Final Results

Fyffes reports strong result in 2011

Preliminary Results 2011

Commenting on the results, David McCann, Chairman, said:

"Fyffes is pleased to report a strong result for 2011, towards the top end of its target range, with good organic growth across each of our product categories. The Group has had a positive start to 2012, with improving pricing in Continental Europe, and is targeting an EBITA result for the year in the range €22m-€27m."

* These financial terms are defined on the next page.

1 March 2012

For further information, please view the 2011 results slide presentation at www.fyffes.comor contact Brian Bell at Wilson Hartnell PR, Tel: +353-1-6690030.

Financial results and operating review

Revenue

Total revenue, including the Group's share of its joint ventures, was €107.9m (14.5%) higher in 2011. This included the €63.8m first time contribution from Fyffes' one third stake in German distributor van Wylick, which was acquired in March 2011. Excluding this, like for like sales were €44.1m (5.9%) higher. Group Revenue, excluding Fyffes' share of its joint ventures, amounted to €659m in the year, an increase of €36m (5.8%). The increase in sales in 2011 has been driven by strong organic growth in each of the Group's product categories.

Operating profit

Adjusted EBITDA* in 2011 amounted to €29.6m, up 10.1% on last year. Adjusted EBITA* amounted to €23.2m, up 8.9% on 2010. The calculation of Adjusted EBITA and Adjusted EBITDA is set out in note 2 of the accompanying financial information. The key drivers of performance in the Group's tropical produce operations are average selling prices, exchange rates and the costs of fruit, shipping and fuel, all of which can result in volatility in year on year profitability. The increases in Adjusted EBITDA and EBITA were achieved through continued improvements and efficiencies, combined with volume growth, in each product category. Adjusted EBIT* amounted to €20.3m, up 19.7% year on year, reflecting the reduction in amortisation charges in 2011.

In contrast to the previous year, market conditions in the banana category followed a more normal pattern in 2011 in the weekly priced part of the business. Overall, Fyffes achieved a low single digit year on year increase in EBITA in the banana category in 2011. This represents a satisfactory result given the significant level of cost inflation experienced by the industry in the year, particularly in relation to bunker fuel costs which increased by 35%. The impact of these higher costs was partly offset by the relative weakness of the US Dollar compared to the previous year. Average selling prices were slightly higher over the full year. The Group grew volumes in its banana category in 2011, securing additional business with new and existing customers, as a result of its efficiency and the competitiveness of its operating structures.

As anticipated, Fyffes achieved an increase in profits in the pineapple category in 2011, including an improved result in its farming operations. The Group increased its pineapple volumes by slightly more than 10% in the year, including increased production on its own farms, reflecting improved yields. Own production accounted for close to 50% of the pineapples sold by the Group in 2011. The pineapple category experienced similar cost inflation as in the banana category, including the significant increase in fuel costs. The impact of this was mitigated by the more favourable exchange rates and the improved efficiency of the Group's own farms.

Fyffes' US melon business achieved a satisfactory result in 2011 despite less favourable market conditions compared to the previous year, in particular during the US production period. This business continues to successfully expand its activities, including adding further production capacity in Guatemala, and has virtually doubled in scale since Fyffes first invested in 2008. Revenues increased by 7% in 2011, driven by further volume growth, while remaining very operationally efficient and focused on its cost structures.

Fyffes' 40% share of the after tax losses of Balmoral International Land Holdings plc ('Balmoral') amounted to €3.5m in 2011, excluding €2.5m which has been written-off against revaluation reserves in Fyffes' balance sheet. As further explained below, Fyffes has written down its investment in Balmoral to €50,000, giving rise to an impairment charge of €2.4m, plus a further €3.6m which was set against Fyffes' remaining revaluation reserves.

The total operating profit for the Group, which is the Adjusted EBITA of €23.2m less the Group's share of Balmoral's result, amortisation charges and the Group's share of joint ventures interest and tax, amounted to €13.2m for the year, compared to €8.7m in the previous year.

* Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, excluding the Group's share of Balmoral's result. Adjusted EBITA is EBITDA less depreciation charges. Adjusted EBIT is EBITA less amortisation charges. Adjusted diluted earnings per share excludes the Group's share of Balmoral's result and amortisation charges.

Financial expense

Net financial expense in the Group's subsidiary companies in 2011 amounted to €0.7m, compared to net financial income of €0.1m in the previous year. Excluding non-cash interest costs of €1.1m on discounting deferred acquisition consideration and other provisions, interest earned on the Group's net cash balances amounted to €0.3m, a return of 1.1%. The Group's share of the net financial expense of its joint ventures was €0.2m in 2011, compared to €0.1m in the previous year.

Profit before tax

Adjusted profit before tax for 2011 amounted to €22.2m, 4.4% up on the previous year reflecting the increase in the Group's net financial expense above. As set out in note 2 of the accompanying financial information, adjusted profit before tax excludes the Group's share of Balmoral's result, amortisation of intangible assets and the Group's share of the tax charge of its joint ventures, which is reflected in profit before tax under IFRS rules. Profit before tax, excluding these adjustments, amounted to €12.5m compared to €8.8m in 2010.

Taxation

An analysis of the tax charge for the year is set out in note 3 of the accompanying financial information. The underlying tax charge in 2011 was €2.9m compared to €2.8m in the previous year, equivalent to a rate of 13% (2010: 13%), when applied to the Group's Adjusted profit before tax. The underlying tax charge excludes deferred tax credits related to the amortisation of intangible assets and includes the Group's share of tax of its joint ventures. This underlying rate is used for the purposes of calculating adjusted earnings per share. The 2011 income statement shows a tax charge of €1.3m before these adjustments, compared to €1.5m in the previous year.

Non-controlling interests

The non-controlling interests share of profit after tax for the year amounted to a credit of €0.2m in 2011, reflecting losses in one non-wholly owned subsidiary, compared to a credit of €0.4m in the previous year.

Earnings per share

The Group has delivered a 10% increase in adjusted diluted earnings per share in 2011, to €6.05 cent. This increase reflects the increase in profits and the positive impact of the repurchase of shares during the second half of the year. The calculation of adjusted earnings per share is set out in note 4 of the accompanying financial information. It excludes the Group's share of Balmoral's result and the amortisation of intangible assets. The diluted earnings per share after Balmoral's result and amortisation charges amounted to €3.53 cent in 2011, compared to €2.23 cent in the previous year, an increase of 58.3%.

Dividend and share buyback

Between 16 September and 18 November 2011, the Group repurchased 32.2m Fyffes shares in the market at a total cost of €12.7m. This was close to the maximum 10% authorised by shareholders at the AGM in May 2011. Fyffes had also repurchased 17m of its own shares in November 2010 at a cost of €5.3m. With dividends paid in 2011 of €5.9m, Fyffes returned total cash of €18.7m to shareholders in the year and €11m in the previous year.

Fyffes will seek to renew its authority from shareholders to repurchase shares at its 2012 AGM. Subject to this authority and taking into account the Group's financial position and other investment opportunities, the Board may from time to time decide to repurchase further Fyffes plc shares in the market.

The Board is proposing to pay a final dividend for 2011 of €1.32 cent per share, up 10% on the previous year. Subject to shareholder approval at the forthcoming AGM, this dividend, which will be subject to Irish withholding tax rules, will be paid on 15 May 2012 to shareholders on the register on 13 April 2012. In accordance with company law and IFRS, this dividend has not been provided for in the balance sheet at 31 December 2011. Total dividends in respect of 2011 will amount to €1.925 cent, 10% up on the previous year and equivalent to a payout ratio of 32% based on adjusted earnings per share. This represents a yield of close to 5% based on Fyffes' current share price.

Balance sheet

Investment in Balmoral International Land Holdings plc ("Balmoral")

In accordance with International Financial Reporting Standards, Fyffes' 40% investment in Balmoral continues to be accounted for under equity accounting rules. Fyffes' share of Balmoral's reported net assets at 31 December 2011 amounted to €6m after current year losses. During the second half of 2011, Balmoral's shareholders approved a corporate reorganisation, including the creation of a new holding company and the cancellation of its listing on the ESM and AIM markets. As a result of its delisting, the market value of Fyffes' investment in Balmoral is now more difficult to accurately determine and, consequently, Fyffes has elected to write down the carrying value of its investment to €50,000. This has given rise to an impairment charge in Fyffes' 2011 income statement of €2.4m and the elimination of Fyffes' remaining revaluation reserves in respect of Balmoral properties of €3.6m. Balmoral continues to be actively managed and, given its extensive and well diversified portfolio of properties in Ireland, the UK and Continental Europe, remains in a position to benefit from any improvement in property market conditions.

Net debt/funds

Fyffes undertook significant investment expenditure in 2011 amounting to €33.8m, comprising the €12.7m in respect of its share repurchase programme, €10.4m in deferred consideration payments in respect of prior year acquisitions, €7.4m in respect of new acquisitions in 2011, including a one third stake in van Wylick and the purchase of a melon farming business in Guatemala, and a further €3.3m development loan to one of the Group's suppliers. Mainly as a result of these investments, the Group moved from net cash of €37.1m at the beginning of the year to a net debt position of €1.2m at 31 December 2011. Fyffes continues to generate strong cash flows from its operations with operating cash generated in the year, excluding the contribution from joint ventures, amounting to €25.6m. From this the Group made recurring payments including capital expenditure of €5.3m, dividends of €5.9m, tax payments of €2.5m and additional pension contributions (including in relation to the MNOPF) of €2.1m. In addition, the Group invested a further €14.3m in working capital in 2011, reflecting the significant organic growth in all parts of its business.

Pension obligations

The deficit in the Group's defined benefit pension schemes, before deferred tax, increased from €13.8m at the beginning of the year to €21.7m at the end of the year. While asset values in the various schemes increased by €3.7m in 2011, liabilities increased by €11.5m as a result of the reduction in long term bond rates. The schemes are closed to new entrants. A deficit recovery plan is in place in respect of the Group's largest scheme, in the UK, which resulted in additional contributions in the year of €0.9m.

Shareholders' funds

Shareholders' funds amounted to €135.8m at 31 December 2011, compared to €148.1m at the beginning of the year. This reduction mainly reflects the €11.9m reduction in the carrying value of the Group's investment in Balmoral in the year. Retained profits in 2011 were offset by the €18.7m of capital returned to shareholders through the share repurchase programme and dividends. In addition, positive balance sheet currency movements in the year, including on hedging instruments, were largely offset by the actuarial losses on the Group's pension schemes.

Current trading

The Group has had a positive start to 2012, with improving pricing in Continental Europe. While it remains very early in the year, Fyffes is targeting an adjusted EBITA for 2012 in the range €22m-€27m. The Group continues to pursue necessary increases in selling prices to offset the impact of significant cost inflation, particularly bunker fuel. Fyffes is also focused on growing the Group further through strategic acquisitions and alliances.

David McCann, Chairman

on behalf of the Board

1 March 2012

Copies of this announcement are available from the Company's registered office, 29 North Anne Street, Dublin 7 and on our website at www.fyffes.com.

Fyffes plc

Summary Group Income Statement for the year ended 31 December 2011

Fyffes plc

Summary Group Statement of Comprehensive Income for the year ended 31 December 2011

Summary statement of movement in equity for the year ended 31 December 2011

Fyffes plc

Summary Group Balance Sheet as at 31 December 2011

Fyffes plc

Summary Group Cash Flow Statement for the year ended 31 December 2011

Fyffes plc

Notes to Preliminary Results for the year ended 31 December 2011

1. Basis of preparation

This preliminary financial information has been derived from the Group's consolidated financial statements for the year ended 31 December 2011, which were approved by the Board of Directors on 29 February 2012, and have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the EU Commission and the accounting policies set out in the Group's 2010 annual report, none of which have changed in 2011. The Group's full financial statements and annual report will be circulated to shareholders, published on the Group's website and filed with the Irish Registrar of Companies in due course.

A number of new or revised accounting standards became effective for the Group for the first time in 2011, including IAS 24 Amendment - Related Party Disclosures, IAS 32 Amendment - Classification of Rights Issues, IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments and IFRIC 14 Amendment - Prepayments of a Minimum Funding Requirement. None of these new standards and interpretations had any material impact on the Group's financial statements in 2011.

The comparative financial information for the year ended 31 December 2010 presented in this preliminary results announcement represents an abbreviated version of the Group's statutory financial statements for that year, on which an unqualified audit report was issued and which have been filed with the Companies Registration Office in Dublin.

The financial information is presented in euro, rounded to the nearest thousand. The results and cash flows of Group companies denominated in foreign currencies have been translated into euro at the average exchange rates for the period while their balance sheets have been translated at the year end rate of exchange. Adjustments arising on retranslation of the opening net assets and results for the year of these non-euro denominated operations at the year end rate of exchange are recognised directly in equity, in the currency translation reserve, net of any movements on related foreign currency borrowings, including those arising on long term intra-Group loans regarded as quasi-equity in nature. All other translation differences are recognised in the income statement. The principle non-euro currencies applicable to the Group are sterling and the US dollar. The average and closing rates to the euro were as follows:

2. Adjusted profit before tax, EBITA and EBITDA

Fyffes is currently organised into two separate operating divisions - its Tropical Produce and its Property activities. Fyffes' Tropical Produce operations grow and import bananas, pineapples and melons sourced in Central and South America for distribution to customers in Europe and the US. Fyffes' Property activities comprise its 40% investment in Balmoral International Land Holdings plc ("Balmoral") which is an international property development company. This preliminary results announcement presents the separate information for Balmoral under equity accounting rules in the Income Statement and the Balance Sheet and in the reconciliation above. The performance of the Tropical Produce division is reviewed by the Chief Operating Decision Maker ("CODM"), being the executive team comprising the Executive Chairman, the Chief Operating Officer and the Finance Director, based on Adjusted EBITA which, while not a term defined in IFRS, Fyffes believes is the most appropriate measure of the underlying operating result of the Group. Adjusted EBITA is earnings before interest, tax and amortisation charges, excluding exceptional items, if any, and the Group's share of Balmoral's result and including the Group's share of its joint ventures on a consistent basis. Adjusted earnings per share are presented on a similar basis in note 4 below. Adjusted EBITA reflects the results of Fyffes' Tropical Produce operations, net of all central overheads, and is the basis for the analysis of the performance of that division in the accompanying text. Financial income and expense, income tax and certain corporate overheads are managed on a centralised basis. The only material inter-segmental transactions between Fyffes' Tropical Produce division and Balmoral arise because Fyffes leases a number of its distribution centres from Balmoral and Fyffes in turn sublets space in its corporate head office to Balmoral.

3. Corporation tax

Including the Group's share of the tax charge of its joint ventures, amounting to €0.9m (2010: credit of €0.1m), which is netted in operating profit in accordance with IFRS, the total tax charge for the year amounted to €2.2m (2010: €1.4m). Excluding the impact of deferred tax credits related to the amortisation of intangibles, the underlying tax charge for the Group for the year was €2.9m (2010: €2.8m), equivalent to a rate of 13% (2010: 13%) when applied to the Group's adjusted profit before tax.

4. Earnings per share

Adjusted diluted earnings per share

Adjusted diluted earnings per share is calculated to exclude the Group's share of the results of Balmoral International Land Holdings plc, intangible amortisation, related tax credits/charges and the impact of share options with a dilutive effect, if applicable.

5. Post employment benefits

The table above summarises the movements during the year in the Group's various defined benefit pension schemes in Ireland, the UK and Continental Europe. The current/past service cost is charged in the Income Statement, net of the finance income on scheme assets. The actuarial gains and losses are recognised in the Statement of Comprehensive Income, in accordance with the amendment to IAS 19 Actuarial Gains and Losses, Group Plans and Disclosures. The measurement of the Group's pension obligations is based on a number of key assumptions which are determined in consultation with independent actuaries. One key assumption is the appropriate interest rate to use in discounting the estimated future cash flows of the schemes. At 31 December 2011, the Group used a rate of 5.2% (2010: 5.6%) in respect of its euro denominated schemes and 4.7% (2010: 5.3%) in respect of its UK scheme.

6. Dividends and share buy-back

The directors have proposed a final dividend for 2011, subject to shareholder approval at the AGM of €1.32 cent per share. In accordance with IFRS, this dividend has not been provided for in the balance sheet at 31 December 2011.

In three separate transactions between 16 September 2011 and 18 November 2011, Fyffes purchased a total of 32,243,384 of its €0.06 cent ordinary shares in the market, at an aggregate cost of €12,732,000, which it held as treasury shares. During the year, Fyffes cancelled 31,243,384 treasure shares held. On 17 January 2012, Fyffes cancelled a further 5,000,000 of the treasury shares held. At 31 December 2011, the company and subsidiary companies held 33,075,000 Fyffes plc ordinary shares (2010: 32,075,000). The right to dividends on these shares has been waived and they are excluded from the calculation of earnings per share.

7. Notes supporting cash flow statement

7.1 Cash generated from operations

7.2 Cash flows from investing activities

7.3 Cash flows from financing activities

7.4 Analysis of movement in net funds in the year

8. Reconciliation of other reserves