Annual Report and Accounts 2019 Total Produce is at the forefront of the global fresh produce industry. Operating primarily across Europe, North America and South America, Total Produce is involved in the growing, sourcing, importing, packaging, marketing and distribution of an extensive selection of fresh fruits, vegetables and flowers – ranging from the familiar to the truly exotic. Financial Highlights Revenue 1 Adjusted EBITDA 1 €6,173m €202.8m +22.4% on prior year +52.1% on prior year Adjusted EBITA 1 Shareholders’ Equity €150.1m €451.1m +53.1% on prior year +4.2% on prior year Adjusted EPS 1 Adjusted EPS (Pre-leasing) 1 14.12 cent 14.86 cent +34.3% on prior year +41.4% on prior year Dividend per Share (Total) 3.4899 cent +1.8% on prior year 1 Key performance indicators are defined on pages 181 to 185. 1. Strategic Report 2. 3. Strategic Report Where We Operate 2 History and Growth 4 Chairman’s Statement 6 Our Strategy and Business Model 8 Our Supply Chain and Product Portfolio 10 Financial Growth 12 Risks and Risk Management 14 Sustainability 20 Chief Executive’s Review 46 Financial Review 50 Governance Board of Directors and Secretary 58 Directors’ Report 60 Corporate Governance Report 63 Audit Committee Report 70 Compensation Committee Report 73 Nomination Committee Report 79 Financial Statements Statement of Directors’ Responsibilities 81 Independent Auditor’s Report 82 Group Income Statement 87 Group Statement of Comprehensive Income 88 Group Balance Sheet 89 Group Statement of Changes in Equity 90 Group Statement of Cash Flows 92 Group Reconciliation of Net Debt 93 Notes to the Group Financial Statements 94 Company Balance Sheet 175 Company Statement of Changes in Equity 176 Company Statement of Cash Flows 177 Notes to the Company Financial Statements 178 Glossary: Alternative Performance Measures 181 Directors and Other Information 186 Shareholder Information 187 Find out more on totalproduce.com 1 Total Produce plc Annual Report and Accounts 2019 Where We Operate Our Global Footprint 36 Number of facilities in North America Total Produce is the world’s premier fresh produce provider. Local at heart, 58 Number of facilities global by nature, our operations in Central America extend across 30 countries, while serving many more. Our international reach brings flexibility to our supply chain, synergies and efficiencies to our operations, broadens our core 35 Number of facilities competencies and capacities and in South America enriches cultural diversity within our organisation. For our customers, our physical presence across the world differentiates Total Produce, positioning our operations at the very heart of the markets in which we trade and in the world’s primary production centres. Serving the wholesale, foodservice and retail sectors, Total Produce is a complete fresh produce solution provider – offering a comprehensive range of services to our customers ranging from simple service provision to complete category management. 2 Total Produce plc Annual Report and Accounts 2019 1. Strategic Report 2. 3. 112 Number of facilities in Europe 9 Number of facilities in Rest of the world The map above is a representative depiction only and also does not include Dole farming interests. 3 Total Produce plc Annual Report and Accounts 2019 History and Growth An Evolving Business Over a century and a half of trading, Total Produce has evolved into one of the world’s premier fresh produce providers extending our reach, broadening our offering and delivering to consumers the cream of the crop from close to home and across the globe. 2012 2013 2007 2008 1850 4 Total Produce plc Annual Report and Accounts 2019 1. Strategic Report 2. 3. 2018 2016 2014 2017 2015 5 Total Produce plc Annual Report and Accounts 2019 Chairman’s Statement Continued Growth in 2019 We are pleased to report that the Group has continued to grow in 2019, recording a 22.4% growth in revenue and 41.4% growth in adjusted earnings per share primarily due to the investment in Dole.” Strategic developments positions in various produce categories, counterparts on targeted synergy projects In 2019, we continued to make progress creating a combined group with increased aimed at generating benefits for both parties. in advancing our strategic goals. scale, geographic and product diversification. It represents a very significant step for the Other developments The Group completed the acquisition of the Group and a continuation of its successful During the year, the Group made some initial tranche of 45% of Dole Food Company expansion strategy. bolt-on investments in the fresh produce (‘Dole’) on 1 July 2018. The 2019 financial sector in Europe, as well as investments in year is therefore the first full year to reflect The performance in 2019 year has been existing joint ventures with total investment this transaction. Further details on the positive for the Group. In 2019, there has of €10m including deferred and contingent transaction structure are outlined on pages been a strong increase in the adjusted consideration payable on the achievement 127 to 131 in Note 15 of the accompanying EBITDA in Dole led by a recovery in of future profit targets. Financial Statements. the Fresh Vegetable division. Dole also completed the sale of its Scandinavian Further examples of our strategic priorities Dole is one of the world’s leading fresh salad business in 2019. being implemented during the year are in produce companies, with an iconic brand included in Our Strategy and Business and leading market positions and scale. In 2019, the Executive Directors, and senior Model section on pages 8 and 9. The transaction brings together two industry and divisional management of the Group leaders, with complementary market have worked closely with their Dole 6 Total Produce plc Annual Report and Accounts 2019 1. Strategic Report 2. 3. Summary of financial The SSWG has developed its sustainability Following these changes, the Board will be performance in 2019 agenda for 2020 and the Board will be made up of six independent Non-Executive Total Produce reported strong results in updated on its progress at each directors and three Executive Directors. 2019. The reported results for year ended scheduled meeting. 31 December 2019 include the Group’s 45% Brexit and international trade share of Dole for the full year, whilst 2018 Corporate Governance The result of the UK’s exit from the European included the five months of Dole from the The Board is committed to integrity, high Union (‘Brexit’) on 31 January 2020 and its date of the deal completed 1 August 2018 ethical values and professionalism in all impact in terms of the exit deal, including to 29 December 2018. of its activities and operations. The Board tariffs and trade agreements remain unclear. recognises the importance of maintaining Brexit committees set up in relevant areas Total revenue in 2019 grew 22.4% to the highest standards of corporate of the business continue to assess and €6,173m (2018: €5,043m), adjusted EBITDA governance and that it is accountable to its prepare for the risks and opportunities increased by 52.1% to €202.8m (2018: shareholders in this regard. The Board has that may arise. €133.3m) with adjusted EBITA increasing adopted the Quoted Companies Alliance 53.1% to €150.1m (2018: €98.0m). Adjusted (QCA) Corporate Governance Code, issued With continuing uncertainty surrounding earnings per share (pre-IFRS 16 Leases) of in April 2018. Full details of our approach global trade, the impact of any tariffs 14.86 (2018: 10.51 cent) was 41.4% ahead to governance are set out in the Corporate on international trade will continue to of prior year. The increase on the prior year Governance Report on pages 63 to 69. be monitored by the Group. was mainly due to the incremental impact of the acquisition of Dole and a good recovery Board changes COVID-19 outbreak in the Fresh Vegetable division in Dole. The Board values the benefits of diversity The Group continues to monitor COVID-19. and the Nomination Committee considers While it is too early to form a definitive view, Sustainability the benefits of diversity to complement the with a broad spread of resources and Environmental, Social range and balance of skills, knowledge and operations, the Group does not expect and Governance (ESG) experience. During the year, as part of a any disruption to be material. As sustainability becomes increasingly planned transition to provide orderly Board important to all of us, we continue refreshment and succession, the Board Dividend to recognise, as a global Group, our appointed the following two new The Board is recommending a final dividend responsibilities in relation to environmental independent Non-Executive Directors: of 2.5770 cent per share, representing a and social issues. Sustainability has always • Imelda Hurley, a finance professional with 2.5% increase on 2018. This, together with been central to our Group’s strategy and significant international and agri-industry the interim dividend of 0.9129 cent per business model, with Sustainable Business experience; and share, brings the total 2019 dividend to Practices, The People Behind our Produce • Helen Nolan, a highly experienced 3.4899 cent per share, an increase of 1.8% and Responsible Fiscal Oversight being financial executive with the Bank of Ireland on 2018. This represents a distribution of three of our core strategic priorities (see where she was also Group Secretary. almost 25% on the reported adjusted fully page 8 for more detail). We are committed diluted earnings per share. to building a better business in a responsible We wish to acknowledge and pay tribute to and sustainable way for all of our Frank Gernon and Jerome Kennedy who Our people stakeholders. have advised the Board that they will retire as The Group’s success reflects the superb Directors on 31 March 2020.