Groceries also recorded strong revenue growth and benefited from new product innovations. Snacks & Treats produced a strong second-half recovery following supply challenges in the first half due to labour disruptions and low opening stock levels. Overall, revenue in Consumer Brands increased by 12% to R12,4 billion. Operating income increased by 25% to R1,4 billion, attributed primarily to strong second-half recoveries in Snacks & Treats, as well as sustained strong performances in Groceries, Beverages and Out of Home. Baby recorded a marginal improvement in operating income.

Groceries delivered a strong top-line performance, growing revenue by 15% to R6,4 billion, driven primarily by price inflation of 11%, while total volumes increased by 4%. Despite significantly higher selling prices, volumes benefited from innovation and support from top-end retailers, as well as growth in the wholesale channel. Core offerings benefited from cost-competitive value packs and price-pack solutions for value-seeking consumers, resulting in market share gains across most segments. Volumes were further supported by distribution gains on product innovations such as canned fish. The improved top line, together with ongoing efficiency improvements, logistics savings, optimal promotional activity and revenue management benefits, resulted in operating income increasing by 51% to R597 million.

Revenue at Snacks & Treats increased by 4% to R2,4 billion, supported by price inflation of 8% less an overall volume decline of 4%. Revenue in the second half increased by 24% following industrial action in the first quarter of the financial year which adversely impacted sales and inventory levels going into the peak Easter season. A particularly strong performance was delivered in the second half across the portfolio with distribution gains in the general trade supporting recovery. Operating income increased by 12% to R263 million due to a favourable product mix, while the factory benefited from increased throughput as inventory levels were restored in the second half.

Beverages' revenue increased by 11% to R1,8 billion, supported by volume growth of 5% and price inflation of 6%. Volume growth was driven by concentrates in the first half of the year as a result of price pack innovation in Oros, a strong performance from sports drinks (Energade) and improved distribution of the full ready-to-drink flavour range. Despite a meaningful recovery in second half profitability relative to last year, operating income for the full year increased marginally to R269 million, mostly due to the impact of higher raw material costs and packaging inflation.

Revenue growth of 4% to R1,1 billion in the Baby segment was driven by price inflation of 11%, offset by volume declines of 7%. Volumes are reflective of lower demand across the jar and pouch segments within the nutrition portfolio, particularly in the second half of the year. Operating income increased by 3% to R147 million, with the benefit of improved factory efficiencies being partially offset by an unfavourable product mix. Once-off costs related to the precautionary recall of certain baby powder products amounted to R16 million, and largely comprise the cost of the affected stock that has been written off, as well as the logistics costs of the recall.

• Revenue

  Up 12%

  R12,4bn

  2021: R11,1 million

• Operating income

  Up 25%

  R1,4bn

  2021: R1,1 billion

• Operating margin

   

  11,1%

  2021: 10,2%

Groceries

• Partner with procurement and logistics to deliver further savings
• Further manufacturing platform efficiencies
• Fast-track innovation and value proposition focus
• Execution of new peanut butter site

Beverages


• Optimisation of operating model to reflect seasonal nature of business
• Drive innovation execution
• Cold availability rollout
• Focus on combo deals throughout winter to mitigate volume regression
• Relentless focus on efficiencies and continuous improvement to mitigate cost push

Snack & Treats


• Fixing and optimising the supply chain remains a priority
• Revenue management to improve promotional ROI and inform strategic pricing relative to consumer need state and relative product positioning
• Drive innovation via strategic partnerships

Baby


• Continued brand investment
• Optimal revenue and portfolio management to hold share in nutrition
• Relentless focus on cost management to remain competitive on shelf
• Innovation will continue to focus on functional and taste benefits