Strauss Group (STRS) Q4 2023 earnings summary

Executive summary

• Q4 2023 Non-GAAP sales rose 9.6% to NIS 2,695m, with 4.6% organic growth; confectionery recovery and Health & Wellness supported performance.

• FY 2023 Non-GAAP sales increased 11.0% to NIS 10,549m, including 6.8% organic growth; EBIT reached NIS 772m, up 103.9%.

• The October 7 war disrupted operations, staffing, supply and demand; the updated strategy prioritizes the core and targets c.11% operating profit in 2026.

Financial highlights

• Q4 Non-GAAP gross profit was NIS 852m, up 15.9%, with 31.6% margin (+170 bps); EBIT was NIS 181m, up 184.9%, with 6.7% margin (+410 bps).

• Q4 Non-GAAP net income was NIS 100m, up 304.4%, with 3.7% margin (+270 bps); adjusted for the prior-year confectionery and Sabra recalls, net income recovered to pre-recall levels.

• FY Non-GAAP gross profit was NIS 3,383m, up 19.4%, with 32.1% margin (+230 bps); EBIT was NIS 772m, up 103.9%, with 7.3% margin (+330 bps).

• FY Non-GAAP net income was NIS 439m, up 154%, with 4.2% margin (+240 bps); GAAP net income attributable to shareholders was NIS 488m versus NIS 64m in FY 2022.

• Q4 GAAP sales were NIS 1,705m versus NIS 2,695m Non-GAAP, reflecting differing reporting bases; Q4 GAAP operating profit was NIS 184m and GAAP net profit NIS 104m.

Outlook and guidance

• 2026 strategic ambition: c.11% operating profit; 10–12% CAGR target from 2024–2026 and core categories targeted for mid-single-digit growth with 10%+ profitability improvement.

• Strategy targets core at ~85% of sales by 2026 versus ~67% in 2023, while renewing core categories, expanding plant-based solutions and water, and building coffee beyond roast and ground.

• January restructuring measures are expected to generate annual savings of NIS 45–55m.

• January price increases covering 25% of Israeli products are expected to raise overall product prices by 1.7%.