A MESSAGE FROM OUR CEO AND CHAIRMAN

It is not outlandish to say that the entire world is looking back on 2022 as a turbulent year. The Russian invasion of Ukraine, the global energy crisis and increasing inflation are just a few notable aspects that have characterised 2022.

COVID-19 may be gradually slipping into the background, but other challenges crossed our path. The availability of packaging and raw materials remains under pressure around the globe, resulting in exploding prices. There was also an unforeseen rise in energy and transport costs within a short period of time and labour costs are following this increasing trend.

We are therefore very proud that Lotus Bakeries, despite all the global challenges, was able to flourish in 2022 and that once again we have seen double-digit growth as a group.

As an organisation, we must be vigilant about maintaining our healthy financial position. Not only for today, but also for tomorrow and further ahead into the future. At Lotus Bakeries, we strive to keep our products accessible and affordable for all.

In 2023, we will continue to look for efficiency improvements and savings to combat the cost of inflation and ensure that consumer price adjustments are fair and responsible. Finding efficiency improvements is crucial, but obviously without ever compromising on the quality of our products.

Lotus® Biscoff® has grown by double digits again, in all major consumer markets, from North America to Europe, the Middle East and Asia. Collaborations with global players such as Nestlé or Häagen-Dazs have contributed to this and only serve to fuel the fire of our international ambition.

We are therefore very proud that Lotus® Biscoff® cookies are once again the strongest riser in the top ten of the global ‘Cookie Brand Ranking’. Lotus® Biscoff® cookies rose from seventh to sixth place. The ambition for Lotus® Biscoff® to become a top 3 cookie brand in the longer term rings truer than ever before.

All our Lotus™ Natural Foods brands also continued to grow strongly in 2022. Not only in the United Kingdom, their home country, but also internationally, as consumers are developing more and more of a taste for our natural foods brands!

A key contributor to the international growth of Lotus™ Natural Foods in recent years is the success of BEAR in the United States. The brand was introduced there in 2018 and has become a huge success. Today, BEAR is already a leading brand in the United States in the ‘Kids Fruit Snacking’ category.

Our BEAR plant in South Africa is now, after Lembeke, the second largest plant within the Lotus Bakeries Group with more than 500 employees. That makes us one of the largest employers in the Ceres Valley (Western Cape province). Flemish Minister-President Jan Jambon symbolically broke the first ground during his working visit, when work on our new factory hall was started. It was a festive event, and it was heart-warming to feel the support of all local stakeholders out there.

nākd is also a strong contributor to international growth and delivered strong results in continental Europe, including France, Spain and the Netherlands.

The more international our company becomes, the more important it is to invest locally. This is for economic, logistical, as well as environmental reasons. We would like to express our pride in the investments we have made over the past year.

In 2022, we invested in no less than four continents. We built additional production facilities and lines for Lotus® Biscoff® in Belgium and in the United States, and we also announced our plans to start up a production facility in Thailand to further support the growth ambitions for Lotus® Biscoff® in Asia Pacific. It is quite clear that we will have to expand our capacity even further in the coming years to be able to supply this growing volume of Lotus® Biscoff® products to the growing number of markets worldwide.

In addition, we also invested in capacity expansion for Lotus™ Natural Foods in South Africa to keep up with BEAR’s international success. We will also continue to invest in the production facilities of our Local Heroes in 2022, including in Sweden, France, the Netherlands and Belgium. Investments that are needed to continue to meet consumer demand today and tomorrow.

2022 has shown a lot of positive energy and dynamism. We will remember it as a year in which important steps were taken in our growth story, as well as an incredible sense of inter-connectivity, engagement and belonging among our employees. In the past year, it has once again been abundantly clear just what a unique family we are at Lotus Bakeries. The daily commitment, dedication, contagious enthusiasm and passion of all employees define our fantastic culture and winning mindset.

Although it may remain unclear how geopolitics and macroeconomics will evolve over the coming period, the Lotus objectives are crystal clear. As a company, we keep setting the bar higher every single year. Not only for our growth ambitions, but also in our pursuit of finding operational and logistical efficiency improvements.

Despite all the global challenges, we are investing more than ever. Why? Because we firmly believe in our strategy, in our products and in our employees who are committed day in and day out. We are already convinced that 2023 will yet again have a lot in store for us, which we will be able to look back on with a great sense of satisfaction.

Jan Boone Jan Vander Stichele CEO Chairman

CEO

Chairman