Hello, and thank you for joining us today. Welcome to Strauss Group's third quarter and first nine months of 2025 results earnings call.

On our call today, management will provide a review of the results followed by questions and answers session. You are encouraged to post your questions to the Q&A function in the Zoom call.

As a reminder, this online Zoom earnings call is being recorded Wednesday, November 26th, 2025. A recording of this call will be available on the company's website a few hours after the call.

I would like to remind everyone that this online webinar may contain projections or other forward-looking statements regarding future events or the future performance of the company. These statements are only predictions and may change as time passes.

Strauss Group does not assume any obligation to update this information. Actual events or results may differ materially from those projected, including as a result of changing industry and market trends, reduced demand for our products, the timely development of new products and their adoption by the market, increased competition in the industry, and price reductions, as well as due to risks identified in the documents filed with the company with the Israeli Securities Authority.

Online with me today are Mr. Shai Babad, Strauss Group's President and CEO, and Mr.

Tobi Fischbein, Group CFO, and myself, Rivka Neufeld, Head of Investor Relations. We will begin with review of the quarterly results by CEO Shai Babad and then move on to the financial highlights of the quarter presented by CFO Tobi Fischbein.

We will then move on to a Q&A section. Shai, the floor is yours.

Thank you very much, Rivka. Can you put the presentation on?

Thank you very much and welcome this afternoon to our quarterly financial reports. We are very happy to have you here.

What we'll try to do in the next 25, 30 minutes is just give you just some kind of overview of the results with our highlights, and then open it up for some questions. I'll start and Tobi will continue.

If you look at the major highlights of of this quarter following all previous quarters, we are continuing a very, very solid and strong growth. Growth this quarter is approximately 16% if I take pro forma growth taking out all the divestment activity that we departed from last year.

If we look from the beginning of the year, it's approximately 19% growth 9 months to 9 months into 2025. When we look at our EBIT and operational profit, we also see a substantial growth, and I'll touch it when we see the results, and the same goes for the net income.

It was a very strong quarter for Strauss and first 9 months. When we look at our productivity journey, we are on track, and I'll say a few words about that later on.

We are continuing to execute our strategy. There were various innovation initiatives that were launched in the third quarter that we will touch later on, and also the inauguration of the plant-based factory facility in the south, in the north, sorry.

Here are the major results. You can see here growth to 3.3 billion from 2.

- from approximately 3 billion, 13% growth if you take the full year to full year numbers, if you take pro forma activity with the divestments that were done last year, then it's 16% growth, 17% growth. When we look at EBIT margins, mostly by the way of the growth is from price, from increasing prices, and very small amount of the growth comes from volume, but still there's volume growth in 3 months and also in the quarter, and also 9 months since the beginning of the year.

When we look at our EBIT, our EBIT summed up to 312 million with 43% growth from last year, substantial growth, and we'll see later on most of it has been driven from our international coffee activity. When it comes to cash flow, our net profit also 146 compared to the 300 in 9 months.

We can see that in the quarter we did very well, 40% more than last year, but when we look at net profit 9 months into the year, we are 50% less, but last year we had tax incentives approximately 60 million and also there is financial activity, financial expenses this year that were higher than last year. Therefore, if we take this tax incentives actually the gap is the other way around.

When we look at cash flow, we generated a very high cash flow this quarter of 245 million compared to -100 last year. Also when we look here to since the beginning of the year, year to date, we are approximately 150 million better than last year, and by the end of the year we are expected to be on positive cash flow.

Of course, three major commodities are affecting our results: the Robusta, the Arabica, and the cocoa. Although we see in the Robusta and in cocoa in the last quarter some kind of decreasing prices, whereas Robusta is continuing with very high prices, still we don't see the impact on that or full impact on that on our results.

Taking Brazil outside of of the equation, in everywhere in all our other geographies we have we have hedging activity and we have a very high inventory as well. Taking that into consideration, there is time till we actually see in our results the impact of the reduction of the prices in the P&L.

I will touch later on how do we see our our cocoa and and our confectionery activity. When we look at at Israel, Israel is with a 3% growth, quite a solid growth.

Part of that growth is limited because of divestment activity that we've done last year with our our in our Health & Wellness division with fresh vegetables that we divested last year. If we do apples-to-apples, also you can see in Health & Wellness there is not actually a decrease, there's actually an in- a slight increase in revenues.

When it comes to EBIT, you can see in total Israel 12% 12 million reduction, 7.7%, and all of it comes from Health & Wellness. You can see there's a 19 million shekels decline.

Here it's very, very important to know that we consider this as a one-time thing. We had some functional issues in our dairy factory in the north during August and some September.

It affected a little bit our business, and therefore you can see that they did less than last year. Looking ahead, looking into October which was already already finished and also November, those one-time problems are behind us and we will see going to going ahead Health & Wellness get- getting back to track, getting back to very on growth and on profitability.

When we look at our Fun & Indulgence, you see an increase here, but the increase is a little bit misleading because last year the 9 million that you see in EBIT is actually 27 million because there was an 18 million loss in derivatives there. This year, the results are 15 million in the confec- in the Fun & Indulgence because in our confectionery business the cocoa is impacting our business, still very high cocoa prices.

Now when we look into the future, and asking ourselves when do we see the effect, we think that when we'll get into 2026 and during 2026 there will be a full turnaround with the business of our confectionery business. Cocoa prices that we know today, which we hedged, and the inventory that we have for 2026, and with the current cocoa prices that they are in the market now, we are very confident that our business will do a turnaround, substantial turnaround, next year, and we'll see much higher profits in this segment.

Next. If we look at our innovation activity, you can see there's vast innovation there.

There's cross-branding collaboration between our brands in alternative milks and in our dairy. There's a new Arab coffee that we targeted for that segment.

We're also with PRO, all our protein desserts, we've done a series of zero sugar. Our Cow-Free innovation, our new disruptive innovation of bringing milk drinks and spread, cheese spreads, with proteins that don't come from a cow, the same protein, the same BLG protein.

It comes from either mushroom or yeast, and from that we managed after two and a half years of development to develop these products. The advantages of of these products are that they are very similar in the taste to cheese and milk.

They have the same protein and the same health components, but they don't have lactose, anyone who is sensitive to lactose will not have a problem having those products. Also they don't have cholesterol because they don't come from animals.

We think there's a a a place for them in the market and demand from consumers for this type of products. We also launched in the confectionery some nostalgic snacks that we had, and we had the inauguration of our plant in the north, which I'll speak about later, and with our confectionery business, a lot of variety of different chocolate tablets and snacks.

If we look at our coffee activity, the international coffee activity, this is the main we think this is the main news of this quarter. We also have seen that last quarter, but this quarter we see it even in a in a in more influential way, more impactful way.

Our coffee business is improving substantially. Growth has been 30% due to price increase and a little bit of volume increase, but mainly, mainly operating profit, you can see, jumped to by 140% to 163 million shekels, reaching the double-digit, almost the double-digit margins.

The reason is of course our activity in Brazil. You can move to the next slide.

You can see that in Brazil, again profit more than doubled, almost tripled, with 170% growth this quarter, and overall from the beginning of the year almost doubled, with 20 27% increase in revenues in this quarter and 37% increase from the beginning of the year. What we believe looking forward is that Brazil, the pro forma that we've managed to generate in Brazil over the last 6 months is a new platform which will also be carried out in the next year in the next quarters.

That doesn't mean that we'll see the same levels of profit and such high profits and margins. You can see the margins here in Brazil this quarter are reaching 11.3%.

It does mean that the new platform definitely will not stay at the 4% or 5% the way in the past and will jump towards more like 8%, 9%, or 10% and will be much more healthier business. The reason is is that we are manag- we are managing to maintain prices, high prices, and maintaining the margin in roasted and ground coffee, while we are continuing to grow all our non-R&G activity, which is generating a double-digit margin.

Looking into the next quarters and looking into next year, we do see a jump in the profitability of our international coffee businesses with an emphasis on Brazil, and we do think this will be a new normal, maybe not as high as this quarter, maybe a little bit lower, but still a new normal to this business, unlike what we used to see in the past. In our water business, you can see there was growth in our revenues here in Israel mainly due 4% growth mainly due to quantities of installed base which grew.

We launched this quarter the Shabbat machine. It's basically for Jews who keep the seventh day, the Shabbat.

Until today, our machines were not kosher for the seventh day, for the Shabbat, and now those machines are applicable for people who keep the Shabbat, for religious Jews, and it's a new solution for approximately 30%-40% of the people of Israel who keep the Shabbat in some sort of way. We do think that will be a future growth engines for us.

Nevertheless, we see a decrease in operating income of 3 million, about 11%. It mainly comes from our operations in China.

In China, there is intensive competition by Xiaomi, who entered the market, and since they entered the market we've seen that we continue to grow double-digit on growth or revenues, but on the other hand we had to give discounts and to and to have to reduce prices in order to maintain our position in the market in order to continue to grow, and we also had to invest in new products. Unlike the one-time events that we had in the dairies in Israel, this will follow us into the next quarter or two and into next year.

We predict that by maybe by the end of 2026 the platform will get back to what we used to see in the past. Still it's very important to mention that we still have high because in China the results are net margins and net profit, and net margins we still have high net margins in China, but much less than we had in the past.

When we look at our productivity, our productivity is on in line with our plan. We said that by the end of 2026 we will reach between 300 to 400 million in productivity, and we do see ourselves reaching the target.

We are on track with a strategy for procurement, with all other streams that we opened in this productivity program, with working capital, with OGM, with logistics, with manufacturing, and of course with capability building, upskilling, and reskilling our people to being able to use the new tools that we are bringing into the company. A little bit about talking moving forward, what are the engines of growth that we developed specifically this quarter, which we think for far as next year will help us a lot to continue our growth.

One one is of course our factory in the north. We built our own factory for alternative milks.

Till today, everything that we've done was outsourcing. From third quarter onwards, the end of third quarter onwards, everything that we're doing we're doing in our factory.

That will enable us to give much better product, much more variety, much higher variety of our products, and also not just to play Till today everybody in Israel plays in the segment of alternative milk drinks. We will bring it also to yogurts and desserts, which is this is our claim to fame, this is where we are number one in the market, this is our strength here in Israel.

We'll take the very, very strong brands that we have in desserts and we have in yogurts and we'll be able to implement them in our factory. Our factory will enable us to give much more capacity into the market in a much higher quality and tastier products than we used to have in the past, on the one hand, get into new categories like the desserts, like the yogurts, with our beloved brands, local brands here of our desserts and yogurts, and also our manufacturing costs are much lower than what we used to have when we outsourced Alpro since the beginning of the year before we had the factory.

Putting all those components together, we see this as a major engine of growth in the next quarters and also in the next years. Cow-Free, which I've mentioned before, when we look at the a dairy and a milk industry in Israel and and all over the world, we divide it into three segments.

One segment is the traditional milk everybody knows. The other one is the alternative milk, such as soy, almond, or oat.

The third one is the new segment that we brought to life, and I think we are one of the first companies, innovative company, to bring this segment into the world, which is basically like milk, but not milk because it doesn't come from a cow, but it has the same protein, it has the same components and nutritional advantages, but and and they are identical taste, the sensory taste, but it doesn't come from a cow. It doesn't have lactose, it's so people sensitive to lactose can actually consume it.

For Jewish people who are religious, you can eat it after meat, people who differentiate between meat and milk, and people and and and people who like the taste of milk, but don't do it for various reasons will be able to to get those products. We believe that those three segments, there's a place for those three segments.

This segment is going to start very small and it's going to grow. It's not something that we're going to see that next quarter or the quarter after that is becoming substantial.

It will take time to build the category, as it took time to build the milk alternatives categories, our plant-based category in Israel for many, many years. We do think that this is a very profound and very unique category, that there's place and that there's a consumer need and requirement from consumers for this category, and we're very, very happy that we were the first one to innovate and to launch these products.

In Yotvata, where we do all our milk drinks, traditional milk drinks and protein drinks based on milk, we had capacity constraints over the past year, year and a half, and basically 20%-25% of the demand we were not being able to to meet. We we deployed the new line about 2 months ago, and by December, after all the testings are done, the new line will start being productive, by 2026 our capacity will grow by 40% to 50%, and a demand of 20%-25% which we don't meet today and we don't give an answer today, we will be able to give an answer.

In our milk drink, which is part of our of course Health & Wellness segment, we'll see substantial growth next year with opening up capacity bottlenecks. Shabbat, which I mentioned before, which is a huge launch and and and growth engines for our water business.

As you remember in the strategy, we talked about taking our water company and making it a multi-product company from a single-product company. This year, we launched Under the Sink, we launched the soda machine, and we also launched the Shabbat.

We launched an affordable machine in the UK, and we'll continue to launch new devices from a different price tag, a different price range, and also different functionality to answer consumer needs. We do see the the the ongoing growth of of the water business, and with those new products, especially with the Shabbat, which is very, very high demand for this product.

We sold thousands of those machines and and we stopped sales because we are waiting for new machines to come to Israel so we can continue to sell them. We see potential for substantial growth in the next year.

Just summing up, if you remember our our strategy talked about four pillars: Israel, focusing on the core and and and growth; and Brazil, transforming the R&G and growing the non-R&G; and our water business, growing our water business and and growing internationally as well; and with productivity, CapEx, and investment into the business. Looking at the parameters that we set to the strategy that we want to achieve, I think that we are in line and even way over in line, growing 5% over the years 2024-2026.

We think we, as you can see in our results in 2024 and also now in 2025, we're growing much more than 5%. When when we talk about expanding the margin, you can see there's a substantial improvement and we believe a lot of that improvement is a pro forma improvement into our margin in in our coffee business, which will be a new level.

We do think the productivity of 300 to 400 million, we will reach the target and even exceed it. We are investing a lot in CapEx, whether it's on productivity, whether it's on engines of growth such as the new plant in the north that you've seen, such as Cow-Free that we launched, the Shabbat that we launched, and also digitalization, in automation that we put in the company to be more productive and to assist us to grow in a more healthier way.

When we focus on our portfolio, when we started we were around 60%-65% core. Our portfolio was core.

Core was being number one in the market, growing more than 5%, and having a double-digit margin. Today, and we believe that by 2026, after we turned around Brazil, after we divested Sabra, divested other parts of our businesses, we believe that we will be able to reach this target.

The last big business that we need to do the turnaround in profitability is our confectionery business, and and as I said before, looking into 2026, knowing already what we have as cost of goods when it comes to hedging cocoa and also the inventory of cocoa, we believe that we'll be able to do a substantial turnaround to the confectionery business and to bring it back to levels that we saw in the past. By that, we'll complete fixing the or transforming all the big businesses and all the core businesses of Strauss, having more than 85% of the business as a core business.

Just to sum up before I give it to Tobi, we believe it was a very strong quarter with substantial results for the coffee business, which we believe a lot of them will come to be pro forma. We had some one-time problems in Israel, which are already fixed and we don't see them following us in the next few quarters.

We are looking into turning around our confectionery business once we will our P&L will absorb the new cocoa prices, which are much lower than what we had in the past. From here, Tobi, it's yours.

Thank you, Shai. On slide 19, looking at the quarter's sales more closely, we see continued growth in all segments, while the most significant contribution came from Coffee International, especially from Brazil.

Excluding the appreciation of the Israeli shekel, group sales grew by 13.2%. We also see the impact of divestments in the quarter, with Sabra and Obela being the most noteworthy.

These businesses were consolidated in the group's 2024 non-GAAP results. Moreover, we also see the impact of the divestment of the ultra-fresh business in Q4 of 2024 and the coffee retailer Cofix to-go in Israel at the end of Q2 of 2025.

Without these businesses, our pro forma growth in Q3 of 2025 would have been 16.3%. On slide 20, where we look at the sales for the first 9 months of the year, and we see similar trends as in Q3.

Moving now to operating profit on the next slide. What we see here is that the group delivers significant improvement in both Q3 and the 9 months of 2025.

Higher EBIT and EBIT margin can be attributed to the higher sales achieved and ongoing productivity measures, and despite the impact of raw material cost inflation. In Coffee International, we see the impact of pricing, whereas in Strauss Israel, pricing did not compensate for higher raw material costs.

As Shai mentioned, Strauss Water's EBIT was impacted by intense competition in China. Looking at the next slide, we can see operating profit and margins by business segments.

On slide 23, we see that net income in the third quarter increased by 42.7% following significantly higher EBIT. In the 9-month period, higher financing and tax expenses impacted net income.

Higher financing expenses in Q3 and the 9-month period were attributed to the impact of the stronger shekel, which led to foreign exchange hedging expenses as well as FX differences, as well as higher interest paid, mainly related to financing working capital and higher interest rates in Brazil. Tax expenses were also higher, reflecting tax income received in 2024 following the release of provisions due to previous tax assessments and the profit mix in 2025.

Moving to cash flow performance. On slide 24, we see that in Q3 our operating and free cash flow improved significantly.

Free cash flow amounted to 245 million shekels, an increase of 343 million shekels over the comparative period last year. This was supported by higher EBITDA, lower inventory levels in Coffee International, as well as lower CapEx.

On slide 25, we look at the net financial debt, and we see that the higher free cash flow led to a decrease in net debt as well as an improvement in the net debt to EBITDA ratio. Let's now take a closer look at our business segments, starting with Israel.

On slide 27, Strauss Israel, we see that sales in the third quarter of 2025 mainly reflected pricing in a number of categories, while divestments of the ultra-fresh business in Q4 of last year and of the retail chain Cofix to-go at the end of Q2 of this year impacted growth. Without this divestment, sales growth would have been approximately 5.2%.

On slide 28, we see Strauss Israel sales for the first 9 months, and we see here that growth across the board stemmed both from pricing as well as higher volumes. Moving to EBIT for Strauss Israel both in Q3 and the 9 months, we see that both the impact of higher raw materials as well as pricing were reflected on the operating profit performance.

In Coffee Israel, pricing offset higher green coffee pricing, whereas in Fun & Indulgence, snacks and confectionery, pricing actually did not compensate for higher cocoa costs. In Health & Wellness, we saw a one-off costs related to food safety and quality control activities, as well as higher raw material costs and increased marketing expenses supporting the plant-based milk category.

Moving to Coffee International on slide 31. For the key highlight here, of course, of the quarterly results, Coffee International, we saw strong growth in sales that was driven primarily by pricing, and this sales growth offset green coffee input cost inflation, while operational efficiencies supported margins.

On slide 32, we can see that geographical breakdown of sales for Coffee International in Central and Eastern Europe. We see that sales growth was achieved across the board following pricing as well as higher total volumes.

Our Brazilian JV, as explained before, grew nicely, and we also saw strong growth in Poland, both from pricing and volumes. Moving to the sales for the first 9 months of the year on the next slide, we see a similar picture showing the same overall market dynamics.

On slide 34, we see the Três Corações, our Brazilian JV, performance on 100% basis and on Brazilian real, and we see the increase in sales supported mainly by pricing in the roast and ground categories, but also the continued growth in non-R&G categories. Moving now to slide 36 for the Strauss Water performance.

During the quarter and first 9 months of the year, we saw higher installed base, higher sales both in Israel and the UK, as well as better sales mix. The gross profit was positively impacted by exchange rates and productivity measures, while Haier Strauss Water, our JV in China with Haier, contributed lower equity gains.

Moving to the next slide, we see Haier Strauss Water yuan-based 100% results. We see there that with double-digit top-line growth with lower net income due to intense competition and efforts to preserve and expand market share through promotions, marketing, and R&D by diversifying the portfolio offering.

Should be mentioned also that the RMB versus shekel exchange rate led to lower sales and profit when translated into shekels in the period. With that, we conclude management's presentation and we will open the call for Q&A.

Thank you very much, Tobi. I'll now fetch your questions.

The first question I have is regarding Cow-Free. Could you please give us more color on the Cow-Free dairy drink and spreadable products release this year?

What are some of the early indications from retailers and consumers in Israel and what demand and sales volumes are experiencing?

As I mentioned before, the new category is basically a category that is there to imitate the nutritious values of milk. It has the same milk protein, the BLG protein that we have in milk that comes from a cow, and it has very similar elements.

It also has almost the same taste as the milk drink, and also the same thing in the cheese spread. The advantages of that is that it doesn't come from a cow, it's more sustainable.

It doesn't have lactose, everybody sensitive to lactose can actually have those products. It has very, very similar to milk and cheese, whoever likes the taste of milk will find it identical, almost identical.

It doesn't have cholesterol because it doesn't come from animals. For Jewish people, it's also who differentiate between meat and milk, it also we call it pareve, which means you can eat it after you eat meat.

We think there's a lot of place for this because in all the milk alternatives they don't actually have the taste of milk. Most, by the way, people don't know this, but in most milk alternatives there's not really many nutritious values, not in oat and not in almond.

There's a little bit of protein in soya, but not as much as we have in milk. Here, that we actually have the advantages of milk, we have the same taste of milk for people who like the taste of milk, but for people who doesn't want it to come from a cow, people who are sensitive to lactose, many other reasons, will be able to have this category.

On these reasons, we believe there's place for this category. Yet this category is very, very small.

Right now, there's not even time to talk about revenues or demand. It's just starting.

It will take time. We'll need a couple of more quarters before we can actually have some data and really understand.

Right now, we know that everything we put in the market was sold, but it's very, very, very small quantities, still under test. There's also educating consumers.

What is this new category? What do you mean it's milk, but it's not milk?

What do you mean it doesn't come from a cow? Whatever I told you now, it's something that really needs to be explained and really needs to be experienced by the consumers.

We really think it will take time to this category will grow. Nevertheless, it took more than 10 years to grow the alternative milk category here in Israel, and today it's a more than 1 billion shekel category and still continuing to grow.

We do believe that Cow-Free can grow to being very big category in Israel and to give solution in Israel, not just in milk drinks and spreads. You can talk about it in yogurts and in desserts and in any dairy products that we have today.

There's questions of the availability of those proteins that come from yeast and mushrooms and don't come from a cow, how available they are going to be. Once this will become more scalable, then there'll probably be more factories that will produce this, it will be easier to make this on scale.

Right now, the ability actually to give these products into the market is very, very limited because the input product of the protein is very limited in the amounts that is being produced today. I hope I gave some kind of answer.

We can speak about this for the next 20 minutes, but I think this wasn't the reason of this session.

I actually have another follow-up question regarding Cow-Free from Chris Reimer from Barclays. Are the results of these products in line with your expectations so far?

Yes, very much and even more. When it comes to sensory tests, when it comes to the consumers' reaction to what we've done, very much in line, but I want to be very careful.

There's still very limited amounts of products that we put on sale, and it's still very, very early. I think that a year from now, by the end of next year, after we have a year of launching, after we have a year of deploying them in the market, after we'll be able maybe to scale a little bit up our production abilities and getting more protein and putting more products into the market, we'll be smarter to say what do we think.

We do think this is a very, very exciting category. We do believe very much in this category, and we believe there's a path to grow this category so that the milk industry will be broken down into three major categories: the traditional milk, the alternative milks that are not milk such as soy, almond, and oat, and also Cow-Free, which is basically imitating milk, but it's not milk, has all the advantages of milk and the taste of milk, just doesn't have the disadvantages of lactose, cholesterol, sustainability, and others.

We do think that over the years there's place for these three categories, and the Cow-Free category can grow substantially.

Staying in this same sector, what do you see in terms of the plant-based milk line? How is that performing so far, especially given

It's performing really well. We also managed to grow our market share very rapidly over the last few weeks when we launched.

Our products are much higher quality, much tastier. We brought in variety of new products into the market.

Far we only been in the milk drinks or milk alternative drinks category. Once, as I mentioned before, we'll go into the desserts and to the yogurts, this is where we own the market.

We have the highest market share, we are the number one player. Once we'll take our loved brands and we put our loved brands on plant-based products in the desserts, in the dairy, we believe we can grow this category very much.

The new plant that we have designed, which has the highest technology and with our partners with Danone bringing in their highest IP into the factory, we really be able to grow this category, also grow this category with new products.

Given your explanation, when looking at the global markets, demand does seems to have some challenges in terms of the alternative milk market. How does that correspond with how you see the growth opportunities here in Israel?

Far, we don't see any demand. There was a hiccup in the last 2 years, but we do see alternative milk continue to grow in Israel.

The demand is quite constant. The category's been growing in the previous years double-digit, now it's growing high single-digit.

We don't see a problem. This is only on the side of the milk, alternative milk drinks or plant-based drinks category.

Once, as I mentioned before, we'll get into the desserts and once we'll get into the yogurts, which is a very big category for us, and give that in alternative milk solutions, we do believe we'll be able to grow this category much more and to gain market share in the category, and also develop new products, because today there's not real products when it comes to desserts and yogurts in this category. I think we'll be able to bring in products which will be very, very unique, very, very tasty, very, very good, and with our loved brands which are the number one brands in the desserts and the yogurt categories.

Regarding expansion in the water segment, how long do you think it will take to come to fruition considering the market in China and depending on the launch of the new facility, or is that more of a 2027 story?

It's really very, very hard to know. We do want to see the new facility will come in place and will start delivering in the beginning of 2026.

It has nothing to do with the new facility. It's not a capacity constraint that is today affecting us.

It's more the competition with Xiaomi and the fact that they have reduced prices and the fact it's kind of a price war right now and the discounts at the beginning on machines. Still there's good margins.

I must say, having a 5%, 6% net margin is not a bad margin in our business. The growth is very solid.

We've seen, although there's this war, although that Xiaomi's has putting very high pressure, we're still doing 13% year-over-year, which is very high growth in the category. We're still gaining market share and still growing.

Yes, this will follow us probably in the next couple of quarters. If it's two quarters, one quarter, three quarters, four quarters, yet to be seen.

We'll keep you updated. We do think that we hope that by 2026 or maybe end of 2026 we'll be able to overcome this dip, this downhill, going back hill, but it's too early to say.

The final question so far is are there any more segments of the business being considered for divesture?

We always look at portfolio optimization. We always look what is the right way for us.

We look at the trends, we look at consumer needs, we look at where we have our competitive advantage, we look at do we have sustainable way to grow to meet consumer needs in the next 5 to 10 years, and we look are we number one player, are we number two player, are we a substantial player in those categories. Then we look, is this business profitable?

Can we make it profitable? If the answer to all this is yes, then it's fine.

If not, then we ask ourselves, can we fix one of the no answers to these questions? If we can't fix it, then we ask ourselves, does it support the core activity?

Does it support our portfolio? Sometimes when the answer to that yes, it's keep it.

Only when the answer is no to all the questions about, then we divest it. I won't give you a specific businesses that we are looking at, and of course it's an internal information.

If there's something, then we'll just announce it. We are always looking at portfolio optimization, making our portfolio that is right for us, as right for consumers as well, so that we will serve our consumers in the best way where we have the competitive advantage by maintaining growth and by maintaining high margins.

We don't seem to have any more questions, I will now turn the call back to Shai for closing remarks.

Thank you very much, Rivka. As I said before, this has been a very good quarter for us and also 9 months into the year.

I think that one of the major things that we've managed to do over the past two quarters and also looking into the fourth quarter and hopefully into next year as well is to transform the pro forma and the platform of our coffee business in Brazil and a little bit in the CEE as well. We do believe that we can get higher margins there, be more sustainable.

As I said before, I'm not sure they'll be as high as we've seen in the third quarter, but I do think that we'll be a higher pro forma. We do think Israel had a one-time leap and they'll go back into growth and to higher margins and profitability as was before, especially Health & Wellness, as I mentioned before.

Those one-time problems we don't believe will continue occurring to the future. We don't see them repeating themselves.

We do think that we are on track to growth. Today the business is healthier than it was in the past.

Most of our categories, almost all of them beside the confectionery, are already there with high margins, high growth, and with high adjustment to consumer needs. The only last business that we believe that in 2026 we'll see the full turnaround is our confectionery business.

Overall, when we look ahead, we see continuous growth through all the growth engines and others that I didn't mention this presentation, but all the growth engines that we set ourselves this quarter that I've shown you this presentation, and also with continuing to work on our core categories and growth, and by fixing also our confectionery business, and the pro forma of the new coffee business, we'll continue to see overall profitability and overall growth improving.

Thank you. Thank you for joining us for Strauss Group's third quarter and first nine months of 2025 results earnings call, and this concludes our call for today, thank you.