INTEGRATED ANNUAL REPORT 2024

for the year ended 30 September 2024

Cost leadership is the foundation of our business transformation journey, and ensuring we produce affordable products for our consumers, and can improve operating margins.

Improving operating margins through cost leadership

In the context of a particularly challenging economic environment, with a subdued market in which most consumers are trading down, we recognise the need to be cost competitive to ensure sustainable margins.

Informed by an extensive external cost-benchmarking exercise – in which we reviewed our performance against category peers and specific SKUs by category and cost line item – we have identified the following six key levers aimed at ensuring cost leadership, improving gross and operating profit margins, enhancing returns on invested capital, and improving total shareholder returns:

Recent examples of costs savings initiatives include:

Optimising our distribution network

In 2024, we launched an ambitious logistics network optimisation programme, the network analysis project aimed to define the future-fit distribution solution for Tiger Brands with an optimised cost base and improved efficiencies. The assessment included all warehousing requirements, road freight and route optimisation.

The project also included raw materials and packaging movement which was not previously considered due to data hygiene challenges. The programme will deliver in excess of R200 million in savings over the next two years.

Through this programme we have implemented a new warehouse management system, which has already delivered some significant benefits, reducing stock-taking time, improving stock rotation and traceability, and enhancing direct delivery efficiencies. We have completed the reorganisation of our customer support centre and we have introduced a pallet weight optimisation initiative at some of our facilities, yielding improvements in transport cost efficiencies.