Tiger Brands unaudited group results and dividend declaration

for the six months ended 31 March 2023



Despite strong revenue growth, Tiger Brands’ performance for the six months ended 31 March 2023 was impacted by a challenging operating environment due to prolonged periods of loadshedding, while high levels of inflation and lower disposable income adversely impacted consumer behaviour in terms of volumes and basket mix. Total earnings were impacted by lower insurance proceeds received relative to the prior year, as well as higher financing costs.

Total revenue increased by 16% to R19,4 billion, driven by price inflation of 17% and overall volume declines of 1%. Volumes held steady in the Domestic Business, driven by a strong volume recovery in Bakeries, Snacks & Treats and Personal Care and good performances in Sorghum Breakfast, Rice, Beverages, and Out of Home. However, volume declines were recorded in flour to retail and wholesale customers, Sorghum Beverages, Groceries and Baby with a marginal decline in Home Care. The firm recovery in Export volumes was offset by a significant decline in Deciduous Fruit volumes.

Although cost saving initiatives and supply chain efficiencies are delivering ahead of plan, these were not enough to counter the high level of input cost inflation, further impacted by the cost of operating in a constrained electricity environment. The total cost of loadshedding amounted to R76 million for the period relative to R12 million in the corresponding period last year, resulting in incremental energy costs of R48 million. As a result, gross margins declined to 27,0% from 29,2% last year. Group operating income (before impairments and non-operational items) decreased by 9% to R1,4 billion. Group operating income in the prior period benefited from insurance proceeds amounting to R161 million related to a product recall and civil unrest that took place in July 2021. In the current period, insurance proceeds amounted to R20 million. Excluding the impact of these proceeds, group operating income declined by 2% and group operating margins decreased to 6,9% from 7,9%.

Income from associates increased by 51% to R275 million, with Carozzi delivering a strong top line performance while National Foods also reported a satisfactory trading performance. Earnings from Carozzi also benefited from favourable currency translation gains.

Net financing costs for the period amounted to R94 million compared to R34 million last year as a result of higher financing costs due to higher average debt levels and higher interest rates. Cash generated from operations was affected by higher working capital investment primarily due to an increase in trade receivables while last year’s share buy-back programme impacted opening cash balances. A net foreign exchange loss of R15 million resulted from the strengthening of the rand against other major currencies, negatively impacting the translation of foreign currency balances. In the same period last year, there was a net foreign exchange gain of R5 million.

The group’s effective tax rate before non-operational items and income from associates increased slightly from 29,6% last year to 29,7%.

EPS increased by 2% to 749 cents (2022: 733 cents) while HEPS increased marginally to 731 cents (2022: 729 cents).

Segmental Operating Performance

Domestic revenue increased by 16% to R17,3 billion, driven by price inflation while volumes remained flat. All domestic segments recorded revenue growth underpinned primarily by price. Overall, domestic operating income declined by 9% to R1,2 billion.


Within Grains, continued progress in the wheat-to-bread value chain was sustained during the period. However, these gains were more than offset by challenging performances in the balance of the portfolio, exacerbated by the incremental cost of loadshedding amounting to R37 million. Revenue increased by 22% to R9,0 billion, reflecting average price inflation of 22% with volumes remaining flat. Operating income declined by 19% to R343 million.

Revenue in Milling & Baking increased by 23%, influenced by 24% price inflation, driven primarily by wheat, maize and sorghum raw material cost increases, while overall volumes declined by 1%. Bakeries benefited from the successful execution of volume recovery strategies particularly within retail customers. Higher bread volumes benefited the wheat-to-bread value chain with MillBake profitability increasing 16%. The Maize category was adversely impacted by significant raw material costs, compounded by lower by-product prices, lower volumes and higher conversion costs related to loadshedding. Although the Sorghum-based breakfast business benefited positively from the relaunch of the Morvite brand, this was offset by significant volume declines in Sorghum beverages due to continued high levels of inflation in a price-sensitive category. Milling & Baking’s total operating income declined by 2% to R268 million.

Period-on-period, revenue in Other Grains increased by 20% to R2,9 billion, comprising price inflation of 16% and volume growth of 4%, while operating income declined to R75 million from R151 million in the corresponding period last year. Despite strong top-line growth, the profitability of Other Grains was adversely impacted by Rice, where despite strong market share growth, operating income declined significantly due to poor price/volume management. This is being rectified through revised levels of promotional activity and pricing which, should result in improved profitability in the second half.

Consumer Brands

Within Consumer Brands, all segments delivered top line growth with a particularly strong performance from Snacks & Treats as this business recovered from the impact of industrial action in the prior period. Out of Home and Beverages also achieved solid revenue growth, while Groceries and Baby were impacted by lower category demand. Overall revenue in this segment increased by 10%, comprising price inflation of 10% while volumes remained unchanged. Operating income declined by 15% to R555 million, driven by the underperformance of Groceries and Baby.

Groceries delivered a muted top line performance as consumers diverted spend to essential items. Revenue remained largely unchanged at R3,4 billion, with price inflation of 10% being offset by an equal decline in volumes. This was driven by an element of customer overstocking at the start of the period exacerbated by category volume declines across most segments. Despite narrowing brand premiums driven by investment into price to recover volumes, absolute price points are a challenge in this category where private label has made significant inroads.

In addition to the consumer dynamics referred to above, specific raw material shortages related to peanuts, vinegar, tomato paste, and peas resulted in factory under-recoveries. Together with significant raw material and packaging cost increases, the above factors led to operating income declining by 57% to R126 million. Demand is expected to remain muted in the second half and although raw material supply challenges are expected to continue, they are likely to have less of an impact. Product mix will be a primary focus area while distribution gains in innovation are expected to drive growth. Marketing efforts will be sustained to drive consumer demand while supporting brand equity. Cost saving initiatives already in progress will further support a recovery.

Snacks & Treats recorded a meaningful recovery during the period under review following the adverse impact of industrial action on supply last year. Revenue increased by 30% to R1,4 billion comprising 12% price inflation and 18% volume growth. Volumes were supported by innovation as well as seasonal occasions such as Christmas and back-to-school while Easter’s performance was lower than expected. Operating income increased by 96% to R109 million as a result of increased throughput.

Beverages’ revenue increased by 18% to R1,2 billion, driven by volume growth of 8% and price inflation of 10%. Volumes benefited from optimal pricing of Oros 2L (concentrates) offset partially by sports drinks (Energade) due to aggressive pricing by the market leader in an attempt to recover lost market share. Operating income increased by 12% to R196 million driven by continuous improvement initiatives, improved product mix and revenue management.

Affordability challenges within the Baby category resulted in lower consumer demand across key segments. Basket penetration for the category reduced as consumers opted out of the category into meal and well-being solutions for the whole family. Revenue increased marginally to R585 million with price inflation of 7% offset by volume declines of 6%. Volumes were challenged across the nutrition portfolio, particularly the jar segment, as well as the wellbeing portfolio. Lower volumes and adverse product mix, resulted in operating income declining to R46 million from R65 million in the prior period.

Despite an increasingly competitive environment, Out of Home has benefited from the solid recovery in the hospitality industry as well as increased demand at quick-service restaurants as loadshedding adversely impacted at-home consumption. Revenue grew by 39% to R429 million with volumes increasing by 20%, underpinned by growth across all channels due to strong customer relationships, agile solutions and innovation. Operating income increased 16% to R78 million, benefiting from improved efficiencies in distribution.

Home and Personal Care (HPC)

Overall, revenue in HPC increased by 16% to R1,3 billion, driven primarily by the Personal Care segment. This, together with enhanced factory performances, resulted in operating income increasing by 21% to R256 million.

Personal Care’s revenue increased by 33% to R372 million as a result of price inflation of 13% and volume growth of 20%. Volumes benefited from an improved performance in body care, depilatories and deodorants, supported by strong brand plans and effective in-store execution. Higher volumes as well as enhanced factory efficiencies led to operating income of R15 million compared with a loss of R14 million in the prior period.

Volumes in Home Care declined by 2% driven mainly by lower pesticides volumes at the start of the period. This was partially offset by improved air care (Airoma) and disinfectant (Jeyes) volumes as the portfolio strategy within this segment gains traction. Airoma has solidified its position as the number 2 brand in the air care category. Revenue increased by 11% to R902 million, with lower volumes offset by price inflation of 13%. Despite lower volumes, improved factory efficiencies and conversion costs, supported by the solar power installation, resulted in operating income increasing to R241 million for the period.

Exports and International

Total revenue for Exports and International increased by 10% to R2,1 billion. This was primarily driven by an improved performance from the Exports business as well as Chococam. In turn, total operating income, increased to R163 million from R64 million in the prior period.

The Exports business grew revenue by 28% to R1,2 billion compared with a disappointing performance in the first half of last year. Robust demand across key markets and product lines supported by solid in-market execution, led to volume growth of 10% while price inflation amounted to 17%. Operating income improved to R76 million from R29 million in the prior period, largely as a result of improved factory performances.

Despite a tough trading environment, including raw material shortages, high material costs, unreliable electricity supply and increased regulation pertaining to imports, Chococam continued to deliver growth. Revenue increased by 26% to R683 million (18% in local currency), comprising 8% volume growth, 11% price inflation, and favourable foreign currency translation movement of 7%. Volumes were driven by optimal pricing strategies and price pack formats. Operating income increased by 16% to R103 million (9% in local currency), supported by strong cost control.

Revenue in the Deciduous Fruit business decreased by 37%, affected by low opening stocks as well as ongoing logistical challenges at the Cape Town harbour. Despite lower volumes, and higher conversion costs due to loadshedding, the business recorded a reduced operating loss of R16 million (2022: loss of R54 million) due to an improved sales mix, and higher international selling prices, particularly in purees.

Update on Deciduous Fruit

As previously indicated, the sale process for Langeberg and Ashton Foods has been reopened and a due diligence exercise is underway. The business will continue in its current form for another year, while we continue to review all options to ensure ongoing sustainable operations.

Cash flow and capital expenditure

Cash generated from operations declined to R305 million (2022: R517 million). This was driven by a significant investment in working capital, due to an increase in trade and other receivables largely driven by selling price inflation, as well as increased stock holdings in raw materials, packaging and finished goods. Apart from the impact of inflation, higher stock levels have been maintained as part of our mitigating strategy to manage local and global supply challenges on certain key raw materials, ingredients and packaging as well as to minimise any inbound disruptions due to loadshedding.

Capital expenditure for the period amounted to R448 million (2022: R419 million). Additional projects amounting to R812 million have been approved during the period, bringing total capex for the year to R1,3 billion.

Year-on-year cash balances reflect the impact of the general share buy-back programme amounting to R1,5 billion, completed in the second half of last year. The group ended the period in a net debt position of R1,7 billion (2022: net cash position of R318 million).

Class Action update

As previously reported, pre-trial preparations by the parties to get the matter ready for trial are ongoing. As part of the overall endeavour to expedite resolution of the matter, Tiger Brands’ legal team and Richard Spoor have recently reached agreement to jointly approach the National Institute for Communicable Diseases (NICD) for access to their records, which are vital to a determination of the action. The approach has been made and we are awaiting the NICD’s response.

Venture Capital Fund

Last year, Tiger Brands’ newly established Venture Capital Fund made its first investment in Herbivore Earthfoods (Herbivore), a company with the goal of making healthy, plant-based foods more accessible and affordable in South Africa. In addition, it had developed a compelling pipeline of opportunities within health and nutrition and snackification. The pipeline has yielded a further tangible opportunity in a South African female-founded snack bar and functional beverage company in line with the snackification mandate.

Changes in Directorate

The Board appointed Mr Sam Sithole as non-executive director of the company with effect from 1 April 2023.

A Chartered Accountant (CA)(SA) and (CA)(Z), Mr Sithole co-founded Value Capital Partners (VCP) in October 2016. Prior to this, he held several leadership positions at Brait including the role of executive director: Capital & Treasury and a member of the investment team. Mr Sithole was a partner at Deloitte, where he departed the firm as Group Leader for the Financial Services Audit Practice in the Johannesburg office.

He is currently non-executive director and chairman of Sun International Limited. He also serves as an alternate director of Metair Investments Limited and Adcorp Holdings Limited.

Mr Sithole has been appointed as a member of the nominations, remuneration and investment committees with effect from 1 June 2023. The Board welcomes Mr Sithole and looks forward to his contribution.

VCP is a shareholder of Tiger Brands with a current holding of 3,47% of ordinary shares in issue.


With consumer confidence continuing to decline, stubbornly high levels of food inflation and a significant increase in interest rates, consumers are becoming more value conscious and price elasticities are rising. In addition, although a significant reduction in certain internationally priced commodities is anticipated, this is currently being offset by rand weakness, while operating costs are expected to rise significantly as a consequence of higher levels of loadshedding during the winter season.

In a low to no growth environment, our efforts will prioritise efficiency improvements and cost reduction initiatives in order to meet the consumers’ need for affordability. In addition, we will continue to focus on enhancing our penetration and performance in the general trade while sustaining the positive share gains in modern trade.

Improving the performance of the Groceries, Bakeries and Rice segments will be prioritised in the short term. Nevertheless, should current operating conditions persist, maintaining full year operating income in line with last year will be challenging.

Despite the immediate headwinds, we will continue to balance short-term impact with long-term growth without compromising the future sustainability of the business. To this end, we will continue to invest in our facilities, our brands, our innovation and digital capabilities as well as our people.

Any forward-looking information has not been reviewed or reported on by the group’s auditors.

By order of the Board

GJ Fraser-Moleketi


NP Doyle

Chief executive officer

29 May 2023

Date of release: 30 May 2023

Declaration of interim dividend

The Company has declared an ordinary dividend of 320 cents per share for the six-months ended 31 March 2023, which is in line with the interim dividend declared last year. In accordance with paragraphs 11.17 (a) (i) to (x) and 11.17 (c) of the JSE Listings Requirements, the following additional information is disclosed:

  • The ordinary dividend has been declared out of income reserves
  • The local Dividends Tax rate is 20% (twenty percent) effective 22 February 2017
  • The gross total dividend amount of 320,00000 cents per ordinary share will be paid to shareholders who are exempt from the Dividends Tax
  • The net total dividend amount of 256,00000 cents per ordinary share will be paid to shareholders who are liable for the Dividends Tax
  • Tiger Brands has 180 327 980 ordinary shares in issue (which includes 10 326 758 treasury shares)
  • Tiger Brands Limited’s income tax reference number is 9325/110/71/7.

Shareholders are advised of the following dates in respect of the interim ordinary dividend:

Declaration date Tuesday, 30 May 2023
Last day to trade cum the ordinary dividend Tuesday, 4 July 2023
Shares commence trading ex the ordinary dividend Wednesday, 5 July 2023
Record date to determine those shareholders entitled to the ordinary dividend Friday, 7 July 2023
Payment date in respect of the ordinary dividend Monday, 10 July 2023

Share certificates may not be dematerialised or re-materialised between Wednesday, 5 July 2023 and Friday, 7 July 2023, both days inclusive.

By order of the Board
JK Monaisa
Company secretary

29 May 2023