Strong Regional Performance Drives RFG’s Earnings 18% Higher

Groot Drakenstein – RFG Holdings increased headline earnings by 18.2% to R577 million in the year to September 2024, mainly driven by the strong
performance of its regional business.

The Western-Cape based food producer, which owns market-leading brands Rhodes, Bull Brand, Magpie, Squish, Hinds and Today, increased group
operating profit by 12.7% to R852 million. The operating profit margin improved by 100 basis points to 10.6%, exceeding the group’s medium-term target.

The group’s debt position improved significantly as debt levels reduced by 37.1% and the net debt-to-equity ratio improved to 11.9% from 21.3%.

Based on the sustained profit and earnings growth, the directors have increased the group’s dividend payout ratio to shareholders from 33.3% to 50.0% of headline earnings. The total dividend was accordingly increased by 79.2% to 111.1 cents per share.

CEO Pieter Hanekom said the group’s regional segment, covering South Africa and sub-Saharan Africa, delivered resilient revenue growth despite the sustained pressure on consumer spending.

Regional revenue increased by 5.9% to R6.4 billion, “with sales volumes recovering strongly in the second half as consumer confidence started to improve in the country.” Long life foods revenue grew by 6.5% and fresh foods revenue by 4.9%.

Revenue was supported by an increased focus on product and packaging innovation, including the launch of the Rhodes fruit nectar juice range which has been well received by consumers.

Regional operating profit increased by 28.1% to R675 million as the operating profit margin expanded from 8.8% to 10.6%. Hanekom said margins benefited from production efficiency gains from recent capital investment, including the new canning equipment and capacity expansion at the meat products plant in Krugersdorp.

The group recorded market and brand share gains in several key product categories. The group’s brands are the market leaders in canned meat (Bull
Brand), canned tomato (Rhodes) and frozen pies and pastry (Today), and hold the number two brand positions in fruit juice, canned fruit, jam, canned
vegetables (all Rhodes), baby food (Squish) and spices, herbs and pepper (Hinds).

International revenue, which accounts for 20% of the group’s total revenue, declined by 12.5% due to weaker global pricing and demand for canned
deciduous fruit. Revenue was further impacted by the lower volumes due to ongoing shipping delays at the Cape Town and Durban ports. While the
international operating profit margin was 160 basis points lower at 11.4%, it remains well within management’s targeted 7.5% to 12.5% range.

RFG invested R324 million in its production facilities across South Africa and Eswatini during the year, which included large-scale equipment replacement and upgrades as well as capacity expansion at the Tulbagh fruit products and Krugersdorp meat products factories. Capital investment of R430 million is planned for the new financial year.

On the outlook for the year ahead, Hanekom said lower inflation, declining interest rates, reducing fuel prices and the absence of load shedding are positive for consumer confidence. “These factors together with South Africa’s improved growth prospects are expected to stimulate a recovery in consumer spending in the next 12 to 18 months.”

“In our international business, the continued equipment upgrade and replacement programme at the Tulbagh fruit products plant will support further
efficiency gains to counteract the headwinds of a stronger exchange rate and lower global pricing,” he added.

Ends
Issued by Tier 1 Investor Relations on behalf of RFG Holdings
For further information contact
Graeme Lillie
Tier 1 Investor Relations
082 468 1507