 5,960.9 million last year. This growth was
despite the challenging macro-economic environment. Organic growth, net of
the impact of changes in currency exchange rates and the acquisition and sale
of businesses in 2008, amounted to 7.6%.

The Group’s sales in the fourth quarter totaled NIS 1,564.2
million compared to NIS 1,572.5 million last year, a decrease of 0.5%.
Organic growth, net of the impact of changes in currency exchange rates in
the fourth quarter, amounted to 5.4%.

In 2008 the Group successfully overcame the increase in both
raw material and energy prices by streamlining all areas of the Group’s
activity, together with raising product prices in all markets. Despite this
leading to erosion in the Group’s gross profit rate, it also led to an
improvement in the consolidated management accounting operating profit.

Operating Profit (before other income (expenses)

The reported operating profit (before other expenses) totaled
NIS 480.3 million in 2008, or 7.7% of sales, compared to NIS 499.0 million,
or 8.4% of sales, in 2007, a decrease of 3.7%.

The pro-forma operating profit totaled NIS 521.9 million in
2008, or 8.4% of sales, compared to NIS 512.2 million, or 8.6% of sales, in
2007, an increase of 1.9%.

The reported operating profit in the fourth quarter totaled
NIS 99.6 million compared to NIS 99.2 million in the corresponding period
last year, an increase of 0.4%.

The pro-forma operating profit in the fourth quarter totaled
NIS 100.8 million compared to NIS 111.0 million in the corresponding period
last year, a decrease of 9.2%. The decrease in the pro-forma profit follows
the decrease in the gross profit.

Income for the Period (for the Shareholders of the Company)

The net profit to the shareholders of the Company in the
reported period amounted to NIS 461.5 million, compared to NIS 247.8 million
in the corresponding period last year, an increase of 86.2%. This increase is
due mainly to capital gains in respect of the allotment of 25.1% of the
shares of Strauss Coffee, the transition from full to proportionate
consolidation of the Sabra business, and the sale of the distribution
business to the Kosher market in the US (Blue & White).

The pro-forma net profit for the year increased 4.1% to NIS
284.9 million in 2008, compared to NIS 273.8 million in 2007.

The net profit to the shareholders of the Company in the fourth quarter
amounted to NIS 73.0 million compared to NIS 41.9 million in the
corresponding period last year, an increase of 74.2%.

The pro-forma net profit to the shareholders in the fourth quarter
amounted to NIS 56.1 million compared to NIS 58.9 million in the
corresponding period last year, a decrease of 4.8%.

Results by Business Units

The Israeli Sector - Strauss Israel

During the year Strauss Israel assimilated a new brand
portfolio, with emphasis on the corporate brand, Strauss. Furthermore, since
September both the corporate logo and the new Elite logo have been featured
on the Company’s products.

The packaging of all of the Company’s products will gradually
be adapted to the new identity and linked to the corporate brand, in a manner
preserving the uniqueness of each brand, while linking them all to one
company.

In 2008 Strauss Israel focused on the implementation of the
streamlining plan and new organizational structure (Horizon), providing a
response to consumer trends in a new divisional deployment. The new
organizational structure supports these streamlining efforts and has equipped
the Company with tools to cope with the current macro challenges.

Additionally, in 2008 the project for merging the information
systems in the Sales Division (SAP SD) was completed, and the activity in
Israel has begun to benefit from working with a system for the management of
sales, distribution and logistics that is among the most advanced of its kind
in the world.

Sales - In 2008 the sales for all of the Strauss Israel
sector, including the coffee business in Israel, net of the industrial
activity, increased by 3.3%.

Sales by the Israeli sector (excluding coffee) totaled NIS
2,671.2 million, and, net of the industrial activity (sold in January 2008),
Israel sales increased by 2.4%.

In the fourth quarter the sales for all of the Strauss Israel
sector, including the coffee business and net of the industrial activity,
decreased by 1.5%. The sales turnover of the Israeli sector (excluding
coffee) decreased by 2.9% in the quarter, and net of the industrial activity
sales decreased by 0.7%.

Operating Profit

The operating profit in Israel increased by 5.5% in 2008
following an improvement in the cost structure. The operating profit, as a
percentage of sales, increased in 2008, reaching 10.3% compared to 9.7% last
year.

Despite the decrease in the gross profit in the fourth
quarter, the operating profit in the Israeli sector rose by 1.5% as a result
of the improvement in the cost structure of this activity. The operating
income rate in the fourth quarter amounted to 9.3% compared to 8.9% in the
corresponding period last year.

The Coffee Sector

Sales - in 2008 Strauss’s coffee business grew by 11.9% and
totaled NIS 3,243.2 million. Net of the impact of currency exchange rates,
Strauss coffee business grew by 18.6%. Organic growth (net of the acquisition
of businesses and the impact of exchange rate differentials) amounted to
9.9%.

Growth in the coffee business in Israeli Shekels was adversely
impacted by the sharp changes in the exchange rates of the different
operating currencies. Although the growth in business is evident in all
clusters, growth was especially strong in the Company’s activity in the
former Soviet Union countries (following the acquisition of the coffee brands
of Cosant Enterprises Ltd. in the CIS countries), Israel, Poland and Brazil.

The AFH (Away-From-Home) business grew by 6.1% in 2008 and
accounted for 12.7% of the coffee business, compared to 13.5% last year.

The growth in sales was positively influenced by the growth in
volumes, organic growth in most countries, mergers and acquisitions and by
raising sales prices. Growth was negatively influenced by the sharp changes
in the exchange rates of the various currencies.

In the fourth quarter the coffee sector grew by 3.9% and sales
totaled NIS 833.5 million. Net of the impact of currency exchange rates,
coffee sector sales in the fourth quarter grew by 20.4% and organic growth
(net of the acquisition of businesses and the impact of exchange rate
differentials) amounted to 7.6%.

In the course of 2008 the Company continued to expand in line
with its strategy to become a leading global coffee company. These actions
included the introduction of the private equity investment fund TPG Capital
as a partner in the coffee company, the acquisition of Cosant Enterprises
Ltd.’s instant and R&G (roast and ground) coffee brands in Russia, and the
acquisition of DonCafe Albania and the rights to the brand in 11 other
countries.

The operating income of the coffee business totaled NIS 255.2
million (7.9% of sales) in 2008 compared to NIS 231.3 million (8.0% of sales)
last year, an increase of 10.3%. The operating profit was influenced by the
accelerated growth and by the growth in the gross profit.

In the fourth quarter, the operating profit totaled NIS 38.9
million (4.7% of sales) compared to NIS 41.5 million (5.2% of sales) in the
corresponding quarter last year, a decrease of 6.3%. The decrease in the
operating profit was influenced mainly by the decrease in the gross profit,
an increase in marketing expenses for the re-branding of DonCafe in Romania
and an increase in selling expenses in Brazil due to the continued
geographical expansion.

The Sabra Refrigerated Flavored Dips Business in the USA

Commencing in the second quarter of 2008 the Company
proportionately consolidated the Sabra business (50%) according to the rate
of its holding following the closing of the transaction with PepsiCo (50%).

In 2008 Sabra’s pro-forma sales (assuming the full
consolidation of Sabra’s business) totaled NIS 300.0 million compared to NIS
254.0 million last year, an increase of 18.1%, and after neutralizing the
impact of the erosion of the Dollar in relation to the Shekel, pro-forma
growth in 2008 totaled 35.0%[2].

In the fourth quarter Sabra’s pro-forma sales totaled NIS 89.0
million compared to NIS 67.0 million last year, an increase of 32.8%, and
after neutralizing the impact of the erosion of the Dollar in relation to the
Shekel, pro-forma growth in the quarter totaled 39.3%.

Operating profit in 2008 (assuming Sabra’s activity was fully
consolidated) amounted to approximately NIS 35 million compared to NIS 33
million. In the fourth quarter operating profit amounted to approximately NIS
8 million last year similar.

Sabra continued to expand and enhance its activities in the
leading North American retail chains, while constantly striving to innovate.
Sabra has continued to grow its market share and to maintain its leading
position in the refrigerated flavored spreads category. Sabra’s average
market share in 2008 was 31.8%, compared to an average market share of 25.8%
in 2007 (according to IRI figures published on December 28, 2008). In the
fourth quarter Sabra maintained its growth trend, and its average market
share reached 34.2%.

In 2008, as a result of Sabra’s rapid growth and the need to
increase production capacity in order to meet demand, it was decided to
invest up to $68 million for the construction of a modern, state-of-the-art
salad factory. The plant, which is expected to open in Virginia in 2010, will
be one of the most sophisticated of its kind and based on cutting-edge
production technology.

Activity in the Kosher Market in North America

In 2008 Kosher market sales totaled NIS 63.0 million compared
to NIS 41.0 million in 2007. In the fourth quarter sales to the Kosher market
totaled NIS 19.0 million compared to NIS 11.0 million in the corresponding
period last year. On December 31, 2008 the Company signed a binding agreement
for the sale of its holdings (51%) in Blue & White Foods LLC. For more
information, see Note 5.9 to the Annual Financial Statements.

The Max Brenner Business

As at the end of 2008, 24 Max Brenner Chocolate Bars were in
operation around the world: 6 in Israel, 2 in the US, 2 in the Philippines, 1
in Singapore and 13 in Australia. Seven branches are owned by the Company,
and all other branches are operated under franchise.

In 2008 Max Brenner sales totaled NIS 94.8 million compared to
NIS 95.7 million last year, a decrease of 0.9%. Net of the impact of the
erosion of the Dollar in relation to the Shekel, Max Brenner sales grew by
4.1% from 2007.

In the fourth quarter Max Brenner’s sales totaled NIS 24.8
million compared to NIS 27.2 million last year, a decrease of 8.8%. Net of
the impact of the erosion of the Dollar in relation to the Shekel, the
decrease in fourth quarter sales amounted to 7.4%., compared to the fourth
quarter last year.

About Strauss Group:

Strauss Group, Israel’s second largest food and beverage conglomerate,
has, over the past few years, become an international corporation with a
steadily growing part of its business conducted outside of Israel. The Group
employs 11,600 people and operates nineteen production sites in eleven
countries.

The Group focuses on key consumption trends in the food industry via
three business divisions in Israel: Health & Wellness, Fun & Indulgence, and
Coffee. The Group continuously expands its business activities outside of
Israel, at present primarily through the Coffee Company, which is positioned
as one of the world’s ten largest coffee companies, leading markets in
Israel, Central and Eastern Europe, and Brazil.

The Group collaborates with a number of leading multinationals - Danone,
PepsiCo and Lavazza - and is traded on the Tel Aviv 25 Index.

Table 1

Following are the condensed financial accounting statements of
income for the years and quarters ended December 31, 2008 and 2007 (in NIS
millions):

For the Years For the Three Months
% %
change change
2008 2007 2008 2007

Sales 6,245.9 5,960.9 4.8 1,564.2 1,572.5 -0.5
Cost of sales not including
impact of hedging
transactions 3,959.8 3,721.0 6.4 997.1 990.3 0.7
Revaluation of the balance
of hedging transactions on
commodities as at the end of
the period 9.6 5.0 (1.2) 5.0
Cost of sales 3,969.4 3,726.0 6.5 995.9 995.3 0.1
Gross income 2,276.5 2,234.9 1.9 568.3 577.2 -1.5

Selling and marketing
expenses 1,426.8 1,376.8 3.6 373.7 382.2 -2.2
General and administrative
expenses 369.4 359.1 2.9 95.0 95.8 -0.8
Operating income before
other income (expenses) 480.3 499.0 -3.7 99.6 99.2 0.4

Other income (expenses), net 208.3 (18.1) 18.1 (9.3)
Operating income after other
income (expenses) 688.6 480.9 43.2 117.7 89.9 30.9
Financing expenses, net (72.0) (77.5) -7.1 (12.3) (13.8)-10.9
Income before taxes on
income 616.6 403.4 52.9 105.4 76.1 38.5
Taxes on income (109.3) (110.6) -1.2 (19.2) (21.8)-11.9
Effective tax rate 17.7% 27.4% 18.2% 28.6%
Income for the period 507.3 292.8 73.3 86.2 54.3 58.7
Income attributed to
shareholders of the Company 461.5 247.8 86.2 73.0 41.9 74.2

Income attributed to
minority interest 45.8 45.0 1.8 13.2 12.4 6.5

Table 2

Following are the condensed results of business operations
(based on the Company’s management accounting statements) for the years and
quarters ended December 31, 2008 and 2007 (in NIS millions):

For the Years For the Three Months
% change % change

2008 2007 2008 2007

Sales 6,245.9 5,960.9 4.8 1,564.2 1,572.5 -0.5
Cost of sales 3,957.5 3,721.0 6.4 997.0 990.3 0.7
Gross income 2,288.4 2,239.9 2.2 567.2 582.2 -2.6

Selling and marketing
expenses 1,423.3 1,380.1 3.1 377.5 382.2 -1.2
General and
administrative expenses 343.2 347.6 -1.3 88.9 89.0 -0.1
Operating income -
management accounting 521.9 512.2 1.9 100.8 111.0 -9.2
Financing expenses, net (72.0) (77.5) -7.1 (12.3) (13.8) -10.9
Income before taxes on
income 449.9 434.7 3.5 88.5 97.2 -9.0
Taxes on income (115.4) (116.2) -0.7 (17.2) (25.9) -33.6
Income for the period -
management 334.5 318.5 5.0 71.3 71.3 -
Income attributed to
shareholders of the
Company 284.9 273.8 4.1 56.1 58.9 -4.8
Income attributed to
minority interest 49.6 44.7 11.0 15.2 12.4 22.6

Table 3

Following are the condensed results of business operations
(based on the Company’s management accounting statements) of the business
sectors for the years and quarters ended December 31, 2008 and 2007 (in NIS
millions):

For the Years For the Three
Months
2008 2007 % 2008 2007 %
Israel*
Net sales** 2,671.2 2,673.1 -0.1 645.2 664.5 -2.9
Gross income 1,080.0 1,101.1 -1.9 269.3 272.4 -1.1
Operating income 273.9 259.7 5.5 60.2 59.3 1.5
Coffee
Net sales 3,243.2 2,897.4 11.9 833.5 802.4 3.9
Gross income 1,044.3 944.5 10.6 252.0 255.9 -1.5
Operating income 255.2 231.3 10.3 38.9 41.5 -6.3
Other***
Net sales 331.5 390.4 -15.1 85.5 105.6 -19.0
Gross income 164.1 194.3 -15.5 45.9 53.9 -14.8
Operating income (loss) (7.2) 21.2 -134.0 1.7 10.2 -83.3
Total
Total net sales (1) 6,245.9 5,960.9 4.8 1,564.2 1,572.5 -0.5
Total gross income 2,288.4 2,239.9 2.2 567.2 582.2 -2.6
Total operating income 521.9 512.2 1.9 100.8 111.0 -9.2

* Not including Israel Coffee sales and without neutralizing
the impact of the sale of the industrial activity in Israel in 2007.

** In 2007, including the industrial market activity that was
terminated and sold, in an amount of NIS 65.7 million in 2007 and NIS 14.8
million in the fourth quarter of 2007.

*** Sabra sales partially consolidate since the second quarter of 2008.

Table 4

Consolidated Balance Sheet (in NIS million):

As at December 31
2008 2007
Millions NIS % Millions NIS %

Cash and Marketable Securities 713 13.1% 549 11.0%

Accounts Receivables 949 17.5% 899 18.0%

Other Accounts Receivables 305 5.6% 254 5.1%

Inventory 814 15.0% 621 12.5%

Investments & Long Term Loans 113 2.1% 140 2.8%

Fixed Assets 1,230 22.6% 1,218 24.4%

Intangible Assests 1,226 22.6% 1,223 24.5%

Other Assets 85 1.5% 84 1.7%

Total Assets 5,435 100.0% 4,988 100.0%

Current Bank Liabilities 314 5.8% 319 6.4%

Accounts Payables 757 13.9% 723 14.5%

Other Creditors 513 9.4% 699 14.0%

Long Term Liabilities 1,152 21.2% 1,280 25.7%

Minority interest 858 15.8% 201 4.0%

Group Equity 1,841 33.9% 1,766 35.4%

Total Liabilities & Equity 5,435 100.0% 4,988 100.0%

———————————

[1] Pro-forma- net of employees options, hedging transactions,
inventory and fix assets write-off and non recurring other income (capital
gains) other expenses (capital losses, write offs)

[2] In the Group’s management accounting (pro-forma) reports
Sabra is proportionately consolidated beginning in the second quarter. For
the sake of comparison, Sabra’s results are presented here pro-forma, as if
Sabra were fully consolidated in the reported period as well.

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

Source: Strauss Group Ltd

Investors Contact: Yaffa Cohen-Ifrah, 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