MHP : Integrated Annual Report and Accounts 2023

MEASURING OUR SUCCESS AND PROGRESS

FINANCIAL HIGHLIGHTS

STRATEGIC REPORT

Measuring our Success and Progress

REVENUE

US$ million

3,021

2023

NET DEBT

US$ million

1,101

2023

NET DEBT/LTM

EBITDA RATIO

3.22

2.47

1,237

EXPORT REVENUE AS

A % OF TOTAL REVENUE

20232022

WAR-RELATED COSTS2

2023

35

US$ million

2022: US$ 69 million

1. Adjusted EBITDA is net of IFRS 16
2. Excluding losses on impairment of property, plant and equipment

GOVERNANCE

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FINANCIAL STATEMENTS

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SHAREHOLDER INFORMATION

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STRATEGIC AND OPERATIONAL HIGHLIGHTS

STRATEGIC REPORT

Measuring our Success and Progress

RESILIENCE AND

INNOVATION

Our operations continued to run at 100% capacity utilisation and we continued to export to over 70 countries despite War-related and other complex logistics-related challenges.

INTERNATIONAL

DIVERSIFICATION

Formation of joint venture in Saudi Arabia, strengthening food security in the region and expanding our global outreach.

OUR CULINARY

TRANSFORMATION

Establishment of a ready-to-eat production line at Perutnina Ptuj in Slovenia.

Expansion of culinary product SKUs.

OVERSIGHT AND

STRATEGY

We are establishing an operational sub-committee to the Sustainability & International Affairs Committee ("S&IA Committee"), which will comprise of Top Management.

EMBEDDING ESG INTO OUR OPERATIONS

Adoption of a Group-wide OKR to implement and develop tools and practices to ensure MHP's sustainable development.

SUSTAINABLE

PRACTICES

We achieved GLOBALG.A.P. and ISSC certification at a combined total of ten of our sites for our sustainable poultry production and farming practices.

GOVERNANCE

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FINANCIAL STATEMENTS

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SHAREHOLDER INFORMATION

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PEOPLE

WE WORK FOR UKRAINE

SUPPORT FOR OUR

WORKFORCE

Full payment of salaries of our 2,380 mobilised employees.

Comprehensive support for our 28,788 employees based in Ukraine, and their families.

SUPPORT FOR THE PEOPLE OF UKRAINE

Cultural, social, and economic initiatives and the provision of humanitarian aid for the people of Ukraine.

SUPPORT FOR VETERANS

Establishment of an extensive and award- winning rehabilitation and reintegration programme for demobilised employees and other veterans.

STRATEGIC REPORT

Measuring our Success and Progress

Growth Pillar 2 on page 65.

PLANET

CARBON TRUST

ACCREDITATION

Carbon Trust accreditation in relation to our Ukrainian poultry production.

Growth Pillar 6 on page 92.

WATER USAGE

Ukraine water usage: 15.1 million m3 European Operating Segment water usage: 2.0 million m3

Growth Pillar 6 on page 92.

GOVERNANCE

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FINANCIAL STATEMENTS

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SHAREHOLDER INFORMATION

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CHAIR'S STATEMENT

STRATEGIC REPORT

Chair's Statement

Russia's War of attrition has entered its third year: a grim milestone. We have seen significant offensives in southern and eastern territories and the destruction of infrastructure and loss of life in all regions. Since the War began until now, more than 410 defenders have returned as veterans, and over 300 of these have resumed working for MHP. We mourn the tragic fate of the 156 MHP workers who have been killed, captured or are currently missing due to the War. Our workforce and the people of Ukraine continue to endure the invasion's physical and psychological effects, whilst remaining steadfastly resolute and determined.

War continues to have a major impact on Company operations. Irregular and frequent drone and rocket attacks against civilian, energy and other infrastructure targets continue, presenting us with a challenging and disruptive logistical environment, driving additional other War-related costs.

Our FY 2023 performance reflects the resilience and agility of our business model and the tremendous efforts of our workforce. We expect 2024 to be another difficult year as we continue to operate in an uncertain and highly challenging environment.

The Group's liquidity position is strong yet this position is nuanced. Ukrainian capital controls restrict MHP to service its debt obligations, which means that currency held in Ukraine may not be sent offshore and there is no visibility on when these restrictions will be lifted. Offshore cash is subject to repatriation rules instituted by the National Bank of Ukraine (NBU). Recent rules set in autumn 2023, if not changed in the nearest term, create more challenging operational environment for the Company, especially for further coupon payments. More information can be found in the Financial & Operational Review on page 35.

Despite War, the Group's progress continues in many areas:

• our culinary transformation;
• our global outreach, including the formation of a joint venture in the Kingdom of Saudi Arabia that will expand MHP's international reach as well as supporting the Kingdom's Food Security Programme, Vision 2030; and
• our approach to responsible business.

OUR PEOPLE

I want to express my deepest thanks to our people for their continued commitment and dedication in the face of adversity. They have adjusted to the new normal and bravely risen to the challenges presented daily. I am tremendously proud of the way our workforce has responded to the disruptions and of what

FOLLOWING THE GROUP'S ROBUST FY 2023 PERFORMANCE AND TREMENDOUS EFFORTS TO MAINTAIN OPERATIONS, PRODUCTION AND SALES VOLUMES, THE GROUP IS FUNDED TO MAINTAIN OPERATIONS AND BUSINESS CONTINUITY.

STRATEGIC REPORT

Chair's Statement

the Group is achieving. The provision of support and stability to our Ukrainian workforce of 28,788 people and their families remains a top priority, and MHP has adopted many new internal policies and approaches to look after and protect employees and their families who, in turn, have responded positively.

I highlighted last year the exceptional contribution from our Chief Executive, Yuriy Kosyuk, since the outbreak of War. Yuriy continues to lead with optimism and energy and to be an ever-present and visionary leader during these turbulent times.

I remain grateful to the Board's Non-Executive Directors and to the team of Executive Directors for their continued support and special contributions during Wartime. The Non-Executives continue to be instrumental in rallying international support and in providing leadership to ensure that a multitude of challenging and uncertain issues are addressed promptly and effectively. More information on the Board's contribution and interaction with stakeholders can be found in the Sustainability

• International Affairs ("S&IA") Committee Report on page 139 and the Corporate Governance Report on page 111.

SUPPORT FROM OUR

STAKEHOLDERS AND

PARTNERS

With so many restrictions and challenges due to the War, I would like to thank the international financial community for their unwavering support and continued backing of MHP.

I would also like to recognise the support from our Note Holders in October and November 2023 in the Tender Offer for our US$ 500 million 7.75% Guaranteed Notes due May 2024; and in October 2023, from international and development finance institutions, the U.S. International Development Finance Corporation, the International Finance Corporation, and the European Bank for Reconstruction and Development, to provide facilities of up to US$ 480 million in aggregate. This comprises up to US$ 400 million for liability management (the 2024 notes) and US$ 80 million for different CAPEX projects, including ESG-linked.

MHP remains an important 'cog' in global food security and this support has enabled us to continue to operate and supply both domestic and international markets with essential food staples. A thriving Ukrainian agricultural sector is critical for sustaining the country and is equally important to global agricultural supply chains that have been disrupted by Russia's invasion. We hope that this support will continue in the future, in spite of the challenges of War.

The Group has also continued to receive significant support from many international partners and stakeholders. For more information on our engagement with stakeholders, see Growth Pillar 1 on page 60.

DIVIDENDS

Given the uncertainties of War, and the resulting need to preserve liquidity to support the Group's

ongoing business operations, the Directors have decided not to declare a final dividend for the 2023 financial year. No final dividend was declared for the 2022 financial year.

CORPORATE GOVERNANCE

The Group recognises the importance of strong corporate governance in line with good international practice. MHP is a GDR issuer listed on London Stock Exchange's Standard Segment and yet it aims to comply as far as possible with the more onerous UK Corporate Governance Code 2018 provisions required of the Exchange's Premium Segment.

In March 2023, we welcomed Oscar Chemerinski to the Board as an Independent Non-Executive Director. Mr Chemerinski brings with him extensive experience in agribusiness, emerging markets, and sustainability. In February 2024, Mr Chemerinski was appointed Chair of the Audit

• Risk Committee, replacing John Grant who will continue as a member of the Audit & Risk Committee until he retires from the Board, expected in summer 2024. Further information on the Board, including a Board Skills and Diversity Matrix, can be found in the Corporate Governance Report on page 118 and in the Nominations and Remuneration Committee ("NRC") Report on page 135.

GOVERNANCE

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FINANCIAL STATEMENTS

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SHAREHOLDER INFORMATION

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MANAGEMENT OF

WAR-RELATED RISKS

There are ongoing risks to the Group's operations due to recurring attacks on the critical infrastructure of Ukraine, including agricultural infrastructure. The Group responds immediately to adverse operational impacts, ensuring it is ready to take all actions necessary to rebuild, restore and restart production in the shortest time possible. For more information, see Risk Management on page 50 and the Audit & Risk Committee Report on page 127.

OUR APPROACH TO RESPONSIBLE BUSINESS

The Group's approach to responsible business is deeply rooted in the Group's transformation to a world-leading sustainable food producer and is a key tenet of our strategy. Whilst never welcomed, adversity often presents opportunities, and the Group has capitalised upon these to make rapid advances over the past 18 months in a broad range of areas through the implementation of different sustainable projects. Please see also Growth Pillars 4 and 6.

Despite the War, the Group continues to look for opportunities to develop its governance in line with good practice. During the year, the S&IA Committee adopted new terms of reference which reflect the Board's increasing focus on the Group's approach to responsible business. Further information can be found in that Committee's Report on page 139.

We are increasingly embedding ESG into our operations as demonstrated by developments during the year: the decision to establish an operational sub-committee to the S&IA Committee which consists of Top Management representatives, and the goal of which will be to consolidate the importance of ESG and provide the vision over the medium to longterm; the centralisation of our environmental protection function, which is developing governance and working with municipalities; and the

increasing incorporation of ESG-related OKRs into management performance targets. These are all important steps in the right direction and highlight the Group's commitment to responsible business.

MHP is proud of its record of adhering to the highest international industry standards of animal welfare and product quality including the appropriate EU regulations and Directives. This has continued during the War, and we aim to be an industry leader in this important area. MHP's facilities are also regularly inspected by the State Service of Ukraine on Food Safety and Consumer Protection. MHP adheres to the principle "prevention of disease is more effective than treatment", and has tight controls over the use of antibiotics for the treatment of poultry stock.

We remain committed to transparency in both our financial and non-financial reporting and are working with consultants and our auditors towards the implementation of the requirements of the new Corporate Sustainability Reporting Directive ("CSRD") from FY 2025.

THE PLANET AND OUR

JOURNEY TO NET ZERO

Our Net Zero 2030 target remains. However, given the ongoing significant challenges and impediments caused by the War in Ukraine, and potential policy changes driven by Ukraine's path towards EU accession, the Group may revisit this target in due course. Meanwhile, we are taking innovative steps in several areas to expedite our Net Zero journey. For more information see Growth Pillar 6: Planet on page 92.

We are also committed to putting in place a robust and Group-wide climate change policy. During the year, we started a project with the EBRD focussed on the TCFD framework, and our aim is to put science-based targets in place in 2025. For more information see the TCFD Disclosures on page 102.

During 2023, following our work with Alltech E-CO2, MHP received Carbon Trust accreditation in relation to its Ukrainian poultry production: a significant achievement, particularly during Wartime.

GLOBAL PARTNERSHIPS AND DEVELOPMENTS

We continue to monitor opportunities to accelerate and expand our culinary transformation, both organically and by acquisition, particularly in the UK, the EU, and MENA, and in relation to "value added" products.

MENA remains one of the key markets for MHP and an exciting prospect. In September 2023, the Group signed a joint venture agreement with Tanmiah Food Company, a leading Saudi Arabia- based provider of fresh poultry, processed poultry, and other processed-meat products to the MENA region. The Group continues to look at other opportunities in the region, in particular in value-added products, including processed meat and culinary products, and Client Bsiness Development ("CBD") solutions to the food service industry.

For more information on strategy, including future partnerships and M&A, see Strategy & Purpose on page 18.

OUTLOOK

War conditions dictate significant uncertainty within Ukraine making forward projections highly challenging. Recent unfavorable debate around the EU elections has added another level of complexity in relation to Ukraine's market access into the EU. Given the circumstances caused by War, the Board is confident that MHP has a strong Top Management team and resilient workforce who are focussed on delivering our strategy.

Dr John Rich

Executive Chair, MHP Board

02 May 2024

STRATEGIC

REPORT

Chair's Statement

GOVERNANCE

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FINANCIAL STATEMENTS

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SHAREHOLDER INFORMATION

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CEO'S STATEMENT

2023 WAS A DIFFICULT YEAR FOR UKRAINE AND ITS PEOPLE. MHP FACED, AND HAS CONTINUED TO OPERATE IN, AN EXTREMELY VOLATILE AND UNCERTAIN ENVIRONMENT.

I AM ENORMOUSLY PROUD OF AND GRATEFUL TO OUR EMPLOYEES: FOR THEIR COLLECTIVE RESILIENCE, AND THEIR STAUNCH COMMITMENT TO MAINTAINING OPERATIONS AND ENSURING DOMESTIC FOOD SECURITY. OUR PEOPLE EPITOMISE WHAT REMAINS CORE TO MHP AS A DYNAMIC INTERNATIONAL COMPANY WITH A UKRAINIAN HEART.

STRATEGIC REPORT

CEO's Statement

Our absolute priority must remain providing food security for Ukraine and support to the domestic economy. However, despite the numerous and deep challenges of the War, MHP's transformation to a world-leading sustainable food producer continues. MHP is increasingly recognised as evolving the food culture in Ukraine, offering more high-quality and tasty convenience foods, ready-to-cook and ready-to-eat meals. We are a sought-after strategic partner and the industry players we cooperate and share knowledge with place high value on our strategic vision, industry expertise and innovative technologies. At the same time, MHP continues to provide the world with important and necessary proteins and food, such as sunflower and soybean oils, grains, chicken meat and chicken products.

Our collective perseverence during such difficult times is paramount. Our continued operations and revenues directly benefit a large share of Ukrainian society. The land on which MHP operates is owned by more than 130,000 small landowners whose livelihoods during the War

depend on the rent paid by the Company. In Ukraine, MHP employs over 28,000 individuals, works with thousands of enterprises, and supports over 500 entrepreneurs operating under franchise agreements in partnership with MHP.

Supporting our mobilised colleagues and re-integrating our veterans back into civilian life is a key part of our strategy and a focus of specific Company programmes. Our message remains clear: even in the most challenging and difficult times, the MHP family will continue doing its utmost to support and provide assistance to our workforce, our communities, and the people of Ukraine as a whole.