Strauss Group Reports First Quarter 2010 Results

Strauss Group Opens 2010 With Strong First Quarter, Presenting 11.5% Sales Growth, 34.4% EBIT Growth & 15.5% Net Income Growth

TEL AVIV, Israel, May 24, 2010 - Ofra Strauss, Chairperson of Strauss Group, and Gadi Lesin, President &
CEO of Strauss Group, announced today that the Group continues to present
strong sales growth, while improving its margins, gross operating profit and
net profit, and operating cash flow.

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    First QUARTER Financial Highlights:

    - Sales up 11.5%, totaling NIS 1.7 billion. Organic growth net
      of exchange rate impact totaled 2.9%

    - Pro-forma[1] gross profit up 24.0%, totaling NIS 684
      million, compared to NIS 551 million last year

    - Pro-forma operating profit up 34.4%, totaling NIS 181
      million, compared to NIS 135 million last year

    - Pro-forma net profit for shareholders totaled NIS 92
      million, compared to NIS 80 million last year, a 15.5% increase

    - Operating cash flow totaled NIS 73 million, compared to NIS
      36 million last year.

The Strauss Group (STRS.TA) today reported its results for the first
quarter of 2010.

Ofra Strauss, Chairperson of Strauss Group, said today, "Strauss Group
opened 2010 with further international expansion while continuing to invest
in the development of new categories, which will become future growth drivers
for the company.

"Strauss Group will continue to operate under the strategy that has
characterized its activities in recent years: further development of
international infrastructure and enhancement of the home base in Israel,
while increasing investment in brands, innovation, and strategic partnerships
and retaining and developing our people."

Gadi Lesin, President & CEO of Strauss Group, said today, "Strauss Group
is presenting a strong first quarter with sales growth and increased gross,
operating and net profits and margins, while improving its operating cash
flow. Our sales growth is evident in all Group activities; Strauss continues
to expand in its home base in Israel, with sales in the Israeli market
increasing by 11.4% following the acquisition of Tami4. Strauss Coffee grew
by 7.5%, Sabra by 34.1% and Max Brenner by 7.7%.

"In 2010, the Group will continue to invest in its future growth drivers,
Sabra, Strauss Water and coffee, while further enhancing its leadership
position in Israel."

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

                             First Quarter
                           2010  2009   % Chg
    Sales                 1,696 1,522   11.5%
    Gross Profit            684   551   24.0%
    Operating Profit (1)    181   135   34.4%
    Profit for the Period   117    95   23.1%
    Net Profit (2)           92    80   15.5%

(1) Before other income (expenses)

(2) Attributed to the shareholders of the Company

Home base

The sales for the entire business of the 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 quarter of 2010 Strauss Group's sales in Israel
totaled NIS 969 million compared to NIS 870 million in 2009, an increase of
11.4%.

Further to the acquisition of Tami4 in the fourth quarter of
2009, the Group has intensified its connection with the Israeli consumer and
has 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 by Strauss's Coffee Sector in the first quarter of 2010
totaled NIS 827 million compared to NIS 770 million last year, an increase of
7.5%. After neutralizing the impact of currency exchange rates, sales growth
amounted to 0.7%.

In the first quarter, growth in the Company's activity
continued in Brazil as well as in the former Yugoslavia countries, Poland and
Israel. Coffee sales in the quarter were positively influenced by the growth
in sales volumes and by the strengthening of the various currencies compared
to last year.

Gross profit in the first quarter increased by 29.7% and
totaled NIS 298 million (36.0%) compared to NIS 230 million (29.8%) last
year. The increase in gross profit was mainly the result of the strengthening
of the currencies in the different countries and the decrease in raw material
prices compared to last year.

The operating profit of the Coffee Sector in the first quarter
increased by 55.3% and totaled NIS 78 million (9.4% of sales) compared to NIS
50 million (6.5% of sales) last year. The operating profit was influenced
mainly by the growth in gross profit in relation to last year.

The Israel Sector - Strauss Israel

Sales

In the first quarter of 2010 sales by the Israel Sector
totaled NIS 697 million compared to NIS 681 million last year, an increase of
2.4%. The sales were positively influenced by the timing of Passover holiday
and continued investment in innovation.

Gross profit in the Israel Sector totaled NIS 291 million in
the first quarter of 2010 compared to NIS 281 million last year, an increase
of 3.7%. The gross profit rate rose from 41.2% to 41.8% this year. Most of
the improvement is due to the continued implementation of streamlining
activities in the cost of sales.

Operating profit in Israel in the first quarter of 2010
increased by 8.3% and amounted to NIS 89 million. The operating profit margin
in the Israel Sector in the first quarter improved and totaled 12.8% compared
to 12.1% 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.

The Sabra Refrigerated Dips Business in the USA

Sabra's activity has been proportionately consolidated (50%)
since the closing of the transaction with PepsiCo, beginning in the second
quarter of 2008.

In the first quarter of 2010 Sabra's sales continued to grow,
as did its market shares, and it maintained a leading position in the
refrigerated flavored spreads and dips category. Sabra's average market share
in the first quarter of this year was 43.0% compared to an average market
share of 37.4% in the corresponding period last year and an average market
share of 41.2% in the fourth quarter of 2009 (according to IRI data published
in March 2010).

Sales (100%) in the first quarter of 2010 Sabra's sales
totaled NIS 127 million compared to NIS 94 million last year, an increase of
34.1%. After neutralizing the currency impact, growth amounted to 45.5%.

The operating profit (100%)in the first quarter of 2010
totaled NIS 20 million (15.9% of sales) compared to NIS 14 million last year
(14.8%), an increase of 44.7%

MAX BRENNER

In the first quarter of 2010 Max Brenner's sales totaled NIS
26 million compared to NIS 24 million last year, an increase of 7.7%. After
neutralizing the impact of the erosion of the Dollar in relation to the
Shekel, growth in the quarter amounted to 11.2%.

As at the date of the report, 29 Max Brenner Chocolate Bars
were operating around the world: 6 in Israel, 2 in the USA, 2 in the
Philippines, 1 in Singapore and 18 in Australia. Seven branches are owned by
the Company, and all other branches are operated under franchise.

The Company continues to invest in the development of core
infrastructure for the Max Brenner business in Israel and abroad, and in 2010
the Company plans to open additional stores while continuing to invest in
core infrastructure for the 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 83 million in the first quarter of 2010 compared to NIS 67 million last
year, an increase of 23.2%. 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 quarter of 2010 the Group's sales amounted to
NIS 1,696 million compared to NIS 1,522 million last year, an increase of
11.5%. After neutralizing the currency impact, growth amounted to 8.1%.
Organic growth, after neutralizing the impact of changes in exchange rates in
the quarter, amounted to 2.9%.

Gross Profit

The financial accounting gross profit in the first quarter of
2010 totaled NIS 683 million (40.3%) compared to NIS 556 million last year
(36.5%), an increase of 22.8%. The management accounting gross profit in the
first quarter amounted to NIS 684 million compared to NIS 551 million last
year, an increase of 24.0%, growing from 36.2% to 40.3%.

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)

The financial accounting operating profit (before other income
and expenses) in the first quarter of 2010 totaled NIS 177 million (10.4% of
sales) compared to NIS 135 million (8.8%) last year, an increase of 31.6%.
The growth in the Group's operating profit is mainly due to the increase in
the operating profit and to maintaining the operating expense level.

The management accounting (pro-forma) operating profit in the
first quarter of 2010 totaled NIS 181 million (10.7% of sales) compared to
NIS 135 million (8.8%) last year, an increase of 34.4%.

The increase in the Group's management accounting operating
profit is evident in all of the Company's activities. The operating profit in
the Coffee Sector improved by 55.3%, in the Israel Sector by 8.3%, 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 (44.7%).

Income for the Period

The financial accounting income for the period in the first
quarter of 2010 amounted to NIS 109 million compared to NIS 90 million last
year. The pro-forma income for the period in the first quarter of 2010
amounted to NIS 117 million compared to NIS 95 million last year, an increase
of 23.1%. 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

The financial accounting income for the period for the
shareholders of the Company in the first quarter of 2010 totaled NIS 84
million compared to NIS 74 million last year, an increase of 12.2%. The
increase in profit is due mainly to the increase in the operating profit.

The management accounting (pro-forma) income for the
shareholders of the Company in the first quarter of 2010 totaled NIS 92
million compared to NIS 80 million last year, an increase of 15.5%. The
increase in profit is due mainly to the increase in the operating profit.

Income for the Period for Minority Shareholders

In the first quarter of 2010 the minority share in the income
of subsidiaries totaled NIS 25 million compared to NIS 16 million in the
corresponding period last year, an increase of 60.6%. The increase in the
minority share in the first quarter of 2010 is due mainly to the continued
growth in the profits of the Coffee sector.

Table 1

Following are the condensed results of business operations
(based on the Company's Pro-forma statements) for the quarters ended March
31, 2010 and 2009 (in NIS millions):

                                                  Three Months
                                              2010    2009   % Chg
    Sales                                     1,696    1,522  11.5
    Cost of sales not including impact of     1,012      971  4.4
    hedging transactions
    Revaluation of the balance of hedging
    transactions on commodities as at the
    end of the period                             1      (5)
    Cost of sales                             1,013      966  4.9
    Gross Income                                683      556  22.8

    Selling and marketing expenses              401      334  19.9
    General and administrative expenses         105       87  20.3
    Operating income before other income        177      135  31.6
    (expenses)

    Other income (expenses), net                (7)      (5)
    Operating Income                            170      130  31.2
    Financing income (expenses), net            (8)        4
    Income before taxes on income               162      134  20.3
    Taxes on income                            (53)     (44)  19.7
    Effective tax rate                        32.7%    32.9%
    Income for the period                       109       90  20.6
    Income attributed to the shareholders of     84       74  12.2
    the Company
    Income attributed to minority interest       25       16  60.6

Table 2

Following are the condensed financial accounting statements of
income for quarters ended March 31, 2010 and 2009 (in NIS millions):

                                             Three Months
                                          2009   2008  % Chg
    Sales                                 1,696  1,522  11.5
    Cost of sales                         1,012    971   4.4
    Gross Income                            684    551  24.0
    Selling and marketing expenses          401    334  19.9
    General and administrative expenses     102     82  23.6
    Operating income - management
    accounting	                          181    135  34.4
    Financing income (expenses), net        (8)      4
    Income before taxes on income           173    139  23.8
    Taxes on income                        (56)   (44)  25.3
    Income for the period - management
    Accounting                              117     95  23.1
    Income attributed to the
    shareholders of the Company              92     80  15.5
    Income attributed to minority
    interest                                 25     15  63.2

Table 3

Following are the condensed results of business operations
(based on the Company's management accounting (pro-forma) statements) of the
business sectors for quarters ended March 31, 2010 and 2009 (in NIS
millions):

                          Three Months
                       2010    2009   % Chg
    Israel
    Net sales             697    681     2.4
    Gross income          291    281     3.7
    Operating income       89     82     8.3
    Coffee
    Net sales             827    770     7.5
    Gross income          298    230    29.7
    Operating income       78     50    55.3
    Other
    Net sales             172     71   141.7
    Gross income           95     40   131.3
    Operating income       14      3   494.5
    Total
    Net sales           1,696  1,522    11.5
    Gross income          684    551    24.0
    Operating income      181    135    34.4

Table 4

Consolidated Balance Sheet (in NIS million):

                                      March 31, 2010        March 31, 2009
                                   Millions NIS    %     Millions NIS    %

    Cash and Marketable Securities          864   14.5%           701  12.9%
    Accounts Receivables                  1,068   17.9%         1,074  19.8%
    Other Accounts Receivables              232    3.9%           245   4.5%
    Inventory                               621   10.4%           739  13.6%
    Investments & Long Term Loans           152    2.5%           117   2.2%
    Fixed Assets                          1,418   23.8%         1,256  23.1%
    Intangible Assets                     1,574   26.4%         1,245  22.9%
    Other Assets                             38    0.6%            52   1.0%

    Total Assets                          5,967                 5,429
    Current Bank Liabilities                289    4.8%           289   5.3%
    Accounts Payables                       665   11.1%           657  12.1%
    Other Creditors                         578    9.7%           681  12.5%
    Long Term Liabilities                 1,754   29.4%         1,142  21.0%
    Minority Interest                       897   15.0%           873  16.1%
    Group Equity                          1,784   29.9%         1,787  32.9%
    Total Liabilities & Equity            5,967                 5,429

———————————

[1] Proforma results neutralizing employee options, hedging transactions,
non-recurring other income (capital gains) other expenses (capital losses,
write offs)

    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

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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 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