2 SISTERS ACCELERATES BUSINESS TRANSFORMATION

• Major investments in UK Poultry and Fox’s Biscuits
• New long term Bakery commitment secured
• Further proposed UK Poultry footprint changes
• Continuing commitment to increase performance of businesses and strengthen its financial position
• 2019 Bonds re-paid

2 Sisters Food Group is today announcing a series of actions as part of its accelerating transformational strategy to turnaround the business.

The company is making further investments in its UK Poultry and Fox’s Biscuits businesses, and is proposing to reduce the number of its UK Poultry sites in order to produce shorter, more efficient supply chains delivering quality products and high service levels and become more competitive against its peer group.

In addition, the new leadership team is pleased to announce the business has secured new, longer term, customer commitments at its Gunstones bakery site in Dronfield, giving a strong platform on which to build a sustainable future.

Ronald Kers, CEO said: “Our stated strategy is to become the number one poultry plus business in Europe and for several months now we have been engaged in a strategic review to facilitate our delivery on this, focussed on improving execution, reducing cost and building a better organisational culture.

“But there is now a pressing need to accelerate our turnaround so we can further increase the performance of our business. That’s why we’re keen to invest where we see potential growth: our UK Poultry business will benefit from this further investment and work which has already started to get Fox’s Biscuits in shape for the future ramps up to the next level with some major investment around automation, marketing and product innovation.

“The good news from Gunstones bakery is great for everyone following delivery of a fantastic product over the Easter period. After a very challenging few years, there is now a strong foundation for future growth, although there is still some work to be done to make the site more efficient and to get more volume for the business.”

As part of an on-going review of the company’s loss-making sites, the company is proposing the potential closure of its UK Poultry business’ Witham processing site in Essex. Consultation has started and will explore all possibilities including redeploying Witham colleagues to other sites in the wider Group.

Ronald said: “We’re all acutely aware that some of our plans, such as reducing our UK poultry footprint, brings uncertainty for colleagues, and it is with regret that we have to make such proposals. But the alternative of doing nothing and hoping for an upturn is not an option.”

2 Sisters’ continuing commitment to realising the value of its businesses outside its poultry and meals businesses has brought about a further wave of media speculation and rumour in recent weeks.

Commenting on the recent speculation around the sale of the Matthew Walker Christmas Pudding business, Ronald said: “We have been clear for some time now that we will realise the value of our businesses to improve our balance sheet only if it is strategically right for us to do so. It is quite natural to get this kind of speculation and, although we do not normally comment, we are in the early stages of a sale process for Matthew Walker and anticipate strong international interest. However, we will only sell at the right time and for the right value and our colleagues would be the first to know if this were to happen.”

The company has previously announced plans to make early repayment of the £250m of its Bonds due to mature in July 2019 and has today given notice that the final payment of £60m required to effect this repayment will be made on 31 May. Ronald said: “This repayment of the 2019 Bonds, in accordance with the milestones previously communicated, is a significant step forward in the transformation of our business.”