Trading Statement And Update For The Six Months Ended 31 March 2018 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 “Company" or the “Group") TRADING STATEMENT AND UPDATE FOR THE SIX MONTHS ENDED 31 MARCH 2018 Trading statement The following disclosure is made in accordance with Section 3.4 (b) of the Listings Requirements of the JSE Limited. Pioneer Foods advises that for the six months ended 31 March 2018, a reasonable degree of certainty exists that operating profit and earnings will be as follows: 31 March 2017 31 March 2018 expected 31 March 2018 actual range expected % change Operating profit before items of a R688 million R922 million - R991 million 34% - 44% higher capital nature Adjusted operating profit before items of a R700 million R917 million - R980 million 31% - 40% higher capital nature (note 1 and 2) Headline earnings per 244.4 cents 305.5 cents - 329.9 cents 25% - 35% higher share Adjusted headline earnings per share 253.4 cents 309.1 cents - 334.5 cents 22% - 32% higher (note 1) Earnings per share 247.6 cents 321.9 cents - 346.6 cents 30% - 40% higher 1. Adjusted for the IFRS 2 share-based payment charge relating to the Phase 1 (2006) B-BBEE transaction and the effect of the related hedge, amounting on a net basis to a loss of R5.2 million after tax (31 Mar 2017: R7.4 million loss after tax). An adjustment was also made in March 2017 for specific once-off merger and acquisition costs (R9.3 million). 2. The major reason for the difference between the growth rate of operating profit versus headline earnings is the Heinz Foods SA related, mostly once-off adjustments, which are alluded to in the trading update below. Trading update The Group delivered a credible performance for the six months ended 31 March 2018, with both volume and margin growth over the comparative period, which included the negative outcome of the purchase position on maize and the poor performance of fruit exports. Total volumes are 4.3% higher while Group turnover decreased by 2.8% from R10.2 billion to R9.9 billion, largely due to sales price deflation in soft commodities. Maize price realisation contracted materially as anticipated with wheaten products and rice also seeing deflation, albeit to a lesser extent. The judicious softening of price points supported volume and market share growth. Essential Foods Improved sales volumes and the normalisation of the raw material procurement position resulted in a sound recovery in maize profitability with White Star restoring its market share in a growing category. This improvement was partially offset by a regression in the wheaten value chain performance with flour and bread seeing margin compression in the face of weaker demand and a more competitive environment. Rice continues to make a stronger portfolio contribution. Groceries Cereals, long-life fruit juice, accompaniments and baking aids performed well from a volume and operating profit point of view. The snacking category recorded negative volume growth and a decline in profitability. Liqui-Fruit gained share while Weet-Bix and Safari maintained its share. International Long-life fruit juice and dried fruit export volumes and margins recovered in line with expectation and posted an improvement on 2017 profitability. Margin recovery is however, as previously indicated, not comparable to that achieved during 2016. The major reasons for the lower margins as compared to 2016 are the strengthening of the rand from the date of procurement of raw materials until manufactured products are sold; and the continued constrained trading environment in Southern Africa. The Lizi’s acquisition has been successfully integrated with the UK business and is already making a positive profit contribution. The rest of the UK business has shown strong volume growth, while margins are continuously improving as the business adjusts to Brexit-related structural changes. The Nigeria business performed to expectation. Joint Ventures The performance of joint ventures as a whole was materially impacted by the once-off impairment of certain items on the Heinz Foods SA balance sheet together with a poor operating performance by this entity. Regulatory approval of the Heinz Foods SA acquisition is in progress. The contribution from joint ventures, excluding Heinz Foods SA, showed a year on year improvement. Pioneer Foods is due to release its interim results for the period ended 31 March 2018 on or about 21 May 2018. The financial information contained in this trading update, has not been reviewed or reported on by the Group’s external auditors. * All market share figures are from the Nielsen’s Trade Desk for the six-month period ending 28 February 2018 and the comparative six-month period. Tyger Valley 19 April 2018 Sponsor: PSG Capital (Pty) Ltd Date: 19/04/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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