Trading update for the five months ended February 2020 Rhodes Food Group Holdings Limited (Incorporated in the Republic of South Africa) Registration number 2012/074392/06 JSE share code: RFG ISIN: ZAE000191979 (“RFG” or “the group”) TRADING UPDATE FOR THE FIVE MONTHS ENDED FEBRUARY 2020 Group turnover for the five month period ended February 2020 (“the period”) increased by 7.6%. Regional segment Turnover in the group’s regional segment (South Africa and the rest of Africa) for the period increased by 9.3%. Regional fresh foods turnover increased by 15.9% for the five months, with volume growth of 3.5% and acquisitive growth of 4.3%. The performance was driven by the strong growth in the ready meals and pie categories. Regional long life turnover grew by 5.7% with volume growth of 3.2%. Fruit juices and baked beans continue to perform well. Squish baby food, previously reported in the regional fresh foods segment, is being reported in the regional long life foods segment from 1 October 2019. The change did not have a material impact on the reported numbers. The operating profit margin for the regional segment improved for the five-month period, although at a slower rate than expected. Trading for March has been strong across all categories and there has been an uplift in canned food volumes (particularly vegetable and meat products) following the national state of disaster being declared in the country. International segment International turnover declined by 1.7% owing mainly to a marked slowdown in exports of canned fruit to China since January following the outbreak of COVID-19. Limited exports have been made to China since January which has resulted in a decline of 11.3% in international volumes. The impact of this reduction in export volumes was partially offset by inflation of 6.0% and the 3.6% depreciation of the Rand against the basket of trading currencies. While some of the excess volume of canned fruit earmarked for China was exported to other Asian markets, a significant volume will be placed in alternative markets at lower margins than those typically achieved in China. The recent devaluation of the Rand will have a favourable impact on the second half performance but the profitability of the segment in the first half will be adversely affected by the mark-to-market revaluation of forward exchange contracts at the end of March. Interest payments Shareholders are advised that interest payments for the six months to March 2020 are expected to be R5 million lower than the prior period owing to the group’s reduced debt levels. RFG response to COVID-19 Management confirms RFG’s adherence to the highest food safety standards. The COVID-19 outbreak has not impacted any of RFG’s manufacturing facilities and precautionary measures have been implemented for staff, contractors and visitors across the group’s operations to reduce the risks associated with the virus. These precautionary measures include restricting all international travel and limiting local travel to business-critical travel only. External and internal visits to the group’s facilities are being limited and are subject to strict approvals and screening of visitors. While it is still too early to determine consumer buying patterns during this period of social isolation by many South Africans, households are stocking up on long life products including canned meat and vegetables, and baby food. RFG has capacity at most of its manufacturing facilities to increase production at relatively short notice should consumer demand increase. The production facilities are supported by a robust supply chain and the group currently has sufficient raw material stock cover for 9 to 12 weeks on imported materials should the international supply chains be disrupted. The group expects a slow recovery of volumes into China from around mid-year. Management is confident that the shipments previously destined for China will be successfully placed in other markets. The impact of the lower margin yielded on exports to these other markets should be partially offset by the weaker currency. The financial information on which this voluntary trading update is based has not been audited, reviewed or reported on by the group’s independent external auditors. The group’s interim financial results for the six months ending 29 March 2020 will be released on the Stock Exchange News Service of the JSE on 19 May 2020. Groot Drakenstein 23 March 2020 Sponsor Rand Merchant Bank (A division of FirstRand Bank Limited) Date: 23-03-2020 10:00:00 Supplied by www.sharenet.co.za 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. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.