Pepco N : First Half Pre- Close Trading Statement

21st April 2022

Pepco Group N.V. - First Half Pre-Close Trading Statement

Strong strategic progress and trading growth achieved despite a challenging trading environment

The fast-growing pan-European variety discount retailer, Pepco Group, owner of the PEPCO and Dealz brands in

Europe and Poundland in the UK, today reports an update for the second trading quarter and first half ending 31st

March 20221.

Summary Financial Performance

• • First half Group revenue2 of €2,371m, +17.5%3 year on year ("YoY") led by PEPCO delivering +28.9% growth.

• • Strong Group half year like-for-like ("LFL")4 of 5.3% driven by accelerated LFL of +12.1% in the Second Quarter:

  • o PEPCO: +18.5% LFL in Q2, +7.2% LFL growth in the half year.

  • o Poundland Group: +5.9% LFL in Q2, +3.3% LFL growth in the half year.

• • Half-year underlying EBITDA5 is anticipated to be within a range of €342m to €350m. Within this range, the Group remains on track to meet guidance for the full year in the absence of any further significant deterioration in the macro environment.

Growth Focused Strategic Progress.

• • Significant new store expansion continues across all trading brands. Openings are ahead of guidance (historic run rate) with 235 net new stores opened in the half year, excluding the impact of 43 Fultons stores closed following acquisition:

  • o PEPCO: a record 202 net new store openings, including 84 in the Western European markets of Austria, Italy and Spain, where initial performance remains strong.

  • o Poundland Group: 33 net new stores, representing an increase of 6.7% YOY

• • 586 store renewals completed YTD (534 PEPCO, 52 Poundland) upgrading stores layout and environment, driving LFL sales growth and positive customer perception (1,900 completed since 2019).

Trading Context & Performance

The first half continued to see the ongoing impact of Covid-19 restrictions on our stores. However, by the end of the half restrictions had eased, with the Group March exit LFL rate of 19.4% demonstrating the strong underlying customer demand for the Group's offer supporting our confidence for the second half.

Total Revenue / €m Total Stores #

553

467

1,020

1,281 2,666

1,090 2,371

1,030 3,696

Total Growth

• - Revenue YoY; Constant Currency

• - Like-for-Like Revenue Growth

• - New Stores YTD

• - New Stores YTD #

• - New Stores YoY

42.6% 18.5%

8.6% 5.9%

25.1% 12.1%

28.9%

6.1% 17.5%

7.2%

3.3% 5.3%

8.2%

(1.0)% 5.5%

202

(10) 192

19.6%

1.3% 13.9%

Leadership Changes

On the 31st March Andy Bond stood down as Group CEO and Trevor Masters assumed responsibility for the CEO role on an interim basis.

Commenting on the results, Trevor Masters, Interim CEO Pepco Group, said:

"We are very pleased with this set of results, considering the global disruption faced by our business. We have maintained our focus on our strategic priorities, in particular our new store growth and our continued re-fit programme, both of which continue to delight our customers and deliver strong financial performances. I wouldalso like to take this opportunity to thank the Pepco team for their resilience and commitment to serving our customers.

"Whilst the impact of Covid-19 progressively eased over the second quarter, the invasion of Ukraine, a country which borders three of our largest operating territories, created further volatility and unpredictability. In response, the Group and our colleagues have donated a generous amount of money to two charities who we have worked with over the past two years to provide relief directly to the people of Ukraine and those at the border of Poland. We have utilised our employee assistance schemes to support our impacted colleagues and introduced paid volunteering days for our staff based in the CEE.

"We will continue to drive our significant growth agenda whilst reducing our cost of doing business. This will enable us to offset the majority of our input inflation allowing us to protect prices for our cost conscious customers. The market within which we operate is likely to remain volatile in the near term, due to the situation in Ukraine and ongoing global inflationary pressures. However, we have a clear and successful strategy to deliver on our sizeable long-term growth opportunities. In the absence of any further significant deterioration in the macro environment, we remain confident of delivering in line with our profit guidance."

For further information, please contact:

Company Enquiries:

Lucy McFetrich, Director of Investor Relations	[phone]
Nick Wharton, Group CFO	[phone]
Media Enquiries:
Finsbury Glover Hering:
Rollo Head	[phone]
James Thompson	[phone]
Explanatory Notes:

• 1. The Group financials are prepared on an unaudited basis for the six-month (First Half) period ending 31st March 2022. Within this the 'PEPCO (Apparel-led multi-price)' segment operates on a calendar month basis with the six-month period ending on 31st March 2022, and the 'Poundland Group (FMCG-led price-anchored)' segment

• primarily operates on a trading week basis with the 26-week period ending on 27th March 2022.

• 2. Revenues are unaudited with foreign currency revenues translated at the average rate for the month in which they are made.

• 3. Revenue growth is reported on a constant currency basis.

• 4. LFL revenue growth is defined as year-on-year revenue growth for stores open beyond their trading anniversary and is reported on a constant currency basis. Absolute LFL revenue and LFL growth are each unadjusted for the impact of Covid in both financial years.

• 5. Underlying EBITDA is unaudited and quoted on an IFRS16 basis and does not yet include the potential impact of the IFRIC IAS38 pronouncement relating to accounting for SAAS implementation costs which will be communicated in the first half earnings statement.

Future Market Updates

• 1. First Half Interim Results including earnings call with management published: 9th June 2022

• 2. Third quarter revenue update: 14th July 2022

• 3. Pre-Close Trading Statement: 13th October 2022

• 4. Capital Markets Day: Autumn 2022

True and Fair Statement

The Executive Directors are responsible for preparing this update and state that, to the best of their knowledge, the information contained herein regarding Pepco Group N.V. is correct as of the date of publication of this document and that it fairly reflects the Group's financial situation and business activities.

-ENDS

-

Notes to Editors

Pepco Group

Pepco Group was established in 2015 and comprises two strong, independent value retailers - PEPCO and Poundland, which also trades internationally under the Dealz brand, together with a global sourcing arm, PGS, which works very closely with both operating companies. Together PEPCO and Poundland operate across some of Europe's largest economies. Pepco Group now has c. 3,700 stores in 17 countries including the UK, the Republic of Ireland, Spain and across the CEE region, employing c. 38,000 people.

About PEPCO

After more than 14 years of continuous growth, PEPCO now serves over 20 million customers a month, offering apparel for the whole family, household goods and toys at the lowest prices. With its head office in Poznan in Poland, the company has around 20,000 employees in 15 different countries across Europe, with the largest footprints in Poland, Romania, Hungary and Czech Republic.

The first 14 PEPCO shops opened in Poland in 2004. PEPCO expanded into the Czech Republic and Slovakia in 2013 and between 2015 and 2017 opened stores in Croatia, Hungary, Lithuania, Romania and Slovenia. From 2018, stores have been opened in Latvia, Estonia, Bulgaria, Italy, Serbia, Spain and Austria.

PEPCO is widely recognised as one of Poland's strongest brands and most dynamic companies. It has regularly won the Forbes' Diamond Award as one of the country's fastest-growing companies and the Superbrand Award for quality and trust among Polish consumers. Recently PEPCO has been chosen as one of Poland's Best Employers of 2021.

About Poundland and Dealz

Since opening its first store in Burton-upon-Trent in 1990, Poundland, has built a network of nearly 850 stores in the UK and the Republic of Ireland, offering top brands and great quality own brand products that provide customers with amazing value every day.

Nominated by Retail Week as Value Discounter of the Year 2019, it now has around 18,000 colleagues who serve over seven million customers every week from Wick to Weymouth, Londonderry to Lowestoft and Holyhead to Hastings.

Poundland offers thousands of quality products in store with over 1,000 well-known brands in 17 shopping categories including food and drink, health and beauty, household, gardening, DIY, pet, stationery, books, DVDs and toys. It is on a journey from a single price to a simple price point retailer. While most items in its stores are at its original £1 price point, it has extended ranges above and below £1 that also offer amazing value.

Within the UK Poundland has also rolled out its fashion brand PEP&CO to around 400 of its larger stores. PEP&CO, launched in 2015 as a standalone brand, offers customers a full range of women's, men's and kids' fashion and is now bringing new style to Poundland with simple low pricing on family fashion that's hard to find on local high streets.

From August 2020, the PEP&CO brand also began to power Poundland's new homewares ranges, which have won widespread acclaim for their style and value. PEP&CO Home brings an on-trend, contemporary, and exclusive home and décor range to Poundland alongside a major refresh of how the products are displayed and merchandised.

Poundland now also offers chilled and frozen food in over 200 stores, which is set to rise to over 500 over the next two years, following its acquisition of Fultons Foods and an investment of £25m.

PEP&CO was also nominated in the 2019 Retail Week Awards as Private Label of The Year.

From opening its first store in 2011, Dealz has built a network of over 200 stores across Ireland, Spain and Poland offering customers a wide selection of over 1,000 well-known top brands and established own label products.

Dealz brings Poundland's simple and straightforward pricing model to shoppers, offering unbeatable value.