TIGER BRANDS LIMITED
?Tiger Brands? or ?the Company?
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
VOLUNTARY TRADING UPDATE FOR THE FOUR MONTHS TO 31 JANUARY 2021 AND TRADING
STATEMENT FOR THE SIX MONTHS ENDING 31 MARCH 2021
TRADING PERFORMANCE AND OUTLOOK
Group revenue from continuing operations for the quarter ended 31 December 2020 was up 12,1%,
underpinned by overall price inflation of 9,0% and volume growth of 2,6%. The strong start to the
year was diluted by a particularly poor performance for the month of January 2021, reducing the
overall growth in Group revenue from continuing operations for the four months to 31 January 2021
to 9,4%, driven mainly by price inflation.
In the four months to end January 2021, cumulative volume growth was achieved across many parts
of the portfolio, with particularly strong performances in Maize, Oat-based breakfast offerings
(Jungle), Rice, Snacks & Treats and Beverages as well as Home Care, Personal Care and Baby.
However, volume challenges were experienced within Bakeries, Maize (Ace Instant) and Sorghum-
based breakfast offerings, as well as Groceries and Deciduous Fruit (LAF). Volume declines in bread
were behind the overall bread market decline, whilst Groceries? volumes were affected by increased
competitor activity, inbound supply chain disruptions and poor seasonal demand. The Exports
business delivered strong growth, benefiting from increased demand in Zimbabwe and a resumption
of sales into Nigeria. Volumes in Deciduous Fruit were adversely impacted by the ongoing effect of
the Covid-19 pandemic on the food services sector in major trading regions.
The Group was unable to fully recover the high level of agricultural commodity cost push, placing
naked margins under pressure. However, with the Group?s cost saving initiatives and supply chain
efficiency improvements gaining traction, the overall gross margin remained stable.
Most businesses reflected year-on-year improvements in operating income, characterised by the
- stabilization of operating profits in the wheat-to-bread value chain;
- steady improvements in the performance of Rice and Pasta;
- significant improvements in operating efficiencies within Groceries; and
- a good recovery in Davita (powdered soft drinks and seasoning) following the resumption of
exports into Nigeria. The Deciduous Fruit business, however, was negatively impacted by the
relative strength of the rand.
Whilst not immune to the tragic consequences of Covid-19, the group?s robust health and safety
protocols currently in place, appear to have had a positive impact. These include the frequent
screening of employees as well as the use of Antigen testing across our sites. Although there were
no major disruptions to business continuity, some businesses were impacted by inbound supply
disruptions. Preventative costs directly attributable to Covid-19 amounted to approximately R26
million for the four months to 31 January 2021. As a precautionary measure, contingency plans have
been put in place to mitigate the potential disruption to our internal and external supply chains in
the event of an anticipated third wave.
It is too early to conclude whether the lower consumer demand levels evident in the month of
January reflect an even more challenging environment than what was experienced over the past
year. However, the company remains confident that the initiatives in place will deliver the
improvements anticipated in the trading statement below.
DISPOSAL OF DECIDUOUS FRUIT BUSINESS
Further to the announcements made on 25 May 2020 and 20 November 2020, regarding the
Company?s intention to exit its Deciduous Fruit business, shareholders are advised that the initial
expression of interest phase has been concluded. Following the receipt of several indicative offers,
the Board approved the commencement of a formal due diligence process. Upon completion of this
process, including the submission of binding offers by potential buyers, all options will be evaluated.
The Company will issue further communication when it is appropriate to do so.
TRADING STATEMENT FOR THE SIX MONTHS ENDING 31 MARCH 2021
In accordance with paragraph 3.4(b) of the Listings Requirements of the JSE Limited, Tiger Brands is
required to publish a trading statement as soon as it is satisfied that a reasonable degree of certainty
exists that its financial results for the six months ending 31 March 2021 will differ by more than 20
percent when compared to the corresponding period last year.
Shareholders are referred to the SENS announcement of 29 October 2020 relating to the conclusion
of the disposal of the Company's Value-Added Meat Products business ("VAMP"). Consequently,
VAMP has been treated as a discontinued operation for purposes of the below disclosures, with the
comparative information restated accordingly.
Shareholders are accordingly advised that:
? Earnings per share (EPS) from total operations for the six months ending 31 March 2021 is
expected to be between 265% and 285% (or between 555 cents and 597 cents) higher than
the 210 cents reported in the same period last year.
? Headline earnings per share (HEPS) from total operations for the six months ending 31
March 2021 is expected to be between 35% and 45% (or between 169 cents and 218 cents)
higher than the 489 cents reported in the same period last year.
? EPS from continuing operations for the six months ending 31 March 2021 is expected to be
between 105% and 125% (or between 347 cents and 414 cents) higher than the 332 cents
reported in the same period last year.
? HEPS from continuing operations for the six months ending 31 March 2021 is expected to be
between 10% and 20% (or between 59 cents and 120 cents) higher than the 611 cents
reported in the same period last year.
The significant increase expected in HEPS from total operations for the six months ending 31 March
2021, is primarily due to the fact that the first six months of last year included significant losses
recorded by the Company?s VAMP business.
The improvements in EPS are primarily due to significant impairment charges recorded in the same
period last year of R557 million, all of which related to continuing operations. The ranges provided in
terms of EPS do not include any further impairment adjustments to those recorded last year. This
will, however, be assessed further at period end.
The information above has not been reviewed or reported on by the Company's auditors.
Tiger Brands? results for the six months ending 31 March 2021 are expected to be released on SENS
on or about 20 May 2021.
17 February 2021
J.P. Morgan Equities South Africa Proprietary Limited
Date: 17-02-2021 03:00:00
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