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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
VOLUNTARY TRADING UPDATE FOR THE FOUR MONTHS TO 31 JANUARY 2022
TRADING PERFORMANCE FOR THE QUARTER ENDED DECEMBER 2021 AND JANUARY YEAR TO
DATE
Group revenue from continuing operations for the quarter ended 31 December 2021 was down 1%,
driven primarily by three categories. Bakeries experienced significant volume losses as a result of
intense price competition, compounded by rising cost pressures and illegal work stoppages in
October and November. Snacks & Treats was impacted by supply challenges due to an 8-week
labour disruption in November and December, compounded by low opening stocks of finished
product because of the civil unrest experienced in July 2021. Rice prices deflated significantly driven
by the decline in international prices. Excluding these three categories, the balance of the portfolio
delivered revenue growth of 3%, comprising 1% volume growth and price inflation of 2%.
A marginal recovery in Snacks & Treats, as well as a slower rate of decline in Bakeries in January,
resulted in group revenue from continuing operations for the four months to 31 January 2022
showing an increase of 1%.
The impact of the industrial action referred to above, at an operating income level, amounted to
R120 million for the three months to December 2021. Although the Snacks & Treats business has
made significant progress in restoring supply, it is anticipated that full supply will only be achieved in
July 2022.
Pleasing performances were achieved in Rice, Groceries, Beverages, Baby and Chococam, whilst
weak category demand due to unfavourable weather conditions impacted insecticide volumes
within Home Care. In addition, disappointing first quarter sales into Nigeria adversely affected
Exports.
The company has not been immune to the global supply chain squeeze. We have experienced
challenges in managing raw material, ingredients and packaging availability, timeous supply, as well
as significant cost increases. The inability to pass through unanticipated cost push resulted in margin
compression in the first quarter. This is likely to be ameliorated in the second quarter as selling price
increases are being implemented. The impact of these price increases on volumes is being carefully
managed.
The poor start to the financial year makes it imperative that the ongoing focus on cost saving
initiatives and supply chain efficiencies be accelerated. In addition, distribution gains on product
innovations are gaining traction. With regards to bread, the immediate priority is to recover the
significant market share losses, facilitated by optimal pricing and effective promotional activity.
However, profitability in this category is likely to remain under pressure for the remainder of the
year. Improvements in revenue management are being accelerated across the portfolio.
VENTURE CAPITAL FUND
As previously reported, the Tiger Brands Venture Capital Fund has significantly progressed the
execution of its first investment in a business closely aligned to our health and nutrition strategy.
UPDATE ON THE DECIDUOUS FRUIT BUSINESS
Further to the previous updates regarding the Deciduous Fruit business, shareholders are advised
that discussions with relevant parties continue. At this stage, we are not able to provide further
details regarding these discussions. An update will be provided when it is appropriate to do so.
UPDATE ON CIVIL UNREST AND PRODUCT RECALL
During December 2021, the group received an interim payment of R87 million from SASRIA. The
payment relates primarily to the stock losses and asset damages at our Snacks & Treats and Rice
facilities following the civil unrest in July last year. The interim payment represents approximately
50% of the total amount being claimed for material damages under the SASRIA policy.
The insurance claim related to the recall of canned vegetable products in the latter part of the
previous financial year is in the process of being assessed. We have, in the meantime, received
confirmation of an interim payment of R17 million, relating to the operational and logistics costs of
implementing the recall, which represents approximately 30% of the total amount claimed.
As previously reported, the supply contract with the third-party supplier of the defective cans makes
provision for the Company to recover, from the supplier, a portion of the costs incurred, and losses
sustained. The contractual claim process against the supplier is currently underway.
UPDATE ON CLASS ACTION
On Friday, 4 February 2022, the Supreme Court of Appeal (SCA) overturned the earlier order of the
Gauteng Division of the High Court, Johannesburg which required various third parties (including the
National Institute of Communicable Diseases) to hand over epidemiological information in their
possession relating to the Listeriosis outbreak, in accordance with the subpoenas issued by Tiger
Brands.
Following the above decision by the SCA, it now remains for the parties to work towards completion
of the pre-trial preparations to get the matter ready for trial, where liability will ultimately be
determined by the Court. Tiger Brands reiterates its commitment to ensure that a resolution of the
matter is reached in the shortest possible time, in the interest of all parties, particularly the victims
of Listeriosis.
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 2022 are expected to be released on SENS
on or about 25 May 2022.
Bryanston
16 February 2022
Sponsor
J.P. Morgan Equities South Africa Proprietary Limited
Queries:
Nikki Catrakilis-Wagner Erene Kairuz
nikki.wagner@tigerbrands.com erene.kairuz@tigerbrands.com
Tel: +27 11 840 4841 Tel: +27 11 840 4841
Date: 16-02-2022 01:00:00
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