Lotus Bakeries : Half-year report 2021

Interim Financial Reporting

per 30 June 2021

Lotus Bakeries

1

INDEX

CONSOLIDATED KEY FIGURES			2
MANAGEMENT EXPLANATION			3
2.	1	Group turnover up by 13% or EUR 42 million . . . . . . . . . . . . . . . . . . . .	. .	.	3
2.	2	Recurring EBITDA up by more than 15% . . . . . . . . . . . . . . . . . . . . . .	. .	.	3
2.	3	Decrease in net financial debt by EUR 41 million compared to the 2020 half-year period . . . . . . . . 4
2.	4	Lotus Biscoff® becomes one of the largest cookie brands in the world			4
2.	5	Successful implementation of the Lotus Natural Foods growth strategy . . . . . . . . . .	. .		. 4
2.	6	E-commerce already accounts for 8% of group turnover and is growing strongly			5
2.	7	FF2032 invests in direct-to-consumer concept Oot . . . . . . . . . . . . . . . . . .	. .		. 5
2.	8	Conclusion and outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. .		. 5
CONSOLIDATED FINANCIAL STATEMENTS			6
3.	1	Consolidated income statement			6
3.	2	Consolidated balance sheet			8
3.	3	Consolidated cash flow statement			9
3.	4	Consolidated statement of changes in equity			10
CONDENSED CLARIFICATION ON THE HALF-YEAR FINANCIAL STATEMENTS			12
4.	1	Declaration of conformity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. .		. 12
4.	2	Segment information by geographical region			12
4.	3	Treasury shares			16
4.	4	Dividends			16
4.	5	Commitments to acquire tangible fixed assets . . . . . . . . . . . . . . . . . . . .	. .	.	16
RISKS AND UNCERTAINTIES			16
TRANSACTIONS WITH RELATED PARTIES			16
AUDITOR'S REPORT			17
DECLARATION BY THE PERSONS RESPONSIBLE FOR THE HALF-YEAR
FINANCIAL REPORT			18

2

Lotus Bakeries

Interim Financial Reporting per 30 June 2021

CONSOLIDATED KEY FIGURES

	INCOME STATEMENT (1) (IN THOUSANDS OF EUR)		30-06-2021		30-06-2020		EVOLUTION %
	TURNOVER		365,248	323,271	+ 13.0
	Recurrent operating result (REBIT) (2)		64,460	55,030	+ 17.1
	RECURRENT OPERATING CASH FLOW (REBITDA) (3)		77,344	67,074	+ 15.3
	Non-recurrent operating result		(1,294)	(4,007)	- 67.7
	Operating result (EBIT) (4)		63,166	51,023	+ 23.8
	Financial result		(1,506)	(2,547)	- 40.9
	Profit for the year before taxes		61,660	48,476	+ 27.2
	Taxes		(13,890)	(10,295)	+ 34.9
	Net result		47,770	38,181	+ 25.1
	RECURRENT NET RESULT		48,774	41,337	+ 18.0
	Total number of shares on 30 June (5)		811,837	810,244	+ 0.2
	KEY FIGURES PER SHARE (IN EUR)
	Recurrent operating result (REBIT)		79,40	67,92	+ 16.9
	Recurrent operating cash flow (REBITDA) (3)		95,27	82,78	+ 15.1
	BALANCE SHEET (IN THOUSANDS OF EUR)
	Balance sheet total		911,519	848,486	+ 7.4
	Equity		471,226	391,555	+ 20.3
	Investments (6)		17,630	31,022	- 43.2
	Net financial debts (7)		129,640	170,870	- 24.1

1. The income statement and balance sheet can be found attached.
2. REBIT is defined as the recurrent operating result, consisting of all the proceeds and costs relating to normal business.
3. Recurrent operating cash flow is defined as recurrent operating result + depreciations + provisions and amounts written off + non-cash costs valuation option and warrant plan.
4. EBIT is defined as recurrent operating result + non-recurrent operating result.
5. Total number of shares on 30 June, excluding treasury shares.
6. Investments in tangible, intangible fixed assets and participating interests.
7. Net financial debts are defined as interest bearing financial debts - investments - cash and cash equivalents - treasury shares, and are reported excluding the 'lease liability' that results from the implementation of the IFRS 16 Leases standard. Including this 'lease liability', the net financial debts amount to EUR 137 million.
   The statutory auditor, PwC Bedrijfsrevisoren, represented by Lien Winne, has executed a review of the consolidated balance sheet and consolidated interim financial information. The statutory auditor has no comments.

Lotus Bakeries

3

MANAGEMENT EXPLANATION

2.1 Group turnover up by 13% or EUR 42 million

In the first half of 2021, the consolidated turnover of the Lotus Bakeries Group rose by EUR 42 million to EUR 365.2 million, up 13%. Without the impact of negative exchange rates and on a constant currency and day basis, turnover growth would have risen 14.6%.

Even though both the COVID-19 pandemic with general lockdown measures and the impact of negative exchange rates provided an unfavourable basis for comparison with last year, growth was nevertheless achieved in the first quarter. The gradual reopening of all of the out-of- home channels and the resumption of on-the-go consumption provided an overall acceleration of growth in the various markets and channels in the second quarter.

Lotus Biscoff®, the Group's number one and largest strategic pillar, grew by 20% in the first half of the year. In addition to the positive impact of the hospitality sector reopening and the gradual recovery of air traffic in the United States, the international expansion of Lotus Biscoff®, Lotus Biscoff® Spread and Lotus Biscoff® Ice Cream continues unabated in every country and continent of the world. For instance, double-digit growth was recorded in among others the UK, Germany, Spain, Italy, Czech Republic, Switzerland, Sweden, China, South Korea, Japan, Israel, United Arab Emirates, Kuwait, Singapore, Jordan, Turkey, Australia, Canada, Egypt, Indonesia and Malaysia.

Furthermore, the innovations launched in 2020 also provided additional growth. After a successful launch in four countries in 2020, the Lotus Biscoff® Sandwich Cookie has also been enthusiastically welcomed in all other countries where it was introduced. In the second half of 2020, Lotus Bakeries also made a successful entrance into the chocolate category. Lotus Biscoff® Chocolate has now built up a wide distribution in Belgium and its range of products has already been expanded further.

The second strategic pillar at Lotus Bakeries is Lotus Natural Foods. After a very strong first quarter in 2020, sales from the Lotus Natural Foods brands nākd, TREK, Kiddylicious and BEAR fell sharply when lockdowns were introduced in the second quarter of 2020. All products for which the on-the-go aspect is an important consumption factor were affected by the shutdown of offices and schools and by the restrictions on travel to work, to visit family or out of the home.

Following a significant and systematic recovery from July last year onwards, the Lotus Natural Foods brands had recovered to the 2019 level by the end of 2020. The first two months of 2021 were highlighted by the tightening of lockdowns, which, when combined with a pre-COVID comparison basis, produced slightly negative growth. From March, there was a systematic upward trend in growth month after month, resulting in two record months in May and June 2021. Lotus Natural Foods posted

40% growth in the second quarter, which was also the best quarter result it had every achieved in its history. All brands and concepts have seen strong growth in recent months.

This strong, rapid recovery after the COVID-19 pandemic supports the belief that the strategy for Lotus Natural Foods is the right one. This is a strategy based, on the one hand, on the development of market-leading brands in the UK and, on the other hand, on the accelerated international growth of brands outside the UK. Kiddylicious, for example, became the market leader in the Baby Snacking category in the UK for the first time in June, with international Lotus Natural Foods business growing by 20% in the first half of the year.

The third pillar of the Lotus Bakeries strategy is the focus on Lotus Local Heroes in the home markets in Belgium, the Netherlands, France and Sweden.

In Belgium and France, Lotus posted good growth in the first half of the year with its "hero" products in the waffle and pastry range. These products were again also supported by targeted media campaigns.

In the Netherlands, the market share of Peijnenburg remained stable in the first half of the year. The on-the-go gingerbread brand Snelle Jelle continued to be adversely affected by the impact of the lockdowns in the first quarter, but has seen solid growth again in recent months.

2.2 Recurring EBITDA up by more than 15%

Recurring operating profit REBIT (EUR 64.5 million or 17.6% in relation to turnover) and recurring operating cash flow REBITDA (EUR 77.3 million or 21.2% in relation to turnover) rose by EUR 9.4 million and 10.3 million respectively compared to last year.

Turnover and volume growth is accompanied by a positive commercial and operating margin contribution. In addition, the Group also continues to invest in the organisation and employees. The growth targets and expansion plans can only be achieved by strengthening and expanding sales teams, operational teams and the supporting functions, which must evolve with the growing and increasingly international Group. Earlier this year, for example, an announcement was made about setting up a new Lotus Natural Foods International headquarters in Switzerland, where all international operations, brands and Global Accounts will be centralised. This new office is up and running and already has 25 staff at the moment.

Certain media campaigns were relaunched in the second half of 2020. The level of media support is maintained in a disciplined and selective manner and is currently still below pre-COVID levels.