INTEGRATED ANNUAL REPORT 2024

for the year ended 30 September 2024

HOME, PERSONAL CARE & BABY (HPCB)

Our ambition

Empowering South Africans with homegrown, exceptional Home and Personal Care products that inspire pride and enhance lives. Our committed, skilled and focused workforce will be the engine of our execution excellence.

Financial performance

R3,7 billion

Revenue

2023: R3,6 billion

2%

R0,67 billion

Operating income

2023: R0,66 billion

2%

18%

Operating margin

2023: 18%

10bps

This year, overall revenue in HPCB grew by 2% to R3,7 billion, while operating income increased by 2% to R667 million, with segments reporting mixed performance.

Personal Care's revenue was driven down by aggressive competitor activity as Tiger Brands held back on deep discounting to preserve margins. Operating income reduced as a result of reduced volumes.

Home Care's performance was negatively impacted by a poor pest season relative to the prior year, as a result of reduced rainfall. Landing competitive pricing remained a challenge which impacted performance, was slightly offset by exceptional growth from the exports side of the businesses.

Under our new operating model and management team, we have made progress this year in driving cost leadership and identifying opportunities for growth in a constrained consumer environment. Current and potential cost-cutting initiatives include SKU rationalisation, manufacturing our own packaging, bringing certain brands in-house, consolidating manufacturing lines in the HPC plant, and realising procurement efficiencies. We are leveraging opportunities in price-pack architecture to offer the right product at the right price to the right shopper, de-seasonalising sales and driving new usage occasions for specific products and realising opportunities to meet specific shopper needs through innovative complementary combos across particular product ranges.

We have made good initial progress in rolling out our brand rationalisation and migration strategy, with the aim of accelerating growth of our prioritised power brands and 6 specialist brands, implementing our portfolio optimisation strategy, and managing the phased exit of the balance of our brand portfolio over the short and medium term, which saw H1 sale of Status brand and H2 sale of Fiesta, Bio Classic and Crystal, Kair and Black Silk brands. We are refocusing our sales efforts, stimulating growth existing customer growth within core categories, and realising new route-to-market opportunities including in the general trade segment.

Baby experienced robust growth despite a challenging competitive market bundle promotions in jars and pouches which were a key driver of this growth in nutrition. The Baby nutrition category has experienced high levels of price inflation, with driving affordability a key growth lever as parents look to exit the category in favour of whole family use products.

Baby wellbeing is recognised as held for sale pending regulatory approvals and completion of conditions precedent.