TIGER BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080
“Tiger Brands” or the “Company”

VOLUNTARY TRADING UPDATE FOR THE FOUR MONTHS TO 31 JANUARY 2024

Update on key strategic initiatives

Following the appointment of Tjaart Kruger as Chief Executive Officer and Thushen Govender as Chief Financial
Officer towards the end of the 2023 calendar year, Tiger Brands remains focused on delivering on the key
strategic initiatives previously announced to drive sustainable growth and improve profitability. Significant
progress has been made in this regard, with the key initiatives listed below:

Operating model
Management have successfully concluded the implementation of the previously communicated operating
model, which remains key to restoring focus, enabling agile decision-making, and driving efficiencies. The
organisational structure has been simplified into six business units as set out below, all reporting directly to the
CEO:
    • Bakeries
    • Grains
    • Culinary (previously Groceries)
    • Snacks, Treats and Beverages
    • Home, Personal Care (HPC) and Baby
    • Exports and International

The relevant Managing Directors have been appointed from within the business effective 1 February 2024.

The above changes have seen the Group do away with one layer of leadership at the Chief Growth Officer level,
enabling increased speed of execution. This will not affect segmental financial reporting for the six months to end
March 2024.

Shared services
The business is currently busy with the next level of restructuring below the Managing Director level. A key
objective of this re-structure is to deploy support functions and shared services from Head Office back into the
business units, which is aimed at achieving the following objectives:
     • Operating a decentralised model with most decisions being made at the business unit level.
     • Quicker and better decision making with regards to manufacturing, procurement, and customers as well
          as speed to market.

We anticipate the second part of the restructure to be completed by the end of the second quarter.

Restoring cost leadership
In line with our revised operating model aimed at empowering the business units, efforts to decentralise
procurement based on uniqueness of spend are well advanced.

The renewed focus on rationalising SKUs (stock keeping units) will reduce complexity, resulting in manufacturing
and procurement efficiencies in due course. Additionally, achievements in portfolio and SKU rationalisation are



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expected to reduce the number of brands requiring support, allowing for more focused investment yielding a
higher return on investment.

Multiple value engineering projects have been expedited to improve the competitiveness of core brands and are
expected to start delivering results within FY24.

Portfolio optimisation & capital allocation
It is important that we direct our resources, both financial and human capital, towards the business segments
which generate or, have the potential to generate the highest returns. To date, significant progress has been
made on the disposal of certain non-core brands within HPC. In addition, focused initiatives are underway to
optimise current working capital levels.

A detailed capital allocation framework review and portfolio rationalisation exercise is underway, with a further
update expected during the course of the year.

While no sale has been concluded in terms of the Deciduous Fruit business, operations have been extended for
another season as we continue to explore optimal solutions for this business.

Market and trading environment overview
Tiger Brands’ domestic performance reflects the difficult trading environment with inflation in food and non-
alcoholic beverages rising ahead of CPI. Prices of essential items such as sugar, vegetables, meat, eggs, and rice
surged by almost 20% (Stats SA). As a result of the higher inflation over the period, consumer shopping habits
shifted towards buying more on promotion and limiting their spend to essentials.

Operational performance
Q1 trading proved difficult, with Black Friday sales and promotional activity over the December period falling
short of expectations. This is a continuation of the underperformance of key segments of the portfolio evident
in the last financial year resulting in significant volume declines. The new management team is committed to
arresting this trend while at the same time restructuring the business for long term sustainability.

On the positive side, Q2 is beginning to show a recovery as competitor pricing and promotional activity aligns
with input cost inflation.

Group revenue for the four months ended 31 January 2024 declined by 1% year-on-year, driven by volume
declines of 8% offset by price inflation of 7%. The Grains division experienced volume regression across all
segments, due to a difficult trading environment. Within the Consumer Brands division, year-on-year volume
growth was achieved in the Snacks & Treats and Baby segments as well as strong volume growth in Beverages.
Groceries experienced volume regression due to absolute volume declines across categories. Home Care was
adversely impacted by a slow start to the pest season due to excessive rainfall, while Personal Care volumes
benefited from the excellent traction of recent innovation.

Chococam delivered a pleasing top-line performance further supporting the strong performance from Exports
and International, including the Deciduous Fruit business.

Income from associates continued to perform well, significantly growing earnings on prior year in both local
currency and in rand terms.

Despite the volume regression over the period and consequential muted revenue performance, the benefit of
improved factory efficiencies and price realisations negated the impact to the gross margin percentage.




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Outlook
Given the slow start to the year, much of which is a function of the internal headwinds the company has been
facing as well as a continuation of the underperformance of the last nine months of FY23, operating income for
the six months ending 31 March 2024 is expected to be flat to lower relative to the same period last year. The
second quarter recovery remains largely dependent on improved trading ahead of the Easter period.

Management is focused on restructuring the business for the long term and believes that the current restructuring
efforts will start to gain momentum in the second half of the year.

The financial information on which the trading update and the outlook statement is based has not been reviewed
or reported on by the Company´s external auditors.

Tiger Brands’ results for the six months ending 31 March 2024 are expected to be released on SENS on or about
27 May 2024.

Bryanston

22 February 2024

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




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