SENS Headlines
Trading update to February 2023

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


RFG increased revenue by 7.4% in the 21 weeks ended 26 February 2023 ("the
period") driven by price inflation of 14.7%. The deteriorating domestic consumer
environment and competitor activity created volume pressure in some categories
and overall group volumes declined by 11.0% which was partially compensated
for by 2.5% growth from the Today acquisition. Foreign exchange gains
accounted for 1.6% of the revenue growth, with an adverse mix impact of -0.4%.

The results for the period include one trading week less than the comparative 22
weeks reported on in the prior period.

Regional segment
The group?s primary focus has been on improving the operating margin through
an effective balance of price, volume and margin management, while being
conscious of price increases negatively impacting volumes due to consumers
being under severe financial pressure. The group?s volume decline is largely in
line with the market in comparable categories.

Revenue in the group?s regional segment increased by 8.7% with price inflation
of 16.0% and volumes declining by 9.4%. Acquisitive growth contributed 3.0%
and the mix change was -0.9%.

The pie category delivered a strong all-round performance after recovering from
the significant sales and margin pressure in the previous financial year due to
high levels of inflation and restructuring costs. The performance was supported
by the turnaround in the Today business following price increases to bring the
margin more in line with the rest of the pie category. The Today acquisition
contributed 3.0% to the growth of the regional segment.

Good sales growth was achieved in three of the key long life foods categories.
Fruit juice, the largest long life category, achieved good volume growth with high
double-digit sales growth and this has enabled the category to maintain margins.
The dry foods and meat categories achieved good sales growth despite price
increases during the period.

Volumes in the canned food categories remain under pressure from weak
consumer demand, sustained cost pressures from high raw material and
packaging costs as well as competitor activity. However, the canned meat
category has started to recover following price increases and stronger sales

International segment
Revenue grew by 0.7% as strong international selling prices and the benefit of
the weakening Rand were offset by the 18.8% decline in volumes off the high
base in 2022 when production was increased to meet the higher global demand
following the failure of the Greek peach crop in 2021.

The international business is managed on a 12-month cycle owing to the
seasonality of raw materials, orders and shipping. Volumes in the first five
months of the financial year were impacted by the shift in the timing of export
orders and shipments, and management expects volumes to normalise over the
remainder of the financial year.

Impact of load shedding
Sustained load shedding continues to impact food manufacturers through lower
production output, operational inefficiencies and higher operating costs as well as
the availability of certain raw materials due to the impact of load shedding on

RFG has invested in generators at its 13 production plants in South Africa over
the past seven years to ensure that food safety is not compromised through
inconsistent electricity supply. At some operations additional generators are
currently being installed to meet the increased demand for electricity.

In the five months ended February 2023, the group?s diesel costs to operate
generators totalled R32 million. At current levels of load shedding the average
weekly diesel cost to run generators amounts to approximately R2 million.

RFG has accelerated its renewable energy infrastructure programme in response
to load shedding. Solar installations have been completed at two facilities and
installations are planned for a further seven sites over the next two years.

Management continues to make pleasing progress in recovering higher input
costs from customers in most product categories which has strengthened
margins in the regional segment. However, the group is still experiencing
inflationary pressures from higher packaging (cans and paper) and meat costs in

The group will maintain its intense focus on price, volume and margin
management as well as tight control on overhead costs.

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 2023 will be
released on the Stock Exchange News Service on 24 May 2023.

Groot Drakenstein
22 March 2023

Rand Merchant Bank (A division of FirstRand Bank Limited)

Date: 22-03-2023 10:00:00

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