Tiger Brands Limited · JSE:TBS
Tiger Brands — FY2016 Earnings Presentation
33 slides from Tiger Brands's earnings presentation, Nov 23, 2016
Slide 1: Group Results Presentation
Group Results Presentation for the year ended 30 September 2016
Slide 2: Index
Index Overview Financial & operating performance Strategic review Group Results Presentation for the year ended 30 September 2016 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 23 November 2016. Actual results may differ materially from the company’s expectations if known and unknown risks or uncertainties affect
Slide 4: Lawrence Mac Dougall, Chief Executive Officer
Please replace this pic Lawrence Mac Dougall Chief Executive Officer
Slide 5: A year characterised by a volatile external environment
13.84 13.78 13.63 13.59 13.36 13.42 13.30 13.27 13.41 13.32 13.08 13.11 13.25 13.26 13.48 13.44 13.59 13.60 13.66 13.56 13.85 13.81 13.79 A year characterised by a volatile external environment 13.85 13.94 13.93 14.19 14.32 14.28 14.19 14.29 14.40 14.37 14.27 14.22 14.03 13.93 14.08 13.99 14.16 14.2
Slide 6: Solid results from continuing operations
Solid results from continuing operations Group performance* Group volumes up Total HEPS up 19% 1% Cents 2 200 2 127 Group turnover up 2 100 11% 2 000 to R31.7 billion Group operating income up 1 900 5% 1 800 1 786 to R4.2 billion 1 700 Total dividends up 1 600 12% FY 15 FY 16 to 1 065 cents * From c
Slide 7: Strong overall performance in tough environment
Strong overall performance in tough environment o Volumes up 2% o Power brands maintain leading positions Domestic o Continued cost savings & investments o Disciplined price/volume management o Deciduous Fruit (LAF) delivers exceptional earnings growth International o Seventh consecutive year of gro
Slide 8: Sustained market leadership in power brands
Sustained market leadership in power brands TOP #1 #1 #1 #1 #1 #1 #1 #1 #1 #2 #1 #1 #2 #1 #1 Source: Nielsen package share, 12 month moving average to September 2016 Group Results Presentation for the year ended 30 September 2016 8
Slide 9: Building on operational excellence
Building on operational excellence Moving to a high performance culture o Excellent in-store execution o On-shelf availability at 96% up from 89% Operational o Achieved further savings of R380 million, including excellence o Procurement savings of R211 million o Innovation rate improves to 4.5% of t
Slide 10: Financial & operating performance
Financial & operating performance Noel Doyle Chief Financial Officer
Slide 11: Credible operating performance
Credible operating performance* Boosted by forex gains & associate growth but offset by higher tax rate Rm 2016 2015 % change Turnover 31 698 28 660 11% Cost of sales (21 499) (18 981) 13% Operating income before IFRS 2 charges 4 243 4 055 5% IFRS 2 charges (89) (29) 207% Operating income before imp
Slide 12: Income from associates up 43%
Income from associates up 43% Associates contribution driven by once-off items Total income from 861 744 603 associates (Rm) 80 29 79 29 54 449 33 402 309 303 234 207 FY16 FY16 excl. capital profits* FY15 Empresas Carozzi Oceana Group UAC of Nigeria National Food Holdings * Excludes capital profits
Slide 13: Cost awareness – a key contributor to performance
Cost awareness – a key contributor to performance Achieved continuous improvement savings of R380 million 3 year cumulative procurement Rm savings 800 R91m 692 700 Total 600 savings 481 500 R211m R380m R36m 400 R42m 300 245 200 Manufacturing efficiencies 100 IT platform 0 Financial shared service ce
Slide 14: Continue to invest in growth, efficiency & flexibility
Continue to invest in growth, efficiency & flexibility Capex & acquisition spend for FY16 (Rm) 1 200 1.69 1.45 1.33 1 000 983 945 800 882 R376m Rm Capex up 679 662 7% to 600 R945m 559 R639m 400 200 0 FY 14 FY 15 FY 16 Capex (Rm) Depreciation (Rm) Expansion Replacement Capex / Depreciation Group Resu
Slide 15: Cash flow improves
Cash flow improves Debt reduction impacted by TBCG disposal Rm 2016 2015 Cash operating profit 4 837 4 396 Working capital changes (604) (812) Cash generated from operations 4 233 3 584 Finance costs net of dividends received 109 (71) Taxation paid (1 107) (1 159) Dividends paid (1 661) (1 643) Cape
Slide 16: Balance sheet strength provides capacity for investment in future growth
Balance sheet strength provides capacity for investment in future growth 2016* 2015 Cash generated from operations (Rm) 4 233 3 584 Net (debt) / cash (Rm) (2 028) (3 788) Net debt / equity (%) 13 28 Net debt / EBITDA 0.4x 0.8x RONA (%) 31 26 Net interest cover (times) 14 18* * From continuing operat
Slide 17: Group turnover up 11% to R32 billion
Group turnover up 11% to R32 billion Group volumes up 1%, domestic volumes up 2% 2% 8% 1% forex R31.7bn inflation volume R28.7bn Total Price Total Forex growth inflation volume Domestic operations 11% 9% 2% - International (including Exports) 7% 2% (5%) 10% Total continuing operations 11% 8% 1% 2% F
Slide 18: Group achieves double-digit turnover growth
Group achieves double-digit turnover growth Strong performances from Groceries, Beverages & Home Care Consumer International Grains Brands Food HPCB (incl. Exports) Group* Volume - ▲ 3% ▲ 6% ▼ 5% ▲ 1% R12.8bn R11.0bn R2.4bn R5.4bn R31.7bn Turnover ▲ 13% ▲ 9% ▲ 13% ▲ 7% ▲ 11% Operating R2.0bn R1.2bn
Slide 19: Grains
Grains Resilient in tough environment – margin distorted by abnormal inflation o Solid performance from core business (Millbake) Rm 16 000 • Offset by Maize & Sorghum 12 845 11 375 o Albany volumes grow despite challenges in Western Cape 12 000 • Leading position in bread maintained 8 000 • Western
Slide 20: Groceries
Groceries Benefits from successful price/volume management in H2 o Strong growth in volumes Rm 5 000 4 701 o Revenue up 10% 4 265 4 000 o Operating income up 13% 3 000 o Input costs impacted by drought and currency volatility 2 000 • Appropriate pricing strategy implemented 1 000 411 466 o Improved
Slide 21: Snacks, Treats & Beverages
Snacks, Treats & Beverages Snacks & Treats returned to growth in H2 o Revenue up 13% Rm Snacks & Treats 3 000 o Operating income up 14% 2 137 2 271 o Boosted by performance of countlines & hard candies 2 000 o Improved service levels 1 000 Beverages – H2 delivers enhanced 315 316 0 performance FY 15
Slide 22: Home, Personal & Baby Care (HPCB)
Home, Personal & Baby Care (HPCB) Exceptional performance repeated o Outstanding performance from Home Care Rm 3 000 o Personal Care delivers growth in competitive environment 2 437 2 147 o Baby Care impacted by consumer down-trading 2 000 o Turnover up 13% 1 000 444 534 o Operating income up 20% 0
Slide 23: International (including Exports)
International (including Exports) Strong growth with mixed performances o Deciduous Fruit (LAF) benefits from favourable Rm exchange rates, improved yields & cost containment 6 000 5 386 5 029 o Central Africa delivers 7th year of consecutive growth 4 000 • Volumes driven by chocolate bars & spreads
Slide 24: Outlook
Outlook o Difficult trading environment to persist o Inflation to remain high o Forex & commodity prices remain volatile Focus areas o Leverage power brands to grow market share o Optimise margin o Accretive innovation & targeted investment o Aggressive focus on cost savings o Drive high performance
Slide 25: Strategic review
Strategic review Lawrence Mac Dougall Chief Executive Officer
Slide 26: Strategic review in progress
Strategic review in progress Developing a strategy for sustainable profitable growth Portfolio growth & strategy o Rejuvenate domestic operations to profitable growth o International strategy Growth Cost & investment accretive to domestic strategy performance = o Build a capable & cost Cost Capabi
Slide 27: Leadership
Leadership Board and Executive Committee appointments o Khotso Mokhele to be appointed chairman at upcoming AGM o Kevin Hedderwick & Emma Mashilwane join the board as non-executive directors o Mary-Jane Morifi joins as Corporate Affairs Executive in December o Neil Brimacombe resigned as Business Ex
Slide 28: Investor Relations
Investor Relations Nikki Catrakilis-Wagner Group Investor Relations Executive investorrelations@tigerbrands.com T: +27 11 840 4841
Slide 29: Appendices
Appendices
Slide 30: Contribution to turnover
Contribution to turnover* 17% 18% 29% 28% 8% 8% 2% FY 16 2% FY 15 7% 7% 4% 11% 11% 4% 7% 7% 15% 15% Milling and baking Other grains Groceries Snacks and treats Beverages Value added meat products Out of home HPCB International (including Exports) * From continuing operations Group Results Presentati
Slide 31: Contribution to operating income
Contribution to operating income* 13% 11% 11% 12% 38% 41% 2% 2% FY 16 4% FY 15 4% 4% 4% 8% 7% 9% 10% 11% 9% Milling and baking Other grains Groceries Snacks and treats Beverages Value added meat products Out of home HPCB International (including Exports) * From continuing operations, before abnormal
Slide 32: Net working capital days
Net working capital days 2016* 2015* Working capital per R1 of turnover 23.3 23.7 Net working capital days 100 102 Stock days 86 90 Debtor days 40 39 Creditor days 26 27 * From continuing operations Group Results Presentation for the year ended 30 September 2016 32
Slide 33: Investor Relations
Investor Relations Nikki Catrakilis-Wagner Group Investor Relations Executive investorrelations@tigerbrands.com T: +27 11 840 4841