Slide 1: Tiger Brands Interim Results presentation
Tiger Brands Interim Results presentation 20 May 2021
Slide 2: Index
Index Executive summary Financial and operational review Strategic update and outlook Picture to be confirmed 2
Slide 3: Disclaimer
Disclaimer Forward-looking statement This document contains forward looking statements that, unless otherwise indicated, reflect the company’s expectations as at 20 May 2021. Actual results may differ materially from the company’s expectations if known and unknown risks or uncertainties affect the b
Slide 4: Executive summary
UNAUDITED GROUP RESULTS for the six months ended 31 March 2021 Executive summary Noel Doyle | CEO We nourish and nurture more lives every day
Slide 5: Market volumes decline as current economic climate impedes consumer demand
Market volumes decline as current economic climate impedes consumer demand With consumer demand declining it becomes a battle for share Market Growth (%) 2021 vs. 2020 2021 vs. 2019 12MM 3MM Mar 21 vs. Mar 20 6MM 3MM Mar 21 vs. Mar 19 Defined basket (5.9) (14.2) (24.7) (4.9) (4.4) (7.5) Grains (6.9)
Slide 6: Tiger grows long term volume ahead of the market while private label loses to branded players
Tiger grows long term volume ahead of the market while private label loses to branded players Marginal share loss in the short-term driven by volume losses as competitors respond with pricing Total data set – volume share of basket 12MM TY vs LY 3MM TY vs LY All Other -0,6 -0,7 All Other 20,3 19,7 2
Slide 7: Tiger grows long term value ahead of the market while private label loses to branded players
Tiger grows long term value ahead of the market while private label loses to branded players Marginal share loss in the short-term driven by volume losses as competitors respond with pricing Total data set – value share of basket 12MM TY vs LY 3MM TY vs LY All Other -0,3 1,0 All Other 23,7 23,0 22,3
Slide 8: Strong performance from majority of Billion Rand Brands over the long-term & compared to 2019
Strong performance from majority of Billion Rand Brands over the long-term & compared to 2019 Maize, Rice & Condiments face aggressive price-led promotional activity 12mm 3mm 12mm 3mm 12mm 3mm share share share share share share Total Total Total change change change change change change ‘20 vs. ‘21
Slide 9: Gaining underlying momentum in increasingly challenging environment
Gaining underlying momentum in increasingly challenging environment Clear prioritisation helps self-help initiatives gain traction Challenging environment Pleasing momentum Not quite there yet • Q2 sees marked weakening in consumer demand • Recovery in Other Grains, Groceries, S&T, Baby, • Identific
Slide 10: Financial and operational review
UNAUDITED GROUP RESULTS for the six months ended 31 March 2021 Financial and operational review Deepa Sita | CFO We nourish and nurture more lives every day
Slide 11: Momentum achieved allows for long-term focus
Momentum achieved allows for long-term focus Supply chain efficiencies & cost saving initiatives deliver ahead of expectations; IT rollout accelerated Highlights Lowlights • Gross margins steady at 30,6% • Capex disbursement behind expectations • Effective cost control R250m - R381m - Improved effic
Slide 12: Improved financial performance driven by revenue growth & positive operating leverage
Improved financial performance driven by revenue growth & positive operating leverage HEPS & EPS in prior period impacted by VAMP losses & significant impairments, respectively Revenue Pricing 9% Volumes 1% Revenue 8% to Gross profit 7% to Operating income* 16% at R16,4bn R5,0bn R1,6bn Tot
Slide 13: Rand strength leads to adverse period-on-period forex swing
Rand strength leads to adverse period-on-period forex swing Negatively impacting the translation of foreign currency cash balances Rm H1 FY21 H2 FY20 % change Operating income before impairments & abnormal items 1 579 1 334 18% Impairments - (557) - Abnormal items 43 (19) 326% Operating income after
Slide 14: Cost saving initiatives are being tracked and monitored with clear lines of accountability
Cost saving initiatives are being tracked and monitored with clear lines of accountability resulting in positive operating leverage Largest contributors include improved procurement, material usage & waste reduction at Groceries, improved factory performance in Jungle, reduction in distribution cost
Slide 15: Solid recovery across the portfolio
Solid recovery across the portfolio Driven by improved performances in Exports and International, solid demand in S&T and improved profitability in Groceries Grains Consumer Brands Home and Personal Care Exports and International H1 FY21 7 464 6 777 H1 FY20 6 042 5 820 1 838 1 551 1 102 1 036 619 53
Slide 16: Grains
Grains Cost savings across segments & recovery in Other Grains partly offset input cost inflation; o Operating income up 16% 10% 16% 50 bps • Albany grows market share over the period despite aggressive price-led promotional activity in Q2 R7,5bn R619m 8,3% • Maize impacted by cost push & unfa
Slide 17: Groceries
Groceries Significant margin uplift due to improved factory efficiencies o Volume growth ahead of market 2% 31% 160bps • Market share growth in Beans, Peanut Butter, Jams and Spreads R3,1bn R222m 7,2% o Factory performance turnaround (OEE and waste improvement) Revenue Operating profit Operati
Slide 18: Snacks & Treats
Snacks & Treats Recovery in volumes supported by chocolate and seasonal consumption o Revenue increase driven by recovery in demand post lockdown 10% 32% 180 bps restrictions • Supported by chocolate volumes in particular R1,2bn R136m 11,1% • Long-term market share gains across segments Revenu
Slide 19: Beverages
Beverages Core brands continue to show strong performance o Back-to-School and Easter festivities bolstered growth across core -% 5% 80bps brands R948m R175m 18,5% o Market share gains driven by momentum in liquid concentrates • Benefitting from core offering & innovation Revenue Operating pro
Slide 20: Baby
Baby Strong volume performances across segments o Volume growth driven by strong performances in cereals, pouches 14% 21% 60 bps and medicinals R544m R56m 10,3% o Strong market share growth in pouches Revenue Operating profit Operating margin o Material costs and conversion well contained o Po
Slide 21: Home and Personal Care (HPC)
Home and Personal Care (HPC) Sustained strong performance in Home Care offset by supply chain issues in Personal Care o Home Care performance driven by good start to pest season 6% 6% 10 bps • Increased demand for hygiene solutions R1,1bn R252m 22,8% • Good factory performance – focused cost m
Slide 22: Exports and International
Exports and International Recovery after resumption of trade in Nigeria o Exports top line growth driven by resumption of sales into Nigeria 18% 58% 110bps • Profitability improved despite adverse impact of industrial action in Q2 R1,8bn R85m 4,6% o Deciduous Fruit adversely impacted by soft p
Slide 23: Creditors remain a focus area while debtor collections are well controlled
Creditors remain a focus area while debtor collections are well controlled Inventory impacted by stock building initiative in anticipation of third wave 3 days Rbn 1H FY21 3,7 32 o Strong collections across the portfolio 1H FY20 3,9 Debtor days 7 days 1H FY21 2,5 o Impacted by payment terms on i
Slide 24: Progress on key deliverables
Progress on key deliverables Significant progress on cost management and working capital; capex requires focus Systematic and Continued Adoption of Continuous Improved capex continuous cost working capital alternative solutions assessment of approval and management optimisation to actively manage ca
Slide 25: Strategic update and outlook
UNAUDITED GROUP RESULTS for the six months ended 31 March 2021 Strategic update and outlook Noel Doyle | CEO We nourish and nurture more lives every day
Slide 26: The honeymoon is over
The honeymoon is over Hard work for the longer-term lies ahead Clear priorities • Resolve remaining category value chain conundrums • Conclude Deciduous Fruit transaction • Over-index on innovation to reduce dependence on price as market share recovery tool − Excel in communication and response to d
Slide 27: Q&A
UNAUDITED GROUP RESULTS for the six months ended 31 March 2021 Q&A We nourish and nurture more lives every day
Slide 28: Appendix
UNAUDITED GROUP RESULTS for the six months ended 31 March 2021 Appendix We nourish and nurture more lives every day
Slide 29: Total revenue increased 8% to R16,4 billion underpinned by price increases
Total revenue increased 8% to R16,4 billion underpinned by price increases Volumes impacted by Out of Home and some volume pressure in Grains Rm Price inflation 9% Volume (1%) Rm Total Price Volume Forex Grains 10% 15% (5%) - Consumer Brands 4% 6% (2%) - 16,4 15,2 HPC 6% 1% 5% - Domestic operations
Slide 30: Grains hold steady, with growth in bread and pasta offset by declines in flour and rice
Grains hold steady, with growth in bread and pasta offset by declines in flour and rice 50% 44,4% 45% 41,5% 39,0% 39,6% 40% 33,9% 35% 32,6% 30% 27,2% 27,2% 25,8% 24,8% 25% 21,5% 21,1% 20% 15% 11,3% 11,2% 10% 5% 0% Grains Maize Flour Cereals Rice Dry Pasta Bread 12MM LY 12MM TY SOURCE: IRI 12MM TIGER
Slide 31: Spreads & canned beans experiencing growth; condiments impacted by price-led competition
Spreads & canned beans experiencing growth; condiments impacted by price-led competition 70% 65,3% 61,5% 61,0% 59,7% 60% 50% 39,6% 39,4% 39,6% 40% 36,8% 31,1% 31,8% 30% 20% 10% 0% Groceries Beans Tomato Sauce Peanut Butter Mayo & Salad Cream 12MM LY 12MM TY SOURCE: IRI 12MM TIGER VALUE SHARE MARCH 2
Slide 32: Snacks & Treats
Snacks & Treats Visible market share gains attributable largely to Chocolate (in particular moulded slabs) and Candy 50% 44,1% 45% 42,0% 40% 35% 29,1% 30,2% 30% 25% 21,5% 20,9% 20% 15% 12,5% 12,6% 10% 5% 0% Snacks & Treats Chocolate Candy Novely & Speciality 12MM LY 12MM TY SOURCE: IRI 12MM TIGER VA
Slide 33: Overall beverages share growth driven by continued momentum in liquid concentrates
Overall beverages share growth driven by continued momentum in liquid concentrates Benefitting from core offering & innovation 60% 53,0% 50,3% 50% 45,6% 47,3% 47,1% 44,5% 40% 30% 18,6% 20% 16,1% 10% 0% Beverages Dilutables Sports Drinks RTD Juice 12MM LY 12MM TY SOURCE: IRI 12MM TIGER VALUE SHARE MA
Slide 34: Market shares maintained across all categories
Market shares maintained across all categories 70% 59,2% 58,6% 59,3% 59,8% 60% 50% 40% 30% 20% 9,6% 9,1% 10% 0% Home Care (Pest) Personal Care Baby Nutrition 12MM LY 12MM TY SOURCE: IRI 12MM TIGER VALUE SHARE MARCH 2021 APPENDIX 34
Slide 35: Contribution to revenue and operating income
Contribution to revenue and operating income Revenue Operating income before IFRS 2 32% 37% 31% 30% 20% 19% 15% 17% 16% 13% 14% 11% 13% 12% 10% 11% 7% 7% 6% 9% 9% 6% 7% 7% 8% 5% 3% 3% 3% 3% 4% 3% 4% 2% 2% 3% 1H FY21 1H FY20 1H FY21 1H FY20 Milling and Baking Other Grains Groceries Snacks & Treats Be