(Logo: http://www.newscom.com/cgi-bin/prnh/20080826/317650 )    Six Month 2009 Financial Highlights:    - Sales totaled NIS 3.0 billion, similar to 2008;   - Sales, net of exchange rate impacts, increased 4.4%;   - Pro-forma operating profit increased 1.9% yoy reaching NIS     270 million;   - Pro-forma net profit increased 1.7% yoy to NIS 134 million;   - Strong cash generation: Operating cash flow improved as a     result of decrease in inventory and improved working capital. Operating     cash flow totaled NIS 280 million compared to NIS 1 million last year.    

Ofra Strauss, Chairperson of Strauss Group, said today, "Strauss Group continues to expand globally while successfully navigating today's challenging business environment. We continue to develop the key foundations for our long term growth, investing in the development of new areas which will serve as the Company's future growth drivers."

Gadi Lesin, President & CEO of Strauss Group, said today, "Our results for the first six months clearly highlight our ability to successfully stand up to the current global challenges; Strauss has succeeded in meeting its pre-defined targets, preserving sales levels while improving both its operating profit and cash flow. Our strict control of expenses and our ongoing efforts to reduce inventory and working capital has resulted in a dramatic improvement in our operating cash flow."

   Main pro-forma data for H1 2009 (in million NIS):                               First Six Months        Second Quarter                             2009    2008   % Chg    2009    2008    % Chg    Sales                    3,036   3,036       -   1,514   1,532    1.2%-   Gross Profit             1,119   1,118    0.2%     568     566     0.3%   Operating Profit (1)       270     265    1.9%     135     128     5.6%   Profit for the Period      175     150   16.1%      80      75     5.7%         (Net Profit (2)      134     131    1.7%      55      65   16.2%-    (1) Before other income (expenses)   (2) Attributed to the shareholders of the Company     The Israel Sector - Strauss Israel  

In the second quarter of 2009, sales for Strauss Israel's activities, including the coffee business in Israel, totaled NIS 764 million, a decrease of 2.9% compared to the second quarter last year. Second quarter 2009 sales by the Israeli sector (excluding coffee) totaled NIS 627 million for the period, a decrease of 2.1% compared to the second quarter last year. Sales in the second quarter were affected by the timing of the Passover holiday, with the majority of the 2009 Passover holiday sales taking place during the first quarter, as opposed to 2008 when the majority of the Passover holiday sales occurred during the second quarter.

In the first six months of 2009, total sales for Strauss Group in Israel totaled NIS 1,620 million, a 0.3% decrease compared to the same period last year. Sales by the Israeli sector (excluding coffee), in the first six months, totaled NIS 1,308 million, a decrease of 0.9% compared to the same period last year.

The Company in Israel is investing greater resources in understanding consumer behavior in a period of recession in view of the change in purchasing power, and continues to focus on the fundamental elements - product quality, service level and pricing management. The Company in Israel is investing efforts to streamline its expenses while placing emphasis on retaining its two major assets -people and brands.

Operating profit, pro-forma, in Israel increased 7.6% in the second quarter, mainly due to the improved cost structure, also drawing an increase in the operating margin, reaching 10.6% in the quarter compared to 9.6% last year.

Operating profit, pro-forma, in Israel increased by 12.1% in the first six months of 2009, primarily due to the continued improvement in the cost structure. The majority of the improvement was evident in the Health & Wellness unit. Operating profit margin in Israel for the six months improved to 11.4% compared to 10.0% last year. The improved operating profit both in the quarter and six months resulted from the ongoing cost efficiencies in both production expenses and material cost.

The Coffee Sector

In the second quarter of 2009 sales by the coffee sector totaled NIS 811 million, a decrease of 0.8%. Sales, net of the impact of currency exchange rates, grew by 5.8%. Organic growth (net of acquisitions and exchange rates) amounted to 2.9%.

The growth in local currency in the second quarter is evident mainly in the Company's businesses in Brazil and in the former Soviet Union countries. Coffee sales in the quarter were positively influenced by the growth in volumes in certain regions, partially offset by currency fluctuations.

Sales in the first six months of 2009 grew by 2.2% year-over-year reaching NIS 1,581 million. Net of the impact of currency exchange rates, sales increase 13.1% year-over-year. Organic growth (net of acquisitions and exchange rate) amounted to 8.2%.

Coffee sales in the first six months were adversely impacted by substantial operating currency fluctuations, combined with the difficulty of raising prices in the prevailing macroeconomic environment. Growth in local currency is evident in the Company's activity in the former Soviet Union countries, Brazil and Poland.

Gross profit for the second quarter totaled NIS 263 million (32.5% of sales) compared to NIS 271 million (33.2%) last year, a decrease of 2.9%. Gross profit in the first six months totaled NIS 493 million (31.2% of sales) compared to NIS 504 million (32.6%) last year, a decrease of 2.2%.

The decrease in the gross profit in both the quarter and first six months was mainly due to the currency impact on raw material costs in the local currency (the purchase currency of raw materials is the US Dollar, which grew stronger in relation to the different currencies in the reported period), and also due to the erosion of the various currencies against the Shekel, which led to a decrease in the gross profit, which is reported in Shekels.

Operating profit of the coffee business in the second quarter totaled NIS 73 million (9.0% of sales), similar to the operating profit in the corresponding period last year. Operating profit in the first six months of 2009 totaled NIS 123 million (7.8% of sales) compared to NIS 137 million (8.8% of sales) last year, a decrease of 10.0%. The decrease in the operating profit is mainly the result of the decrease in the gross profit and the impact of currency exchange rates.

The Sabra Refrigerated Dips Business in the USA

Commencing in the second quarter of 2008 the Company proportionately consolidated the Sabra business (50%) according to the rate of its holding following the closing of the transaction with PepsiCo.