Tiger Brands Limited · JSE:TBS
Tiger Brands — H1 2015 Earnings Presentation
33 slides from Tiger Brands's earnings presentation, May 19, 2015
Slide 1: Group Results Presentation for the six months ended 31 March 2015
Tiger Brands Limited Group Results Presentation for the six months ended 31 March 2015
Slide 2: Index
Index 1 Performance review 2 Financial performance 3 Outlook 2
Slide 3: Performance review
Performance review Peter Matlare Chief Executive Officer 3
Slide 4: Group half-year results
Performance review Financial performance Outlook Group half-year results Strong domestic performance offset by Haco & DFM › Solid domestic performance in a tough trading environment › Pleasing operational progress in DFM, despite Naira devaluation › East Africa disappoints › Enhanced investment in c
Slide 5: Solid underlying performance
Performance review Financial performance Outlook Solid underlying performance Offset by Haco & DFM Rm Operating income before abnormal items 2 000 12% 1 913.6 1 800 (134.3) 1 714.3 1 600 (108.1) (38.9) 1 632.3 1 400 1 200 1 000 H1 2014 H1 2015* DFM Haco IFRS 2 H1 2015 Actual forex loss year-on-year
Slide 6: Domestic operations
Performance review Financial performance Outlook Domestic operations Solid performance in tough trading environment Turnover growth › Turnover growth of 8% › Improved market shares with overall volumes up 2% › Continued focus on brand health ‒ Marketing investment up 15% › Effective management of pr
Slide 7: Ongoing positive momentum in SA: Groceries
Performance review Financial performance Outlook Ongoing positive momentum in SA Despite consumer pressure Groceries › Effective price, volume, margin management › Overall margin up 180bps to 9.2% › Operating income up 39% › Maintained strong brand equity › Improved market shares Volume Market Growt
Slide 8: Ongoing positive momentum in SA: Grains
Performance review Financial performance Outlook Ongoing positive momentum in SA Despite consumer pressure Grains › Margins maintained and operating income up 7% despite competitive environment › Marketing investment up 23% › Consistent operational excellence › Market share gains in most categories
Slide 9: Market shares appreciate
Performance review Financial performance Outlook Market shares appreciate Volume Market Share Market Growth Tiger Growth Performance Bread Buns & Rolls Rice Pasta Maize Flour Consumer Premixes Breakfast - Ready to eat - Hot cereals Source: Nielsen 6 month moving average to March 2015 9
Slide 10: Ongoing positive momentum in SA: Home & Personal Care
Performance review Financial performance Outlook Ongoing positive momentum in SA Home & Personal Care Rebuild and reinvest phase gaining traction › Increased investment in innovation supported by 57% increase in marketing investment › Volumes up 13% in Home Care; 4% in Personal Care › Operating inco
Slide 11: Exports & International
Performance review Financial performance Outlook Exports & International Deliver a mixed performance Exports & International (excluding Haco) › Solid top-line growth of 7% › Underpinned by strong volumes of 5% Prior year irregularities impact Haco’s first half performance › Disciplinary action taken
Slide 12: DFM - continued operational progress
Performance review Financial performance Outlook DFM - continued operational progress In difficult macroeconomic environment Dangote Flour Mills (DFM) › Volumes up 16% in highly competitive market › Operating loss down 38%, excluding forex loss › Gross margin improvement driven by operational effici
Slide 13: DFM: Impact of Naira devaluation
Performance review Financial performance Outlook DFM Impact of Naira devaluation Impact on DFM 210 110 NGN vs.USD › 25% increase in wheat costs following Brent Crude ($/bbl) 100 closure of preferential forex market 200 90 › Cost push not fully recovered in price 190 increases 80 › Forex losses on fo
Slide 14: DFM: Way forward
Performance review Financial performance Outlook DFM Way forward › Pursue current strategic initiatives ‒ Value added product offerings within existing categories ‒ New category opportunities ‒ Strategic alliances to enhance volumes and mitigate risk › Currency devaluation and liquidity remains a ri
Slide 15: Financial performance
Financial performance Funke Ighodaro Chief Financial Officer 15
Slide 16: Operating income before abnormal items
Performance review Financial performance Outlook Operating income before abnormal items Strong operating performance impacted by Haco & DFM Rm H1 2015 H1 2014 % Change Turnover 15 907.6 14 926.9 7 Gross Margin 4 946.3 4 607.6 7 Sales and Distribution (1 849.9) (1 753.1) (6) Marketing (453.5) (377.7)
Slide 17: Income statement
Performance review Financial performance Outlook Income statement Prior year impairment impact Rm H1 2015 H1 2014 % Change Operating income before abnormal items 1 632.3 1 714.3 (5) Abnormal items (41.4) (835.7) 95 Operating income after abnormal items 1 590.9 878.6 81 Net finance costs (189.7) (206
Slide 18: Group turnover
Performance review Financial performance Outlook Group turnover Organic growth of 7% Rbn 16 2% R15,9 bn 5% 15 Price inflation Volume R14,9 bn Turnover Price Total 14 Forex Growth Inflation Volume Domestic operations 8% 6% 2% - 13 Grains 5% 3% 2% - Consumer - Foods 11% 10% 1% - HPCB 12% 4% 8% - 12 Ex
Slide 19: Operating income before IFRS 2
Performance review Financial performance Outlook Operating income before IFRS 2 Operating income before IFRS2 Operating margins % Rm H1 2015 H1 2014 % Change H1 2015 H1 2014 Domestic Operations 1 697.2 1 557.2 9 14.0 13.9 Grains 889.6 832.1 7 15.9 15.6 Milling and Baking 735.8 689.0 7 18.7 17.8 Othe
Slide 20: Operating income before IFRS 2
Performance review Financial performance Outlook Operating income before IFRS 2 Operating income before IFRS2 Operating margins % Rm H1 2015 H1 2014 % Change H1 2015 H1 2014 Total International 105.2 154.0 (32) 2.8 4.1 Exports and 233.8 335.0 (30) 10.4 14.8 International Exports 217.3 198.4 10 9.6 8
Slide 21: Cash Flow
Performance review Financial performance Outlook Cash Flow Working capital impacted by stock procurement positions Rm H12015 H12014 Change (%) Cash operating profit 2 158.8 2 149.8 - Working capital (744.7) (427.4) (74) Cash generated from operations 1 414.1 1 722.4 (18) Finance cost net of dividend
Slide 22: Group Balance Sheet
Performance review Financial performance Outlook Group Balance Sheet Rm 31 March 2015 30 Sept 2014 Assets Property, plant & equipment 5 679.7 5 867.6 Goodwill & intangible assets 4 443.3 4 526.7 Investments 3 447.7 3 422.5 Current Assets 10 500.2 9 568.0 24 070.9 23 384.8 Equity and Liabilities Ordi
Slide 23: Outlook
Outlook Peter Matlare Chief Executive Officer 23
Slide 24: Dividend up 3%
Performance review Financial performance Outlook Dividend up 3% Dividend (cps) 340 338 339 336 334 332 330 328 329 326 324 H1 2014 H1 2015 24
Slide 25: Outlook
Performance review Financial performance Outlook Outlook Well positioned › Focused on driving long-term growth › Continued focus on brands and operational efficiencies › Depth of management in place to drive execution › Intense competition in South Africa ‒ Continue to defend market shares responsib
Slide 26: Questions & Answers
TIGER BRANDS Questions & Answers
Slide 27: Appendix
TIGER BRANDS Appendix
Slide 28: Cost saving initiatives
Appendix Cost saving initiatives Annualised target of R500 million Initiative Status Saving Centralised procurement In place R250 million p.a. Consolidation of manufacturing HPC factory consolidation R150 – R200 architecture complete March 2016 million p.a. Completion end December Finance shared ser
Slide 29: Contribution to turnover
Appendix Contribution to turnover H12014 H12015 Grains 3% 10% 10% 4% Consumer Brands 5% 4% 36% 35% 6% Exports 7% International 39% LAF 41% Nigeria 29
Slide 30: Contribution to operating income before IFRS 2 & other operating charges
Appendix Contribution to operating income before IFRS 2 & other operating charges H12014 H12015 2% Grains (10%) 2% (1%) (16%) 6% Consumer Brands 11% 48% 13% 53% Exports International 43% LAF 49% Nigeria 30
Slide 31: Key Statistics
Appendix Key Statistics H1 2015 Sept 2014 Net (Debt)/Cash (R'm) 3 972.0 3 489.2 Net Debt/Equity (%) 28.1 25.0 Net Debt/EBITDA (%) 0.9 0.8 Working capital per R1 (cents) 24.5 22.1 Net interest cover (times) 8.6 9.0 Effective tax rate 31.4 28.1 (before abnormal items & associates) (%) RONA (%) 23.8 24
Slide 32: Disclaimer
Disclaimer Forward-looking statements This document contains forward looking statements that, unless otherwise indicated, reflect the company’s expectations as at 19 May 2015. Actual results may differ materially from the company’s expectations if known and unknown risks or uncertainties affect the
Slide 33: Investor Relations
Investor Relations Nikki Catrakilis-Wagner Nikki.wagner@tigerbrands.com Telephone +27 11 840 4841 www.tigerbrands.com 33