Wrap Text
Tiger Brands’ audited group results for the year ended 30 September 2024 and final dividend declaration
TIGER BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080
("Tiger Brands" or the "Company")
TIGER BRANDS' AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2024 AND FINAL DIVIDEND
DECLARATION
Tiger Brands delivers a robust set of operational results for the year ended 30 September 2024 with second-
half performance reflecting progress on refreshed strategy
Salient features
• Revenue increased by 1% to R37.7 billion
• Group operating income* was marginally ahead of the prior year at R3.1 billion
• Income from associates increased by 4% to R724 million
• EPS increased by 13% to 1 942 cents per share
• HEPS up 4% to 1 810 cents per share
• Final dividend up 1,9% to 684 cents per share
• Total dividend of 1 034 cents per share (991 cents: 2023)
*Before impairments, fair value losses and non-operational items
Overview
Tiger Brands delivered a robust full-year performance, continuing to build on the turnaround momentum. With
the new management team and federated operating model in place, the performance for the second half of
2024 (H2) exceeded expectations, showing credible improvement against the first half (H1). The performance
trajectory was a result of agile and focused management teams empowered to make decisions, as well as various
continuous improvement initiatives, such as value engineering, logistics and conversion cost savings.
On a full-year basis, revenue was marginally ahead of the prior year at R37.7 billion, driven by price inflation of
7%, offset by volume declines of 6%. For the domestic business, volume declines were 8%, partially offset by
strong growth in exports and International at 6% and 5% respectively. Notably within the domestic business,
there was commendable volume growth from the food service channel, as well as the Beverages and Pasta
divisions.
Overall gross margin increased to 28.3%, from the 27.7% reported in the prior year. This increase was driven by
continuous improvement initiatives, including value engineering savings of recipes and packaging.
Group operating income for the year was marginally ahead of the prior year at R3.14 billion, against the backdrop
of implementing a new operating model and a challenging operating environment. The sale of non-core brands
in H2 – namely, Bio Classic, Crystal, Kair, Fiesta, Eulactol and Black Silk – together with the disposal of the Status
brand in H1, generated R241 million in non-operational profit for the group. The R102 million after-tax insurance
proceeds from the Value-Added Meats Product (VAMP) business is shown as profit from discontinued operation.
Income from associates increased by 4% to R724 million, driven mainly by the performance from Carozzi. Net
financing costs for the year amounted to R299 million compared to R238 million in the prior year, due to higher
interest rates and higher debt levels in H1.
The group's effective tax rate before fair value losses, non-operational items and income from associates
reduced to 28.2% from 29.0% in the previous year.
Earnings Per Share (EPS) increased by 13% to 1 942 cents (2023: 1 725 cents). Headline EPS (HEPS) increased by
4% to 1 810 cents per share (2023: 1 735 cents). The variation between HEPS and EPS relates to profit on the
sale of non-core brands.
Segmental operating performance
In the new operating model, the Business Units (BUs) are classified as:
• Milling and Baking (Wheat Milling and Bakeries),
• Grains (Maize, King Food, Jungle, Rice and Pasta),
• Culinary (Culinary domestic and Davita),
• Snacks, Treats and Beverages (STB),
• Home, Personal Care and Baby (HPCB); and
• International (the Chococam subsidiary and the Deciduous Fruit business).
Food service solutions and exports are now allocated to the respective BUs, based on products sold, which gives
a more holistic view of actual category and brand performance.
There was notable volume recovery in H2, with volume declines at 2% versus prior year, offset by price inflation
of 5%. H1 volume declines as reported were 9%, offset by price of 8%.
Milling and Baking (Wheat Milling and Bakeries)
Revenue for Milling and Baking declined by 10% to R8.2 billion, as the Bakeries growth initiatives in H2 were
offset by aggressive competitor pricing within the retail channel. Tiger Brands deliberately managed the depth
of discounting and investment behind promotional activities to protect margins. In addition, general trade
volumes for Bakeries were lower than anticipated, which management has since rectified with the appropriate
activation support.
Operating income declined by 7% to R634 million, with a slight increase in margins to 7.8%. A disappointing first
half, with operating income lagging the prior year, was remediated in H2, with operating income recovering as
compared to the same period in the prior year. This was a direct result of operational excellence initiatives and
improved maintenance regime.
Leveraging technology remains a key strategic enabler for the business, and management has now implemented
the route management software across all bakeries.
Conversion cost reduction initiatives implemented are gaining traction and included labour optimisation, waste
reduction, and a focus on water and electricity consumption.
Culinary (Culinary domestic and Davita)
Culinary revenue increased by 5% to R8.9 billion, with the domestic price inflation of 8% offset by lower volumes
of 3%. Promotional strategies were key to driving growth for the business, which continued to leverage the
brand and product portfolio of Tiger's power brands via combo deals across the group and focused marketing
investment.
Operating income at R819 million was a commendable 51% higher than the prior year, reflective of the initiatives
executed to drive affordability through value engineering, which has enabled investment into price and
strategically narrowed the price index to our competitors. In addition to these value engineering initiatives,
conversion cost efficiencies across labour and processing also contributed to driving improved margins.
The continuous improvement initiatives have mitigated supply pressures, with the supply of small white beans,
peanuts and fresh tomatoes significantly affected by local and global weather events, resulting in reduced
market availability and pricing challenges.
In the export markets, Davita exports were driven by innovation and market development initiatives. Leveraging
the key distributors in the various strategic markets has allowed for consumer insights generation and
consequently better in-market execution.
Grains (Maize, King Food, Jungle, Rice and Pasta)
The Grains revenue increase of 2% to R8.5 billion was enabled by strong promotional support in H2, which
focused on the carbohydrates share of the plate across all channels. Volume declines were experienced across
the Grains categories, except for Pasta. The Rice volume decline was due to the Government of India
implementing an export ban that ultimately impacted global pricing of parboiled rice, with consumers
subsequently trading out of the category into more affordable carbohydrates. Operating income for the full year
therefore ended 55% lower than prior year, with management's continuous improvement initiatives across the
supply chain to reduce the cost base and enable more competitive price points yet to yield material results.
Driving affordability, leveraging Tiger Brands' carbohydrate share of the plate and increasing presence in combo
deals are the three key pillars of focus to restore Grains competitiveness.
Snacks, Treats and Beverages (STB)
The STB business recorded strong revenue growth of 9% for the full year to R5.8 billion, with price inflation of
over 9% slightly offset by volume declines of 0.1%. Seasonal promotional campaigns were well executed across
all channels with campaigns focusing on digital channels and in-store activities. The food service solutions
channel delivered exceptional growth for Beverages, driven by a combination of well-executed marketing
initiatives, strong collaborative partnerships, and a strategic product and pricing mix.
Full-year gross margin at 33% benefitted from the prior years' time-in-motion studies at the facilities and
consequential labour force optimisation initiatives implemented in the current year; this partially assisted in
offsetting the impact of cost pressures sustained in raw materials. Significant increases in global cocoa butter
and cocoa liquor prices (c. +63%) impacted Beacon chocolate, while orange supply shortages driven by the
Brazilian citrus belt drought saw the price of orange juice input for Oros increasing markedly. The full impact of
the cost inflation challenges was mitigated by the supply chain efficiency initiatives that resulted in full-year
gross margin only regressing by 1% versus the prior year.
Operating income was up 8% at R720 million, with margins largely flat at 12.4%.
Home, Personal Care and Baby (HPCB)
Overall revenue in HPCB grew by 2% to R3.7 billion, while operating income increased by 2% to R667 million,
driven mainly by exports.
The domestic HPCB business came under pressure due to aggressive promotional activity from competitors,
with Tiger Brands holding back on deep discounting to preserve its operating margin. The Home Care business
was impacted by the pest season and the higher-than-expected rainfall; further to this, savings delivered by
factory efficiencies were diluted by the impact of the commissioning of the new aerosol line. The export markets
continue to gain traction with the appropriate focus and market support into neighbouring countries. The export
channel remains a key growth driver. Strategic initiatives within the Baby business to drive combo deals across
pouches and jars as well as new value offerings delivered results ahead of expectations.
In line with our portfolio optimisation strategy, we have entered into a sale and purchase agreement for the
disposal of our Baby Wellbeing business, as announced on 11 November 2024. The transaction was concluded
at an attractive valuation. The sale of Baby Wellbeing, following the successful divestiture of several non-core
HPC brands earlier in the year, marks another milestone in the simplification of our portfolio.
This strategic decision will enable us to intensify our focus on our Nutrition business, a core area where we
believe we have a clear competitive advantage. The transaction is subject to standard conditions precedent
customary for a transaction of this size and nature.
International (Chococam and LAF)
The Chococam business delivered exceptional revenue growth versus the prior year, mainly driven by the
chocolate spreads category and the export markets. Management has reacted quickly with the appropriate
product formulation changes and price pack architecture strategies.
Deliberate fixed cost management initiatives during the year partially offset the impact of the cocoa beans
increase resulting in minimal erosion of operating margin.
LAF continued to face puree pricing challenges in H2, with the market more affected by higher global stocks
resulting in lower sales and lower prices. This resulted in a double-digit decline in operating income.
The solid performance from the Chococam business negated the decline in profitability of the LAF business
resulting in full-year operating income for the International segment growing by 3%.
Cash flow and capital expenditure
Cash operating profit at R4.8 billion improved relative to the prior year of R4.3 billion. The benefit of slightly
lower inventory days and an ongoing focus on collections, assisted by an increase in trade and other payables,
resulted in improved working capital of R2.3 billion. This led to a significant increase in cash generated from
operations to R5.5 billion. The group ended the period in a net cash position of R757 million (2023: net debt
R923 million).
Capital expenditure for the period amounted to R0.97 billion (2023: R1.2 billion). Key capex projects for FY24
included the Aerosol Home and Personal Care line, the commissioning and move of the peanut butter facility as
well as a Jungle investment for Flakes innovation.
Listeriosis class action update
As previously communicated, although liability in the Listeriosis case has not yet been determined, the
company's attorneys have engaged with the plaintiffs' attorneys to agree on relief to qualifying individuals who
have urgent medical needs. In addition, the legal representatives are engaging in measures to arrive at a speedier
resolution of the class action overall. These engagements are ongoing.
We are committed to working diligently to bring the listeriosis class action to a close as speedily as possible. The
company has product liability insurance cover appropriate for a group of its size. Coverage is subject to the terms
and limits of the policy.
Outlook
Management remains optimistic for the year ahead where rejuvenating our core brands as well as volume
growth will remain a key focus. Continuous improvement initiatives driving cost leadership and affordable
product solutions for our consumers are a key enabler for our turnaround strategy, particularly when consumers
remain under pressure.
In line with our strategic priorities, we will focus on restoring profitability and embedding a renewed culture
through the following strategic thrusts:
- Shaping our Portfolio: We will continue with our portfolio review and dispose of non-core brands and
business units; this will allow us to rebase our business and prioritise those categories where we believe
Tiger Brands has the 'right to win'.
- Superior Channel Presence: Increasing our presence in General Trade, with the activation of additional
stores and the Albany recovery, remains an immediate priority. In-store execution and supporting our
customers across all channels remains of paramount importance.
- Cost Leadership: We are driving continuous improvement and cost leadership initiatives to deliver
affordable products for our consumers. We anticipate sustained improvements in the Bakery performance
and a turnaround in Grains as management execute on the strategies.
- Deliberate Growth Platforms: In response to the current highly dynamic consumer and competitor
environment, we will retain focus on our three growth platforms: driving affordability, democratising
health and nutrition, and over-indexing on snackification.
- Rejuvenating our Brands: We are leveraging our Power Brands to maximize return on investment with
focused and effective marketing.
Our strategic priorities will enable achievement of the following financial metrics over the short to medium term:
• Volume growth (%): 1% - 3%
• Revenue growth (%): greater than inflation
• Operating margin (%): high single digits
• ROIC: greater than WACC
• Net Working Capital Days: Maintain 67 days
Any forward-looking information has not been reviewed or reported on by the Group's auditors.
By order of the Board
GJ Fraser-Moleketi TN Kruger
Chairman Chief Executive Officer
Bryanston
03 December 2024
Short-form statement
This short-form announcement is the responsibility of the Directors of the Company and has not been reviewed
or audited by the group's external auditors. The information disclosed is only a summary of the information
contained in the consolidated annual financial statements ("Financial Statements"), and consequently, does not
contain full or complete details.
The Financial Statements have been audited by Tiger Brand's independent auditors Deloitte & Touche, who
expressed an unmodified audit opinion. Copies of the Financial Statements together with the auditors' opinion
are available on the Company's website www.tigerbrands.com and may also be requested from Investor
Relations by emailing Investorrelations@tigerbrands.com.
Any investment decisions made by investors should be based on the consideration of the Tiger Brands Financial
Statements. The Financial Statements are available through the JSE cloudlink at:
https://senspdf.jse.co.za/documents/2024/jse/isse/tiih/TigerFY24.pdf.
Declaration of final dividend
The company declared a final ordinary dividend of 684 cents per share for the year ended 30 September 2024,
in line with the company's dividend policy of 1.75x cover based on HEPS. Together with the interim dividend of
350 cents per share, this brings the total dividend for the year to 1034 cents per share.
In accordance with paragraphs 11.17 (a) (i) to (x) and 11.17 (c) of the JSE Listings Requirements, the following
additional information is disclosed:
• The ordinary dividend has been declared out of income reserves
• The local Dividends Tax rate is 20% (twenty percent)
• The gross final dividend amount of 684.00000 cents per ordinary share will be paid to shareholders who
are exempt from the Dividends Tax
• The net final dividend amount of 547.20000 cents per ordinary share will be paid to shareholders who are
liable for the Dividends Tax
• Tiger Brands has 180,327,980 ordinary shares in issue (which includes 11,431,244 treasury shares)
• Tiger Brands Limited's income tax reference number is 9325/110/71/7.
Shareholders are advised of the following dates in respect of the final ordinary dividend:
Declaration date Wednesday, 4 December 2024
Last day to trade cum the ordinary dividend Tuesday, 14 January 2025
Shares commence trading ex the ordinary dividend Wednesday, 15 January 2025
Record date to determine those shareholders entitled to the ordinary Friday, 17 January 2025
dividend
Payment date in respect of the ordinary dividend Monday, 20 January 2025
Share certificates may not be dematerialised or re-materialised between Wednesday, 15 January 2025 and
Friday, 17 January 2025, both days inclusive.
By order of the Board
J. K. Monaisa
Company Secretary
Bryanston
04 December 2024
Registered office: 3010 Winnie Mandela Drive, Bryanston, 2021
Independent non-executive directors: GJ Fraser-Moleketi (Chairman), MO Ajukwu, FNJ Braeken, TE Mashilwane,
M Sello, LA Swartz, OM Weber, DG Wilson
Non-executive director: S Sithole
Executive directors: TN Kruger (Chief Executive Officer), TG Govender (Chief Financial Officer)
Company secretary: JK Monaisa
JSE Sponsor
J.P. Morgan Equities South Africa Proprietary Limited
Date: 04-12-2024 07:05:00
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