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Tiger Brands Limited

Integrated annual report

NOTICE OF AGM

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OUR BUSINESS MODEL

OUR PURPOSE

  • Nourish and nurture more lives everyday
VALUE IN

KEY RESOURCES

  • Experienced, diverse leadership team and skilled employees underpinned by strong governance structures
  • Reliable and sustainable access to primary agricultural products (including wheat, rice, maize, oats, sugar and sorghum), other ingredients, packaging, energy, fuel and water
  • Well capitalised manufacturing plants, supported by efficient and effective distribution and logistics networks
  • Strong and trusted corporate brand; positive supplier and customer relations and constructive relationship with government, regulators and host communities
  • Continuous investment in our brands through research and development, marketing investment, and innovation informed by strong consumer insights
  • Access to financial capital, through strong cash generation and enhanced by superior investor returns and sustained market confidence

KEY RELATIONSHIPS

  • Employees and trade unions
  • Customers
  • Consumers
  • Government
  • Investors
  • Suppliers
  • Communities
  • Media

GOVERNING THE VALUE CREATION PROCESS

The board represents a range of corporate and strategic business leadership skills, diversity and independence to appropriately exercise sound judgement and leadership in directing Tiger Brands to create value for all stakeholders.

Our operating environment

Trends impacting value:

  • A challenging macro-economic environment
  • Shifting customer and consumer dynamics in an increasingly competitive environment
  • Heightened stakeholder expectations on ESG performance

Sensitivity analysis

Tiger Brands’ cost base is highly sensitive to exchange rate volatility with ~70% of our costs directly or indirectly exposed to exchange rates. Price/volume management is therefore a key strategic lever. In an inflationary environment, for every 1% price increase not implemented, the group requires 4% volume growth to offset the impact of higher input costs.

Material risks

  Albany route-to-market
  Market responsiveness
  Cost competitiveness
  Food safety
  Cyber security
  Occupational Health and Safety (OHS)
  Industrial action
  Third party supplier risk

OUR VALUE CHAIN ACTIVITIES
Procurement   Manufacturing   Research and development   Packaging and logistics   Marketing, branding & distribution
       

Our revenue streams

Our revenue streams comprise product sales from:

  • Grains: 46%
  • Consumer Brands: 36%
  • Home and Personal Care: 5%
  • Exports and International: 11%

Material revenue differentiators

  • The group’s long-standing market-leading position in branded food and beverages
  • Our “Billion-Rand Brands”, many of which are rated first or second in their categories and have received many external awards as South Africa’s most loved brands
  • A robust marketing strategy to ensure our brands remain relevant and top-of-mind, supported by increased and targeted investment
  • Far-reaching distribution capabilities
  • The strength and quality of our relationships with our customers
  • Strong consumer insights informing our category strategies

Our cost streams

Our most significant cost streams are:

  • Raw material procurement
  • Sales and distribution expenses
  • Marketing expenses
  • Maintenance and upgrading of plant and equipment
  • Food quality and safety
  • Employee wages and benefits
  • Electricity and fuel
  • Regulatory compliance costs
  • Other administrative costs

Material cost differentiators

  • Our vertical supply chain
  • Standardisation and simplification of group processes, systems and practices
  • Centralised procurement function leveraging scale both internally and externally

VALUE OUT

OUR PRODUCTS (OUTPUTS)

  • Grains
  • Groceries
  • Baby Nutrition and wellbeing
  • Beverages, Snacks & Treats
  • Home and Personal Care

OUR IMPACTS (OUTCOMES)

Significant impacts (positive and negative) include:

  • Consumer nutrition and health
  • Natural resource use
  • Food and packaging waste
  • Employment (direct and indirect)
  • Development of small business
  • Government tax revenue
  • Shareholder returns
  • Investment in infrastructure, plant and equipment.