TIGER BRANDS LIMITED RESULTS PRESENTATION for the year ended 30 - PowerPoint PPT Presentation

TIGER BRANDS LIMITED RESULTS PRESENTATION for the year ended 30 September 2014 www.tigerbrands.com

AGENDA

Peter Matlare Chief Executive Officer

Group Nigeria Consumer Brands Grains Exports and International A CREDIBLE SET OF RESULTS 4 • Results underpinned by solid fundamentals • Achieved despite challenging trading conditions • Dangote Flour Mills (Nigeria) – Results impacted by asset impairments – Challenges remain but encouraging signs of improvement • Grains – Admirable performance in the face of significant competitor and cost pressures • Groceries – Solid volume growth, supported by a focus on manufacturing efficiencies • Tiger Brands International and Exports – Continues to deliver strong performance and entrench its African footprint

Group Nigeria Consumer Brands Grains Exports and International A SOLID PERFORMANCE 5  11% to R 30.1 billion • Group turnover  15% to R 3.6 billion • Operating profit  to 11.8% • Operating margin  15% to 1 804 cents • HEPS  9% to 940 cents • Total Dividend

Group Nigeria Consumer Brands Grains Exports and International GOOD TURNOVER GROWTH 6 30,5 2% 11% Organic Growth 29,5 4% 28,5 5% 27,5 R30.1 bn R'billion 26,5 Turnover Pricing Total Forex Growth inflation Volume 25,5 Domestic 10% 6% 4% - Volume R27.0 bn Pricing inflation Forex 24,5 Exports and 16% 1% 7% 8% International Nigeria 11% - (3%) 14% 23,5 TOTAL GROUP 11% 5% 4% 2% 22,5 September 2013 Pricing inflation Volume Forex September 2014 Turnover Turnover

Group Nigeria Consumer Brands Grains Exports and International ECONOMIC GROWTH PROSPECTS 7 Global Economic Growth Y-o-Y % change 2012 2013 2014 2015 • Global GDP growth – 3.3% Global 3.4 3.3 3.3 3.8 • Uneven economic performance • Slowdown in emerging markets Advanced markets 1.2 1.4 1.8 2.3 – Brazil, Russia, China Emerging markets 5.1 4.7 4.4 5.0 SS-Africa 4.4 5.1 5.1 5.8 Sub-Saharan Africa • GDP growth – 5% South Africa 2.5 1.9 1.4 2.3 • Still an exciting opportunity • But potential downside risks Y-o-y % change 2013 2014 2015 South Africa Kenya 5.6 5.3 6.2 • Anaemic growth – 1.5% Nigeria 6.3 7.0 7.3 • Households increasingly financially vulnerable Ethiopia 9.7 8.2 8.5 Cameroon 4.6 5.1 5.2 Source: IMF, World Economic Outlook, October 2014

Group Nigeria Consumer Brands Grains Exports and International A BALANCED APPROACH 8 Tight trading conditions required a balanced approach… a focus on market positioning, organisational agility and resilience • Harnessed brand equity – leveraged off the stable of iconic brands • Keen price management – Balancing above-inflation cost push with constrained household disposable income • Drive for manufacturing efficiencies and astute cost management – Organisational agility a cornerstone • Resilience of the Tiger Brands team – In the face of intensifying competitor activity and adverse economic headwinds

Group Nigeria Consumer Brands Grains Exports and International A PLATFORM FOR GROWTH 9 • Benefits of investments in brands • Drive for innovation bearing fruit • Cost management initiatives gaining traction • Established footprint on the African continent • Creating a platform for growth and new opportunities

Funke Ighodaro Chief Financial Officer

Group Nigeria Consumer Brands Grains Exports and International INCOME STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 11 R’m 2014 2013 % Change Turnover 30 072.0 27 003.5 11% Operating income before IFRS 2 3 661.4 3 217.0 14% IFRS 2 Charges (105.4) (134.2) 21% Operating income 3 556.0 3 082.8 15% Operating margin (%) – After IFRS 2 Charges 11.8% 11.4% Income from investments 1.5 17.0 Net financing cost (402.7) (378.8) (6%) Income from Associates 596.9 515.1 16% Income before tax and abnormal items 3 751.7 3 236.1 16% Income tax expense (886.3) (833.5) (6%) Income after tax before abnormal items 2 865.4 2 402.6 19%

Group Nigeria Consumer Brands Grains Exports and International INCOME STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 12 R’m 2014 2013 % Change Income after tax before abnormal items 2 865.4 2 402.6 19% Abnormal items (net of taxation) (1 001.6) (5.5) Non-controlling interests 126.5 118.9 6% Profit from continuing operations 1 990.3 2 516.0 (21%) Discontinued operation 29.9 60.7 (51%) Profit from total operations 2 020.2 2 576.7 (22%) HEPS (cents) 1 815.7 1 628.6 11% - Continuing operations 1 804.4 1 574.3 15% - Discontinued operation 11.3 54.3 (79%) EPS (cents) 1 261.6 1 612.9 (22%) - Continuing operations 1 242.9 1 574.9 (21%) - Discontinued operation 18.7 38.0 (51%)

Group Nigeria Consumer Brands Grains Exports and International TURNOVER BY OPERATING SEGMENT 13 September September R’m % Change 2014 2013 Domestic operations 22 373.2 20 250.7 10% Grains 10 948.6 10 052.7 9% Milling and Baking 8 043.0 7 243.3 11% Other Grains 2 905.6 2 809.4 3% Consumer Brands 11 424.6 10 198.9 12% Groceries 3 968.7 3 238.6 23% Snacks & Treats 2 054.5 1 924.0 7% Beverages 1 107.9 1 020.3 9% VAMP 1 896.2 1 736.3 9% Out of Home 437.1 402.7 9% HPCB 1 960.2 1 877.0 4% Domestic intergroup sales - 0.9 International operations 7 698.8 6 752.8 14% Exports and International (Excluding Nigeria) 4 578.7 3 944.0 16% Nigeria 3 120.1 2 808.8 11% Total turnover 30 072.0 27 003.5 11%

Group Nigeria Consumer Brands Grains Exports and International CONTRIBUTION TO TURNOVER 14 2013 2014 Nigeria Nigeria Milling 10% 10% Exports & and Baking Milling and International 27% Exports & Baking International 15% 28% 15% HPCB HPCB 7% 7% Other Other OOH OOH Grains Grains 1% 1% 10% 10% VAMP VAMP 6% 6% Groceries Beverages Beverages Groceries 13% 4% 4% 12% Snacks And Treats Snacks and Treats 7% 7% 2014 Turnover: R30.1 billion 2013 Turnover: R27.0 billion

Group Nigeria Consumer Brands Grains Exports and International OPERATING INCOME BEFORE IFRS2 CHARGES 15 Operating Income % Operating Margins R’m 2014 2013 Change 2014 2013 Domestic operations 3 252.2 3 026.2 7% 14.5% 14.9% Grains 1 918.9 1 689.7 14% 17.5% 16.8% Milling and Baking 1 596.5 1 399.9 14% 19.8% 19.3% Other Grains 322.4 289.8 11% 11.1% 10.3% Consumer Brands 1 375.8 1 345.9 2% 12.0% 13.2% Groceries 320.4 295.1 9% 8.1% 9.1% Snacks & Treats 309.4 305.0 1% 15.1% 15.9% Beverages 126.6 106.4 19% 11.4% 10.4% VAMP 130.8 119.7 9% 6.9% 6.9% Out of Home 90.1 80.4 12% 20.6% 20.0% HPCB 398.5 439.3 (9%) 20.3% 23.4% Other operating charges (42.5) (9.4) - - International operations 409.2 190.8 114% 5.3% 2.8% Exports and International 691.1 574.8 20% 15.1% 14.6% Nigeria (281.9) (384.0) 27% (9.0%) (13.7%) Operating income 3 661.4 3 217.0 14% 12.2% 11.9%

Group Nigeria Consumer Brands Grains Exports and International CONTRIBUTION TO OPERATING INCOME BEFORE IFRS2 AND OTHER OPERATING CHARGES 16 2014 2013 Nigeria ; Nigeria ; (8%) (12%) Milling and Milling and Exports & Baking ; 44% Baking Exports & International; 43% International; 19% 18% HPCB 11% HPCB 14% OOH 2% OOH VAMP 2% Other Grains Other Grains 4% VAMP 9% 9% Beverages 4% Groceries ; 3% Groceries ; Snacks and Beverages 9% Snacks and 9% Treats ; 8% 3% Treats ; 9% 2014 Operating income: R3.7 billion 2013 Operating income: R3.2 billion

Group Nigeria Consumer Brands Grains Exports and International RECONCILIATION BETWEEN PROFIT FOR THE YEAR AND HEADLINE EARNINGS 17 2014 2013 % Change Continuing operations Net profit: 1 990.3 2 516.0 (21%) Non Gross Adjusting items controlling Tax amount interest Impairment- DFM 953.9 (46.1) (56.8) Impairment - Other 67.7 - - Derecognition of assets 40.1 - (11.2) Other (6.2) (13.1) 14.1 Abnormal items 1 055.5 (59.2) (53.9) 942.4 Less non-adjusting items (36.4) Other Headline items (7.0) (1.0) Headline earnings - Continuing 2 889.3 2 515.0 (15%) Discontinued operation Net profit: 29.9 60.7 (51%) Loss on sale of PPE - 9.7 Fair value (gain)/loss (11.8) 16.3 Headline earnings - Discontinued 18.1 86.7 (79%) Total Headline Earnings 2 907.4 2 601.7 12%

Group Nigeria Consumer Brands Grains Exports and International RECONCILIATION BETWEEN PROFIT FOR THE YEAR AND HEADLINE EARNINGS (continued) 18 2014 2013 % Change Total Headline earnings 2 907.4 2 601.7 12% Weighted average number of shares 160 127 228 159 754 722 Headline earnings per share - Total 1 815.7 1 628.6 11% Headline earnings per share - Continuing 1 804.4 1 574.3 15% Headline earnings per share - Discontinued 11.3 54.3 (79%) Diluted number of shares 164 150 637 163 827 535 Diluted headline earnings per share 1 771.2 1 588.1 12% Continuing operations 1 760.2 1 535.2 15% Discontinued operation 11.0 52.9 (79%)