Half Yearly Report

Fyffes plc

Interim Results 2013

Fyffes reports solid first half result and increases full year target

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

"Having achieved a significant step up in profits in 2012, Fyffes is pleased to have grown its business further and consolidated its earnings at this higher level in the first half of 2013. Trading conditions have remained positive in the early months of the second half. The Group is increasing its target EBITA range for the full year 2013 from €27m-€33m to €29m-€34m, compared to €30.5m in 2012."

* These financial terms are defined on the next page. Earnings for 2012 have been restated for the effects of a revision in the accounting standard on pensions, as more fully explained in the attached financial information.

5 September 2013

For further information, please view the interim results slide presentation at www.fyffes.comor contact Sheila Gahan at Wilson Hartnell PR, Tel: +353-1-6690030 or +353-87-2342409.

Financial results and operating review

Revenue

Total revenue, including the Group's share of its joint ventures, was 6.4% higher year on year in the first half, amounting to €585.4m. Sales were higher in each of the Group's product categories, as a result of further organic growth in bananas and melons, and price inflation in pineapples. Revenue growth was restricted by lower average pricing in the melon category and an adverse translation impact on Sterling and US Dollar denominated sales.

Operating profit

Having delivered a significant step up in operating profits in its tropical produce operations in 2012, Fyffes has focused on consolidating at this higher earnings level for 2013, while continuing to grow the business. This has been achieved in the year to date, with Adjusted EBITA* increasing by 1.3% in the first half, to €23.1m. The key drivers of the Group's short term performance in its tropical produce operations, and its banana category in particular, 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.

Trading conditions were relatively more difficult year on year in the early months of 2013 in the banana category, due to extended winter weather in Europe and excess market volumes. Exchange rates were also less favourable throughout the first half due to the strength of the US Dollar. In addition, as anticipated, fruit costs have been higher in 2013, continuing a multi-year trend. Trading conditions improved in the weekly spot market in Continental Europe in the final two months of the first half, as supply constraints emerged due to a number of factors, including weather issues which impacted production in certain regions of Central and South America. These supply issues and the improved trading conditions in Continental Europe continued during the summer months, while Fyffes has pursued higher selling prices in all markets to deal with the higher fruit costs and adverse exchange rates. The Group has also continued to successfully grow its banana volumes organically in the year to date, with both new and existing customers.

In pineapples, Fyffes delivered a satisfactory increase in operating profits in the first half of 2013. Market conditions were better year on year throughout the first half, particularly in Continental Europe, due to greater stability in supplies. Fyffes' own volumes were unchanged in the period, although a higher portion is now sourced from the Group's own farms following the purchase of a new farm adjoining its existing operations in Costa Rica.

Fyffes' US melon business again performed well during the key import season, with a further significant increase in volumes, consolidating its position as the market leader in this category in the US. Favourable weather in the production regions, particularly in Guatemala, contributed to an increase in yields and lower unit production costs. This was a key driver of the satisfactory performance for the season, despite average pricing being below the prices achieved in the same period last year, reflecting higher market volumes.

Balmoral International Land Holdings plc ("Balmoral"), in which the Group has a 40% shareholding, recently reported is final results for 2012. These showed a further reduction in its net assets, with the Group's share amounting to €0.4m. Fyffes wrote down its investment in Balmoral to €50,000 in 2011. As a result, Fyffes does not recognise any further share of Balmoral's losses while the Group's share of its net assets exceeds this €50,000 carrying value. Balmoral has not yet reported its first half results for 2013.

Total operating profit for the six months ended 30 June 2013, including amortisation charges and joint ventures tax charges amounted to €21.5m, compared to €21.1m in the first half last year, an increase of 1.7%.

* Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, including the Group's share of the pre-tax earnings of its joint ventures. Adjusted EBITA is EBITDA less depreciation charges. Adjusted EBIT is EBITA less amortisation charges. Adjusted profit before tax is Adjusted EBITA less financing charges. Adjusted diluted earnings per share excludes amortisation charges. The reconciliation of these performance measures to statutory profits is set out in note 2 of the accompanying financial information.

Prior year adjustment

Certain revisions to the accounting standard on pensions became effective this year as explained in note 5 of the accompanying financial information. These revisions were applied retrospectively, resulting in the restatement of certain 2012 figures, although there was no impact on the previously reported net pension deficit. The pension charge in the Income Statement for the full year 2012 increased by €1m (half year 2012: €0.5m), with an equivalent reduction in the charge recognised in the Statement of Comprehensive Income. The related deferred tax credit in the Income Statement in the full year 2012 increased by €0.2m (half year 2012: €0.1m), with a corresponding reduction in the deferred tax credit recognised in through the Statement of Comprehensive Income.

Financial expense

Net interest expense in the Group's subsidiary companies in the first half amounted to €0.8m, similar to the same period last year, including €0.4m non-cash interest charges on discounting the Group's deferred consideration and other provisions. The Group's share of the interest expense in its joint ventures was also unchanged at €0.1m in the period.

Profit before tax

Adjusted profit before tax amounted to €22.2m in the first half, 1.1% up on the same period last year. As explained above and set out in detail in note 2 of the attached interim financial information, adjusted profit before tax excludes 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 and, where applicable, the Group's share of Balmoral's result and exceptional items. Profit before tax, before these adjustments, amounted to €20.7m, up 1.6% on the €20.4m in the same period last year.

Taxation

The underlying tax charge for the first half of the year has been calculated based on the tax rate that is expected to apply for the full year 2013. The tax charge for the period is analysed in note 3 of the accompanying financial information. Excluding the impact of deferred tax credits related to the amortisation of intangible assets and including the Group's share of tax of its joint ventures, the underlying tax charge for the half year was €2.8m (2012 half year: €2.8m), equivalent to a rate of 12.6% (2012 half year: 12.8%). This underlying tax rate is used for the purposes of calculating adjusted earnings per share. The equivalent underlying tax rate for the full year in 2012 was 12.6%, after the restatement arising from the prior year adjustment explained above.

Non-controlling interests

The non-controlling interests' share of profit after tax for the first half amounted to €0.3m, unchanged on the same period last year.

Earnings per share

Adjusted diluted earnings per share amounted to €6.36 cent in the first half, up 0.2% on €6.35 cent in the same period last year (restated for the impact of the prior year adjustment above). The number of shares in the calculation of earnings per share was 1% higher in the period, due to the inclusion of certain share options as a result of the increase in the Group's share price. As set out in note 4 of the accompanying financial information, adjusted earnings per share excludes the Group's share of Balmoral's result where applicable, the amortisation of intangible assets and related tax credits. Diluted earnings per share, after amortisation charges, amounted to €6.13 cent in the period, up 1.7% on the first half last year.

Dividend and share repurchase

The Board has declared an interim dividend for the year of 0.68 cent per share, an increase of 4.6% on the prior year. This dividend, which will be subject to Irish withholding tax rules, will be paid on 16 October 2013 to shareholders on the register on 13 September 2013. In accordance with company law and IFRS, this dividend has not been provided for in the balance sheet at 30 June 2013.

At its AGM in May 2013, shareholders renewed the Group's authority to repurchase up to 10% of the shares in issue. Taking into account the Group's financial position and other investment opportunities, the company may from time to time decide to repurchase further Fyffes plc shares in the market.

Balance sheet

Net funds

Net funds at 30 June 2013 amounted to €1.4m, compared to €8.6m at the beginning of the year. Cash generated from operations, comprising EBITDA before non-cash items including the Group's share of profits in its joint ventures, less interest paid, was a strong €26.1m in the first half. Capital expenditure amounted to a substantial €14m in the period, including the purchase of a pineapple farm adjoining Fyffes' existing farm in Costa Rica. The Group also made deferred consideration payments of €7.9m during the first half. Other significant expenditure in the period included dividends of €4.2m, tax payments of €2.1m and excess pension contributions plus MNOPF payments of €1.1m. Investment in working capital increased by €3.7m in the period as a result of the further organic growth in the business. Fyffes is expected to move into a net debt position during the second half of the year, due to the regular seasonal working capital requirement in its US melon business together with other planned investments in connection with the further development of the Group.

Pension obligations

The deficit in the Group's defined benefit pension schemes, before deferred tax, increased marginally during the period to €29.9m at 30 June 2013, as set out in note 5 of the accompanying financial information, including details of the impact of the revisions to the applicable accounting standard. An increase in Sterling bond rates in the period did reduce scheme liabilities but this was offset by the impact of an increase in projected inflation. The schemes are closed to new members.

Shareholders' funds

Shareholders' funds increased by €16.4m in the first half, to €152.1m at 30 June 2013. This reflected retained profits of €18.4m, less dividends paid of €4.2m, a gain of €3.4m on marking to market outstanding hedging instruments at 30 June 2013 and a €2m actuarial loss in the Group's pension schemes, net of deferred tax.

Current trading

Trading conditions have remained positive in the early months of the second half. Fyffes continues to pursue necessary increases in selling prices in all markets to offset the impact of higher fruit costs and less favourable exchange rates, particularly the Sterling / US Dollar currency pair. Fyffes is increasing its target EBITA range for the full year 2013 from €27m-€33m to €29m-€34m, compared to €30.5m in 2012.

David McCann, Chairman

on behalf of the Board

5 September 2013

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

Condensed Group Income Statement

Fyffes plc

Condensed Group Statement of Comprehensive Income

Fyffes plc

Condensed Group Statement of Movement in Equity

Fyffes plc

Condensed Group Statement of Movement in Equity (cont'd)

Fyffes plc

Condensed Group Balance Sheet

Fyffes plc

Condensed Group Cash Flow Statement

Fyffes plc

Notes supporting 2013 interim financial statements

1. Basis of preparation

The condensed consolidated interim financial statements of Fyffes plc, its subsidiaries and joint ventures ("the Group") for the half year ended 30 June 2013 are unaudited. These financial statements do not constitute the statutory financial statements that are required by Section 7 of the Companies (Amendment) Act, 1986 to be annexed to the annual return of the company. The statutory consolidated financial statements for the year ended 31 December 2012 have been annexed to the 2013 annual return and filed with the Registrar of Companies. The audit report on those statutory financial statements was unqualified.

The financial information contained in these interim financial statements has been prepared in accordance with the accounting policies set out in the last annual report for the year ended 31 December 2012, prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) as adopted by the EU Commission, except for the changes resulting from revisions to IAS 19 Employee Benefits. As more fully explained in note 5 below, revisions to IAS 19 became effective for the Group for the first time in 2013. Comparative information for the six months ended 30 June 2012 and the full year ended 31 December 2012 has been restated on a comparable basis as if the revisions to IAS 19 had been effective in 2012. These revisions have increased the pension charge recognised in the Income Statement and increased the related deferred tax credit, resulting in a reduction in the originally reported profits and earnings per share for the prior year. There has been a corresponding reduction in the actuarial loss recognised in the Statement of Comprehensive Income and related deferred tax credit. There is no net impact on the Group's net pension deficit in the current or prior years.

In addition to the impact of IAS 19 above, the following new standards are effective for the Group's financial year ending on 31 December 2013 and only impact the presentation of the interim results for the period ended 30 June 2013:

· IAS 1 Presentation of financial statements - changes to the presentation of the Statement of Comprehensive Income.

· IAS 34 Interim Financial Reporting - additional disclosures on financial instruments included in note 9.

During the period, a number of other amendments to existing accounting standards became effective. These have been considered by the directors and have not had a significant impact on the Group's consolidated interim financial statements.

The financial information is presented in euro, rounded to the nearest thousand. Given the seasonality of the tropical produce sector, the Group's profits are typically significantly weighted towards the first half of the year. In addition, the Group's biological asset valuation peaks at its year end date due to the seasonality in the melon category in particular.

The interim financial statements were authorised by the Board on 4 September 2013.

2. Adjusted profit before tax, EBITA and EBITDA

Fyffes believes that adjusted profit before tax, EBITDA, EBITA and earnings per share (note 4 below) are the appropriate measures of the underlying performance of the Group, excluding exceptional items if any and amortisation charges.

Fyffes is currently organised into two separate operating divisions - Tropical Produce and Property. Fyffes' Tropical Produce operations produce 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. 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 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.

Balmoral recently reported its 2012 full year results, which showed a loss attributable to equity shareholders of €14.1m reducing its net equity to €1.1m. Fyffes' share of this net equity value is €430,000, which exceeds its €50,000 carrying value in the Group's balance sheet. Balmoral has not yet reported its interim results for the period ended 30 June 2013. Fyffes has no obligation to fund any net asset deficit which might arise in Balmoral in the future.

3. Taxation

Including the Group's share of the tax charge of its joint ventures of €0.5m (2012 first half: €0.3m), which is netted in operating profit in accordance with IFRS, the total tax charge for the period amounted to €2.5m (2012 first half: €2.5m). As more fully explained in note 5 below, the Group's tax charge for the full and half year in 2012 has been restated for the impact of the revisions to IAS 19.

Adjusting for deferred tax credits related to the amortisation of intangible assets, the underlying tax charge for the period was €2.8m (2012 first half: €2.8m), equivalent to a rate of 12.6% (2012 first half: 12.8%) when applied to the Group's Adjusted Profit before Tax.

The Group's underlying tax rate for the first half of the year is based on the estimated tax rate that is expected to apply for the full year. The equivalent underlying charge for the full year in 2012 was a charge of €3.7m, equal to a rate of 12.6%.

4. Earnings per share

Adjusted diluted earnings per share excludes, where applicable, the Group's share of Balmoral's result, the impact of exceptional items after tax and non-controlling interests, once-off tax credits and amortisation charges on intangible assets and related deferred tax credits.

5. Post employment benefits

This table summarises the movements in the net deficit on 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 finance income on scheme assets. The actuarial loss is 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 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 30 June 2013, the Group used a rate of 3.80% (31 December 2012: 4.35%) in respect of its euro denominated schemes and 4.4% (31 December 2012: 4.15%) in respect of its UK scheme.

Certain revisions to IAS 19 became effective on 1 January 2013 and have been applied in calculating the movements above in the six month period ended 30 June 2013. These revisions have been applied retrospectively and the figures for the six months ended 30 June 2012 and the year ended 31 December 2012 have been restated accordingly. The revisions, which include a requirement to calculate the expected return on scheme assets using the same interest rate used to discount scheme liabilities, did not change the previously reported net deficits in the schemes. However, the charge recognised in the Income Statement in the full year 2012 has increased by €1,025,000 (six months ended 30 June 2012: Income Statement charge increased by €513,000), with an equivalent reduction in the charge recognised in the Statement of Comprehensive Income. The related deferred tax credit recognised in the Income Statement in the full year 2012 increased by €235,000 (six months ended 30 June 2012: Income Statement credit increased by €117,000), with a corresponding reduction in the deferred tax credit recognised in equity through the Statement of Comprehensive Income.

6. Dividends paid to equity shareholders

The final dividend for 2012 of 1.42 cent per share, approved by the shareholders at the Annual General Meeting on 9 May 2013, gave rise to a distribution of €4.2m in the period.

The directors have proposed an interim dividend for 2013 of €0.68 cent per share (2012: €0.65 cent per share). This dividend, which will be subject to Irish withholding tax rules, will be paid on 16 October 2013 to shareholders on the register at 13 September 2013. In accordance with company law and IFRS, this dividend has not been recognised as a liability in the balance sheet at 30 June 2013.

At 30 June 2013, the company and subsidiary companies held 28,075,000 Fyffes plc ordinary shares(31 December 2012: 28,075,000). The right to dividends on all treasury shares has been waived and they are excluded from the calculation of earnings per share.

7. Notes supporting cash flow statement

7.1 Cash flows from operating activities

7.2 Cash flows from investing activities

7.3 Cash flows from financing activities

7.4 Analysis of movement in net funds in the period

8. Reconciliation of other reserves

9. Financial instruments

The fair values of financial assets and financial liabilities, together with the carrying amounts in the Condensed Group Balance Sheet at 30 June 2013, are as follows:

For information on the maturity profile of the Group's debt, please refer to notes 16 and 28 of the 2012 Annual Report.

Fair value of financial instruments carried at fair value

Financial instruments recognised at fair value are analysed between those based on quoted prices in active markets for identical assets or liabilities (Level 1); those involving inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly (Level 2); and those involving inputs for the assets or liabilities that are not based on observable market data (Level 3). The following table sets out the fair value of all financial instruments whose carrying value is at fair value:

All derivatives entered into by the Group are included in Level 2 and consist of foreign currency forward contracts and bunker fuel forward contracts.

Where derivatives are traded either on exchanges or liquid over-the-counter markets, the Group uses the closing prices at the reporting date. Normally, the derivatives entered into by the Group are not traded on active markets. The fair values of these contracts are estimated using a valuation technique that maximises the use of observable market inputs, eg market exchange.

Deferred contingent consideration is included in Level 3. Details of movements in the period are set out below. The contingent element is measured on a series of trading performance targets, and is adjusted by the application of a range of outcomes and associated probabilities.

Additional disclosures for Level 3 fair value measurements