Trading Update For The 3 Months Ended 31 December 2017 Pioneer Food Group Limited (Incorporated in the Republic of South Africa) (Registration number: 1996/017676/06) (Share code: PFG) (ISIN code: ZAE000118279) (“Pioneer Foods” or “the Group”) TRADING UPDATE FOR THE 3 MONTHS ENDED 31 DECEMBER 2017 Total volumes are 5.2% higher (4.6% excluding Nigeria) while Group turnover has decreased by 2.4% (3.3% excluding Nigeria) largely due to sales price deflation in soft commodities. Maize price realisation contracted materially with wheaten products and rice also seeing deflation, albeit to a lesser extent. The Group’s South African business, excluding exports, delivered a solid performance despite the challenging economic backdrop and intensified competition by delivering volume growth of 4.7%. South African revenue declined by 5.2% largely due to sales price deflation in soft commodities. Revenue from the Group’s International business, including South African exports, grew by a pleasing 19.5% (12.1%, excluding the Nigerian business). The Nigerian joint venture was not consolidated for the corresponding previous period. The increase in sales volumes resulted in Pioneer Foods gaining market share, confirmed by the growth in our composite corporate market share in top end South African grocers on a three- month basis ending December 2017 (Nielsen’s data). The improved sales volume performance and normalisation of raw material cost positions (most notably in respect of maize) should support higher first half margin and profit compared to the corresponding period. The improvements will be partially offset by the underperformance in the wheaten value chain as well as price promotional related margin pressure. The maize business delivered a strong performance with White Star regaining market share within a category that has seen high single-digit volume growth for the three-month period under review. The wheaten value chain, including bakeries, however faced a challenging trading environment which was partly as a result of consumers switching from bread to more affordable maize meal, as well as intensified price promotional activity. The additional bread capacity in Kwazulu-Natal which was successfully commissioned in December 2017, will enable more effective participation in the coastal region. The Weet-Bix, Liqui-Fruit and Ceres brands posted excellent performances during the reporting period with double-digit revenue growth. This was mainly as a result of participation in major retailer promotions as well as solid growth in the independent wholesale market. Beverage exports performed better than expected, but volume growth remains challenging due to currency volatility and the prudent credit management policies in place. Fruit export volumes improved given the higher levels of stock available for sale compared to the prior comparative period. Further afield, the UK cereals business, mainly granolas, is showing good growth and should start to see the benefits of the recent acquisition of the Lizi’s granola brand; while the Nigerian business is reporting positive growth in both sales volume and pricing. The Heinz joint venture did not perform to expectations prompting corrective actions. Regulatory finalisation of Pioneer Foods’ acquisition of the remaining stake in the joint venture is expected during March 2018. The Group’s short-term strategy remains focused on restoring the health of the core portfolio and delivering a substantial recovery on the weak 2017 performance. We, however, remain mindful of the major detractors in the wheat and baking value chain, as well as concerns around the performance of the Heinz SA business which is currently being repositioned. The international business will also stand to be impacted by the stronger Rand. It is expected that the overall trading environment will remain competitive. The Group has considerable operations in the Western Cape and in light of the widely-reported water crisis in the region, contingency plans have been developed to ensure sustained supply of products. In addition to a continued containment in overall water consumption, a number of contingencies, have been put in place to limit the impact of the water crisis as far as possible. The financial information contained in this trading update, has not been reviewed or reported on by the Group’s external auditors. Tyger Valley 9 February 2018 Sponsor PSG Capital (Pty) Ltd Date: 09/02/2018 07:05:00 Produced by the JSE SENS Department. 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