Interim Results

PureCircle Limited

("PureCircle" or the "Company")

Interim results for the six months ended 31 December 2014

PureCircle (LSE: PURE) the world's largest producer and marketer of high purity stevia today announces its unaudited interim results for the six month period from 1 July 2014 to 31 December 2014 ("1H FY 15").

The unaudited financial statements comprising the profit and loss and cashflow statements for the six months to 31 December 2014 ("1H FY15") along with the balance sheet as at 31 December 2014 are set out below, together with the unaudited profit and loss and cashflow comparatives for the six months to 31 December 2013 ("1H FY14").

SUMMARY FINANCIALS

** Operating profit and EBITDA are as per segmental reporting on page 13. The full profit and loss account is detailed on page 4.

 Sales: Sales of $43m increased 24% over 1H FY14 ($35m). There was growth in sales in all of our global sales regions.

Gross margin: Gross margin increased 18% to $14.5m. Gross margin % of 34% was consistent with 1H FY14 (35%).

EBITDA: EBITDA increased 24% in line with sales revenues to $6.4m. EBITDA improvements are after $1.5m increased SG&A investment in PCL's operational management and global customer service infrastructure, including in-region application capacity, to support anticipated future sales growth.

Net Result after Tax: 1H FY15 net result of ($0.9m) represented a $1m (53%) improvement on 1H FY14. The net result reflects $1.2m improved EBITDA, $0.6m increased Long Term Incentive Plan (LTIP) costs, $3m adverse foreign exchange movements and $3.8m favourable interest and tax.

Net debt: Net debt of $52m is $33m lower than the $85m at 31 December 2013. This reflects $43m November 2014 placement proceeds, offset by increases in inventory production ahead of anticipated H2 and FY16 sales growth.

During 1H FY15 the Group successfully restructured its principal bank facilities. $20m of debt was repaid a year early and the balance refinanced onto a new $71m 5 year facility (to September 2019) at a 3% lower interest rate. 

Share Placement: In November 2014 the Group issued 5 million new ordinary shares at GBP 5.50 per share raising $43m to fund expansion of its production capacity, described in more detail below.

Interim results for the six months ended 31 December 2014 (continued)

BUSINESS DEVELOPMENTS

Market: Since the end of FY14 the Stevia market has seen an unparalleled series of milestone F&B product launches and roll-outs integrating stevia into mainstream products. High profile Cola roll-outs led by Coca-Cola Life, Pepsi Next and Pepsi True into major markets like the USA, Mexico, UK, France, Japan and other markets and reformulations across a range of leading carbonated Lemon Lime, Orange and other brands indicate clearly that stevia is now seen as a mainstream sweetener of choice in the Carbonated Soft Drink (CSD) category. The period has also seen a wide range of stevia sweetened product launches from major retailers across Europe and America and iconic brand adoption in categories as diverse as Ketchups, Yogurts and Confectionery.

Global brand adoption has been mirrored with growth in product launches by large regional F&B brands across the world: from Chile in the South to Finland in the North and from Japan, China, and Philippines in the East to Mexico in the West. Mintel reports 2,274 new product launches in 2014 taking 5 year launches over 6,000. Mintel report that food product adoption exceeded beverages by number, confirming the widening usage of stevia as a mainstream ingredient. With 4 billion consumers now having regulatory access to stevia, market estimates suggest that the current footprint of products already launched using stevia has the potential to support billion dollar industry when existing launches are rolled out fully across the next 10+ years.

Innovation: PureCircle continues to lead stevia innovation with new products and applications designed to meet identified market needs and unlock further demand to help moderate calories naturally. 1H FY15 saw important developments including the successful launch of Sigma D, which has excellent application properties in the dairy sector, and further developments within our proprietary flavor systems. Each of our new developments continue to grow overall market usage and strengthen further our market share.

With our strong diversified customer base, our unique breadth of product innovation and application support and our global supply chain and customer support infrastructure already established PureCircle continues to retain and build further market leadership.

Production capacity expansion: With the prospects of sustained long term market growth, PureCircle has started to expand its production capacity so as to meet anticipated future increased volume demand and further sustain market share and its first mover advantage. The PureCircle Board has approved $42m of capital expenditure projects that will increase production capacity of refined stevia sweeteners and natural flavor systems and provide additional investment in next generation stevia innovation.

It is expected that $34m of the investment will be for production capacity expansion to come on stream  in FY17 with the balance of $8m supporting innovation projects through FY18. The $42m investment will be funded from the $43m November 2014 Placement proceeds described earlier.

The production capacity expansion will be centred on the Group's existing Malaysia and China production facilities.

Leaf: with growth in end consumer demand, leaf supply has tightened. Prices in China have increased year on year. We are actively managing this long term through leading the diversification of leaf supply outside China. But in the short term higher leaf prices will increase cost of sales.

Interim results for the six months ended 31 December 2014 (continued)

Sustainability: In January PureCircle issued the industry's first sustainability report. The report demonstrates the efficient carbon and water footprint of stevia relative to other major sweeteners and tracks progress against the Company's social and environmental goals. The full report may be downloaded at http://purecircle.com/company/corporate-social-responsibility/

Management and systems: To support management of growth, in 1H FY15 we strengthened our management with the appointment of Jordi Ferre as Chief Operating Officer and implemented an Operating Committee reporting to him with key new hires in Manufacturing, Leaf Development, HR and Planning. At the same time we have strengthened management in each of our key Commercial regions. We also implemented the first stages of Group ERP information systems.

Outlook: Commenting on the 1H FY15 trading, the Group CEO Magomet Malsagov said:  the size and breadth of F&B product launches and roll-outs in 1H FY15 indicate that stevia is well on the way to becoming an important ingredient for F&B companies wishing to moderate calories. Further the existing footprint of products launched using stevia provides a sound basis for a multi-billion $ stevia industry in the years to come.

In 1H FY15 we again strengthened our position as market leader with further proprietary product innovation and growth in both delivered sales and project pipelines. With sustained long term growth prospects, PureCircle has started to expand our production capacity and expect this to come on stream in FY17.

We are generating revenues from a wide range of natural sweetener and flavor products and from a wide range of customers directly and through our business partners. With accelerating roll-outs of food and beverage products using PureCircle's stevia solutions, particularly in the important Carbonated Soft Drink category, the Company is confident of large long term sales growth and with it improvements in profitability. However, until market consumption smooths out, that growth will come with a lumpy sales profile and therefore some volatility: this adds some complexity to our ability to provide guidance in the short term.

NOTES TO EDITORS

PureCircle is the global leader in the production of high purity Stevia sweeteners and natural flavors. PureCircle is leading the industry with the development of a sustainable, vertically integrated supply chain operating in four continents. Across these regions, PureCircle sources dry stevia leaves, undertakes extraction processes and refines the extract into sweeteners which it markets as a mainstream ingredient to Food and Beverage manufacturers worldwide. PureCircle provides a sustainable cash crop for rural farming communities in each region and works closely with these communities to maximize the social, economic, and environmental benefits of its operations. PureCircle's investment in research and development has given it a leadership position in the Stevia industry and its scientists are globally recognized experts in their field. PureCircle has pioneered the industry trust mark "Stevia PureCircle" that educates consumers about the benefits of Stevia and provides a strong base of trust for both consumers and Food & Beverage companies alike. PureCircle also funds the Global Stevia Institute (globalsteviainstitute.com) which provides a global platform for stevia education and outreach, led by internationally recognized health professionals. PureCircle's corporate offices are located in Chicago, USA; Asuncion, Paraguay; Kuala Lumpur, Malaysia; Ganzhou, China; Shanghai, China and Kericho, Kenya. PureCircle is listed on the London Stock Exchange AiM market under the ticker symbol: PURE. For more information on PureCircle, visit: www.purecircle.com.

Condensed consolidated statement of comprehensive income

for the period ended 31 December 2014

Condensed consolidated statement of financial position

As at 31 December 2014

Condensed consolidated statement of changes in equity

as at 31 December 2014

 Condensed Consolidated Statement of Changes in Equity as at 31 December 2013

Condensed consolidated cash flow statement for the period ended 31 December 2014

Condensed consolidated cash flow statement for the period ended 31 December 2014 (continued)

Notes to interim financial statements

1. General information

The Company was incorporated and registered as a private limited company in Bermuda, under the Companies (Bermuda) Law 1991 (as amended). The Company has its primary listing on the AIM market operated by the London Stock Exchange, plc (AIM).

The Company is engaged principally in the business of investment holding whilst the principal activities of the rest of the Group are the production, marketing and distribution of natural sweeteners and flavours.

The unaudited condensed consolidated interim financial statements have been authorised for issue by the Board of Directors on 16 March 2015.

2. Basis of preparation

The condensed consolidated interim financial statements for the six months ended 31 December 2014 have been prepared in accordance with IAS 34, "Interim financial reporting". In preparing these condensed interim financial statements, the significant judgments and estimates made by management in applying the Group's accounting policies were the same as those that applied to the consolidated financial statements for the year ended 30 June 2014. The condensed consolidated interim financial statements should be read in conjunction with the Group's annual financial statements for the year ended 30 June 2014 ("FY2014"), which have been prepared in accordance with IFRSs.

3. Accounting policies

The accounting policies adopted for 1H FY2015 are as stated in the Group's FY2014 financial statements, with the addition of new standards and amendments to standards that are mandatory for the financial year beginning 1 July 2014, the new standards are summarised below:

(i) Financial year beginning on/after 1 July 2014

· Amendment to IAS 32, 'Financial Instruments: Presentation' does not change the current offsetting model in IAS 32. It clarifies the meaning of 'currently has a legally enforceable right of set-off' that the right of set-off must be available today (not contingent on a future event) and legally enforceable for all counterparties in the normal course of business. It clarifies that some gross settlement mechanisms with features that are effectively equivalent to net settlement will satisfy the IAS 32 offsetting criteria.

· Amendments to IFRS 10, IFRS 12 and IAS 27 introduce an exception to consolidation for investment entities. Investment entities are entities whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both and evaluate the performance of its investments on fair value basis. The amendments require investment entities to measure particular subsidiaries at fair value instead of consolidating them.

· Amendment to IFRS 2 'Share-based Payment' clarifies the definition of 'vesting conditions' by separately defining 'performance condition' and 'service condition' to ensure consistent classification of conditions attached to a share-based payment.

Notes to interim financial statements (continued)

4. Accounting policies (continued)

The accounting policies adopted for 1H FY2015 are as stated in the Group's FY2014 financial statements, with the addition of new standards and amendments to standards that are mandatory for the financial year beginning 1 July 2014, the new standards are summarised below (continued):

(i) Financial year beginning on/after 1 July 2014 (continued)

· Amendment to IFRS 8 "Operating Segments" requires disclosure of the judgements made by management in aggregating operating segments. This includes a description of the segments which have been aggregated and the economic indicators which have been assessed in determining that the aggregated segments share similar economic characteristics.

The standard is further amended to require a reconciliation of segment assets to the entity's assets when segment assets are reported.

· Amendment to IFRS 13 "Fair Value Measurement" relates to the Basis for Conclusions which is not an integral part of the Standard. The Basis for Conclusions clarifies that when International Accounting Standards Board (IASB) issued IFRS 13, it did not remove the practical ability to measure short-term receivables and payables with no stated interest rate at invoice amounts without discounting, if the effect of discounting is immaterial.

· Amendment to IAS 24 "Related Party Disclosures" extends the definition of 'related party' to include an entity, or any member of a group of which it is a part, that provides key management personnel services to the reporting entity or to the parent of the reporting entity. 

The adoption of the above standards and interpretations does not have any material impact on the interim financial statements in the period of initial application.

5. Fair value estimation

Assets and liabilities measured at fair value can be determined based on valuation methods as defined in the fair value measurement hierarchy as follows:

(i) Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

(ii) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

(iii) Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The Group's biological assets are measured at fair value less cost to sell and classified as Level 3 of which valuation inputs are not based on observable market data as management considers that the costs of the biological assets approximate fair value as little biological transformation has taken place since initial cost incurrences, and expect that the impact of the biological transformation on price is not expected to be material.

There are no other assets and liabilities of the Group which are measured at fair value. The carrying values of the financial assets and liabilities of the Group at the balance sheet date approximated their fair values.

Notes to interim financial statements (continued)

6. Other income

Other income represents net foreign exchange gain and other miscellaneous income.

7. Other expenses

Other expenses represent net foreign exchange loss and other operating expenses.

8. Principal risks and uncertainties

The Group set out in its FY2014 Annual Report and Financial Statements the financial risks including foreign currency risk, interest rate risk, credit risk, liquidity and cash flow risks and capital risk management that could impact its performance; these remain unchanged since the Annual Report was published. The Group operates a structured risk management process, which identifies and evaluates risks and uncertainties and reviews mitigation activity.

9. Seasonality

At 31 December 2014 the Group had gross cash of USD58 million (30 June 2014: USD46 million) and net debt of USD52 million (30 June 2014: USD80 million). Net debt is defined as short-term and long-term borrowings less cash and bank balances. The Group's sales are seasonally weighted towards the H2 of each year and net debt is expected to reduce over time as sales increase and then convert to cash. At 31 December 2014, the Group had more than USD76 million cash and banking facilities headroom. The Directors believe the banking facilities to be sufficient for projected funding requirements.

10. Segmental information

Management determines the Group's operating segments based on the criteria used by the Chief Operating Decision Maker who has been identified as the Chief Executive Officer (CEO) for making strategic decisions. Management considers the Group to be a single operating segment whose activities are the production, marketing and distribution of natural sweeteners and flavors.

From a geographical perspective, the Group is a multinational with operations located on all continents, but managed as one unified global organization.

Notes to interim financial statements (continued)

10. Segmental information (Cont'd)

Under segmental reporting, share of loss in joint venture includes Group's realised profit amounting to USD 0.3 million, arising from its sales to the joint ventures. Under the statement of comprehensive income, the profit is included within the gross profit line.

Notes to interim financial statements (continued)

10. Segmental information (Cont'd)

Geographical information

The primary performance indicators used by the Group are revenues, gross profit, EBITDA, net cash from operations and net debt.

Notes to interim financial statements (continued)

10. Segmental information (Cont'd)

EBITDA is calculated as EBITDA adjusted to exclude discretionary items such as share based, bonus, foreign exchange gain/losses and any other non-recurring expenses.

The entity is domiciled in Bermuda. The entity's non-current assets are located in countries other than Bermuda. There is no revenue from Bermuda.

11. Property, plant and equipment and intangible assets

During the period, the Group invested USD1.4 million in property, plant and equipment.

The addition to intangible assets is in respect of capitalisation of project developments during the period, net of amortisation for products now launched commercially.

12. Inventories

13. Biological assets

As at 31 December 2014, total biological assets of USD 3.9 million (30 June 2014: USD 4.2 million) represent 5.4 million nursery plants (30 June 2014: 5.2 million). Nursery plants are carried at cost as it is deemed to have limited biological transformation. Seedlings from nursery plants are sold to farmers upon harvest and are carried at a consistent unit cost.

Notes to interim financial statements (continued)

14. Borrowings

During the period, the Group repaid bank loan amounting to USD123 million, in line with previously disclosed repayment terms. The Group then drew down bank loans amounting to USD105 million at a weighted average effective interest rate of 5% per annum. The proceeds were used to meet working capital.

15. Income taxes

Income tax expense is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year. The Group has no estimated assessable profit.

The Company was granted a tax assurance certificate dated 18 August 2007 under the Exempted Undertakings Tax Protection Act 1966 pursuant to which it is exempted from any Bermuda taxes (other than local property taxes) until 28 March 2016 which was extended to 31 March 2035 following the enactment of the Exempted Undertakings Tax Protection Amendment Act 2011.

A subsidiary of the Group, PureCircle Sdn Bhd (PCSB), has been granted the Bio-Nexus Status by the Malaysian Biotechnology Corporation Sdn Bhd in which PCSB is entitled to a 100% income tax exemption for a period of 10 years on its first statutory income commencing in 2009. Upon the expiry of the 10-year incentive period, PCSB will be entitled to a concessionary tax rate of 20% on income derived from qualifying activities for a further period of 10 years.

Another subsidiary of the Group, PureCircle (Jiangxi) Co. Ltd. (PCJX), has also been granted a 10% exemption on corporate tax from 1 January 2013 to 31 December 2020 by Ganzhou State Tax Revenue Department under the Western Ganzhou State Development program.

Notes to interim financial statements (continued)

16. Share capital and share premium

In November 2014, the Group completed a placement of 5 million new ordinary shares at GBP5.50 per share. The placement raised USD43.5 million in cash, net of expenses.

17. Earnings per share

The basic earnings per share is calculated by dividing the loss attributable to owners of the Company by the weighted average number of ordinary shares in issue during the period.

Diluted earnings per share is not applicable as the potential ordinary shares under the Company's Long Term Incentive Plan would have an anti-dilutive effect.

18. Dividends

No dividends were declared or paid by the Company during the interim period.

19. Contingent liabilities and capital commitments

At the end of the period, there are no material contingent liabilities which, upon becoming enforceable, may have a material impact on the financial position of the Group.

Capital commitments amounting to approximately USD1.1million is approved and contracted for, these are incurred for the purchase of land and upgrading of plant and machinery in Malaysia.

Subsequent to the period, the Group approved an expansion capital expenditure of USD7.8 million.

Notes to interim financial statements (continued)

20. Events after the end of the reporting period

There were no events that had a material impact to the condensed consolidated interim financial statements after the end of the reporting period.

Please refer to note 19 relating to post balance sheet capital expenditure expansion.

21. Significant related party transactions

(a) Identities of related parties:

The Group and / or the Company have related party relationships with:

(i) its subsidiaries and joint ventures;

(ii) the directors who are the key management personnel; and

(iii) companies in which certain directors are common directors and / or substantial shareholders.

The following transactions were carried out by the Group during the period:

(b) Related parties

(i) Related Parties

(ii) Key Management Personnel

Key management includes executive and non-executive directors. The compensation paid or payable to key management for employee services is shown as below:

Notes to interim financial statements (continued)

21. Significant related party transactions (continued)

(b) Related parties (Cont'd)

(ii) Key Management Personnel (Cont'd)

Independent review report to PureCircle Limited

PureCircle Limited

(Incorporated in Bermuda)

Registration No.: 40431

Introduction

We have been engaged by the Company to review the condensed consolidated interim financial statements for the six months ended 31 December 2014 set out on pages 4 to 19, which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows and related notes.

Directors' responsibilities

The condensed consolidated interim financial statements are the responsibility of, and have been approved by, the directors of PureCircle Limited. The directors are responsible for preparing the condensed consolidated interim financial statements in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the Company's annual financial statements.

As disclosed in Note 2, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards. The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" ("IAS 34").

The maintenance and integrity of the PureCircle Limited website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the condensed consolidated interim financial statements since they were initially presented on the website.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed consolidated interim financial statements based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of preparing the condensed consolidated interim financial statements under IAS 34 and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Independent review report to PureCircle Limited (continued)

PureCircle Limited

(Incorporated in Bermuda)

Registration No.: 40431

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial statements for the six months ended on 31 December 2014 are not prepared, in all material respects, in accordance with IAS 34.

PricewaterhouseCoopers

(No. AF: 1146)

Chartered Accountants

Kuala Lumpur

Malaysia

16 March 2015

Corporate Information

BOARD OF DIRECTORS

Non-executive Chairman

Paul Selway-Swift

Executive Directors

Magomet Malsagov, Chief Executive

William Mitchell, Chief Financial Officer

Non-executive Directors

Peter Lai Hock Meng

Olivier Maes

Christopher Pratt

Audit Committee

Peter Lai Hock Meng (Chairman)

Olivier Maes

Christopher Pratt

Remuneration Committee

Olivier Maes (Chairman)

Paul Selway-Swift

Christopher Pratt

Nomination Committee

Paul Selway-Swift (Chairman)

Magomet Malsagov

Olivier Maes

NOMINATED ADVISERS

RFC Ambrian Limited

Level 14, 19-31 Pitt Street

Sydney NSW 2000

Australia.

Level 28, QV1 Building

250 St George's Terrace

Perth WA 6000

Australia.

CORPORATE BROKERS

Macquarie Capital (Europe) LimitedRopemaker Place28 Ropemaker StreetLondon EC2Y 9HD

United Kingdom

Mirabaud Securities Limited

33 Grosvenor Place

London SW1X 7HY

United Kingdom

Liberum Capital Limited

Ropemaker Place, Level 1225 Ropemaker Street

London EC2Y 9LY

United Kingdom

AUDITORS

PricewaterhouseCoopers

Chartered Accountants

Level 10, 1 Sentral

Jalan Travers, Kuala Lumpur Sentral

PO Box 10192

50706 Kuala Lumpur

Malaysia

Shareholder Information

INTERNET

Investors and corporate stakeholders www.purecircle.com

Consumers

www.steviapurecircle.com

Health professionals, customers, policy makers, consumers

www.globalsteviainstitute.com

REGISTERED OFFICE

Clarendon House

2 Church Street

Hamilton HM 11

Bermuda

CORPORATE HEADQUARTERS MALAYSIA

10th Floor, West Wing

Rohas Perkasa

No. 9 Jalan P. Ramlee

50250 Kuala Lumpur, Malaysia

T +606 2166 2206

F +606 2166 2207

E [email protected]

INVESTOR RELATIONS

Request for further copies of the annual report or other investor relation matters should be addressed to PureCircle office

SHARE REGISTRAR

In Jersey (Shares)

Computershare Investor

Services (Jersey) Limited

Queensway House, Hilgrove Street

St Helier, Jersey

JE1 1ES

Channel Islands

In the UK (Depositary Interests)

Computershare Investor Services plc

The Pavilions, Bridgwater Road

Bristol BS13 8AE, United Kingdom

ANNUAL GENERAL MEETING

The Annual General Meeting (AGM) will be announced following publication of the Group's results for financial year 2015.

2015 financial year and corporate calendar

Half year end 31 December 2014

Year end 30 June 2015