Total Produce plc Annual Report and Accounts 2014 WorldReginfo - f16a8953-d9ac-4dac-b297-9ce68d2ccea1 We are Europe’s leading fresh produce provider Inside involved in the growing, sourcing, importing, packaging, marketing and distribution of hundreds this report of lines of fresh fruits, vegetables and flowers. Overview Total Produce offers partners and At a Glance 2 customers the best of both worlds. 5 Year Financial Summary 4 Chairman’s Statement 6 One of our greatest strengths is our ability to adapt successfully to Our Business Business Model 8 changing economic, environmental Our Business: Diverse 10 Our Business: Collaborative 14 and operational circumstances. Our Business: Innovative 18 We progress because we are Corporate Social Responsibility 22 diverse, collaborative, innovative Operating and Financial Review and responsible. Operating Review 26 Financial Review 29 Financial Statements Total Revenue1 Adjusted EBITDA1 Board of Directors and Secretary 36 Directors Report 38 Corporate Governance Report 42 €3,129m €73.0m Audit Committee Report 46 -1.4% on prior year -1.5% on prior year Compensation Committee Report 47 Statement of Directors Responsibilities 53 Independent Auditor’s Report 54 Group Income Statement 55 Adjusted EBITA1 Adjusted EPS1 Group Statement of Comprehensive Income 56 Group Balance Sheet 57 €56.7m 9.45 cent Group Statement of Changes in Equity 58 Group Statement of Cash Flows 60 -3.4% on prior year +4.5% on prior year Significant Accounting Policies 61 Notes to the Group Financial Statements 70 Shareholders’ Equity Dividend per Share (Total) Company Balance Sheet 128 Company Statement of Changes in Equity 129 € 217.1m 2.403 cent Company Statement of Cash Flows 130 Notes to the Company -0.1% on prior year + 5.7% on prior year Financial Statements 131 Notice of the Annual General Meeting 134 1Key performance indicators are defined on page 4. Directors and Other Information 140 Shareholder Information 141 Forward-looking statements Any forward-looking statements made in the annual report have been made in good faith based on the information available as of the date of the report and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in this report, and the Company undertakes no obligation to update any such statements whether as a result of new information, future events or otherwise. Outlined on page 39 of this report are important factors that could cause these developments or the Company’s actual results to differ materially from those expressed or implied in these forward-looking statements. WorldReginfo - f16a8953-d9ac-4dac-b297-9ce68d2ccea1 Overview Our Business Financial Review Financial Operating and Statements Financial Diverse 10 Collaborative 14 Fresh produce does not lend itself to one-size-fits-all In a sector as complex as fresh produce the effectiveness solutions. Total Produce’s agility, flexibility and our with which contributors to the supply chain collaborate commitment to customise operations to reflect local can define not only the quality of the produce and the market dynamics and meet individual customer efficiency of service but also competitive advantage. requirements has given rise to a group infrastructure notable for its customer-centric diversity and strengthened by its collective resources. Innovative 18 Responsible 22 Innovation can deliver very practical dividends in the fresh Trust in our produce is contingent on a confidence in produce sector; providing opportunities to refine the route the supply chain through which it is delivered and in to market, extract costs from the supply chain, add value the integrity of those from whom it is sourced. In Total to our products and services and help drive consumption. Produce we recognise that ours is a position of immense Across Total Produce, an innovation orientated culture responsibility and are committed to adherence to best where convention is challenged permeates throughout practice in everything we do. our international operations. 1 WorldReginfo - f16a8953-d9ac-4dac-b297-9ce68d2ccea1 At a Glance A global business with local knowledge Total Produce is one of the world’s largest and most accomplished fresh produce providers. Operating out of 22 countries while serving many more, Total Produce’s global infrastructure of over 100 depots extends across Europe, India and North America. Headcount Facilities 4,500+ 100+ 2 Total Produce plc Annual Report and Accounts 2014 WorldReginfo - f16a8953-d9ac-4dac-b297-9ce68d2ccea1 Overview Our Business Financial Review Financial Operating and Statements Financial Growing, sourcing, importing, packaging, Distributing over 300 million cartons of fresh marketing and distributing over 200 lines of fruits and vegetables annually, the Group’s fresh produce, Total Produce’s range extends size and reach across the supply chain brings from the more familiar to the truly exotic. together the collective resources of a global Serving the wholesale, foodservice and retail multi-national with the market knowledge of sectors, Total Produce is a complete fresh local management; generating synergies, produce solution provider – offering a creating efficiencies and adding value. In comprehensive menu of services to our customising our supply chain, we strive to customers ranging from simple service translate our competitive advantages: our provision to complete category management. people, our suppliers, our infrastructure and our relationships – into value for our customers; delivering a superior service to them, and to the consumer, produce which exceeds expectations. * The map above is a representative depiction only. 3 WorldReginfo - f16a8953-d9ac-4dac-b297-9ce68d2ccea1 5 Year Financial Summary 5 Year Financial Summary The Group has recorded solid returns in the five year period ending 2014 with a 4.7% compounded growth rate in revenue and an 8.1% compounded growth rate in adjusted earnings per share. 2014 2013 2012 2011 2010 € € € € € Total Revenue1 (including share of joint ventures and associates) 3,129m 3,175m 2,811m 2,527m 2,600m Group Revenue 2,667m 2,638m 2,432m 2,284m 2,343m Adjusted EBITDA1 73.0m 74.1m 69.5m 59.7m 62.4m Adjusted EBITA1 56.7m 58.7m 53.7m 45.0m 47.8m Adjusted profit before tax1, 2 51.2m 52.9m 47.0m 39.8m 43.5m Profit before tax 44.3m 48.2m 36.4m 34.4m 33.6m Adjusted fully diluted earnings per share (cent)1, 2 9.45 9.04 8.08 7.28 6.92 Basic earnings per share (cent) 8.83 9.38 6.40 7.11 5.25 1 Key performance indicators defined Adjusted profit before tax excludes acquisition related Total revenue includes the Group’s share of the revenue intangible asset amortisation charges and costs, fair value of its joint ventures and associates. movements on contingent consideration and exceptional items. It also excludes the Group’s share of these items Adjusted EBITDA is earnings before interest, tax, depreciation, within joint ventures and associates. acquisition related intangible asset amortisation charges and costs, fair value movements on contingent Adjusted earnings per share and adjusted fully diluted earnings consideration and exceptional items. It also excludes per share excludes acquisition related intangible asset the Group’s share of these items within joint ventures amortisation charges and costs, fair value movements on and associates. contingent consideration, exceptional items and related tax on such items. It also excludes the Group’s share of these Adjusted EBITA is earnings before interest, tax, acquisition items within joint ventures and associates. related intangible asset amortisation charges and costs, fair value movements on contingent consideration and exceptional items. It also excludes the Group’s share of these items within joint ventures and associates. 2 Calculation of adjusted earnings per share and adjusted profit before tax are restated for the periods 2010 to 2013 to ensure conformity with the current year presentation whereby fair value movements on contingent consideration are excluded from adjusted earnings. Comparative figures for 2010-2011 have not been restated for the impact of revision to IAS 19 Employee Benefits (2011). 4 Total Produce plc Annual Report and Accounts 2014 WorldReginfo - f16a8953-d9ac-4dac-b297-9ce68d2ccea1 Overview Our Business Financial Review Financial Operating and Statements Financial Revenue (€’m) Adjusted EBITA (€’m) €3,129m €56.7m CAGR3 4.4% CAGR3 4.7% 58.7 56.7 3,175 3,129 53.7 2,811 47.8 2,600 2,527 45.0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Adjusted EBITDA (€’m) Adjusted EPS (cent) €73.0m 9.45 cent CAGR3 4.0% CAGR3 8.1% 9.45 74.1 73.0 9.04 69.5 62.4 8.08 59.7 7.28 6.92 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 3 Compounded Annual Growth Rate 5 WorldReginfo - f16a8953-d9ac-4dac-b297-9ce68d2ccea1 Chairman’s Statement C P McCann, Chairman Well positioned for future growth Total Produce has delivered The fresh produce business is a significant global industry and is the largest grocery category. Our medium term goal is to continue to increase our scale a robust performance in through organic growth, innovation and by acquisitions in the fresh produce 2014 and is pleased to sector and related areas. Scale creates efficiencies which help to generate increased shareholder returns. record a 4.5% increase in adjusted earnings In this industry acquisitions have been, and continue to be, a key part of our strategy and are a foundation for future growth. The Group successfully per share in a mixed completed a number of acquisitions during the year with a total investment of year for the fresh produce over €22m. In Europe, the Group completed an agreement to acquire the second 50% shareholding in All Seasons Fruit (‘ASF’) in The Netherlands, a company industry. The performance which specialises in the soft fruit category. An initial 20% shareholding was underpins the Group’s acquired increasing its shareholding to 70% on 28 May 2014 with the balance to be acquired in subsequent years.