Tiger Brands Limited · JSE:TBS
Tiger Brands — FY2012 Earnings Presentation
88 slides from Tiger Brands's earnings presentation, Nov 21, 2012
Slide 1: Tiger Brands Limited Results Presentation to Investors
Group Grains Consumer Brands Exports and Interna4onal TIGER BRANDS LIMITED RESULTS PRESENTATION TO INVESTORS for the year ended 30 September 2012
Slide 2: Agenda
Group Grains Consumer Brands Exports and Interna4onal Agenda Strategic Review Financial Analysis Business Performance -‐ Grains Business Performance -‐ Consumer Brands Business Performance – Interna4onal Outlook 2
Slide 3: Strategic Review
Group Grains Consumer Brands Exports and Interna4onal Strategic Review Peter Matlare Chief Execu4ve Officer
Slide 4: Financial Highlights
Group Grains Consumer Brands Exports and Interna4onal Financial Highlights 2012 % change Turnover R22,7 billion + 11.0% Opera4ng income before IFRS2 charge R3,65 billion +8.7% Opera4ng margin before IFRS2 charge 16.1% -‐0.3% 4
Slide 5: Operating context – slow down in global economy
Group Grains Consumer Brands Exports and Interna4onal OperaGng context – slow down in global economy Y-‐o-‐Y % change 2011 2012 2013 • IMF outlook for global GDP growth revised Actual downwards. Global 3.8 3.3 3.6 • On-‐going impact of Advanced Markets 1.6 1.3 1.5 Eurozone recession USA 1.8 2.2 2
Slide 6: Global woes and negative sentiment weigh on South African economy
Group Grains Consumer Brands Exports and Interna4onal Global woes and negaGve senGment weigh on South African economy Real GDP growth • Domes4c GDP growth slowed from 7 3.1% in 2011 to 2.4% in 2012H1. 6 5 • Growth in real consumer spending, 4 private fixed investment and 3 exports all faltering. YoY
Slide 7: Operating context – muted growth in domestic economy
Group Grains Consumer Brands Exports and Interna4onal OperaGng context – muted growth in domesGc economy Y-‐o-‐Y % change 2010 2011 2012 2013 2014 • Slow down in consumer Consumer spending 3.7 5.0 3.3 3.7 4.2 spending in 2012 due to infla4onary increases in Govt consump4on 4.9 4.5 4.2 4.3 4.4 food
Slide 8: Operating context – consumer expenditure
Group Grains Consumer Brands Exports and Interna4onal OperaGng context – consumer expenditure Y-‐o-‐Y % change 2010 2011 2012 2013 2014 • Significant slow down in final consump4on expenditure Durable goods 18.1 15.7 10.2 5.7 7.0 growth during 2012. Semi-‐durable goods 2.0 7.0 5.6 5.6 6.5 • Solid em
Slide 9: Market trends – categories in which Tiger participates
Group Grains Consumer Brands Exports and Interna4onal Market trends – categories in which Tiger parGcipates Markets conGnued to show volume • Volumes down by 1.7% declines as inflaGon climbed during 2012 over the 12 mm period as Total South Africa : Category Volume and Value Growth trends consumers r
Slide 10: Tiger retains leading position across most categories
Group Grains Consumer Brands Exports and Interna4onal Tiger retains leading posiGon across most categories September 2012 PosiGon InsecGcides 1 Leading brands Homecare Air Care 3 Sanitary Cleaners 3 • Tiger Brands con4nues to Face Care 7 Hand & Body 2 maintain the No.1 or 2 Personal care Hair Care H
Slide 11: Where we are today
Group Grains Consumer Brands Exports and Interna4onal Where we are today 23,0 R'billions 0.7% 22,5 5,3% organic growth 22,0 4.1% -‐2.7% 0.7% 21,5 8.0% 21,0 R22.7bn 20,5 20,0 11% 19,5 19,0 2011 Turnover Pricing inflaGon Volume Forex Full year effect of PY CY AcquisiGons 2012 Turnover acquisiGons 11
Slide 12: Where we are today
Group Grains Consumer Brands Exports and Interna4onal Where we are today DomesGc business: • Increased vola4lity and substan4al cost infla4on in sok commodi4es and above infla4onary increases in energy and fuel costs. • Impact of slow down in the economy with consumers under increasing financial pressu
Slide 13: How we have responded
Group Grains Consumer Brands Exports and Interna4onal How we have responded Selling Supply chain • Merchandising force remodelled for • Improvements in manufacturing greater efficiency architecture • Customer centric structures enhanced • Logis4cs review • Increased trade and brand investment • Opera4
Slide 14: Domestic Businesses over-arching goals
Group Grains Consumer Brands Exports and Interna4onal DomesGc Businesses Over-‐arching goals • Regain volume shares. • Enhance value proposi4on to customers. • Maintain margins – increase efficiencies and lower costs. • Re-‐invest savings to drive top-‐line growth. • Strengthen brand health. 14
Slide 15: Generating fuel through cost savings
Group Grains Consumer Brands Exports and Interna4onal GeneraGng “fuel” through cost savings • Shared F & A services Sustained • Centralised procurement profitability and cash flow • Shared Logis4cs services Cost savings • Op4mise Trade spend Marke4ng & Brand • Opera4onal cost efficiencies investment • I
Slide 16: International expansion gaining momentum
Group Grains Consumer Brands Exports and Interna4onal InternaGonal expansion gaining momentum Drive internaGonal scale to achieve 30% contribuGon to top-‐line Geographic and Category Expansion • Consolidate and grow current acquisi4ons • New acquisi4ons in Emerging markets • Increase Exports • Gree
Slide 17: International businesses continue to deliver
Group Grains Consumer Brands Exports and Interna4onal Where we are today InternaGonal businesses conGnue to deliver • Interna4onal revenues pleasing. • Rest of Africa growth remained more robust. • Export growth has been significant. • Acquisi4on of Davita has enhanced distribu4on network throughout
Slide 18: HEPS (cents) – year ended September
Group Grains Consumer Brands Exports and Interna4onal HEPS (cents) – year ended 30 September 1 700 1 689 1 680 +7.3% 1 660 1 640 1 620 1 600 1 580 1 575 1 560 1 540 1 520 1 500 2011 2012 18
Slide 19: Total distributions – cents per share
Group Grains Consumer Brands Exports and Interna4onal Total distribuGons – cents per share 850 850 840 +7.5% 830 820 810 800 791 790 780 770 760 2011 2012 19
Slide 20: Financial Review
Group Grains Consumer Brands Exports and Interna4onal Financial Review Funke Ighodaro Chief Financial Officer
Slide 21: Solid performance overall despite muted domestic growth
Group Grains Consumer Brands Exports and Interna4onal Solid Performance overall despite muted domesGc growth Group turnover • Solid performance by domes4c % Opera4ng margin before IFRS2 charge businesses in challenging economic 25,0 20,0% R’billions R3,7bn climate. 18,0% R2,4bn 20,0 R1,8bn 12,4% 16,
Slide 22: Operating margins negatively affected by input cost push
Group Grains Consumer Brands Exports and Interna4onal OperaGng margins negaGvely affected by input cost push 16,5% 16,0% 15,5% -‐ 1.2% 15,0% 0.8% 14,5% -‐0.2% 15.3% 15,9% 14,0% 13,5% 13,0% 2011 OperaGng Gross margin IFRS2 effect OperaGng 2012 OperaGng margin expenses margin 22
Slide 23: Income statement for the year ended September
Group Grains Consumer Brands Exports and Interna4onal Income statement for the year ended September % Rm 2012 2011 Change Turnover 22,677 20,430 11.0 OperaGng Income before IFRS2 charges 3,652 3,359 8.7 IFRS 2 charges (178) (114) (56.1) – Equity seoled (36) (50) 28.0 – Cash seoled (142) (64) (121.9)
Slide 24: Income statement for the year ended September
Group Grains Consumer Brands Exports and Interna4onal Income statement for the year ended September % Rm 2012 2011 Change Profit before taxaGon and abnormal items 3,772 3,465 8.9 Income tax expense (1,023) (1,002) (2.1) Profit aoer taxaGon before abnormal items 2,749 2,463 11.6 Abnormal items aker tax
Slide 25: Abnormal items for the year ended September
Group Grains Consumer Brands Exports and Interna4onal Abnormal items for the year ended September Rm 2012 2011 Equity accounted take-‐on gain -‐ Na4onal Foods Holdings Zimbabwe -‐ 91 Recogni4on of pension fund surpluses -‐ 44 Profit on disposal of Mousson brand 35 Acquisi4on costs (25) -‐ Other
Slide 26: Reconciliation between profit for the year and headline earnings
Group Grains Consumer Brands Exports and Interna4onal ReconciliaGon between profit for the year and headline earnings Rm 2012 2011 Profit a`ributable to ordinary shareholders 2,718 2,584 Adjusted for: Equity accounted take-‐on gain -‐ Na4onal Foods Holdings Zimbabwe -‐ (91) Associates -‐ Impairmen
Slide 27: Turnover by operating segment
Group Grains Consumer Brands Exports and Interna4onal Turnover by operaGng segment Rm 2012 2011 % change Total 22,677 20,430 11.0 DOMESTIC OPERATIONS 19,043 18,049 5.5 Grains 8,854 8,349 6.0 -‐ Milling and Baking 6,682 6,192 7.9 -‐ Other Grains 2,172 2,157 0.7 Consumer Brands 10,189 9,700 5.0 -‐
Slide 28: Income statement
Group Grains Consumer Brands Exports and Interna4onal Income statement Rm 2012 2011 % change Turnover 22,677 20,430 11.0 Organic 21,184 19,929 6.3 Acquisi4ons 1,493 501 198.0 Gross margin 8,214 7,636 7.6 Organic 7,781 7,482 4.0 Acquisi4ons 433 154 181.2 OperaGng income before IFRS2 charges 3,652 3,3
Slide 29: Contribution to turnover
Group Grains Consumer Brands Exports and Interna4onal ContribuGon to turnover 2012 2011 Interna4onal Interna4onal opera4ons Exports opera4ons Exports 3% 4% 2% 9% Home, Personal Milling and Milling and Baking care and Baby Baking 40% (HPCB) 40% Home, Personal 13% care and Baby (HPCB) Out of Home 12%
Slide 30: Operating income before abnormal items
Group Grains Consumer Brands Exports and Interna4onal OperaGng income before abnormal items OperaGng Income % % OperaGng margins Rm 2012 2011 Change 2012 2011 OperaGng income before IFRS2 charges 3,652 3,359 8.7 16.1 16.4 DomesGc operaGons 3,201 3,150 1.6 16.8 17.5 Grains 1,732 1,746 (0.8) 19.6 20.9
Slide 31: Contribution to operating income
Group Grains Consumer Brands Exports and Interna4onal ContribuGon to operaGng income 2012 2011 Interna4onal Interna4onal opera4ons Exports opera4ons Exports 4% 3% 2% 9% Milling and Home, Personal Milling and Baking care and Baby Baking Home, Personal 40% 40% (HPCB) care and Baby 13% (HPCB) 12% Out o
Slide 32: Group balance sheet as at 30 September
Group Grains Consumer Brands Exports and Interna4onal Group balance sheet as at 30 September Rm 2012 2011 Assets Property, plant & equipment 3,359 3,317 Goodwill and intangible assets 4,012 3,826 Investments 2,655 2,360 Current Assets 7,412 6,187 17,438 15,690 Equity and LiabiliGes Ordinary Sharehol
Slide 33: Key statistics
Group Grains Consumer Brands Exports and Interna4onal Key staGsGcs 2012 2011 Net Debt (Rm) (1,182) (1,671) Net Debt/Equity % 10.1 16.3 Working capital per R1 turnover (cents) 22.2 21.8 Net interest cover (4mes) 25.3 51.0 Opera4ng income margin before IFRS2 charges % 16.1 16.4 Effec4ve tax rate before
Slide 34: Cashflow statement for the year ended September
Group Grains Consumer Brands Exports and Interna4onal Cashflow statement for the year ended 30 September Rm 2012 2011 Cash operaGng profit 4,224 3,777 Working capital requirements (592) (173) Cash generated from operaGons 3,632 3,604 Dividends received net of financing costs 58 107 Taxa4on paid (1,058)
Slide 35: Capital Expenditure and Commitments
Group Grains Consumer Brands Exports and Interna4onal Capital Expenditure and Commitments Rm 2012 2011 Capital expenditure 480 818 -‐ Replacement 303 387 -‐ Expansion 177 431 Capital commitments 421 421 -‐ Contracted 105 299 -‐ Approved 316 122 35
Slide 36: In Summary
Group Grains Consumer Brands Exports and Interna4onal In Summary…. • Solid performance and financial posi4on overall • Margins have held up well notwithstanding challenges in the domes4c market • We con4nue to invest in our assets and structures in order to ensure long term growth • Interna4onal expa
Slide 37: Grains Division
Group Grains Consumer Brands Exports and Interna4onal Grains Division Noel Doyle Business Execu4ve
Slide 38: Grains Overview - Steady in the Storm
Group Grains Consumer Brands Exports and Interna4onal Grains Overview -‐ Steady in the Storm OperaGng income grew in all but Rice and Sorghum Categories H1 H2 FY Second Half Dynamics Net sales +8.4% +3.8% +6.0% • Albany returned to growth in laoer part. EBIT -‐3.6% +1.8% -‐0.8% • Con4nued strong
Slide 39: Milling and Baking - Maize and Wheat
Group Grains Consumer Brands Exports and Interna4onal Milling and Baking -‐ Maize and Wheat Winning the race to develop differenGated premium offering is key to sustainability • Price vola4lity makes procurement a greater challenge • Maize volumes nega4vely impacted by extra-‐ordinarily compe44ve la
Slide 40: Milling and Baking - Bakeries
Group Grains Consumer Brands Exports and Interna4onal Milling and Baking -‐ Bakeries Brand equity supports premium prices and volume decline arrested by year-‐end • Volume decline slowed significantly from H1 and reverted to volume growth from August • Despite compe4tor deep discoun4ng, No 1 market
Slide 41: Milling and Baking - Sorghum Cereals and Beverages & Ace Instant
Group Grains Consumer Brands Exports and Interna4onal Milling and Baking -‐ Sorghum Cereals and Beverages & Ace Instant Convenient/affordable offerings drive growth • Ace instant con4nued to excel • Dynamics of Sorghum pricing presen4ng challenging value proposi4on. Volume sacrificed for margin in the
Slide 42: Other Grains - Tastic
Group Grains Consumer Brands Exports and Interna4onal Other Grains -‐ TasGc The perfect storm conGnues • Ongoing Thai Government interven4on exacerbates price differen4al between Indian and Thai rice • Volume decline slowed despite August out of stocks • Currency dynamics exacerbates challenges • Fo
Slide 43: Other Grains - Jungle
Group Grains Consumer Brands Exports and Interna4onal Other Grains -‐ Jungle Solid performance driven by innovaGon and price point management • Leading market shares maintained • Innova4on and price point management delivered good second half volume growth • Exci4ng innova4on pipeline for F13 43
Slide 44: Summary
Group Grains Consumer Brands Exports and Interna4onal Summary With the excepGon of Rice the porsolio exhibited resilience in F12 • Albany remains the biggest driver of profitability and maintained its premium posi4oning in a very compe44ve environment with limited volume loss • Impera4ve to move up t
Slide 45: Consumer Brands
Group Grains Consumer Brands Exports and Interna4onal Consumer Brands Phil Roux Business Execu4ve
Slide 46: 2nd Half Trading Landscape, Features, Management Focus
Group Grains Consumer Brands Exports and Interna4onal 2nd Half Trading Landscape Features Management Focus • Low Growth, no Growth, ex Growth • Innova4on / Renova4on markets • Cost and efficiency improvement • Fierce Compe44on • Value chain analysis and transforma4on • Cost Push • Brand Investment • V
Slide 47: Performance Summary
Group Grains Consumer Brands Exports and Interna4onal Performance Summary EBIT Performance % Change EBIT margin EBIT 2012 2011 Groceries +2.9 % 14.3% 15.3% VAMP -‐23.3 % 6.4% 8.5% Snacks and Treats +36.6% 15.1% 11.3% Beverages +7.5% 10.2% 9.2% OOH -‐1.4% 19.5% 23.5% HPCB Flat 24.3% 25.2% 47
Slide 48: Groceries
Group Grains Consumer Brands Exports and Interna4onal Groceries Good Volume Growth and Share Recovery H1 FY Volume OperaGng Volume -‐3.7% +3.3% growth leverage Net Sales +3.9% +10.2% EBIT +9.9% +2.9% Mayonnaise +7% ++ EBIT margin 14.5% 14.3% Pasta +11% -‐ Canned meat +19% ++ Fruit +3% ++ Raw mater
Slide 49: Groceries continued
Group Grains Consumer Brands Exports and Interna4onal Groceries conGnued Volume Groceries Market Shares 70 60 • Share gains in core categories under 50 highly compe44ve circumstances 40 30 • Share gains into the short term within 20 Tomato Sauce and Pasta 10 6MM LY 6MM CY 0 Tomato Canned Canned Veg
Slide 50: KOO does it again!
Group Grains Consumer Brands Exports and Interna4onal KOO does it again! 50
Slide 51: Innovation
Group Grains Consumer Brands Exports and Interna4onal InnovaGon 51
Slide 52: Snacks & Treats
Group Grains Consumer Brands Exports and Interna4onal Snacks & Treats Good recovery post 1st quarter strike impact H1 FY Volumes -‐18,7% -‐7.5% Net Sales -‐6.6% +1.6% EBIT +40.0% +36.6% EBIT margin 14.6% 15.1% Performance Drivers • Margin correc4on • Cost base reduced • Innova4on trac4on • Brand
Slide 53: Innovation and Renovation
Group Grains Consumer Brands Exports and Interna4onal InnovaGon and RenovaGon 53
Slide 54: Beverages
Group Grains Consumer Brands Exports and Interna4onal Beverages DisappoinGng sales performance but good leverage H1 FY Volume -‐14.5% -‐12.7% Net Sales -‐4.5% -‐3.8% EBIT +3.2% +7.5% EBIT margin 13.7% 10.2% Performance Drivers Performance Inhibitors • Lower costs – Low Season • Dairy Fruit Blend
Slide 55: Step change in Innovation
Group Grains Consumer Brands Exports and Interna4onal Step change in InnovaGon 55
Slide 56: VAMP
Group Grains Consumer Brands Exports and Interna4onal VAMP Signs of improvement H1 FY Margin compression Volume -‐8.6% -‐4.6% • Maize price c.44% increase Net sales -‐0.7% +2.2% EBIT -‐31.5% -‐23.3% • Priced to compete EBIT margin 6.8% 6.4% • Product returns increase Short Term • Market Share r
Slide 57: Innovation
Group Grains Consumer Brands Exports and Interna4onal InnovaGon Polony Caps • Cheese • French vs Pork 57
Slide 58: HPCB
Group Grains Consumer Brands Exports and Interna4onal HPCB H1 FY Volume -‐3.8% +2.3% Net sales -‐1.7% +3.4% EBIT +2.2% Flat EBIT margin 24.0% 24.3% Salient Features • Brand Investment > Sales Growth rate • Jarred baby food – new compe44on • Strong Homecare market contrac4on • Status achieves acqui
Slide 59: HPCB continued
Group Grains Consumer Brands Exports and Interna4onal HPCB conGnued Net Sales Growth H1 FY Home Care -‐1.2% -‐ 0.8% Personal Care -‐5.5% +6.1% Baby +1.2% +4.8% 59
Slide 60: Out of Home
Group Grains Consumer Brands Exports and Interna4onal Out of Home Pleasing Top Line Growth • Commodity cost push compresses H1 FY margins Volumes +6.9% +11.8% • Tourism and leisure industry Net Sales +12.2% + 18.8% constrained EBIT +2.2% -‐1.4% • Steady progress in the QSR channel EBIT margin +18.2
Slide 61: Tiger Brands International
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal Neil Brimacombe Business Execu4ve
Slide 62: Tiger Brands International: Strategy continues to gain momentum
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal Strategy conGnues to gain momentum • Very encouraging progress – Exports -‐ Excellent performance – Langeberg & Ashton Foods (L&AF) Mali Niger -‐ pleasing turnaround Sudan Ghana – Davita -‐ Good result and on track Ni
Slide 63: Tiger Brands International: Exports (incl. Davita)
Group Grains Consumer Brands Exports and Interna4onal Tiger TIGER Brands BRANDS InternaGonal: INTERNATIONALExports (incl. : EXPORTS Davita) ConGnued good progress • Net sales R1,260.0m (+78.6%) * • EBIT R313.2m (+84.0%) * *Davita 4 months in prior year Growth drivers • Strong consumer demand from so
Slide 64: Tiger Brands International: Exports
Group Grains Consumer Brands Exports and Interna4onal Tiger TIGER Brands BRANDS InternaGonal: INTERNATIONALExports : EXPORTS ConGnued investment in core brands Zambia Ghana Ghana Mozambique 64
Slide 65: Exports: Davita Trading - Engaging Customers & Consumers
Group Grains Consumer Brands Exports and Interna4onal TIGER Tiger Brands BRANDS InternaGonal: INTERNATIONALExports : DAVITA TRADING Engaging Customers & Consumers Zimbabwe Mozambique Egypt 65
Slide 66: Tiger Brands International: Davita Trading
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: Davita Trading Performance in line with expectaGons Growth drivers • Strong growth in southern rim countries • Synergies with Tiger Brands distributors • Significantly increased marke4ng ac4vity • Price management in key
Slide 67: Davita Trading: availability and visibility
Group Grains Consumer Brands Exports and Interna4onal TIGER Tiger Brands BRANDS InternaGonal: INTERNATIONALDavita Trading : DAVITA TRADING Key driver: availability and visibility 67
Slide 68: Tiger Brands International: Davita
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: Davita Engaging our consumers 68
Slide 69: Tiger Brands International: Langeberg & Ashton Foods
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: Langeberg & Ashton Foods Return to profitability aoer 2 years of losses • Net sales R 1,007.5m (+18.1%) • EBIT R 26.4m (PY R43.3m loss) L&AF growth drivers • Selling price increases • Favourable exchange rates • New terr
Slide 70: Tiger Brands International: Central Africa
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: Central Africa PosiGve momentum conGnues • Net Sales R390.5m (+19.5%) • EBIT R50.3m (+21.2%) Growth Drivers • Pleasing volume growth across key categories • Excellent progress in market penetra4on • Regional export mark
Slide 71: Central Africa: Expanded Distribution
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: Central Africa Expanded DistribuGon 71
Slide 72: Central Africa: Engaging our consumers
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: Central Africa Engaging our consumers 72
Slide 73: Tiger Brands International: East Africa (Haco TB & EATBI)
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: East Africa (Haco TB & EATBI) ConGnued strong growth • Net Sales R586.2m (+90.4%)* • EBIT R68.9m (+140.9%)* *EATBI 5 months in prior year HACO TB Growth drivers • Key category volume growth • Expanded distribu4on / mark
Slide 74: Haco Tiger Brands: Investing in our Brands
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: Haco Tiger Brands InvesGng in our Brands 74
Slide 75: Tiger Brands International: EATBI, Ethiopia
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: EATBI, Ethiopia Performance ahead of Investment Case Growth drivers • Strong consumer demand • Distributor development programme • Mix, price and cost management • Opera4onal efficiencies Challenges • Port and customs cle
Slide 76: EATBI, Ethiopia: Investing for future growth
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: EATBI, Ethiopia InvesGng for future growth • Con4nuous facility upgrade and capex deployment • Innova4on projects in new product sectors – Toilet Soaps – Powdered Juices • Further enhancement of RTM – Investment in addi
Slide 77: Tiger Brands International: Very pleasing results
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal Very pleasing results • Interna4onal expansion remains key growth objec4ve • Con4nue to bed down acquisi4ons • Emphasis on Fix, Op4mise and Grow • Leverage new capabili4es • Acquisi4ons remain a key theme 77
Slide 78: Tiger Brands in Nigeria
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands in Nigeria Thabi Segoale Business Execu4ve
Slide 79: Tiger Brands in Nigeria
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands in Nigeria Growth opportunity -‐ recurring macro-‐economic themes • Robust macro-‐economic outlook – GDP >7% p.a. • Large popula4on – ~160 mill; growing at 2-‐3% p.a. • Rapidly growing middle class – increasing demand for consume
Slide 80: West Africa (Nigeria) Deli Foods: geared for growth
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: West Africa (Nigeria) Deli Foods: geared for growth • Stagnant top-‐line -‐ constrained capacity • Significant cost push compresses margins Progress update • Efficiency planorm seoled • Appropriate opera4ng model in plac
Slide 81: West Africa (Nigeria) UAC Foods: solid progress
Group Grains Consumer Brands Exports and Interna4onal Tiger Brands InternaGonal: West Africa (Nigeria) UAC Foods1: solid progress • Solid volume and net sales growth • Efficiency benefits lik profitability run rate. - (FY 2012: GM = 30.8%; EBIT margin =11.2%) Key performance drivers • Efficiencies -‐ imp
Slide 82: Dangote Flour Mills Plc: Transformative step
Group Grains Consumer Brands Exports and Interna4onal Dangote Flour Mills Plc TransformaGve step DFM is a major player in the flour, pasta & noodles categories of the Nigerian Consumer Packaged Goods market with well established brands, manufacturing facili4es & distribu4on capabili4es. • The acquisi
Slide 83: Dangote Flour Mills Plc: The 5-day game commences
Group Grains Consumer Brands Exports and Interna4onal Dangote Flour Mills Plc The 5-‐day game commences • A classical entrepreneurial business – Inadequate robustness in systems, processes & controls F L O U R – Centralised decision making – Diluted focus from previous management – Sub-‐op4mal ope
Slide 84: Dangote Flour Mills Plc: Integration process
Group Grains Consumer Brands Exports and Interna4onal Dangote Flour Mills Plc IntegraGon process • Integra4on process is pillared on dis4lling available informa4on. • Key work streams pursued along a dual axis integra4on model – Func4on specific priori4es and business process integra4on themes. • Re-
Slide 85: Dangote Flour Mills: Way Forward
Group Grains Consumer Brands Exports and Interna4onal Dangote Flour Mills Way Forward • Leverage group experience and exportable competencies • Strong shareholder partnerships to be maintained • Commioed leadership with focus on deliverables • Strong support from SA base and collabora4on across the
Slide 86: Outlook
Group Grains Consumer Brands Exports and Interna4onal Outlook Peter Matlare Chief Execu4ve Officer
Slide 87: Outlook
Group Grains Consumer Brands Exports and Interna4onal Outlook Solid growth on the conGnent • Ongoing challenges in the domes4c economy • Exacerbated by vola4lity in sok commodity prices and Rand exchange rate • Beoer growth expected on the balance of the Con4nent • Con4nue to look for acquisi4ons •
Slide 88: Disclaimer
Group Grains Consumer Brands Exports and Interna4onal Disclaimer Certain statements in this presenta4on may be defined as forward looking within the meaning of the United States Securi4es legisla4on. Forward-‐looking statements involve known and unknown risks, uncertain4es and other important factor