Trading update for the 22 weeks ended February 2022

RFG Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2012/074392/06)
Share code: RFG
ISIN: ZAE000191979
(?RFG? or ?the group?)

TRADING UPDATE FOR THE 22 WEEKS ENDED FEBRUARY 2022

Group revenue for the 22 weeks ended 27 February 2022 (?the period?)
increased by 20.0%, with strong volume and turnover growth in both the regional
and international segments.

Margins came under further pressure due to significant increases in input costs,
notably tin plate used in food cans, global commodities, raw materials such as
meat and fats, as well as international freight costs.

In the constrained consumer spending environment, it is proving particularly
challenging to recover the higher input costs through price increases, with
resistance from both retailers and consumers.

In the first half of the 2021 financial year (?the prior period?), the group reported
foreign exchange gains of R19.6 million and management expects to report a
small foreign exchange loss for the first half of the 2022 financial year, owing to
currency movements over the reporting periods.

The results for the period include an additional trading week compared to the 21
weeks in the prior period. Excluding the impact of the 22nd week, group revenue
increased by approximately 15.2%.

Regional segment
Turnover in the group?s regional segment increased by 16.1%, with volume
growth of 14.0% and acquisitive growth of 0.9% (refer below).

The main driver of growth was long life foods, where strong volume growth
contributed to turnover increasing by 17.7% for the five-month period.

The two best performing categories were fruit juice and dry foods. Fruit juice
achieved high double-digit sales growth, due to robust volume growth, which
contributed to increased market share in this highly competitive category. Dry
foods also achieved strong sales growth, supported by good volume growth.

Canned meat turnover declined, owing mainly to the impact of inflationary
pressures, primarily in cans and mechanically deboned meat, which is mainly
imported from South America, with prices more than doubling year-on-year.
Long life foods sales into the rest of Africa grew by 12.0%, with continued good
growth in fruit juice, dry foods and canned meat and vegetables.

Fresh foods turnover increased by 13.4%. Volumes grew by 5.6%, with price
inflation and mix changes accounting for 7.8% of the turnover growth.

Ready meals continue to prove resilient in the weak consumer spending
environment and achieved good volume growth. Pie sales recovered and the
category recorded double-digit volume growth. However, meat price inflation and
increased competitor activity continue to place pressure on margins.

The turnover for the Today pie business has been included in these results for
one month since the effective date of the acquisition on 1 February 2022. The
business services South Africa?s top end retail market with well-known brands
Today, Mama?s and Big Jack.

While the acquisition is margin dilutive to the category, due to the current low
margin profile of the Today product range, management is engaging with
customers to adjust pricing in line with the rest of the category. The Today
operation has been relocated from Atlantis in the Western Cape to RFG?s pie
production facilities in Gauteng. The pie category should benefit from improved
operational leverage following the consolidation of the Today pie business into
the existing plants.

The group expects to incur once-off acquisition costs of approximately R19
million in the first half of the 2022 financial year, including restructuring, relocation
and severance costs.

Loadshedding and related water supply interruptions continue to impact certain of
the group?s facilities in Gauteng, resulting in lower production output, higher
manufacturing costs and ultimately lost sales.

International segment
Strong demand for the group?s canned fruit products contributed to international
turnover increasing by 44.1% as export volumes grew by 24.2%. The increased
demand has been supported by the failure of last year?s peach crop in Greece,
the world?s largest exporter of canned peaches.

The good volume growth has been achieved despite the ongoing global logistics
challenges and congestion at the Cape Town port which continues to create a
shipping backlog. Shipping challenges have contributed to significantly increased
sea freight costs since the start of the Covid-19 pandemic, while also impacting
the group?s raw material imports.
Global industrial fruit pulp prices are currently buoyant, while RFG continues to
diversify its international sales and to expand into new markets.

Impact of Russia-Ukraine conflict
While the war in the Ukraine is expected to have a significant inflationary impact
on global commodity and food prices in the months ahead, it is too early to
assess the possible impact of the conflict on inflation, pricing and potential supply
chain disruption.

RFG does not import any raw materials from Ukraine or Russia and has no direct
raw material sourcing exposure to the region. In terms of sales exposure, RFG?s
export volumes to Russia have declined substantially in recent years.

The financial information in this trading update is the responsibility of the
directors and 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 to March 2022 will be
released on the Stock Exchange News Service on 25 May 2022.


Groot Drakenstein
17 March 2022

Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)

Date: 17-03-2022 10:11:00

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