Rimoni: How deep is the real exposure to exports, FX, and auto

Where The Exposure Really Sits

The main article already argued that Rimoni's core remained relatively resilient even as the cash cushion thinned. This continuation isolates a narrower question: did 2025 expose a deep dependence on exports, FX, and auto, or was it a cyclical hit that sounds larger than it really is?

The answer is more nuanced than the label of a plain exporter. At the revenue line, Rimoni is already less dependent on foreign markets than a superficial read suggests. Revenue outside Israel fell in 2025 to ILS 41.99 million, from ILS 46.08 million in 2024 and ILS 59.75 million in 2023. Exports therefore accounted for only 23.1% of sales, down from 25.2% in 2024 and 28.0% in 2023. At the same time, domestic revenue actually rose to ILS 139.86 million from ILS 136.89 million. This does not look like a business that collapses just because Europe slows.

But this is exactly where the more interesting layer begins. Rimoni's currency exposure is deeper than its geographic exposure. The company says that most selling prices for the group's products and services are denominated in dollars or euros, and that a meaningful part of purchases, alongside part of assets and liabilities, is also denominated in foreign currency. That means that even when a smaller share of sales is booked outside Israel, FX still reaches into pricing, inventory, the balance sheet, and the financing line.

In that same year, Rimoni explicitly tied together three forces: shekel appreciation against the dollar and the euro, weaker activity with auto-industry customers, and lower activity at European car manufacturers. These are not three separate problems. They are one chain. When foreign-market activity softens, when auto weakens, and when FX moves in the wrong direction, the pressure does not stop at revenue. It reaches margins and financing too.

That chart matters because it sharpens the gap between the story and the numbers. 2025 was not a broad demand collapse. It was a year in which foreign-market revenue kept weakening, while the domestic market buffered enough of the blow for total revenue to decline by only 0.6%. That is an important distinction. It means the issue is not "either exports work or the company breaks." The issue is that the part of the business with higher FX and auto sensitivity weakened, while the FX layer remained deeply embedded in the model.

Exports Shrunk, But The Currency Layer Did Not

This is the point that is easiest to miss. If the reader looks only at revenue by market destination, it is tempting to think FX exposure is shrinking together with exports. In practice, almost the opposite happened.

Rimoni's financial balance sheet became far more dollar-heavy in 2025. Net dollar-denominated financial assets rose to ILS 38.24 million, from ILS 13.34 million at the end of 2024. In euros, the position also moved from a net liability of ILS 643 thousand to a net asset of ILS 3.26 million. In line with that shift, pre-tax sensitivity to a 5% move in the dollar rose to ILS 1.912 million, versus only ILS 667 thousand at the end of 2024. Euro sensitivity remained much smaller at ILS 163 thousand in 2025.

Put differently, Rimoni came out of 2025 with much greater dollar exposure on the balance sheet precisely in a year when exports had already become a smaller share of sales. That is the key point. A reader who measures exposure only through the "outside Israel" revenue line misses that the dollar still sits inside pricing and inside the balance sheet.

The company itself says that shekel depreciation benefits results and appreciation hurts them. That fits the swing from net financing income of ILS 2.85 million in 2024 to net financing expense of ILS 1.53 million in 2025. In other words, the financing line alone deteriorated by ILS 4.38 million year over year. For a company that ended 2025 with ILS 34.32 million of net profit, this is no footnote.

It is also worth noticing what the company did not say. Rimoni lays out a policy of maintaining foreign-currency liquidity, relying on natural hedging, examining hedging transactions, and embedding adjustment mechanisms into pricing, but it also says there was no change in 2025 in how currency risk is managed or measured. When dollar sensitivity has almost tripled, the standing policy stops looking like a technical disclosure. It becomes part of the thesis.

What matters here is not only the size, but the direction. 2025 did not just expose operational weakness in exports and auto. It also left Rimoni with a financial structure that is more sensitive to FX. So even if foreign-market revenue stabilizes, the financing line may not calm down at the same pace.

Auto Is Not Just An End Market, But A Business Junction

The weakness in auto is not just another box in the product mix. It sits exactly at the point where end demand, the marketing channel, the subcontracting chain, and European exposure meet.

In 2025 Rimoni's auto revenue fell to ILS 35.88 million, from ILS 42.45 million in 2024 and ILS 51.73 million in 2023. That is a 15.5% decline in one year and a 30.6% decline versus 2023, while group revenue as a whole fell by only 0.6% versus 2024. So anyone looking for the center of weakness was given it almost directly.

The company explicitly says the decline in auto-related activity reflected lower activity at European car manufacturers. That matters because it ties auto not just to one product line, but to the demand cycle in Europe. At the same time, Rimoni notes that MPE serves as a marketing arm for plastic products for the auto industry. Auto is therefore not just part of the sales mix. It is part of how the group reaches customers.

The depth of that link also appears on the production side. Polplast is described as the group's subcontractor for plastic products for the auto industry, and the company stresses that work cannot simply be moved to another subcontractor without stringent tests and customer approvals. That means auto exposure does not stop at whether orders rise or fall in a given quarter. It also shapes Rimoni's operational flexibility when demand changes.

That chart sharpens two conclusions that seem contradictory, but are both true. On one side, Rimoni is less dependent on auto than it was two years ago, and some of the decline there was offset by a sharp rebound in the technical category and continued growth in defense. On the other side, auto still represented almost one fifth of group revenue in 2025 and, more importantly, sits at a strategic junction that management still describes as a growth field together with medical.

That means the 2025 auto weakness looks more cyclical than structural, but it is far from marginal. Rimoni is not exiting this market. Quite the opposite, it still wants to win new projects in auto and medical. So the real question for 2026 and 2027 is not whether auto disappears. It is on what terms it returns, and under what exchange-rate backdrop.

How Deep Is The Real Exposure

The precise way to read 2025 is not through a simple formula of "exporter hurt by the euro." The picture is sharper than that.

At the revenue line, Rimoni is leaning more on Israel and less on foreign markets. At the pricing level, it remains deeply tied to the dollar and the euro. At the end-market level, auto weakened quickly, but it did not disappear and still remains a strategic market. And at the balance-sheet level, dollar exposure actually increased. So 2025 did not prove that Rimoni is a business fully built on exports. It proved that the company's sensitivity to foreign-market cycles and FX remained deep even after direct export dependence had already fallen.

That also defines the right near-term read. If foreign-market revenue stabilizes and European auto stops dragging, Rimoni can benefit from an operating structure that did not crack in 2025. But for that to show up cleanly in profit, FX also has to stop working against the company, or Rimoni has to show that the tools it talks about, pricing adjustments, natural hedging, and hedging transactions, are actually capable of smoothing the volatility.

Bottom line: Rimoni's export exposure is no longer large enough to explain the whole story on its own, but FX and auto are still large enough to explain most of the deterioration. A reader looking only at geographic revenue mix misses the depth of the exposure. A reader looking only at the financing line misses that the source is both operational and sector-specific. Both things are true at the same time.

Conclusions

The main article argued that the operating core remained relatively resilient. This follow-up shows that the 2025 weakness was highly concentrated: less in the company as a whole, and much more in the overlap between foreign markets, FX, and auto. This is not an all-or-nothing export dependency, but it is a deep sensitivity.

Current thesis in one line: Rimoni is already less export-driven at the revenue line, but more exposed to FX and auto in the quality of earnings.

What changes in the sharper reading is that the issue is not only that part of foreign activity weakened. The issue is that this weaker part sits exactly where the business is also priced in foreign currency, carries higher dollar exposure on the balance sheet, and faces a softer European auto market.

The strongest counter-thesis is that this exposure is already on its way down: exports carry less weight, the domestic market held up well, the technical category rebounded sharply, defense is growing, and the company continues to broaden other lines. That is a serious argument. But it does not cancel the fact that dollar sensitivity rose sharply in 2025.

What could change the market read over the short to medium term is the combination of three datapoints: whether foreign-market revenue stabilizes, whether auto stops shrinking, and whether the financing line becomes materially less volatile. If all three start moving in the right direction together, 2025 will look more like a transition year than a structural break.

Why this matters: At Rimoni, foreign exposure is not only a question of how much gets sold in Europe and the US. It is also a question of which currency the business is priced in, which end market absorbed the hit, and what still remains tied to European demand even after export share has already come down.

What must happen over the next 2 to 4 quarters for the thesis to strengthen is stabilization or renewed growth in auto, a calmer financing line against FX, and proof that the technical, defense, and medical categories can offset foreign weakness without hurting margins. What would weaken the thesis is another step down in foreign-market revenue, further growth in net dollar exposure, or continued weakness among European auto customers.