20
22

Tiger Brands Limited

Integrated annual report

NOTICE OF AGM

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Tiger Brands is one of Africa’s largest listed manufacturers of fast-moving consumer goods (FMCG). Our core business is the manufacture, marketing and distribution of everyday branded food and beverages.

 

WHO WE ARE

OUR VISION

To deliver top-tier financial results and be recognised by all stakeholders as the pre-eminent fast-moving consumer goods (FMCG) company in South Africa and the most desirable growth company on the continent.

OUR PURPOSE

We nourish and nurture more lives every day.

Our products are relevant across every meal occasion and are well-positioned to grow. The portfolio also includes leading brands in the home and personal care segments and we have a growing presence in Africa.


Our strategy for sustainable profitable growth is supported by six strategic pillars, underpinned by our core values.

 

OUR STRATEGY

  Building a growth pipeline
  Meeting the needs of the consumer
  Optimising our supply chain
  Being obsessed about cost savings and efficiencies
  Igniting our people
  Investing in a sustainable future

OUR VALUES

  • We treat each other with care and respect
  • We deliver with passionand excellence
  • Safety and quality are non-negotiable for us
  • We embrace diversity and inclusivity
  • We act with integrity and accountability in all we do

WINNING BEHAVIOURS

Consumer obsession

Teamwork

Empowered accountability

Focused execution


FINANCIAL PERFORMANCE (from continuing operations)

  • Revenue

    R34,0bn

    2021: R31,0 billion

  • Group operating income*

    R3,4bn

    2021: R2,2 billion

  • EPS

    1 762cps

    2021: 1 070cps

  • HEPS

    1 702cps

    2021: 1 127cps

  • Final dividend

    653cps

    2021: 506cps

  • Total dividend

    973cps

    2021: 826cps

* Before impairments, fair value losses and non-operational items.

OUR VALUE CONTRIBUTION IN 2022

The value created, preserved, or eroded for our stakeholders in 2022

DELIVERY OF VALUE BY STAKEHOLDER GROUP

  • Providers of financial capital
  • R1,4 billion paid in dividends (2021: R1,7 billion)
  • R1,5 billion returned to shareholders in share buy-back programme
  • Return on equity 17,4% (2021: 12,7%)
  • Return on net assets 26,0% (2021: 19,3%)
  • Return on invested capital* 16,4% (2021: 11,7%)
  • Cash generated from operations R2,6 billion (2021: R4,0 billion)

* As defined in the annual financial statements.

  • Consumers
  • 21 innovation projects launched this year
  • 28,2% value share (2021: 28,6%)
  • Precautionary recall of certain baby powder products
  • Suppliers
  • R14 billion spent with B-BBEE-verified suppliers (2021: R14 billion)
  • R7 billion spend with black-owned enterprises (2021: R6 billion)
  • R5 billion spend with black women-owned enterprises (2021: R4 billion)
  • Customers (retailers, wholesalers, and general trade)
  • 97% on-shelf availability (2021: 97%)
  • 88% order-fill (2021: 90%)
  • Communities and environment
  • R26 million total socio-economic development spend (2021: R23 million)
  • 109 million cumulative breakfasts supported by Tiger Brands Foundation since 2011
  • Employees
  • R4,3 billion paid in salaries and benefits to 9 670 permanent employees (2021: R4,0 billion to 10 158 employees)
  • R97 million invested in employee training and development (2021: R94 million)
  • 3 work-related employee fatalities (2021: 0)

Tiger Brands is dedicated to growing its footprint by continuing to explore new opportunities to bring quality brands to consumers across Africa.

 

  • Own and operate

    41

    sites in South Africa and Cameroon

  • and export to

    33

    markets in Africa,

  • with almost

    80%

    of total export sales from

  • Priority markets:

    5

    Mozambique, Zimbabwe, Zambia, Nigeria and Cameroon.

WE CURRENTLY EXPORT OUR PRODUCTS TO 33 MARKETS IN AFRICA

Map

154
quality brands
and products
within		   21
categories


We have made some important strides this year in delivering on our sustainable future strategy, leveraging our influence, and increasing our effort and investment, to progress our commitments to improve consumer health and nutrition, enhance livelihoods, and ensure responsible environmental stewardship.

 

OUR INVESTMENT CASE

  • STRONG BRANDS
  • With almost 30%* of the grocery basket, and 10 Billion Rand Brands, Tiger Brands has leading positions in most categories, and our iconic brands are well-entrenched with consumers in South Africa
  • Our products provide a solution for every meal occasion and meet consumer needs through a range of daily touchpoints

EQUITY RANK
  • #1
  • #1
  • #3
  • #2
  • #2
  • #1
  • #1
  • #1
  • #1
  • #1

VOLUME RANK
  • #2
  • #1
  • #2
  • #2
  • #1
  • #1
  • #1
  • #2
  • #1
  • #1

VALUE RANK
  • #1
  • #1
  • #2
  • #2
  • #1
  • #1
  • #1
  • #2
  • #1
  • #2

* Refers to value share

  • ABILITY TO GENERATE CASH AND RETURN CASH TO SHAREHOLDERS
  • Our free cash flow conversion has averaged ~85% over the last five years; above the peer group average of ~70%
  • Our ability to generate cash allows us to re-invest into our business, both in terms of capex and innovation, making us more competitive, efficient and effective in the long term
  • The execution of a share buy-back programme demonstrates commitment to disciplined capital allocation while enhancing shareholder returns
FREE CASH FLOW CONVERSION


  • FOCUS SHIFTING TO IMPROVED RETURNS
  • ROIC trending upwards towards peer group average
ROIC VS PEERS


  • COMMITTED TO A POSITIVE ESG PERFORMANCE
  • We have made significant progress in delivering on our sustainable future strategy and on our commitments in each of our three strategic focus areas: health and nutrition, enhanced livelihoods, and environmental stewardship
  • Our key initiatives focus on reducing waste-to-landfill, recycling packaging material, reducing food waste and loss, and diverting waste towards new value-creation opportunities
  • We recognise that we have a significant responsibility to continue addressing our material ESG impacts and continue to fully integrate this responsibility across the business

GROWTH AREAS

  • Informal market

    The informal market in South Africa is valued at approximately R150 billion a year. We are pursuing various initiatives to expand our reach in this market and have already improved the availability of our targeted SKUs.

  • Innovation and marketing investment

    We have been driving innovation and renovation in our product offerings including price-pack architecture, as well as investing in more effective advertising and marketing to highlight the value benefits of our current brands.

  • Technology

    We have completed the development and approval of a comprehensive digital strategy, including cyber security, that defines the key areas of focus for the business and serves as a comprehensive framework and roadmap for our business initiatives over the coming years.

  • Venture Capital Fund

    The newly established Venture Capital Fund made its inaugural investment this year and has a strong pipeline of opportunities, particularly within health and nutrition and snackification.

  • Africa

    We aspire to be a pan-African business with a South African head office. The past year has been one of consolidation, in which we have fixed the basics and positioned the business for growth.
  • United Nations Sustainable Development Goals (UN SDGs)

The UN SDGs set a long-term agenda to end poverty, protect the planet and ensure prosperity for all by 2030. In fulfilling our core purpose – to nourish and nurture more lives every day – Tiger Brands is committed to playing its role in delivering on these goals. As part of our strategic commitment to a sustainable future, we have developed a set of commitments and targets relating to three key focus areas: health and nutrition, enhanced livelihoods and environmental stewardship. In meeting these commitments and targets we believe we will provide a meaningful contribution to the following eleven SDGs: Our approach to responding to these goals is reviewed in more detail in our accompanying sustainability report 2022, which reviews Tiger Brands’ material impacts on people, society and the environment.