AVI LIMITED
Registration number 1944/017201/06
Share code: AVI
ISIN: ZAE000049433
(“AVI” or “the Company” or “the Group”)

TRADING STATEMENT AND UPDATE FOR THE YEAR ENDED 30 JUNE 2023

The financial environment remained difficult with increasingly weak
macroeconomic conditions. Significant inflation, rising interest rates and
continued load-shedding all constrained consumer demand for the financial
year.

Segmental revenue for the year ended 30 June 2023
                                                        2023       2022          %
                                                          Rm         Rm    Change
 Food & Beverage                                    11 999,4    11 157,8       7,5
 Entyce Beverages                                     4 251,6   3 981,6        6,8
 Snackworks                                           5 261,2   4 702,4       11,9
 I&J                                                 2 486,6    2 473,8        0,5
 Fashion brands                                      2 920,2    2 687,5        8,7
 Personal Care                                        1 223,3    1 176,5       4,0
 Footwear & Apparel                                  1 696,9     1 511,0      12,3

 Group                                              14 919,6    13 845,3       7,8


Group revenue rose by 7.8% largely due to selling price increases required
to offset the effect of a weaker Rand exchange rate and rising raw material
costs. The consolidated gross profit margin improved marginally, benefiting
from the non-recurrence of prior year write-off’s following the July 2021
unrest, sound cost control, the benefits of the trademarks acquired from
Coty, a strong performance from the biscuit brands and improved footwear
and apparel profitability. Selling and administrative expenses increased at
rates above inflation, partially due to the impact of a substantially higher
fuel price on distribution costs, increased marketing and innovation
investment and the non-recurrence of insurance proceeds recognised last
year. Consolidated operating profit was 6.9% higher than last year,
reflecting an improved second semester performance with only I&J’s earnings
declining for the year. The Group’s branded consumer business, excluding
I&J improved operating profit by 12.7%.

Some categories required price increases in the second semester to protect
margins with cost increases partially mitigated by ongoing currency and raw
material hedging. Volume declines slowed from those recorded in the first
semester supporting a 14.5% improvement in group operating profit for the
second semester.

Higher levels of load-shedding negatively affected our manufacturing,
distribution and retail operations and our supply chains generally. Our
back-up solutions minimised production losses albeit at an added R58,5
million direct operating cost for the financial year.

I&J’s profitability improved in the second semester but the full year result
was still lower than last years’. Notwithstanding significant price
increases gross margins were not fully recovered due to materially higher
diesel costs for the fishing fleet, inconsistent catch-rates and the direct
costs associated with load-shedding. Abalone volumes benefitted from the
lifting of lock-down restrictions in China and Hong Kong from January 2023.
I&J’s value added plant experienced a load-shedding related fire at the
facility in April 2023. This resulted in the closure of the site for several
weeks impacting the semesters operating profit with the insurance proceeds
not recognized in this year’s operating profit. The site returned to full
operation during June 2023.

Net finance costs were higher than last year due to higher interest rates
and higher average borrowing levels. The effective tax rate is marginally
better than last year and slightly higher than the corporate tax rate of
27%.

Cash generated by operations was strong through the second half, partly
supported by a reduction in working capital, with full year operating cash
flows better than last year. Capital investment amounted to R482,6 million
and was well above last year with some post COVID catch-up in project
activity. Net debt levels remain within our target range.


CAPITAL GAINS
There were no material capital items in the current financial period.


CONSOLIDATED HEADLINE AND ATTRIBUTABLE EARNINGS
The weighted average number of shares in issue is expected to be 0,1%
higher than last year due to the issue of new shares in terms of the
Group’s various share incentive schemes.

We hereby advise shareholders, in accordance with Section 3.4 (b) of the
Listings Requirements of the JSE Limited, that:

   ▪   Consolidated headline earnings per share for the year ended 30 June
       2023 are expected to increase by between 3% and 5% over the prior
       year, translating into an increase from last year’s 530,6 cents to a
       range of between 546,5 and 557,1 cents per share; and

   ▪   Consolidated earnings per share for the year ended 30 June 2023,
       including capital gains and losses, are expected to increase by
       between 4% and 6% over the prior year, translating into an increase
       from last year’s 530,1 cents to a range of between 551,3 and 561,9
       cents per share.


It is expected that AVI will release its f u l l results for t h e y e a r
e n d e d 3 0 J u n e 2 0 2 3 o n or about 4 September 2023.


The information above has not been reviewed and reported on by the Group’s
external auditors.


Illovo
26 July 2023

Sponsor
The Standard Bank of South Africa Limited