Nearly NIS 1 billion has been "erased" from the market value of the Strauss company, with the stock falling by about 9% in three days, since the dramatic announcement of the presence of salmonella in the Galilee landscape plant.
With the announcement of the expansion of the recall today (Wednesday), the stock fell sharply and its price fell by 4.28% on the Tel Aviv Stock Exchange.
So it may no longer be a "slight wing injury", but investors understand that this is not the end of the story and are fleeing the stock.
The company itself wrote in an announcement to investors that "as of the date of this report, the company estimates that the aforesaid is expected to have a material effect on the company's profit for 2022. The company is examining the financial implications estimates for the first quarter of 2022. .
Strauss apparently does not yet know how long the plant will be closed and the fault itself has not been identified.
Sales of the company's entire category of sweets total about NIS 850 million a year and bring in a profit of about NIS 85 million - according to one of the sources in the field.
If we take into account the loss of sales of half a year (two months back of a recall and four months of shutdown of the plant), then we are talking about a loss of profit of about NIS 40 million.
Strauss CEO announced last night: Double compensation for customers due to the salmonella case (archive)
But of course the story does not end here, because after the products return to the shelves, the company will have to restore the damaged image, which costs quite a bit of money - marketing expenses, advertising, promotions - all to bring the Israeli consumer back.
The huge recall event is a big hit for a food company whose first value it is supposed to guarantee the consumer is a quality assurance.
In addition, additional expenses must be taken into account, which cannot be estimated at this stage, but are also likely to be incurred - fines, class actions and more.
And yet, it is too early to eulogize the stock and the company.
The company's profit from sales of chocolate products and sweet snacks in Israel is only about 8% of the company's total annual profit.
Although it is publicly recognized as an Israeli company, it is a company that has extensive activity abroad - in Europe, Central and South America and in Europe where it produces, coffee, dairy products, salads and spreads. Strauss' sales in Israel constitute about 44% of the company's sales (excluding Coffee and Tami 4).
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