Tiger Brands Limited

Integrated annual report


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The year under review can be characterised as a year of two halves. The first half was impacted by a lag in recovering unprecedented and unanticipated levels of cost inflation. This was compounded by certain supply constraints as a consequence of global and local supply chain challenges and industrial action at Snacks & Treats and Bakeries. The second half performance, despite a continuation of the cost and supply challenges, exacerbated by prolonged periods of loadshedding, reflects the effective implementation of category specific margin recovery initiatives, as well as the execution of specific initiatives in Bakeries, Snacks & Treats and Exports. In addition, the Deciduous Fruit business benefited from improved global fruit pricing and a weaker exchange rate.


Volume growth in Exports and International was offset by volume declines in the Domestic Business, primarily attributable to Milling and Baking, Snacks & Treats, and Baby, as well as Home and Personal Care. These volume declines were partially offset by good volume growth in Rice, Beverages, Groceries, and Out of Home.

Although slightly lower than previously guided, cost-saving initiatives and supply chain efficiencies continued to make a positive contribution to the results. Together with further progress in revenue management, this resulted in the overall gross margin being maintained at to 30,3% relative to the prior year (excluding the impact of the product recall and civil unrest). Group operating income (before impairments and non-operational items) increased by 53% to R3,4 billion. Operating income for the current period includes insurance proceeds of R52 million in respect of last year’s product recall and R166 million in respect of the civil unrest, which occurred in July 2021. Last year, the group’s operating income was impacted by once-off costs related to the product recall (R647 million) and civil unrest (R85 million). Excluding the pre-tax impact of these costs as well as the benefit in the current period of the insurance proceeds as referred to above, operating income increased by 10% compared to the prior year whilst group operating margin remained unchanged at 9,6%.

Income from associates increased by 38% to R478 million. Good underlying trading performances from Carozzi and National Foods were augmented by a profit on disposal of an associate investment in National Foods and favourable currency translation gains at Carozzi.

Net financing costs for the year amounted to R75 million compared to R54 million last year. This was due to higher average debt levels and higher interest rates compared to the prior year. Debt during the year was impacted by higher raw material inventory levels and the impact of the share buy-back programme. A net foreign exchange gain of R46 million resulted from the translation, in the current year, of foreign currency cash balances at a weaker average exchange rate, while last year there was a net foreign exchange loss of R9 million due to the strengthening of the rand against major currencies.

The group's effective tax rate before impairments, fair value losses, non-operational items and income from associates, increased slightly to 29,4% from 29,1% last year.

The share buy-back programme amounting to approximately R1,5 billion, which was executed during the year, reduced the weighted average number of shares in issue by 1,9% to 162 552 439.

Earnings per share (EPS) from continuing operations increased by 65% to 1 762 cents (2021: 1 070 cents), while headline earnings per share (HEPS) from continuing operations increased by 51% to 1 702 cents (2021: 1 127 cents). Excluding both the impact of the product recall and civil unrest in the prior year, as well as the benefit of the related insurance recoveries in the current year, HEPS from continuing operations increased by 11%.

EPS from total operations increased by 54% to 1 762 cents (2021: 1 142 cents). Similarly, HEPS from total operations increased by 51% to 1 702 cents (2021: 1 127 cents).

Differing performance across our divisions

This year we saw mixed performance across our divisions, with continued solid performances in Rice, Beverages, and Groceries, and pleasing volume growth in Exports, International and Out of Home, offset by volume declines in other areas of our domestic business.

In Grains, revenue benefited from price increases across the Milling and Baking segments, and a strong volume performance in Rice. Operating income generated by the wheat-to-bread value chain was significantly higher than in the first half although flat on the second half comparative period and therefore the full year performance reflects the significant decline reported at the end of the first half. The improved performance of the value chain in the face of both pricing pressure and significant cost escalations, reflects the impact of a refreshed leadership and management team in executing on initiatives aimed at driving volume, price/volume management, quality and internal efficiencies. Volume performance has been pleasing with the double-digit declines of the first quarter reversed with solid growth in volume achieved in the fourth quarter. Our sorghum-based breakfast and beverages business delivered a muted performance, impacted by supply challenges and lower demand. Although our Jungle and Pasta businesses delivered solid revenue growth, profitability was impacted by higher input and distribution costs, and sub-optimal factory performance.

Within Consumer Brands, all segments delivered top-line growth with a particularly strong performance from Out of Home in line with increased post-lockdown demand. Groceries benefited from innovation, particularly in cost-competitive value packs and price-pack solutions for value-seeking consumers. Snacks & Treats recorded a strong second-half recovery following supply challenges in the first half due to labour disruptions and low opening inventory levels, while Beverages operating income was impacted by higher raw material costs, ingredients, and packaging inflation.

Home and Personal Care's top line was unable to recover from a poor start to the year, with unfavourable weather conditions impacting category demand for pesticides, compounded by increased raw material and packaging costs.

We saw a pleasing turnaround in performance in Exports and International, driven primarily by an improved performance from the Deciduous Fruit business, which benefited from higher international fruit prices, favourable exchange rates, and improved volumes. We are continuing to engage with affected stakeholders to identify mutually beneficial solutions regarding the future of our deciduous fruit business, Langeberg and Ashton Foods (LAF). We have reopened the sale process together with our advisers and will continue to operate the business through to the end of the current season in May 2023. Elsewhere, Chococam's revenues increased by 10%, off the back of volume growth and price inflation, reduced by an unfavourable foreign currency translation. Volumes were driven by optimal pricing strategies, an improved distribution network in key markets and market share gains in chocolate.

Further details are provided in the operational review.

Cash flow and capital expenditure

Continued investment in working capital due to increased stock holdings, particularly on raw material purchases as well as due to the rebuilding of inventory levels at Groceries and Snacks & Treats, resulted in cash generated from operations declining to R2,6 billion from R4,0 billion in FY21. This is line with the strategy to carry higher stock levels to ensure continuity of supply due to ongoing global and local supply chain disruptions. The level of investment is further exacerbated by the unprecedented levels of inflation over the past year. Capital expenditure for the year amounted to R961 million (2021: R1,0 billion), while the cash position was further impacted by the completion of the general share buy-back programme. The group ended the period in a net cash position of R143 million (2021: R2,2 billion).

Share buy-back programme

As previously disclosed, the board approved a share buy-back programme to return cash to shareholders over and above ordinary dividends.

In line with the general authority granted by shareholders for the company to acquire shares from its shareholders, the buy-back was limited to 5% of the issued share capital of Tiger Brands. On 20 July 2022, the company completed the repurchase up to the limit of the general authority, acquiring 9,49 million shares at a total cost of R1,5 billion. All the shares repurchased have been cancelled.

Given the company’s ungeared balance sheet and in the absence of any significant or imminent corporate activity, the board will continue to consider a share buy-back programme as part of its capital allocation deliberations.

Final ordinary dividend

The company declared a final ordinary dividend of 653 cents per share for the year ended 30 September 2022. Together with the interim dividend of 320 cents per share, this brings the total dividend for the year to 973 cents per share, a 18% increase relative to last year. In calculating last year's total dividend, HEPS was adjusted to exclude the costs of the product recall and the civil unrest. This year, the company's dividend policy of 1,75x cover was applied to HEPS, inclusive of insurance proceeds received in respect of these events.

Shareholders are referred to the accompanying dividend declaration for further details.


The year ahead is likely to remain challenging. Persistently high unemployment and inflation levels together with higher interest rates, will place further pressure on overextended consumers. In addition to local and global supply chains remaining volatile, our cost base is sensitive to rand weakness as well as higher commodity prices whilst the cost of mitigating the regular occurrence of loadshedding is significant. This will require ongoing agility and judicious price/volume management in the face of a challenged consumer.

To this end, the progress made over the last three years in terms of stabilising the core and building a solid foundation for growth will help facilitate the agility required. Significant investments were made in technology and digital capabilities, which will help drive operational efficiencies, increase automation, improve data analytics, and drive revenue management initiatives. In addition, there are further cost-saving opportunities that are potentially available within our procurement and logistics activities.

In response to the constrained consumer environment, we have accelerated value-led innovation and renovation including price-pack architecture solutions across key segments of the portfolio. In addition, we have various initiatives with customers aimed at strengthening our position at the point of purchase.

While the performance this year is encouraging and provides forward momentum as well as internal confidence, there is still much work to be done to deliver the group’s full potential. We are confident in our strategies and our focus for the foreseeable future remains on relentless and flawless execution.


Albeit a challenging year, we have made meaningful progress on many initiatives that will benefit the group going forward. I wish to thank Noel, and my colleagues on the executive committee, the audit committee and the board, for their support and guidance. I also wish to thank the finance department for their dedication and support. Finally, thank you to our shareholders for their investment and meaningful engagement.

Deepa Sita
Chief financial officer

1 December 2022