Tiger Brands Limited · JSE:TBS
Tiger Brands — FY2015 Earnings Presentation
47 slides from Tiger Brands's earnings presentation, Nov 19, 2015
Slide 1: Tiger Brands Limited Group Results Presentation
Tiger Brands Limited Group Results Presentation for the year ended 30 September 2015
Slide 2: Index
Index Strategic review Financial performance Operating performance Outlook 2
Slide 3: Strategic review
Strategic review Peter Matlare Chief Executive Officer 3
Slide 4: Key strategic deliverables
Performance review Financial performance Operating performance Outlook Key strategic deliverables 1 Improve Domestic operating performance Drive improved performance in Exports & 2 International Resolve the future of Tiger Branded Consumer 3 Goods (TBCG, formerly “DFM”) 4
Slide 5: Improved Domestic operating performance
Performance review Financial performance Operating performance Outlook Improved Domestic operating 1 performance › Sustained market leadership in all core categories › Significantly increased marketing investment › Increased innovation at 3.5% of turnover › Continuous focus on cost savings and effic
Slide 6: Highlights of Domestic operating performance
Performance review Financial performance Operating performance Outlook Highlights of Domestic operating 1 performance › Strong performance in Groceries › Reinvestment in HPC delivers encouraging results › Solid performance from Grains › Good performance from balance of portfolio 6
Slide 7: Exports and International
Performance review Financial performance Operating performance Outlook 2 Exports and International › Tough environment - impacted consumer sentiment & behaviour › Cameroon performance consistent – EBIT up 12% › Haco – progress towards a recovery › Improved H2 from EATBI › Exports impacted by Mozambi
Slide 8: Key enablers to performance
Performance review Financial performance Operating performance Outlook Key enablers to performance Cost saving Investment in brands 1 People 2 initiatives 3 and facilities 4 Go-to-market › Enhanced › FY12 targeted savings › FY15 Capex R882m › Service levels of 95% management of R500m in FY15 capabil
Slide 9: Decision on TBCG (DFM)
Performance review Financial performance Operating performance Outlook Decision on TBCG (DFM) › Rationale for acquisition was to add scale to existing businesses in Nigeria › Important step towards African expansion › Initial focus was on integration and consolidation › Fixing, optimising and growin
Slide 10: Decision on TBCG (DFM)
Performance review Financial performance Operating performance Outlook Decision on TBCG (DFM) No further financial support › Difficult trading environment › Impairment of R1.7 bn this year › No known residual exposure › Considered all options ‒ Outright sale ‒ Partnerships ‒ Joint ventures ‒ Recapit
Slide 11: Salient features
Performance review Financial performance Operating performance Outlook Salient features* Solid performance HEPS 1% Group operating margin (%) Group operating income (Rm)1 1 786 cents Rm 5 000 Adjusted HEPS** 11.8% 11.6% 4 000 6% 11.4% 3 556 3 654 1 920 cents 3 000 3 083 2 000 Total dividend 1% 1 000
Slide 12: Financial performance
Financial performance Funke Ighodaro Chief Financial Officer 12
Slide 13: Group financial highlights
Performance review Financial performance Operating performance Outlook Group financial highlights* Turnover Operating income** 5% to 3% to R31.6 bn R3.7 bn HEPS Adjusted HEPS*** Operating margin 1% 6% 11.6% to 1 786 cents to 1 920 cents Total dividend per share 950 cents 1% * From continuing operati
Slide 14: Condensed income statement
Performance review Financial performance Operating performance Outlook Condensed income statement Profits impacted by TBCG decision Continuing operations Rm FY15 FY14 % Change Turnover 31 558 30 072 5% Operating income before abnormals 3 654 3 556 3% Abnormals (1 710) (1 056) Net financing costs (39
Slide 15: 2015 Financial review
Performance review Financial performance Operating performance Outlook 2015 Financial review Income statement notes FY15 FY14 % Change Income from Associates Empresas Carozzi 207 199 4% Oceana Group Limited 309 282 10% UAC of Nigeria 33 44 (25%) National Food Holdings Ltd 54 72 (26%) Total income fr
Slide 16: Operating income before IFRS 2
Performance review Financial performance Operating performance Outlook Operating income before IFRS 2* Solid Domestic performance Operating income Operating margin Rm FY15 FY14 % Change FY15 FY14 DOMESTIC OPERATIONS 3 595 3 252 11% 15.2% 14.5% Grains 2 061 1 919 7% 18.1% 17.5% Milling and baking 1 6
Slide 17: Segmental operating income
Performance review Financial performance Operating performance Outlook Segmental operating income Strong domestic operations offset by International operations 12% 4% 11% VAMP ST&B 28% HPCB Exports & Inter- national Groceries 7% Nigeria (24%) Other* (8%) Grains (14%) FY15 Group EBIT FY14 R3,7 bn Gro
Slide 18: TBCG impact on earnings
Performance review Financial performance Operating performance Outlook TBCG Significant impact on FY15 group earnings HEPS adjusted for Tiger decision on TBCG Headline earnings Headline earnings (Rm) per share (cents) Total headline earnings as reported 2 887 1 786 Once off deferred tax asset write
Slide 19: Balance sheet remains strong
Performance review Financial performance Operating performance Outlook Balance sheet remains strong Rm FY15 FY14 ASSETS Non-current assets 13 237 14 124 Property, plant & equipment 4 641 5 868 Goodwill 2 239 2 411 Intangible assets 1 994 2 116 Investments 4 312 3 422 Deferred taxation asset 51 307 C
Slide 20: Cash flow statement
Performance review Financial performance Operating performance Outlook Cash flow statement Working capital impacted by procurement and stock levels Rm FY15 FY14 Cash operating profit 4 417 4 541 Working capital changes (812) (348) Cash generated from operations 3 605 4 193 Finance cost net of divide
Slide 21: Key statistics
Performance review Financial performance Operating performance Outlook Key statistics FY15 FY14 Net (Debt)/Cash (R'm) (3 788) (3 489) Net Debt/Equity (%) 27.5 25.0 Working capital per R1 (cents) 22.3 22.1 Net interest cover (times) 9.2 8.8 Operating margin after IFRS 2 charges 11.6 11.8 Effective ta
Slide 22: FY16 capex commitment of R1.7bn
Performance review Financial performance Operating performance Outlook FY16 capex commitment of R1.7bn Carry forward from FY15 R270m Maintenance R590m R850m Strategic investments 22
Slide 23: Operating performance
Operating performance Noel Doyle Chief Operating Officer 23
Slide 24: Operational highlights
Performance review Financial performance Operating performance Outlook Operational highlights Volumes maintained Group Turnover Group operating income* 5% 3% Marketing investment 12% More than double the rate of turnover growth * Before abnormal items 24
Slide 25: Solid overall performance
Performance review Financial performance Operating performance Outlook Solid overall performance › Driven by core South African business › Domestic operating income up 11% despite tough environment › Groceries and HPC delivered double-digit profit growth › Solid performance from Grains › Mixed perfo
Slide 26: Grains
Performance review Financial performance Operating performance Outlook Grains Profits up 7% and margin maintained › Strong overall performance despite tough Wheat WheatFY2015 FY15 4300 trading conditions 4100 › Albany regains market leadership 3900 3700 - Volume growth in 2H 3500 3300 › Rice and pas
Slide 27: Bread volume and value shares return to No.1
Performance review Financial performance Operating performance Outlook Bread volume and value shares return to No.1* Packages** Market share Market growth Tiger growth performance Bread Maize Meal Flour Rice Pasta ― Hot Cereals *6mm average to September 2015 **12mm average to September 2015 Source:
Slide 28: Groceries
Performance review Financial performance Operating performance Outlook Groceries Operating income up 28% › Volumes maintained despite price Operating margin % adjustments Operating income (Rm) Rm › Improved manufacturing performance 600 9.6% › Portfolio strategy implemented 8.1% - Relaunch of Hugo’s
Slide 29: Groceries market share growth
Performance review Financial performance Operating performance Outlook Groceries Continued market share growth through iconic brands Packages Market share Market growth Tiger growth performance Total Grocery Peanut butter Tomato sauce Mayonnaise Jams Total Canned Veg ― Total Beans Total Chakalaka So
Slide 30: Home and Personal Care
Performance review Financial performance Operating performance Outlook Home and Personal Care Reinvest and rebuild delivers operating income growth › Operating income up 24% to R218m Operating margin % Operating income (Rm) › Innovation rate of 7% Rm › Marketing investment up by 72% 300 17.3% 15.5%
Slide 31: Insight to action: Ingram's Triple Glycerine Cream
Performance review Financial performance Operating performance Outlook Home & Personal Care Insight to action: Ingram’s Triple Glycerine Cream Insight › Consumers mixing glycerine with Body cream for added moisture Action › Ingram’s Triple Glycerine Cream Results › Sales FY15 = R31 million › No 5 ra
Slide 32: Baby Care
Performance review Financial performance Operating performance Outlook Baby Care Innovative market leader › Turnover growth of 7% Operating margin % Operating income (Rm) › Operating income up 2% Rm › Pouches launched in July 2015 240 28.1% 26.7% › Provides affordable entry to baby food › Cereals be
Slide 33: Snacks, Treats & Beverages
Performance review Financial performance Operating performance Outlook Snacks, Treats & Beverages Beverages achieve excellent growth, S&T impacted by cost push › Turnover growth of 5% Operating margin % Operating income (Rm) › Beverages operating income up 9% Rm 13.7% › Consistent innovation 480 13.
Slide 34: Exports and International
Performance review Financial performance Operating performance Outlook Exports and International › Chococam delivered strong performance Operating margin % ‒ Volume growth up 9% Operating income (Rm) Rm ‒ Operating income up 12% 800 15.1% › Exports and Davita impacted by failure 11.4% of Mozambican
Slide 35: TBCG (DFM)
Performance review Financial performance Operating performance Outlook TBCG (DFM) Underlying operational improvement not reflected in results › Positive volume growth - Flour volumes up 18% - Pasta volumes up 59% › Innovation launched in pasta, semolina and wholemeal under Tastic › Improved efficien
Slide 36: Commitment to ongoing investment in facilities
Performance review Financial performance Operating performance Outlook Commitment to ongoing investment in facilities Key highlights › Maintained strong capex investment ratios › Sustained investment in asset replacement and enhancement Capex investment ratios Rm Capex Capex/Depreciation 1 200 1.45
Slide 37: Cost saving initiatives executed
Performance review Financial performance Operating performance Outlook Cost saving initiatives executed Procurement savings Rm 300 200 245 236 100 39 0 FY13 FY14 FY15 Manufacturing Status Saving › Tomato, beverages and mayonnaise R75 million Consolidation of manufacturing consolidation architecture
Slide 38: Key areas for execution FY16
Performance review Financial performance Operating performance Outlook Key areas for execution FY16 › Effective investment in marketing, innovation and improved route-to-market › Ongoing investment in capex › Improving effectiveness in manufacturing architecture › Revenue growth initiatives › Execut
Slide 39: Outlook
Outlook Peter Matlare Chief Executive Officer 39
Slide 40: Outlook
Performance review Financial performance Operating performance Outlook Outlook Differentiated and resilient portfolio › Tough year ahead › Business is on a solid platform ‒ Addressed portfolio weaknesses ‒ Invested in brands and people ‒ Improved processes › Explore accretive opportunities for growt
Slide 41: Questions & Answers
THE ENERGY CHAMPION UL+RA GRUINGH nr "esse TIGER BRANDS Questions & Answers 41
Slide 42: Appendix
TIGER BRANDS ‘ u
Slide 43: Group turnover
Appendix Group turnover Up 5% - Driven by strong domestic performance Rbn 32 1% R31.6 bn 31 4% Volume 30 R30.1 bn Price inflation Turnover Price Total 29 Forex Growth Inflation Volume Domestic operations 6% 6% - - 28 Grains 4% 4% - - Consumer - Foods 7% 8% (1%) - HPCB 10% 9% 1% - 27 Exports & 1% 1%
Slide 44: Contribution to turnover
Appendix Contribution to turnover FY14 FY15 10% 10% 27% 26% 15% 15% 7% 7% 10% 10% 1% 1% 6% 6% 4% 13% 4% 14% 7% 7% Milling and baking Other Grains Groceries Snacks and Treats Beverages Value Added Meat Products Out of Home HPCB Exports and International Nigeria 44
Slide 45: Contribution to operating income
Appendix Contribution to operating income Before IFRS 2 and other operating charges FY14 FY15 (8%) (12%) 19% 14% 43% 46% 12% 11% 2% 2% 4% 4% 4% 3% 9% 9% 10% 8% 9% 11% Milling and baking Other Grains Groceries Snacks and Treats Beverages Value Added Meat Products Out of Home HPCB Exports and Internat
Slide 46: Disclaimer
Disclaimer Forward-looking statement This document contains forward looking statements that, unless otherwise indicated, reflect the company’s expectations as at 19 November 2015. Actual results may differ materially from the company’s expectations if known and unknown risks or uncertainties affect
Slide 47: Investor Relations contact
Investor Relations Nikki Catrakilis-Wagner Nikki.wagner@tigerbrands.com Telephone +27 11 840 4841 www.tigerbrands.com 47