INTERIM RESULTS PRESENTATION...AGENDA 2 Business Overview – Page 3 / Slide 3 Industry Trends – Page 11 / Slide 20 The Period in Perspective – Page 15 / Slide 28 Financial Overview

INTERIM RESULTS

PRESENTATION

FOR THE SIX MONTHS ENDED 31 MARCH 2018

AGENDA

2

Business Overview – Page 3 / Slide 3

Industry Trends – Page 11 / Slide 20

The Period in Perspective – Page 15 / Slide 28

Financial Overview – Page 16 / Slide 30

Industry Matters – Page 22 / Slide 41

Outlook – Page 23 / Slide 43

Additional Information – Page 25 / Slide 47

BUSINESS OVERVIEW

BUSINESS OVERVIEW

Results for the six months ended March 2018 are a significant

improvement on the prior comparable period, which was one of the lowest

reported profits in history

Feed input costs reduced significantly due to lower maize prices on the

back of a bumper maize crop for 2017

Supply and demand balance gave pricing support, imports during the

period remained high but stable, whilst lower brine levels and industry

cutbacks resulted in a firmer market

Further improvements in on-farm poultry production efficiencies were

recorded

No further incidents of bird flu and related costs were experienced during

the period 4

BUSINESS OVERVIEW

Revenue

Profit before interest and tax

Earnings per share @ 1 973 cps

Headline earnings per share 455%

Key

Financial

Indicators 460%

393%

5

15%

BUSINESS OVERVIEW

6

Poultry

Feeding cost decreased

Bird performance improvement

Sales volumes up (3 contributors)

Average sales realisations up

No impact from HPAI (bird flu)

Feed

Maize price significantly down

General market improvement

Higher internal feed required

Sales volumes up

Rand per ton margin up

Other Africa

Higher profits – improved performance from all three countries

“

”

POULTRY DIVISION - OVERVIEW

Operating profit - R million

Operating profit up

• Feed price down 11.2%

• Selling price contribution

• Net margin 15.2% 1H2017: 0.5%

Revenue - R million

Revenue up 23%

• Broiler sales volumes up 12.6%

• Broiler sales realisations up 11.2%

4 456

5 481

-

1 000

2 000

3 000

4 000

5 000

6 000

1H2017 1H2018

22

836

-

100

200

300

400

500

600

700

800

900

1H2017 1H2018

8


Broiler feed prices decreased by 11.2%, after significantly lower raw material

costs offset the implementation of a further enhanced feeding programme

Improved broiler production efficiencies with a better feed conversion achieved

on a new feeding programme resulting in a lower cost of feeding

Broiler sales volumes increased by 12.6% (≈ 26 000 tons) due to increased

placements, higher bird weights and sales out of stock offsetting lower brine levels

Broiler sales realisations increased impacted by a change in the product offering

due to the brine impact and recovery above inflationary costs on strong demand

IQF sales realisations were higher as the lower priced 30% IQF was sold until

January 2017 and then replaced with 15% brined IQF at a higher cost

Additional Listeria counter-measures with increased costs of R9.7 million for the

period

9


51%

2%

3%

14%

7%

23%

1H2018

230 710 Tons Volume increase ≈ 12.6%

47%

4% 5%

14%

7%

23%

1H2017

204 887 Tons

Product Mix

10

BROILER PRODUCTION PERFORMANCE

11

94%

96%

98%

100%

102%

104%

106%

108%

F2012 F2013 F2014 F2015 F2016 F2017 1H2018

Average daily gain Slaughter age Live weight

Key indicators base-lined to 100% in F2012


12 Source: Own Data

85%

90%

95%

100%

105%

110%

115%

120%

125%

130%

135%

140%

F2012 F2013 F2014 F2015 F2016 F2017 1H2018

Broiler feed price index Feed conversion efficiency index Feeding cost index



13

75%

80%

85%

90%

95%

100%

105%

110%

115%

120%

125%

F2012 F2013 F2014 F2015 F2016 F2017 1H2018

Mortality Feed conversion efficiency Efficiency factor (PEF)


“

”

FEED DIVISION - OVERVIEW


Operating profit up 3.8%

• Net margin 6.2% 1H2017: 5.3%

• Improved trading conditions

Revenue - R million

Revenue down 10.2%

• Raw material costs down

• Average selling prices down 16.3%

• Sales volumes up 7.3%

3 448

3 097

-

1 000

2 000

3 000

4 000

1H2017 1H2018

184 192

-

100

200

1H2017 1H2018

15

FEED DIVISION - OVERVIEW

SAFEX yellow maize prices decreased significantly for the period under review

1H2018 avg. R1 981 per ton (1H2017: R2 973) down R992 per ton year-on-year

Feed volumes increased due to both higher internal feed requirements and higher

external feed sales

Internal feed sales increased by 7.2% due to an increase in broiler production

numbers in 1H2018 off cutbacks in the comparable period of the prior year

External feed sales increased by 7.4% as livestock sectors recovered following

the high feed costs associated with the 2016 drought

Margins improved in the period under review with an increase in the net rand per

ton margin achieved

16

FEED DIVISION - SALES

59%

7%

21%

13%

Meadow Feeds - Sales Mix

59%

7%

21%

13%

1H2017

656 169 Tons

1H2018

703 827 Tons Volume increase ≈ 7.3%

17

“

”

OTHER AFRICA DIVISION - OVERVIEW


Operating profit up

• Net margin 9.1% 1H2017: 2.4%

• All countries improved performance

Revenue - R million

Revenue down 14.4%

• Raw material costs down

• Average selling prices down 9.6%

• Sales volumes down 5.0%

216

185

-

50

100

150

200

250

1H2017 1H2018

5

17

-

5

10

15

20

1H2017 1H2018

19

INDUSTRY TRENDS

SAFEX YELLOW MAIZE PRICE

Source: CJA Strategic Risk Brokers 21

SAFEX YELLOW MAIZE PRICE vs. CBOT IN RAND TERMS


DURBAN SOYA MEAL PRICE


POULTRY IMPORTS PER MONTH

Source: SAPA 24

-

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

50 000

55 000

60 000

65 000

70 000

Oct-

11

De

c-1

1

Fe

b-1

2

Ap

r-12

Ju

n-1

2

Au

g-1

2

Oct-

12

De

c-1

2

Fe

b-1

3

Ap

r-13

Ju

n-1

3

Au

g-1

3

Oct-

13

De

c-1

3

Fe

b-1

4

Ap

r-14

Ju

n-1

4

Au

g-1

4

Oct-

14

De

c-1

4

Fe

b-1

5

Ap

r-15

Ju

n-1

5

Au

g-1

5

Oct-

15

De

c-1

5

Fe

b-1

6

Ap

r-16

Ju

n-1

6

Au

g-1

6

Oct-

16

De

c-1

6

Fe

b-1

7

Ap

r-17

Ju

n-1

7

Au

g-1

7

Oct-

17

De

c-1

7

Fe

b-1

8

Total poultry imports 6 per. Mov. Avg. (Total poultry imports)

Tons

BROILER SELLING PRICES

Source: Own Data

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

80%

90%

100%

110%

120%

130%

140%

150%

160%

170%

180%

Oct-

11

Dec-1

1

Fe

b-1

2

Ap

r-12

Ju

n-1

2

Au

g-1

2

Oct-

12

Dec-1

2

Fe

b-1

3

Ap

r-13

Ju

n-1

3

Au

g-1

3

Oct-

13

Dec-1

3

Fe

b-1

4

Ap

r-14

Ju

n-1

4

Au

g-1

4

Oct-

14

Dec-1

4

Fe

b-1

5

Ap

r-15

Ju

n-1

5

Au

g-1

5

Oct-

15

Dec-1

5

Fe

b-1

6

Ap

r-16

Ju

n-1

6

Au

g-1

6

Oct-

16

Dec-1

6

Fe

b-1

7

Ap

r-17

Ju

n-1

7

Au

g-1

7

Oct-

17

Dec-1

7

Fe

b-1

8

Broiler selling price index Six month average

IQF cost

recovery on

new legislated

brine levels

25

BROILER PRICE vs. FOOD PRICE INFLATION

Source: Own Data & CJA Strategic Risk Brokers 26

70%

80%

90%

100%

110%

120%

130%

140%

150%

160%

170%

180%

70%

80%

90%

100%

110%

120%

130%

140%

150%

160%

170%

180%

Oct-

11

Dec-1

1

Fe

b-1

2

Ap

r-12

Ju

n-1

2

Au

g-1

2

Oct-

12

Dec-1

2

Fe

b-1

3

Ap

r-13

Ju

n-1

3

Au

g-1

3

Oct-

13

Dec-1

3

Fe

b-1

4

Ap

r-14

Ju

n-1

4

Au

g-1

4

Oct-

14

Dec-1

4

Fe

b-1

5

Ap

r-15

Ju

n-1

5

Au

g-1

5

Oct-

15

Dec-1

5

Fe

b-1

6

Ap

r-16

Ju

n-1

6

Au

g-1

6

Oct-

16

Dec-1

6

Fe

b-1

7

Ap

r-17

Ju

n-1

7

Au

g-1

7

Oct-

17

Dec-1

7

Fe

b-1

8

Broiler selling price index SA food price index

IQF cost

recovery on

new legislated

brine levels

CHANGE IN BROILER PRICE vs. FEED PRICE

Source: Own Data 27

-30%

-20%

-10%

0%

10%

20%

30%

40%

Oct-

11

Dec-1

1

Fe

b-1

2

Ap

r-12

Ju

n-1

2

Au

g-1

2

Oct-

12

De

c-1

2

Fe

b-1

3

Ap

r-13

Ju

n-1

3

Au

g-1

3

Oct-

13

De

c-1

3

Fe

b-1

4

Ap

r-14

Ju

n-1

4

Au

g-1

4

Oct-

14

Dec-1

4

Fe

b-1

5

Ap

r-15

Ju

n-1

5

Au

g-1

5

Oct-

15

Dec-1

5

Fe

b-1

6

Ap

r-16

Ju

n-1

6

Au

g-1

6

Oct-

16

Dec-1

6

Fe

b-1

7

Ap

r-17

Ju

n-1

7

Au

g-1

7

Oct-

17

Dec-1

7

Fe

b-1

8

% Change in feed price % Change in broiler selling price

20 months

THE PERIOD IN PERSPECTIVE

THE PERIOD IN PERSPECTIVE

Operating profit (PBIT) reconciliation

29

443 -176

-138

212

1 044

97

554

52

-

200

400

600

800

1 000

1 200

1 400

PB

IT 1

H20

17

Bro

iler

Vo

lum

es

Bro

iler

Pri

ce

s

Fe

ed

ing

Co

st

Pro

ce

ssin

gC

os

t

Inc

en

tiv

eB

on

use

s

Oth

er

PB

IT 1

H20

18

(R million)

FINANCIAL OVERVIEW

INCOME STATEMENT

Six months ended 31 March 2018

R million

2017

R million

Revenue 6 666 5 795

Operating profit (PBIT) 1 044 212

Operating profit margin 15.7% 3.7%

Net finance income / (costs) 22 (16)

Profit before tax 1 066 196

Tax (300) (60)

Profit for the period 766 136

Headline earnings 765 138

EPS – Cents 1 973 353

HEPS – Cents 1 974 356

15%

393%

463%

456%

460%

455%

% change

31

444%

GROUP SIX MONTHLY REVENUE AND PROFITABILITY

32

4 039 4 122 4 219 4 290

4 700 4 902

5 755 5 511

5 823

6 131

5 795

6 556 6 666

324

153 59

208 213 280

550 551

429

120

212

866

1 044

0

200

400

600

800

1000

1200

1400

1600

1800

2000

0

1000

2000

3000

4000

5000

6000

1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18

External revenue Operating profit (PBIT) Margin %

(R million)

15.7%

3.7%

13.2%

FEED SIX MONTHLY REVENUE

33

2 175 2 152 2 397

2 519 2 550

2 956 2 961

3 275 3 461

3 729

3 448 3 405

3 096

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1,8

1000

1500

2000

2500

3000

3500

4000

4500

1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18

Revenue Change in volumes Change in feed price

(R million)

POULTRY SIX MONTHLY REVENUE

34

2 878 2 956 2 952 3 049 3 317

3 650

4 503 4 237

4 436 4 693

4 456

5 394 5 480

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1,8

2,0

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

6000

1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18

Revenue Change in poultry selling price Change in volumes

(R million)

GROUP SIX MONTHLY OPERATING PROFIT (PBIT)

35 Source: Own Data

140

-3 -117 5

45 59

351 310 194

-135 22

608

836

154

135 156 173 157 197

186 237

233

252 184

207

191

324

153 59 203 213

280

550 551

429

120

212

867

1 044

-0,1

0,4

0,9

1,4

1,9

-120

380

880

1380

1880

1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18

Poultry Feed Other Africa Change in feed price Change in poultry selling price

(R million)

36

March 2018

R million

September 2017

R million % change

Non-current assets 2 302 2 228

Net working capital 813 862

Current assets (excl. cash) 2 610 2 461

Current liabilities (excl. borrowings) (1 797) (1 599)

Non-current liabilities (excl. borrowings) (598) (610)

Net assets 2 517 2 480

Net cash (934) (553)

Equity 3 451 3 033

Total 2 517 2 480

BALANCE SHEET

6%

6%

12%

2%

1%

1%

14%

3%

WORKING CAPITAL

March 2018

R million

September 2017

R million

Variance

R million

Current assets 2 610 2 461 149

Biological assets 759 658 101

Inventory - Poultry 288 316 (28)

- Feed 271 185 86

- Other Africa 35 50 (15)

Trade receivables 1076 1049 27

Receivables – investment sold 16 56 (40)

Other receivables 165 147 18

Current liabilities (1 797) (1 599) (198)

Net working capital 813 862 (49)

37

STATEMENT OF CASH FLOWS

For the six months ended 31 March 2018

R million

2017

R million

Cash operating profit 1 102 282

Working capital movement (50) (39)

1 052 243

Tax paid (259) (50)

Net interest received / (paid) 25 (14)

Capital expenditure (136) (69)

682 110

Dividends paid (339) (39)

Other cash flow items 2 6

Proceeds on investment sold – prior year 40 -

Loans repaid - (23)

Movement in cash equivalents 385 54

Effect of exchange rate changes (4) -

Opening balance 553 (205)

Closing balance 934 (151)

38

CAPITAL EXPENDITURE

Six months ended 31 March 2018

R million

2017

R million

Depreciation 78 73

Total amount capitalised to PPE 162 65

Net movement in advance / outstanding payments (26) 4

136 69

Commitments 144

Total spend and committed 280

39

IN SUMMARY

Improvement in profits in 1H2018 with a profit margin at 15.7% (1H2017: 3.7%)

Cash positive throughout the period

Net surplus cash at end March 2018 (R934 million)

Astral is well positioned for investment in future growth

Interim dividend of R10.00 per share (2x cover) within the Group’s liquidity

capability

40

INDUSTRY MATTERS

INDUSTRY MATTERS

Poultry imports – Page 32 / Slide 62

Highly Pathogenic Avian Influenza (HPAI) – Page 33 / Slide 63

Listeriosis– Page 34 / Slide 65

42

OUTLOOK

INVESTMENT IN FUTURE GROWTH

44

Capital projects amounting to R1.3 billion over the next three years

have been approved by the Astral board that support our stated strategy, as

well as organic growth and efficiency improvement opportunities.

Project Description

New state of the art feed mill for Zambia

Silo expansion at the Standerton feed mill

Expansion of Festive poultry operation:

Expansion phase 1

Expansion phase 2

Expansion of Mountain Valley poultry operation

Existing Capacity

5 000 tpm

24 000 tpm

1 450 000 bpw

190 000 bpw

Added Capacity

20 000 tpm

16 000 tpm

400 000 bpw

400 000 bpw

200 000 bpw

OUTLOOK

45

General business confidence improved as well as the prospect for foreign

direct investment following the election of a new President for the country

A bumper maize crop in 2017 and the country set to harvest an above average

maize crop in 2018 will stand us in good stead over the next period from a

feed input cost point of view

Further unlocking the inherent genetic potential of the Ross broiler breed

through optimised broiler nutrition therefore cementing Astral’s best cost

strategy

Higher level of competitiveness as producers have expanded broiler

production numbers, and the pork industry has been forced to sell product at

lower prices following the listeria outbreak

Continued high levels of poultry imports especially from the United States of

America and Brazil, equivalent to over 40% of local poultry production

HPAI remains a threat and major concern for the poultry industry with the

upcoming winter season

“

”

ADDITIONAL INFORMATION

WHAT WE SAID IN NOVEMBER 2017

48

The negative political landscape and policy uncertainty has contributed to a weak

economic environment that could lead to a further downgrade by the credit rating

agencies. Record unemployment levels and lower levels of disposable income are

unlikely to improve due to a poor economic outlook for the foreseeable future.

Continued high level of poultry imports with weak tariff protection, has allowed

foreign produced poultry to become further entrenched in the local market leading to a

contraction in production amongst South African producers.

On a positive note and key to local protein production, both global and local coarse

grains (maize and soybeans) exhibit healthy stock-to-use ratios. Current

consensus points towards the promise of another year where at least average local

grain production is predicted.

Numerous supply constraints influenced by the past drought, production cutbacks

and the devastating bird flu could result in further inflation in the food basket.

Further unlocking the inherent genetic potential of the Ross broiler breed

through optimised broiler nutrition, and the cementing of Astral’s best cost strategy.

The threat of further spread of the highly pathogenic bird flu virus (H5N8) is a

major contributor towards uncertainty around the sustainability of certain sectors of

the local poultry industry. The role of vaccination of high value breeding stock as a

preventative measure, together with the concept of compensation for losses incurred

is paramount to managing this highly virulent avian disease.

?

125 132

167

222 215

228

191 186

12,6%

13,58%

15,40%

19,85% 19,37% 18,99%

15,51%

15,23%

11%

12%

13%

14%

15%

16%

17%

18%

19%

20%

21%

22%

23%

24%

0

25

50

75

100

125

150

175

200

225

250

201

2

201

3

201

4

201

5

201

6

201

7

201

8E

201

9F

End stock STU

WORLD CORN ENDING STOCKS vs. STU

Million Tons


SOUTH AFRICA – TOTAL MAIZE SUPPLY & DEMAND

Source: CJA Strategic Risk Brokers

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18E 2018/19F

Actual Actual Actual Actual Actual Estimate Forecast

Carry In (1 May) 991 1,414 589 2,074 2,471 1,093 3,969

Crop Estimate 12,121 11,811 14,250 9,955 7,779 16,820 12,827

Retentions 433 163 309 841 641

Sagis Delivery 11,972 11,072 13,817 9,794 7,469 15,979 12,185

Minus early deliveries 0 0 0 0 450 0 0

Imports 11 80 65 1,964 2,237 0 0

Total Supply 12,973 12,566 14,471 13,831 11,727 17,072 16,154

Domestic Usage Food 4,499 4,583 4,840 4,698 4,808 4,812 4,908

Domestic Usage Feed 4,378 4,715 5,041 5,520 5,004 5,499 5,410

Gristing, withdrawn & released 674 480 376 293 278 358 343

Total Domestic Usage 9,551 9,777 10,257 10,512 10,090 10,670 10,661

Exports & Sundries 2,008 2,122 2,153 848 993 2,434 2,337

Plus early deliveries 0 0 0 0 450 0 0

Carry Out (30 Apr) 1,414 590 2,062 2,471 1,093 3,969 3,156

No of days usage 54 25 73 86 40 136 108

STU 12.23% 4.96% 16.62% 21.75% 9.87% 30.29% 24.28%

Marketing year (May to April)

'000 tons

50

12,23%

4,96%

16,62%

21,75%

9,87%

30,29%

24,28%

-4%

1%

6%

11%

16%

21%

26%

31%

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18E 2018/19F

Carry out Maize stock to use ratio

RSA MAIZE CARRY OUT & STOCK TO USE RATIO

Source: CJA Strategic Risk Brokers

‘000 Tons

51

EL NIÑO SOUTHERN OSCILLATION - FORECAST

Source: International Research Institute for Climate and Society (IRI) – Columbia University 52

SOUTHERN AFRICA – VEGETATION HEALTH INDEX

VHI of previous year VHI of current year

Source: NOAA - National Environmental Satellite, Data, and Information Service (VHI) 53

BROILER FEED – INGREDIENT INCLUSION & COST CONTRIBUTION

Source: Own Data 54

64,9 40,0 66,2 42,7 65,0 45,7 63,3 43,6 61,4 39,6 61,1 38,0 55,6 29,8

16,5

25,0

14,7

20,4

11,4

14,9

15,6

20,3

16,8

22,3

14,0

18,6

14,0

17,9

7,5

7,4

7,4

7,5

9,1

8,6

6,4

5,6

6,9

5,4

6,2

4,0

6,1

3,3

0,3

0,9

0,4

1,3

0,2

0,9

0,4

1,2

0,5

1,7

0,4

1,5

0,5

1,7

4,3

6,8

4,8

7,1

7,5

10,3

7,3

10,3

6,6

9,1

9,9

13,8

14,6

19,8

0,3

4,2

0,4

6,2

0,3

4,7

0,3

5,0

0,4

4,7

0,5

5,4

0,5

6,0

6,2

15,6

6,1

14,9

6,4

14,9

6,7

14,0

7,3

17,2

7,8

18,8

8,6

21,5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1H15Incl.

1H15Contr.

2H15Incl.

2H15Contr.

1H16Incl.

1H16Contr.

2H16Incl.

2H16Contr.

1H17Incl.

1H17Contr.

2H17Incl.

2H17Contr.

1H18Incl.

1H18Contr.

Maize Soybean Meal Sunflower Meal Fish Meal F/Fat and Extr Soy Vitamins, Minerals and Medication. Other

BRAZIL, EU & USA PRODUCT COST BENCHMARK

Source: Own Estimates

Ex BRAZIL – May 2018

FROZEN LEG QUARTERS BULK PACKED

CIF DBN US$ per ton TON 1 050.00 1 050.00 1 050.00 SA COST

R/$ exchange rate R$ 12.00 12.50 13.00

Rand per ton TON 12 600.00 13 125.00 13 650.00 19 209.00

Rand per kg KG 12.60 13.13 13.65 19.21

Duty per kg KG 37% 37% 37% -

Clearance costs KG 0.65 0.65 0.65 -

COST INTO STORAGE KG 17.91 18.63 19.38 19.21

Storage KG 0.50 0.50 0.50 -

Distribution KG 0.70 0.70 0.70 0.91

Marketing, Administration, Finance KG 0.80 0.80 0.80 0.88

TOTAL COST KG 19.91 20.63 21.35 21.00

EUROPE Ex NETHERLANDS – May 2018


CIF DBN € per ton TON SA COST

€ exchange rate R$

Rand per ton TON 19 209.00

Rand per kg KG 19.21

Duty per kg KG -

Clearance costs KG -

COST INTO STORAGE KG 19.21

Storage KG -

Distribution KG 0.91

Marketing, Administration, Finance KG 0.88

TOTAL COST KG 21.00

55

BRAZIL, EU & USA PRODUCT COST BENCHMARK


EUROPE Ex Denmark with Safeguard Duty @ 0% – May 2018 (Safeguard Duty expired on 3 July 2017)


CIF DBN € per ton TON 1 250.00 1 250.00 1 250.00 SA COST

R/€ exchange rate R$ 15.00 15.50 16.00

Rand per ton TON 18 750.00 19 375.00 20 000.00 19 209.00

Rand per kg KG 18.75 19.38 20.00 19.21

Duty per kg KG 0% 0% 0% -



Storage KG 0.50 0.50 0.50 -



TOTAL COST KG 21.40 22.03 22.65 21.00

Ex USA – May 2018


CIF DBN US$ per ton TON 900.00 900.00 900.00 SA COST

R/$ exchange rate R$ 12.00 12.50 13.00

Rand per ton TON 10 800.00 11 250.00 11 700.00 19 209.00

Rand per kg KG 10.80 11.25 11.70 19.21

Duty per kg KG 37% 37% 37% -



Storage KG 0.50 0.50 0.50 -



TOTAL COST KG 17.45 18.06 18.68 21.00

56

LOCAL BROILER PRODUCTION & MARKET SHARE

Local broiler production ≈ 19.0 million birds per week


27%

20%

8%

7%

8%

4%

4%

22%

Astral RCL Country Bird Daybreak Sovereign Grainfields Chubby Chick Other

57

LOCAL BROILER PRODUCTION & MARKET SHARE


Avg. poultry imports ≈ 8.3 million birds per week (6 months ending March 2018)

19%

14%

6%

5% 5%

3% 3%

15%

30%

Astral RCL Country Bird Daybreak Sovereign Grainfields Chubby Chick Other Imports

58

TOTAL POULTRY IMPORTS (CHICKEN, TURKEY, MDM)

F2017 50,324 50,955 34,533 37,375 39,212 65,658 41,876 47,173 42,451 44,424 45,971 51,915

F2018 46,348 45,875 48,600 47,242 40,230 52,807

% Var -7.9 -10.0 40.7 26.4 2.6 -19.6

bpw* 8.2 8.1 8.6 8.4 7.1 9.4

*bpw ≈ million birds per week

Source: SAPA 59

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

F2015 42 363 81 170 108 674 137 660 168 965 209 337 247 672 285 532 327 180 375 717 417 427 460 255

F2016 37 789 83 258 126 866 165 602 200 461 258 134 306 385 360 899 414 947 460 098 502 138 551 209

F2017 50 324 101 279 135 812 173 187 212 399 278 057 319 933 367 106 409 557 453 981 499 952 551 867

F2018 46 348 92 223 140 823 188 065 228 295 281 102

0

100 000

200 000

300 000

400 000

500 000

600 000

F2015 F2016 F2017 F2018

Tons

TOTAL POULTRY IMPORTS – COUNTRY OF ORIGIN

Source: SAPA

Brazil 60,6%

EU 14,0%

Argentina 5,9%

US 15,6%

Other 3,9%

Country of origin for poultry imports - 2017

Brazil 59,9%

EU 9,5%

Argentina 7,3%

US 19,5%

Other 3,8%

Country of origin for poultry imports - March 2018 YTD

556 878 tons 140 279 tons

60

TOTAL POULTRY IMPORTS – COUNTRY OF ORIGIN

Source: SAPA 61

Country Imports (tons) 2015 2016 2017 2018 YTD

Brazil 241 180 233 787 337 476 84 038 Netherlands 61 995 110 344 112 105 United Kingdom 15 985 45 647 1 366 75 Spain 27 090 39 620 11 138 - United States 331 26 573 87 059 27 343 Belgium 35 613 24 256 23 451 23 Argentina 27 718 18 713 32 816 10 230 Ireland 13 336 15 556 24 746 6 270 Hungary 10 547 13 174 0 - Denmark 9 508 9 779 16 884 6 820 Canada 131 8 884 14 431 1 582 Germany 554 6 073 134 57 Poland - 4 773 72 - Thailand 7 616 2 078 4 019 2 302 Chile 408 360 1 770 1 099 Australia 264 254 984 - France 24 895 105 4 2 Uruguay 182 0 25 332

POULTRY IMPORTS

Provisional safeguard duties against the EU of 13.9% that were implemented

during December 2016 at 13.9% expired on 3 July 2017

A decision on a permanent safeguard duty against the EU is still awaited

following efforts made by an industry, DTI and DAFF work group to secure better

trade terms to support local industry jobs and reinvestment

Avian Influenza outbreaks caused temporary trade bans with some EU countries

and with this a switch to Brazilian and US imports

Total poultry imports remain high at average 46 850 tons (≈ 8.3 million bpw) and

equivalent to 44% of local production for the six months ending March 2018

62

HIGHLY PATHOGENIC AVIAN INFLUENZA

South Africa reported its first case of H5N8 infection in domestic poultry in June

2017 in Mpumalanga

From that date H5N8 has caused wide spread damage to the local poultry

industry and in particular significantly affected commercial laying hens and broiler

breeders

Surveys indicated that as much as 5.4 million birds were culled on commercial

poultry production units to date

A biological loss of just over R317 million was reported for the local South

African poultry industry split between the table egg / commercial laying industry

(76%) and the broiler industry (24%)

The estimated income foregone for the local industry is estimated at just over

R1.5 billion and spread out over a period of between 18 and 24 months

63

64

Vaccination / Compensation progress:

Vaccine challenge studies underway as requested by DAFF

Only one out of five vaccines tested so far (100% liveability)

Virus shedding data awaited from this one trial

Expected to be completed late autumn or early winter 2018

Public participation / comment process also required by DAFF

Could take up to 3 months

Challenges

Vaccinated birds cannot be sold live at depletion

Culling of vaccinated flocks infected with H5N8 (affected house)

Industry Task Team in place engaging with DAFF (Astral active participation)

The compensation guidelines published by DAFF in December 2017 are, based on legal

advice obtained, fundamentally flawed in terms of the relevant legislation contained in the Animal Diseases Act, and are being challenged by certain industry participants

HIGHLY PATHOGENIC AVIAN INFLUENZA

LISTERIOSIS

World’s worst outbreak of Listeriosis with 1 019 cases reported from 1 January

2017 to 17 April 2018 with 199 deaths confirmed, representing 28.5% of incidents

with known outcomes.

Sovereign Foods Hartebeespoort operations shut down on 22 December 2017 for

3 days following the detection of Listeria monocytogenes on product from this

facility and subsequently from the facility itself. This was later confirmed not to be

the ST 6 outbreak strain.

Enterprise (Tiger Brands) On 4 March 2018 the Minister of Health announced that

the outbreak strain (ST 6) had been detected at the Enterprise facility in Polokwane

leading to the large scale recall of polonies and other processed meats from this

facility. Independent testing has verified the presence of the ST6 at the facility.

RCL On 4 March 2018 the Minister of Health announced that Listeria had been

detected at the RCL facility in Wolwehoek, leading to the recall of Rainbow’s

Chicken Polonies. It was subsequently confirmed that this was not related to the

outbreak strain.

65

LISTERIOSIS

Primary Impact on the Poultry Market - chicken products were incorrectly

implicated on various occasions prior to the identification of the source. Health

officials did little to address this misconception but the sales of chicken products

remained largely unaffected prior to the minister’s announcement on 4 March 2018

that the source had been found. The sales of raw chicken products were however

adversely affected after the announcement, as stores incorrectly started to remove

raw chicken and further processed products from the shelf. Astral products were

not implicated and the company managed to retain its presence on shelf.

Secondary Impact on the Poultry Market - companies directly implicated by the

minister’s announcement are reported to have experienced an impact on the sale of

all poultry products. By implication the supply chain of live chickens to abattoirs

could not be stopped at short notice, which lead to a disproportionately high

production of frozen chicken products that could be held in stock. This additional

stock pile is now being released to the market, temporarily increasing the relative

supply of IQF products and leading to pressure on selling prices resulting in some

disruption to the market.

66

LISTERIOSIS

Impact on the Pork Industry the sale of pork products has been more heavily

impacted than poultry by the identification of the source of the Listeriosis outbreak,

due to the association of pork with processed meats in general and the Enterprise

brand in particular. The resultant slow down in the demand for pork across all

product ranges, including products and producers that were not implicated in the

DOH’s findings, has resulted in a backlog throughout the supply chain. Pork prices

are reported to have dropped by 50% since December 2017 due to this disruption in

demand. This drop in price at consumer level is expected to have a limited impact

on poultry demand directly since non-pork eaters will not be enticed to switch to

poultry products, but pork eaters may well consume more pork at the expense of

chicken. The extremely low price of pork is however disrupting the conventional

relative value of chicken, with some impact on price being experienced.

67

SOUTH AFRICAN PROTEIN PRICE COMPARISON

Source: FNB, Red Meat Industry Forum, Own Data

Chicken Pork Beef

Feed Conversion Rate 1.55 2.2 5.5

Per Capita Consumption 38.9 kg 4.6 kg 17.8 kg

68

1000

1500

2000

2500

3000

3500

4000

4500

5000

Cents per kg

CONTACT DETAILS

Chris Schutte

Chief Executive Officer

Tel : +27 (0) 12 667 5468

Fax : +27 (0) 86 504 2002

email: [email protected]

www.astralfoods.com

Daan Ferreira

Chief Financial Officer

Tel : +27 (0) 12 667 5468

Fax : +27 (0) 86 504 1602

email: [email protected]

Documents

INTERIM RESULTS PRESENTATION...AGENDA 2 Business Overview – Page 3 / Slide 3 Industry Trends – Page 11 / Slide 20 The Period in Perspective – Page 15 / Slide 28 Financial Overview