Welcome to Strauss Group's Fourth Quarter and Full Year 2024 Results Earnings Call. On our call today, management will provide a review of the results followed by a questions and answers session. We encourage you to post your questions to the Q&A function in the Zoom. As a reminder, this online Zoom earnings call is being recorded Tuesday, March 25th, 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 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 our 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 by the company with the Israel Securities Authority. Online with me today are Mr. Shai Babad, Strauss Group's President and CEO, and Mr. Ariel Chetrit, Group CFO, and myself, Rivka Neufeld, Head of Investor Relations. We will begin with a review of the quarterly results by CEO Shai Babad and then move on to the financial highlights of the quarter presented by CFO Ariel Chetrit. We will then move on to a Q&A session. Shai, the floor is yours. Thank you very much, Rivka, and welcome everybody to today's earnings call. What I will do in the next 10 minutes is just give you a brief review of our operations and performance in 2024 in regards and in line with our strategy. Ariel will elaborate more on the figures. Let's start. If we look at 2024, the full year results, we see substantial growth compared to last year in line with our strategic goals with 8.6% organic growth and 6.2% growth. When we look at our gross profit and EBIT, we see that there has been an impact and a decrease in the margins mainly due to the increase of cost of goods taking into consideration cocoa prices, which eroded by more than 300% over the last year, and coffee prices as well. This, of course, impacted our EBIT and our net profit, and we can see the same phenomenon in Q4 with even higher growth due to price increase in revenues, but again, lower margins in EBIT and in gross profit, and at the end of the day, also in net profit, which was impacted also by high financial costs. When we look at our strategies, just a short reminder, the strategy is divided into four major pillars. The major pillar number one, sorry, is Israel as a strong base. In Israel, we continue to focus on the core. We continue to optimize our category to reduce SKUs and also to put a lot of efforts in new product innovation and new product launches and in consumer centricity. I will give several examples in a bit. In addition, this year, we will open up our new plant in the north for alternative milks products, in which we'll give all the variety of our products and we'll distribute and we'll manufacture them in that new plant so that by the end of 2025 and 2026, we will launch a variety of new products in alternative milk. In Brazil, we will continue our journey. In 2024, we continued, and in 2025, we will continue our journey in implementing the strategy of becoming a large food, not only coffee, but also dry food company with a variety of categories in which we distribute and manufacture today in Brazil, in addition to green coffee, and in addition to roasted and ground coffee, in which we are the number one player in Brazil and how that will impact the result. In our international water segment, 2024 was a very good year in implementing the strategy, continuing our growth in China, becoming the number two player in China in purification of water compared to number three, in which we were a year ago, with substantial growth in revenues and in net profit and also our continuous growth in Israel. A future is coming this year of launching a variety of new products, transforming the company from a single product company to a multi-product company with a variety of launches of new products this year. All this lies on a major pillar of future readiness and resilience in which we improve our performance and improve our capabilities with our productivity plan and also invest a lot in the health of our organization, in the culture of our organization in order to meet future demands and resiliency. When we look at the targets that we set ourselves for 2026, just a quick reminder. We said we're going to grow 5% and above between the years 2024 and 2026, and we actually achieved this this year. Also looking forward, we think that we'll be able to meet this goal. When we look at expanding our margins from the 7% they were to between 10%-12% this year, of course, the trend is in the opposite direction due to the increase of cost of goods, mainly cocoa and coffee. The activity and the operations that we are taking upon ourselves with the productivity and also with looking ahead the forecasts on cocoa and coffee prices in 2025 and 2026, we believe this is still an achievable goal. When we look at our cost structure and productivity here, we are in line. We set ourselves a target to save between ILS 300 million-ILS 400 million platform saving by the end of 2026, and more than a third of that journey is already behind us with those achievements. When we look at investing in our future CapEx investments, they're between 5%-7% in line with what we have set ourselves to do. Those investments are in new growth engines, investing in new plants, investing in optimization, investing in digitalization, in IT, in maintenance, and in quality and quality assurance. This is in line with what we set to do. When we look at the percentage of our core activity when we started, and we'll see this in a bit, we started with 67% core activity and 33% non-core, and we set ourselves to be at 85% core activity of our total portfolio. There is progress, and we believe this target is also achievable. When we look at the top line, there has been nice growth in all our sectors in Israel, in coffee, and in our water. In all our segments, we see very nice growth of more than 5%, mostly due to price increase that we took upon ourselves in Israel in our coffee business. In Strauss Water, mostly was done due to the increase of activity in China and also in Israel. When we look at consumer centricity, there is a lot of product innovation that we took upon ourselves to do this year that is set for different communities and various customers and consumers with trying to give a healthier portfolio and also meeting our snacking trend and focusing on innovation in our snacking segments. When we look at our business internationally, in Brazil, due to the high increase of the raw materials of green coffee prices, we have launched a new premium brand in order to help us deal with the erosion of coffee prices. Here you can just see at a glance the effect on average year to year of the cocoa prices and Robusta and Arabica. We've managed to pass those cost increases to consumers in Brazil and outside Israel. In Israel, of course, price increase is more limited, and there's a lot of mitigation that took place in order to help us maintain and improve our results. When we look at our confectionery business, there was a very nice turnaround in this business this year. We've gone back to the same market shares that we had before the recall. We have actually exceeded the revenues that we had in 2021, and we've done that with less than half of the SKUs that were there in 2021. Basically, the business has improved by much its complexity. We've got revenues back and top line back to where we were with focus on core segments such as chocolate tablets and chocolate snacks. This will continue in the year to come. When it comes to profit, there's still, due to very high cocoa prices, been two effects. One is a one-time effect of derivatives in cocoa, which we have a wrote loss of approximately ILS 45 million that affected the results of the confectionery in 2024. Also, the high cocoa prices are affecting the margins. Yet with the current growth of this segment in quantity and in revenues and with the focus we have on confectionery in the tablets and in the snack and chocolate snacking, having a 360 focus on how to deal and mitigate high cocoa prices, we do believe we can reach by the end of 2026 the double-digit margins in the confectionery. We do see the business back on track as a core business. When it goes into Health & Wellness segments, the growth was more moderate there, but due to a lot of productivity, activity, and focus and mix in the right categories, we've managed to increase our EBIT by approximately 10%, and the margins have increased from 11.6% to 12.6%, 1% increase in margins due to the productivity and the focus that we have in this segment. Here it says that the segment grew by 0.3%, but actually it was due to a classification of some of the products in this category, specifically the Energy snacking category that has moved from this category to sweet snacks. If we try to compare apples to apples, there is a 2.6% growth in the activity with a 10% in EBIT. When we look at Brazil, Brazil with all the challenges that Brazil had this year with coffee prices and always trying to catch the market because once we increase prices, it is always in a month or two months' delay to the actual green prices increase. As long as green prices continue to increase, there is a time lag that we need to catch. Yet with all those challenges, Brazil is showing the results in profit, which are the second highest in all times. The best year was 2022, and this is the second best year Brazil has ever had with very, very, very high coffee prices. Our focus in Brazil, as I mentioned before, is to try to take it from a coffee, just being a coffee company or the biggest coffee company to a dry food company. We focus a lot on non-R&G segments which generate margins of more than 10% and a growth of more than 5%. We will continue to focus on those with organic growth, but also with M&As that we are looking to do now in Brazil. We want those segments to become 40% of the activity in Brazil. Today, we are reaching in Brazil approximately 180,000 customers at end points. This is a very good infrastructure for us to distribute all our products in the dry food company as a dry food company for all kinds of categories, not just roasted and ground. We will continue to push in this direction. Also, in 2023, the results were—in 2024, sorry, the results were highly impacted by the non-R&G, and this will continue in 2025 with our efforts to continue and push prices up and to continue to improve the margins from R&G. We are today still the market leader with approximately 32%-33%. The market share that we have lost a little bit by the end of the year, we already managed to get back in the beginning of the year. We will continue to push prices up to improve the margins of the R&G and continue our investments in non-R&G. When we look at our water business, there is really a substantial improvement in the profit, in the margins, and also in the total profit with an increase of almost 30% in the total EBIT. We have crossed ILS 100 million profit in our water business and reaching more than 900,000 households in Israel in direct-to-consumer sales. The business grew by 5%, and as you can see, the EBIT improved a lot. The major and the main improving EBIT is due to the operations in China. China is, in line with the strategy, growing by a double digit in the past three years. Also its net margins are a double digit, and it reached very high results, which helped us gain the EBIT that we're presenting here. Yes, there were one-timers also in China, but on the overall, even without the one-timers, there's a significant improvement in our results in China and in Israel. All of that is, of course, supported by our productivity initiatives that we took upon ourselves and the journey that we started around a year ago when we launched the updated strategy. We focus a lot on various streams along the P&L. Here are just some of the highlights of the activities that we are doing. We're focusing a lot on operational excellence of setting one standards to all our factories in Israel. We have implemented the IWS method in most of our factories in Israel. We will continue to deploy them this year in the remaining factory. It helps us improve the OEE. It helps us bring a higher operational excellence. We also have streams working in revenue growth management, implementing new systems, new methods of giving discounts and doing pricing. We, of course, do a lot of capability building and changing the mindset of our people and the culture of our people to accept those capability buildings. We work a lot around strategic procurement. Procurement is becoming an issue due to the very, very high cost of cocoa and coffee and the fact that our commodities account for approximately 60% of our total cost of goods, the coffee and cocoa commodities. Due to that, we have launched several procurement initiatives in order to improve the way we source, to improve the way we tender, to improve the quality of what we source, and also, of course, at the end of the day, also to improve and increase and improve the price. Also in design to value in food and water, there are initiatives on the size of the package, the material of the package, the ingredients themselves, and others to improve quality and also to reduce cost. As I mentioned before, in cocoa, there are specific streams that are specifically aimed in cocoa to look 360 from the sourcing of the product, also to the product design, to the design to value, and to the mixture of the products, how much of the product itself in the confectionery is made out of cocoa and how much is made out of waffle or other ingredients. In addition, we continue to invest in our infrastructure. Our CapEx are in line with what we said in the strategy. They are between 5%-7%. This year, we invested approximately ILS 650 million in new factory in the north of Israel, in new lines in Yotva ta, in our dairy in the south of Israel, in maintenance in all our plants, in automization in our factories, and also in quality and quality assurance. All this is intended to help us generate our core in a faster and also a more productive way and to enhance our quality. This will continue in 2025 and 2026, and with time, it will decline once we catch up with all the gaps. When we look at our portfolio, so when we launched the strategy, our starting point was 67% core and 33% non-core. Today, in this journey, already we can identify 79% of our portfolio is being core or will be core by the end of 2026, and 21% of the activity is non-core. To achieve that, we actually also, besides improving our core and improving our core and activity, we also did portfolio optimization. We sold, we divested our Sabra operations. We have divested our fresh vegetables operations in Israel, and we also sold our coffee business in Serbia. When we take into consideration the divestments and the turnaround of confectionery, you can see the shift in the percentages of core to non-core in the journey of having 85% of activity as core. To wrap up, when we look at our long-term targets, we did achieve our top line. There is gap, of course, in expanding our margins, but with continuing working on our productivity initiatives, plus the forecasts for cocoa and coffee looking into 2026 and our continuous investment in our growth engines, we do believe that it's achievable to reach targets that we set ourselves for the end of 2026. When we look at productivity, we are in line with the ILS 300 million that we set ourselves with more than a third of the journey behind us. CapEx have just shown, and also looking in 2025, 2026, we will continue to invest in line with the strategy. When we focus on the core from 67%, we've reached 79%, and by 2026, we do see ourselves reaching the 85%. We cannot do this presentation, I cannot finish this presentation without mentioning the fact that there's still a war going on in Israel, and this is a place to say that we wish for the same. We pray for the safety return of all our hostages. We pray for the safety return of all our soldiers, and we pray for the healthy and fast recovery of all the wounded in this war. We hope that all this conflict will be resolved as soon as possible and that we'll have better days in peace. With that, it's worth noting to mention that we try to be as much involved as we can this year in Israel, in our society, and to contribute a little bit from what we can to make Israel a better place. We have donated more than 300 million of our products, which account for more than 600 tons. When we look at value, we talk about more than ILS 20 million of donations that we've done this year, including our farmer funds to help the farmers in the south that have been severely damaged by the war. We opened a farmer fund with Leket together that gave ILS 14 million to the farmers in order to enable them to get their farms back and to get their agriculture back in place. Our employees have donated more than 17,000 hours of volunteer work all across the countries in various, various communities. I think this work helps us to be who we are, to keep the values, and also to help us fulfill our purpose of nourishing a better tomorrow. With that, and before I transfer to Ariel, I would like to take the opportunity and thank Ariel. It is the last time Ariel will be presenting here in the earnings results. Ariel has done 69 reports, quarterly reports in Strauss, 24 of them as the CFO of the group. He has done amazing work. Ariel, you have been a true partner. You have been a true friend. I thank you so much for everything that I've learned from you and from our time together. When I came to the company two and a half years ago, Ariel was there to help me, mentor me, and assist me in getting into my role. I consider you much more than CFO. I consider you as a very true friend. I wish you the best of luck. We are definitely going to miss you a lot, and we really, really wish you the best of luck in your next adventure. Thank you very much, Shai, for your very kind words. I want to send my appreciation to all of the people, all the participants online. First, for your partnership and trust over the past years and fruitful and valuable conversations, and for your valuable inputs over the years. It has been really a privilege and my honor to serve you. Thank you very much. I will continue with a brief presentation of the quarterly and the annual results. If we start with the fourth quarter and look at the top line, we grew in sales with around 6.6% growth. When we take into account the translation effect and we neutralize it, we grew almost 14% in our top line. If we look at on the right-hand side on the segments, different segments, we can see that Strauss Israel grew more than 8%, mainly due to the price adjustment effect that we made in 2023 and during the first half of 2024, and also due to the effect of the big volume and mixed growth that we experienced in our confectionery division. If we look at the coffee, international coffee company, most of the growth there came from price adjustments due to the very high inflation we experienced in our green coffee prices. We experienced a very strong growth during the fourth quarter in Strauss Water. These numbers represent only the Strauss Water Israel and Strauss Water U.K. numbers, therefore representing a very strong growth in the fourth quarter. When we look at the gross profit, we see the gross profit declined. We also see a decline in the gross profit margin. This is mainly due to the very high inflation, commodity inflation of cocoa and green coffee in the Strauss Israel segment and the almost 100% inflation in the green coffee in the coffee international segment. When we go to the EBIT line, we can see that the decline in the profit shrank a little bit to a ILS 7 million, almost negligent difference between this year's operational profit and the fourth quarter of 2023. The reason for the improvement in the operational expenses is mostly due to the productivity enhancement and the projects that we're doing that Shai mentioned with our strategy. As Shai mentioned, we are more than a third of our journey is behind us, and therefore we can see the results in our operating profit. Going to the net income, we see that the difference between the fourth quarter of this year and the fourth quarter of last year increased a little bit compared to the operating profit. This is mainly due to the increase of our finance costs. Interest costs grew by around ILS 13 million this quarter. This is mainly due to the fact that this year our net debt platform increased a little bit and our interest rates increased mostly outside of Israel and mostly in Brazil. If we look at the annual results, we can see that in our revenue, we grew by more than 6%. We had a negative influence of the translation effect of ILS 230 million that negatively affected mainly our coffee international sales. The same effects of increasing and adjusting selling prices due to commodity inflation and a big mix and quantity increase in sales in Israel in the confectionery division. Gross profitability deteriorated this year and decreased a little bit, but we can see that on an annual base, our gross profit grew with relation to the year of 2023. This growth represents our capability in the long term to adjust our selling prices to the very high inflation of our commodities, mainly the green coffee inflation. Just to remind everybody on the line, the green coffee inflation is now on its fourth year. It began in the second half of 2021, and it continued over the past three and a half years. Over these years, we managed to increase our selling prices nominally by at least the same amount of the inflation of the green coffee prices. Of course, it still causes a decrease in our gross profitability rates, but at least our gross profit is still growing. If we look at the operating profit line, we see that on an annual base, our operating profit is ILS 20 million less than what it was in 2023. If we look at the bridge of the main causes for the effects, we can see that Strauss Israel operating profit grew by ILS 39 million. This includes also the derivative loss effect that Shai mentioned before of around ILS 44 million. Therefore, if we take it, if we neutralize it, we can see a, let's say, real business growth of more than ILS 80 million in the operating profit in Strauss Israel this year. In Strauss Coffee International, we can see a decrease of ILS 24 million. This decrease comes mainly from Central Eastern Europe and in Central Eastern Europe, mainly from Russia. In Strauss Water, we can see a very significant increase of ILS 25 million, which 80% of it came from Strauss Water in China results, which we are very satisfied with. If we look at the one-time items on the left-hand side, we can see the translation effect. Of course, it's a negative effect of ILS 11 million. On the right-hand side, we can see the effect of the one-time benefit that we received from the insurance reimbursement last year in Sabra, reimbursing us for the factory shutdown that occurred in 2022. Of course, if we neutralize it, we can see that our actual ongoing operating profit in 2024 was much higher than what it was in 2023. If we look at the net profit, we can see in this bridge the main causes for the approximately ILS 20 million decline year- over- year. We can see the increase in our finance expenses, which I explained with relation to the quarterly results. On the other hand, a very significant decrease in our tax expenses due to tax settlements that we had during the first half of 2024, mainly in Israel and in Central Eastern Europe. This explains the net profit. Just a very brief focus on Brazil results on a long-term base. These are the quarterly results. What we can see here is that Brazil has been capable to increase its selling prices and at least cover nominally in financial terms for the very high inflation in green coffee. This is why we see the gross profit increasing over the different quarters. You can see the very significant improvement in local currency in the fourth quarter in our operating profit in Brazil, which is actually the highest fourth quarter profit that Brazil has ever achieved. When we look at the annual results, we can see the same trend here. The Brazil, the Três Corações business manages to cover for the very, very high green coffee inflation, not in terms of margin rates, but of course, in nominal terms, we can see that gross profit grew from 2021 to 2024 very significantly. We can see that in the operating profit, this is the second highest ever profit that Três Corações shows during its history since 2005. Shai explained already the increase in our CapEx. Just one note to say that our average IRR on our CapEx is higher than our average ROIC, and therefore we will see significant fruits of these large investments in our results in the next couple of years. Last but not least, the Sabra and Obela divestment deal, which yielded a ILS 356 million net profit for Strauss Group, but even not less important than that, yielded a ILS 730 million increase in our net cash position. You can see it here with our net debt decline to less than ILS 2 billion at the end of 2024 and our gearing ratio that went down to 1.7x, putting us in a very flexible financial situation and stable financial position towards the future in implementing our strategy in the next couple of years. Last but not least, we declared a dividend of ILS 160 million today. This is combined and added to the dividend that we declared approximately a month ago of ILS 200 million due to the Sabra Obela divestment deal and its profit. On a combined base, we are declaring this year ILS 360 million of dividend, showing our confidence in the business and in its strategy for the next years. Thank you very much, and we will move on to your questions, please. Thank you. I will remind that you can submit your questions to the Q&A function on the Zoom call. We have not received any questions. With this, I will now return the call to Shai for his closing remarks. Thank you, Shai. Thank you, Rivka. As I mentioned in the beginning, it was a challenging year. It was a challenging year because of the war. It was a challenging year because of cost of goods and cocoa prices and coffee prices. I think that the lights that we see is that the productivity work that we took upon ourselves and the mitigations that we have done helped us. If we take out or cancel the one-timers that we had in 2023, which is the ILS 48 million that we've received for the insurance of Sabra, and we take out the ILS 45 million loss in 2024 for the derivatives in cocoa, there's actually an improvement in total EBIT of ILS 93 million that should be implemented there, which is approximately improving the results by more than ILS 70 million between the years 2024 to 2023. Looking at the business itself without the timers, although this was a year of war, although cocoa and coffee prices have reached record heights that they have never been before, we'll still manage to improve our profits. When we look at 2025 with the new innovation in place, with the continued mitigation in place, with the new plant that we'll have in the north, with the new focus that we have on our water business as a multi-product company, with the launches that we'll have this year, and the continuing productivity, immense productivity that we're doing, we are confident that we are in this journey of improving our results and improving our margins for 2025 in order to meet the targets that we set ourselves by the end of 2026. Thank you very, very much for everybody that was joining. We actually received a few questions if you would like to answer. We can take it. Okay. The first question, can you give any color on the dynamics around what's driving the strong growth in Brazil? Can you comment on the progress of penetration with new products there? Growth in Brazil is mainly driven now by the fact that we have increased prices by approximately 100% between 2023 to 2024. This is due to the high erosion of coffee prices, green coffee prices. In addition, we are investing a lot in growing all the non-R&G categories. We are continuing to sell coffee machines there, reaching more than 2.5 million coffee machines that we have sold with our capsule. We have continued to grow our positive brand there, which is a brand for alternative milk. We have continued to push our ready-to-drinks. We have continued to push our protein drinks there. We have continued to push our corn business there and also powder juices there. We are looking into new categories and M&As in new categories beside the organic growth. I think that on the one hand, there's a lot of growth in the non-R&G that is happening organic and will happen also non-organic. There were substantial price increases that drove growth in Brazil and will continue to drive growth in Brazil since coffee prices are continuing to erode. Thank you, Shai. An additional question, what are your plans for the Kitchen Hub? As we've mentioned, we are looking into divesting our activities in the Kitchen Hub. Our updated strategy is talking about focusing on the core. We will take from the Kitchen Hub technologies which are in line directly and in line with our business, that has a direct contribution to our business, so that we see direct contribution to our business. Overall, overseeing the food tech industry here in Israel or outside Israel is not a major focus for us. Therefore, we will be looking at divesting our activity there and only focusing on technologies which are relevant to Strauss activity. Thank you, Shai. The final question is, what are some of the additional steps for this year and next to reach your 2026 goals? I think I went through them during the presentation, but just to give the highlights again, it is the new engines of growth. If it is the water business, it is the product launches that we will have this year and next year. It is the continuing work on margins in Brazil, improving the margins of Brazil, productivity in Brazil, and also investment in the non-R&G, including M&As that we will do in the next two years in the non-R&G segment. All of the non-R&G segments are growing by more than 5% and have an EBIT of double digit, a very nice high double digit EBITs. We will continue to work on our core in Israel, invest in our core in Israel, reduce our SKUs. We already reduced complexity from 1,300 SKUs to 780 SKUs. In addition, we will go into innovation, going into more snacking innovation, opening our new plants in the north for alternative milks, which will enable us to take all our dairy products and now give those products the variety of products that we have in desserts, and in yogurts, also in alternative milk category. We will continue to push that as well. Above all, we will continue to work on the culture and on execution and on making the company more resilient in order to reach the goals. Since we have divested from Sabra and now debt to EBITDA is standing on 1.7x, that gives us room to look for new opportunities of investment for new legs that we want to add to our business in order to continue to push for healthy growth. Thank you. Those are all the questions we have for today. Thank you for joining Strauss Group's fourth quarter and full year 2024 results. This concludes our call for today. Thank you.