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T&G Global Limited Results of Annual Shareholder Meeting

Wednesday 24th June 2020

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Due to the travel restrictions of COVID-19, the 99th Annual Meeting of T&G Global Limited was held as a virtual meeting through a live webcast, commencing at 9:00am New Zealand time.

Prof. Klaus Josef Lutz chaired the meeting, with addresses made by the Chairman and by the Chief Executive, Gareth Edgecombe.

After summarising the performances of the Company’s various divisions in the 2019 financial year, Prof. Klaus Lutz outlined key areas of focus and potential opportunities for the future:

• In May 2020, T&G acquired Freshmax New Zealand’s domestic business, further strengthening T&G’s New Zealand Produce business, which has been rebranded to T&G Fresh;

• Continued strong focus on international growth, developing new categories, simplifying the Company’s operating model and using its vast resources more effectively;

• COVID-19 has raised the awareness of food and its importance in terms of accessibility, and the need to simplify supply chains to ensure the smooth and continuous flow of produce globally - T&G is well prepared to harness these opportunities;

• The pandemic has also accelerated the uptake of technology by creating opportunities to directly connect with customers and consumers and to bypass traditional distribution channels;

• Future workforce plans will need to factor in the opportunities for COVID-19 impacted unemployed New Zealanders, alongside skilled and trained RSE seasonal workers.

The Chairman noted the significant contribution of retiring Director Mr Mau Wah Liu over the last three years. Mr Liu had advised that he will not be standing for re-election at this meeting.

Acknowledgement was made to former Chairman, Tony Gibbs, who recently passed away. Mr Gibbs led the then Turners and Growers for 16 years, until 2011, and during his tenure the business grew to be a significant player in the international fresh produce industry.

In his presentation Chief Executive Gareth Edgecombe highlighted the following:

• Significant growth potential due to growing global population and consumers increasingly seeking out healthy, trusted food;

• Operating profit increased in 2019 by 6% to $16.5 million despite a number of one-off costs including restructure-related costs, reduction of the fair value in biological assets, Holidays Act remediation and various transactional initiatives;

• Key performance drivers included:

o Strong sales and margin growth in key markets;

o A premium position in the US for Envy with increased sales by 43%;

o Further divestment of non-core assets with more productive use of freed up capital (e.g. sale of the Mt Wellington site for $65 million, acquisition of Freshmax New Zealand Limited).

- These drivers were impacted by:

o Adverse New Zealand weather impacting apple volumes and sizes;

o Oversupply of commodity apple varieties in Europe impacting prices;

o Mild New Zealand winter resulting in price volatility and oversupply of tomatoes in New Zealand.

Mr Edgecombe further outlined T&G’s strategy with 2019 being the foundational year for growing great brands, winning in key markets, and leading Aotearoa’s fresh produce future.

COVID-19 has resulted in a very challenging first half of 2020, including soft demand in some markets, price pressure and supply chain challenges. In the outlook for 2020, Mr Edgecombe highlighted the following areas of focus:

- Engaging the team by building a performance culture with health and safety being a critical priority, and by harnessing digital tools and flexible ways of working;

- Executing key initiatives well, including maximising sales opportunities across key markets and integrating Freshmax New Zealand to unlock synergy benefits;

- Mitigating COVID-19 risks by managing ongoing supply and demand constraints while tightly controlling costs;

- Improving financial performance.

A number of shareholders took the opportunity to question the Board and management regarding the financial statements and other matters.

Source: T&G Global Limited

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