Integrated Annual
Report 2018
We nourish and
nurture more lives
every day
Contents
For further information within this report
Visit our website: www.tigerbrands.com
for additional information
We nourish and nurture more lives every day
Tiger Brands is one of Africa’s largest, listed manufacturers of fast-moving consumer goods
(FMCG). Our core business is manufacturing, marketing and distributing everyday branded
food to middle-income consumers. We also distribute leading brands in the home, personal
care and baby sectors.
Business overview
Strategic review
Operational review Non-fi nancial overview
Risk management
Chairman’s review
Chief executive
offi cer’s review
Chief fi nancial
offi cer’s review
24
30
34
38
Grains
Consumer Brands –
Food
Home, Personal
Care & Baby
Exports &
International
Associates
Associates
42
44
46
48
48
50
50
Overview of non-
fi nancial performance 52
Our people
Environmental
sustainability
55
58
About this report
Group profi le
2018 performance
Our business model
Turning outputs
into competitive
advantage
Our operating
environment
Our stakeholders
2
4
7
8
12
13
13
14
14
18
Our material matters 18
Our strategy
Africa strategy
20
20
22
22
About Tiger Brands
About Tiger Brands
Governance review
Shareholders info
Corporate
governance
Audit committee
report
Social, ethics and
transformation
committee report
59
69
71
Shareholders’ diary 101
Declaration of
dividend
101
Analysis of
registered
shareholders and
company schemes
Remuneration report 74
About this report
Company
information
102
104
IBC
Purpose
We nourish and nurture more lives every day.
Vision
Deliver top-tier fi nancial results and be
recognised by all stakeholders as the best
fast-moving consumer goods (FMCG) company
in South Africa and most desirable growth
company on the continent. We attract the best
talent and are recognised as a great place
to work.
Operating model
Our operating model focuses on the consumer,
reigniting innovation and leveraging our scale
as one Tiger Team – resulting in an agile, lean
organisation that responds quickly and is
aided by simple ways of working. A key
enabler will be improved processes and
enhanced systems.
Tiger Brands Limited Integrated Annual Report
Tiger Brands Limited Integrated Annual Report 2018
Page 1
About this report
This integrated report analyses Tiger Brands’ performance for the
year to 30 September 2018 (review period), in the context of our
external environment. It also illustrates our focus on ensuring our
strategy and governance structures support our prospects for
creating value over the short, medium and long term. Covering the
review period, this is our primary report to all stakeholders. It should
be read in conjunction with the supplementary sustainability report
and annual fi nancial statements, published on our website,
www.tigerbrands.com.
In preparing our integrated and sustainability reports, we were
guided by the International Integrated Reporting Council (IIRC)
framework and GRI Standards, as well as recommendations in
the King Report on Corporate Governance for South Africa
(King IVTM*).
The scope and reporting boundaries, as well as frameworks
guiding content and independent assurance, are detailed on
page 104.
Determining materiality
We start with issues in the prior year, the group risk register and
views of our executive committee. These are combined with issues
arising from a detailed assessment of our operating environment
and stakeholder engagement, and clustered into logical themes,
in line with our strategy, to provide a concise view of our material
matters (with detailed disclosure in our online sustainability report,
where relevant).
Approval
The audit committee and board acknowledge their joint
responsibility for ensuring the integrity of the integrated report.
After applying our collective minds, we believe this report addresses
all material matters, and offers a balanced view of Tiger Brands’
strategy and how it relates to the group’s ability to create value
in the short, medium and long term. The report adequately
addresses the use of and impact on our capitals, as well as
the way in which their availability affects our strategy and
business model.
Khotso Mokhele
Chairman
21 November 2018
Emma Mashilwane
Chairman – Audit committee
* Copyright and trademarks are owned by the Institute of Directors in
Southern Africa NPC and all of its rights are reserved.
Page 2
Integrated Annual Report 2018
Tiger Brands Limited Integrated Annual Report 2018
Material matters for the review period
People
People
People
Innovation
Innovation
Food Security
Innovation
Food Security
Material matters the review period refer
page 18.
People
Food Security
Innovation
Macro-economic
Environment
Weak macro-
economic
Job Creation
environment
Material matters the review period
Job Creation
Executing Our Strategy
Business continuity
Macro-economic
Environment
Safety and Quality
Executing Our Strategy
Job Creation
Material matters the review period
Material matters the review period
Macro-economic
Environment
Human resources
and skills
Safety and Quality
Food security safety
and quality; security
Safety and Quality
of supply
Material matters the review period
Job Creation
Executing Our Strategy
Food Security
Safety and Quality
Macro-economic
Environment
Executing Our Strategy
Macro-economic
Environment
Food Security
Macro-economic
Environment
People
Food Security
Weak macro-
economic
environment
Combined assurance
Weak macro-
Food security safety
economic
and quality; security
environment
of supply
Executing Our Strategy
Safety and Quality
Executing Our Strategy
Macro-economic
Environment
Business
continuity
Human resources
and skills
Food security safety
Weak macro-
and quality; security
economic
Innovation
of supply
Nature of
environment
assurance
Human resources
and skills
Food security safety
Innovation
and quality; security
Assurance
of supply
Executing Our Strategy
provider
Safety and Quality
Business
continuity
Safety and Quality
External audit
Ernst & Young Inc.
Business process
Annual fi nancial
statements
People
Business Continuity
Food Security
Business Continuity
People
Macro-economic
Environment
Business Continuity
Food Security
People
Business Continuity
Human resources
and skills
Innovation
Business
continuity
Risk management
and internal controls
Internal audit
Environmental risk
assessments
Social responsibility
and sustainability
External audit
External audit
In-house
supplemented by
co-sourced service
providers
Marsh Proprietary
Limited
Human resources
and skills
Innovation
Weak macro-
economic
environment
Business
continuity
Food security safety
and quality; security
of supply
Safety and Quality
Executing Our Strategy
In this report
The scope of this audit covers information in the annual
fi nancial statements and does not extend to any fi nancial
or operating indicators in the integrated report
Risk management, page 24
Audit committee report, page 69
Pages 52 to 58
The group reports annually on its carbon emissions under
the global CDP, with the completeness of data validated
in this submission. www.cdp.net
Similar to the assurance provided for group risks,
management will consider appropriate assurance for
sustainability reporting as well as the acceptable level
of coverage by external assurance providers in FY19.
In future, we will also report on the United Nations
Sustainable Development Goals (SDGs) once we have
mapped them for our entire value chain, and have the
data to support reporting.
BBBEE
External verifi cation
EmpowerLogic
Proprietary Limited
Transformation, page 56
Tiger Brands Limited Integrated Annual Report 2018
Page 3
Group profi le
Tiger Brands is Africa’s leading manufacturer and distributer of fast-moving consumer goods (FMCG).
Grains
57%
45%
57%
25%
45%
Consumer brands – food
25%
10%
8%
10%
8%
8%
13%
8%
13%
34%
34%
100
100
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
80
80
Revenue R12,8 billion*
Operating income R1,9 billion*
Revenue R9,7 billion*
Operating income R828 million*
60
60
Milling and
baking
40
40
20
20
0
0
Bread
Milling:
– Flour
– Maize
– Sorghum*
*Includes Breakfast
and Beverages
Other grains
Groceries
Snacks & treats
Beverages
Pasta
Breakfast
Rice
Ingredients
Condiments
Spreads
Sugar
Chocolate
Concentrates
Sports drinks
Ready-to-drink
Value Added Meat
Products (VAMP)
Ready-to-cook
Ready-to-eat
Canned
processed meat
Market share
Market share
Market share
Market share
Grains
Grains
29%
29%
Maize
Maize
12%
12%
Flour
Flour
31%
31%
Bread
Bread
33%
33%
Breakfast
Breakfast
37%
37%
Pasta
Pasta
37%
37%
Rice 43%
Rice 43%
Consumer Brands –
food
Consumer Brands –
46%
food
46%
Spreads
Spreads
Condiments
Condiments
40%
40%
46%
46%
Canned veg
Canned veg
55%
55%
Snacks & Treats
Snacks & Treats
Chocolate
Chocolate
Sugar
Sugar
23%
23%
14%
14%
43%
43%
Number 1 brands
Number 1 brands
Market share
Market share
Home care
Home care
Pest
Pest
42%
42%
73%
73%
Number 2 brand
Market share: Nielsen volume share 12 month moving as at September 2018
* From continuing operations.
Page 4
Tiger Brands Limited Integrated Annual Report 2018
Personal care
Personal care
Number 2 brand
6%
Camphor cream
Camphor cream
85%
and lotions
and lotions
6%
85%
Baby
Baby
Wellbeing
Wellbeing
Nutrition
Nutrition
29%
29%
12%
12%
59%
59%
Homogenised
baby food
Homogenised
88%
baby food
88%
100
80
60
40
20
0
Market share
Maize
57%
45%
57%
25%
45%
25%
10%
10%
8%
8%
8%
8%
13%
13%
34%
34%
Home, Personal Care & Baby
Exports & International
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
Market share
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
■ Revenue
■ Operating
income
Grains
Flour
Bread
29%
12%
31%
33%
Breakfast
37%
Pasta
37%
Rice 43%
Revenue R2,2 billion*
Operating income R341 million*
Spreads
Consumer Brands –
food
46%
40%
Revenue R3,8 billion*
Operating income R270 million*
Personal Care
Condiments
Baby
Canned veg
46%
55%
Exports
International
Home Care
Sanitary cleaners
Insecticides
Snacks & Treats
Camphor cream
& lotions
Hair care
Chocolate
Nutrition
Baby wellbeing
23%
14%
43%
Davita
Jolly Jus
Benny
Other Tiger
Brands products
Chococam
Deli
Sugar
Home care
Pest
Market share
Personal care
Baby
Wellbeing
Camphor cream
and lotions
Nutrition
Homogenised
baby food
Number 1 brands
42%
73%
6%
85%
29%
12%
59%
88%
Our core business is providing
everyday branded food to large
and growing emerging markets
through a unifi ed customer sales
team and integrated supply
chain that leverages the group’s
scale. We target best-in-class
profi tability, underpinned by a
cost-conscious culture as well as
environmental, social and
governance principles to drive
shared value creation.
We have leading positions in
most categories and our iconic
brands are well-entrenched with
consumers in South Africa, as
illustrated by the percentage
share of market.
Camphor
* From continuing operations.
Tiger Brands Limited Integrated Annual Report 2018
Page 5
16 500
15 500
14 500
13 500
12 500
11 500
10 500
s
e
c
i
r
p
8
1
0
2
t
n
a
t
s
n
o
c
$
S
U
n
i
2
2
0
2
–
8
1
0
2
m
o
r
f
h
t
w
o
r
G
9 500
8 500
7 500
6 500
5 500
4 500
3 500
2 500
1 500
500
0
Group profi le continued
Tiger Brands is active in sub-Saharan Africa’s (SSA) largest consumer markets, and well positioned in large attractive categories.
Beyond our core market, South Africa, we have built a sizeable exports business for our products throughout Africa, and we have
operations in Nigeria and Cameroon. The Africa strategy approved this year builds on our core competencies and existing markets.
Read more on pages 42 to 51.
SSA’s largest consumer markets
SSA packaged food and soft drinks market (Total market size $84 billion, RSV)
Bubble size represents size of
the market 2018
Nigeria
South Africa
Angola
Tanzania
Zimbabwe
Côte d’lvoire
Ghana
Kenya
Senegal
Ethiopia
DRC
Mozambique
Uganda
Zambia
Cameroon
■ Tiger presence
■ Export market
■ Non-presence
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
21%
23%
2018 – 2022 retail sales CAGR (%)
Well positioned in large, attractive categories
SSA market by fastest-growing categories (Total market size $84 billion RSV)
Bubble size represents size of
the market 2018
Bottled
water
s
e
c
i
r
p
8
1
0
2
t
n
a
t
s
n
o
c
$
S
U
n
i
2
2
0
2
–
8
1
0
2
m
o
r
f
h
t
w
o
r
G
8 500
8 000
7 500
7 000
6 500
6 000
5 500
5 000
4 500
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
0
Processed Fruit
and Vegetables
Confectionery
Processed Meat
and Seafood
Dairy
Carbonates
Baked Goods
Sauces, Dressings
and Condiments
Rice, Pasta and Noodles
Edible Oils
Savoury Snacks
Sweet Biscuits, Snack Bars and Fruit Snacks
Ready Meals
Soup
RTD Tea
Spreads
Concentrates
Ice Cream
and Frozen
Desserts
Juice
Baby Food
Sports and energy drinks
Breakfast Cereals
■ Tiger Presence
■ Non-Presence
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
16%
2018 – 2022 retail sales CAGR (%)
Source: Euromonitor data; Top 15 categories of packaged food & soft drinks by market size; All SSA countries; RSV – Retail sales value
Our success is underpinned by the strength of our brands and
continuous improvement initiatives. We invest signifi cantly in our
core brands, backed by consumer and shopper research that
provides comprehensive insights into our chosen categories
and markets. We also hold meaningful minority interests in
associate companies.
› South Africa: JSE-listed Oceana Group Limited (42,1%) (fi shing)
› Chile: Empresas Carozzí (24,4%) (FMCG)
› Nigeria: UAC Foods Limited (49,0%) (FMCG)
› Zimbabwe: JSE-listed National Foods Holdings Limited
(37,4%) (FMCG)
Page 6
Tiger Brands Limited Integrated Annual Report 2018
2018 performance
We assess our performance against key metrics under each strategic pillar.
Read more about our strategy
on page 20.
The metrics below indicate our performance against each strategic pillar and are aligned with the short-term incentives for employees
in management and above (see remuneration report page 74).
Strategic pillar
DRIVE
DRIVE
GROWTH
BE
BE
EFFICIENT
GREAT
GREAT
PEOPLE
SUSTAINABLE
SUSTAINABLE
FUTURE
Drive growth
Be effi cient
Great people
Sustainable future
KPI
2018
2017 KPI*
2018
2017 KPI*
Total HEPS
(cents)
1 589
2
161
Safety
(lost-time injury
frequency rate)
0,27
0,30 BBBEE
implementa-
tion
2018
2017
3
3
Indications are that the
group will temporarily
drop to level 8
given the minimum
requirements for priority
elements (ownership,
skills development,
enterprise and supplier
development).
A broader group
transformation strategy
is being developed to
achieve level 4 status
by FY22.
Earnings before
interest and tax
(R billion)*†
3 321 4 634
Volume growth*†
(5,8%)
(3,1%)
12-month rolling
average
net working
capital
(days)*†
Continuous
improvement
savings
89,1
87,9
R707
million
R505
million
* Before IFRS 2 charges, impairments and abnormal items.
† From continuing operations.
Tiger Brands Limited Integrated Annual Report 2018
Page 7
Our business model
The business model is underpinned by four strategic drivers (see page 20) as well as the group’s strong brands,
manufacturing capability and distribution reach, which arguably gives our group a sustainable competitive
advantage. By successfully executing this business model, we create value for all our stakeholders.
Our capitals
Financial capital
Input by capital
› Funding received from providers of capital and
fi nancial resources available to the group
› Equity fi nancing: R17,3 billion
› Borrowing: R991 million
› Low gearing levels and strong cash
generating capabilities
Manufactured capital
› The physical infrastructure used to convert raw materials
and ingredients into high-quality food, home and
personal care products in branded packaging; inbound/
outbound logistics – we receive imported and locally
produced raw materials, ingredients and packaging
from suppliers and distribute fi nished products via
third-party transport and leased fl eet to customers.
› Cost of sales: R19,2 billion
› Sales and distribution: R3,7 billion
› Other operating expenses: R1,5 billion
› Production facilities: 44 manufacturing
facilities
› Capital expenditure: R720 million
Natural capital
› Natural resources consumed to convert
raw materials
Human capital
› Employees’ skills, capabilities, development
and experience
› Remuneration practices and recruitment
strategy
Intellectual capital
› Raw materials
› Energy
› Fuel
› Water
› Board of directors with a diverse range
of corporate leadership and industry expertise
› Twelve executive committee members
› Capabilities have been enhanced in key
disciplines
Consumer
insights
Procurement
Nourish and
nurture more
lives every
A
c
t
i
v
i
t
i
e
s
day
Manufacturing
Sales and
distribution
› Company knowledge, systems, processes,
intellectual property such as formulations, and,
most importantly, brands
› Marketing investment: R845 million
› Innovation, R&D: 5,3% of net sales
Marketing
Social and relationship capital
› Stakeholder relationships and engagement,
corporate reputation and values
› Governance and safety systems
Key external impacts
› Maintain positive relationships with
stakeholders including government,
regulators, investors, suppliers, service
providers and customers and invest in the
well-being of our communities through
corporate social investment initiatives
Read more on pages 18 and 19 and in our
sustainability report.
Exchange rates Commodity prices and demand/supply dynamics Security of raw materials supply
Page 8
Tiger Brands Limited Integrated Annual Report 2018
Our activities
Outputs
Our outcomes
Consumer
Consumer
insights
insights
Procurement
Procurement
Nourish and
nurture more
lives every
day
A
c
t
i
v
i
t
i
e
s
Manufacturing
Manufacturing
Sales and
Sales and
distribution
distribution
Marketing
Profi t formula
The group’s value-creating business model is focused on
producing, marketing and distributing food, home and personal
care products. We generate profi t by procuring raw materials
and ingredients and convert these as effi ciently as possible into
high-quality food, home and personal care products; seal them
into branded packaging; and distribute to consumers through a
network of customers that includes retailers, wholesalers and the
general trade. Our purpose is to nourish and nurture more lives
every day.
Our revenues
The majority of our revenue is generated in South Africa
from grains, consumer brands – food, home, personal
care and baby, with the balance from exports as well as
our international businesses in Cameroon and Nigeria.
Tiger Brands has defi ned its core as the manufacturing,
marketing and distribution of everyday branded food to
middle-income consumers. Key revenue differentiators
include the group’s overall market-leading position and the
number 1 or 2 position of most of our brands, increased
marketing investment to ensure our brands remain relevant
and top of mind, our far-reaching distribution capabilities
and the relationships with our customers.
Our costs
Our aim is to achieve sustainable savings based on
targeted spending, clear policies and compliance. We
have an established cost-conscious culture and a proven
track record of procurement savings and supply chain
effi ciencies. In addition, we are focused on optimising
indirect costs to deliver savings in sales activities as well as
general and administrative costs. Key cost differentiators
include our ability to leverage a centralised procurement
hub as well as the standardisation and simplifi cation of
processes, systems and practices.
Outcomes and trade-offs
Our business activities affect our capitals. Our aim is to
ensure that trade-offs have a positive effect overall. Given
the challenges we faced in FY18, we created little value
for shareholders, but we did create value for employees,
particularly those in our value added meat products unit who
have benefi ted from focused training and are now working in
a world-class facility.
We invested in our social and relationship capital through
stakeholder engagement, particularly with government and
regulators, as well as shareholders, through joint business
planning with our customers, and through our corporate
social investment initiatives. Signifi cant investments in our
manufactured and intellectual capitals were balanced with
acceptable reductions in natural capital for sustainable growth.
Legislative/regulator y change Weather patterns and climate change, including water scarcity
Tiger Brands Limited Integrated Annual Report 2018
Page 9
Our business model continued
Our activities
Outcomes and trade-offs
› Continued access to fi nancial capital through
investor and fi nancial market confi dence
Financial capital
› Net interest paid R55 million
› Dividends paid R1,9 billion
› Dividend policy: 1,75x cover (based on HEPS)
from FY19
› Revenue R28,5 billion
› Interest cover 59x
› Operating income* R3,3 billion
› Cash generated from operations
R3,3 billion
› Return on equity 18,6%
Manufactured
capital
› R12 billion spent with BBBEE-verifi ed suppliers
including R2 billion with black-owned enterprises
› Ongoing investment in the group’s manufacturing
architecture, distribution capability and technology
to promote and sustain growth
› On-shelf availability 97%
› Continuous improvement – R707 million
Natural capital
› Depleting natural resources through our
supply chain and operations
› Water consumption down 19,3%
› Signifi cant water savings from facilities in the
water-stressed Western Cape
› CO2 emissions down 4,17% (intensity trend)
› Creating employment, developing employees through
skills training and workplace experience, promoting
fair labour practices
› Management trainee programme ranked second
in SAGEA awards (SA Graduate and Employee
Associate)
Human capital
› Capabilities appointed in line with new operating model
› One fatality in a route-to-market incident
› Lost-time injury frequency rate on target at 0,27
› Fair labour practices – nil reported cases of unfair
practices (this was after year end)
› Black Managers Trust II terminated in December
2017 in line with our plan. On termination,
R575 million (pre-tax) was paid to employees
› Developing new and streamlining existing business
processes and systems, maintaining our market-leading
brand portfolio
› Tiger Brands has a 100% penetration in South Africa.
Every household buys at least one Tiger Brands product
› In the categories we compete in, we have 26% volume
share and improved brand equity for most key brands
› Top three in 80% of categories we compete in; 41% are
number 1 brands
› Innovation 5,3% of revenue
› Increasing marketing investment by outspending
our competitors as measured by share of voice
› 100% compliance to current sodium targets
› 11% reduction in sugar across the portfolio in past
fi ve years
› 25% of net sales from wholegrain, fi bre-rich grains,
vegetables and fruit
› Total socio-economic development (SED) spend of
› Over 200 engagements with shareholders,
R32 million
investors and analysts
› The Thusani Trust provides bursaries for the children
of qualifying black employees; 381 students have
graduated since 2007
Intellectual
capital
Social and
relationship
capital
› Incinerated 4 500 tons of processed meat
products due to Listeria outbreak
› 156 tons of non-recyclable packaging
reduction since FY15
› Invested R61 million or 1,8% of total
payroll on training
› Recognised by Top Employers Institute as
a Top Employer 2019 for excellence in
employee conditions
› Leading the industry in modern food-
labelling practices in South Africa through
Eat Well Live Well initiative to empower
consumers to make more informed
decisions about their dietary intake
› 5% of net sales fortifi ed voluntarily
with micronutrient enrichment
› The group has 5 brands generating
in excess of R1 billion in net invoiced
sales and 10 brands in excess of
R500 million
› Tiger Brands Foundation provides breakfast
meals to 67 500 learners across the
country. By September 2018, over
65 million breakfasts had been served
› Responsible supply chain practices
› Considered investor feedback and
addressed in remuneration policy
› Black Managers Trust
Page 10
Tiger Brands Limited Integrated Annual Report 2018
› Continued access to fi nancial capital through
investor and fi nancial market confi dence
› Dividend policy: 1,75x cover (based on HEPS)
Financial capital
› Net interest paid R55 million
› Dividends paid R1,9 billion
from FY19
› Revenue R28,5 billion
› Interest cover 59x
› Operating income* R3,3 billion
› Cash generated from operations
R3,3 billion
› Return on equity 18,6%
› Long-term strategy remains compelling and relevant
› Identifi ed priorities to facilitate focused execution
› Clear Africa strategy, building on what we have in South Africa
› Embed operating model through revitalised ways of working
CEO & CFO’s
reports – pages
34 to 41.
Annual fi nancial
statements
Manufactured
capital
› R12 billion spent with BBBEE-verifi ed suppliers
including R2 billion with black-owned enterprises
› Ongoing investment in the group’s manufacturing
architecture, distribution capability and technology
to promote and sustain growth
› On-shelf availability 97%
› Continuous improvement – R707 million
› Prudent and diligent approach to capex approvals
› Focus on appropriate business restructuring
Strategy section –
page 20.
Actions to enhance/mitigate outcomes in 2018
Read more
Natural capital
› Depleting natural resources through our
supply chain and operations
› Water consumption down 19,3%
› Signifi cant water savings from facilities in the
water-stressed Western Cape
› CO2 emissions down 4,17% (intensity trend)
› Creating employment, developing employees through
› Management trainee programme ranked second
skills training and workplace experience, promoting
in SAGEA awards (SA Graduate and Employee
fair labour practices
Associate)
› Capabilities appointed in line with new operating model
› Fair labour practices – nil reported cases of unfair
Human capital
› One fatality in a route-to-market incident
› Lost-time injury frequency rate on target at 0,27
practices (this was after year end)
› Black Managers Trust II terminated in December
2017 in line with our plan. On termination,
R575 million (pre-tax) was paid to employees
› Developing new and streamlining existing business
› Increasing marketing investment by outspending
processes and systems, maintaining our market-leading
our competitors as measured by share of voice
brand portfolio
› Tiger Brands has a 100% penetration in South Africa.
Every household buys at least one Tiger Brands product
› In the categories we compete in, we have 26% volume
share and improved brand equity for most key brands
› Top three in 80% of categories we compete in; 41% are
number 1 brands
› Innovation 5,3% of revenue
› 100% compliance to current sodium targets
› 11% reduction in sugar across the portfolio in past
fi ve years
› 25% of net sales from wholegrain, fi bre-rich grains,
vegetables and fruit
› Total socio-economic development (SED) spend of
› Over 200 engagements with shareholders,
R32 million
investors and analysts
› The Thusani Trust provides bursaries for the children
of qualifying black employees; 381 students have
graduated since 2007
Intellectual
capital
Social and
relationship
capital
› Incinerated 4 500 tons of processed meat
products due to Listeria outbreak
› 156 tons of non-recyclable packaging
reduction since FY15
› Invested R61 million or 1,8% of total
payroll on training
› Recognised by Top Employers Institute as
a Top Employer 2019 for excellence in
employee conditions
› Assessed the impact of climate change and the drought in the
Western Cape on our operations and supply of raw materials
and implemented mitigating measures to ensure continuity of
production and supply
› Energy effi ciency and water-saving initiatives continued, and
we support the new Energy Effi ciency Accord in South Africa.
We have mitigating plans in place to ensure continued
production in spite of an unstable electricity grid
› We have enhanced waste reduction and are in the process
of implementing the relevant legislation
› We continue to optimise packaging by light weighting where
possible
› Strengthened, experienced executive team
› Key skills gaps addressed
› Structure capability and new process embedded
› Centralised R&D function established and fully resourced
› Detailed plans on career development
› Establish long-term human capital planning
› Leading the industry in modern food-
labelling practices in South Africa through
Eat Well Live Well initiative to empower
consumers to make more informed
decisions about their dietary intake
› 5% of net sales fortifi ed voluntarily
with micronutrient enrichment
› The group has 5 brands generating
in excess of R1 billion in net invoiced
sales and 10 brands in excess of
R500 million
› Tiger Brands Foundation provides breakfast
meals to 67 500 learners across the
country. By September 2018, over
65 million breakfasts had been served
› Responsible supply chain practices
› Considered investor feedback and
addressed in remuneration policy
› Black Managers Trust
* Before IFRS 2 charges impairments and abnormal items.
› Health and wellness underpins our R&D to ensure our brands
remain relevant and make a meaningful contribution to the
health challenges affecting our communities. Focus is to provide
affordable everyday nutrition
› IT investment
› Centralised reporting platforms being implemented
› Relationship with Stellenbosch University (Food Safety Centre)
› Supplier development fund
CEO report
– page 34.
Overview of non-
fi nancial performance
– page 52.
Sustainability report
Overview of non-
fi nancial performance
– page 52.
Remuneration
committee
report – page 74.
Sustainability report
Awards – page 12.
Operational review
– page 42.
Our stakeholders –
page 14.
Social, ethics and
transformation
committee
report – page 71.
Remuneration report
– page 74.
Sustainability report
Tiger Brands Limited Integrated Annual Report 2018
Page 11
Turning outputs into competitive advantage
Collectively, various outputs (marketing investment, innovation, minimising environmental impact) are
transformed into a key outcome for an FMCG company – leading brands. Our strategy is to have the
fi rst or second-placed brand in our chosen categories.
Sunday Times Top Brands 2018
In the 20th year of this leading survey, KOO again ranked as the top brand overall, ahead of several global brands and
mirroring its position in the fi rst survey in 1998. Over the years, KOO has entrenched its reputation for quality, convenience and
value – a preferred food brand on consumers’ tables since 1940. In a competitive consumer market, which has seen brands
appear and disappear, KOO’s sustainability and strength is evident in its status as an integral part of South African consumers’
lives. Key to this brand strength is its ability to remain relevant with generations of consumers. For example, in today’s market,
nutrition is key for many shoppers and KOO’s ability to deliver nutritious meals that are quality-assured and offer good value
has been a vital ingredient in its ongoing success. The brand also resonates with consumers on an emotional level – evoking
memories of family favourites – as proved by its recent ‘share your favourite KOO recipe’ campaign which elicited thousands
of entries from its 257 000 followers on Facebook.
Tastic was ranked number 1 essential food for the second consecutive year, while Tastic and All Gold Tomato Sauce were in the
top 10 most-loved South African brands. Similar to KOO, our Tastic and All Gold ranges are fi rmly entrenched in South Africa‘s
hearts and shopping baskets. This was recently illustrated by the excellent response when Albany and Tastic commissioned
special Heritage Day product packaging, designed by famed local artist Esther Mahlangu. More than a mere advertising tactic,
this promotional strategy enhanced the brand equity of both Albany and Tastic, while showcasing a uniquely South African artist.
Gran d P ri x
o v e r a l l faavouritebran
d
-
1
l
ti a
n
E s s e
f o o d s
1
s & s a u ces
t
n
e
Con di m
Co
1
2
Our brands also feature prominently in their categories:
2018 Sunday Times Top Brands Awards.
TINNED FOODS
ESSENTIAL FOODS
CONDIMENTS & SAUCES
FRUIT-BASED DRINKS
ENERGY DRINKS
Koo
No 1
All Gold
No 3
Hugo’s
No 7
Tastic
No 1
Albany
No 2
Fatti’s & Moni’s
No 4
Ace
No 7
Aunt Caroline
No 9
All Gold Tomato
Sauce
No 1
Crosse & Blackwell
Mayonnaise
No 2
Mrs Ball’s Chutney
No 4
Page 12
Tiger Brands Limited Integrated Annual Report 2018
Oros
No 1
Halls
No 5
Energade
No 4
In the review period, our operating environment has had a markedly greater impact on our performance.
Given the number of issues outside our control, we have had to focus carefully on balancing the trade-off
between addressing each issue effectively and preserving our own capitals.
Macro landscape
Minimal economic growth in South Africa, and rand volatility
during the year, has meant a steady decline in consumers’
discretionary spend (compounded by higher VAT, fuel and utility
costs). In response, we are managing our input and operating
costs to ensure affordable prices for consumers.
The South African economy slipped into recession in the second
quarter of 2018, shown below. The country’s last recession was
during the 2008 – 2009 global fi nancial crisis with three
consecutive quarters of economic decline.
Higher infl ation as taxes take a toll
South Africa’s consumer infl ation rate jumped to 4,9% in
September after a seven-year low of 3,8% in March. Much of
the increase refl ects price rises in product groups that attract
specifi c taxes – alcohol, fuel and sugary drinks.
Impact of drought
The protracted drought in the Western Cape obviously affected
the supply of fruit and vegetables, although much of the produce
from that area is designated for export markets. To manage the
impact on our operations, we focused on reducing water
consumption, and securing alternative sources of supply (see
case study in our sustainability report on the website).
South African economic growth over time
Quarter-on-quarter growth in gross domestic product (GDP)
COMPETITIVE POSITIONING
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
Q1/14
Q2/14
Q3/14
Q4/14
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Q2/16
Q3/16
Q4/16
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Seasonally adjusted and annualised Source: STATS SA
Despite the VAT increase, food infl ation
continues to fall
Annual food infl ation continues to slow despite April’s rise in
value added tax (VAT) from 14% to 15%, with some food items
being cheaper than they were a year ago.
Oils, bread, fruit and sugar are cheaper than they
were a year ago
Percentage change in food and drink prices, June 2018
compared with June 2017
›
Beer
Spirits
Fish
Wine
Cool drinks
Meat
Vegetables
Hot drinks
Milk, eggs and cheese
-1,4%
-3,1%
-3,2%
-5,3%
Source: STATS SA
9,1%
7,7%
7,5%
7,1%
7,0%
6,8%
5,7%
4,8%
4,8%
Oils and fats
Bread and cereals
Fruit
Sugar, sweets and desserts
The VAT increase will take time to fi lter through to the infl ation
rate, as will the rise in fuel prices. But motorists are already
feeling the impact – with petrol prices up 9% over the past year,
fuel and meat show the highest year-on-year price increases.
›
›
›
Tiger Brands retained the lead in packaged food in 2018,
with a 26% volume share. While we lost share in the review
period, we made good progress in new product launches to
address expressed consumer needs for convenience, healthier
foods and affordable pack sizes.
The breadth and diversity of our portfolio enables the group
to address the full range of consumers’ shopping needs,
particularly those in the middle-income bracket (living
standards measure 5 – 8).
The quality of our brands appeals to all consumer groups.
As acknowledged premium brands, they are trusted and
many are considered heritage brands. This means consumers
are prepared to pay slightly more for the quality they know
they will receive.
Retail landscape
The economic environment has resulted in retailers becoming
more focused and assertive in executing their strategies.
We are monitoring a number of trends among retailers:
›
›
Transforming data into insights for more meaningful solutions
Retailers are differentiating formats across their group, eg from
small convenience stores to large one-stop stores and
discounters
Enhancing their agility to respond to changing shopper
dynamics and support sustainable growth, for example
increasing their own category penetration through private-label
products.
We are working closely with our customers on mutually
benefi cial solutions that ensure our products are competitive
while meeting their need to attract consumers to their stores.
Through our joint business-planning initiatives, we are
demonstrating our expertise in growing categories, revising our
assortment based on understanding the shopper in each store
format, improving our price-pack architecture to increase
availability and build effective partnerships.
In the year ahead, we will focus on embedding appropriate
technology that enhances monitoring the return on investment of
our promotional activity while effectively meeting the needs of
our customers. We will also implement channel-specifi c category
management methodologies focused on differentiated sales,
assortment and relevant innovation.
Our ultimate aim is to be a preferred supplier – for our product
range, innovation, capabilities and execution. We believe we
have the resources and expertise to achieve this aim.
Tiger Brands Limited Integrated Annual Report 2018
Page 13
Our stakeholders
Sustainable relationships with key stakeholders are essential to our long-term growth. Accordingly,
shareholders, employees, consumers, customers and suppliers are all part of the chain that creates value.
In addition, we believe in creating shared value, specifi cally in
areas where our operations intersect with society. As such, we
have concentrated on developing long-term and sustainable
relationships with communities through projects that allow us to
bring our purpose to life. We do this by creating value not just
for shareholders but for society through nurturing and nourishing
lives every day. We have reviewed our socio-economic
development approach to ensure we can create the most value
and make the most difference.
We also depend on broader society to provide a conducive
operating environment, and a consumer and talent base that we
can reliably draw from in future. As such, stakeholders in our
broader socio-economic environment – law-makers, regulators,
industry groups, the media and communities – all hold a stake
in our licence to operate but, more so, the freedom to operate.
No licence will ensure our operating rights without the extended
relationships and partnerships with our stakeholder community.
Stakeholder relations at Tiger Brands is, therefore, a strategic
function. It is focused on constructive engagement to build
positive reputational capital for the group to underpin our growth
and sustainability.
Our aim is to maintain our social licence to operate and protect
the reputation of Tiger Brands as a trusted, strategic partner.
Our FY17 stakeholder engagement survey provided a baseline
understanding of how stakeholders perceive our engagement
with them. This aligns with our strategic goal of increased
stakeholder inclusivity, and meets the requirements of King IV.
Based on results from the survey (detailed in our prior report),
we have developed stakeholder engagement training for internal
issue owners. This began rolling out in October 2018. We
have worked with key production sites such as King Korn in
Potchefstroom, Tiger Milling in Hennenman and Albany Bakery
in Secunda to develop stakeholder engagement plans, enhance
stakeholder inclusivity, and co-create shared value with
communities around us. In 2019, we will focus on rolling out
our stakeholder engagement plans to the rest of our operations,
and developing long-term relationships with key stakeholders
nationally and in our operating areas.
Key elements of our stakeholder relations strategy include:
Consistent
approaches to
engagement
throughout the
group
Mechanism to
anticipate risk
and
opportunities
Coordinated
framework for
stakeholder
management
Leadership
actively
engaging with
stakeholders
Values-based
engagement
Stakeholder issues in 2018
Key issues in 2018
Our response
Customers (retailers/wholesalers)
Stakeholder-
focused as
opposed to
compliance-
based
engagement
Read more
Increased competition amid
muted consumer demand
Developing joint business plans and growth workshops with key accounts to
implement relevant customer marketing campaigns and grow market share
P 13.
Driving in-store activation, on-shelf availability and distribution in modern and
general trade to improve execution and overall availability
Building relevant pack-price architecture and category management plans to
improve ranging and assortment by chain/format to differentiate Tiger Brands
and increase penetration and consumption
Collaborating with key customers on shopper campaigns, data and insight
gathering, customer service excellence and CSI opportunities
Page 14
Tiger Brands Limited Integrated Annual Report 2018
Key issues in 2018
Our response
Employees
New operating model and
organisational redesign
Performance and rewards
Talent and career
development
Teamwork and collaboration
Enhanced internal
communications
Wage negotiations
Consumers
Product affordability
Value proposition
Health and wellness
Regular, high-impact employee engagement sessions, one-on-one consultations
and the recruitment of an in-house change management specialist
The revised operating model and corresponding people strategy has directly
considered and addressed these issues. Monitoring of existing and new issues
has been included in updated HR processes, eg pulse (satisfaction) survey and
a dedicated employee relations centre of excellence
Wage negotiations were settled while regular regional leadership engagements
will be introduced
Mitigate infl ationary pressures through cost-saving initiatives and operational
effi ciencies
Smaller pack sizes and/or alternative, more affordable packaging formats
– strong pipeline of innovation. New packs launched in Benny, Jungle, Morvite,
Maize, Oros ready-to-drink
Ensure our product quality meets consumer expectations and the brand
represents value
Proactive communication on health benefi ts and claims such as fortifi ed products,
eg Ace, Jungle and Morvite; preservative-free products, eg All Gold tomato
sauce, sugar and salt reduction
Listeria and food safety
Founding member of the Centre for Food Safety and relaunch of Enterprise,
accompanied by public education on food safety
Community
Food security and related
nutrition issues
Maintain strong partnerships with governments and developmental agencies to
support initiatives that promote nutrition, health and education, and contribute
to the development of local communities and eradication of poverty
Conduct social return on investment (SROI) review to assess the impact of our
development initiatives
Increased demand for support
with enterprise development
and assistance in getting
community members –
particularly the youth – to
be economically active
We emphasise community enterprise development programmes which are
designed purposefully, where possible, to foster a seamless transition to formal
enterprise and supplier development programmes (ESD). This in turn supports the
transition from philanthropy to community development to entrepreneurship. In
addition to this new approach from 2019, we will also conduct social mapping
to ensure solutions are holistic and respond to community needs and realities
Read more
P 55.
P 56.
P 38.
P 12.
P 84
and 43.
P 30 to
37 (SD
report.
P 56.
P 56.
Tiger Brands Limited Integrated Annual Report 2018
Page 15
Our stakeholders continued
Key issues in 2018
Our response
Read more
Investors
Lacklustre macroeconomic
outlook
Impact of aggressive
competition and increased
promotional activity on sector
profi tability
Confi rmed the strategy approved in 2017 as sound and relevant
Articulated strategic progress to date and plans to address gaps
Embed the operating model through revitalised ways of working
Limited progress on strategy
execution
Narrowed priorities to facilitate focused execution; dedicated resource to
drive strategic portfolio decisions
Remuneration
Considered investor feedback and addressed in remuneration policy
Listeria outbreak
Kept market abreast of developments through SENS announcements and
engagements. Conducted over 200 engagements (calls, individual meetings,
conference attendance and results presentations)
Succession pipeline
Prioritising the development of leadership capability and capacity to inspire
winning performance
P 20.
P 20 to
21, 55.
P 20 to
21.
P 74 to
100.
P 30 to
37 (SD
report.
P 55.
Government
Regulations on sodium
reduction; proposed tax on
sugar-sweetened beverages
Promoting awareness of
nutrition education
Food security
Growth and development of
local agricultural sector
Media
Media management focus
Increase access to
management and information
Strong emphasis on proactive
and reactive media relations
Swift response to media
enquiries
Complying with all relevant regulations; actively participating in dialogue
before legislation is promulgated
Keeping abreast of emerging issues
Active partnerships to promote agri-sector development and greater inclusion
of smallholder farmers
Nutrition education programme with the Department of Basic Education
In-school breakfast programme in partnership with Tiger Brands Foundation
See our
sustainability
report.
Appointed a senior media and PR manager to deepen and broaden our engagement with the
media and implement the media strategy
Dedicated media and consumer section on the website for major issues such as Listeria
Enhanced one-on-one media engagements – CEO, CFO interactions with key media
Manage all enquiries within deadline
Fair treatment of consumers
Answer all media and social media queries on all consumer-related enquiries within timeframes
Increased focus on newsroom
interactions
Social media engagement
Greater access to spokespeople and Executive committee members for editors and journalists
Increased Tiger Brands’ social media presence and engagement on Facebook and Twitter with
media and consumers
Media governance
Strengthened media governance and protocols when dealing with journalists and media houses
Approvals and media protocols now built into the media strategy to ensure swift responses
Media analysis
Enhanced media monitoring and analysis ensure that reputational risks are identifi ed and dealt
with timeously, and proactive approaches to emerging opportunities are maximised
Page 16
Tiger Brands Limited Integrated Annual Report 2018
Key issues in 2018
Our response
Read more
Suppliers
Volatility of the rand against
major currencies
Group-wide savings programme intensifi ed to dilute impact of
currency-related cost increases
Industrial pollution restrictions
in China continue to affect
raw material availability for
fl avours and other chemicals
Signifi cant increases in global
paper pulp pricing impact the
cost of paper packaging
White fl y pestilence had a
signifi cant impact on the
availability and price of fresh
tomatoes
Adverse domestic weather
conditions affected crops such
as groundnuts, tomatoes and
fruit
Potential threat of El-Niño
weather conditions
Availability of oats supply
constrained by drought in EU
and Australia
Introduction of sugar tax and
higher duties signifi cantly
increased cost of using sugar
across several categories
Collaboration with strategic suppliers to secure requirements and contain cost
increases
Augmenting supplies by identifying new global supply sources and alternative
ingredients for recipes
Leveraged relationships with large-scale commercial farmers and international
sources to secure quantities required
Approved hedging policy governs price protection and sales and operations
planning secures supply
See pages 53 to
57 and our
sustainability
report.
Activated international sourcing to augment raw material shortages
Continued to play a leading role in appealing for moderated duties to
safeguard the impact to consumers and managed sugar cover ahead of price
increases by the local sugar industry
Reformulated key beverage brands to reduce sugar content
Listeria in the value added
meat products business
Validated that our suppliers/farmers have complied with requisite food
safety/hygiene standards
Leveraged trusted relationships with pig farmers to manage the risk of cost
increases on start-up
Tiger Brands Limited Integrated Annual Report 2018
Page 17
Our material matters
Determining materiality
Using the prior year’s issues and the group risk register as a starting point, individual or group sessions were held with exco
members. Their views were combined with issues arising from a detailed assessment of our operating environment and feedback
from all stakeholder engagements, and then clustered into logical themes, in line with the group’s strategy, to provide a concise
representation of the issues Tiger Brands faces in this report. Where relevant, further details appear in our online sustainability report.
Strategic
objective
DRIVE GROWTH
Clear strategies
to win in each
category,
channel and
customer
Topic
Issue
Related risk
(page 24)
Our response
A weak
macro-
economic
environment
› Increased regulation
› Operating environment
› Our markets
› Failure to successfully
execute business
transformation
programmes
› Inability to react to
intensifying competition
› Failure to respond to
changing consumer
preferences
and operating
environment
› Chief executive
officer’s review
› Our business
model
› Our
competitive
advantages
and market
position
› Operational
review
› Higher reliance on the private sector
to deliver national infrastructure and
services
› Exchange rate volatility
› High unemployment in a low-growth
environment affects consumers’
propensity to spend
› Increase in value added tax
› Record fuel prices impacting
consumers’ disposable income
› Increasingly competitive landscape
among customers (including
changing store formats and private
label) and manufacturer restraint on
pricing in an attempt to minimise
consumer inflation and maximise
volumes
› Low innovation rate inhibiting our
ability to address unmet consumer
needs and emerging trends; while
anticipating potential legislation/
regulation
Page 18
Tiger Brands Limited Integrated Annual Report 2018
Strategic
objective
BE EFFICIENT
Efficiency in
all we do, cost
effective and
an advantaged
integrated supply
chain
GREAT PEOPLE
A great place
to work and
winning culture
that energises
consumer-
obsessed agile
people
SUSTAINABLE
FUTURE
Sustainable
environment,
communities and
company
Our response
› Chief financial
officer’s review
› Risk
management
Topic
Issue
Related risk
(page 24)
Business
continuity
› Security of natural resources and
› Cybercrime and
raw materials
› Exposure to cyber threat
› Disruptive technologies
› Compliance with new laws and
regulations
› Unstable social environment
» Strikes
» Xenophobia
› Political environment and impact
on labour
» Unstable working environment
» Infighting on shop floor between
unions
› Fragmented union representation
information security
› Business continuity
vulnerabilities
› Data and information
risk
› Regulatory non-
compliance
› Fraud, theft, corruption
and crime
› Ageing infrastructure
› Industrial action
› Threats to employee
› Remuneration
security
report
› Inability to attract and
retain critical skills
› Occupational health
and safety
› Supplementary
sustainability
report
› Food safety and product
quality
› Inability to be cost
competitive
› Environmental risks
› Occupational health
and safety
Human
resources and
skills
› Safety
› Security
› Attraction
› Developing and retaining critical
skills; developing core capabilities
development; skills pipeline;
employee relations; social impact
› Impact of automation on jobs
› BBBEE compliance
Food security
safety and
quality; security
of supply
› Listeria
› Maintaining superior quality
› Increased regulation
› Uncertain policy on land
expropriation
› BBBEE compliance
› Climate change
› Drought in South Africa
› Changes in legislation
› Carbon tax
› Our response to climate-change
challenges
» Effect on sourcing raw materials
› Waste Act
» Food waste legislation and
initiatives
Tiger Brands Limited Integrated Annual Report 2018
Page 19
Our strategy
Achieving our true potential by 2022
In 2017, a thorough strategic review was conducted and the board approved a strategy for sustainable profi table growth.
Supported by four strategic pillars, namely drive growth, be effi cient, great people and sustainable future, it ensures focus on areas
that will help Tiger Brands achieve its true potential.
We nourish and nurture more lives every day
DRIVE
DRIVE
GROWTH
BE
BE
EFFICIENT
GREAT
GREAT
PEOPLE
SUSTAINABLE
SUSTAINABLE
FUTURE
Our Values
We treat each
other with care
and respect
We deliver with
passion and
excellence
Safety and quality
are non-negotiable
for us
We embrace
diversity and
inclusivity
We act with
integrity and
accountability
in all we do
Our winning behaviours
CONSUMER
OBSESSION
TEAMWORK
EMPOWERED
ACCOUNTABILITY
FOCUSED
EXECUTION
Management and the board conducted a further review in FY18 and believe the strategy to be compelling and relevant. To achieve
our purpose, we are concentrating on four focus areas. Our progress, challenges and priorities for FY19 are summarised below:
Focus areas Drive growth
Be effi cient
Great people
Sustainable future
Objectives
Clear strategies to win in
each category, channel
and customer
Effi ciency in all we do,
cost-effective and an
advantaged integrated
supply chain
A great place to work
and winning culture that
energises consumer-
obsessed agile people
Sustainable planet,
communities and company
Focused execution
› New operating model
› Introduced a
Progress
in FY18
› Consumer insights,
media and strategic
pricing capabilities
in place; innovation
operating model
resourced
› Improved availability
and optimal pricing
strategies in key
categories
› Distorted marketing
investment to key
brands, and focused
working spend
› Innovation ahead of
budget and tracking
upwards
› Improved customer
relationship and service
› Integrated supply chain
implemented across
group
implemented
› Savings in line with
› Total continuous
budget
› New capabilities
appointed
› Critical vacancies in
management fi lled
› Group-wide talent
review process
conducted
improvement savings
of R707 million
› Good progress on
shop-fl oor development
› First wave of shared
services (HR + fi nance)
implemented
› IT roadmap and
capability in place; IT
investment prioritised
› Procurement forum
established to govern
key purchase decisions
supplementary
sustainability report
covering broader
ESG-related topics
› Enterprise and supplier
development (ESD) offi ce
operational
› Financial and non-
fi nancial support,
agronomics and agrarian
support as well as
business mentorship
Page 20
Tiger Brands Limited Integrated Annual Report 2018
Focus areas Drive growth
Be effi cient
Great people
Sustainable future
Challenges
› Managing volume,
margin and market
share
› Meaningful innovation
› Growth of private label
› Listeria crisis
› Drive supply-chain
› Embed operating
› Employee safety and
effi ciency and unlock
cash
model
security
› Enhance speed of
› Climate change (changes
execution
› Drive One Tiger culture
Priorities
FY19
› Availability and fair
› Agile and dynamic
share
supply chain
› Optimal pricing strategy
› Continuous improvement
› Optimal pack sizes/
savings
format
› Meet consumer needs
and trends
› Disproportionate
investment in key
brands
› Signifi cant IT investment
› Further improve group
quality, safety and
security standards
› Prudent and diligent
approach to capex
approvals
› Talent: embed
standardised
framework with
targeted strategies
› Leadership: develop
executive succession
plan
› Great place to work:
transformation, review
rewards strategy
in weather patterns,
drought in production
areas and the impact on
sourcing raw materials,
changes in legislation,
carbon tax)
› Adequate pipeline of
critical skills
› Increased regulation
› Policy on land
expropriation
› BBBEE compliance
› BBBEE: level 4 by FY22
› Enterprise supplier
development: increase
procurement opportunities
for black-owned
enterprises through ESD
fund and capacity
building, supplier
compliance, import
replacement
› Socio-economic
development: align with
national priorities
› Sustainability: ethical
sourcing and human rights
policies approved, meet
improvement targets for
energy, water, waste,
packaging;
environmentally friendly
packaging
Our measures of success
Key performance indicators *
2022 target disclosed
Net sales (R billion)
Category growth +1 – 2%
Gross margin (%)
Marketing investment
(% of net sales)
Operating margin
(before IFRS 2 charges) (%)
+150 – 180 bps
+100 – 160 bps
Return on average net assets (%)
>35%
* From continuing operations.
+100 – 160 bps
3,0
2,5
2,5
FY18
28,5
32,5
FY17
31,3
33,4
FY16
Progress
30,6
31,8
11,7
26,6
14,8
35,3
13,7
30,4
Met
Partially met
Not met
Tiger Brands Limited Integrated Annual Report 2018
Page 21
Africa strategy
Tiger Brands has an established presence in Africa, as do several of our key customers. Learning from past
lessons, and following comprehensive fact-based analysis, the board has approved an Africa strategy that
builds on what we have and complements our strategy in South Africa.
Strong growth projected in the medium to long term driven by sub-Saharan countries
Packaged food growth
Consumer expenditure CAGR
➜ 8%
(2017 – 2022)
GDP CAGR
➜ 6%
(2017 – 2022)
➜ 4%
(2017 – 2030)
Population CAGR
➜ 3%
(2017 – 2030)
Disposable income growth
➜ 9%
(in 2030)
Source: Euromonitor
Our analysis shows that growth in African markets is possible, but requires a focused strategy and excellent execution. Given our
core competencies, we will concentrate on the retail packaged food market (defi ned as fresh, packaged and prepared foods for
home preparation and consumption), which Euromonitor expects to grow by 27% into a US$1billion market in the next fi ve years.
Based on a clear understanding of the opportunities and the risks in this sizeable market, we have identifi ed four growth imperatives
with clear strategic drivers:
Explore
Attractive country and category
opportunities to explore and establish
best approach for entry
Strategic d riv
s
r
e
Capability
Africa-based trade
marketing team to
support and develop
markets
In-country team to
measure and manage
partners
Categories and brands
Select, prioritise, drive
sustainable volume growth
Invest in key brands
Develop new products that
meet consumer needs
Growth
imperatives
Expand
Attractive categories and countries where
we are established and profitable, with a
developed route-to-market
Str
a
t
e
g
i
c
d
r
i
v
e
r
s
Develop and optimise
route-to-market
Best partners
in-country
Standards, processes
and measures agreed
with each partner
S
t
r
a
t
e
g
i
c
d
riv
ers
Product sourcing
Optimise value chains to
drive competitive pricing
Local manufacture or packaging
where this makes sense
Create Africa local
production hubs
gic drivers
a t e
t r
S
Trade
Opportunistic export trading to
increase revenue, test relevance of our
products and future market potential
Page 22
Tiger Brands Limited Integrated Annual Report 2018
Develop
Attractive categories and countries where we have a
multi-category presence and are developing in-market
capability. Focus and/or investment will increase our
capability and route-to-market capability
We currently sell our products into 26 markets in Africa
Manufacture
Current exports
Out of scope
Mali
Burkina Faso
Niger
Chad
Sudan
Sierra Leone
Liberia
Ghana
Nigeria
Cent Afr Rep
Cameroon
Equatorial Guinea
Rep of
Congo
Gabon
Uganda
Rwanda
Kenya
DRC
Tanzania
Seychelles
Angola
Zambia
Malawi
Mozambique
Zimbabwe
Namibia
Botswana
Madagascar
Mauritius
Reunion
Reunion
Almost 80% of total sales from
› Almost 80% of total sales from
fi ve markets – Mozambique,
fi ve markets – Mozambique,
Zimbabwe, Zambia, Nigeria
Zimbabwe, Zambia, Nigeria
and Cameroon
and Cameroon
South Africa
Tiger Brands Limited Integrated Annual Report 2018
Page 23
Risk management
Effective risk management is fundamental to our business activities
and supports our strategic goals.
Read more about our strategic goals on
page 20.
By identifying and proactively addressing risks and opportunities, we aim to generate sustained value for
stakeholders while protecting our business operations, reputation and the well-being of our employees.
Tiger Brands recognises that risk in business is a complex and diverse concept, and that many parts of the
group focus on managing risk exposures. Our intention is that these parts work together in a consistent and
integrated manner to manage and reduce risk appropriately. Ultimately, the function of risk management is
to help Tiger Brands achieve its objectives and ensure a safer, healthier work environment for employees
while preserving assets and earnings for the benefi t of all stakeholders.
Approach
Tiger Brands effectively identifi es, manages and reports on risk across the organisation. Risk management activities are embedded
in daily operations through processes, resources and structures. The group has adopted an enterprise-wide approach, meaning that
every identifi ed material risk is included in a structured and systematic process of risk management.
Risk appetite and tolerance
Risk appetite – the level of risk management is prepared to absorb before mitigating actions are implemented – has been determined
by setting exposure limits at three tiers:
Tier 1:
Any calculated risk exposure that
requires no further management
mitigation, ie does not present
a catastrophic threat to Tiger Brands
Tier 2:
A threshold zone where any risk
exposure that exceeds our risk
appetite, but remains within the
risk tolerance, may be acceptable
but management must make a
conscious decision about risk
tolerance versus risk mitigation
Tier 3:
All exposure above our risk
tolerance will be considered
a signifi cant risk and must be
supported by a comprehensive
mitigation plan and timeline for
implementation
Risk
identification
Current control
identification
Gain an understanding of risks
that might create, prevent, accelerate
or delay achieving group objectives
Establish whether our
existing controls adequately
mitigate the risk
2
Monitor and
review
Ensure planned risk
response actions are
implemented and
remain effective
1
6
Risk appetite
and tolerance
3
Prioritise
risks
Rank risks in order of
their potential impact
and likelihood of
occurrences
4
Risk
reporting
5
Risk
response planning
Inform decisions and
ensure the Tiger Brands
risk profi le is adequately
managed
Proactively managing risks
considered unacceptably
high and that require
additional treatment
Exposure limits are determined after assessing residual risk. The risk appetite, tolerance and velocity (time taken to feel the impact of
a risk after it materialises) of the group is set by the risk and sustainability committee and approved by the board annually.
This process complements existing risk management processes and aims to ensure Tiger Brands effectively identifi es, manages and
reports on risk across all operations and all territories. The underlying reporting structure starts at site level and rolls up into the relevant
business unit, followed by divisional consolidation to culminate in risk reporting at group level.
Page 24
Tiger Brands Limited Integrated Annual Report 2018
R1
R5
Alm
o
st c
R2
R7
e
rt
a
i
n
R3
R4
R6
Likely
Min o r
M
ajo
r
Inherent
risk
M
o
d
erate
e rious
S
R9
R10
R8
Alm
o
st c
e
rt
a
i
n
R7
Min o r
M
ajo
r
Residual
risk
M
o
d
erate
e rious
R9
S
R4
R8
R5
R1
R10
R2
R6
R3
Likely
Alm
o
st c
Unlikely
P
o
s
si
ble
Unlikely
P
o
s
si
ble
Unlikely
R3
Min o r
M
ajo
r
Future risk
state
M
o
d
erate
R5
R7
R2
R4
e rious
S
R8
R10
R6
R1
R9
P
o
s
si
ble
e
rt
a
i
n
Likely
Governance
The board of directors is ultimately responsible for oversight of the
group’s risk management processes. The risk and sustainability
committee assists the board by ensuring that the risk management
process complies with the relevant standards and governance
requirements in all the group’s operating territories. Senior
management in each division and business unit is responsible
for managing risks in its area. Oversight of risk management
at divisional level rests with the relevant executive committees.
Divisional and business unit risk registers are updated quarterly
and the risk and sustainability committee meets three times a year.
To prioritise risks, each risk is evaluated in terms of likelihood and
impact on an inherent (actual impact) and residual (after mitigating
action) basis. The heat maps alongside reflect the significant
inherent and residual risks for Tiger Brands.
The Tiger Brands combined assurance model ensures that the
committee evaluates and approves the level of assurance provided
for all group risks.
R1 – Threats to employee security
R2 – Food safety and product quality
R3 – Occupational health and safety
R4 – Cyber crime and information security
R5 – Business continuity vulnerabilities
R6 – Operating environment
R7 – Data and information risk
R8 – Earnings contribution from associates
R9 – Fraud, theft, crime and corruption
R10 – Ageing infrastructure
The future state of group risks represents the executive committee’s
view based on information available at the time of compiling this
report. The group risk profile is reviewed quarterly and may be
revised after considering changes to the local and macroeconomic
environment, crime, political developments, legislative and
regulatory changes, socio-economic challenges and technological
advancements. The Tiger Brands risk management process is
therefore not a static view of risks facing the organisation.
Tiger Brands Limited Integrated Annual Report 2018
Page 25
Risk management continued
Signifi cant risks
Signifi cant exposures are determined by analysing business unit risks, divisional risks and group risks.
The score for each risk is determined by multiplying the likelihood of the risk occurring with its impact on
Tiger Brands. A risk is regarded as signifi cant when its score exceeds the risk tolerance set by the board.
The link between risks and material issues is complex, but we have noted how key risks relate to material
matters below.
The following risks are regarded as signifi cant to Tiger Brands:
Key risk
Material issues
1 Employee
security
Human resources and skills
Effectively executing our strategy
People - critical skills to deliver our
strategy
Macro-economic
Environment
We have zero compromise on employee safety and security. Safety procedures aligned with the global OHSAS 18001 standard
are embedded across all our manufacturing facilities, with restricted access controls at all production facilities.
Executing Our Strategy
Food security and security of supply
Job creation
Executing Our Strategy
People
Macro-economic
Environment
Innovation - both to to address unmet
needs and emerging trends, and ahead
of potential legislation/regulation
Ongoing risk assessments are focused on reviewing the strategy to reduce the safety risk to employees in certain businesses.
A tailored response was developed from detailed risk assessments across these businesses. Partnerships have been established
with law enforcement to combat crime and armed escorts are in place for high-risk routes. Our response is detailed in the
sustainability report.
Innovation
Innovation
People
Job Creation
2 Food safety and
product quality
Job Creation
Food Security
Food security
Safety and Quality
Food Security
Safety and Quality
Safety and quality
Business Continuity
Tiger Brands is committed to producing quality products that are aligned with our superior brand equity. Good manufacturing
practice (GMP) standards and the food safety system certifi cation 22000 (FSSC 22000) have also been revised and implemented
across the group. Our manufacturing, group legal and regulatory compliance functions collaborate effectively to ensure our products
comply with all regulatory standards and meet consumer preferences.
Macro-economic
Environment
Business Continuity
Further improving quality-related processes, controls and practices was a major focus in FY18. Group quality standards have been
established and this function has been centralised. Quality self-assessments have been standardised for all manufacturing sites and
a supplier quality management process (including supplier qualifi cation) is also being implemented.
People
Executing Our Strategy
Tiger Brands has partnered with Stellenbosch University to remain at the forefront of scientifi c developments and trends, with a
memorandum of understanding signed to establish a Centre for Food Safety.
Innovation
Refer to the sustainability report for an update on quality and food safety.
Job Creation
Food Security
3 Occupational health
and safety
Human resources and skills
Safety and Quality
Safety and quality
Effectively executing our strategy
People - critical skills to deliver our
strategy
Innovation - both to to address unmet
needs and emerging trends, and ahead
of potential legislation/regulation
Business Continuity
A comprehensive safety programme has been implemented across Tiger Brands. Each site is subject to self-audits and annual
independent safety audits. A dedicated group security manager is responsible for continuous improvement on security measures
and a group occupational health risk manager was appointed in FY18 to drive group-wide awareness of the occupational health
framework. To further strengthen the environment, integrated safety, health and environment systems will be benchmarked to improve
the group risk outlook.
Food security and security of supply
Job creation
Our safety and health performance for the review period is on page 55, with more detail in the sustainability report.
Page 26
Tiger Brands Limited Integrated Annual Report 2018
Macro-economic
Environment
Executing Our Strategy
People
Innovation
Job Creation
Macro-economic
Environment
Food Security
Key risk
Material issues
Executing Our Strategy
Safety and Quality
4 Cybercrime and
information security
People
Business continuity
Business Continuity
Innovation
Read more about our material matters on
page 18.
Increasing interconnectivity, globalisation and ‘commercialisation’ of cybercrime are driving greater frequency and severity of cyber
incidents, including data breaches. Group IT monitors the cyber security landscape continuously with a view to implementing the
latest security practices and revising existing controls to safeguard the group against cybercrime. A two-year remediation plan has
been designed in partnership with an external security specialist provider to ensure that we prioritise high-risk areas as well as quick
wins to enhance our security posture.
Food Security
Job Creation
5 Business
continuity
Safety and Quality
Business continuity
Business Continuity
Complete business-continuity plans are already in place for high-priority packaging and raw materials across the business. The roll-
out of a formal business-continuity management process for the group’s manufacturing facilities is on track, ensuring a systematic and
consistent approach. This risk is managed with appropriate group insurance cover, reviewed annually, and disaster-recovery plans
that include replicating core business applications and services, with maintenance and support service agreements in place with
key vendors.
The Western Cape water-supply risk has been reduced after recent rainfalls improved dam levels. Borehole water applications
continue to be explored for sites in areas where the water table is high. Work has been undertaken to scope the feasibility of fi t-
for-purpose solutions for water recovery and water-treatment systems at various operations. Risk, control and environmental audits
are performed by an external specialist annually. Results are used to improve business-continuity planning and disaster-recovery
processes.
Macro-economic
Environment
People - critical skills to deliver our
strategy
Effectively executing our strategy
Our energy strategies are detailed in the sustainability report.
Food security and security of supply
Executing Our Strategy
Innovation - both to to address unmet
needs and emerging trends, and ahead
of potential legislation/regulation
6 Operating
environment
Job creation
People
Weak macro economy and
job creation
Innovation
Effectively executing our strategy
Job Creation
Food Security
Food security
People
Effectively executing our strategy
Innovation
Effectively executing our strategy
People - critical skills to deliver our
strategy
People - critical skills to deliver our
strategy
Innovation - both to to address unmet
needs and emerging trends, and ahead
of potential legislation/regulation
Innovation - both to to address unmet
needs and emerging trends, and ahead
of potential legislation/regulation
Food security and security of supply
Food security and security of supply
Job creation
Job creation
As outlined on page 13, our operating environment continues to be intensely challenging. We are focusing on signifi cant
opportunities for effi ciency improvements that have been identifi ed in developing our new operating model. These will enable us to
channel scarce resources to activities with the greatest impact.
Innovation - both to to address unmet
needs and emerging trends, and ahead
of potential legislation/regulation
Business Continuity
Food security and security of supply
Job creation
Safety and Quality
Effectively executing our strategy
People - critical skills to deliver our
strategy
Tiger Brands Limited Integrated Annual Report 2018
Page 27
Risk management continued
Macro-economic
Environment
Executing Our Strategy
People
Innovation
Job Creation
Key risk
7 Data and
information risk
Food Security
Material issues
Safety and Quality
Business continuity
Business Continuity
Suboptimal information management disciplines could lead to inconsistent and poor data quality that could compromise decisions
and give rise to privacy/identity management and information security risks. Increased regulation will also place additional demand
on our system capabilities and IT teams. There are substantial regulatory changes pending (cyber crime bill, IFRS 5, money
laundering (FICA), protection of personal information (POPI), general data protection rules (GDPR)) that could materially impact
on our strategic execution if unmanaged.
We have a robust process for ensuring all new initiatives consider security testing as part of the project. This helps strengthen our
technology control environment for data security. A new information classifi cation policy is the basis for better understanding how
we handle different classes of information in the organisation. This is being driven as part of the POPI project. A gap assessment
is also under way to identify key risk areas and implementation plans for POPI compliance. A holistic approach to data and
information management is being established to ensure there is a defi ned group strategy. This includes ownership of the data
and information held by Tiger Brands.
8 Earnings contribution
from associates
Macro-economic
Environment
Executing Our Strategy
Our earnings are affected by income from associates, predominantly Oceana which accounted for 57% of total earnings from
associates of R731 million in FY18. Oceana has signifi cantly diversifi ed its portfolio in recent years to reduce the level of reliance
on fi shing rights in South Africa and neighbouring countries, as the risk of these rights being allocated on increasingly stringent
empowerment credentials has risen materially.
Innovation
People
For all our associates, exchange rate volatility can materially impact their contribution to Tiger Brands. The performance of our
associate companies is summarised on pages 50 and 51 with further information in the company’s annual fi nancial statements
(www.tigerbrands.com).
Food Security
Job Creation
9 Fraud, theft,
corruption and crime
Safety and Quality
Business continuity
Business Continuity
Internal controls are continuously reviewed to guard against fraud and crime through employee awareness campaigns, strict access
control at all facilities, and working with local police in investigating syndicated crime.
Our people are annually required to acknowledge compliance with key group policies on anti-bribery and corruption, ethics,
and gifts and entertainment. The Tiger Brands ethics line is available to all employees, suppliers, customers and consumers to
confi dentially report unethical business practices without fear or victimisation. The ethics committee independently validates the
effective fi nalisation of all reports.
More detail appears in the sustainability report.
Page 28
Tiger Brands Limited Integrated Annual Report 2018
Macro-economic
Environment
Executing Our Strategy
People
Innovation
Key risk
Material issues
Job Creation
10 Ageing
infrastructure
Food Security
Food security
Safety and Quality
Security of supply
Security of supply
Business Continuity
Macro-economic
Macro-economic
Environment
Environment
Executing Our Strategy
Executing Our Strategy
People
People
Read more about our material matters on
page 18.
Innovation
Innovation
Job Creation
Job Creation
Food Security
Food Security
Safety and Quality
Safety and quality
Safety and Quality
Business Continuity
Business continuity
Business Continuity
To address effi ciency and capacity, we have dispersed R720 million in capital expenditure over the year and plan for a further
R2 billion in FY19. This includes investments in Davita in the exports segment, our beverages division and breakfast, which are
planned for completion in FY19. Upgrades to the Germiston Enterprise factory have been completed and the Polokwane factory
upgrades are under way.
Manufacturing optimisation studies are ongoing. Standards for facilities are being developed, including personal and food safety
requirements, with planned completion by the end of FY19. Manufacturing excellence customs and practices (MECP) is being rolled
out at all manufacturing facilities and was completed in FY18. Where possible, sustainability is considered for these projects to
reduce our environmental impact, improve a safe production environment and address any potential health risks such as ergonomics.
Tiger Brands Limited Integrated Annual Report 2018
Page 29
Chairman’s review
For Tiger Brands, the past year has been one of the most challenging in recent memory, with external
and internal events combining to truly test the mettle of the group’s leadership, including its board.
Risk of foodborne
diseases
According to the World Health
Organisation, the global burden of
foodborne diseases, including
listeriosis, shows that almost one in
10 people fall ill every year from
eating contaminated food and
420 000 die as a result. Almost one
third (30%) of all deaths from
foodborne diseases are in children
under the age of five years, even
though children make up only 9% of
the global population. Most
worryingly, the African and South-
East Asia Regions have the highest
burden of foodborne diseases. More
than 91 million people in the WHO
African region are estimated to fall ill
and 137 000 die each year.
WHO report: Estimates of the global burden of
foodborne diseases (2015).
As one of the largest and most well-
established manufacturers of food
products in Africa, food safety is a
non-negotiable priority. We have a
central function to monitor adherence to
good manufacturing practice standards
across all our sites in South Africa, and all
sites are certified under the Global Food
Safety System 22000. In addition, our
manufacturing, group legal and
compliance functions collaborate
effectively to ensure our products comply
with all regulatory standards.
Despite these robust controls, the country’s
worst outbreak of Listeria monocytogenes
was attributed to our Enterprise facility in
Polokwane. This was a truly devastating
development to the Tiger Brands family,
including the board, the leadership and
the entire staff.
Globally, Listeria is a risk in food-
preparation facilities. In South Africa,
data from the National Institute of
Communicable Diseases proves that
60 – 80 cases of listeriosis have been
identified annually for the past five years.
National food-safety regulations
acknowledged this risk, and the group’s
hygiene processes and testing protocols
had proved effective in keeping
contamination levels well below
statutory limits.
The advent of the ST6 (sequence type 6)
strain of Listeria was, therefore, a massive
outbreak that caught all role-players by
surprise – from national regulators to the
scientifi c community and, of course, the
industry. Testing for the little-known ST6
was not required at the time, the strain is
particularly aggressive, and consumers
most at risk include those with immune
defi ciencies. This was a lethal and
tragic combination in South Africa, one
that caused 209 deaths, including
91 newborn infants and infected over
1 000 people1. While the outbreak was
offi cially declared over in September
2018, the full impact is yet to be
determined. Legal processes to certify
a class action lawsuit were still under
way at the time of writing. A detailed
case study is included in our sustainability
report.
Tiger Brands has a long and proud
history, producing some of South Africa’s
most-loved and iconic branded food
products, and with our company purpose
to ‘nourish and nurture more lives every
day’, we pride ourselves in providing
quality food products that are loved and
expected by consumers. For our products
– intended to nourish and be enjoyed –
to have been identifi ed as the cause of
illness and death was singularly shocking.
Our hearts go out to all the individuals
and families in any way affected by the
listeriosis outbreak.
There are several key outcomes to this
tragic event, with national benefi ts. The
government has tightened its industry
regulations, with processors of heat-
treated, ready-to-eat meat products now
required to implement a hazard-analysis
and critical control point system (known
as HACCP) by mid-2019. Collaboration
between all levels of government, the
scientifi c community and the industry has
enhanced processes and protocols, while
the involvement of global bodies will
ensure national standards are on par
with international best practice.
For our group, the outbreak highlighted
the need for centralised oversight of
quality. This had already been established
as part of our new operating model,
along with raising awareness of the
importance of maintaining robust
standards at all times. It has also
underscored the value of stringent
governance and sharing knowledge
across the group. The new executive
team has proved itself in this respect,
working together to ensure that learnings
are effectively shared and, more
importantly, internalised.
From the board’s perspective, we
understand that there is no second
chance after the events of 2018.
Accordingly, we have requested – and
received – further enhancements in risk
reporting to the board and its committees.
We are encouraged by the improved
collaboration with government that will
enhance industry standards of food
security, although we believe this
responsibility begins with each company.
Given our purpose to nourish and nurture
more lives every day, it’s simply the right
thing to do.
1 www.nicd.ac.za
Page 30
Tiger Brands Limited Integrated Annual Report 2018
Khotso Mokhele, Chairman
Khotso Mokhele, Chairman
performance of the business was
disappointing.
In terms of mitigating macro challenges,
we are making progress, from fortifying
basic foods to controlling our costs to
keep products affordable while supporting
keep products affordable while supporting
small farmers to broaden the procurement
base. We acknowledge that more needs
to be done, but the scale of this issue
demands a coordinated approach from
the highest levels of government to the
smallest producer of raw materials. Tiger
Brands is committed to playing its part.
Brands is committed to playing its part.
Encouragingly, what this period has
proved is that there is a deep pool of
experience and expertise in Tiger Brands,
and a sincere commitment to honouring
the responsibility inherent in the group’s
purpose.
Sadly, we also recorded one fatality
during the year when an Albany driver,
Mr Thulani Shoba, died in a robbery
during his delivery rounds on 10 August
2018. Our sincere condolences go to
his family and loved ones. See the
sustainability report for details on how
we are mitigating this risk.
Moving beyond internal challenges in
the review period, the group was also
operating in a very diffi cult environment.
The CEO details these challenges but,
from a macro perspective, data shows
that South Africa is becoming chronically
poor. Terms like income inequality, poverty
alleviation and infrastructural constraints
mask the dire reality for the majority of
our people. Our national economy is
shrinking, and is now out of sync with
population growth. The result is less
disposable income – or no income at
all – which in turn means the search for
value will be paramount and pervasive.
This has important implications for groups
manufacturing basic foodstuffs, like
Tiger Brands. As a result, the fi nancial
Tiger Brands Limited Integrated Annual Report 2018
Tiger Brands Limited Integrated Annual Report 2018
Page 31
Page 31
Chairman’s review continued
The two sets of challenges outlined
previously – listeriosis and the macro
environment – have sharpened the
board’s awareness of the quality of
leadership required to steer the company
forward. Equally important is the need for
vigilance to identify possible challenges
and to act and react swiftly and with
great agility to meet and overcome those
challenges.
Governance
The board is committed to aligning Tiger
Brands with King IV principles and
entrenching a culture of good leadership,
strong organisational ethics and
responsible corporate citizenship.
We are making good progress in
identifying suitable candidates to
reconstitute the board after Swazi
Tshabalala and Rob Nisbet resigned as
independent non-executive directors
on 15 August 2018 and 7 September
2018, respectively. Swazi resigned after
being appointed vice president of fi nance
and chief fi nancial offi cer of the African
Development Bank. She also stepped
down as member of the risk and
sustainability committee. Rob stepped
down as chairman of the audit
committee, as well as a member of the
investment and risk and sustainability
committees. He has served on the board
since August 2010. The board thanks
Swazi and Rob for their signifi cant
contributions to the company and wishes
them well in their future endeavours.
Gail Klintworth became an independent
non-executive director on 16 August
2018. Her knowledge and experience in
sustainability matters in our industry are
important additions to the skills set of
the board, and we look forward to her
contributions.
Tiger Brands is developing a sustainability
strategy to ensure we achieve our true
potential and our purpose. The strategy
will align existing sustainability initiatives
in the different functions and businesses,
covering the sustainability of our products,
improved effi ciencies of our production
facilities, focus on our employees and the
communities where we operate, and our
wider stakeholder community. Many
initiatives are already in place and
delivering results.
In line with this approach, we have
produced our fi rst stand-alone
sustainability report, guided by the GRI
Standards (formerly known as the Global
Reporting Initiative). This report reviews
Tiger Brands’ environmental, social and
governance performance for the past
year, and covers issues of particular
interest to stakeholders in the
environmental, social and governance
(ESG) aspects of our operations, namely
our shareholders, employees, local
communities, non-governmental
organisations (NGOs), investors,
customers, partners, suppliers and
government.
government.
Strategic progress
Despite our challenges in the review
period, management has made progress
in implementing the group’s strategy. This
is detailed by the CEO on page 36.
The board remains confi dent that this
strategy will unlock the full potential of
Tiger Brands and create value for all
stakeholders. As a board, our role is to
ensure the required focus and energy in
implementing this strategy are attained.
Towards the end of the period, we
approved the group’s strategy for
Africa over the next four years. This
complements the strategy in South Africa
and supports the local operations, our
current exports business as well as the
operations in Cameroon and Nigeria.
Importantly, given the group’s history on
the continent, we stress that the Africa
strategy builds on what we have – driving
category growth through selected brand
investments, shaping superior routes to
markets and investing in key capabilities.
The fact-based strategy is supported by
a detailed business plan and clear
roadmap, with milestones.
Simultaneous implementation of the
group’s strategy to optimise operations
in South Africa while winning on the
continent will be a standing item on
the agenda at board meetings.
Outlook
I have noted the challenges facing South
Africa politically, economically and,
therefore, societally. The next months will
be diffi cult as we approach national
elections in 2019. The political situation
is fl uid and citizens will be deluged by
pre-election promises and posturing that
will do little to address the real issues in
our country. We do believe that President
Cyril Ramaphosa is sincere in his efforts
to stimulate the economy and he has
made some progress.
While focusing on our strategic objectives
in South Africa, we will need to
accelerate our strategy for Africa by
building on the many inherent strengths
of our group.
Simultaneously, as the only consumer
goods company in the JSE’s top 40,
we are fully committed to our societal
responsibilities. We will continue to work
with stakeholders at every level to
address concerns such as food safety,
food security and water supply, with the
longer-term goal of creating a more
equitable and sustainable economy that
benefi ts all citizens. We vow to work
Page 32
Tiger Brands Limited Integrated Annual Report 2018
tirelessly to ensure that South Africa does
not experience a repeat of the listeriosis
outbreak of 2018.
Appreciation
Tiger Brands is still undergoing extensive
change. This is never an easy process
and we deeply appreciate the
commitment evident at every level. I am
also grateful for the support and insight
of my fellow board members, and the
dedication of the executive team, several
of whom are new members. Willing
engagement from key stakeholders,
particularly all levels of government and
industry bodies, were especially valuable
this year. We trust the outcomes will
benefi t the country at large. We also
sincerely thank our shareholders for their
continued support during an exceptionally
trying year and their confi dence in our
ability to execute our strategy for
long-term value creation.
Khotso Mokhele
Chairman
21 November 2018
Tiger Brands Limited Integrated Annual Report 2018
Page 33
Chief executive offi cer’s review
The year to 30 September 2018 was an intensely challenging period
for our economy, our industry and our group.
Read more about our material matters on
page 18.
While I elaborate on the contributing
factors below, some of which were
identifi ed as material matters, it is
important to note that we maintained
focus on executing our strategy to create
value that underpins a sustainable future
for our group.
A combination of external factors made
calendar 2018 a very diffi cult trading
environment. The South African economy
slipped into recession during the year.
While this was still a ‘technical’ recession
at the time of writing, ie two consecutive
quarters of negative GDP growth, the
Bureau of Economic Research was
expecting a return to growth in the third
quarter. However, our industry is already
refl ecting the impact of recessionary
conditions on retailers and consumers
alike, with the JSE food companies index
down 34% for 2018 to end September.
Volatility in the rand exchange rate has
exacerbated the situation. While much of
this volatility is due to external factors, the
impact on the national economy and
private sector remains severe and
far-reaching.
In addition to the country’s lack of
meaningful economic growth, consumers
are under pressure on a number of fronts:
rising infl ation, the fi rst hike in value
added tax since 1994, record fuel
increases and rising utility costs.
Combined, these have intensifi ed
pressure on consumers’ disposable
income and heightened social instability
– from service-delivery protests to cases of
arson (and subsequent looting) of stores
for various reasons. Social instability has
a pronounced impact on the availability
of goods. In our case, on any given day,
these protests and social action could
make it impossible for our sales teams to
service retailers because their routes are
closed or inaccessible.
Consumers found some reprieve as food
infl ation has been well controlled, with
defl ation in certain categories, such as
maize. However, we believe raw
material prices have bottomed, which will
add to mounting infl ationary pressures.
Our industry therefore became even more
competitive as manufacturers attempted to
fi nd the balance between maintaining
volumes and limiting infl ation, with a
knock-on effect on margins. To bolster
profi tability and capture market share,
retailers capitalised on rand strength to
import growing volumes of private label
products. We are mitigating this risk
through our strategic drive to build on
already-strong relationships with our key
customers and have disproportionately
spent on master and standalone brands
to drive brand equity. In addition, we
have innovated wisely to meet consumer
needs for value, on-the-go lifestyle as well
as health and wellness, while our strong
pipeline of innovation includes new pack
sizes to address affordability. Throughout
the review period, we have focused on
consistent, clear positioning through
advertising, supported by product
enhancements that will keep our brands
contemporary while adhering to their
core promise.
The fi nal external factor was the
protracted drought in the Western Cape,
Addressing key consumer trends to health, wellness and on-the-go
Health and wellness
On-the-go
Value
(price)
Value
(bulk & multi-pack)
Crunchalots
Muesli fl avours
Quick cook samp
Bread-A-Betix
Cake-In-A-Mug
Fasta Pasta
Instant Noodles
50g strip pack
Benny Chicken
Thick Slice
Soft and absorbing long grain
whiter rice/wholegrain long
grain brown rice
Black Cat – 1kg Tub
All Gold Jam – 1,2kg Tub
Morvite – 500g
Page 34
Tiger Brands Limited Integrated Annual Report 2018
Lawrence Mac Dougall, Chief executive offi cer
which has had a signifi cant impact on
the quality and availability of key raw
materials such as wheat and fruit. Our
facilities coordinated in mitigating the
water shortage, working closely with
authorities on water allocation, permits for
boreholes and ensuring that communities
around our facilities were not affected by
our water use. Similarly, we worked with
industries around us to optimise water
effi ciency, learning from each other. All
the facilities had plans in place for day
zero (the forecast day when the Western
Cape would have run out of water) to
ensure minimal disruption of production.
A contributing factor that began as
external but rapidly became internal for
Tiger Brands in 2018 was the national
listeriosis outbreak and resulting health
crisis. Listeria monocytogenes is a
ubiquitous bacteria worldwide: while
commonly associated with food
preparation, it also caused several deaths
in Australia this year after people ate
contaminated melons. The specifi c ST6
strain, which was not previously included
in testing requirements in South Africa,
is particularly aggressive, especially for
people whose immune systems are
compromised by disease or malnutrition.
After exhaustive investigation, it became
apparent that industry standards needed
to be reviewed to be more appropriate
for the level of immune defi ciency among
the majority of the South African
population.
This was a signifi cant event in our history,
one that affected each of our capitals in
different ways and to different extents.
Arguably the most important was the
social, reputational and fi nancial impact
caused by a relatively small component
(7% of revenue) of our portfolio.
Financially, it had a material impact on
our results, disclosed in the detailed
fi nancial statements. The social loss of
these lives to their families can simply
not be quantifi ed.
We have consulted with local and global
food-health experts and regulatory
authorities in developing controls and
standards that will set new industry
benchmarks. The collaboration between
Tiger Brands and various stakeholders
during this outbreak is proof of how
important the United Nations Sustainable
Development Goals (SDGs) are for us,
in this case SDG 17. We will report in
more detail on SDGs in future.
The more aggressive standards now
in place at our VAMP facilities can
be confi dently rated as world-class,
and are being rolled out across our
group. For consumers, our commitment
to quality is evident in the 7-step
quality check process on every label
(www.enterprisefoods.co.za).
By November, the Germiston
manufacturing facility and associated
supplier had reopened after extensive
deep-cleaning, rehabilitation and staff
training. Our Polokwane facility will
resume production towards the end of
2018, once we have received full
regulatory approval. The high standard
of food-safety procedures in place before
the outbreak is evident in the relatively
low capital expenditure required
(R68 million) to entrench world-class
standards.
Importantly, learnings from the work of
internal and external experts have been
distributed across the group and shared
with relevant stakeholders. In line with our
commitment to enhance standards in the
industry we have advanced discussions
with key stakeholders, including industry
bodies and academia, for improved food
safety assurance in South Africa. To
bolster these efforts, Tiger Brands has
partnered with the Stellenbosch University
and is the founding member of the Centre
for Food Safety. The Centre is a one-of-a-
kind applied food science research
consortium comprising Stellenbosch
University and the food industry. The
Centre will provide stakeholders with the
opportunity to develop and exchange
knowledge, experience, and expertise
in food safety, food defence and food
processing. Specifi cally, the Centre for
Food Safety aims to provide expert
opinion and academic support to the
industry, contribute to the knowledge of
research in food safety, and participate
effectively with Government to ensure that
food safety regulations are based on
Tiger Brands Limited Integrated Annual Report 2018
Page 35
Chief executive offi cer’s review continued
Key strategic objectives
Met
Partially met
Not met
Progress
Grow the core and expand into adjacent categories and geographies, while delivering top-tier fi nancial results
Deploy an operating model that provides the capabilities needed to deliver on our growth objectives
Build distinctive capabilities required to win with consumers, customers and business partners
Build a world-class integrated supply chain to leverage scale and create fuel for growth
Invest in our communities and sustainable supply.
sound scientifi c evidence. Additionally,
the Centre will provide industry research
and will educate consumers.
This builds on our core competencies and
existing markets and is supported by
detailed and clear milestones.
At the time of writing this report, the
now-combined class action lawsuit was
still awaiting agreement between the
parties on the wording of the proposed
certifi cation order. Only once this order
is granted will the class action
commence, beginning with determining
the company’s liability, and, if liable,
establishing the extent of damages due
to claimants.
We again express our deep regret for
the loss of life and offer our heartfelt
condolences to all who have lost a loved
one. Tiger Brands has a long heritage in
South Africa. The key task ahead is to
rebuild trust with every stakeholder
through our actions and to manage every
facet of this crisis openly and with
absolute integrity.
Progress against strategic
objectives
Against this background, Tiger Brands
produced disappointing results for the
period. Despite the challenges, however,
we continued to execute our strategy to
position our business for the future. We
are confi dent that our strategy remains
compelling but, mindful of the current
operating environment, we regularly
review every strategic element and refi ne
where necessary. Some adjustments were
implemented in the review period.
In September 2018, the board approved
the Africa growth strategy.
Embedding the new operating model
has taken longer than anticipated, partly
because implementation had only been
under way for 10 weeks when news
of the Listeria crisis broke. However,
capabilities have been enhanced in
key disciplines through executive
appointments for human resources,
growth, strategy, Africa and marketing.
Supported by strong teams, the new
leadership is settling well and focused
on strategic issues to achieve our true
potential.
Tiger Brands is a large, established group
– while there are inherent strengths to this
status, we also understand we need to be
more fl exible and agile in today’s market.
Our new structure and the cultural
transformation under way will support this
fl exibility, along with a certain level of
independence, within a framework for
success. Throughout this process, we are
mindful that change needs to be carefully
managed. For example, we are
introducing new, simpler processes,
with the fi rst wave implemented in shared
services and human resources during
the year. This includes a R82 million
investment in our IT systems to improve
communication and information fl ow, as
well as more robust cyber security.
In tandem with our new operating model,
capital expenditure of R2 billion has been
approved to enhance our manufacturing
facilities in FY19. Projects totalling
R720 million were executed across the
portfolio in FY18. In tandem, we have
created a separate function for quality
control in the group. This builds on similar
functions in each business unit, adding a
layer of central monitoring and control for
additional assurance.
Our investment in key brands paid off
with another sterling performance in the
Sunday Times Top Brands survey. KOO
was again ranked top brand overall,
against global competitors, and Tastic as
number 1 essential food for the second
consecutive year. Please see summarised
results on page 12.
In the current environment, managing the
trade-off between volumes and protecting
our margins has proved challenging. As
such, we are encouraged by the brand
equity improvement in most of our key
brands (Tastic, Fatti’s & Moni’s, Mrs Balls,
Oros, Maynards, Beacon, Energade and
Crosse & Blackwell). Measured by brand
equity, our key brands continue to lead
by a signifi cant margin, with KOO,
Albany and All Gold well ahead of their
closest competitors in these fi ercely
traded sectors.
Tiger Brands holds one of the top three
positions in 80% of the categories in
which it competes, as illustrated
alongside.
Our fully integrated supply chain has
been established, and delivered
signifi cant value in this period. At present,
around 70% of the group’s procurement
is fl owing through a centralised hub,
with important opportunities for smaller
suppliers. We have also made progress
Page 36
Tiger Brands Limited Integrated Annual Report 2018
Gap between Tiger Brands equity share
vs closest competitor
73,2
46,8
43,9
27,0
26,7
26,0
16,4
16,1
KOO
Doom
Fatti’s &
Moni’s
Albany
All Gold
Tastic
Oros
Black Cat
in how we engage with our customers
in terms of our contact centre and
consolidating our distribution network.
The anticipated benefits of an integrated
supply chain include unlocking cash
through improved efficiencies and
significant cost savings.
The company’s investment in associates
was reviewed during the period. To
this end, the Tiger Brands board has
decided, subject to the necessary
regulatory approvals, to pursue an
unbundling of its shareholding in
Oceana, with an approximate
implementation date of April 2019. The
decision was taken following a review
Oceanas’ fit with the group’s core
business undertaking, as well as after
taking into account the challenges
associated with acquiring a controlling
stake in Oceana, given the regulatory
environment in which it operates.
Outlook
South Africa faces another challenging
year, exacerbated by the political
hyperbole and uncertainty ahead of
national elections early in 2019.
Throughout this run-up, consumers will
remain under intense pressure in an
economy marked by low growth and
rising inflation.
Government faces an immense task to
restore our economy to the levels that
support investment and job creation. The
private sector can contribute by ensuring
its businesses are run efficiently and
ethically to create value for all
stakeholders.
For Tiger Brands, this means an
unrelenting focus on executing our
strategy. We believe we are structuring
our business to profitably improve revenue
and market share while our Africa
strategy will build on what we have in
South Africa. The elements of our strategy
combine to support growth in earnings for
our shareholders and make Tiger Brands
a great place to work for our people,
whose skills are our lifeblood.
Appreciation
In an intensely difficult year, our people
have proved their resilience and their
determination. Many employees took time
to personally engage with me and offer
their support. This has meant so much to
me and showcased our people’s can-do
spirit. I thank every one of you for your
commitment to achieving our purpose.
Equally, the energy and support of the
leadership team has been invaluable
and is deeply appreciated.
Our board has been an extraordinary
source of counsel, insight and support for
which we are most grateful. In particular,
we thank our chairman, Dr Khotso
Mokhele, for his active and expert
contributions.
KOO, a favourite South
African brand, has
an equity leadership of
73,2%
points
Tiger Brands are on the podium
in 80% categories we compete in
41%
22%
17%
#2
#1
Brand positions (volume share)1
#3
1 Nielsen
The contributions of our strategic partners
and ongoing support from our service
providers, suppliers and customers is
equally valued. We will continue to listen
to you, and work towards common
goals.
Lawrence Mac Dougall
Chief executive officer
21 November 2018
Tiger Brands Limited Integrated Annual Report 2018
Page 37
Chief fi nancial offi cer’s review
Tiger Brands’ results refl ect the depressed consumer environment, which deteriorated further in the second
half of the year.
Salient features*
Revenue declined by
Group operating income**
decreased
Group operating margin**
down
9% to
R28,5 billion
28% to
R3,3 billion
310 basis points
to 11,7%
HEPS down
Dividend unchanged at
Dividend cover reduced to
26% to
1 587 cents
1 080
cps
* From continuing operations.
** Before IFRS 2 charges, impairments and abnormal items.
1.75x based on
HEPS
Overview
South Africa slipped into a technical
recession during the second quarter
of 2018 and the rand weakened
signifi cantly, adding to the pressure on
consumer spending. At the same time,
input costs started to increase
considerably. Despite this cost push, the
market was characterised by manufacturer
restraint on pricing in an attempt to
minimise consumer infl ation and maximise
volumes. The group’s VAMP division
had a material impact on the results
after suspending operations for the
entire second half of the fi nancial year.
Analysis of fi nancial
performance
The following review of the group’s
fi nancial performance should be read
together with the annual fi nancial
statements (www.tigerbrands.com).
Income statement
The increase in VAT and further increases
in the cost of transport and essential
services weakened consumer demand
in all categories except maize, where
increased supply and price defl ation
stimulated demand. Domestic revenue fell
9%, with volumes down 5% and price
defl ation of 4%. Suspending operations
at VAMP contributed 4% to the volume
decline. The balance of the volume
Savings in procurement and ongoing supply
chain efficiencies yield record savings
R124m
R210m
R16m
R44m
R243m
Total YTD
savings
R707m
Manufacturing efficiencies
Logistics savings
Procurement savings
Financial Shared Services Centre
R&D
Zero-based spend
R70m
Cumulative procurement savings (Rm)
1 400
1 200
1 000
800
600
400
200
0
1 156
913
692
481
FY15
FY16
FY17
FY18
Page 38
Tiger Brands Limited Integrated Annual Report 2018
Noel Doyle, Chief fi nancial offi cer
of intangible assets in the Personal Care
of intangible assets in the Personal Care
division, a review of the carrying value of
division, a review of the carrying value of
Deli Foods’ operating assets in view of its
Deli Foods’ operating assets in view of its
loss-making position, as well as the impact
loss-making position, as well as the impact
of the Listeria outbreak on Hercules, the
of the Listeria outbreak on Hercules, the
Pretoria-based VAMP facility.
Abnormal losses of R422 million in the
Abnormal losses of R422 million in the
current year include the signifi cant
current year include the signifi cant
impact of the VAMP product recall of
impact of the VAMP product recall of
R380 million (net of insurance recoveries).
R380 million (net of insurance recoveries).
decline refl ected a worse-than-expected
performance in Groceries and Home &
Personal Care. This was partially offset
by volume and market-share growth in
Grains. Disappointingly, the positive
volume performance in Grains was not
refl ected in operating income due to
category defl ation and increases in the
cost of essential services, pressuring
margins. This resulted in domestic
operating income declining by 28%
to R3,0 billion (2017: R4,2 billion).
Total revenue for the Exports and
International businesses declined 10%
to R3,8 billion, while operating income
reduced by 32% to R270 million. This
result was infl uenced by a positive
performance from our African exports,
which grew revenue and profi t.
The Deciduous Fruit business had a
disappointing year. Fruit quality and
availability were affected by the
prolonged drought in the Western Cape,
with lower fruit yields and declining
volumes resulting in an operating loss
for the year.
The impact of volume declines and
pricing pressures on the group’s gross
margins was partially offset by another
year of record savings in procurement
and ongoing supply-chain effi ciencies
totalling R707 million (2017:
R505 million). Gross margins declined
by 90 basis points (bps) to 32,5%
from 33,4%.
During the year, asset impairments of
R262 million (2017: R560 million) were
accounted for after a detailed evaluation
Integrated Annual Report 2018
Tiger Brands Limited Integrated Annual Report 2018
Page 39
Page 39
Chief financial officer’s review continued
Income from associates increased 37% to R731 million
(2017: R533 million), with all associates reporting improved
performances in local currency, and particularly strong
performances from Oceana and Carozzí. Oceana benefited
from a once-off deferred tax adjustment after the US federal
corporate tax rate was reduced from 35% to 21%, effective
1 January 2018. Tiger Brands’ equity accounted share of
this benefit was R79 million for the year.
Net financing costs of R34 million benefited from a reduction in
net interest costs of R125 million, due to lower average debt
levels. A net foreign exchange gain of R21 million was realised,
compared to a loss of R30 million in the previous year, due to
the weakening of the rand in the latter part of this year.
The effective tax rate before abnormal items, impairments and
income from associates increased to 30,2% from 28,9%, largely
due to the non-recurrence of investment allowances claimed on
qualifying capital projects in 2017.
Headline earnings per share (HEPS) from continuing operations
declined 26% to 1 587 cents (2017: 2 155 cents), while
earnings per share (EPS) from continuing operations decreased
21% to 1 451 cents (2017: 1 848 cents).
HEPS from total operations decreased 26% to 1 589 cents
(2017: 2 161 cents). EPS from total operations reduced by
24% to 1 458 cents (2017: 1 915 cents). Excluding VAMP’s
trading results and product-recall costs from the current and prior
year, HEPS from continuing operations declined by 11% to
1 881 cents (2017: 2 109 cents). Similarly, EPS from
continuing operations declined 2% to 1 760 cents
(2017: 1 802 cents).
HEPS impacted by VAMP and challenging trading conditions
2 155
(24)
(288)
HEPS (cents) vs FY
(58)
(171)
(86)
8
48
113
76
75
1 848
(216)
(231)
138
48
1 587
14%
14%
HEPS
FY17
Impact of
WANOS
Grains –
trading
Consumer
Foods –
trading
(excl
VAMP)
HPCB
trading
LAF
trading
Exports and
Int. trading
(excl LAF)
Market
related
(IFRS 2 &
forex)
Interest
savings
Associates
– trading
Normalised
trading
HEPS FY18
VANP
trading
losses
Taxation
(incl
impact
of
effective
tax rate
change)
Tax
impact
Oceana –
once-off
tax credit
HEPS
as
reported
Sept 2018
VAMP–
recall &
related
costs
(net of
insurance
proceeds)
* WANOS – Weighted average number of shares.
Segmental performance
The increasingly competitive environment resulted in ongoing volume pressure, with the domestic business reporting revenue declines
of 9% while operating income declined by 28%. The Exports and International business delivered a mixed result, with improved
performances from Exports and Chococam offset by Deciduous Fruit and Deli Foods. Total revenue for the Exports and International
businesses declined by 10% while operating income reduced by 32%.
Suspension of VAMP and challenging trading environment affect overall performance
Consumer
Brands Food
(ex VAMP)
HPCB
Grains
R12,8bn
Exports and
Group*
International
▲ 3% ▼ 3% ▼ 14% ▼ 8% ▼ 2% ▼ 53% ▼ 6%
R28,5bn
▼ 4% ▼ 3% ▼ 16% ▼ 10% ▼ 6% ▼ 52% ▼ 9%
R3,3bn
▼ 20% ▼ 8% ▼ 45% ▼ 32% ▼ 21% ▼ 342% ▼ 28%
▼ 14,8% ▼ 12,5% ▼ 15,3% ▼ 7,2% ▼ 13,0% ▼ (23,7%) ▼ 11,7
Group*
(ex VAMP)
R27,4bn
(R0,3bn)
R2,2bn
R0,3bn
R0,3bn
R3,6bn
R8,7bn
R1,9bn
R1,1bn
R3,8bn
R1,1bn
VAMP
Volume
Revenue
Operating income**
Operating margin**
* From continuing operations.
** Before IFRS 2 charges, impairments and abnormal items.
Page 40
Tiger Brands Limited Integrated Annual Report 2018
Outlook
The economic outlook for 2019 remains challenging, with no
signs of a signifi cant recovery in economic growth or consumer
confi dence.
We remain committed to the growth of our power brands, with
a relentless focus on creating a cost-conscious culture and
developing a great place to work for all our employees, which
will result in superior returns and a benefi cial outcome for all our
stakeholders.
Acknowledgements
Thank you to our local and international shareholders for your
continued investment in our group and to members of the
broader investment community for their interest and engagement.
I also thank my colleagues in the fi nance department who
constantly strive to ensure the group achieves best-practice
standards in reporting and disclosure.
Noel Doyle
Chief fi nancial offi cer
21 November 2018
Detailed segmental disclosures appear on pages 89 and 90 of
the annual fi nancial statements on the website and operational
reviews on pages 42 to 51.
Statement of fi nancial position
Cash generated from operations decreased by 46% to
R3,3 billion. Working capital was predominantly impacted by
strategic raw-material purchases coupled with higher inventory
holdings, refl ecting forecasting challenges due to constrained
consumer demand. Capital expenditure disbursed during the
year totalled R720 million, of which almost 15% related to
effi ciency optimisation and improved compliance.
Final dividend
Taking into account the company’s strong balance sheet and
once-off impact of suspending operations at VAMP, including
costs of the product recall, a gross fi nal cash dividend of
702 cents per share has been declared for the year ended
30 September 2018. This, together with the interim dividend
of 378 cents per share, brings the total dividend for the year
to 1 080 cents, unchanged from last year.
Shareholders are referred to the accompanying dividend
announcement on page 101 for further details.
Dividend policy
In recognition of the company’s low gearing levels and strong
cash-generating capabilities, the board has decided to change
the company’s dividend policy, from 2x cover (based on HEPS)
to 1,75x for the foreseeable future, in the absence of any
signifi cant corporate activity.
Balance sheet strength supports lower
dividend cover
FY18
FY17
Cash generated from operations (Rm)
3 284
6 134
Net cash (Rm)
RONA (%)
Net interest cover
Working capital per R1 of turnover
590
27
59x
21,7
431
35
25x
19,9
Tiger Brands Limited Integrated Annual Report 2018
Page 41
Operational review
Grains
Performance
Revenue declined to
Operating income declined to
Operating margin down to
R12,8 billion
R1,9 billion
14,8%
(FY17: R13,3 billion)
(FY17: R2,4 billion)
(FY17: 17,7%)
% contribution to Grains revenue
20%
19%
55%
53%
5%
7%
2018
8%
5%
Mill bake*
Breakfast
Sorghum
Maize
Pasta
Rice
5%
10%
2017
8%
5%
Salient features
› Wheat-to-bread value chain holds volumes
Launched thick slices (value) and Bread-a-Betix (health and wellness) in the bread category
› Launched thick slices (value) and Bread-a-Betix (health and wellness) in the bread category
› Golden Cloud #1 retail brand in fl our**
Jungle biggest cereal brand in the country, driven by Crunchalots and Muesli
› Jungle biggest cereal brand in the country, driven by Crunchalots and Muesli
Jungle biggest cereal brand in the country, driven by Crunchalots and Muesli
Strong performance in rice delivers share gains in Tastic
› Strong performance in rice delivers share gains in Tastic
* Mill bake includes the wheat-to-bread value chain and fl our milling.
** Nielsen 3mm September 2018.
Page 42
Tiger Brands Limited Integrated Annual Report 2018
Revenue declined 4% to R12,8 billion, refl ecting signifi cant
price defl ation of 7%, while overall volumes grew by 3%. The
increase in volumes was not suffi cient to offset the impact of
margin pressures, with operating income down 20% to
R1,9 billion. The operating margin reduced to 14,8%. In one
of its most challenging years yet, the Grains division maintained
overall market share and improved its share in a number of
categories, including fl our, breakfast and rice.
Revenue in Milling and Baking decreased 7%, infl uenced by
price defl ation across the entire segment, particularly maize
(24%). Operating income declined by 17% to R1,5 billion.
The wheat-to-bread value chain, which maintained overall
volumes for the year, was unable to sustain its fi rst-half
performance due to market dynamics restricting input
cost recovery in the second half.
Other Grains recorded revenue growth of 2% to R3,9 billion,
with 9% volume growth. This strong growth in volumes was
driven by an outstanding performance in rice, with Tastic
improving market share. Pasta and noodles also delivered a
solid performance. However, the operating income decline of
32% to R342 million refl ects the intensity of competition in the
main meal carbohydrate segment.
Our investment in key brands paid off with another sterling
performance in the Sunday Times Top Brands survey. Tastic was
ranked number 1 essential food for the second consecutive year
and included in the top 10 most-loved South African brands.
In the fi nal quarter of the year, Jungle achieved a signifi cant
milestone as the biggest cereals brand in the country. This was
driven by the relaunch of muesli and Crunchalots in the kids’
cereal segment while the core segment of cooking and instant
oats achieved record market shares.
Tiger Brands Limited Integrated Annual Report 2018
Page 43
Operational review continued
Consumer Brands – Food
Performance
Revenue declined to
Operating income decreased to
Operating margin down to
R9,7 billion
R828 million
8,5%
(FY17: R11,1 billion)
(FY17: R1,3 billion)
(FY17: 11,5%)
Excluding VAMP, down to
R8,7 billion
Excluding VAMP, down to
R1,1 billion
Excluding VAMP, operating
margin down to 12,5%
(FY17: R8,9 billion)
(FY17: R1,2 billion)
(FY17: R13,2%)
% contribution to Consumer Brands – Food revenue
5%
5%
49%
49%
20%
20%
45%
45%
Groceries
Snacks & treats
Beverages
Value added meat products
Out of home
Groceries
Snacks & treats
Beverages
Value added meat products
Out of home
11%
2017
2017
11%
19%
19%
6%
6%
11%
11%
13%
13%
2018
2018
21%
21%
Salient features
› Focus in Groceries on balancing volumes and profi tability and recovering market share
› Share gains in chocolate (slabs and countlines)
› Focus on mix and volume recovery in Snacks & Treats
Beverages benefi ts from investments in effi ciencies; ready-to-drink and concentrates drive market share growth
› Beverages benefi ts from investments in effi ciencies; ready-to-drink and concentrates drive market share growth
with steady performance in sports drinks
with steady performance in sports drinks
VAMP Germiston facility resumed production on 12 October 2018
› VAMP Germiston facility resumed production on 12 October 2018
VAMP Germiston facility resumed production on 12 October 2018
Page 44
2018
Tiger Brands Limited Integrated Annual Report 2018
Excluding the signifi cant impact of suspending the Valued
Added Meat Products (VAMP) operations, revenue in Consumer
Brands – Food declined 3%, in line with volume declines, and
with virtually no infl ation in this segment. Excluding VAMP,
with virtually no infl ation in this segment. Excluding VAMP,
operating income declined by 8% to R1,1 billion.
operating income declined by 8% to R1,1 billion.
At Groceries, the impact of volume declines and competitive
At Groceries, the impact of volume declines and competitive
market pricing resulted in an operating income decline of 27%
market pricing resulted in an operating income decline of 27%
to R432 million. Contributing factors included supply constraints
to R432 million. Contributing factors included supply constraints
in condiments and spreads, and the growth of private label on
in condiments and spreads, and the growth of private label on
the back of extremely competitive import pricing.
the back of extremely competitive import pricing.
Snacks & Treats’ category volumes slowed signifi cantly in
Snacks & Treats’ category volumes slowed signifi cantly in
the second half, particularly in channels servicing lower-income
the second half, particularly in channels servicing lower-income
groups. Despite share gains in chocolate, revenue declined
groups. Despite share gains in chocolate, revenue declined
4% to R2,1 billion. Lower volumes, coupled with an adverse
4% to R2,1 billion. Lower volumes, coupled with an adverse
product mix, resulted in operating income decreasing 6% to
product mix, resulted in operating income decreasing 6% to
R305 million.
R305 million.
The Beverages business performed strongly throughout FY18,
The Beverages business performed strongly throughout FY18,
with revenue increasing 8% and operating income by 48% to
with revenue increasing 8% and operating income by 48% to
R213 million, benefi ting from previous years’ investments in
cost-containment initiatives and improved factory effi ciencies.
VAMP’s performance was severely impacted by the well-
publicised closure of its facilities in early March 2018. Revenue
declined 52% to R1,1 billion, with an operating loss of
R252 million. Halting these operations allowed us to undertake
signifi cant refurbishments of our production facilities and
allowed dedicated time for employee training and education,
which culminated in reopening our Germiston facility on
12 October 2018. The Clayville abattoir will supply raw
material requirements for the Germiston facility, as well as fresh
meat cuts to the market. In addition, it will continue to contract
slaughter on behalf of approved pig suppliers. The Enterprise
meat-canning operation, which is a separate unit on the
Polokwane site, restarted production on 12 September 2018.
Structural refurbishments have been completed at the Polokwane
facility and it is currently being assessed by the Capricorn
Municipality. Full production will begin once all required
regulatory approvals have been issued.
Tiger Brands Limited Integrated Annual Report 2018
Page 45
Operational review continued
Home, Personal Care & Baby (HPCB)
Performance
Revenue declined to
Operating income declined to
Operating margin down to
R2,2 billion
R341 million
15,3%
(FY17: R2,7 billion)
(FY17: R623 billion)
(FY17: 23,5%)
% contribution to HPCB revenue
27%
27%
36%
36%
26%
26%
33%
33%
2018
2018
Baby
Baby
Homecare*
Homecare*
Personal care
Personal care
2017
2017
37%
37%
41%
41%
Salient features
› Home Care grows market share in volume and value
› Margin recovery in Personal Care to be supported by normalised stock levels and increased volumes
Baby pouches and snacks gain momentum; good volume and market share growth in pouches
› Baby pouches and snacks gain momentum; good volume and market share growth in pouches
* Includes stationery.
Page 46
Tiger Brands Limited Integrated Annual Report 2018
Despite market-share gains in key segments of the Home Care
category, lower consumer demand resulted in higher-than-
expected trade stocks going into the peak pest season. This
resulted in revenue and operating income declines of 25% and
48%, respectively. Lower production levels had an adverse
effect on factory recoveries, while competitor pricing put
pressure on margins.
The poor performance in HPCB continued through the second
half, with revenue down 16% to R2,2 billion. All three
categories were affected by price defl ation and volume
declines. The deleveraging impact of this volume loss was
primarily responsible for the signifi cant reduction in operating
income to R341 million.
Revenue in Personal Care declined 10% to R616 million. An
intensely competitive trading environment resulted in operating
income decreasing by 53% to R65 million.
Revenue in Baby declined 10% to R796 million, while
operating income fell 36% to R133 million. This performance
refl ects lower sales volumes, an unfavourable sales mix and the
concomitant pressure on factory overhead recoveries. The new
baby-food pouch line was successfully commissioned in June
2018, contributing to volume growth of 30%.
Tiger Brands Limited Integrated Annual Report 2018
Page 47
Operational review continued
Exports & International
Performance
Revenue declined to
Operating income declined to
Operating margin down to
R3,8 billion
R270 million
7,2%
(FY17: R4,2 billion)
(FY17: R399 million)
(FY17: 9,5%)
% contribution to Exports and International revenue
3%
3%
2018
2018
29%
29%
23%
23%
Salient features
45%
45%
32%
32%
Exports
Exports
Central Africa
Central Africa
Deciduous fruit
Deciduous fruit
West Africa
West Africa
7%
7%
41%
41%
2017
2017
20%
20%
› Exports business increased revenue 4% to R1,8 billion and operating income by 6% to R290 million despite challenging
macro environment
› Chococam recorded 3% revenue growth in local currency in an increasingly challenging environment, assisted by growth from
innovation, tight cost management and favourable procurement positions
› Deciduous fruit impacted by drought and lower volumes; operation restructured for recovery
› Africa strategy approved
Page 48
2018
Tiger Brands Limited Integrated Annual Report 2018
Total revenue for the Exports and International businesses
declined 10% to R3,8 billion, while operating income reduced
by 32% to R270 million.
The Deciduous Fruit business was the major contributor to
reduced operating income. Revenue declined 20% on lower
volumes and fruit yields after the severe drought in the Western
Cape. An operating loss of R128 million was incurred in the
year (2017: R13 million operating income).
The Exports business produced a good performance, with
revenue up 4% to R1,8 billion, despite ongoing macro-
economic headwinds. These included foreign currency
shortages, weak consumer demand, as well as regulatory
changes in the group’s core markets. Operating income
increased 6% to R290 million.
In an increasingly challenging environment, Chococam
recorded 3% revenue growth in local currency terms. Revenue
in rand terms increased 7% to R882 million. Operating income
rose 8% in rand terms to R159 million (4% in local currency),
assisted by growth from innovation, tight cost management
and favourable procurement positions.
Deli Foods recorded a further operating loss of R51 million,
following a reduction in revenue of 61% refl ecting ongoing
market challenges. Several cost-saving initiatives have been
implemented and management changes were made in the
second half.
The board has approved an Africa strategy, detailed on
page 22. This builds on our core competencies and existing
markets, and complements our strategic goals in South Africa.
Tiger Brands Limited Integrated Annual Report 2018
Page 49
Operational review continued
Associates
Performance
Associate earnings increased to
Associate earnings as a % of HEPS increased to
R731 million
28%
(FY17: R533 million)
(FY17: 15%)
3%
7%
3%
29%
2018
2018
% contribution to Associates revenue
7%
14%
45%
33%
3%
32%
41%
40%
Exports
Central Africa
Deciduous fruit
West Africa
Empresas Carozzi
Oceana
UAC Foods
National Food
Holdings Limited
2017
2017
23%
57%
43%
20%
Chile: Empresas Carozzí (24,4% held)
Empresas Carozzí S.A. is a Chilean company headquartered
in Santiago, Chile. It is one of the largest and most respected
South American food producers. The company has manufacturing
operations in Chile, Peru and Argentina. Carozzí has two main
business areas: fast-moving consumer goods and agro-industrial
(business-to-business) products. Its main customer markets are
Chile and Peru.
The Chilean economy is recovering from the economic
stagnation of the last four years, evident in improving macro-
economic fundamentals, while the Peruvian economy is also
performing well. As such, Carozzí’s revenue growth is strong
in both countries.
Carozzí’s success refl ects its consistent innovation and new
product development, high-quality products, well-known brands,
manufacturing effi ciencies and strong fi nancial position.
Page 50
Tiger Brands Limited Integrated Annual Report 2018
South Africa: Oceana (42,1% held)
Oceana is a leading fi shing company, listed on the JSE.
It has delivered a strong performance for the year, driven
primarily by increased canned fi sh sales volumes, improved
landings for hake, horse mackerel and squid in South Africa,
and Gulf menhaden in the United States. The focus remained
on operational effi ciencies and improved management of
foreign currency exposure. A disappointing year for the
Commercial Cold Storage division tempered group
performance.
Headline earnings for the year ended 30 September 2018
increased by 86% after a 24% increase in operating profi t
before associate and joint-venture income, fair value adjustments
and other operating items. Included in headline earnings is a
once-off release of deferred taxation following the reduction in
the federal corporate tax rate in the United States from 35%
to 21%. Excluding the effect of the tax adjustment, fair value
adjustments and other operating items, headline earnings
increased by 45%.
Nigeria: UAC Foods (49,0% held)
UAC Foods is a leading manufacturer and marketer of
convenience foods in Nigeria. Its brands span a broad spectrum
of the country’s food market, specifi cally snacks, dairy products
and beverages.
The snacks category comprises Gala sausage roll, Funtime
cupcakes, Funtime coconut chips and the new Gala Chinchin
(a popular regional fried snack). The dairy category includes
the Supreme range of ice-cream and yoghurt products, while
the beverage category includes Swan Natural Spring Water.
The business environment in the review period was challenging
due to high input costs, and increased maintenance and
haulage costs. These could not be recovered as the company
was unable to increase selling prices for its primary offering in
the snacks segment under the Gala brand.
The company embarked on several cost-savings initiatives to
maintain sustainable profi table growth. Stiff competition and
a challenging business environment are likely to continue as
we approach 2019 elections in Nigeria.
Zimbabwe: National Food Holdings
Limited (37,4% held)
National Foods is a leading branded food manufacturer in
Zimbabwe. The past year saw signifi cant political change in
the country. While the government has committed to focusing
on economic recovery, the country is still impacted by macro-
economic challenges. Foreign currency shortages worsened
in the past year and continue to create challenges for importers
in settling foreign creditors. National Foods is working with the
Reserve Bank given that its needs are prioritised as an importer
of basic commodities.
The company’s oil division, maize business and rice trading
improved. While record fl our volumes were achieved, margins
were signifi cantly affected by the inability to increase prices as
a result of a bread price that remained constant for the greater
part of the year.
The outlook for the Zimbabwean economy remains uncertain
in the aftermath of recent elections.
Tiger Brands Limited Integrated Annual Report 2018
Page 51
Overview of non-fi nancial performance
Tiger Brands has published a supplementary sustainability report in FY18, available on our website, with additional information and
data for a broader range of stakeholders. We welcome your feedback (contact details on the inside back cover). For convenience,
we have cross-referenced the summaries below to the sustainability report.
Highlights and challenges
Safety
Safety and health
Challenges
› One fatality in a route-to-market incident
› Group lost-time injury frequency rate (LTIFR) at 0,27
›
Lost-time injuries (LTIs) down 14%
Our people
Invested R61 million or 1,8% of total payroll on training
›
› Trained 1 200 employees in only our value added meat products division, in addition to all
Our communities
›
›
other training across the group
Launched bespoke mentorship and coaching framework
Invested R32 million on socio-economic development (SED), reaching over 88 000
benefi ciaries
Environmental sustainability
› Preferential procurement of R12 billion, with BBBEE verifi ed suppliers, including R2 billion with
black-owned enterprises
› Enterprise and suppler development: R12 million to support black farmers and small businesses
› CO2 emissions down 4,17% (intensity trend)
› Absolute water use dropped 19,3% and water intensity decreased 21,2%
› Signifi cant water savings from our manufacturing facilities in the water-stressed Western Cape
Governance
Read more about governance on
page 59.
This section includes our approach to a number of industry-
specifi c matters and global concerns.
Supporting global initiatives
Our collaborative approach to sustainability issues includes
actively engaging with various forums:
› Participating in the annual climate change and water
›
disclosures of the CDP
Independently assessed against FTSE4Good criteria,
and satisfi ed requirements to remain a constituent of the
FTSE4Good index
› Member of the National Business Initiative (NBI), Strategic
Water Partners Network and Business Leadership South Africa
(BLSA)
› Member of the Consumer Goods Council South Africa.
Human rights
Our human rights policy was updated in the review period.
It defi nes our commitment to respecting human rights enshrined
in the bill of rights in South Africa’s constitution, the UN guiding
principles on business and human rights, the international bill
of human rights, and the International Labour Organisation’s
declaration on fundamental principles and rights at work.
There were no reported cases of alleged human rights abuses
in the review period.
Page 52
Tiger Brands Limited Integrated Annual Report 2018
Our approach to ethics
The board has ultimate oversight of our ethics, anti-corruption
and anti-bribery policies, and compliance is monitored by the
social, ethics and transformation committee. Confi dential and
independent facilities enable any stakeholder to report alleged
corruption, fraud, human resources issues, human rights issues,
theft and unethical behaviour.
For FY18, 54 whistleblowing reports were received: 45 were
closed and nine are under investigation (FY17: 60 reports, all
closed). After investigation, 12 employees were dismissed, two
received fi nal written warnings and 22 cases were registered
with the SAPS, pending criminal proceedings. Seven successful
prosecutions were reported in FY18 for cases registered in
previous years.
Cyber security and protection of personal
information
A three-year programme is under way to comply with the
requirements of the Protection of Personal Information Act
2013 (POPI) and EU General Data Protection Regulation. This
includes training and awareness campaigns for the top
1 000 employees in the group.
Sustainable agriculture
Our business depends on healthy ecosystems to produce
sustainable supplies of wheat, maize, fruit, vegetables and other
raw materials to create our iconic products used in millions of
households daily.
Acknowledging the complex challenges facing the global food
system and specific issues in South Africa, we are using our
scale and presence, and expert input, to make a positive impact
on the farms, communities and environment where our main raw
materials are grown. Our smallholder producer programme is
just one example. We are also actively driving change in our
manufacturing processes and with our suppliers through our
ethical sourcing policy so that sustainability becomes the
accepted way to do business.
We are consolidating codes and practices across our business
units into a group standard for sustainable agriculture and
livestock farming based on key principles and best practices,
including:
› Ensuring biodiversity by using environment-friendly chemicals,
and crop rotation
› Selecting non-genetically modified (GM) cultivars for
vegetable where possible
› Sustainable water management
› Animal welfare
Sustainable manufacturing
We are committed to running an environmentally responsible
company and our operations adhere to all relevant
environmental regulations. Managing operations in an
environmentally and socially responsible manner – sustainable
manufacturing – is therefore a business imperative.
Our procurement strategies focus on ethical sourcing and the
long-term sustainability of our processes. Apart from our own
initiatives, we collaborate with global and local bodies and
experts to achieve our sustainability goals. We are also working
with suppliers to ensure sustainable, traceable sourcing of key
raw materials, such as palm oil.
An ethical sourcing policy was approved recently and will be
implemented in 2019. It covers topics such as:
› Sustainable palm oil
› Sustainable cocoa sourcing
› Conflict minerals
› Human rights in the supply chain
Packaging
Packaging is vital in delivering our products to consumers in a
way that preserves the integrity of the product while protecting
consumers’ health and safety, and minimising environmental
impacts. Our packaging initiatives focus on:
› Optimising costs
›
Lightweighting
›
Innovative packaging that keeps content intact and protected
from contamination and infestation
› Reduced primary, secondary and tertiary packaging
› Using recycled plastics where possible
›
› Support reduce, reuse and recycle packaging principle
Investigating the use of biodegradable packaging
Lifecycle assessments evaluate the environmental impacts of
all stages of a product’s life from cradle to grave (ie from raw
material extraction through materials processing, manufacture,
distribution, use, repair and maintenance, and disposal or
recycling).
Tiger Brands Limited Integrated Annual Report 2018
Page 53
Overview of non-fi nancial performance continued
We are dedicated to helping consumers make better food choices so that healthy living becomes easier. In 2009,
we voluntarily initiated the Eat Well, Live Well system that includes the guideline daily amount (GDA) table on all
our products.
The GDA notes the fi ve nutrients that have an impact on non-communicable and lifestyle conditions, such as heart
disease, type 2 diabetes, obesity and some cancers, and allows the consumer to balance high-risk nutrients for the
day, and make better food choices. This is complemented by the Be Nutrient Wise system on the front of each pack.
Nutrition – focus areas
Issue
Reason
Our response
Reducing sugar content
Compliance and healthy living
Reducing salt content
Compliance and healthy living
Portion size
Healthy living
Nutritional value of our food products
Malnutrition affects a signifi cant
proportion of the populations we serve
Reduced sugar by 11% or 12 000 tons
across the portfolio in the past fi ve years
100% compliance to current regulated
targets
2 000 tons less salt used in milling and
baking operations
On-pack labelling
Be Nutrient Wise and
Eat Well, Live Well icons
Eat Well, Live Well icons
We fortify staple foods like bread and
maize meal, and cake fl our with key
vitamins and minerals. We voluntarily
enrich certain breakfast cereals and
instant porridges with micronutrients.
Some products are developed to target
specifi c requirements: Jungle Energy bars
are enriched with B vitamins that assist
in releasing energy; Morvite contains
micronutrients to assist the immune system
Page 54
Tiger Brands Limited Integrated Annual Report 2018
Our people
Safety and health
Occupational health
Lost-time injury frequency rate (LTIFR)
0,27
0,36
Safety
and
health
0,30
FY16
FY17
FY18
Our long-term success depends on ensuring the safety of our
people, visitors and contractors at our operations. Despite our
diligent efforts to improve overall safety management, in FY18
we regrettably recorded a fatality when an Albany Bakery
employee, Mr Thulani Shoba, died on duty in a route-to-market
incident in Durban. Our deepest condolences go to his family,
friends and colleagues.
In the review period, site evaluations of occupational health
services were completed for 27 business units. This highlighted
the need for a group standard which has been prioritised
for FY19.
Our people
At Tiger Brands, our people and our brands are our biggest
differentiator. We leverage on their talent and agility to nourish
and nurture more lives every day. To this end, we continuously
strive to create a great place for our diverse people to thrive,
grow and innovate.
Integral to our business strategy is unleashing the power of our
people. This means creating a great place to work attracts,
develops and retains talented people who deliver winning
performance.
A Great Place to Work
In the review period, we engaged our leaders and workforce to
identify cultural barriers affecting our business performance. As
an outcome, we have refreshed our values and defined our
winning culture and behaviours that will support executing our
business strategy and embedding our new operating model.
In line with our people strategy, key focus areas during the
period included the attraction, acquisition and development of
core capabilities. In FY18, we invested R61 million of local
labour costs on in-house training in South Africa, through the
Tiger Brands Academy, as well as learnerships.
All reported incidents are investigated to identify root causes.
Based on FY18 reported incidents, behavioural and operational
discipline are the leading causes of injuries.
As part of creating a great place to work we reviewed our
remuneration strategy, and focussed on engagement with our
union stakeholders on matters of mutual interest.
Key indicators
Employee headcount
Female employees
Learnership participants
Skills development (Rm)
Total training as % of payroll
Overall staff turnover rate (%)
Retention rate of key talent (target 80%)
FY18
17 608
3 637
529
60,5
1,80
11,0
89%
FY17
18 085
3 532
417
56,7
2,08
9,1
91%
FY16
21 474
3 910
324
66,8
2,05
7,1
91%
Rewarding winning performance
Despite the group’s financial performance being severely
impacted by challenging operating environment and the Listeria
outbreak, in FY18, we sought to leverage the remuneration
strategy to attract and retain key skills to support our business
strategy.
To ensure our remuneration policy remains competitive and fulfils
the objective of attracting, motivating and retaining high-
performing employees, pay scales and other elements of the
remuneration mix were reviewed after considering market
benchmarks and capabilities required to deliver the business
strategy.
Tiger Brands Limited Integrated Annual Report 2018
Page 55
Our people continued
Changes included:
› Refining our approach to linking our annual execution plans
directly with business strategy by ensuring the appropriate
focus of our short-term incentive metrics on growth, efficiencies,
people and sustainability
› Revising our market anchor point for guaranteed pay from the
50th to 65th percentile of the national market and
implementing a pay-progression model to ensure we are able
to attract and motivate talent and core capabilities
›
Increasing focus to address any unjustifiable pay inequities
› Developing a clawback and malus policy to minimise risk
› Revising long-term incentive performance metrics to align
executive and shareholder interests.
Employee relations
In fulfilling our strategic goal of creating a constructive, safe and
fair working environment for all our people, our leaders engage
directly with our people regularly to address issues of mutual
interest. We also work closely with employee representatives,
partner trade unions to ensure everyone has a voice in matters
that affect them daily.
Fourteen wage-negotiation cycles were settled across our sites
out of 18 scheduled for the period, and the balance will be
concluded in the new year. An average settlement of 7,5%
was achieved.
Our employees have full freedom of association, with over 62%
belonging to unions (including three major industry unions). Site
management and shop stewards meet monthly to address issues
of mutual interest.
Communities
Key indicators (Rm)
Total SED spend
Tiger Brands Foundation spend
Beneficiaries reached
* For the Foundation’s financial year to end-February.
FY18
32,0
28,7*
FY17
35,0
23,9*
FY16
23,0
19,0*
FY15
24,2
15,3
88 632
104 215
100 977
118 443
To fulfil our responsibility to contribute to the welfare of our
communities, we revised our socio-economic development (SED)
strategy to be more responsive to challenges.
From six primary schools in Alexandra, this has expanded to
94 schools in all provinces, providing the essential breakfast
meal to around 67 500 learners.
The new SED strategy is integrated into our business objectives
and focused on real – and changing – community needs.
In the spirit of stakeholder inclusivity (a key insight from the
2017 stakeholder survey), this strategy has integrated national
and societal challenges. This allows us to respond to real issues
impacting communities.
› By September 2018, we had cumulatively invested over
R174 million to serve more than 65 million breakfasts to
our country’s most vulnerable learners
› We have constructed or upgraded 38 school kitchens
› Created over 390 sustainable jobs for the community
as food handlers, monitors and regional coordinators
In the review period, we invested 1,5% of net profit after tax,
or R32 million, on community development, achieving several
milestones:
› Over 55 600 high-quality, nutrient dense and fortified food
packages distributed
› 30 000 direct and indirect beneficiaries reached monthly
via the Tiger Brands food and nutrition support programme
› Over 3 000 beneficiaries in crisis supported through our
›
CSI and employee volunteerism programmes
In partnership with the Tiger Brands Foundation, we supported
the development and distribution of 15 000 placemats and
10 500 posters focused on nutrition education in schools
› 204 community members trained in food gardening and
community education.
Tiger Brands Foundation
In 2011, the Tiger Brands Foundation implemented South
Africa’s first in-school breakfast programme in partnership
with the Department of Basic Education’s national school
nutrition programme.
Page 56
Tiger Brands Limited Integrated Annual Report 2018
› Provided a stipend of R550 per month for 367 food handlers,
›
injecting over R2,4 million into vulnerable communities
Introduced a food-handlers skills training programme
accredited by the South African Qualifications Authority
› Ensuring uniform food-preparation safety and hygiene
standards.
Transformation
In South Africa, we support social transformation by advancing
broad-based black economic empowerment (BBBEE) and other
initiatives.
Tiger Brands is currently rated level 3 against the agriculture
sector (agri-BEE) codes gazetted in December 2012. As these
codes were gazetted after the group’s last verification, it will be
measured against the amended codes in December 2018. We
are conducting our final verification, with the outcome available
by 5 December 2018 (therefore not in time for this report).
Our internal assessment indicates that the group, measured
against the amended codes, will temporarily drop to level 7
(discounted to level 8) given the new minimum requirements for
priority elements (ownership, skills development, enterprise and
supplier development).
To align with the revised codes, we are developing a broader
group transformation strategy that will ensure integrated
execution in all elements of the BBBEE scorecard to achieve
level 4 status by FY22.
Preferential procurement
Tiger Brands is committed to driving preferential-procurement
practices and local-content requirements. In line with the agri-BEE
codes, we provide a valuable procurement opportunity to drive
social and economic transformation in South Africa.
In the review period, R12 billion was spent with BBBEE verified
suppliers including R2 billion with black-owned enterprises.
Enterprise and supplier development
(ESD)
Our aim is to develop the operational and financial capacity of
black-owned and black women-owned enterprises to become
part of our value chain – from sourcing to distribution – as
reliable and competent suppliers.
The new enterprise and supplier development office is
mandated to develop and execute our ESD strategy and
unlock procurement opportunities for black enterprises.
In the review period, we supported 58 black farmers under
our smallholder programme. This included financial and
non-financial support, agronomics and agrarian support,
as well as business mentorship and 0% interest loans.
› 52 tomato farmers supplied Tiger Brands with 5 200 tons
of tomatoes.
› 6 bean farmers supplied 70 tons of beans.
With a total investment of R11 million, these farmers have been
entrenched in our procurement chain. In turn, they created
412 jobs, including 194 female employees. An additional
investment of R1,3 million was made in Khayelitsha Cookies,
Cape Town, to commission a factory producing Purity baby
rusks. Khayelitsha Cookies created 91 jobs, all women.
In 2019, we plan to expand the smallholder farmer programme
to wheat, sorghum and peanuts.
Tiger Brands Limited Integrated Annual Report 2018
Page 57
Environmental sustainability
Key legislative developments
› The carbon tax bill will come into effect on 1 July 2019. Tiger Brands is prepared to report scope 1 emissions to the
authorities as we are already reporting these in our CDP submissions.
› The draft climate change bill, published in June 2018, provides for the effective management of inevitable climate-change
impacts. The bill also calls for industry to make a fair contribution to the global effort to stabilise greenhouse gas (GHG)
concentrations in the atmosphere.
› The Department of Environmental Affairs (DEA) published a notice requiring several industries to submit waste
management plans for approval. As a brand owner, this will include Tiger Brands as a producer.
› Water restrictions were announced in July 2018, specifically for municipal water supply.
Environmental sustainability is underpinned by a group sustainability strategy that requires our operations to concentrate on reducing
our environmental footprint and avoid environmental accidents. Specific environmental targets include:
› Water reduction target for each unit in 2018 and 15% in total by 2021
› Waste to landfill down 24% by 2021 from 2018 level, with yearly targets
› Energy-saving and CO2 emission-reduction targets for each unit in 2018 and 15% in total by 2021
› 2021 packaging losses reduced by 15% from the 2018 baseline
› All production units to conduct ISO 14001 (2015 standard) audits and retain this certification.
Key indicators
Measure
Energy (kWh)
Water (kl)
Packaging (tons)
Waste (tons)*
Carbon emissions CO2-e
Production output (tons)
* Impacted by VAMP product recall and incineration of products due to Listeria outbreak.
Page 58
Tiger Brands Limited Integrated Annual Report 2018
FY17
Intensity/ton
FY18
Intensity/ton
128,19
132,61
2,12
0,31
0,005
0,24
1,67
0,28
0,02
0,23
2 395 809
2 378 278
Corporate governance
Creating value through good governance
The Tiger Brands board is committed to the highest levels of
ethical leadership and integrity, which are embodied in the
company’s values. The board sets the tone for the organisation
which, in turn, directs our daily activities.
The board is guided by the principles in the King IV Report on
Corporate Governance, JSE Listings Requirements, Companies
Act No 71 of 2008 and other relevant laws and regulations.
Governance structures, policies and standard operating
procedures continue to be embedded in the organisation.
Tiger Brands reviews its operations and strategy to ensure
these remain aligned with the principles of good governance,
accountability, fairness, integrity, responsibility and trust.
The board is satisfi ed that Tiger Brands applied all the
recommended King IV principles in FY18. Further enhancements
will be made, in line with the board’s objectives to continuously
improve corporate governance practices. The King IV register
is available on the company’s website www.tigerbrands.com.
Our board
The Tiger Brands board comprised 10 directors at
30 September 2018, with a range of corporate leadership
skills, industry expertise and diversity appropriate to lead and
best achieve the company’s strategic objectives in this
competitive environment. All directors have the relevant
knowledge, skills and experience to make a meaningful
contribution to the business of the company.
The board was strengthened during the period by appointing
Gail Klintworth on 16 August 2018. Gail has signifi cant
experience across a number of sectors, having worked
extensively across Africa and globally. She essentially has
extensive food experience across all continents. The board looks
forward to benefi ting from her insights and perspectives.
On 24 November 2017, Santie Botha retired as a non-
executive director after serving on the board for 14 years.
On 20 February 2018, Clive Vaux retired as an executive
director. On 15 August 2018, Swazi Tshabalala stepped
down as a non-executive director, followed by Rob Nisbet,
who also stepped down as a non-executive director on
7 September 2018.
Board diversity
Independence
2
Gender
3
8
Tenure
7
■ Independent non-executives
■ Executive directors
■ Male
■ Female
Race
4
6
Demographics
2
11
8,2 8,2
6,4
12
10
8
6
4
2
0
3,6
3,3 3,2
2,5
1,9
0,1
8
■ Black
■ White
■ South African
■ Non-South African
All non-executive directors are independent as determined by the board
30% of all directors are women and 60% of all directors are black. The board is determined to achieve its target of 50% for women
and black representation by 30 September 2022.
Tiger Brands Limited Integrated Annual Report 2018
Page 59
Corporate governance continued
Any term in offi ce by an independent non-executive director
exceeding nine years is subject to a rigorous review by the
board. A self-assessment, via individual questionnaires, was
performed in FY18. This covered the performance of the board,
individual directors retiring by rotation, board committees
and the chairman, as well as directors’ interests and any
circumstances and relationships that may impair their judgement
and consequently their independence. No major concerns were
raised on the functioning of the board or any of its committees.
Dr Khotso Mokhele completed 11 years of service as a
non-executive director on 30 September 2018. After taking into
account, among other considerations, the extent to which the
diversity of his views, skills and experience continue to enhance
the board’s effectiveness, the board is satisfi ed that Dr Mokhele’s
independence is not impaired by his length of service.
Role of the board
The Tiger Brands board provides effective leadership and
strategic direction in the best interest of the company and
its stakeholders. In executing its mandate, the board reviews
business models to ensure they support value creation, ensures
that an effective systems of risk management and internal
controls are in place, and establishes a culture of ethical
leadership across the group.
The board operates in line with its formally approved charter
which ensures its activities conform to sound corporate
governance principles. The board is satisfi ed it has complied
with the terms of its charter for the review period. The board has
delegated certain functions to its committees to assist in meeting
its oversight responsibilities. All committees have board-approved
terms of reference and a work plan, which are reviewed
annually. In the annual review process, which was conducted
internally in 2018, the directors confi rmed that all committees
had fulfi lled their obligations for the period and operated within
their terms of reference.
Board committees
Audit committee
The audit committee was chaired by an independent non-
executive director, Rob Nisbet, who stepped down as director
and accordingly as a member and chairman of the audit
committee on 7 September 2018. On 2 November 2018,
the board appointed Emma Mashilwane as chairman of this
committee, with an additional independent non-executive
director as a member, namely Mark Bowman.
Yunus Suleman has been a member since he joined the board
in July 2015.
The committee comprises three independent non-executive
directors. The board is satisfi ed with the level of experience
and competency of committee members.
Risk and sustainability committee
The risk and sustainability committee is chaired by an
independent non-executive director, Yunus Suleman, supported
by two independent non-executive directors as members,
namely:
› Michael Ajukwu
› Emma Mashilwane appointed from 2 November 2018
› Swazi Tshabalala resigned 15 August 2018
› Rob Nisbet resigned 7 September 2018
The board is satisfi ed with the level of experience and
competency of these members.
Nominations committee
The nominations committee is chaired by the chairman of the
board, Dr Khotso Mokhele, with three additional independent
non-executive directors as members, namely:
› Mark Bowman
› Maya Makanjee
› Makhup Nyama
The board is satisfi ed with the level of experience and
competency of committee members.
The committee met four times in 2018 and attendance is set
out on pages 64 to 66.
Page 60
Tiger Brands Limited Integrated Annual Report 2018
The committee met three times in 2018, with attendance set out
on pages 64 to 66.
Committee mandate
› Oversees the integrity of the company’s fi nancial reporting
› Monitors the strength of internal fi nancial controls and ensures
the effectiveness of assurance services and functions, with
particular focus on combined assurance arrangements,
including external assurance service providers, the fi nance
function and internal audit.
The audit committee chairman’s report is set out on page 69.
The committee met three times in 2018, with attendance set out
on pages 64 to 66.
Committee mandate
Assists the board in risk management, which includes IT
governance, and reports to the audit committee and board
on risk and sustainability issues.
The risk management report appears on page 24.
The nominations committee has, on behalf of the board:
› Assessed the composition of the board to ensure it is
appropriately structured, skilled and staffed to enable directors
to effi ciently execute their mandates
› Monitored the execution of diversity policies for the group and
board, noting the progress in raising the diversity profi le from
54% black representation in FY17 to 60% in FY18
› Monitored group succession plans, noting good progress on
CEO succession plans
› Assisted with performance evaluations of the board and its
committees, directors retiring by rotation, and the performance
of the board chairman
› Assisted the board in evaluating performance of the CEO
› Monitored progress in fi lling key executive management
positions.
Social, ethics and transformation committee
The social, ethics and transformation committee is chaired by an
independent non-executive director, Maya Makanjee, supported
by two independent non-executive directors, namely:
› Dr Khotso Mokhele
› Makhup Nyama and
› CEO, Lawrence Mac Dougall
The board is satisfi ed with the level of experience and
competency of committee members.
The committee met three times in 2018, with attendance
set out on pages 64 to 66.
Investment committee
The investment committee is chaired by the chairman of the
board, Dr Khotso Mokhele, supported by two independent
non-executive directors, namely:
› Mark Bowman
› Rob Nisbet resigned 7 September 2018
› Yunus Suleman
The board is satisfi ed with the level of experience and
competency of committee members.
Remuneration committee
The remuneration committee is chaired by independent non-
executive director, Mark Bowman, supported by three
independent non-executive directors, namely:
› Maya Makanjee
› Dr Khotso Mokhele
› Makhup Nyama
The board is satisfi ed with the level of experience and
competency of committee members.
The committee met four times in 2018. Attendance is set out
on pages 64 to 66.
The company’s memorandum of incorporation requires that
one-third of directors must retire each year, beginning with those
who have been in offi ce the longest. The following directors will
retire, and are eligible for re-election, at the company’s next
annual general meeting (AGM): Maya Makanjee, Makhup
Nyama and Emma Mashilwane.
The nominations committee proposed the re-election of all
retiring directors after a satisfactory performance review in
all cases.
Gail Klintworth was appointed by the board since the last
AGM and is required to stand for election by shareholders
at the company’s next AGM.
Committee mandate
› Assists the board in monitoring and ensuring matters relating
to organisational ethics, responsible corporate citizenship,
sustainable development and stakeholder relationships are
effectively managed.
› This includes promoting equality, preventing unfair
discrimination, contributing to community development and
monitoring the company’s activities in terms of relevant
legislation and prevailing code of best practices.
› The committee oversees Tiger Brands’ transformation
objectives and broad-based black economic empowerment
(BBBEE) activities.
The social, ethics and transformation committee’s activities are
set out on page 71.
The committee met twice in 2018, with attendance set out
on pages 64 to 66.
› The committee assessed all investment opportunities identifi ed
in the strategic planning process, and made recommendations
to the board on disinvestment proposals.
› Post-investment reviews of prior strategic investments are
monitored closely.
Committee mandate
› Oversee development of the Tiger Brands remuneration policy
that articulates and gives effect to the board’s direction on fair,
responsible and transparent remuneration.
› This includes setting out principles that aim to attract and
retain key and critical talent required to deliver business goals
and results.
› Enable remuneration structures that are aligned with the
company’s objectives for value creation.
The remuneration report is set out on pages 74 to 100.
The formal induction programme for all new directors is
monitored by the nominations committee, which assumes
responsibility for the induction process and ongoing board
development programme for all directors, assisted by the
company secretary. The induction programme includes
introductions to key members of executive management
and site visits to the company’s manufacturing units as well
as its customers.
Tiger Brands Limited Integrated Annual Report 2018
Page 61
Khotso Mokhele
Michael Ajukwu
Mark Bowman
Maya Makanjee
Gail Klintworth
Makhup Nyama
Yunus Suleman
Emma Mashilwane
Lawrence Mac Dougall
Noel Doyle
Corporate governance continued
Board profi le
Chairman
Board
Experience
Auditing and
accounting
Business
intelligence
Corporate
fi nance
Banking and
Finance
FMCG
General
management
Corporate
governance
Human
resources
ICT
Marketing
Mergers and
acquisitions
Regional
Risk
Sales
Stakeholder
relations
Strategy
Sustainability
Board
committee
membership
Other
directorships
West Africa
Remuneration
•
•
Chairman of AECI and
non-executive director of
Afrox, MTN Group,
Mapitso Consortium, Hans
Merensky Holdings, Kenosi
Investment Holdings.
Special adviser to the
minister of Science and
Technology and chancellor
of the University of the Free
State.
Page 62
Tiger Brands Limited Integrated Annual Report 2018
Africa
•
Africa
•
Non-executive director of
International Breweries plc,
a subsidiary of AB-Inbev,
Sterling Bank plc and
Novotel: Port Harcourt,
Nigeria (member of Accor
Hotels group).
Non-executive director of
Dis-Chem and Mr Price
Group and director of
Signall Mill Products.
Non-executive director of
Mpact Limited, Truworths
International Limited,
Datatec, AIG SA Group,
trustee of Nelson Mandela
Foundation.
Partner at SYSTEMIQ.
Non-executive director of
GlobeScan, advisory board
member to MAS Holdings
and NESTE, advisory group
member for SIG, advisory
council member of Wheeler
Business and Development
Institute, London Business
School.
Africa telecoms
Chief executive
Chief fi nancial
offi cer
offi cer
Africa
•
•
Director of Marsh Inc,
Zensar SA, Makhup
Properties, Kapela
Holdings and its
subsidiaries.
Independent non-executive
Non-executive director of
Non-executive director of
Non-executive director of
director of Liberty
Murray & Roberts, Famous
Oceana Group and
Oceana Group and
Holdings, Liberty Group,
Brands. Co-founder and
Empresas Carozzí (Chile)
National Foods Holdings
Albaraka Bank and Gold
CEO of MASA Risk
Fields, chairman of Sulfam
Advisory Services.
(Zimbabwe)
Holdings, trustee of Liberty
Holdings Group
Participatory Share Trust,
Liberty Two Degrees
Restricted Participatory
Interest Trust and Sulfam
Trust.
Board committee memberships key
Audit committee
Social, ethics and transformation committee
Remuneration committee
Nominations committee
Risk and sustainability committee
Investment committee
•
Chairman of specifi c committee
Chief executive
offi cer
Chief fi nancial
offi cer
Khotso Mokhele
Michael Ajukwu
Mark Bowman
Maya Makanjee
Gail Klintworth
Makhup Nyama
Yunus Suleman
Emma Mashilwane
Lawrence Mac Dougall
Noel Doyle
Africa telecoms
•
•
Africa
Chairman
•
•
Board
Experience
Auditing and
accounting
Business
intelligence
Corporate
fi nance
Banking and
Finance
FMCG
General
management
Corporate
governance
Human
resources
ICT
Marketing
Mergers and
acquisitions
Regional
Risk
Sales
Stakeholder
relations
Strategy
Sustainability
Board
committee
membership
West Africa
Remuneration
Africa
•
Africa
•
Chairman of AECI and
non-executive director of
Afrox, MTN Group,
Non-executive director of
Non-executive director of
International Breweries plc,
Dis-Chem and Mr Price
a subsidiary of AB-Inbev,
Group and director of
Signall Mill Products.
Mapitso Consortium, Hans
Sterling Bank plc and
Merensky Holdings, Kenosi
Novotel: Port Harcourt,
Non-executive director of
Mpact Limited, Truworths
International Limited,
Partner at SYSTEMIQ.
Non-executive director of
GlobeScan, advisory board
Datatec, AIG SA Group,
member to MAS Holdings
trustee of Nelson Mandela
and NESTE, advisory group
Nigeria (member of Accor
Hotels group).
Foundation.
member for SIG, advisory
council member of Wheeler
Business and Development
Institute, London Business
School.
Other
directorships
Investment Holdings.
Special adviser to the
minister of Science and
Technology and chancellor
of the University of the Free
State.
Director of Marsh Inc,
Zensar SA, Makhup
Properties, Kapela
Holdings and its
subsidiaries.
Independent non-executive
director of Liberty
Holdings, Liberty Group,
Albaraka Bank and Gold
Fields, chairman of Sulfam
Holdings, trustee of Liberty
Holdings Group
Participatory Share Trust,
Liberty Two Degrees
Restricted Participatory
Interest Trust and Sulfam
Trust.
Non-executive director of
Murray & Roberts, Famous
Brands. Co-founder and
CEO of MASA Risk
Advisory Services.
Non-executive director of
Oceana Group and
Empresas Carozzí (Chile)
Non-executive director of
Oceana Group and
National Foods Holdings
(Zimbabwe)
Tiger Brands Limited Integrated Annual Report 2018
Page 63
Corporate governance continued
Attendance at board and committee meetings
In FY18, the board met six times at scheduled meetings. It met once every quarter with separate sessions to review implementation
milestones for the approved 2022 strategy and to consider and approve the 2019 budget. In addition, special meetings were
convened to deliberate on critical matters that needed the attention of the board.
On 4 March 2018, the National Consumer Commission (NCC) issued a directive to Tiger Brands to recall specific ready-to eat and
ready-to-cook products. Mindful of its duty as a responsible corporate citizen, the board made a concerted effort to ensure it met
regularly, particularly in the early stages of what manifested into a crisis for the company. The board engaged with management,
industry and professional experts, government, regulators and other stakeholders to understand the origin of Listeria monocytogenes.
This common bacteria was said to be the cause of the NCC’s action, with a massive impact on the food industry and the lives of
consumers. The national Listeria crisis was devastating for Tiger Brands as a company, for our people, but most importantly for the
affected families. Our deepest and heartfelt thoughts remain with those who lost their loved ones and who are otherwise affected by
this crisis.
Ten special board meetings were held in the calendar year to deal with this crisis. As the board is committed to the highest standards
of corporate governance, it executed its duties responsibly and acted independently when reviewing reports presented by
management. No board fees were paid for these meetings.
In the year ahead, while we continue to resolve issues emanating from the crisis and deal with the complex environment of multi-
categories, the board and management also recognise the need to maintain focus on driving the health and wellness agenda and
deliver sustainable growth that creates value for all stakeholders.
INDEPENDENT NON-EXECUTIVE DIRECTORS
Member attendance
Scheduled
board
Special
board
Audit
Risk and
sustainability
Remuneration
remuneration Nominations
Special
Special
nominations
Social, ethics
and
transformation
Ad hoc
committee
Investment
6/6
9/10
3/3
1/1
3/3
1/1
3/3
2/2
Appointed:
1 August
2007
Dr Khotso
Mokhele
(63)
Chairman of the board
BSc (agriculture),
MSc (food science),
PhD (microbiology)
6/6
10/10
3/3
Appointed:
31 March
2015
1/1
Appointed:
18 August
2004
1/1
1/1
6/6
9/10
3/3
1/1
3/3
1/1
2/2
Appointed:
1 June
2012
2/2
1/1
Appointed:
16 August
2018
Michael
Ajukwu
(62)
BSc (finance), MBA
Santie Botha1
(54)
BEcon (hons)
Mark
Bowman
(52)
BCom, MBA
Gail
Klintworth2
(55)
BA (industrial
psychology), MSt
(sustainability
leadership)
Page 64
Tiger Brands Limited Integrated Annual Report 2018
INDEPENDENT NON-EXECUTIVE DIRECTORS
Member attendance
Scheduled
board
Special
board
Audit
Risk and
sustainability
Remuneration
remuneration Nominations
Special
Special
nominations
Social, ethics
and
transformation
Ad hoc
committee
Investment
6/6
7/10
3/3
1/1
3/3
1/1
3/3
Appointed:
1 August
2010
6/6
9/10
3/3
Appointed:
1 December
2016
4/4
9/9
3/3
2/3
2/2
6/6
10/10
3/3
1/1
3/3
1/1
3/3
6/6
9/10
3/3
3/3
2/2
Appointed:
1 August
2010
Appointed:
1 August
2010
Appointed:
13 July
2015
3/3
7/8
3/3
Appointed:
26 May
2017
Maya
Makanjee
(56)
BA (fine arts), BCom,
MBL (cum laude)
Emma
Mashilwane (43)
BCompt, BCom
(hons), CA(SA), MBA,
Global Executive
Development
Programme
Rob
Nisbet3
(63)
BCom, BAcc, CA(SA)
Makhup
Nyama
(61)
BCom, MBA,
diploma in
marketing
management
Yunus
Suleman
(61)
CA(SA), BCom,
BCompt (hons),
leadership
programmes
Swazi
Tshabalala4
(52)
BA (economics),
MBA
1 Stepped down 24 November 2017.
2 Appointed 16 August 2018.
3 Stepped down 7 September 2018.
4 Stepped down 15 August 2018.
Tiger Brands Limited Integrated Annual Report 2018
Page 65
Corporate governance continued
EXECUTIVE DIRECTORS
Member attendance*
Scheduled
board
Special
board
Audit
Risk and
sustainability
Remuneration
remuneration Nominations
Special
Special
nominations
Social, ethics
and
transformation
Ad hoc
committee
Investment
6/6
10/10
3/3
1/3
3/3
1/1
3/3
1/1
3/3
2/2
6/6
10/10
3/3
3/3
2/2
2/2
1/1
1/1
2/2
2/2
2/2
Appointed:
10 May
2016
Appointed:
31 March
2015
Appointed:
16 February
2000
Lawrence
Mac Dougall
(61)
Chief executive
officer
Noel Doyle
(52)
Chief financial
officer
FCA, CA(SA)
Clive Vaux1
(67)
Corporate
finance director
CA(SA)
1 Stepped down 20 February 2018.
* Executive directors attend board committee meetings by invitation. However, Lawrence Mac Dougall is a member of the social, ethics and transformation committee.
Our executive committee
The executive committee comprises 12 members. The CEO and his leadership team are empowered to lead and manage the
execution of all board-approved strategic objectives and overall direction for Tiger Brands, guided by an approved delegation
of authority.
The executive committee meets at least once a month or as often as required.
Our company secretary
The board has access to the services and advice of the company secretary, Advocate Kgosi Monaisa. The board appointed
the company secretary in line with the requirements of the Companies Act and King IV. The JSE Listings Requirements stipulate that
the board must annually consider and satisfy itself on the competence, qualifications and experience of the company secretary.
The board concluded that Advocate Monaisa has the relevant qualifications, skills, experience and competency to effectively
discharge his responsibilities. The board also confirmed that he is not a director of the company and is able to interact with the
board and chairman independently.
Our subsidiaries
The necessary framework, systems, policies and processes are in place to ensure all entities adhere to essential group requirements
and minimum governance standards. The board monitors the implementation of strategies, decisions, values and policies by its
committees, executive management and group entities.
Page 66
Tiger Brands Limited Integrated Annual Report 2018
EXECUTIVE COMMITTEE
LAWRENCE MAC DOUGALL (61)
Chief executive offi cer
Appointed: May 2016
Non-executive director of Oceana Group
and Empresas Carozzí (Chile).
NOEL DOYLE (52)
Chief fi nancial offi cer
Rejoined: July 2012
Non-executive director of Oceana Group
and National Foods Holdings
(Zimbabwe)
MARC EYRES (59)
Chief customer offi cer
Appointed: April 2015
Marc previously held senior FMCG sales and
customer marketing roles across Africa, south
Asia and Australia, including customer
vice-president for Unilever South Africa and
India.
KAMAL HARILAL (45)
Chief strategy offi cer
Appointed: April 2018
Kamal was previously with AB-InBev Africa as
director: strategic projects since 2016. Prior
to this role, he served as head of strategy and
planning at SAB and Business Development
Executive at SABMiller Africa. He has
extensive experience in business
development, strategy development and
execution, mergers and acquisitions and
corporate fi nance in South Africa and Africa.
MARY-JANE MORIFI (56)
Chief corporate affairs and
sustainability offi cer
Appointed: December 2016
Mary Jane has over 20 years’ business
experience in oil and gas and mining. Prior to
her appointment, she was responsible for
leading the global capital campaign for the
Nelson Mandela Children’s Hospital Trust.
THIROSHNEE (ROSH) NAIDOO (45)
Chief legal offi cer
Appointed: May 2015
Rosh is an experienced admitted attorney,
with over 16 years’ experience as corporate
counsel, mostly in the FMCG industry, and
particularly in African operations.
BECKY OPDYKE (39)
Chief marketing offi cer
Appointed: October 2018
Becky was previously with AB-Inbev as
brand director: Castle Light Africa after fi lling
senior brand leadership roles from 2013.
Prior to that, she spent 11 years at General
Mills based in the USA in commercial and
marketing roles, having been responsible for
several global and regional portfolios,
including South Africa.
PATRICK SITHOLE (51)
Chief supply chain offi cer
Appointed: August 2012
Patrick has over 30 years of experience
in FMCG, including as supply chain
vice-president for Unilever South Africa.
Tiger Brands Limited Integrated Annual Report 2018
Page 67
Corporate governance continued
EXECUTIVE COMMITTEE
S’NE MAGAGULA (45)
Chief human resources offi cer
Appointed: May 2018
S’ne is a former senior vice president, group
human capital for the Sasol group since
2016. She held various human resources
leadership positions in Sasol since 2008,
locally and globally. Prior to that, she spent
10 years at Shell in various roles in South
Africa and Netherlands. She is a well-
rounded and highly experienced human
resources and business leader with a proven
track record.
YOKESH MAHARAJ (46)
Chief growth offi cer: Exports, International
and Snacks, treats & beverages
Appointed: July 2018
Yokesh joins Tiger Brands from Distell Limited,
where he was managing director: Africa from
2017. Prior to that, he spent 17 years at
South African Breweries (SAB) serving as
executive director: sales/distribution,
executive director: HR as well as president
of SAB, post the AB-Inbev acquisition.
PIETER SPIES (53)
Chief growth offi cer: Grains and Consumer
Brands
Appointed: February 2017
Pieter was previously CEO of GWK Group.
He has over 25 years of business experience
in the FMCG and agricultural sectors from a
number of local and international companies,
including Cadbury, Coca-Cola, Diageo and
Brandhouse.
CLIVE VAUX (67)
Executive: Corporate fi nance
34 years with the group
Clive retired as an executive director on
20 February 2018 after serving on the board
of Tiger Brands since February 2000. He has
over 40 years of experience in the fi nance
and corporate fi nance disciplines. Previous
roles included group fi nance director of
CG Smith Ltd and CG Smith Foods Ltd,
Reunert Ltd and Barlow Rand Ltd (now
Barloworld)
GRATTAN KIRK (54)
Chief growth offi cer: Consumer brands
Resigned: 31 August 2018
BRENDA KOORNNEEF (66)
Chief marketing offi cer
Retired: 31 May 2018
Page 68
Tiger Brands Limited Integrated Annual Report 2018
Audit committee report
This report is provided by the audit committee appointed for FY18 in compliance with the Companies Act,
No 71 of 2008, as amended.
Emma Mashilwane, Chairman
The committee’s activities are guided by a detailed charter
informed by the Companies Act and King IV, and approved
by the board.
The committee has executed its duties and responsibilities for
the group’s accounting, internal control, external auditing and
fi nancial reporting practices for the review period in line with
its approved charter.
Structure
The committee comprises three independent non-executive
directors, and its chairman is not the chairman of the board.
Members and attendance are on pages 64 to 66.
Biographical details of members are on pages 62 and 63,
while fees are noted in the remuneration report on pages
98 and 99.
The review period
External audit
The committee, among other matters:
› Nominated Ernst & Young Inc. to shareholders for appointment
as the external auditor, with Warren Kinnear as the designated
auditor, for the fi nancial year ended 30 September 2018.
It ensured that the appointment complied with all applicable
legal and regulatory requirements, and that the auditor and
designated auditor are accredited by the JSE Limited
› Approved the external audit engagement letter, plan and
budgeted audit fees. Fees paid to the auditor are detailed
in note 3 of the group annual fi nancial statements
› Reviewed the audit results, evaluated the effectiveness of the
auditor and its independence, and evaluated the external
auditor’s internal quality-control procedures
› Obtained an annual written statement from the auditor that
its independence was not impaired
› Considered the reports of the external auditor on the group’s
systems of internal control, including fi nancial controls
› Determined the nature and extent of all non-audit services
provided by the external auditor and pre-approved all
non-audit services
› Obtained assurances from the external auditor that adequate
accounting records were being maintained
› Considered whether any reportable irregularities were
identifi ed and reported by the external auditor in terms of
the Auditing Profession Act, No 26 of 2005, and determined
there were none.
Independence of the external auditor
The audit committee is satisfi ed that Ernst & Young Inc. is
independent of the group after considering the following factors:
› Representations by Ernst & Young Inc. to the committee
› The auditor does not, except as external auditor or in
rendering permitted non-audit services, receive any
remuneration or other benefi t from the company
› The auditor’s independence was not impaired by any
consultancy, advisory or other work undertaken
› The auditor’s independence was not prejudiced by any
previous appointment as auditor
› Criteria specifi ed for independence by the Independent
Regulatory Board for Auditors and international regulatory
bodies.
Financial statements
For the fi nancial statements, the committee:
› Confi rmed the going concern requirement as the basis
of preparing interim and annual fi nancial statements
› Reviewed compliance with the fi nancial conditions of loan
covenants and determined that the capital and debt facilities
of the group are adequate
› Examined and reviewed the interim and annual fi nancial
statements, as well as all fi nancial information disclosed to
the public before submission to and approval by the board
› Ensured the annual fi nancial statements fairly present the
fi nancial position of the company and group at the end of the
fi nancial year and the results of operations and cash fl ows for
that period, and considered the basis on which the company
and group were determined to be a going concern
› Considered accounting treatments, signifi cant unusual
transactions and accounting judgements
› Considered the appropriateness of accounting policies
adopted and any changes
› Reviewed the external auditor’s audit report including the key
audit matters identifi ed
› Reviewed the representation letter on the group fi nancial
statements signed by management
› Considered any problems identifi ed and reviewed any
signifi cant legal and tax matters that could have a material
impact on the fi nancial statements
› Met separately with management and external audit to review
and discuss the annual fi nancial statements
› Received and considered reports from the internal auditors.
Tiger Brands Limited Integrated Annual Report 2018
Page 69
Audit committee report continued
Internal controls and internal audit
For internal controls and internal audit, including forensic audit,
the committee:
› Reviewed and approved the internal audit charter and annual
audit plan, and evaluated the independence, effectiveness
and performance of the internal audit function and compliance
with its charter
› Considered reports of the internal auditor on the group’s
systems of internal control including fi nancial controls and
business risk management
› Received assurance that an adequate and effective system of
internal control and risk management is being maintained
› Received assurance that proper and adequate accounting
records were maintained and that the group’s systems
safeguarded its assets against unauthorised use or disposal
› Reviewed signifi cant issues raised by internal and forensic
audit functions and the adequacy of corrective action taken
› Assessed the performance of the internal audit function and
found it to be satisfactory.
The committee confi rms it has no reason to believe there
were any material breakdowns in the design and operating
effectiveness of internal fi nancial controls in the period that
have not been addressed or are not being addressed
by management.
In terms of risk management and information technology
relevant to its functions, the committee:
› Reviewed the group’s policies on risk assessment and
management, including fraud risks and information technology
risks as they relate to fi nancial reporting and the going-
concern assessment, and found them to be adequate and
effective
› Considered and reviewed the fi ndings and recommendations
of the risk and sustainability committee.
For sustainability issues, the committee:
› Considered the fi ndings and recommendations of the risk
and sustainability committee
› Met with senior management to consider fi ndings on
assurance, and made appropriate enquiries from
management. Through this process, it has received the
necessary assurances that material disclosures are reliable
and do not confl ict with fi nancial information.
For legal and regulatory requirements, where these may affect
the fi nancial statements, the committee:
› Reviewed, with management, legal matters that could have
a material impact on the group
› Reviewed, with the company’s internal counsel, the adequacy
and effectiveness of the group’s procedures to ensure
compliance with legal and regulatory responsibilities
› Monitored concerns on accounting matters, internal audit,
internal accounting controls, contents of the fi nancial
statements, potential violations of the law and questionable
accounting or auditing matters
› Considered reports provided by management, the internal
auditor and external auditor on compliance with legal and
regulatory requirements.
In terms of coordinating assurance activities, the committee
reviewed the plans and work outputs of the external and internal
auditors and concluded these were adequate to address all
signifi cant risks facing the business.
Page 70
Tiger Brands Limited Integrated Annual Report 2018
There is an enterprise-wide system of internal control and risk
management in all key operations to manage and mitigate risks.
The combined assurance approach is integrated with the risk
management process to assess assurance activities across the
various lines of defence.
Chief fi nancial offi cer expertise and
experience
The committee considered the expertise, resources and
experience of the chief fi nancial offi cer, Noel Doyle, and
concluded that these were appropriate. Biographical details
appear on page 67.
Company secretary
The board is satisfi ed that Advocate Kgosi Monaisa has the
necessary skills and experience for this position. Biographical
details appear on the website.
All directors have unlimited access to the services of the
company secretary, who is responsible to the board for ensuring
proper corporate governance principles are applied.
The company secretary also ensures the proper administration
of proceedings and matters relating to the board, the company
and shareholders in line with applicable legislation and
procedures. He is responsible for director training and induction,
as well as the annual board evaluation.
The committee confi rms that the company secretary maintains an
arm’s-length relationship with the board and directors, taking into
account that the company secretary is not a director of the
company nor related to any directors.
Annual fi nancial statements
Following its review of the annual fi nancial statements of Tiger
Brands Limited for the year ended 30 September 2018, the
committee believes that, in all material respects, these comply
with the relevant provisions of the Companies Act and IFRS and
fairly present the consolidated and separate fi nancial position of
the company at that date and the results of its operations and
cash fl ows for that year. The committee has also satisfi ed itself on
the integrity of the remainder of this integrated annual report for
the year ended 30 September 2018.
Having achieved its objectives, the audit committee
recommended the annual fi nancial statements and integrated
report for approval by the board. The board has since approved
the annual fi nancial statements and integrated report 2018,
which will be open for discussion at the upcoming annual
general meeting.
On behalf of the committee
Emma Mashilwane
Chairman – Audit committee
21 November 2018
Social, ethics and transformation committee report
In the fi rst half of 2018, South Africa faced a tragic crisis, the listeriosis outbreak that claimed so many
lives – many of them children.
Maya Makanjee, Chairman
We were devastated that Listeria was found in our Polokwane manufacturing facility, and our sincere condolences go to all those
who lost loved ones to listeriosis. We would like to assure our stakeholders that we are dealing with the matter ethically, with integrity
and care, and as swiftly as possible, to be able to provide closure to the affected families.
The lessons learned from the crisis have led to the establishment of the Centre for Food Safety at Stellenbosch University. We
hope that through the centre we will be able to enhance the national food safety system to ensure consumers have greater certainty
about the quality and safety of food they consume. This is a start, and we will continue to work with our stakeholders, including
government, academia, local and international experts and industry partners, to support and improve South Africa’s food
safety standards.
Below is a detailed schedule of the focus areas of the social, ethics and transformation committee, the progress and the gaps that
still need to be closed:
Focus areas Elements
Focus areas in 2018
Gaps to be addressed in 2019
Economy
› Economic development
› Preventing corruption
› Broad-based black
economic
empowerment (BBBEE)
› We have plans to improve our
BBBEE score to level 4 by FY22
by focusing our investments on
preferential procurement,
enterprise development and
supplier development
Job creation and job security
remain critical areas to
stakeholders, and Tiger Brands
will need to develop strategies
to address these challenges
›
› We registered a special-purpose vehicle
and trust to manage our enterprise and
supplier development programme
› The community enterprise development
programme was established, focusing on
community bakeries, farming cooperatives
and community food gardens
› All senior employees and non-executive
directors were required to undertake ethics
training, particularly anti-bribery and
anti-corruption
› We have a functioning confi dential tip-off
line that can be accessed by employees,
suppliers and other stakeholders
› Our BBBEE scorecard moved from the old
agricultural codes where Tiger Brands was
rated as a level 3 contributor; under the
new codes, indications are that Tiger
Brands will drop to level 8
› For the scorecard, Tiger Brands was rated
non-compliant on the enterprise and supplier
development element – an area we must
improve on
› The committee applied its mind to the issue
of counterfeit stock and export stock being
sold in the local market
› Tiger Brands remains a member of Business
Leadership SA and has signed the business
integrity pledge
Tiger Brands Limited Integrated Annual Report 2018
Page 71
Social, ethics and transformation committee report continued
MANDATE OF THE SOCIAL AND ETHICS COMMITTEE
MONITOR THE COMPANY’S PERFORMANCE
REPORT ON THE COMPANY’S SOCIAL PERFORMANCE
› SED – socio-economic development
› Draw matters to the attention of the board
› Good corporate citizenship
› Consumer relations
› Labour relations and employment issues
› Health, safety and environment (HSE)
› Report to the annual general meeting
Focus areas Elements
Focus areas in 2018
Gaps to be addressed in 2019
Workplace
› Employment equity
› Decent work
› Employee safety and
health
› Employee relations
› Skills development of
employees
› Employee health and wellness
need to be enhanced at site
level. Some progress has been
made as we now have a group
occupational health risk
manager who will work with
sites to develop employee health
and wellness programmes
› We are deeply saddened that one of our
employees died while on his bread-delivery
route. We continue to work with industry
partners to seek ways to improve the safety
and security of our bakery drivers
› Following the suspension of our value added
meat products facilities, we used the
opportunity to retrain staff on safe production
and product quality. All employees at the
suspended sites remained fully employed
during this period
› The graduate and management trainee
programme, the Thusani Trust bursary scheme
for children of qualifying employees and the
community bursary programme are well
established
› A progress report was provided to the
Gender Commission in November 2017
after the review conducted in 2016. Positive
feedback was received from the commission,
with some recommendation for enhancement
of our diversity and inclusion initiatives
› Agreement was reached with the Department
of Labour for Tiger Brands to submit one
employment equity report for the group
instead of separate reports for each of our
business units
› The committee considered activities on
equality and unfair discrimination, the
industrial relations climate and union
engagements. Wage negotiations were
concluded successfully
› Tiger Brands launched the Tiger Woman’s
Network, which was very well received by
employees
› The committee engaged with the risk
committee on matters monitored by that
committee on its behalf – including employee
safety, health and the environment. Tiger
Brands has been independently assessed
against FTSE4Good criteria, and has
satisfied the requirements to remain a
constituent of the FTSE4Good index
Page 72
Tiger Brands Limited Integrated Annual Report 2018
Focus areas Elements
Focus areas in 2018
Gaps to be addressed in 2019
Social
environment
› Community
development
› Donations and
sponsorships
› Public health and safety
› Consumer protection
› Advertising
› Human rights
› Stakeholder management
strategies and plans at all
our operating sites need to be
articulated and implemented
to enable effective site-specific
stakeholder management
› Relationship owners will be
trained on the Tiger Brands
stakeholder protocols, systems
and processes
› A stakeholder management
system will be implemented
to enable central reporting
› In the review period, the committee focused
significant attention on the listeriosis crisis.
The concerns of all stakeholders were
considered and responded to with integrity
and transparency
› The company is working with the class-
action lawyers to facilitate the speedy
certification of the class action and enable
the legal process to progress expeditiously
› Tiger Brands is the founding member of the
Stellenbosch Centre for Food Safety which
will work with other academic institutions,
industry and government to improve the food
safety system in South Africa
› We approved the socio-economic
development (SED) strategy which focuses
on nutrition and food security of
communities. The SED programme has been
extended to universities to cater for food
security of students in need. Both the
community and university programmes are
complemented by food gardens that provide
fresh vegetables to their beneficiaries
› The Tiger Brands Foundation continues
its well-established partnership with the
Department of Basic Education and is
providing daily in-school breakfast to
94 non-fee-paying schools, reaching
67 500 children and teachers per day
› In the review period, the consumer contact
centre recorded a significant increase in
consumer interactions due to the listeriosis
crisis
› The committee considered and approved
the stakeholder relations policy, human rights
policy, group code of ethics and ethical
sourcing policy
The committee is satisfied that it has carried out its mandate. We will continue to engage with our stakeholders to receive feedback
and input on material issues they wish to bring to our attention.
On behalf of the committee
Maya Makanjee
Chairman – Social, ethics and transformation committee
21 November 2018
Tiger Brands Limited Integrated Annual Report 2018
Page 73
Remuneration report
Mark Bowman, Chairman
SECTION 1: BACKGROUND
Statement from the chairman of the
remuneration committee
Dear Stakeholder
On behalf of the remuneration committee, I am pleased to
present the 2018 summarised remuneration report, which
highlights:
› Key components of our remuneration policy
› Alignment of these components with the Tiger Brands business
›
strategy
Implementation of the policy for the 2018 fi nancial year
(FY18).
The remuneration report
In line with our commitment to comply with King IV, our
remuneration report adheres to the requirements of that code:
the background statement (part 1), overview of the remuneration
policy (part 2 – detailing the current policy and future policy
from 2019) and the implementation report (part 3).
Remuneration committee objectives for FY18
Despite the group’s fi nancial performance being severely
impacted by challenging operating environment and the Listeria
outbreak, in FY18, the remuneration committee sought to
leverage the remuneration strategy to enable the attraction and
retention of key skills to support delivery of the business strategy.
In a tough operating environment, the company succeeded in
attracting key employees, further strengthening the Tiger Brands
executive leadership team by recruiting new capabilities in
certain business units: marketing, strategy and human resources.
Following the 2018 reorganisation of the group, the leadership
team focused on embedding the new operating model, skilling
employees to embrace new responsibilities in their roles and
engaging teams to entrench new ways of working to execute
the business strategy and deliver winning performance.
To ensure our remuneration policy remains competitive and fulfi ls
the objective of attracting, motivating and retaining high-
performing employees, we have reviewed our pay scales and
other elements of the remuneration design after considering
market benchmarks and capabilities required to deliver the
business strategy.
The remuneration committee again engaged with shareholders on recent voting outcomes and analysed major points that affected
their voting:
Issue
Remuneration committee action/response
Share appreciation rights (SARs) vesting scale does not include
suffi cient stretch
Revised scheme to be introduced from FY20 that will have more
demanding targets.
Lack of a return metric in short- and long-term incentive (STI and
LTI) schemes
No clawback policy in place
Return on net assets (RONA) included in key performance
indicators for FY18, which infl uences the STI and the inclusion of
return on invested capital (ROIC) as a performance metric in the
LTI scheme for FY19
A clawback and malus clause will be included in the
remuneration policy from FY19
Limited disclosure on STI targets
Greater disclosure on STI scorecard in FY18 report
Non-executive directors are paid hourly fees for extra work,
which implies they could be paid for consultancy work. This
may affect their ability to function independently
Effect payment of hourly fees in exceptional and extraordinary
circumstances, subject to the approval by the Chief Executive
Offi cer
Page 74
Tiger Brands Limited Integrated Annual Report 2018
As required by the Companies Act, non-executive directors’ fees
for the coming year will be put to shareholders by way of a
special resolution.
We encourage all shareholders to provide feedback on their
position on the various voting requirements. We commit to
engaging with shareholders as required to discuss issues of
concern.
External advice to the committee in 2018
In reviewing our remuneration offering to ensure it is competitive,
fair, ethical and transparent, we enlisted the services of PwC
South Africa and Vasdex to assist us with design, market practice
and survey data. The committee is satisfied that PwC and Vasdex
are independent.
Mark Bowman
Chairman – Remuneration committee
21 November 2018
Shareholder input has been considered in our continued efforts
to modernise and align our remuneration policy with business
strategy execution and shareholder interests. Accordingly,
we have:
› Refined our approach to linking our annual execution plans
directly with business strategy by ensuring the appropriate
focus of our STI metrics on growth, efficiencies, people and
sustainability
› Revised our market anchor point for guaranteed pay from
the 50th to 65th percentile of the national market and
implemented a pay-progression model to ensure we are
able to attract and motivate talent and core capabilities
Increased focus to address any unjustifiable pay inequities
›
› Developed a clawback and malus policy to minimise risk
› Revised LTI performance metrics to align executive and
shareholder interests.
Refer to the overview section of the report which discusses the
remuneration elements and outlines key enhancements to our
remuneration strategy from 2019.
Shareholder engagement
The remuneration committee is committed to shareholder
engagement and will take the following steps if 25% or more
of total votes exercised by shareholders at the upcoming annual
general meeting (AGM) are against the remuneration policy
or implementation report:
› Tiger Brands will issue a SENS announcement inviting
dissenting shareholders to note their specific concerns and
to engage with the company
› We will consider these concerns and report on the outcome
of this engagement, and measures taken, in our next
integrated report.
Focus areas for 2019
As we begin our new financial year, the remuneration
committee is committed to staying abreast of remuneration
market trends and best practice, business requirements, our
responsibilities to our community as well as our shareholders
to ensure our remuneration practices are aligned with our
business strategy.
Key focus areas include aligning our people with business
objectives through an integrated scorecard that has group/
business and individual components to support strategy
execution. We will also continue to actively monitor and address
identified pay inequities to ensure we attract and retain key
talent. Finally, we will review share instruments in the LTI scheme
to further align executives’ interests and commitment with
shareholder value creation.
Voting at AGM
As required by King IV, the remuneration policy and
implementation report detailed here will be tabled for
separate non-binding advisory votes by shareholders at
the upcoming AGM.
Tiger Brands Limited Integrated Annual Report 2018
Page 75
Remuneration report continued
SECTION 2: OVERVIEW OF REMUNERATION
POLICY
The Tiger Brands approach to remuneration is holistic,
encompassing the monetary elements of reward as well as
non-fi nancial aspects such as growth, development and work
environment.
Central tenets of our remuneration
policy
To support our remuneration strategy, our remuneration policy
is based on the following central tenets:
› Aligning strategic business performance with shareholder
interests
› Providing a competitive reward offering to attract and retain
talent that enables execution of our business strategy
› Rewarding and motivating winning performance across
all levels in the organisation
› Build a strong foundation of fair and responsible pay.
Fair and responsible remuneration
The remuneration committee is committed to ensuring our
remuneration policy and practices are fair, transparent and
responsible. Key principles guiding this policy include:
› Motivating delivery of the company’s strategic objectives
›
while aligning strategy execution with internal and external
stakeholder interests. As such, executive remuneration is
determined by considering performance, complexity of
the role, peer-group comparisons and market practice.
Internal equity – we continually investigate and address
any inequitable pay practices across the organisation. We
have made a concerted effort to address income disparities,
based on race, gender and performance. Any unjustifi able
differences in pay and conditions of employment between
employees at the same level are being addressed in line
with the ‘equal pay for work of equal value’ philosophy.
› External equity – we conduct annual benchmarking exercises
to understand economic trends and ensure all employees are
paid a market-related salary, taking into consideration
performance levels.
Guaranteed
package
Engaging
work
environment
environment
Short-term
Short-term
incentive
incentive
(STI)
(STI)
Our
approach to
remuneration
Employee
growth and
development
Long-term
Long-term
incentive
incentive
(LTI)
Performance
Performance
management
Recognition
Recognition
(Tiger Stripes)
Page 76
Tiger Brands Limited Integrated Annual Report 2018
Guaranteed package (excluding bargaining unit employees)
Description
Guaranteed package (GP) comprises base pay, allowances, retirement and medical benefits. It is reviewed
annually based on personal performance (key performance indicators (KPIs) based on a balanced scorecard that
includes financial and non-financial metrics), business performance (linked to budget), behaviours aligned with the
values and market competitiveness (national and sector benchmarks)
Benchmarks
Benchmarking for executive directors and prescribed officers is based on a peer group of companies. The peer
group is determined using the closeness metric formula, based on:
Turnover
Operating
income
before tax
Number of
employees
Companies included in the peer group comprise:
Total assets
EBITDA
Market cap
Factor
Executive directors and prescribed officers
Survey type
Bespoke survey
Comparator group
Public data of South African companies listed on the
JSE, based on the closeness metric is used to determine
an appropriate peer group. Our peer group comprises:
Rest of exco, senior
management and below
Remchannel survey
National and consumer goods
circles
Aspen
Pharmacare Ltd
Massmart
Holdings Ltd
Remgro Ltd
Bid Corporation
Ltd
Pick n Pay
Stores Ltd
Shoprite
Holdings Ltd
Distell Group
Ltd
Pioneer Foods
Ltd
The Spar Group
Ltd
Imperial
Holdings Ltd
RCL Foods Ltd Woolworths
Holdings Ltd
Frequency
Every second year
Service provider
PwC
Annually
PwC
Anchor point
Benefits
Changes for
FY19
Tiger Brands’ current pay position is at the 50th percentile (median) of the market, where a normal distribution
around the median is to be expected based on individual employee performance, talent/potential, experience
and, in certain instances, tenure
Benefits include retirement fund contributions, funeral cover, permanent health insurance, death-in-service cover,
medical aid contributions and travel allowances (where applicable)
Market benchmarks indicate that our guaranteed package is not competitive in relation to our peers. In practice,
we have had to pay significant premiums to source key talent externally. To address this challenge, we have taken
a balanced approach and revised our anchor point for guaranteed package from the 50th percentile to the
65th percentile to attract and motivate talent to ensure we sustainably build core capability to execute our
business strategy.
We are implementing a pay-progression model to ensure we reward performance competitively and actively
manage pay around our chosen anchor point.
Tiger Brands Limited Integrated Annual Report 2018
Page 77
Remuneration report continued
Short-term incentive
Description and
link to strategy
The primary intention of the STI is to improve business performance by focusing participants’ attention on key
financial, strategic, functional and personal performance objectives (KPIs based on a balanced scorecard),
which are aligned with the long-term business strategy for sustainable value creation.
› All permanent employees on a guaranteed package in Paterson grades DL and above, are eligible to
participate
› The STI is paid annually in cash for employees who are still employed by the organisation on the payment date
› By incorporating personal performance, the STI aims to:
» Drive achievement of our annual strategic goals
» Allow for differentiation in rewarding high performers
› The on-target percentage (as a percentage of guaranteed package) is benchmarked against the South African
market to ensure we are aligned with market practice. It is based on affordability and the STI payment is based
on achieving the defined objectives
› The final STI award uses two performance multipliers:
» A business performance multiplier focused mainly on group financial metrics, measured in a range of 0 to
150%
» An individual performance multiplier focused mainly on non-financial strategic objectives, measured in a
range of 0 to 175%
› This facilitates the appropriate focus to sustainably achieve the business’s long-term goals, particularly since the
personal performance multiplier can significantly impact the quantum of an employee’s STI
STI = Guaranteed Package (GP) x on-target % x business performance multiplier x personal performance multiplier
The following ranges of STI awards apply to the various categories of employees covered by this report:
CEO and CFO and executive directors
Prescribed officers
Target % of
Guaranteed
Package
Maximum % of
Guaranteed
Package
60%
50%
157,5%
131,25%
Maximum STI amounts are based on the on-target % adjusted for the maximum potential ranges applicable to both
the business performance multiplier (150%) and personal performance multiplier (175%).
The underlying values and weightings for each KPI are set and approved by the remuneration committee in
advance of each year to determine parameters for the STI.
Below threshold
Threshold
Weight
0%
50%
Target
100%
Maximum
150%
Calculation
Target and
maximum
Business
performance
multiplier
CEO, CFO and
executive directors
HEPS
EBIT
Sales volume growth
Working capital
Prescribed officers
EBIT
Sales volume growth
Working capital
35%
35%
15%
15%
70%
15%
15%
Linear interpolation between threshold, target
and maximum
Linear interpolation between threshold, target
and maximum
Page 78
Tiger Brands Limited Integrated Annual Report 2018
Personal
performance
multiplier
Personal performance measurement is based on a weighted combination of a balanced scorecard of metrics,
typically comprising:
Top-tier financial
results
Market
performance
Compliance
People
Revenue
Gross margin
Productivity cost savings
Return on net assets
Market share
On-shelf availability
Innovation rate
Brand health measure
Zero level 1audit findings
Reduction in consumer complaints
Safety (LTIFR)
BBBEE implementation
Improved employee
engagement
Employee development
plans in place
Diversity and inclusion
Taking into account the balanced scorecard and the individual KPIs, the personal performance multiplier is
determined as follows:
Performance rating
Range
5
4
3
2
1
150% – 175%
120% – 130%
90% – 110%
15% – 50%
0%
Changes for
FY19
To incentivise execution of our strategic and tactical plans to deliver winning performance, the scheme has been
revised from a multiplicative model to an additive model as follows:
STI = GP x on-target % x {group performance factor (0 – 200%) + business unit performance factor (0 – 200%) +
individual performance factor (0 – 200%)}. Predetermined weightings will be applied to each of the performance
factors.
The maximum STI that can be earned is 200% of the applicable on-target percentage.
This drives high performance by explicitly creating line of sight in linking group, business unit and individual
performance.
An integrated STI scorecard for the group that includes financial and non-financial (sustainability) metrics is being
implemented to align teams on a One Tiger bottom line. Payment of an STI is subject to the overriding condition
that the group/business unit meets or exceeds its earnings before interest and tax (EBIT) entry threshold.
Below is the group STI scorecard that will apply to the CEO, CFO, executive directors and prescribed officers:
Strategic
objective
Strategic
objective
weighting
Key
Performance
Indicator
Growth
60%
Gross margin %
Sales volume growth
Efficiency
10%
People and
sustainability
30%
EBIT
Cost-saving initiatives
Net working
capital days
Quality
Safety (LTIFR)
BBBEE score
Key Per-
formance
Indicator
weighting
Threshold
Target
Stretch
Score =
50%
Score =
100%
Score =
200%
10%
10%
40%
5%
5%
10%
10%
10%
40,0%
98,6%
98,6%
98,6%
101,2%
100%
100%
100%
100%
100%
140,0%
103,6%
103,6%
123,4%
97,7%
Reduction in execution-related marketplace
incidents YoY by
10%
120%
15%
100%
Level 7
(60 – 61)
Level 7
(61,1 – 65)
20%
80%
Level 6
The group, business unit and individual weightings applicable to the CEO, CFO, executive directors and
prescribed officers are detailed below:
Employee category
Group
Business unit
Individual
CEO, CFO and executive directors
Prescribed officers
80%
60%
0%
20%
20%
20%
Page 79
Tiger Brands Limited Integrated Annual Report 2018 Remuneration report continued
Long-term incentive
Description
Long-term incentive (management and above)
There are three schemes operating for long-term incentives as part of the Tiger Brands 2013 Share Plan (LTIP):
› Share appreciation rights (SARs)
› Restricted shares issued as bonus-matching shares
› Restricted shares issued as deferred bonus shares and company-matching shares.
Key elements of the LTIP include:
›
Annual awards of SARs, with a performance vesting condition of real HEPS growth, combined with a
gatekeeper that the company’s return on capital must exceed its weighted average cost of capital. Targeted
HEPS growth is equal to CPI plus the annual growth in GDP. Vesting is on a sliding scale
› Annual awards of bonus-matching shares are linked directly to achieving the STI in the prior financial year. If no
STI is earned, bonus-matching shares are not awarded
› A performance differentiation tool (PDT) is used to modify the standard quantum of SARs and bonus matching
shares, based on an individual’s personal performance, leadership and ability. This is a discretionary
percentage ranging from 0% to 200%
› Executive management and other senior management may voluntarily defer a portion (25%, 33% or 50%)
of their STI award into deferred bonus shares, which are then matched 1:1 by the company in the form of
company-matching shares. Both deferred bonus shares and company-matching shares vest three years
after grant
If no bonus is earned or a participant elects not to voluntarily defer a portion of their STI, no deferred bonus
shares and company-matching shares will be awarded. There will be no upward adjustment of other share
instruments to compensate for this.
›
Vesting periods
› Bonus matching, deferred bonus and company-matching shares: these are subject to continued tenure for three
years after being granted
› SARs: these will vest in equal thirds on the third, fourth and fifth anniversaries of the date of allocation, but need
not be exercised until the sixth anniversary, when they must be exercised or will lapse. Vesting will depend on
the company’s performance relative to specified conditions, as set out above, measured over a three-, four- and
five-year period respectively.
Historical LTI information
Performance shares
The last awards of performance shares were made in February 2016 and in May 2016. The vesting of these
awards would be determined by the company’s comparative total shareholder return (TSR) relative to the TSR of the
constituent members of the FINDI 30 index. The vesting of the 2016 performance shares will thus be based on
Tiger Brands’ relative TSR position over the three-year vesting period, as follows:
› Position 15 out of 30: the targeted number (one-third of maximum number) of performance shares awarded
will vest
› Position 7 or better: the maximum number (three times targeted number) of performance shares awarded
will vest
› Position 23 or worse: all performance shares awarded will be forfeited
› Between position 7 and 15, or between 15 and 23: a pro-rated number of performance shares will vest.
Any performance shares that do not vest at the end of the three-year period will be forfeited.
SARs performance conditions for previous allocations
For outstanding SARs allocated before December 2016, the performance vesting conditions are based on
a targeted rate of 3% per annum real growth in HEPS over three-, four- and five-year periods.
Percentage threshold levels for real HEPS growth and corresponding percentage of allocation to vest:
› >0% and <0,5%
› ≥0,5% and <1,0%
› ≥1,0% and <1,5%
› ≥1,5% and <2,0%
› ≥2,0% and <2,5%
› ≥2,5% and <3,0%
› ≥3,0%
5%
10%
16%
27%
44%
75%
100%
Page 80
Tiger Brands Limited Integrated Annual Report 2018
Share
appreciation
rights
Value of awards
Calculation
Share price
The following ranges of SARs, based on the face value of awards, apply to the categories of staff covered by this
report:
Employee category
CEO
CFO
Prescribed offi cers and executive directors
% of GP
151%1
145%
110%
1 The policy for the SARs multiple is 151% (face value). However, when the CEO was appointed in May 2016, specifi c SARS multiples were
included in his employment contract for allocation until the last allocation in December 2018. Thereafter, the policy will apply.
The number of SARs at award date is determined as follows:
SARs = (GP x SARs multiple/share price) x PDT multiplier
The share price is determined based on the volume-weighted average price (VWAP) for the 10 trading days
before the issue date.
Vesting
Vesting occurs according to the following pattern:
Performance
metrics
Year from award date
Vesting
0
1
2
3
1/3
4
1/3
5
1/3
Performance metrics that determine vesting (in addition to continued employment) are defi ned as:
Metric
HEPS growth
Weight
100%
0% vesting
CPI and below
Maximum
100% vesting
CPI + GDP
Pro rata vesting on linear scale if HEPS growth > CPI but below CPI + GDP rate. Further vesting condition:
Average annual return on capital over the relevant performance period must exceed the company’s weighted
average cost of capital (WACC).
Fair value
To illustrate the target and maximum outcomes of total remuneration as set out on pages 84 and 85, the face
value of SARs was based on a defi ned % of GP (assuming ‘on-target’ and ‘maximum’ performance will be met),
with the fair value of SARs calculated at 30% of this face value.
Bonus-matching
shares
The following multiples of bonus-matching shares, based on the face value of STI award, apply to the employee
categories covered by this report:
Value of awards
Employee category
% of STI earned (face value)
CEO
CFO
Prescribed offi cers and executive directors
50%
50%
50%
Calculation
The number of bonus-matching shares at award date is determined as follows:
Bonus-matching shares = (actual STI x 50%/share price) x PDT multiplier
Share price
The share price is determined based on the VWAP for the 10 trading days before the issue date.
Vesting
Vesting occurs according to the following pattern:
Vesting
0
1
2
3
100%
4
5
Year from award date
Performance
metrics
Fair value
There are no further performance conditions to determine vesting, which is therefore time-based. The reason for no
further vesting condition is that the quantum of bonus-matching shares is directly linked to the bonus. Performance is
required ‘on the way in’ to earn the bonus. If STI targets are not met, no STI is earned, hence no bonus-matching
shares will be allocated.
To illustrate the target and maximum outcomes of total remuneration set out on pages 84 and 85, the face value
of bonus-matching shares was based on a defi ned % of STI earned. The fair value of the bonus-matching shares
was calculated at 90% of this face value.
Tiger Brands Limited Integrated Annual Report 2018
Page 81
Remuneration report continued
Deferred bonus
shares and
company-
matching shares
The CEO, CFO, executive directors, prescribed offi cers and members of the executive team may be granted
deferred bonus shares and company matching shares on the following basis: Upon election by the individual,
a percentage of the STI (25%, 33% or 50%) may be deferred and converted into deferred bonus shares, with
additional company-matching shares being granted by the company.
Value of awards Deferred bonus shares and company-matching shares are only awarded if a bonus/STI was earned. Hence
performance is ‘on the way in’.
Calculation
The number of deferred bonus shares and company-matching shares, at award date, is determined as:
Deferred bonus shares and company-matching shares = (actual STI deferred x 2/share price)
Share price
The share price is determined based on the VWAP for the 10 trading days before the issue date.
Vesting
Vesting for deferred and company-matching shares occurs according to the following pattern:
Performance
metric
Fair value
Dilution
Vesting
0
1
2
3
100%
4
5
Year from award date
There are no further performance conditions to determine vesting.
To illustrate the target and maximum outcomes of total remuneration set out on pages 84 and 85, the face value
of deferred bonus shares and company-matching shares was calculated on the assumption that the maximum of
50% of the STI will be deferred. The fair value was calculated at 90% of this face value.
Under the rules of the Tiger Brands Phantom Cash Option Scheme (replaced by the LTIP), at any point the
aggregate number of unexercised phantom options is limited to 10% of the total issued share capital of the
company. At 30 September 2018, aggregate outstanding options under the scheme represented 0,02%
(2017: 0,06%) of the company’s issued share capital.
The maximum aggregate number of shares that may be acquired by participants under the LTIP and any other
share plan may not exceed 5,5 million shares; and for any one participant 550 000 shares. In determining these
limits, shares acquired through the JSE and transferred to participants are not considered. At 30 September 2018,
the aggregate number of shares that may be acquired by participants under the various schemes was 1 898 112
(2017: 1 742 012), which represents approximately 1% of the number of issued ordinary shares. This is in line
with market practice.
BEE schemes
Two schemes were previously established as part of the company’s black empowerment strategy:
› Tiger Brands Black Managers Trust (BMT I)
» Established in 2005 to attract and retain diverse talent
» Rights allocated – Tiger Brands shares. Rights are settled after making the required capital contributions to
BMT I at any time after the specifi ed lock-in period, ie from 1 January 2015. For all rights allocated after
31 July 2010, the lock-in date varies depending on the date of allocation. Periodically, new allocations are
made to new joiners and top-up allocations are made to existing participants promoted to higher grades as
shares became available after forfeitures
› Tiger Brands Black Managers Trust II (BMT II)
» Established in 2009
» Scheme terminated on 31 December 2017
» On termination, R574,8 million (pre-tax) was paid out to participants
› Thusani Trust
» Established in 2005 as part of the company’s BEE phase I empowerment initiative. The trust’s resources were
enhanced in 2009 under the company’s BEE phase II transaction
» As part of our social investment initiatives, the trust provides bursaries for tertiary education to dependants of
permanently employed black employees who might not otherwise be able to afford this cost
Page 82
Tiger Brands Limited Integrated Annual Report 2018
Changes for
FY19
To focus on our long-term strategy execution, we have revised LTI performance conditions for share appreciation
rights by including ROIC. As such, we have implicitly aligned the interests of our shareholders and employees.
Vesting conditions are summarised below:
Metric
Measurement
Weight
0%
25%
100%
HEPS
Compound annual
growth
50%
Full vesting: HEPS = > CPI + rate of growth in GDP
(measured on an annual compound basis over the
applicable period)
Pro rata vesting on a linear scale: HEPS growth > CPI
but below CPI + GDP rate.
No vesting if HEPS < = CPI
ROIC
Average published
ROIC measured over
3, 4 and 5 years for
each one-third tranche
WACC: weighted average cost of capital.
Minimum shareholding policy
50%
Less than
WACC+1%
WACC+1% WACC+2% and
above
Description
We have a minimum shareholding policy, where executives are expected to build up their personal shareholding
in the company to at least 150% of GP (for CEO) and 100% of GP for other exco members. Executives have six
years to build up these holdings. Executives who were in service when the policy was adopted have six years to
build up their shareholding from date of adoption. Executives appointed after adoption have six years to build
their shareholding from date of appointment. They may use a portion of their STI, any vesting LTIs or their own
resources to acquire these shares.
Name
LC Mac Dougall
NP Doyle
P Spies
Y Maharaj
PD Sithole
Date of
engagement
10/05/2016
01/07/2012
01/02/2017
01/07/2018
01/08/2012
Value of
shares
GP*
held** % of GP
Years
remaining
to meet
target
Target
% of GP
R9 083 550
R172 263
R6 549 750 R2 305 144
0
R4 853 000
0
R4 850 000
0
R4 549 157
2%
35%
0%
0%
0%
150%
100%
100%
100%
100%
4
4
5
6
6
* GP as at 30 September 2018.
** Value calculated with reference to the closing price of a Tiger Brands share at 28 September 2018, ie R265,02.
For FY19, we have increased the minimum shareholding for the CEO from 150% to 200% to align with
market practice.
Clawback and malus
Description
From FY19, we have implemented a clawback and malus policy to minimise risk. The central tenets of the policy
include:
In the event that the remuneration committee, in consultation with the board and/or any committee of the board,
believes that a trigger event has occurred, it has full discretion to reduce, in part or whole, unvested variable
remuneration before the end of the vesting or payment period – malus.
It is the responsibility of the remuneration committee, in consultation with the board and/or any committee of the
board, to implement clawback for the whole or portion of vested variable remuneration in the event of a trigger
event over a period of three years from the date on which payment was made of such vested variable
remuneration.
Trigger events include, but are not limited to:
› Material misstatement of financial results
› Misconduct, incompetence, fraud, dishonesty
› Negligence or material breach of obligations to the company
› Deliberate harm to the company’s reputation
› Material failure of risk management.
Tiger Brands Limited Integrated Annual Report 2018
Page 83
Remuneration report continued
Illustrating potential remuneration outcomes
The variable pay arrangements described on the previous pages have various potential outcomes. These outcomes could be from
zero (minimum) to the expected level of performance outcomes (target) to the maximum potential variable pay outcomes (maximum).
In the illustrations presented below, it should be noted that:
› STI represents the cash component of short-term performance
›
LTI represents the total of share appreciation rights awards, bonus-matching awards, deferred bonus shares and company-matching
shares.
CEO
The potential total remuneration outcomes for the CEO are as follows:
Minimum
On-target
Maximum
GP
9 084
9 084
9 084
STI
0
5 450
14 307
LTI
0
5 723
16 146
Total
9 084
20 256
39 536
R’000
Maximum
On-target
Minimum
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
GP STI ■ LTI
CFO
The potential total remuneration outcomes for the CFO are as follows:
Minimum
On-target
Maximum
GP
6 550
6 550
6 550
STI
0
3 930
10 316
LTI
0
4 126
11 642
Total
6 550
14 606
28 508
R’000
Maximum
On-target
Minimum
0
5 000
10 000
15 000
20 000
25 000
30 000
GP STI ■ LTI
Prescribed officers (on average)
The potential total remuneration outcomes for prescribed officers are as follows:
Minimum
On-target
Maximum
GP
4 751
4 751
4 751
STI
0
2 375
6 235
LTI
0
2 637
7 180
Total
4 751
9 763
18 166
R’000
Maximum
On-target
Minimum
0
■ GP ■ STI
LTI
5 000
10 000
15 000
20 000
Page 84
Tiger Brands Limited Integrated Annual Report 2018
Group executive committee (on average)
The potential total remuneration outcomes for other members of the group executive committee are as follows:
Minimum
On-target
Maximum
GP
3 790
3 790
3 790
STI
0
1 807
9 138
LTI
0
2 044
9 455
Total
3 790
7 641
22 384
R’000
Maximum
On-target
Minimum
0
■ GP ■ STI
LTI
5 000
10 000
15 000
20 000
25 000
Executive service contracts
Senior executives are employed full-time under standard agreements, with a notice period of three months.
We strive to bind all senior executives by a restraint-of-trade agreement. To the extent that executives have access to proprietary
business insights and intellectual property, Tiger Brands will enforce the agreement should they join a competitor. The restraint
comprises a three-month notice period or three months’ special leave (paid as a three-month lump sum (based on guaranteed
package) on termination).
Payments on termination of employment
Remuneration policy
component
Voluntary termination
(ie resignation)
Involuntary termination
(retrenchment, retirement, death)
Guaranteed package
Paid up to last date of service
Medical aid
Benefit continues to last date of service
Retirement and risk plans
Employer contributions paid until last date of
service. Employee is entitled to the value of
the investment
Other benefits
Not applicable
Short-term incentive
No pro rata bonus paid
Long-term incentives
All unvested awards (other than certain
deferred bonus shares) will be forfeited
Paid up to last date of service including
notice period, where applicable
Benefit continues up to last date of service.
Employees who qualify for post-retirement
medical aid funding will continue to receive
the employer contribution with effect from
their normal retirement date.
Severance package – 1 or 2 weeks for every
completed year of service in terms of the
relevant rules
Pro rata STI payment (based on extent of
achieving specified financial and strategic
targets for the period and a personal
performance agreement being in place
at the date of exit)
Depending on the nature of the unit (ie SARs,
bonus-matching shares, deferred bonus
shares or company-matching shares) and
reasons for termination, a participant may
retain all units or a pro rata portion.
Accelerated vesting and settlement of
retained units may apply in certain
circumstances.
Tiger Brands Limited Integrated Annual Report 2018
Page 85
Remuneration report continued
External board appointments
Tiger Brands encourages members of the executive committee to consider accepting appropriate opportunities to serve as non-
executive directors on the main board or committees of external companies. We believe this encourages our executives to broaden
their skills base and experience.
Under a formal policy, an executive is limited to one substantive outside directorship. The chairman of the Tiger Brands board,
chairman of the nominations committee, and chairman of the remuneration committee are required to authorise these appointments
based on a recommendation from the CEO. Other than in respect of their appointment to the boards of associate companies,
directors’ fees under this policy may be retained by the individual. Other than associate companies, Tiger Brands currently has no
executive members serving as non-executive directors on the main boards or committees of external companies.
Details of exco members serving on the boards of associate companies appear on page 67.
Non-executive directors
Fees and approval process
Non-executive directors are paid an annual retainer that refl ects their overall contribution and input to the company, and not just for
attendance at board and committee meetings.
Fees are reviewed annually and increases are implemented in March after approval at the AGM. A bespoke survey is conducted
every two years to benchmark these fees against South African companies listed on the JSE, based on market capitalisation, revenue,
total assets and number of employees. These are similar metrics to that of the benchmark group for executive directors and prescribed
offi cers but further expanded to include the diversity of skill and calibre required on the board or relevant committee.
Companies included in the peer group are detailed below:
RCL Foods Limited
The Spar Group Ltd
MTN Group Ltd
Blue Label Telecoms Ltd
Clicks Group Ltd
Vodacom Group Ltd
Pioneer Food Group Ltd
Sappi Group
Standard Bank Group Ltd
Telkom SA SOC Ltd
Woolworths Holding Ltd
Datatec Ltd
Distell Group Ltd
Aspen Pharmacare Holdings Ltd
JD Group Ltd
Targeted remuneration for FY18 is the 50th percentile of the peer group. In line with the revision of our internal anchor point, from
FY19 the targeted remuneration will be moved to the 65th percentile of the peer group.
Non-resident non-executive directors are paid a premium in comparison to resident directors. The table below shows the range of the
premium paid to non-resident non-executive directors across large JSE-listed organisations in various industries:
Target position
Premium for non-resident non-executive directors
Minimum
Maximum
Average
Median
85%
307%
185%
174%
The median for non-resident non-executive directors’ fees is at a premium of 174% above resident fees. Tiger Brands currently pays a
premium of 130% for non-resident non-executive directors, which is below the market median.
The chairman does not receive any additional remuneration for participating in committees of the board. Non-executive directors who
perform services outside the scope of their ordinary duties will not receive additional remuneration. Shareholder approval will be
sought for increasing non-executive directors’ fees, including fees paid for attending special board meetings. Details of proposed
increases for 2019 appear in the notice of AGM of shareholders to be held on 19 February 2019.
Details of non-executive directors’ fees paid in the review period appear on page 100.
Page 86
Tiger Brands Limited Integrated Annual Report 2018
SECTION 3: IMPLEMENTATION REPORT
Voting outcomes
Results of voting at the 2018 and 2017 AGM are indicated below:
% vote in favour
Remuneration policy
Remuneration implementation
Non-executive directors’ fees
February 2018
February 2017
73,41%
82,59%
99,80%
53,80%
n/a
99,95%
Summary of shareholder feedback and responses
The following common themes were noted by shareholders:
Shareholder feedback
Tiger Brands response and actions
A sign-on bonus was paid; however, reasons
for the payment were not suffi ciently
explained. There is a preference for sign-on
bonuses to include restricted shares.
Matching plans are not believed to be best
practice, as these provide a mechanism for
additional shares to be awarded without any
performance conditions attached.
The SARs vesting scale does not build in
suffi cient stretch. At entry level, HEPS growth
should be in line with CPI+GDP, with pro rata
vesting on a linear scale above this level.
HEPS growth above CPI but below CPI+GDP
should result in no payment.
Restricted share awards in the form of bonus
matching shares, bonus deferral shares and
company-matching shares are not subject to
performance conditions.
Should any sign-on bonuses be awarded in future, greater detail on reasons for
the award will be provided to improve disclosure. In addition, for executive
appointments in FY18, all sign-on LTI awards were made in the form of SARs,
which have vesting conditions attached. Y Maharaj was paid a sign-on bonus
of R1 000 000. In addition, he will receive a share allocation of 20 000 Tiger
Brands shares and 17 000 Adcock Ingram shares in terms of the Tiger Brands
Black Managers Trust Scheme. The sign-on bonus and share award are in lieu of
STI and LTI forfeited at his former employer. Other strategic appointments to the
executive committee and sign-on payments were made, as disclosed in the annual
fi nancial statements on page 66.
The quantum of company matching shares (ie 100% matching) is directly linked to
the STI. Performance is required ‘on the way in’ to earn the STI. Furthermore,
company matching shares are only awarded on deferred bonus shares (which
requires a voluntary deferral of the STI). Company matching shares are considered
best practice on voluntary deferrals, and promote good behaviour (by
encouraging the deferral of a portion of the STI, which supports a long-term view
of performance and demonstrates commitment to the company).
Performance conditions for SARs are usually viewed as an underpin, with the
embedded condition of share price growth being the primary objective. Market
benchmarks for SARs targets are usually more moderate than those for full-value
share awards.
The performance criteria are determined ‘on the way in’, through individual
performance ratings and STI fi nancial targets. If no STI is earned, no restricted
shares are awarded.
Tiger Brands Limited Integrated Annual Report 2018
Page 87
Remuneration report continued
Shareholder feedback
Tiger Brands response and actions
Performance measures should include both
financial and non-financial (sustainability) KPIs.
The LTI scheme has a minimum hurdle rate
which equates to the company’s cost of
capital. Hurdles to measure operational
returns in excess of cost of capital plus an
appropriate margin are recommended.
The STI is a multiplier scheme, aligned with global best practice, using a business
modifier that primarily focuses on financial metrics to ensure alignment with
shareholder outcomes, as well as a personal performance modifier, which
differentiates based on achieving agreed strategic initiatives (including
sustainability targets), as well as an individual’s KPIs. This ensures personal
accountability for the financial and strategic aspects of the business. From FY19,
a group-wide STI scorecard, which includes financial and non-financial metrics
(sustainability), has been introduced.
The LTI scheme also has a performance differentiator (PDT tool) which ensures
personal accountability for non-financial KPIs.
Introducing an additional performance metric into the SARs element of the LTI
scheme for FY19. There will be two metrics, each with an equal weighting: 50%
HEPS growth (as per the current scheme) and 50% ROIC (new metric).
Individual maximum limits for STI and LTI
schemes are not explicit.
Individual maximum limits are set in terms of the STI and LTI schemes. This has
been clarified in the FY18 remuneration report.
No clawback policy in place.
A clawback and malus clause has been included in the remuneration policy from
FY19.
Limited disclosure on STI targets.
STI target disclosure has been enhanced in the FY18 remuneration report.
The personal performance multiplier in the STI
is an output of an individual’s KPIs, which
focus on long-term business goals. It is
recommended that these KPIs be disclosed.
Lack of a return on capital metric in the STI
scheme.
An EBIT weighting of 35% is excessive. It may
provide sufficient incentive to leadership to
pursue mergers and acquisitions which come
at the expense of HEPS and DPS. To align
better with shareholder interests, a per-share
metric is recommended.
There is no distinction in non-executive director
fees between a base fee and an attendance
fee per meeting as per King III.
Non-executive directors are paid hourly fees
for extra work, which implies they could be
paid for consultancy work. This may
negatively impact their ability to function
independently.
Non-resident non-executive directors are paid
a premium of 130% relative to resident
directors. The rationale for the high premium
should be disclosed.
STI scorecards for the group and operational/functional units to be introduced for
FY19. The scorecards contain both financial and strategic objectives.
RONA has been included in KPIs for FY18.
This concern is already fully addressed in the rules of the STI scheme. In the event
of an unbudgeted acquisition or disposal, the remuneration committee will adjust
reported results for the impact of such acquisition or disposal to ensure actual
business performance is directly comparable with agreed financial targets.
As part of the non-executive director survey, benchmarking is conducted on a
holistic fee per committee, which includes a base fee, preparation and attendance
fee. It is most common to just pay a retainer. King IV has replaced King III and no
longer requires this separation. In addition, most companies pay a retainer rather
than a per-meeting fee, and there is some sentiment in the market that a retainer is
more appropriate as it reflects the director’s inputs throughout the year, not just in
meetings.
Payment of hourly fees will be discontinued from FY19. Under exceptional
circumstances, if it is deemed appropriate to pay hourly fees, the specific
resolution to approve remuneration to non-executive directors for attending
unscheduled meetings and performing extraordinary additional work will be
split to allow shareholders to exercise their right in voting against the payment of
hourly fees.
Considering the need to have a team of non-executive directors who are both
commercially and technically strong, as well as to ensure that there is diversity
and independence in strategic decision making, we have appointed non-resident
non-executive directors. Market benchmarking indicates that the 130% premium
is on the lower side for non-resident directors. Non-resident non-executive director
fees are usually between two and three times fees paid to SA non-executive
directors. This has been contextualised in the FY18 remuneration report in the
outcome of the market survey.
Page 88
Tiger Brands Limited Integrated Annual Report 2018
For the review period, in addition to fi nancial targets, the following KPIs as per the balanced scorecard applied to the CEO, CFO
and Prescribed offi cers. The level of achievement is refl ected alongside each KPI:
Top Tier Financial Results
Market Performance
Compliance
Revenue
Market share (value)
Zero high risk audit fi ndings
KPIs scorecard
Gross margin
On shelf availability
Productivity/cost savings
Innovation rate
Return on net assets
Power in mind
(brand health)
Met
Partially met
Not met
Reduction in consumer
complaints
Safety (lost time injury
frequency rate)
BBBEE implementation
People
Improved employee
engagement
Employee development plans
in place
Diversity and inclusion
The implementation report details the outcomes of implementing the approved policy in the current fi nancial year, as detailed on
page 87 of this report.
2018 guaranteed package
The following increases to guaranteed packages were implemented in the reporting period for executive directors and prescribed
offi cers. New amounts were effective from 1 December 2017:
1 Dec 2017 to
30 Nov 2018
R
1 Dec 2016 to
30 Nov 2017
R
% increase
Executive directors
LC Mac Dougall
NP Doyle
CFH Vaux*
Prescribed offi cers
AG Kirk**
PW Spies
Y Maharaj***
PD Sithole****
* Stepped down from the board on 20 February 2018.
** Resigned on 31 August 2018.
*** Joined on 1 July 2018.
**** Categorised as prescribed offi cer 1 October 2017 in line with the new operating model.
9 083 550
6 549 750
5 236 335
4 842 563
4 853 000
4 850 000
4 549 157
8 610 000
6 150 000
4 963 351
4 590 107
4 600 000
n/a
3 973 063
6
7
5
6
6
14,5
The average increase of 6% (2017: 4,1%) for executive directors and prescribed offi cers compares to an average of 6%
(2017: 4%) for the rest of the company.
2018 short-term incentive
As indicated in the policy section, the STI for executive directors and prescribed offi cers is based on the combination of a business
multiplier and personal performance multiplier.
Executive directors
The business multiplier for executive directors is weighted according to the table below. Results for FY18 were as follows:
KPI
HEPS
EBIT
Volume growth
Net working capital
Total
Weighting
35%
35%
15%
15%
100%
Threshold
Business multiplier
= 50%
94%
91,80%
75%
101%
Target
On-target
Business multiplier
= 100%
100%
100%
100%
100%
Stretch
Business multiplier
= 150%
104%
104%
140%
97%
Achievement
Actual
result
<94%
<91,80%
<75%
>101%
Weighted
result
0%
0%
0%
0%
0%
Notes:
1. The targeted percentages for “threshold”, “on-target” and “stretch” as set out above per KPI represent the targeted percentage achievement of the underlying budgeted
amounts.
2. Linear vesting will apply if the actual result falls between “threshold” and “on-target” or between “target” and “stretch”.
Tiger Brands Limited Integrated Annual Report 2018
Page 89
Remuneration report continued
Targets for the STI for 2017 and 2018 were not met, hence no STI was paid.
The FY18 personal performance multiplier is the aggregated result of assessing the KPIs for the relevant executive, as follows:
Executive directors
KPIs
Weighting
Not
met
Partially
met
Met
Exceeded
Not
met
Partially
met
Met
Exceeded
Not
met
Partially
met
Met
Exceeded
LC Mac Dougall
NP Doyle
CFH Vaux*
Top-tier financial results
Revenue
Gross margin
Productivity/
cost savings
Return on net assets
Market performance
Market share
On-shelf availability
Innovation rate
Power in mind (brand
health)
Compliance
Zero level 1 audit
findings
Reduction in consumer
complaints
Safety (LTIFR)
BBBEE implementation
People
Improved employee
engagement
Employee development
plans in place
Diversity and inclusion
Individual KPIs
* CFH Vaux stepped down as an executive director in February 2018
No STI was awarded to executive directors as illustrated below:
GP*
R
On-target
%
Business
multiplier
%
Personal
performance
multiplier
%
LC Mac Dougall
NP Doyle
CFH Vaux***
9 083 550
6 549 750
5 236 335
x
x
x
60 x
60 x
60 x
0
0
0
x
x
x
100 =
100 =
110 =
* GP at 30 September 2018.
** Includes value of bonus deferral.
*** Stepped down as an executive director in February 2018.
STI award
STI award
2018**
2017**
R
0
0
0
R
0
0
0
Page 90
Tiger Brands Limited Integrated Annual Report 2018
Prescribed officers
The business multiplier for prescribed officers is weighted according to the table below. The results for FY18 were as follows:
Threshold
Target
Target
Stretch
Achievement
Weighting
Business multiplier
= 50%
Business multiplier
= 100%
Business multiplier
= 150%
Actual
result
Weighted
result
70%
15%
15%
100%
91,80%
75%
101%
100%
100%
100%
104%
140%
97%
<91,80%
<75%
>101%
0%
0%
0%
0%
KPI
EBIT
Volume growth
Net working capital
Total
Notes:
1. The targeted percentages for “threshold”, “on-target” and “stretch” as set out above per KPI represent the targeted percentage
achievement of the underlying budgeted amounts.
2. Linear vesting will apply if the actual result falls between “threshold” and “on-target” or between “target” and “stretch”.
The overall business multiplier result for prescribed officers is 0% in comparison to 101,1% in 2017.
The FY18 personal performance multiplier is the aggregated result of assessing the KPIs for the relevant executive, as follows:
Prescribed officers
KPIs
Top-tier financial results
Revenue
Gross margin
Productivity/
cost savings
Return on net assets
Market performance
Market share
On-shelf availability
Innovation rate
Power in mind (band health)
Compliance
Zero level 1 audit findings
Reduction in consumer complaints
Safety (LTIFR)
BBBEE implementation
People
Improved employee engagement
Employee development plans in place
Diversity and inclusion
Individual KPIs
PW Spies
PD Sithole
Not
met
Partially
met
Met
Exceeded
Not
met
Partially
met
Met
Exceeded
Tiger Brands Limited Integrated Annual Report 2018
Page 91
Remuneration report continued
No STI was awarded to prescribed officers as illustrated below:
GP*
R
On-target
%
Business
multiplier
%
Personal
performance
multiplier
%
–
4 853 000
4 850 000
4 549 157
AG Kirk***
PW Spies
Y Maharaj****
PD Sithole*****
* GP as at 30 September 2018.
** I ncludes value of bonus deferral.
*** Resigned on 31 August 2018.
**** Appointed 1 July 2018.
***** Categorised as prescribed officer 1 October 2017 in line with the new operating model.
50 x
50 x
50 x
50 x
0
0
0
0
x
x
x
x
x
x
x
x
0 =
110 =
0 =
120 =
STI award
2018**
R
–
–
–
–
STI award
2017**
R
2 320 310
1 782 738
–
2 610 911
2018 long-term incentive
Long-term incentive awards made during the year to executive directors and prescribed officers are set out below:
PDT
multiplier***
Award
%
GP
SARs
Face
value
100%
200%
0%
9 083 550
6 549 750
5 236 335
41
3 725 906
145 18 994 244
–
–
Number
8 990
45 830
–
Bonus-matching shares
Deferred bonus shares and
company-matching shares
Award
%
STI**
Face
value Number
Match
%
Face
value Number
–
–
–
50
50
–
–
–
–
–
–
–
100
100
100
–
–
–
–
–
–
Expected value (based on fair value)
SARS
1 117 772
5 698 273
–
Bonus-
matching
shares
–
–
–
Deferred bonus shares and
company-matching shares
–
–
–
Name
LC Mac Dougall*
NP Doyle*
CFH Vaux*
Name
LC Mac Dougall*
NP Doyle*
CFH Vaux*
* Allocated on 11 December 2017 at a VWAP of R414,45.
** STI in respect of the year ended 30 September 2017.
*** A performance differentiation tool (PDT) is used to modify the standard quantum of SARs and bonus-matching shares, based on an individual’s personal
performance, leadership and ability. This is a discretionary percentage ranging from 0% to 200%.
Page 92
Tiger Brands Limited Integrated Annual Report 2018
Due to the executive directors STI targets not being met in FY17 performance, no bonus-matching and subsequently deferred bonus
shares and company-matching shares were awarded to executive directors. Only share appreciation rights were awarded. Bonus
matching shares, deferred bonus shares and company matching shares were awarded to Prescribed officers in addition to Share
Appreciation Rights as the Prescribed officers STI targets were met.
PDT
multiplier***
Award
%
GP
SARs
Face
value
137,5%
137,5%
200,0%
4 853 000
4 842 563
4 549 157
7 339 910
110
110
7 327 476
110 10 008 968
Number
17 710
17 680
24 150
Bonus-matching shares
Deferred bonus shares and
company-matching shares
Award
%
STI**
Face
value Number
Match
%
Face
value Number
1 782 738
2 320 310
2 610 911
50 1 226 772
50 1 595 633
50 2 611 035
2 960
3 850
6 300
100 1 786 280
100 2 320 920
–
–
4 310
5 600
–
Expected value (based on fair value)
Bonus-
matching
shares
SARS
Deferred bonus shares and
company-matching shares
Name
P Spies*
AG Kirk*
PD Sithole*
Name
P Spies*
AG Kirk*
PD Sithole*
* Allocated on 11 December 2017 at a VWAP of R414,45.
** STI in respect of the year ended 30 September 2017.
*** A performance differentiation tool (PDT) is used to modify the standard quantum of SARs and bonus-matching shares, based on an individual’s personal performance,
1 104 095
1 436 069
2 349 932
2 201 973
2 198 243
3 002 690
1 607 652
2 088 828
–
leadership and ability. This is a discretionary percentage ranging from 0% to 200%.
LTI awards vesting or with a performance period ending in 2018
The outcome for awards due to vest in FY18, and whose performance conditions ended by 30 September 2018, are shown below.
This applies to all eligible participants.
LTI allocation
Company-matching shares granted in 2015**
Deferred bonus shares granted in 2015**
Bonus-matching shares granted in 2015**
Performance shares granted in 2015**#
Phantom cash share options granted in 2013 – third tranche**@
Share appreciation rights granted in 2013 – third tranche**
Share appreciation rights granted in 2014 – second tranche**
Share appreciation rights granted in 2015 – first tranche**
LTI measures
Total
shareholder
return
Real HEPS
growth
Performance
condition result
(% vesting)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a 100% (time-based
vesting)
n/a 100% (time-based
vesting)
n/a 100% (time-based
vesting)
n/a
175%
0%*
0%
100%
27%
* Only 50% of allocation subject to performance conditions.
** I n general, LTI allocations vested in 2018. However, the vesting date is extended for certain employees as a result of them being included in
an employer-enforced voluntary closed period.
# Performance shares are no longer awarded. The last allocation was in May 2016.
@ Phantom cash share options are no longer awarded. The last allocation was in February 2013.
Met
Partially met
Not met
Payments for termination of office
No additional payments were made for executives terminating office.
Compliance with remuneration policy
There were no deviations from the remuneration policy in the financial year.
Tiger Brands Limited Integrated Annual Report 2018
Page 93
Remuneration report continued
Single total figure of remuneration
The following tables disclose total remuneration received and receivable by executive directors and prescribed officers for the period
1 October 2017 to 30 September 2018:
Executive directors
Remuneration
element
Basic salary
Retirement funding
Other benefits
Guaranteed
package
Short-term incentive
Cash remuneration
SARs
Bonus-matching
shares
Deferred bonus
shares and
company-matching
shares
Total remuneration
LC Mac Dougall
FY17
R
FY18
R
NP Doyle
CFH Vaux*
%
FY18
R
FY17
R
%
FY18
R
FY17
R
%
8 511 653 8 058 719
429 695
149 432
339 880
153 092
5 497 977 5 211 772
923 969
72 000
913 148
72 000
1 967 786 4 531 406
406 707
51 504
145 875
22 648
–
9 004 625 8 637 846
–
9 004 625 8 637 846
–
–
–
6 483 125 6 207 742
–
6 483 125 6 207 742
–
–
–
2 136 309 4 989 618
–
2 136 309 4 989 618
–
725 158
–
–
–
–
–
–
–
–
9 004 625 8 637 846
4,2
–
–
6 483 125 6 207 742
4,4
–
–
2 861 467 4 989 618
* Stepped down as an executive director in February 2018.
Prescribed officers
Remuneration element
Basic salary
Retirement funding
Other benefits
Guaranteed package
Short-term incentive
Cash remuneration
SARs
Bonus-matching shares
Deferred bonus shares and company-matching shares
Total remuneration
** Resigned on 31 August 2018.
AG Kirk**
PW Spies
FY18
(R)
FY17
(R)
%
FY18
(R)
FY17
(R)
%
3 860 556 3 955 010
4 029 942 2 343 743
316 384
390 999
344 639
250 723
220 000
240 000
408 446 2 002 282
4 396 940 4 586 009
4 783 027 4 596 748
– 2 320 310
– 1 782 738
4 396 940 6 906 319
4 783 027 6 379 486
–
–
–
–
–
–
–
–
–
–
–
–
4 396 940 6 906 319 (36,3)
4 783 027 6 379 486 (25,0)
Page 94
Tiger Brands Limited Integrated Annual Report 2018
Remuneration element
Basic salary
Retirement funding
Other benefits
Guaranteed package
Short-term incentive
Cash remuneration
SARs
Bonus-matching shares
Deferred bonus shares and company-matching shares
Y Maharaj***
PD Sithole
FY18
R
1 021 587
84 797
1 106 116
2 212 500
–
2 212 500
–
–
–
FY17
R
%
FY18
R
FY17
R
%
3 988 160 3 435 295
344 981
363 047
141 624
120 000
4 474 765 3 918 342
– 2 610 911
4 474 765 6 529 253
–
–
–
–
–
–
Total remuneration
2 212 500
4 474 765 6 529 253 (31,5)
*** Paid a combination of a sign on bonus (R1 000 000) and share allocation (20 000 Tiger Brands shares and 17 000 Adcock Ingram shares in
respect of the Tiger Brands Black Managers Trust), still to be allocated, in lieu of STI and LTI forfeited at his former employer.
Number and value of LTI share awards
Disclosure of the quantum and value of awards for the CEO and CFO outstanding at the beginning of the reporting period, as well
as new awards made in the period, are provided in the tables on pages 96 and 97, with the cash value of awards settled during
the reporting period indicated in the value-based tables.
Tiger Brands Limited Integrated Annual Report 2018
Page 95
Remuneration report continued
Schedule of LTI awards
Unvested awards and cash flow from settling LTI awards for the CEO and CFO are tabulated below:
Name and awards
Award date
LC Mac Dougall
2016 deferred bonus shares
2016 company-matching shares
2016 bonus-matching shares
2016 performance shares
2016 SARs
07/12/2016
07/12/2016
07/12/2016
24/05/2016
24/05/2016
2016 SARs
07/12/2016
2017 SARs
11/12/2017
Total
NP Doyle
2015 company-matching shares
2015 deferred bonus shares
2016 company-matching shares
2016 deferred bonus shares
2015 bonus-matching shares
2016 bonus-matching shares
2016 bonus-matching shares
2015 performance shares
2016 performance shares
2012 Phantom Cash Share
Options
2013 Phantom Cash Share
Options
03/12/2015
03/12/2015
07/12/2016
07/12/2016
04/02/2015
09/02/2016
07/12/2016
04/02/2015
09/02/2016
02/07/2012
13/02/2013
2014 SARs
28/02/2014
2015 SARs
04/02/2015
2016 SARs
09/02/2016
2016 SARs
07/12/2016
2017 SARs
11/12/2017
Total
Grant
share price
at award
ZAR
Vesting
date
Opening
number
Granted
during
the year
Forfeited
during year
Performance
condition
achieved
Settled
during
the year
Face value
Cash
Closing
number
at award
received
acquired
ZAR
ZAR
ZAR
Value of
shares
Share
price
effect
value of
award
ZAR
Effective
Forfeited/
awarded
performance
during the
target
year
Closing
fair value
vesting
ZAR
07/12/2019
07/12/2019
07/12/2019
24/05/2019
24/05/2019
24/05/2020
24/05/2021
07/12/2019
07/12/2020
07/12/2021
11/12/2020
11/12/2021
11/12/2022
03/12/2018
03/12/2018
07/12/2019
07/12/2019
04/02/2018*
09/02/2019
07/12/2019
04/02/2018*
09/02/2019
02/07/2015**
02/07/2016**
02/07/2017**
13/02/2016
13/02/2017
13/02/2018*
28/02/2017
28/02/2018*
28/02/2019
04/02/2018*
04/02/2019
04/02/2020
09/02/2019
09/02/2020
09/02/2021
07/12/2019
07/12/2020
07/12/2021
11/12/2020
11/12/2021
11/12/2022
–
–
–
–
341,68
341,68
341,68
395,97
395,97
395,97
414,45
414,45
414,45
–
–
–
–
–
–
–
–
–
252,01
252,01
252,01
299,83
299,83
299,83
254,45
254,45
254,45
385,33
385,33
385,33
291,71
291,71
291,71
395,97
395,97
395,97
414,45
414,45
414,45
650
650
650
8 160
12 000
12 000
12 000
10 946
10 947
10 947
–
–
–
78 950
2 688
2 688
1 060
1 060
2 320
1 330
1 590
2 490
5 720
5 000
5 000
5 000
5 000
5 000
10 000
6 067
6 067
6 066
3 846
3 847
3 847
7 623
7 623
7 624
11 260
11 260
11 260
–
–
–
142 336
–
–
–
–
–
–
–
–
–
–
2 996
2 997
2 997
8 990
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
15 276
15 277
15 277
45 830
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5 000
–
–
–
2 808
–
–
–
–
–
–
–
–
–
–
–
7 808
1 868
182 226
63 257 077
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 868
87 940
32 590 292
650
650
650
8 160
12 000
12 000
12 000
10 946
10 947
10 947
2 996
2 997
2 997
2 688
2 688
1 060
1 060
2 320
1 330
1 590
4 358
5 720
5 000
5 000
5 000
5 000
5 000
5 000
6 067
6 067
6 066
1 038
3 847
3 847
7 623
7 623
7 624
11 260
11 260
11 260
15 276
15 277
15 277
257 381
257 381
257 381
2 788 109
4 100 160
4 100 160
4 100 160
4 334 288
4 334 684
4 334 684
1 241 692
1 242 107
1 242 107
921 715
921 715
419 728
419 728
893 966
387 974
629 592
1 679 268
1 668 581
1 260 050
1 260 050
1 260 050
1 499 150
1 499 150
1 499 150
1 543 748
1 543 748
1 543 494
399 973
1 482 365
1 482 365
2 223 705
2 223 705
2 223 997
4 458 622
4 458 622
4 458 622
6 331 138
6 331 553
6 331 553
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
167 089
167 089
167 089
172 583
258 848
372 600
447 000
226 363
281 995
339 576
81 851
96 533
105 165
2 883 781
710 653
710 653
272 484
272 484
614 846
350 721
408 725
1 154 957
122 522
65 050
65 050
65 050
–
–
–
180 069
180 069
233 602
11 781
44 587
45 010
226 327
298 136
374 415
232 857
290 058
349 285
417 340
492 072
536 070
8 724 873
* Vesting date extended as a consequence of the voluntary closed period.
** Lapsing of shares extended as a consequence of closed period. Shares should have been exercised by 02/07/2018.
Page 96
Tiger Brands Limited Integrated Annual Report 2018
Schedule of LTI awards
Unvested awards and cash flow from settling LTI awards for the CEO and CFO are tabulated below:
Name and awards
LC Mac Dougall
2016 deferred bonus shares
07/12/2016
07/12/2019
2016 company-matching shares
07/12/2016
07/12/2019
2016 bonus-matching shares
2016 performance shares
07/12/2016
07/12/2019
24/05/2016
24/05/2019
2016 SARs
24/05/2016
2016 SARs
07/12/2016
2017 SARs
11/12/2017
24/05/2019
24/05/2020
24/05/2021
07/12/2019
07/12/2020
07/12/2021
11/12/2020
11/12/2021
11/12/2022
341,68
341,68
341,68
395,97
395,97
395,97
414,45
414,45
414,45
Total
NP Doyle
Options
Options
2014 SARs
2015 company-matching shares
03/12/2015
03/12/2018
2015 deferred bonus shares
03/12/2015
03/12/2018
2016 company-matching shares
07/12/2016
07/12/2019
2016 deferred bonus shares
2015 bonus-matching shares
2016 bonus-matching shares
2016 bonus-matching shares
2015 performance shares
2016 performance shares
07/12/2016
07/12/2019
04/02/2015
04/02/2018*
09/02/2016
09/02/2019
07/12/2016
07/12/2019
04/02/2015
04/02/2018*
09/02/2016
09/02/2019
2012 Phantom Cash Share
02/07/2012
2013 Phantom Cash Share
13/02/2013
28/02/2014
–
–
–
–
–
–
–
–
–
–
–
–
–
02/07/2015**
02/07/2016**
02/07/2017**
13/02/2016
13/02/2017
13/02/2018*
28/02/2017
28/02/2018*
28/02/2019
04/02/2019
04/02/2020
09/02/2019
09/02/2020
09/02/2021
07/12/2019
07/12/2020
07/12/2021
11/12/2020
11/12/2021
11/12/2022
252,01
252,01
252,01
299,83
299,83
299,83
254,45
254,45
254,45
385,33
385,33
385,33
291,71
291,71
291,71
395,97
395,97
395,97
414,45
414,45
414,45
2016 SARs
09/02/2016
2016 SARs
07/12/2016
2017 SARs
11/12/2017
650
650
650
8 160
12 000
12 000
12 000
10 946
10 947
10 947
–
–
–
78 950
2 688
2 688
1 060
1 060
2 320
1 330
1 590
2 490
5 720
5 000
5 000
5 000
5 000
5 000
6 067
6 067
6 066
3 846
3 847
3 847
7 623
7 623
7 624
11 260
11 260
11 260
–
–
–
2 996
2 997
2 997
8 990
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
15 276
15 277
15 277
45 830
2015 SARs
04/02/2015
04/02/2018*
2 808
10 000
5 000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Award date
Vesting
date
Grant
share price
at award
ZAR
Opening
number
Granted
during
the year
Forfeited
during year
Performance
condition
achieved
Settled
during
the year
Closing
number
Face value
at award
ZAR
Cash
received
ZAR
Share
price
effect
value of
award
ZAR
Value of
shares
acquired
ZAR
Effective
performance
target
Forfeited/
awarded
during the
year
Closing
fair value
vesting
ZAR
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 868
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
142 336
7 808
1 868
* Vesting date extended as a consequence of the voluntary closed period.
** Lapsing of shares extended as a consequence of closed period. Shares should have been exercised by 02/07/2018.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
650
650
650
8 160
12 000
12 000
12 000
10 946
10 947
10 947
2 996
2 997
2 997
257 381
257 381
257 381
2 788 109
4 100 160
4 100 160
4 100 160
4 334 288
4 334 684
4 334 684
1 241 692
1 242 107
1 242 107
87 940
32 590 292
2 688
2 688
1 060
1 060
2 320
1 330
1 590
4 358
5 720
5 000
5 000
5 000
5 000
5 000
5 000
6 067
6 067
6 066
1 038
3 847
3 847
7 623
7 623
7 624
11 260
11 260
11 260
15 276
15 277
15 277
182 226
921 715
921 715
419 728
419 728
893 966
387 974
629 592
1 679 268
1 668 581
1 260 050
1 260 050
1 260 050
1 499 150
1 499 150
1 499 150
1 543 748
1 543 748
1 543 494
399 973
1 482 365
1 482 365
2 223 705
2 223 705
2 223 997
4 458 622
4 458 622
4 458 622
6 331 138
6 331 553
6 331 553
63 257 077
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
167 089
167 089
167 089
172 583
258 848
372 600
447 000
226 363
281 995
339 576
81 851
96 533
105 165
2 883 781
710 653
710 653
272 484
272 484
614 846
350 721
408 725
1 154 957
122 522
65 050
65 050
65 050
–
–
–
180 069
180 069
233 602
11 781
44 587
45 010
226 327
298 136
374 415
232 857
290 058
349 285
417 340
492 072
536 070
8 724 873
Tiger Brands Limited Integrated Annual Report 2018
Page 97
Remuneration report continued
Interests of directors and prescribed officers in BBBEE schemes
No executive director or prescribed officer, other than PD Sithole who was granted 7 000 Tiger Brands and 5 950 Adcock Ingram
Shares on 31 January 2013. In addition, Y Maharaj, will qualify to participate in the company’s BMT I scheme when he will be
granted 20 000 shares in Tiger Brands Limited, once the closed period has been lifted.
PD Sithole was also granted 9 202 Tiger Brands shares in terms of the BMT II scheme on 30 September 2017. This grant is subject
to a three year retention period which expires on 30 September 2020.
Non-executive directors’ remuneration 2018
The non-executive director remuneration paid during the year under review (as approved by shareholders on 20 February 2018) and
the total comparative figure for 2017 are disclosed below, excluding VAT:
Committee
MO Ajukwu
SL Botha3
MJ Bowman
GA Klintworth1
M Makanjee
E Mashilwane
Dr KD Mokhele
RD Nisbet4
MP Nyama
YGH Suleman
BS Tshabalala2
Board fees
Audit committee fees
Investment committee fees
Remuneration and nomination committee fees
Nomination committee fees
Social, ethics and transformation committee fees
Risk committee fees
Extraordinary fees
Ad hoc work/meetings
Total FY18
Total FY17
1 Appointed 16 August 2018.
2 Resigned 15 August 2018.
3 Resigned 24 November 2017.
4 Resigned 7 September 2018.
890 074
–
–
–
–
–
318 258
–
–
1 208 332
812 387
93 929
–
–
23 548
–
–
–
–
–
117 477
577 780
386 989
–
25 552
214 717
–
–
–
–
20 127
647 384
477 468
229 000
–
–
–
–
–
–
–
–
229 000
–
386 989
–
–
97 017
–
177 186
–
–
22 093
683 284
612 393
Non-executive directors’ remuneration 2017
The non-executive director remuneration paid for the year ended 30 September 2017 is disclosed below, excluding VAT:
MO Ajukwu
SL Botha
MJ Bowman
K Hedderwick1
M Makanjee
E Mashilwane2
Dr KD Mokhele6
BL Sibiya3
RD Nisbet
MP Nyama
AC Parker4
YGH Suleman
BS Tshabalala5
Board fees
Carozzí board meeting
Audit committee fees
Investment committee fees
Remuneration committee fees
Nominations committee fees
Social, ethics and transformation
committee fees
Risk committee fees
Extraordinary fees
Ad hoc work/meetings*
TOTAL FY17
612 707
–
–
–
–
–
–
199 680
–
–
812 387
368 491
–
–
–
201 729
7 560
–
–
–
–
368 491
–
–
41 805
–
–
–
67 172
–
–
90 316
–
–
–
–
–
–
–
–
–
577 780
477 468
90 316
368 491
–
–
–
47 096
7 560
164 046
–
–
25 200
612 393
278 175
–
81 988
–
–
–
–
–
–
–
1 053 045
658 948
368 491
368 491
368 491
93 929
280 052
58 815
112 357
–
–
–
–
–
–
95 621
7 560
82 022
–
–
–
–
–
–
838 858
218 010
–
–
–
–
–
–
–
22 680
153 811
41 805
48 526
132 369
–
–
–
–
–
–
–
–
–
–
–
–
–
–
360 163
1 280 705
658 948
819 716
553 695
1 079 548
745 002
93 929
1 Appointed on 1 December 2016 and resigned on 14 February 2017.
2 Appointed on 1 December 2016.
3 Resigned on 30 June 2017.
4 Resigned as chairman on 21 February 2017.
5 Appointed on 26 May 2017.
6 Appointed as chairman on 21 February 2017.
* Paid for special meetings attended for committee of the board.
Page 98
Tiger Brands Limited Integrated Annual Report 2018
1 797 170
386 989
386 989
386 989
294 110
25 552
–
–
–
–
138 374
27 989
873 012
819 716
97 017
88 593
–
–
–
–
–
–
572 598
553 695
386 989
168 896
25 552
–
–
–
–
22 093
876 207
745 002
–
–
–
–
–
–
–
525 362
93 929
272 679
138 374
555 884
360 163
8 334
1 805 504
1 280 705
386 989
168 896
–
–
–
–
–
–
–
–
–
–
–
–
71 823
11 340
96 617
47 880
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Interests of directors and prescribed officers in BBBEE schemes
No executive director or prescribed officer, other than PD Sithole who was granted 7 000 Tiger Brands and 5 950 Adcock Ingram
Shares on 31 January 2013. In addition, Y Maharaj, will qualify to participate in the company’s BMT I scheme when he will be
granted 20 000 shares in Tiger Brands Limited, once the closed period has been lifted.
PD Sithole was also granted 9 202 Tiger Brands shares in terms of the BMT II scheme on 30 September 2017. This grant is subject
to a three year retention period which expires on 30 September 2020.
Non-executive directors’ remuneration 2018
The non-executive director remuneration paid during the year under review (as approved by shareholders on 20 February 2018) and
the total comparative figure for 2017 are disclosed below, excluding VAT:
Committee
Board fees
Audit committee fees
Investment committee fees
Remuneration and nomination committee fees
Nomination committee fees
Social, ethics and transformation committee fees
Risk committee fees
Extraordinary fees
Ad hoc work/meetings
Total FY18
Total FY17
1 Appointed 16 August 2018.
2 Resigned 15 August 2018.
3 Resigned 24 November 2017.
4 Resigned 7 September 2018.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Non-executive directors’ remuneration 2017
The non-executive director remuneration paid for the year ended 30 September 2017 is disclosed below, excluding VAT:
612 707
368 491
368 491
90 316
368 491
278 175
Board fees
Carozzí board meeting
Audit committee fees
Investment committee fees
Remuneration committee fees
Nominations committee fees
Social, ethics and transformation
committee fees
Risk committee fees
Extraordinary fees
Ad hoc work/meetings*
–
–
–
–
–
–
–
–
41 805
201 729
7 560
199 680
67 172
1 Appointed on 1 December 2016 and resigned on 14 February 2017.
2 Appointed on 1 December 2016.
3 Resigned on 30 June 2017.
4 Resigned as chairman on 21 February 2017.
5 Appointed on 26 May 2017.
6 Appointed as chairman on 21 February 2017.
* Paid for special meetings attended for committee of the board.
–
–
–
–
–
47 096
7 560
164 046
25 200
612 393
81 988
–
–
–
–
–
–
–
–
MO Ajukwu
SL Botha3
MJ Bowman
GA Klintworth1
M Makanjee
E Mashilwane
Dr KD Mokhele
RD Nisbet4
MP Nyama
YGH Suleman
BS Tshabalala2
890 074
93 929
386 989
229 000
386 989
23 548
25 552
214 717
318 258
1 208 332
812 387
117 477
577 780
20 127
647 384
477 468
229 000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
97 017
177 186
22 093
683 284
612 393
386 989
168 896
–
–
–
–
–
–
–
555 884
360 163
1 797 170
–
–
–
–
–
–
–
8 334
1 805 504
1 280 705
386 989
294 110
25 552
–
–
–
138 374
–
27 989
873 012
819 716
386 989
–
–
97 017
–
88 593
–
–
–
572 598
553 695
386 989
168 896
25 552
–
–
–
272 679
–
22 093
876 207
745 002
386 989
–
–
–
–
–
138 374
–
–
525 362
93 929
MO Ajukwu
SL Botha
MJ Bowman
K Hedderwick1
M Makanjee
E Mashilwane2
Dr KD Mokhele6
BL Sibiya3
RD Nisbet
MP Nyama
AC Parker4
YGH Suleman
BS Tshabalala5
TOTAL FY17
812 387
577 780
477 468
90 316
360 163
1 280 705
658 948
1 053 045
–
71 823
11 340
–
–
–
96 617
–
47 880
658 948
–
–
–
–
–
–
–
–
–
368 491
–
280 052
58 815
–
–
–
112 357
–
–
819 716
368 491
–
–
–
95 621
7 560
82 022
–
–
–
838 858
218 010
–
–
–
–
–
–
–
22 680
553 695
1 079 548
368 491
–
153 811
41 805
48 526
–
–
132 369
–
–
745 002
93 929
–
–
–
–
–
–
–
–
–
93 929
Tiger Brands Limited Integrated Annual Report 2018
Page 99
Remuneration report continued
Non-executive directors’ remuneration 2019
The following table reflects proposed fees from 1 March 2019, excluding VAT, subject to the approval of shareholders at the AGM
on 19 February 2019:
Forum
Main board
Audit
Remuneration and nominations
Risk
Social, ethics and transformation
Hourly fees
Extraordinary meetings
* Not applicable.
Capacity
Chairman
Member
Chairman
Member
Chairman
Member
Chairman
Member
Chairman
Member
Current rate
effective
March 2018
Proposed rate
resident board
members –
effective
March 2019
1 849 515
1 941 990
398 260
302 676
173 815
220 971
99 842
280 621
142 404
182 347
91 173
4 167
20 951
418 173
326 890
186 851
229 810
107 331
290 443
148 100
195 111
98 467
4 396
22 103
Proposed fees
to be paid
to non-resident
board members –
effective
March 2019
*
961 798
*
*
*
*
*
340 629
*
*
10 111
50 837
Non-binding advisory vote
Shareholders are requested to cast two separate non-binding votes on the remuneration policy and implementation report in parts 2
and 3 of this report.
Page 100
Tiger Brands Limited Integrated Annual Report 2018
Shareholders’ diary
Financial year end
Annual general meeting
Reports and accounts
30 September
19 February 2019
Announcement of interim results and interim dividend for the six months ending 31 March 2019
May 2019
Announcement of annual results and final dividend for the year ending 30 September 2019
Integrated annual report
Dividends 2019
Ordinary shares
Interim dividend
Final dividend
November 2019
December 2019
Declaration
Payment
May 2019
July 2019
November 2019
January 2020
Declaration of final dividend number 148
The board has approved and declared a final cash dividend of 702 cents per ordinary share (gross) for the year ended
30 September 2018.
The dividend will be subject to the dividends tax that was introduced with effect from 1 April 2012. 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 dividend has been declared out of income reserves
› The local dividend tax rate is 20% effective 22 February 2017
› The gross local dividend amount is 702 cents per ordinary share for shareholders exempt from the dividends tax
› The net local dividend amount is 561,60 cents per ordinary share for shareholders liable to pay 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 dividend:
Declaration date
Last day to trade cum final dividend
Shares commence trading ex the final dividend
Record date to determine those shareholders entitled to the final dividend
Payment date in respect of the final dividend
Thursday, 22 November 2018
Tuesday, 8 January 2019
Wednesday, 9 January 2019
Friday, 11 January 2019
Monday, 14 January 2019
Share certificates may not be dematerialised or rematerialised between Wednesday, 9 January 2019 and Friday, 11 January 2019,
both days inclusive.
By order of the board
JK Monaisa
Company secretary
21 November 2018
Tiger Brands Limited Integrated Annual Report 2018 Page 101
Analysis of registered shareholders and company schemes
Registered shareholder spread
In accordance with the JSE Listings Requirements, the following table confirms the spread of registered shareholders as detailed in the
annual report and accounts dated 28 September 2018 was:
Shareholder spread
1 – 1 000 shares
1 001 – 10 000 shares
10 001 – 100 000 shares
100 001 – 1 000 000 shares
1 000 001 shares and above
Total
Number
of holders
% of total
shareholders
Number
of shares
% of share
issued capital
14 810
2 457
560
152
31
18 010
3 567 489
82,2
7 654 392
13,6
16 957 268
3,1
0,9
48 458 164
0,2 113 181 613
1,9
4,0
8,9
25,5
59,7
100,00
189 818 926
100,00
Public and non-public shareholdings
Within the shareholder base, we are able to confirm the split between public shareholdings and directors/company-related schemes
as being:
Shareholder type
Non-public shareholders
Empowerment holdings
Own holding
Share trusts
Directors and associates
Public shareholders
Total
Number
of holders
% of total
shareholders
Number
of shares
% of share
issued capital
10
6
1
2
1
18 000
18 010
0,06
0,03
0,01
0,01
0,01
24 447 455
13 897 716
10 326 758
218 031
4 950
99,94 165 371 471
12,9
7,4
5,4
0,1
0,00
87,1
100,00 189 818 926
100,00
Substantial investment management and beneficial interests above 3%
Through regular analysis of STRATE registered holdings, and pursuant to the provisions of section 56 of the Companies Act, the
following shareholders held directly and indirectly equal to or in excess of 3% of the issued share capital as at 28 September 2018:
Investment management shareholdings
Investment manager
PIC
Colonial First State Global Asset Management
Janus Henderson Investors
Coronation Asset Management Proprietary Limited
BlackRock Inc
The Vanguard Group Inc
Total
Beneficial shareholdings
Government Employees Pension Fund (PIC)
Tiger Consumer Brands Limited
Tiger Brands Foundation SPV
Stewart Investors Global Emerging Markets Leaders Fund
Total
Page 102
Tiger Brands Limited Integrated Annual Report 2018
Total
shareholding
21 941 167
16 237 136
13 286 954
7 113 954
6 821 587
6 026 117
71 426 915
Total
shareholding
24 362 021
10 326 758
9 068 067
7 569 525
51 326 371
%
11,6
8,6
7,0
3,7
3,6
3,2
37,7
%
12,8
5,5
4,8
4,0
27,1
Geographic split of investment managers and
company-related holdings
9%
4%
17%
Issued
capital
Geographic split of beneficial shareholders
10%
48%
8%
16%
South Africa
United Kingdom
United States of America
and Canada
Rest of Europe
Rest of World
49%
Issued
capital
22%
17%
Tiger Brands Limited Integrated Annual Report 2018 Page 103
About this report
This integrated annual report is intended to be a concise
communication about how Tiger Brands’ use of and impact on
its capitals lead to creating value over the short, medium and
long term. The report covers strategy, governance, performance
and prospects, in the context of its external environment, for the
year to 30 September 2018, and follows a similar report for
the year to 30 September 2017.
For further information, please contact the investor relations
director, Nikki Catrakilis-Wagner
T: +27 11 840 4000 E: investorrelations@tigerbrands.com
Reporting principles and approach
The annual fi nancial statements have been prepared in line with
International Financial Reporting Standards (IFRS) and the South
African Companies Act.
Listings Requirements of the JSE Limited
In reporting on environmental, social and governance (ESG)
aspects, we are guided by:
› King IV report
›
› Standards and codes governing specifi c areas, including
the Department of Trade and Industry’s broad-based black
economic empowerment (BBBEE) codes of good practice
› Guiding principles of the International Integrated Reporting
Committee (IIRC) framework (2013) – Tiger Brands reports
against strategic goals and, as appropriate, how these affect
the six capitals in this framework
› We use the GRI standards to guide us in our sustainability
reporting.
Boundary and scope
Entities/stakeholders considered in
determining reporting boundary
While this report is aimed primarily at providers of capital, we
believe fi nancial and non-fi nancial disclosure will interest all
stakeholder groups. The report covers the operations of Tiger
Brands and its subsidiaries, with limited disclosure on associate
companies, for the review period. For completeness, however,
we have endeavoured to include risks, opportunities and
outcomes attributable to or associated with entities or
stakeholders beyond Tiger Brands that have a signifi cant
effect on our ability to create value, illustrated below.
In this review period, our major issue was the Listeria outbreak,
which highlighted the need to strengthen quality controls in the
broader South Africa food industry. We are spearheading the
initiative to upgrade controls to global standards.
There were no changes to the boundary or any measurement
techniques in 2018.
Supplementary information
This report should be read with our sustainability report and
annual fi nancial statements on our website for a full
understanding of the group.
Assurance
Our combined assurance model is set out on page 3.
Reporting boundary for integrated report
(risks, opportunities and outcomes)
Financial reporting entity (control and signifi cant infl uence)
Tiger Brands
Grains
Consumer brands –
Food
Home, Personal Care
and Baby
Exports and
International
Associates
Consolidated
Equity accounted
Employees
Customers
Consumers
Suppliers
Business
partners
Communities
Regulators
Others
Page 104
Tiger Brands Limited Integrated Annual Report 2018
Company information
Tiger Brands Limited
Registration number: 1944/017881/06
Company secretary
JK Monaisa
Registered office
3010 William Nicol Drive
Bryanston
Sandton
Postal address
PO Box 78056, Sandton, 2146
Telephone: +27 11 840 4000
Auditors
Ernst & Young Inc
Principal banker
Nedbank Limited
Sponsor
JP Morgan Equities South Africa (Pty) Limited
South African share transfer secretaries
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue
Rosebank, 2196
PO Box 61051, Marshalltown, 2107
American Depository Receipt (ADR) facility
ADR Administrator
The Bank of New York Mellon
Investor relations
Nikki Catrakilis-Wagner
Telephone: +27 11 840 4000
Website address
www.tigerbrands.com
Contact details
Companysecretary@tigerbrands.com
Investorrelations@tigerbrands.com
Tigercsd@tigerbrands.com
Consumer helpline: 0860 005342
Forward-looking information
This integrated annual report contains forward-looking statements that, unless otherwise indicated, reflect the company’s expectations
at the time of finalising the report. Actual results may differ materially from these expectations if known and unknown risks or
uncertainties affect the business, or if estimates or assumptions prove inaccurate. Tiger Brands cannot guarantee that any forward-
looking statement will materialise and, accordingly, readers are cautioned not to place undue reliance on these statements.
The company assumes no obligation to update or revise any forward-looking statements, even if new information becomes available
as a result of future events or for any other reason, save as required by legislation or regulation.
Head offi ce: South Africa
Physical address
Tiger Brands Limited
3010 William Nicol Drive
Bryanston
Postal address
PO Box 78056
Sandton, 2146
South Africa
www.tigerbrands.com