Hamat 2025: What Really Happened in Kitchens After the KLÖSS Exit

The main article argued that Hamat's retail recovery was carrying the group again, while kitchens remained the unresolved bottleneck. This follow-up isolates that exact issue: what happened inside the kitchens platform after the KLÖSS exit, who actually filled the gap, and why Formex was the business that ended up taking the impairment.

This is not a story of collapsing sales. On the contrary, the kitchens segment finished 2025 with NIS 172.5 million of external revenue, up 4.6% from 2024. But underneath that headline, the customer base was reset aggressively. Sales to private customers jumped to NIS 156.9 million from NIS 81.6 million a year earlier, while sales to manufacturers and others fell to just NIS 15.6 million from NIS 83.3 million in 2024. In other words, the platform did not really return to the same economics. It replaced one engine with another.

Three points matter before getting into the details:

• The reset is much sharper than the sales line suggests. In 2024 the kitchens segment was almost evenly split between private customers and manufacturers or other customers. In 2025 private customers were already about 91% of segment sales.
• KLÖSS did not just fade from the headline, it nearly explains the industrial side that was left. Its share of kitchens sales fell to 8.3% in 2025 from 14.4% in both 2024 and 2023, and the agreement ended at the close of 2025.
• The impairment is not an indictment of the whole kitchens segment. Ziv Kitchens passed the value-in-use test without a write-down, but Formex did not. That is a very clear signal about where the model actually broke.

The real reset was in customer mix

Commercially, 2025 looks like an attempt to detach the kitchens segment from a heavy reliance on one meaningful industrial customer. Formex had been producing sliding-door cabinets for the KLÖSS brand, and that customer represented about 14.4% of kitchens-segment sales in both 2024 and 2023. In 2025 the share had already fallen to 8.3%, and in February 2025 the group was notified that the agreement would end at year-end. At the same time, Formex only started working with another strategic customer during the fourth quarter, and the company explicitly says that the activity with that new customer is ramping gradually and is still smaller than what it had with Beit Hasapa.

That is the heart of the story, because the customer-type table shows what actually filled the hole. It was not a deep replacement from other manufacturers. It was a sharp swing toward private customers.

In 2023 and 2024 the model was close to balanced: roughly half of sales came from private customers and half from manufacturers and others. In 2025 that picture flipped. Private-customer sales rose about 92%, while manufacturers and others fell about 81%. That is not a cosmetic change. It is an almost full replacement of the segment's demand profile.

The non-obvious point is how narrow the industrial leg looked by year-end. An 8.3% share of 2025 segment sales is roughly NIS 14.3 million, almost the entire "manufacturers and others" bucket of NIS 15.6 million. So the key 2026 question is not whether Hamat can sell kitchens to private customers. It is whether Formex can rebuild an industrial customer book that does not once again lean on a single large account.

The operating meaning of that shift is larger than it first appears. Formex is explicitly described as the arm producing and marketing fronts and components for kitchen manufacturers, while Ziv Kitchens and Leicht are the finished-kitchen businesses serving the private and premium customer side. That is why a higher total sales number does not mean the engine that was damaged has actually recovered.

Higher sales did not translate into better economics

This is where the gap opens between the surface reading and the segment numbers. Kitchens finished 2025 with total segment sales of NIS 172.8 million, versus NIS 165.2 million in 2024. Gross profit rose modestly to NIS 58.1 million, and gross margin was basically flat at 33.6% versus 33.6% in 2024. Anyone stopping there could conclude the segment absorbed the shock reasonably well.

That would be the wrong read. Below the gross line, the economics weakened sharply. Kitchens EBITDA fell to just NIS 8.7 million, versus NIS 25.1 million in 2024 and NIS 29.0 million in 2023. So the increase in revenue did not restore the segment's economics. It barely preserved the top line.

Even the lens management prefers does not really describe a turnaround. In the annual presentation, the kitchens segment is still shown with an operating loss before other income and expenses of NIS 798 thousand, versus a loss of NIS 512 thousand in 2024. That means the segment was still not generating positive operating profit even before the impairment and before other items. In the same presentation, management continues to frame kitchens as a strategic expansion area and as a synergistic combination of industrial production and a leading retail brand. The important takeaway is that the strategy remains intact, but 2025 still did not prove its economics.

There is another useful nuance in the segment note. On a reported accounting basis, kitchens operating loss after purchase-price amortization but before other income and expenses actually improved to NIS 5.0 million from NIS 6.1 million in 2024. But that improvement is small relative to the EBITDA collapse, and it disappeared entirely once other items came through. So 2025 was not a breakout year. At best it was a reset year in which private-customer demand filled volume, while the industrial leg still failed to return to a level that could generate normal operating profitability.

Formex is where the accounting confirmed what the numbers were already signaling

The NIS 5.2 million Formex goodwill impairment is not just an accounting event. It is the formal confirmation that the KLÖSS hit was not repaired inside 2025 on comparable economics. The company tested value in use for Hazibank, Ziv Kitchens, and Formex using a 5-year forecast and a long-term growth assumption of 2.5%. The outcome was clear: Ziv Kitchens passed, Formex did not.

That contrast matters more than the impairment amount itself. Ziv Kitchens, the arm facing the private customer, finished the year with value in use about NIS 14.2 million above carrying value. Formex, the industrial arm, failed the same test and had to be written down. That is why it is not enough to say "kitchens had a difficult year." The weakness is more specifically concentrated in the piece that was supposed to provide industrial depth and scale.

The sensitivity table reinforces the same reading. For Formex, adding 0.6 percentage points to the discount rate cuts recoverable value by NIS 7 million, while trimming 0.5 percentage points from the growth assumption cuts it by NIS 4 million. That does not automatically mean another write-down is coming. It does mean the assumptions around Formex are sensitive, and the model does not have much room for error.

That is also what drove the sharp swing in reported segment profitability. In other income and expenses, kitchens recorded a net expense of NIS 3.94 million in 2025, versus net income of NIS 11.03 million in 2024. The simple explanation is that this year included the Formex impairment, while last year that line supported profitability. As a result, kitchens moved from NIS 4.9 million of operating profit in 2024 to NIS 8.9 million of operating loss in 2025.

2026 will not be judged by sales alone, but by whether Formex is rebuilt

The number that connects year-end 2025 to the next phase is the order backlog. Kitchens backlog stood at NIS 95.2 million at year-end 2025, versus NIS 77.6 million at year-end 2024, but near the report date it was already down to NIS 90.2 million. The company says that this backlog is expected to be recognized during the first half of 2026.

That matters for two reasons. First, the proof window is short. If the backlog is meant to convert into revenue already in the first half of 2026, both the market and management will get a fairly quick answer on whether 2025 was a temporary reset or something more structural. Second, backlog alone is not enough. It also has to convert into acceptable economics in the industrial arm.

This is where the capacity-utilization data becomes useful. Near the report date, the Ziv Kitchens plant in Sderot was running at about 75% utilization, while the Formex plant in Tefen was at about 65%. That is not dramatic by itself, but it does fit the broader 2025 reading: the commercial load is leaning more on the retail side than on the industrial side. If Formex's new strategic customer does not ramp faster, or if more industrial customers do not come in, that gap will continue to hang over the segment even if total revenue remains respectable.

In that sense, 2025 was a transition year of a very specific kind. Not a transition from weakness to full recovery, but a transition from a model that leaned on one large industrial customer to a model trying to hold the segment mainly through the private customer while rebuilding the industrial arm. That can work. But it still has not proved that it produces the same quality of earnings.

Conclusion

Hamat's kitchens segment did not break on revenue, but it did break in structure. The KLÖSS exit did not trigger a sales collapse because private customers filled much of the hole. But that left the segment looking very different: far more retail-heavy, far less supported by industrial customers, and still with Formex unable to show a commercial replacement strong enough to justify the value carried into the acquisition.

That is why 2025 was not a recovery year for kitchens. It was a reset year. The real indicators now are not the revenue headline but three narrower checkpoints: whether Formex expands its new customer base, whether early-2026 backlog converts into EBITDA rather than revenue alone, and whether the gap between Ziv Kitchens and Formex starts to close. Until that happens, kitchens remain the unresolved piece in Hamat's broader thesis.