Pepco N: First Half Pre-Closing Trading Statement

21st April 2022

Pepco Group NV – First half pre-closing statement

Strong strategic progress and business growth achieved despite challenging business environment

Pepco Group, the fast-growing pan-European discount retailer, owner of the PEPCO and Dealz brands in

Europe and Poundland in the UK, today reports an update for the second commercial quarter and the first half ending 31st

March 20221.

Summary of financial performance

  • Group revenue in the first half2 of €2,371m, +17.5%3 year-on-year (“YoY”) led by PEPCO generating growth of +28.9%.

  • Solid half-year like-for-like (“LFL”) Group4 of 5.3% driven by an acceleration of the LFL of +12.1% in the second quarter:

    • oh PEPCO: +18.5% LFL in Q2, +7.2% LFL growth in the semester.

    • oh Poundland Group: +5.9% LFL in Q2, +3.3% LFL growth during the semester.

  • Half-year underlying EBITDA5 should be in the range of 342 to 350 million euros. Within this range, the Group remains on track to achieve its guidance for the full year in the absence of any further significant deterioration in the macroeconomic environment.

Growth-oriented strategic progress.

  • The significant expansion of new stores continues across all commercial brands. Openings are ahead of forecasts (historical run rate) with 235 net new store openings over the half-year, excluding the impact of the closure of 43 Fultons stores following the acquisition:

    • oh PEPCO: a record 202 net new store openings, including 84 in the Western European markets of Austria, Italy and Spain, where the initial performance remains solid.

    • oh Poundland Group: 33 net new stores, an increase of 6.7% year-on-year

  • 586 store renewals completed year-to-date (534 PEPCO, 52 Poundland) improving store layout and environment, driving LFL sales growth and positive customer perception (1,900 completed since 2019).

Business context and performance

The first half continued to see the continued impact of Covid-19 restrictions on our stores. However, by the end of the semester, restrictions had eased, with the Group’s LFL exit rate in March of 19.4% demonstrating the strong underlying customer demand for the Group’s offering, supporting our confidence in the second semester.

Total turnover / M€ Total number of stores

467

1,020

1,281 2,666

1,090 2,371

1,030 3,696

42.6% 18.5%

8.6% 5.9%

25.1% 12.1%

28.9%

6.1% 17.5%

7.2%

3.3% 5.3%

8.2%

(1.0)% 5.5%

202

(10) 192

19.6%

1.3% 13.9%

Direction changes

31st March Andy Bond stepped down as Group CEO and Trevor Masters assumed responsibility for the role of interim CEO.

Commenting on the results, Pepco Group Acting CEO Trevor Masters said:

“We are very pleased with this set of results, given the global disruption our business is facing. We maintained our focus on our strategic priorities, in particular the growth of our new stores and our ongoing redevelopment program, which both continue to delight our customers and deliver strong financial performance.I also take this opportunity to thank the Pepco team for their resilience and commitment to serving our customers.

“While the impact of Covid-19 gradually waned during the second quarter, the invasion of Ukraine, a country that borders three of our largest operating territories, created further volatility and uncertainty. ‘unpredictability. In response, the Group and our colleagues have generously donated money to two charities we have worked with over the past two years to provide direct assistance to Ukrainians and those on the border. We used our employee assistance programs to support our affected colleagues and introduced paid volunteer days for our CEE-based staff.

“We will continue to drive our significant growth program while reducing our operating costs. This will allow us to offset the majority of our input inflation, allowing us to protect prices for our cost-conscious customers. The market in which we operate is likely to remain volatile in the near term, due to the situation in Ukraine and continued global inflationary pressures, however, we have a clear and effective strategy to realize our significant long-term growth opportunities. Absent any further significant deterioration in the macroeconomic environment, we remain confident of delivering in line with our earnings guidance.”

For more information, please contact:

Company information:

Lucy McFetrich, Director of Investor Relations

+44 (0) 203 735 9210

Nick Wharton, Group Chief Financial Officer

+44 (0) 203 735 9210

Media inquiries:

Finsbury Glover Hering:

Rollo’s head

+44 (0) 7768 994 987

James Thompson

+44 (0) 7947 796 965

Explanatory notes:

  • 1. The Group’s financial statements are prepared on an unaudited basis for the six-month period (first semester) ending on 31st March 2022. Within this segment, the “PEPCO (Apparel-led multi-price)” segment operates on a calendar month basis, with the six-month period ending on 31st March 2022, and the “Poundland Group (FMCG-led price-anchored)” segment

  • operates primarily on a trading week basis with the 26 week period ending on the 27thand March 2022.

  • 2. Revenue is unaudited and foreign currency revenue is converted at the average rate for the month in which it is earned.

  • 3. Revenue growth is expressed in constant currencies.

  • 4. LFL revenue growth is defined as year-over-year revenue growth for stores open beyond their sales anniversary and is reported on a constant currency basis. LFL absolute revenue and LFL growth are not adjusted for the impact of Covid in both fiscal years.

  • 5. The underlying EBITDA is unaudited and is based on IFRS16 and does not yet include the potential impact of the IFRIC IAS38 pronouncement relating to the recognition of SAAS implementation costs which will be communicated in the first half income statement.

Future Market Updates

  • 1. Publication of the half-year results of the first half, including the call for results with management: 9and June 2022

  • 2. Q3 Revenue Update: 14and July 2022

  • 3. Pre-closing statement: October 13, 2022

  • 4. Capital Markets Day: Fall 2022

True and just statement

The executive directors are responsible for the preparation of this update and declare that to the best of their knowledge, the information contained in this document concerning Pepco Group NV is correct at the date of publication of this document and that it fairly reflects the financial situation and the activities of the Group. Activities.

ENDS

Notes to Editors

Pepco Group

The Pepco Group was established in 2015 and comprises two strong independent value retailers – PEPCO and Poundland, which also market internationally under the Dealz brand, as well as a global supply arm, PGS, which works closely collaboration with the two operating companies. Together, PEPCO and Poundland operate in some of Europe’s largest economies. The Pepco Group now has c. 3,700 stores in 17 countries including UK, Republic of Ireland, Spain and CEE region, employing approx. 38,000 people.

About PEPCO

After more than 14 years of continuous growth, PEPCO now serves more than 20 million customers monthly, offering family apparel, homewares and toys at the lowest prices. Headquartered in Poznan, Poland, the company has approximately 20,000 employees in 15 different countries across Europe, with the largest locations in Poland, Romania, Hungary and the Czech Republic.

The first 14 PEPCO stores opened in Poland in 2004. PEPCO expanded into the Czech Republic and Slovakia in 2013 and between 2015 and 2017 opened stores in Croatia, Hungary, Lithuania, Romania and Slovenia. Since 2018, stores have been opened in Latvia, Estonia, Bulgaria, Italy, Serbia, Spain and Austria.

PEPCO is widely recognized as one of the strongest brands and fastest growing companies in Poland. It has consistently won the Forbes’ Diamond Award as one of the fastest growing companies in the country and the Superbrand Award for quality and trust among Polish consumers. PEPCO was recently chosen as one of Poland’s Top Employers in 2021.

About Poundland and Dealz

Since opening its first store in Burton-upon-Trent in 1990, Poundland has built a network of nearly 850 stores across the UK and Republic of Ireland, offering top brands and high-end own-label products. quality that deliver incredible value to customers every day. .

Nominated by Retail Week as Value Discounter of the Year 2019, it now has around 18,000 colleagues who serve more than seven million customers every week, from Wick to Weymouth, Londonderry to Lowestoft and Holyhead to Hastings.

Poundland offers thousands of quality in-store products with over 1,000 well-known brands in 17 shopping categories, including food and drink, health and beauty, home, gardening, DIY, pets, stationery, books, DVDs and toys. It is a journey from a single price to a single price retailer. While most items in its stores are at their original £1 price, it has extended over and under £1 ranges which also offer incredible value.

In the UK, Poundland has also rolled out its fashion brand PEP&CO in around 400 of its largest stores. PEP&CO, launched in 2015 as a standalone brand, offers customers a full range of women’s, men’s and children’s clothing and is now bringing new style to Poundland with simple, low prices on hard-to-find family fashion on the streets. local traders.

From August 2020, the PEP&CO brand also began to power Poundland’s new homeware ranges, which have been widely praised for their style and value. PEP&CO Home brings to Poundland a range of trendy, contemporary and exclusive home and decoration products, as well as a major overhaul in the way products are presented and marketed.

Poundland now also offers chilled and frozen food in over 200 stores, which is expected to grow to over 500 over the next two years, following its acquisition of Fultons Foods and a £25 million investment.

PEP&CO was also nominated for the Retail Week Awards 2019 as Private Label of The Year.

Since opening its first store in 2011, Dealz has built a network of over 200 stores across Ireland, Spain and Poland offering customers a wide selection of over 1,000 leading, well-known brands and established own brand products.

Dealz brings Poundland’s simple and straightforward pricing model to buyers, delivering unbeatable value.