Slide 1: Nourish and Nurture More Lives Every Day: Year End Results Presentation
NOURISH AND NURTURE YEAR END RESULTS PRESENTATION MORE LIVES EVERY DAY 1 December 2023
Slide 2: Index
Index Strategic Financial Operational update & review review outlook 2
Slide 3: Disclaimer: Forward-looking statement
Disclaimer Forward-looking statement This document contains forward looking statements that, unless otherwise indicated, reflect the company’s expectations as at 1 December 2023. Actual results may differ materially from the company’s expectations if known and unknown risks or uncertainties affect t
Slide 4: Financial Review
FINANCIAL REVIEW Deepa Sita CFO
Slide 5: Mixed operational performance while group earnings benefit from higher income from associates
Mixed operational performance while group earnings benefit from higher income from associates Pricing 11% Revenue Volumes 2% Revenue 10% to Gross profit flat at Operating income* 9,1% at R37,4bn R10,3bn R3,1bn Gross margin 260bps to Operating margin* 175bps at Effective tax rate 10bps
Slide 6: A mixed performance
A mixed performance Highlights Headwinds > Revenue growth reflects > Significant headwinds in Bakeries and Groceries cost-led price increases in all segments > Under-recoveries due to inbound supply chain • Inflation slowed in the second half challenges > Home Care shows solid H2 performance; driven
Slide 7: Inflation slows in the second half while volumes impacted by declines across Grains
Inflation slows in the second half while volumes impacted by declines across Grains, due to margin recovery strategy in Rice, offset by strong Export volumes Revenue* H2 F22 vs H2 F23 1% 5% (2%) Price inflation Volume Forex H1 F22 vs H1 F23 17% (1%) - Price inflation Volume Forex 19,4 17,3 18,0 16,8
Slide 8: Group operating income impacted by non-recurring items, loadshedding and input cost inflation
Group operating income impacted by non-recurring items in the base, incremental cost of loadshedding & difficulty in recovering input cost inflation Rm FY23 FY22 Total revenue 37 388 34 029 Cost of sales (27 048) (23 713) Decline in gross margin attributable to Gross profit 10 340 10 316 higher inpu
Slide 9: Mixed operational performance reflects adverse category dynamics
Mixed operational performance reflects adverse category dynamics particularly in Groceries & Baby while deliberate strategies in HPC & the Rest of Africa gain traction Grains (R’m) Consumer Brands (R’m) FY22 FY23 13 341 12 414 17 030 15 496 1 272 1 413 1 162 838 Revenue Operating profit Revenue Oper
Slide 10: Cash from operations unchanged at R4 billion
Cash from operations unchanged at R4 billion; reduced inventory outflows offset by increased creditor outflows in response to volatile and unreliable inbound supply chain Major contributors to decrease in cash for the period (R’m) 4 264 247 2 703 (1 561) (1 564) 1 116 776 (808) (208) 726 (292) (1 14
Slide 11: Significantly accelerated capex spend in H2 brings total spend to R1,2bn
Significantly accelerated capex spend in H2 brings total spend to R1,2bn for the year FY23 Capex spend Capex spend focus on four main categories > Automation R1,6bn > Brand Development R1,2bn > Capacity expansion R1,3bn > Efficiency optimisation H2 R765m Most significant investments > Bakeries - Mix
Slide 12: A solid foundation off which to grow
A solid foundation off which to grow Key deliverables Opportunities > Pursued cost savings with rigour, with > Improved working capital management cumulative cost savings >R1bn - >R2bn invested in working capital over the last three years > Significant investment in automation and innovation to opti
Slide 13: Grains
GRAINS Yokesh Maharaj Chief Growth Officer
Slide 14: Higher volumes in Bakeries and increased market shares offset by adverse mix and costs
Higher volumes in Bakeries and increased market shares offset by adverse channel, product mix and higher conversion costs Grains (R’m) Milling & Baking (R’m) Other Grains (R’m) FY22 FY23 > Grains revenue reflects price 5 528 inflation of 10% with volumes 17 030 10 642 11 505 4 853 15 496 declining 3
Slide 15: Milling and Baking
8% 25% 231 bps Milling and Baking R11,5bn R602m 5,2% Revenue Operating profit Operating margin > Volume recovery in bread driven by retail channel Looking - Albany achieving volume share gains ahead of the market in medium and ahead short-term - According to SAGIS, overall category in decline,
Slide 16: Other Grains
14% 50% 541 bps Other Grains R5,5bn R235m 4,3% Revenue Operating profit Operating margin > Strong top-line growth driven by improved price realisations - Well-executed pricing strategy in Rice resulted in margin recovery in H2Looking ahead > Overall profitability impacted by unfavourable mix a
Slide 17: Consumer Brands
CONSUMER BRANDS Thushen Govender Chief Growth Officer
Slide 18: Value shares aided by inflation while category contraction limits pass through
Value shares aided by inflation while continued category contraction limits pass through of cost inflation Groceries (R’m) Snacks & Treats (R’m) Beverages (R’m) Baby (R’m) Home & Personal Care (R’m) FY22 FY23 2 785 1 147 6 377 6 415 2 392 2 160 1 134 2 166 1 842 1 859 597 263 229 269 340 147 134 308
Slide 19: Shifting spending patterns and affordability result in category contraction
Shifting spending patterns and affordability result in overall category contraction across all Consumer Brands segments Volume Growth to September 23 12MM 3MM • Category contraction evidence of change in consumer behaviour - 4,7 • Shifting spend toward essential items and Groceries -5,3 rotating int
Slide 20: Groceries
1% 49% 458 bps Groceries R6,4bn R308m 4,8% Revenue Operating profit Operating margin > Lower category demand continuing into H2 - Market volumes declined 5% year-on-year Looking ahead > Tiger volumes recover in H2 > Gains in price inflation offset by volume declines > Raw material shortages re
Slide 21: Strategies deliver volume recovery in H2
Strategies deliver volume recovery in H2 Groceries volume growth vs. revenue growth Volume growth Revenue growth 0,0% 1,0% 1,0% -4,7% -7,3% -9,6% H1 H2 FY23 > Reduced volume declines in H2 despite overall category contraction > Successful cost containment - Manufacturing - Logistics > Innovation ste
Slide 22: Snacks & Treats
16% 13% 278 bps Snacks & Treats R2,8bn R229m 8,2% Revenue Operating profit Operating margin > Pleasing value and volume growth ahead of market Looking ahead > Chocolate & Sugar segments record above-inflationary price realisations - Offset by plant reconfiguration to improve safety protocols -
Slide 23: Beverages
17% 26% 114 bps Beverages R2,2bn R340m 15,8% Revenue Operating profit Operating margin > Volume growth driven by dilutables due to optimal pricing and effective promotional activity Looking ahead - Gained volume share to 46% from 41% a year ago & value share from 43% to 45% > Revenue growth of
Slide 24: Baby
1% 9% 131 bps Baby R1,1bn R134m 11,7% Revenue Operating profit Operating margin > Category impacted by affordability issues resulting in lower consumer demand across key segments Looking ahead - Particularly jars and well-being portfolio - Increasing activity and aggressive pricing strategies
Slide 25: Home and Personal Care (HPC)
17% 50% 471 bps Home and Personal Care (HPC) R2,2bn R461m 21,3% Revenue Operating profit Operating margin > Overall segment driven by solid performances in both Home and Personal Care Looking ahead > Home Care volumes supported by a better pest season relative to last year - Price inflation +9
Slide 26: Deciduous Fruit (LAF)
10% >100% 606 bps Deciduous Fruit (LAF) R1,1bn R92m 8.1% Revenue Operating profit Operating margin > LAF delivered a significantly improved performance - Favourable customer mix Looking ahead - Elevated global fruit & puree prices - Rand weakness > Significant margin improvement - Driven by lo
Slide 27: Rest of Africa
REST OF AFRICA Polycarp Igathe Chief Growth Officer
Slide 28: Exports and International (excl. LAF)
24% 57% 284 bps Exports and International (excl. LAF) R3,7bn R508m 13.7% Revenue Operating profit Operating margin > Improved performance by Exports and Chococam - Driven by volume growth and margin expansion Looking ahead > Exports supported by increased demand, boosted by price adjustments t
Slide 29: Rest of Africa – a sustainable step change in trajectory
Rest of Africa – a sustainable step change in trajectory > Volume growth in 3 key regions > Reliable key distributors - Cameroon, Mozambique, Nigeria, South Sudan > Five power brands - Benny; Jolly Jus; Crosse & Blackwell; Ingrams and Doom - Number 1 brand positions in Cameroon CEMAC SADC COMESA 29
Slide 30: Conclusion
CONCLUSION Tjaart Kruger CEO
Slide 31: The immediate market outlook remains challenging
The immediate market outlook remains challenging External Internal response > Consumer confidence under pressure > Operating model - Interest rates likely to remain elevated > Reshaping to a desired portfolio of the future - Uncertain food inflation outlook > Rand weakness and loadshedding expected
Slide 32: Solutions are within our reach
Solutions are within our reach Opportunity Response OPERATING MODEL > Move critical decision-making as close to operations as possible > Optimal structure to drive efficiencies and leverage synergies > Ensure a stronger outcomes-based approach > Implement most appropriate organisational design MANAG
Slide 33: Tiger Brands has what it takes to restore the business to its rightful position
Tiger Brands has what it takes to restore the business to its rightful position Opportunity Response > Innovations focused on value propositions & stretching our brands STRONG BRANDS • Achieving positive share of innovation > Brands formally recognised GenNext, Smarties MMA awards, Loeries > Strong
Slide 34: Fostering the right culture
Fostering the right culture > Promote strongly shared values - mutual respect, hard work and commitment > Create a cohesive team, setting high standards > Create a spirit of collaboration, while being at ease in our environment 34
Slide 35: Improved long-term prospects and consistent returns to all stakeholders
By leveraging our strengths and restoring the fundamentals, we will generate improved sustainable returns for all stakeholders Strong brands Deliberate Action Plan 1. Milling and Baking Performance Improved long-term 2. Operating model 3. Capital allocation prospects and 4. Rejuvenating our brands 5
Slide 36: Q&A
TIGER BRANDS e NOURISH AND NURTURE MORE LIVES EVERYDAY Q&A
Slide 37: Inflation reflects sustained level of raw material and input cost push
Inflation reflects sustained level of raw material and input cost push Revenue Price inflation 11% Forex 1% R37,4bn Volume (1%) R34,0bn Total Price Volume Forex Grains 10% 13% (3%) - Consumer Brands 8% 7% 1% - HPC 17% 11% 6% - Domestic operations 9% 10% (1%) - Exports & International 14% 12% (5%) 7%
Slide 38: Summary of ratios
Summary of ratios Cash generated from operations (R’m) 1% Cash and cash equivalents (R’m) 30% Rm FY23 FY22* Net (debt) / cash (R’m) (923) 143 Return on equity (ROE) 15,7 18,4 2 703,0 1 115,9 2 684,0 Return on invested capital (ROIC) 14,7 16,4 WACC rate 14,1 13,6 Working capital per R1 22,6 20,6
Slide 39: Income from associate companies
Income from associate companies Rm FY23 FY22 Carozzi 526,1 337,7 National Foods Holdings Ltd 170,6 114,1 Other (0,1) (0,2) Total 696,6 451,6 39
Slide 40: Segmental contribution to revenue and operating income
Segmental contribution to revenue and operating income Revenue Operating Income * FY22 FY23 31% 31% 24% 20% 20% 18% 15% 19% 14% 17% 10% 11% 9% 10% 14% 15% 13% 13% 8% 7% 8% 8% 5%4% 4% 4% 7% 7% 5% 6% 5% 6% 1% 2% 2% 3% 3% -1% Groceries Groceries Other costs Beverages Beverages Baby Baby Other Grains Ot
Slide 41: Overall Groceries market share declines driven by mayonnaise
Overall Groceries market share declines driven by mayonnaise as consumers opt for more affordable options 12MM LY 12MM TY 60,0 60,5 55,5 55,8 39,7 38,9 37,6 36,5 30,8 29,1 Groceries Beans Tomato Sauce Peanut Butter Mayo & Salad Cream Source: Circana Tiger value share September 2023 performance 41
Slide 42: Snacks & Treats achieved pleasing value and volume growth
Snacks & Treats achieved pleasing value and volume growth despite overall category declines 12MM LY 12MM TY 44,1 41,9 27,8 23,0 24,0 21,7 12,9 13,9 9,0 7,5 Snacks & Treats Chocolate Candy Novelty & Speciality Health Bars Source: Circana Tiger value September 2023 performance 42
Slide 43: Beverages share growth driven by optimal pricing and promotions
Beverages share growth driven my optimal pricing and effective promotional activity of dilutables (Oros) and improved PPA of ready-to-drink 12MM LY 12MM TY 57,1 54,1 49,3 49,9 49,4 42,9 29,7 25,1 Beverages Dilutables Sports Drinks RTD Juice Source: Circana Tiger value share September 2023 performanc
Slide 44: Baby nutrition impacted by category affordability issues
Baby nutrition impacted by category affordability issues resulting in lower demand 12MM LY 12MM TY 59,3 58,0 8 7,8 Baby Nutrition Baby Care Source: Circana Tiger value share September 2023 performance 44
Slide 45: Home Care reflects better pest season; Personal Care supported by body care
Home Care reflects better pest season; Personal Care volumes supported by strong execution in body care 12MM LY 12MM TY 60,4 61,9 8,6 8,5 Home Care (Pest) Personal Care Source: Circana Tiger value share September 2023 performance 45