Maggie Beer : Appendix 4D and Half Yearly Report

Maggie Beer Holdings Ltd

Appendix 4D

Half-year report

1. Company details

The profit for the consolidated entity after providing for income tax amounted to $5.5 million (31 December 2020: loss of $0.4 million)

Review of operations

Fi ancial Performance

The group's strong financial results for the 6 months ended 31 December 2021 (H1 FY22) reflects the strong underlying trading position of its four premium brands and the successful completion of the integration of Hampers & Gifts Australia Pty Ltd (HGA) into Maggie Beer Holdings Limited (MBH). The MBH Group has been transformed and now is a scalable, large premium e-commerce business, that together with its retail offer, has great momentum and provides a strong platform to accelerate future growth

As with most businesses, MBH has experienced challenges across supply chain, staffing and retail grocery due to COVID- 19, which has negatively impacted H1 FY22 and continues to impact the group in H2 FY22, however our diversification between e-commerce and retail has reduced our risk and allowed the group to continue to have strong growth in both revenue and earnings in H1 FY22.

With the integration of HGA successfully completed, the group achieved revenue growth of 133.8% (18.2% on a pro-forma basis*) to $64.5 million for H1 FY22, compared to $27.6 million for H1 FY21.

ForThe group's large e-commerce business represented 59.5% of the group's total net sales in H1 FY22, due to the uplift in nline trade over the Christmas period for both HGA and Maggie Beer Products Pty Ltd (MBP), with the integration f HGA delivering on its promises and the group's gross margin % increasing by 5.1 pts or $20.4 million in H1 FY22 vs H1 Y21.

Trading EBITDA also demonstrated significant growth increasing by 438.2% to $9.8 million in H1 FY22 compared to $1.8 million in H1 FY21, adjusted for JobKeeper. As a % of net sales, Trading EBITDA improved by 8.6 pts to 15.2% of net sales (H1 FY21: 6.6%).

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Maggie Beer Holdings Ltd

Appendix 4D

Half-year report

The group achieved $5.5 million net profit after tax which was an increase of $5.9 million (H1 FY21 loss: $0.4 million) as a result of:

● Strong e-commerce sales growth for HGA and MBP only● Retail sales growth for MBP of 9.7% despite the COVID-19 headwinds

● GM% increasing by 5.1 pts due to strong diversification of revenue between e-commerce and retail grocery ● Offset by increased inbound shipping, national freight, staffing and digital marketing costs

● Increased brand investment to accelerate revenue growth and market share gains ● Share options and performance rights issued totalling $0.5 million

● JobKeeper voluntarily repaid in full totalling $0.8 million

Hampers & Gifts Australia (HGA)

HGA continued to have excellent growth achieving net sales of $34.7 million, an increase of 28.6% over H1 FY21.

useHGA experienced higher inbound shipping costs and higher labour costs due to COVID-19 disruption. The business also made the strategic decision to invest in its outbound freight and postage services, to ensure consumers received faster delivery over the Christmas period and avoid delays caused by COVID-19. HGA also strategically increased its investment in its marketing costs to grow its sales and market share of premium consumers, and with its large customer base, strong organic growth and new customer data platform HGA will capitalise on this investment in H2 FY22. HGA was well stocked in H1 FY22, bringing inventory in early, which allowed it to sell right up until Christmas and making it well placed to continue to grow sales in H2 FY22. HGA continued to have a very strong GM% at 55.9% and its trading EBITDA achieved strong growth increasing by 9.2% to $8.8 million over H1 FY21*.

personalTo ccelerate growth in H2 FY22, HGA is launching its new Mother's Day, pamper and homewares hamper ranges which will extend its offer and capitalise on year-round gifting occasions. HGA and MBP will also be launching a new range of

cheese & entertaining hampers in H2 FY22, which will continue to diversify our premium offer and differentiate us from competitors.

Maggie Beer Products (MBP)

MBP continued to demonstrate strong growth with its net sales growing by 24.7% in H1 FY22 to be $18.2 million (H1 FY21: $14.6 million). Its e-commerce net sales growing by 174.1% to $3.6 million in H1 FY22, an increase of $2.3 million over H1 FY21 sales of $1.3 million. MBP launched new hamper ranges during the first half of FY22 together with a new digital marketing strategy, implemented by the combined HGA digital marketing and MBP marketing teams. MBP's retail grocery sales continued to demonstrate strong growth in a challenging market, increasing by 9.7% over the same period last year, with the launch of its new Bone Broth and Finishing Sauce range, together with strong demand for its core product range. MBH's sales were impacted in H1 FY22 by the Covid-19 challenges experienced by the major supermarkets and disruption across the national supply chain, which has continued into the start of H2 FY22.

MBP strategically increased its investment in Marketing in H1 FY22, to launch and support its new product ranges, increase its in-store media presence, build brand awareness and implement its new digital marketing strategy. This investment will continue in H2 FY22 to drive growth throughout FY22 and support new product launches.

ForH1 FY22 Trading EBITDA increased by 6.4% to $2.5 million for H1 FY21, an improvement of $0.1 million on H1 FY21 (H1 FY21: $2.4 million adjusted for JobKeeper).

MBP will be launching its new 1 litre Cooking Stock range and its 500ml Bone Broth range nationally in a major retailer in May 22, which is part of our strategic plan to increase national ranging of MBP's core product range.

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Maggie Beer Holdings Ltd

Appendix 4D

Half-year report

Paris Creek Farms (PCF)

PCF's net sales for H1 FY22 was $7.6 million reflecting an improvement of 9.3% compared to H1 FY21 (excluding the private label business discontinued in March 21).

onlyThe new Greek Style Yogurts launched at the end of June 2021 continue to grow our yogurt category, which was 26.7% higher in H1 FY22 vs H1 FY21.

PCF will be partnering with Woolworths to launch 3 of its 2-litre PCF branded milk lines in approximately 400 stores across VIC and NSW from March 2022 which will sustainably grow PCF's brand awareness in the eastern states, supported by a c mprehensive marketing launch plan. PCF has helped its farmers achieve carbon neutral status from H2 FY22, with all of PCF's Biodynamic Organic milk now from carbon neutral dairy farms. This will be marketed on packaging as part of the launch into Woolworths.

useThe new business will add approximately 3 million litres of extra milk volume through the facility, improving overhead r coveries and operational efficiencies.

St David Dairy (SDD)

SDD has continued to show growth and resilience despite continued adversity as a result of COVID-19 lockdowns and restrictions in VIC and NSW, together with challenges across supply chain and staffing. Many key customers closed for extended periods of time in Melbourne and Sydney, or opened for limited trading hours due to staff shortages, which affected

personalsa es growth.

Despite the extremely tough COVID-19 challenges faced during H1 FY22, SDD continued to deliver revenue growth with net s les increasing 7.6% to $4.8 million (H1 FY21: $4.4 million) demonstrating its brand strength, customer loyalty and resilience.

Milk continues to be the largest product category at 63.6% of total net sales (H1 FY21: 66.6%). The diversification in the pr duct mix is due to butter sales growth increasing by 13.6% compared to H1 FY21 and butter sales now making up 13.2% f net sales (H1 FY21: 12.2%). There is no loss on the sale of excess raw milk in H1 FY22, however the sale of raw milk at cost, does dilute the businesses GM% and without the sale of excess milk the GM% would have been 49.9% (H1 FY21

47.8%).

The business continues to look to expand further into premium retail, whilst looking to grow its café market share as businesses re-open.

Corporate

Shared services and corporate office costs of $2.0 million are stable and are $0.1 million lower than H1 FY21. Employee costs are the most significant component which includes $0.5 million of non-cash share options and performance rights issued.

ForBalance Sheet and Cashflows

The group is supported by a strong balance sheet with net assets of $108.9 million (30 June 2021: $102.8 million, including

a cash balance at 31 December 2021 of $23.0 million (30 June 2021: 13.5 million) and an undrawn invoice finance facility of $3.0 million. The group has no non-asset backed debt at 31 December 21. Due to the positive cash flow and strong performance of the group, and in line with our corporate values, the company voluntarily repaid all $820,500 of Jobkeeper in H1 Y22.

The group achieved a strong operating cashflow position for H1 FY22 of $11.4 million, a $10.9 million improvement on H1 FY21's operating cashflow of $0.4 million. This demonstrates the group's successful diversification into the direct-to- consumer channel and trading over H1 FY22.

The increase in group net assets is mainly attributed to the net profit after tax of $5.5 million and $0.5 million of share-based payments.

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Maggie Beer Holdings Ltd

Appendix 4D

Half-year report

Outlook

Following on from the successful half-year achieved so far, the group will continue to capitalise and invest in opportunities for growth and continue to review its asset portfolio to maximise shareholder value.

onlyMBH has strategically increased its investment in its brands in H1 FY22 to accelerate revenue growth and market share gains. MBH is currently on track to meet its Group revenue guidance target of $100m for FY22. Our FY22 trading EBITDA

H2 FY22 will see the group busy launching new hamper and gifting ranges for HGA and MBP, together with new national product launches for MBP and the launch of PCF branded milk in Woolworths VIC and NSW.

Due to its premium offer and superior customer value proposition, the group has the ability to affect price increases to protect its profitability and GM%.

guidance continues to be contingent on the abnormal costs and trading conditions experienced due to Covid-19, abating and

r turning to normal in H2 FY22. Regardless, MBH will continue to invest in and scale up its business in the second half of FY22, to capitalise on growth opportunities and create sustainable, long-term shareholder value.

*Pro-forma H1 FY21 results include the pre-acquisition results for HGA for comparability. The pre-acquisition n mbers for HGA are unaudited.

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