INTEGRATED ANNUAL REPORT 2023

For the year ended 30 September 2023

Integrated Annual Report

Sustainability Report

Annual Financial Statements

How we sustain value

SRC			OUR RELATIONSHIPS

			Material inputs	Our actions to sustain value	Outcomes of our activities
			Engaged workforce Constructive relationship with government Investor confidence Trusted brands and strong consumer reputation Positive supplier and customer relations Robust operating context and strong levels of institutional trust	Investment in employee value proposition Structured engagement with regulators; focus on compliance and societal contributions Regular investor communication Investment in product safety and quality Product and process innovation Active engagement with suppliers and customers Trading terms that are fair, equal and available to all customers	Generally positive relations across stakeholder groups 7% reduction in consumer complaints R18 billion B-BBEE supplier spend R54 million spend to support black farmers and small businesses Year-on-year HEPS growth of 2% Year-on-year dividend growth of 2% Continuing concerns in certain areas Pending listeria class action lawsuit
			Challenges in securing inputs Finding the right balance in addressing the sometimes competing interests of stakeholders, each of whom add value to the company (see here)	Strategic pillar:

HC			OUR PEOPLE

			Material inputs	Our actions to sustain value	Outcomes of our activities
			Strong and diverse board Experienced executive team 9 296 permanent employees	Implementing people strategy to attract, retain and develop a diverse talent base, with strong leadership capacity Invested in employee reward and personal development opportunities R3,1 billion on salaries and benefits R93 million on employee training and development Focus on diversity and employment equity Embedded enhanced employee wellbeing programme (THRIVE)	Investment in talent and personal development Accelerated core capability in manufacturing, customer, marketing and R&D Launched accelerated leadership development programme Progress in promoting employee diversity 57,6% ACI representation at senior management and 64% at top management Eliminated historical wage and salary income differentials ahead of target 46% female representation at senior management and 30% at top management Board diversity 46% black and 54% female on our board Directors with extensive FMCG knowledge, global experience and skills in digitalisation and innovation Improvements in employee health and safety One work-related fatality (2022: three) 0,25 lost-time injury frequency rate (2022: 0,45)
			Challenges in securing inputs Technical skills shortages Changing employee career expectations and priorities Increasing emigration from South Africa Increased cost of attracting and retaining skills Company underperformance Enabling workplace environment with performance and purpose-led culture	Strategic pillar:

IC			OUR BRAND, REPUTATION AND COMPANY CULTURE

			Material inputs	Our actions to sustain value	Outcomes of our activities
			Established strong brand and reputation Unique product formulations and trusted recipes Research and development capacity Internal governance and business systems Company culture	Focus on innovation and renovation to meet consumer needs including on value, health and nutrition, convenience, e-commerce, and sustainability Deploy marketing best practice toolkit across the business Drive relevance in value segment by building clear benefits of current brands	Sustained a strong brand presence Billion Rand Brands sustained their brand equity and relevance among consumers despite inflationary pressures Continue to focus on our unique ability to offer local brands with local flavours, leveraging cross-brand collaborations to offer consumers more of what they love MMASmarties Awards (effective modern marketing in South Africa – Albany (x2), Morvite and Eat Well Live Well) Heritage brand, KOO refreshed positioning and packaging, entrenching it as SA’s No.1 tinned product, and highlighting its “farm-to-plate” credentials Innovation launches Completing 31 innovation projects across our consumer growth areas, achieving a 3,7% innovation rate Innovations include Jungle Oats functional beverages, lower-calorie Energade drink, Jungle Crunchalots Fillows and Crosse & Blackwell’s Kasi Magic sauces
			Challenges in securing inputs Constrained consumer environment favouring affordability over brand Increased retailer concentration and growing role of private label High prevalence of promotional activity	Strategic pillar:

MC			OUR MANUFACTURING CAPACITY

			Material inputs	Our actions to sustain value	Outcomes of our activities
			41 manufacturing facilities Efficient logistics and distribution activities	R1,2 billion capital expenditure in manufacturing and distribution capability and technology 22% improvement in overall equipment effectiveness (OEE) in focus sites over past three years R525 million in cost-savings through continuous improvement initiatives	Continued investment in plant and equipment Expanded capacity, optimising efficiency, upgrading infrastructure, and realising innovation opportunities Some challenges remain High agricultural and other input cost inflation Short supply of certain ingredients resulting in factory under-recoveries
			Challenges in securing inputs High frequency of loadshedding Knock-on effects of loadshedding on other municipal services such as water and sanitation Inefficient local ports and other transport routes Shortage of technical skills Civil unrest Adverse weather patterns such as flooding	Strategic pillar:

FC			OUR FINANCIAL STRENGTH

			Material inputs	Our actions to sustain value	Outcomes of our activities
			Equity Borrowings Cash generated from operations	Implementing a fit-for-purpose operating model with decision-making close to the operations Continued operational efficiency drive Strong corporate governance structures Acceleration of portfolio optimisation Clear guiding principles in response to the growth of private label	21,7% return on net assets (RONA) (2022: 27,5%) R238 million paid in net interest (2022: R75 million) R2,7 billion cash generated from operations (2022: R2,7 billion) Savings of R525 million (2022: R387 million) Total dividend per share declared: 991 cents (2022: 973 cents) 15,7% return on equity (2022: 18,4%) ROIC of 14,7% exceeds weighted average cost of capital of 14,1% (2022: 16,4% >13,6%)
			Challenges in securing inputs Rising interest rate cycles Underperformance resulting in higher cost of capital	Strategic pillar:

NC			OUR RAW MATERIAL INPUTS

			Material inputs	Our actions to sustain value	Outcomes of our activities
			Local and imported raw material ingredients Water (municipal and own borehole) for production Fuel (diesel and petrol) for distribution and manufacture Energy for manufacturing (primarily Eskom electricity) Fertile soil and conducive agricultural conditions	Energy and water efficiency measures Investment in renewable energy to strengthen energy security and reduce carbon footprint Innovations and partnerships to reduce packaging and food waste	Some progress in mitigating impacts 0,6% reduction in total GHG emissions 0,9% reduction in GHG emissions intensity 0,3% reduction in absolute energy use 0,9% reduction in electrical energy intensity 4% reduction in absolute water use 1,9% reduction in water intensity 32,1% reduction in landfill waste intensity Challenges remain in certain areas The global food system is recognised as having a significant impact on biodiversity and habitat loss, climate change and packaging pollution, placing direct pressure on the resources we depend on and increasing consumer and regulatory practices
			Challenges in securing inputs Climate change and extreme weather events impacting quality, quantity and cost Supply disruptions in certain key inputs due to adverse weather patterns Inefficiencies at South African ports resulting in delays	Strategic pillar: