Distell : Sustainability Report 2021

WE ARE DISTELL

Distell is a business with deep roots in South Africa with a growing African and International presence. We are Africa's leading producer and global marketer of wines, spirits, ciders and other ready-to-drink beverages (RTDs).

CREATING AND SHARING VALUE

Our purpose captures the customer and consumer experience associated with our award-winning brands. It recognises our role as a corporate citizen and our obligation to act responsibly and pursue excellence in everything we do.

OUR PERFORMANCE IN 2021

The year has been undoubtedly challenging. However, it also presented an opportunity for us to realign the Group's strategy. Distell has proven to be a resilient African business with a strong and diverse portfolio. This will enable us to thrive in the long term.

Brands

CIDERS & RTD'S

We pioneered the cider category in South Africa to become the second largest global producer of ciders:

• Savanna
• Hunter's
• Extreme
• Bernini

SPIRITS

Our premium and accessible spirit brands include local brands in key African markets:

• Amarula
• Bunnahabhain
• Scottish Leader
• Viceroy

WINES

Distell owns key wine brands, including:

• 4th Street
• Drostdy-Hof
• Nederburg
• Sedgwick's Old Brown

www.distell.co.za

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NAVIGATING THIS REPORT

To make it easier to read and engage with content in this report, we have included interactive tools:

Access additional info on the web

Read more within this report

FEEDBACK

Your feedback is important to us and we welcome your input to enhance our reporting. Please send your comments to [e-mail] or call [phone].

THE PRODUCTS MENTIONED IN THIS REPORT ARE NOT FOR SALE TO PERSONS UNDER THE AGE OF 18. AS ALWAYS, WE APPEAL TO ALL CONSUMERS WHO HAVE CHOSEN TO DRINK ALCOHOL TO ENJOY OUR PRODUCTS WITH CARE AND RESPONSIBILITY.

We actively participate in various national and global industry associations and voluntary initiatives to advance social, environmental and governance best conduct in our business activities.

We are recognised by independent ESG rating and research agencies for our leading practices.

CONTENTS

ABOUT OUR REPORT	002
WE ARE DISTELL	004
OUR STRATEGY AND SUSTAINABILITY PERFORMANCE	012
MAKING A POSITIVE IMPACT ALONG OUR VALUE CHAIN	018
MESSAGES FROM OUR LEADERSHIP	020
GOVERNING SUSTAINABILITY	028
OUR OPERATING CONTEXT	042
OUR FIVE KEY FOCUS AREAS	046
THE DISTELL DEVELOPMENT TRUST	116
ESG APPENDIX	118

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01	ABOUT OUR	02	WE ARE	03	OUR STRATEGY AND	04	MAKING A POSITIVE IMPACT	05	MESSAGES FROM
	REPORT		DISTELL		SUSTAINABILITY PERFORMANCE		ALONG OURVALUE CHAIN		OUR LEADERSHIP

06 GOVERNING	07 OUR OPERATING	08 OUR FIVE KEY	09 THE DISTELL	10 ESG APPENDIX
SUSTAINABILITY	CONTEXT	FOCUS AREAS	DEVELOPMENT TRUST

ABOUT OUR REPORT

ASSURANCE

While third-party assurance has not been sought for all information contained in this report, certain information has been independently assessed and verified:

•	Broad-based black economic empowerment (B-BBEE)
	performance was independently assessed and verified by AQRate
•	Certain environmental information, including our greenhouse

These are not guarantees or predictions of future performance. As discussed in this report, Distell faces risks, opportunities and other factors outside of its control. These and other uncertainties may cause our actual future results to be materially different from those expressed in this report. Readers are therefore advised not to place undue reliance on forward-looking statements.

OUR MATERIALITY APPROACH

APPROVAL

The social and ethics committee considered detailed reports on the matters discussed in this report. In general, the committee is satisfied that Distell is fulfilling its social and ethical obligations as a good corporate citizen. The committee reviewed this report and collectively believes

Distell is a business with deep roots in South Africa and with a growing African and international presence.We are Africa's leading producer and marketer of ciders, ready-to-drink beverages

This report is part of a suite of publications we produce to best meet our stakeholders' needs and expectations. These publications are available online.

This report provides insight into the material sustainability issues we face and the matters vital to our future prosperity. The report is aimed at a wide range of stakeholders who influence our business as well as those with an interest in our environmental, social and governance (ESG) impacts.

gas (GHG) emissions

Refer to our integrated report for a full list of our accreditations and certifications.

FORWARD-LOOKING STATEMENTS

Due to the future-orientated principle of reporting, some statements in this report constitute forward-looking statements.

Our approach to determining report content is guided by our commitment to the United Nations Sustainable Development Goals (SDGs). We track performance against our foundational and primary SDGs and structure the report according to the five key focus areas along our value chain where we can make the most significant contribution to these global goals.Read more in the 'Our strategy and focus areas' section on page 12.

it fairly represents Distell's sustainability performance for FY21.

Gugu Dingaan

Chairperson: Social and ethics committee

20 September 2021

(RTDs), spirits and wines enjoyed responsibly by people across the world. Our brand portfolio offers

Our integrated report, which includes our summarised consolidated annual financial statements,

We adhere to the principle of combined assurance.We follow an audit trail for non-financial disclosures and performance data, and validate this information through an internal audit process:

consumers a choice for every

is aimed at all of our stakeholders but particularly our shareholders and the local and offshore investment community which provides our financial capital.

Our sustainability

Any errors picked

Internal audit then

This is the tenth year that our sustainability

occasion and provides unique

team works

Once compiled, the team submits

up by internal audit

submits the report to our audit committee,

report has been

moments of social enjoyment. The value we create enriches

Our summarised consolidated annual financial statements, notice to shareholders and separate proxy form provide information to enable shareholders to participate

with variousa portfolio of

stakeholders toevidence to internal gather qualitative

are reported back to the sustainability team, who ensures

which provides a rating reflecting the audit

reviewed by internal audit. For the last four years, we have received

the lives of our employees,

in the annual general meeting (AGM).

and quantitative

audit, which works independently to

these are fixed

opinion and risk profile of the report. The team

a rating of 'very good'.

shareholders and the communities

data for the pastcheck the accuracy

financial year and

before finalising the report and making

uses this information to

This means that report controls are adequate

in which we live and work.

identify future

and validity of the

it publicly available

improve the accuracy

and provide reasonable

SCOPE AND BOUNDARY

focus areas.

information.

to our stakeholders.

of our sustainability report year on year.

assurance that content is accurate and valid.

This sustainability report (report) covers the non-financial performance of Distell Group Holdings Limited (Distell or the Group) for the financial year ended 30 June 2021 (FY21 or the year) and relates to our operations in South Africa only, unless otherwise indicated. We have an extensive worldwide distribution network, supported by local production capability and joint ventures and associate partnerships.

002

Our complete annual financial statements provide a comprehensive report of the Group's financial performance for the year.

Our statement of compliance with the King IV Report on Corporate Governance™ for South Africa, 2016 (King IV)1 provides an overview of our compliance with King IV.

1 Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved.

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"Internal audit again verified more than 80% of the sustainability information contained in key sections of this report. We are pleased to see that ongoing

collaborationbetweenthecross-functionalteams,underpinnedbyastrongmethodologyandframework,continuetoresultinimprovedaccuracyandvalidityof

the information reported."

KUMEREN PILLAY, DISTELL CHIEF AUDIT EXECUTIVE

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01 ABOUT OUR REPORT

02	WE ARE	03
	DISTELL

OUR STRATEGY AND	04 MAKING A POSITIVE IMPACT	05 MESSAGES FROM	06 GOVERNING	07 OUR OPERATING	08 OUR FIVE KEY	09 THE DISTELL	10 ESG APPENDIX
SUSTAINABILITY PERFORMANCE	ALONG OURVALUE CHAIN	OUR LEADERSHIP	SUSTAINABILITY	CONTEXT	FOCUS AREAS	DEVELOPMENT TRUST

WE ARE DISTELL OUR BRAND PORTFOLIO

Our multi-category beverage portfolio is uniquely adaptive to key trends because it resonates with a broad spectrum of consumers with different taste profiles, plays across the price continuum, and helps create memorable moments at mixed-gender drinking occasions worldwide.

This is underpinned by a culture of innovation to maintain relevance as consumer preferences blur across beverage categories:

OUR VISION

OUR PURPOSE

OUR VALUES

Making a difference by creating shared value in our chosen markets

Creating memorable moments, crafting a better future

Customer and consumer focus: We are passionate about our customers and consumers.

Excellence: We are committed to excellence in everything we do.

One Distell: We win by collaborating with integrity, honesty and respect.

We aim to build the Distell of tomorrow, while helping to regenerate economies and communities, and allowing the environment to thrive.

Our purpose captures the customer and consumer experience associated with our award-winning brands. It recognises our role as a corporate citizen and our obligation to act responsibly and pursue excellence in everything we do.

Our values reflect what we stand for as an organisation and act as guiding principles. At the foundation of these values is a total commitment to our consumers and customers, characterised by an unwavering passion to serve their needs with integrity and excellence.

CIDERS AND RTDS

We pioneered the cider category in South Africa and are

the second largest global producer of ciders.

Contribution to	Volume
Group revenue (%)	contribution (%)
	54,8

SPIRITS

Our premium and accessible spirit brands include local

brands in key African markets.

Contribution to	Volume
Group revenue (%)	contribution (%)

WINES

Our wines, with their rich heritage, are sold on

every continent.

Contribution to	Volume
Group revenue (%)	contribution (%)

THE BEHAVIOURS THAT UNDERPIN OUR VALUES

004

We delight our consumers by putting them first As our customers grow, we grow

We think and act like business owners We challenge, then commit

We are digitally fluent

We fail fast and learn faster

We dare to care

We build trust together

Together, we play to win

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		54,1	53,4
36,5	34,6	36,2

2019

2020

2021

2019

2020

2021

36,8	40,1	39,4
			11,2	13,5	12,1
2019	2020	2021	2019	2020	2021

26,8

25,3

24,3

34,8

33,1

32,9

2019

2020

2021

2019

2020

2021

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01	ABOUT OUR	02	WE ARE	03	OUR STRATEGY AND	04	MAKING A POSITIVE IMPACT	05	MESSAGES FROM
	REPORT		DISTELL		SUSTAINABILITY PERFORMANCE		ALONG OURVALUE CHAIN		OUR LEADERSHIP
OUR OPERATING MODEL

Distell's operations are driven through three regional business divisions: South Africa, Africa and ourVenture Business.

Each function acts as a specialist division, with its own decision-making processes, thus enabling quick responses to the unique macro-economic conditions and evolving consumer and competitor behaviour in its geographic region. Oversight of sustainability resides in the corporate centre.

SOUTH AFRICA	AFRICA	VENTURE BUSINESS
WE ARE PROUDLY SOUTH AFRICAN	WE ARE BUILDING A PLATFORM	WE ARE BUILDING A PREMIUM
Distell is the only South African-owned and operated	FOR GROWTH	SPIRITS BUSINESS
multi-category alcoholic beverages company.	We are Africa's leading producer and marketer of ciders,	We focus on premium spirits in select international
	RTDs, spirits and wines.	markets.
Strategic geographic goals:Where to play
DEFEND AND GROW	EXPANDING IN AFRICA THROUGH	BUILDING INTERNATIONAL
IN SOUTH AFRICA.	LOCAL PARTNERSHIPS.	PREMIUM SPIRITS.

Contribution to Group revenue (%)	Contribution to Group revenue (%)	Contribution to Group revenue (%)
74,1	71,0	72,7

			15,6	17,7	17,2	10,6	11,3	9,9
2019	2020	2021	2019	2020	2021	2019	2020	2021

Find out more about our brand portfolio, our operations, and our performance in the regions in which we operate in our integrated report.

006

06 GOVERNING	07 OUR OPERATING	08 OUR FIVE KEY	09 THE DISTELL	10 ESG APPENDIX
SUSTAINABILITY	CONTEXT	FOCUS AREAS	DEVELOPMENT TRUST

OUR BUSINESS MODEL

Our business model enables us to fulfil our purpose of creating memorable moments, crafting a better future. It explains how we preserve and create value through the successful management of interconnected resources.

The way the Group navigated the challenging circumstances of the past two financial years, to emerge stronger than before, highlighted our key competitive advantages. These include:

OUR			GOOD	AN AGILE	A COMMITMENT
DECENTRALISED	OUR FOCUSED
STRONG	RELATIONSHIPS	BUSINESS AND	TO SOCIAL AND	A WINNING
OPERATING	BRAND
GOVERNANCE	WITH	SUSTAINABILITY	ENVIRONMENTAL	CULTURE
MODEL	PORTFOLIO
	STAKEHOLDERS	STRATEGY	SUSTAINABILITY
Page 6	Page 5	Page 28	Page 36	Page 12	Page 14	Page 100

OUR BUSINESS MODEL IS UNDERPINNED BY STRONG GOVERNANCE.

The Distell board takes great care in ensuring good governance. In an unpredictable world, governance requirements continually evolve and present new challenges, especially given Distell's growing footprint in regions with high operating risks. The board applies integrated thinking as promoted by King IV, and Distell's governance practices, risk and compliance frameworks, policies and controls exist to:

• support the Group to achieve our strategic ambitions and goals;
• ensure the sustainability of the Group; and
• optimise value for our shareholders and other stakeholders.

Read more in our governance report, available in our integrated report.

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