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MILAN – Strauss Group today reported first quarter sales up 15.5% to NIS 2.99 billion ($842.62 million) largely driven by its international coffee operations alongside continued momentum in Israel and Strauss Water. Several business segments also recorded volume gains. The Group achieved significant revenue growth despite ongoing inflationary pressures in raw material costs, particularly coffee and cocoa.
The international coffee business achieved record revenues and operating profit in the quarter. In Brazil, the group continues to maintain its leading competitive position in coffee and presented an improvement in its operating profit.
The Group’s operating profit reached NIS 181 million ($51 million), 6.0% of sales, compared to NIS 204 million, 7.8% of sales in the first quarter last year. Operating profit was impacted by rising raw material costs, particularly green coffee and cocoa. Net profit amounted to NIS 73 million (205.7 million), 2.4% of the sales.
In parallel, and as part of its strategic plan, Strauss Group delivered operational efficiencies through the implementation of productivity initiatives. Excluding a non-recurring loss on cocoa derivatives of NIS 49m, the gross profit would have reached NIS 830m ($233.9 million) , reflecting a 27.7% margin.
In Q1 2025, Strauss Coffee’s sales reached NIS 1.4 billion ($394.5 million), representing an increase of 45.4%, yoy. Operating profit reached NIS 55 million ($15.5 million), an increase of 43.9%, yoy, with an operating margin of 3.9%.
The Group’s coffee activity in Central Eastern Europe – Poland, Romania, Russia and Ukraine – delivered sales growth during the quarter moderated by the impact of exchange rates.
Sales of the coffee company in Brazil, Três Corações (50% owned) reached NIS 1,008 million ($284 million), up 56.4%, yoy, while operating profit reached NIS 30 million ($8.454 million), an increase of 133.1%, yoy.
Strauss Israel concluded the quarter with revenue of NIS 1.4 billion ($394.5 million), an increase of 6.6%, yoy. Strauss Israel’s operating profit was NIS 113 million, reflecting a decline of 25.7%, yoy. The decline in profitability was mainly due to rising coffee and cocoa prices and realization of a non-recurring loss of NIS 49m on cocoa derivatives.
Fun & Indulgence (Israel Coffee) segment sales reached NIS 260 million ($73.3 million), up 19.4%, yoy, with the segment’s operating profit reaching NIS 41 million, an increase of 15.5%, yoy.
Strauss Group President & CEO Shai Babad commented: “In the first quarter. Strauss Group achieved significant growth in all activities, while improving market share in main categories. This growth was driven across the board by strengthening our position as the leading coffee company in Brazil and leaning into consumer centric trends in Israel, introducing product innovation that powers our popular brands.
Likewise, we have continued our commitment to Israeli industry, investing in manufacturing facilities and logistics centers in the North and South of the country. We recently laid the cornerstone for a new logistics center in Bror Hayil, and later this year we intend to launch a new production facility for plant-based milk alternatives in the North.
“The Group remains focused on the consistent execution of our strategic plan, while facing the ongoing pressure of high raw material costs and are committed to delivering sustainable growth and value to our consumers.”
