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1DELEK GROUP LTD > EXPANDING, EMPOWERING

Delek Group

June 2007

Alan GelmanCFO & Deputy CEO


Disclaimer

This presentation has been prepared by Delek Group Ltd (“Delek” or “the Group”) and is provided to you solely for your information and is not to be copied or distributed to any other person. This presentation does not purport to be all-inclusive or to contain all of the information that may be relevant in making any decision concerning an investment in the securities of the Delek Group.

No representation or warranty, express or implied, is made by any person as to the accuracy or completeness of any of the information contained herein. In particular, no representation or warranty is given as to the achievement or reasonableness of any forecasts about the future prospects of the Delek Group.

This presentation does not constitute an offer or invitation to purchase or subscribe for any securities, and neither this presentation nor anything contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.


Who We Are?

Founded in 1951 as Israeli retail petrol distributor

Since 1999, controlled by entities related with Isaac Sharon (Tshuva)

TASE 12th largest company; $2.7bn market cap.

Global investment focus on strategic sectors:

Energy & Infrastructure

Real Estate

Financial Services

Seek complementary acquisitions, leveraging industry experience


Group Strengths

Experienced and swift acting management team

Ability to Identify unique investment opportunities

Proven value enhancing track record

Established reputation with banking community and capital markets

Dividend policy; 40-50% quarterly

Driving Shareholder ValueDriving Shareholder Value


Market Perspective

Source: TASE, correct as of 29/5/07Dividend yield is calculated based on share price at the start of the year

-50%

0%

50%

100%

150%

200%

250%

300%

350%

400%

Dec-02 Dec-03 Dec-04 Dec-05 Dec-06

Delek Group (Adj.)TA-25 Index

Dividend Allocation

$47m

4% Yield

$21m4% Yield

$75m

10% Yield

$140m

8% Yield

$33m


Sector FocusSector Focus

Energy

& Infrastructure

AutomotiveReal Estate Insurance & Financial Services


Energy: Upstream

Israel: First Natural Gas Discovery Offshore

Sole Israeli independent energy source

Strategic Joint Venture with Nobel Energy

Experienced international operator

World class natural gas “Yam Tethys” reservoir

Long term contract with Israeli Electricity Co.

Prospect for second natural gas reservoir off Northern Israeli coast

Global Projects: Expanding Capabilities

Vietnam, Russia and USA

Vietnam project

Yam Tethys, Israel


Energy: Downstream

Retail: Operate Gas Stations Worldwide

US: 502 retail fuel & convenience stores, 8 states

Israel: 2nd largest retail operator; 232 gas stations

Europe: 869 gas stations (pending completion)

Refining: 60,000 bpd Oil Refinery (US)

Sole supplier in Tyler, Texas

Outperforming Gulf Coast crack spreads

US Based Marketing & Supply

2 terminal’s and 114 miles of pipelines


Infrastructure: Water Desalination

Leader in water desalination technologies

Use of both thermal and membrane technologies

Over 360 plants constructed worldwide

Plants in key locations worldwide

Israel, Cyprus, China, Spain, California, India, Kazakhstan etc.

Built world’s largest sea-water desalination plant

Most technologically advanced plant in the world

100million m3/year capacity

Located in Ashkelon, Israel

Ashkelon, Israel

Reverse osmosis method, Cyprus


DGRE’s tenants comprise public bodies, well-known financial institutions and major corporations

Leases with built-in rental uplifts

Matched liabilities to long-term assets

High loan to value (65%)

In robust economies

Prime location

Development potential

High occupancy rates

Long term leases

Income Producing Assets Strong Tenants

Location of DGRE Portfolio* Growth and Leverage

Real Estate: Active Portfolio Management

Switzerland8%Scandinavia

8%

Germany10%

Canada18%

UK56%

*Value based calculation. Based on Delek Global Real Estate (DGRE) ownership share using values correct as of 31/12/06. Not including Marriott hotels (UK) and RoadChef (UK)


Phoenix Holdings Ltd. (55.5%) - Israel One of Israel’s top 5 insurance groups

Market Share - 16% in Life Insurance & 12% in General Insurance

Republic Companies, Inc. (100%) - USA Property and casualty insurer in 4 States in South West USA

8 insurance companies with licenses in 42 States

Niche business with large growth potential

Financial Services - Delek Capital

Seeking to build leading global financial services platform


Delek Automotive Systems

Israel’s leading vehicle importer since 1995

Sole importer & distributor of Mazda & Ford

Mazda #1 brand and Ford #4 in Israel

Market share: 24%

In 2007 launched 9 new Mazda & Ford models

Entering into new segments, compete in 90% of total car market


Financial Performance

Financial Performance


Year-on-Year Growth in Profitability

Delek Group Net Profit

Unit: NIS million

NIS 183m

NIS 403m

NIS 622m

NIS 1,513

CAGR 102%

2003 2004 2005 2006

NIS 310m NIS 325m

Q1/2006 Q1/ 2007


Impressive Financial Performance

ROE (Return on Equity) – Net Income/ Shareholders Equity, averageROIC (Return on Invested Capital) = (Operating income x(1-0.32))/((trade receivables + inventory – trade payables) + PP&E net), average

0%

10%

20%

30%

40%

50%

60%

70%

13%8%

15%

29%

33%

18% 21%9%

66%

21%

2003 2004 2005 20062002

ROIC

ROE


Looking Ahead

Energy: Initiate work on Israel’s largest exploration project

Acquire additional gas stations and oil refineries

Grow Delek Europe (Road Chef, Chevron)

Real Estate: Strong pipeline of income producing assets

Financial Services: Identify M&A opportunities in US and Europe

Expand product base

Automotive: Maintain leadership, 9 new models

Value Potential IDE & Israel Fuel Corp.


Thank youThank you

Contact Us:

Dalia BlackHead of Investor RelationsEmail: [email protected]: +972 9 863 8444

www.delek-group.com


HOT – Cable Media

System TASE:HOT

$775m

HOT – Cable Media

System TASE:HOT

$775m

Republic Companies

Group

Republic Companies

Group

IPP (Power Station)

IPP (Power Station)

IDE (Israel Desalination Enterprises)

IDE (Israel Desalination Enterprises)

Major Holdings

Note: All market cap.’s & currency conversion rate, correct as of 29/05/07*Cumulative holdings of Delek Investments

Delek Group TASE (TA- 25 Index)Market cap. ~ $2.7 Billion

50% 100%

PhoenixInsurance

TASE:PHOE$1,209m

`

PhoenixInsurance

TASE:PHOE$1,209m

`

68%

55.5%*

DanknerInvestment

s

DanknerInvestment

s

DelekBelron

International

DelekBelron

International

Delek Real Estate

TASE:DLKR$994m

Delek Real Estate

TASE:DLKR$994m

Delek Investment & Properties

Delek Infrastructur

e

Delek Infrastructur

e

100%

Delek Energy

Systems

TASE:DEOL$327m

Delek Energy

Systems

TASE:DEOL$327m

Delek Petroleum

Delek Petroleum

100%

100%

Delek Israel FuelCorp.

Delek Israel FuelCorp.

DelekUSA

`

DelekUSA

`

NYSE:DK$1,210m

Delek CapitalDelek

Capital

100%

94%89% 55%64%

16%

DelekAutomotive

Systems

TASE:DLEA$957m

DelekAutomotive

Systems

TASE:DLEA$957m

GadotBiochemicals

TASE:GDBC$48m

GadotBiochemicals

TASE:GDBC$48m

77%

Delek Global Real Estate

AIM:DGRE$1,030m

Delek Global Real Estate

AIM:DGRE$1,030m

Avner Oil Exploration

TASE:AVNR.L$272m

Avner Oil Exploration

TASE:AVNR.L$272m

Delek Drilling LP

TASE:DEDR.L$313m

Delek Drilling LP

TASE:DEDR.L$313m

51%* 69%*

100%

77%100%

100%

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