WH : Announcements and Notices - Unaudited Consolidated Quarterly Results for the Nine Months Ended September 30, 2017

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萬洲國際有限公司

(Incorporated in the Cayman Islands with limited liability)

The board (the "Board") of directors (the "Directors") of WH Group Limited (the "Company") is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the nine months ended September 30, 2017 (the "Period"). This announcement is made by the Company on a voluntary basis to enhance the practice of good corporate governance and further promote the transparency and accountability of the Company.

Results before biological fair value adjustments

Results after biological fair value adjustments

US$ million US$ million

(unless stated otherwise) (unless stated otherwise)

Turnover 16,285 16,285 15,775 15,775

EBITDA 1,752 1,681 1,666 1,549

Operating profit 1,379 1,379 1,282 1,282 Profit attributable to owners of the

Company 779 732 741 679

Basic earnings per share (US cents) 5.70 5.35 5.42 4.97

As at December 31,

2016

US$ million US$ million

Total assets 14,482 13,611

Equity attributable to owners of the Company 6,837 6,316

In the Period, turnover of the Group was US$16,285 million, up 3.2% as compared to that of the nine months ended September 30, 2016 (the "Comparable Period"). Operating profit was US$1,379 million, an increase of 7.6% over that of the Comparable Period. Disregarding any biological fair value adjustments and the non-recurrent debt extinguishment costs of US$70 million and the related tax effect of US$26 million incurred during the Period for the Refinancing (as defined hereinafter), the underlying profit attributable to owners of the Company was US$823 million, 11.1% higher than that of the Comparable Period.

As the largest pork company in the world, our business is closely tied with the hog industry in each market that we operate. Supply and demand drive the movement in prices of hog and meat and consequently impact our inputs (costs) and outputs (sales). During the Period, the average hog price in China was RMB15.6 (equivalent to approximately US$2.3) per kilogram ("kg"), a decrease of 18.3% from that of the Comparable Period as a result of increase in market supply. On the other hand, the average hog price in the U.S. for the Period was US$1.23 per kg, an increase of 7.0% from that of the Comparable Period, in view of robust demand.

1. Turnover refers to net external sales.

2. Europe denotes mainly our operations in Poland and Romania.

3. Operating profit represents the profit earned by each reportable segment before biological fair value adjustments, other income and expenses not attributed to the respective segment, other gains and losses, finance costs and share of results of associates and joint ventures.

4. Others primarily includes sales of ancillary products and services, as well as certain corporate expenses.

During the Period, sales volume of our packaged meats increased by 1.3% as a result of the growth in U.S. and Europe markets. Operating profit of our packaged meats in the Period, however, decreased by 5.1% over that of the Comparable Period. The decline was associated with the higher raw material costs in U.S. and Europe as well as the adverse effect generated from the exchange rates applied in reporting the RMB-denominated business in US$.

Fresh Pork

Total number of hogs processed in the Period increased by 9.1%. External sales volume of fresh pork during the Period was 3,296 thousand metric tons, 9.4% more than that of the Comparable Period. The increase in sales volume was the result of production expansion in all markets and the increment brought in by the Acquisition of Clougherty (as defined hereinafter). Operating profit also rose 23.7% primarily due to the contribution of our U.S. and Europe operations. Profitability in U.S. was strong and operations in Europe turned around as pork prices were high with the benefit of exports.

Hog Production

In the Period, hog production volume increased by 5.7% and operating profit rose 3.7 times from that of the Comparable Period as a result of the significant increase in our U.S. and Europe operations. Such increases were primarily driven by the movement of hog prices in each of their respective markets.

ACQUISITION

On January 3, 2017, the Group completed the acquisition of an integrated producer and processor of pork products in U.S., which operates various brands including Farmer John ("Acquisition of Clougherty"). The Acquisition of Clougherty expands and strengthens the Group's vertically integrated supply chain with existing profitable fresh pork and packaged meats businesses. As Farmer John is the leading brand of bacon and fresh sausage in California, the Acquisition of Clougherty also provides the Group with an immediate entry into the U.S. West Coast market and further solidifies the Group's image as a premium pork products producer and processor.

On June 1, 2017, the Group completed the acquisitions of three meat companies in Poland which comprised of a meat processing and packaging plant, a case ready meat plant and a chicken processing plant which is currently under development. On July 28, 2017, the Group also acquired 33.5% interest in a hog slaughterhouse in Poland and agreed to acquire the remaining 66.5% interest conditional upon approval from regulatory authorities ("Acquisition of Pini"). The Acquisition of Pini aligns with the strategic growth plans of the Group by strengthening its vertically-integrated supply chain in resourceful regions and increasing its production of high-quality packaged meats products. It is also expected to help our business in Poland to become more competitive in Europe and globally.

On September 25, 2017, the Group entered into a share purchase agreement to acquire Elit SRL and Vericom SRL in Romania ("Acquisition of Elit and Vericom"), which operates three packaged meats manufacturing facilities, five distribution centers and certain related assets. The Acquisition of Elit and Vericom (conditional upon approval from regulatory authorities) will give the Group a leading position in the Romanian packaged meats market with a branded portfolio of higher margin products.