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Tiger Brands audited group results and dividend declaration for the year ended 30 September 2021
TIGER BRANDS LIMITED
“Tiger Brands” or “the Company”
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080
TIGER BRANDS AUDITED GROUP RESULTS AND DIVIDEND DECLARATION
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Tiger Brands’ improved operational performance for the year ended 30
September 2021 was offset by the costs of the product recall and civil unrest
Salient Features*
- Total Revenue increased by 4% to R31.0 billion
- Revenue excluding the product recall and civil unrest increased by 5% to
R31.2 billion
- Group operating income** declined by 10% to R2.2 billion
- Group operating income** excluding the product recall and civil unrest
increased by 20% to R3.0 billion
- Group operating margin** declined to 7.2% from 8.3%
- Group operating margin** excluding the product recall and civil unrest
increased to 9.5% from 8.3%
- EPS increased by 21% to 1 070 cents per share
- HEPS declined 6% to 1 127 cents per share
- Total Dividends increased 23% to 826 cps
*From continuing operations – consistent with the previous year, Value Added Meat
Products has been treated as a discontinued operation
**Before impairments and non-operational items
Overview
This year, Tiger Brands joins a select group of South African companies that have
celebrated their centenary. The company has come a long way since starting out as
a small family business in Newtown, Johannesburg, to become Africa’s largest listed
manufacturer of fast-moving consumer goods, with trusted brands that form part of
every South African’s shopping basket. Although, the past few years have presented
particularly high levels of volatility and uncertainty, with rapidly changing production
and consumption patterns and increasing social, economic and environmental
pressures, all of which have been exacerbated by the Covid-19 pandemic, our
longevity reflects the company’s resilience, the inherent strength of our brands and
the quality of our people.
Inspired by our strong history, our strategic priorities are aimed at improving the
performance of our core portfolio while positioning the company for sustainable long-
term growth.
Tiger Brands’ results for the year ended 30 September 2021 reflect steady progress
against our strategic priorities with an improved underlying performance from the
core business, negated by the costs related to the product recall and the civil unrest
that took place in July 2021. These costs amounted to R732 million (pre-tax).
The write-off of stock related to the civil unrest (R85 million), as well as the product
recall (R308 million), has been accounted for through cost of sales. Customer
refunds related to the product recall have been accounted for as a reduction in
revenue, whilst other recall related costs have been accounted for through the
relevant expense functions in the income statement.
In terms of the group’s underlying performance, the year under review can be
characterised as a year of two halves, with a solid first half result, driven primarily by
a strong first quarter, offset in part by slower top line growth in the second half.
Despite revenue challenges, cost savings and efficiency initiatives were sustained,
resulting in positive operating leverage for the full year.
Total revenue from continuing operations (before the impact of the product recall and
civil unrest) increased by 5%, underpinned by price inflation of 7%, which was
partially offset by an overall volume decrease of 2%. As a result of the costs related
to the product recall and civil unrest, operating income from continuing operations**
declined to R2.2 billion from R2.5 billion the previous year. Gross margin and
operating margin declined to 28.5% (2020: 30.1%) and 7.2% (2020: 8.3%),
respectively. In addition, naked margins came under pressure due to the high level
of agricultural commodity cost push not being fully recovered through selling price
increases. However, this was offset by a steady improvement in manufacturing
efficiencies, resulting in a marginal improvement of overall gross margins (excluding
the product recall and civil unrest) to 30.3% from 30.1% in the prior year. Operating
income ** (excluding the product recall and civil unrest) increased by 20% to R3.0
billion.
Earnings per share (EPS) from continuing operations increased by 21% to 1 070
cents (2020: 886 cents), whilst headline earnings per share (HEPS) from continuing
operations declined by 6% to 1 127 cents (2020: 1 196 cents).
EPS from total operations increased by 87% to 1 142 cents (2020: 612 cents), and
HEPS from total operations increased by 20% to 1 127 cents (2020: 940 cents).
The group’s statements of financial position for the years ended 30 September 2020
and 30 September 2019 were restated to better reflect the requirements of IFRS 15
by offsetting a portion of the group’s rebate liability against trade and other
receivables. In addition, there was a restatement in the income statement for the
year ended 30 September 2020 relating to the disclosure of non-operational items to
better reflect the presentation requirements of IAS 1. This change had no impact on
EPS and HEPS reported for the year ended 30 September 2020.
Report of the independent auditors
**
Before impairments and non-operational items
Ernst & Young Inc., Tiger Brands Limited’s independent auditors, have audited
the consolidated financial statements of Tiger Brands Limited from which the
summarised consolidated results have been derived. The auditors expressed an
unmodified opinion on the consolidated financial statements. The consolidated
financial statements and auditor's report, including the key audit matters, are
available on the Company's website www.tigerbrands.com.
Board Committee Assignments
Shareholders are referred to the Company’s audited group results and dividend
declaration for the year ended 30 September 2021.
In addition, shareholders are advised of the following committee appointments:
• Following the resignation of Mr Ian Burton from the board in June 2021, Ms
Geraldine Fraser-Moleketi is appointed chairman of the investment committee
with effect from 19 November 2021.
• Following the retirement of Ms Maya Makanjee with effect from 31 December
2021, Ms Emma Mashilwane will be appointed chairman of the social, ethics
and transformation committee, with effect from 2 January 2022.
• Following the retirement of Mr Mark Bowman at the company’s annual
general meeting on 16 February 2022, Mr Donald Wilson will be appointed
chairman of the remuneration committee with effect from 17 February 2022.
Declaration of final dividend
The Board has declared a final ordinary dividend of 506 cents per share for the year
ended 30 September 2021. This, together with the interim ordinary dividend of 320
cents per share, brings the total dividend for the year to 826 cents. In view of the
company’s ungeared balance sheet and strong cash generating ability, it has been
decided to determine this year’s total dividend on the company’s adjusted headline
earnings. Consequently, HEPS was adjusted to exclude the impact of the product
recall and the civil unrest, which took place in July this year. The Company’s
dividend policy of 1.75x cover has therefore been applied to HEPS after the
aforementioned adjustments.
In accordance with paragraphs 11.17 (a) (i) to (x) and 11.17 (c) of the JSE Listings
Requirements, the following additional information is disclosed:
• The ordinary final dividend has been declared out of income reserves
• The local Dividends Tax rate is 20% (twenty percent) effective 22 February
2017
• The gross final dividend amount of 506.00000 cents per ordinary share will be
• paid to shareholders who are exempt from the Dividends Tax
• The net final dividend amount of 404.80000 cents per ordinary share will be
paid to
• shareholders who are liable for the Dividends Tax
• Tiger Brands has 189 818 926 ordinary shares in issue (which includes 10
326 758 treasury shares)
• Tiger Brands Limited’s income tax reference number is 9325/110/71/7.
Shareholders are advised of the following dates in respect of the final ordinary
dividend:
0B Declaration date Friday, 19 November 2021
Last day to trade cum the ordinary
1B
Tuesday, 11 January 2022
dividend
Shares commence trading ex the Wednesday, 12 January 2022
ordinary dividend
Record date to determine those Friday, 14 January 2022
shareholders entitled to the ordinary
dividend
Payment date in respect of the ordinary Monday, 17 January 2022
dividend
Share certificates may not be dematerialised or re-materialised between
Wednesday, 12 January 2022 and Friday, 14 January 2022, both days inclusive.
Outlook
We acknowledge that the challenging economic climate and pressure on the
consumer will remain. Against this backdrop, the company has made progress in
strategically positioning itself for the future. Our strategy is supported by five key
pillars namely:
• Meet the needs of the consumer
• Optimise the supply chain
• Be obsessed about cost savings and efficiencies
• Build a growth pipeline, and
• Ignite our people.
We have continued to accelerate our efforts towards consumer and shopper
orientation and strengthened our focus on meeting consumers’ needs. Given the
constrained consumer environment, our priority has been on delivering value for the
consumer. We have made plans to roll-out additional innovation in the value space,
while several renovations are underway in the health and nutrition segment. We
have launched the Black Cat brand as our third power brand, joining Jungle Energy
and TV Bar to capitalise on the rising trend in snacking.
In line with our second and third strategic pillars, we have enhanced our supply chain
and our cost-saving initiatives and efficiency programmes are expected to gain
momentum, supported by increased technology investments.
In the medium to long term, the recent launch of the Tiger Brands venture capital
fund, which has led to the receipt of over 500 expressions of interest, will provide
inorganic growth opportunities. We are in the final stages of making an offer for a
business which is closely aligned to our health and nutrition strategy, while a further
nine opportunities are being assessed.
These initiatives, together with the reinvigorated and focused Africa growth strategy
are expected to be supportive of top-line growth while driving our fourth strategic
objective of building a growth pipeline.
Our fifth priority focus is on igniting our people and this forms the foundation of the
company’s growth strategy. We have aligned internally on the desired culture for the
company, as well as the underpinning values and winning behaviours. Our focus is
now on accelerating strategy execution.
The strategic progress achieved this year, together with the non-recurrence of once-
off items in 2021, are expected to result in an improved overall performance in the
year ahead.
For Tiger Brands to flourish in the years ahead, it needs to realise the commercial
opportunities associated with creating a more sustainable future. This is the
underlying ethos of our sustainable future strategy as we recognise the responsibility
to address our material environmental, social and governance (ESG) impact and
continue to integrate this across the organisation.
Any forward-looking information has not been reviewed or reported on by the
Group’s auditors.
By order of the Board
GJ Fraser-Moleketi NP Doyle
Chairman Chief Executive Officer
Bryanston
18 November 2021
Date of release: 19 November 2021
This short?form announcement is the responsibility of the Directors of the Company
and has not been reviewed or audited by the Group's auditors. The information
disclosed is only a summary of the full announcement and does not contain full or
complete details.
Any investment decisions should be based on the consideration of the Tiger Brands
annual results announcement ("Results"). The results were released on SENS on 19
November 2021 and are available on the Company's website www.tigerbrands.com
and
https://senspdf.jse.co.za/documents/2021/jse/isse/tiih/TigerHY21.pdf.
Copies of the Results are available for inspection at the Company's registered office,
the offices of our sponsor or may be requested from the Company's investor
relations department during normal business hours and are available at no charge.
Registered office: 3010 William Nicol Drive, Bryanston, 2021
Independent non-executive directors: GJ Fraser-Moleketi (Chairman), MO Ajukwu,
MJ Bowman, CH Fernandez, GA Klintworth, M Makanjee, TE Mashilwane, M Sello,
OM Weber, DG Wilson
Executive directors: NP Doyle (Chief Executive Officer), DS Sita (Chief Financial
Officer)
Secretary: JK Monaisa
Sponsor
J.P. Morgan Equities South Africa Proprietary Limited
Date: 19-11-2021 07:30:00
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