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Integrated annual
report 2020
for the year ended 30 September 2020
Who we are
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. Our portfolio
also includes leading brands in the home,
personal care and baby sectors.
Our vision
To deliver top-tier financial
results and be recognised by all
stakeholders as the pre-eminent
fast-moving consumer goods
(FMCG) company in South Africa
and most desirable growth
company on the continent.
Our purpose
We nourish and nurture more lives every day.
Our strategy
Our strategy for sustainable profitable growth is supported
by four strategic pillars, underpinned by our core values.
DRIVE GROWTH
BE EFFICIENT
GREAT PEOPLE
SUSTAINABLE FUTURE
Winning category,
channel and customer
strategies
A cost-conscious
and effective
supply chain
A winning mindset
and great place
to work
Sustainable
company, community
and planet
Our values
1
We treat each
other with care and
respect
2
We deliver
with passion and
excellence
3
Safety and quality
are non-negotiable
for us
4
We embrace
diversity and
inclusivity
5
We act with integrity
and accountability
in all we do
Consumer
obsession
Teamwork
Empowered
accountability
Focused
execution
Winning behaviours
On the cover:
Jungle | muesli range
Total muesli segment R647m Volume share 22% Value share 26%
Source: Nielsen
www.tigerbrands.com
1
Contents
Overview
2 About this report
Our business
3 Our value contribution in 2020
4 Group profile
7 Chief executive officer’s review
12 Our business model
14 Our business impacts
16 Our key relationships
Our outlook
22 Chairman’s review
26 Interview with chairman
designate
28 Our operating environment:
material trends
32 Material risks and opportunities
Our strategy
36 Our strategy
37
40
42
46
Drive growth
Be efficient
Great people
Sustainable future
Our performance
50 Financial review
52 Operational review
52
54
56
58
60
Grains
Consumer Brands – Food
Home, Personal Care and
Baby (HPCB)
Exports and International
Associates
Our governance
62 Our leadership team
66 Creating value through good
governance
69 Remuneration and performance
Administration
90 Shareholders’ diary
91 Declaration of final dividend
92 Company information
United Nations Sustainable Development Goals (SDGs)
The UN SDGs set a long-term agenda to end poverty, protect the planet and
ensure prosperity for all by 2030. In fulfilling our core purpose – to nourish and
nurture more lives every day – Tiger Brands is committed to playing its role in
delivering on these goals. As part of our strategic pillar on Sustainable Future
(see page 46), we have developed a set of commitments and targets relating
to three key focus areas: health and nutrition, enhanced livelihoods and
environmental stewardship. In meeting these commitments and targets we
believe we will provide a meaningful contribution to the following eleven SDGs:
Our approach to responding to these goals is reviewed in our
accompanying sustainability report 2020.
Tiger Brands’ 2020
integrated reporting suite
Our 2020 integrated reporting
process comprises the following
reports:
›
Integrated report 2020:
Provides a succinct review of
our strategy and business
model, operating context,
operational performance and
governance; aimed primarily
at investors, it is written for all
stakeholders who have an
interest in Tiger Brands’
long-term performance.
› Sustainability report 2020:
Reviews our performance
in managing significant
environmental, social and
governance (ESG) impacts
and addressing sustainability
issues of interest to a broad
range of stakeholders.
› Consolidated annual
financial statements 2020:
Comprehensive review of our
financial results, with audited
financial statements, prepared
in accordance with IFRS.
These are all available at
www.tigerbrands.com
Navigation
Further reading within
this report
Reference to further
online disclosure
This icon highlights
the direct impact of the
Covid-19 pandemic
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Tiger Brands Limited Integrated annual report 2020
About this report
Report boundary and audience
Reporting frameworks
This integrated report reviews Tiger Brands’ business
model and strategy, the risks and opportunities in our
operating environment, and our operational and
governance performance for the financial year ending
30 September 2020. In terms of operational scope,
operations at Deli Foods in Nigeria were terminated in
October 2019 while two separate sale-of-business
agreements were entered into for the disposal of the
company’s Value Added Meat Products business (VAMP).
As a consequence, Deli Foods and VAMP have been
treated as discontinued operations for purposes of these
disclosures with the comparative information restated
accordingly.
This is our primary annual report, written for investors
and any other stakeholder who has an interest in our
ability to create value over the short, medium and long
term. This report should be read in conjunction with
the supplementary sustainability report and our annual
financial statements, published on our website:
www.tigerbrands.co.za
Combined assurance
We use a combined assurance model comprising
assurance obtained from management and from internal
and external assurance providers:
› Ernst & Young Inc. audited our consolidated financial
statements, from which extracts have been included in
this report. The auditor’s audit report does not
necessarily report on all the information included in this
integrated report
› EmpowerLogic Proprietary Limited provided external
verification of our BBBEE activities
› Marsh South Africa conducted risk control audits at our
manufacturing sites and warehouses covering health,
safety, security, fire protection and readiness
› The group’s internal audit team, overseen by the audit
committee, provides annual assurance to the board on
the effectiveness of the combined assurance plan.
Materiality and scope
This report provides information needed to enable an informed
assessment of Tiger Brands’ capacity to create value over time.
We believe that all of the following information is material, and
structured in a manner intended to enable such an assessment:
› Who we are: Our group profile and leadership team
(see pages 4 to 62).
› How we create value: Our business model,
key relationships and business impacts (see pages 12 to 15).
› What impacts on value: Our operating environment, and
material risks and opportunities (see pages 28 to 35).
› Our strategic response: Our strategy and performance
(see pages 36 to 61).
› Our governance: Our governance activities and
remuneration practices (see pages 62 to 89).
Our reporting process has been guided by the principles
and requirements contained in the International Financial
Reporting Standards (IFRS), the IIRC’s International
Framework, the King Code on Corporate Governance
2016 (King IV™*), the JSE Listing Requirements, the South
African Companies Act, No 71 of 2008, and the GRI’s
Sustainability Reporting Standards.
* Copyrights and trademarks are owned by the Institute of
Directors in South Africa NPC and all of its rights are reserved.
Board approval
As a board, we have applied our collective mind to the
preparation and presentation of the information in this
report. We believe that the report addresses all material
matters and that it presents a balanced and fair account
of Tiger Brands’ performance for the financial
year ending 30 September 2020, as well as an accurate
reflection of our strategic commitments. On the advice of
the audit committee, the board approved the integrated
report and the consolidated annual financial statements
on 19 November 2020.
Khotso Mokhele
Chairman
Noel Doyle
CEO
Emma Mashilwane
Chair of audit committee
Additional information not material for this report, but of interest
for other purposes, is provided in separate reports and on our
website. In assessing those issues that materially impact value
creation we have looked beyond the conventional financial
reporting boundary to provide for the relevant interests of key
stakeholders. We have also considered the most significant
risks, opportunities and impacts associated with our activities
over the short term (less than 12 months), medium term (one to
three years) and long term (beyond three years).
www.tigerbrands.com
3
Our value
contribution in 2020
Financial performance (from continuing operations)
+4%
R29,8
billion
-18%
R2,6
billion
-240bps
8,7
percent
-23%
1 196
cents
-37%
670
cps
Revenue
2019: R28,6 billion
Group operating
income*
2019: R3,2 billion
Group operating
margin*
2019: 11,1%
HEPS
2019: 1 556 cents
Total dividend
2019: 1 061 cps
* Before impairments and abnormal items.
Providers of financial capital
Consumers
› R740 million paid in dividends
(2019: R2,3 billion)
› Return on equity 10,5% (2019: 13,9%)
› Return on net assets 21,6% (2019: 26,1%)
› Cash generated from operations R3 billion
(2019: R3,5 billion)
Customers
(retailers, wholesalers and general trade)
› 26% value share
› 96% on-shelf availability
› 90% order-fill
Employees
› R4,1 billion paid in salaries and benefits
to 11 188 permanent employees (2019: R4,0 billion
to 10 543 employees)
› 79% of leadership positions filled internally
› Recognised by Top Employers Institute as a
Top Employer 2020
› Launched immunity campaign on the Morvite brand
in the context of Covid-19
› Launched the “perfect store”* initiative
› Supported at-home consumption, communicated
recipe content, listed on major e-tailing and retailers’
online platforms
› Launched value offerings through multiple
configurations of Tiger hampers, extra value packs
such as Jungle 1kg + 100g free, specific packs for
discount channels Oros 500ml and Brookes Crush
Suppliers
› R474 million in savings across the supply chain
› R13 billion spent with BBBEE-verified suppliers
› R5 billion spend with black-owned enterprises
› R4 billion spend with black women-owned enterprises
Communities and environment
› R32 million total socio-economic development spend
› 87 million meals and 74 455 learners supported by
› 2 employee fatalities and 1 contractor (2019: 1)
Tiger Brands Foundation
* This programme highlights the in-store execution standards expected from our field sales teams. It provides shoppers with the product range they expect to
find in the outlet type, correctly merchandised and displayed, and at a price they are willing to pay for the product.
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Tiger Brands Limited Integrated annual report 2020
Group profile
Our core business is providing everyday branded food to large and growing markets through
a unified customer sales team and effective supply chain that leverages the group’s scale. We
target best-in-class profitability, underpinned by a cost-conscious culture and environmental,
social and governance (ESG) principles to create and share value.
Grains
+5%
R13,9bn
Revenue
2019: R13,2 billion
-14%
R1,2bn
Operating income
2019: R1,4 billion
Consumer Brands – Food
+3%
R9,7bn
Revenue
2019: R9,4 billion
-20%
R830m
Operating income
2019: R1,0 billion
Home, Personal Care and Baby (HPCB)
+5%
R2,8bn
Revenue
2019: R2,7 billion
-6%
R510m
Operating income
2019: R546 million
Exports and International
+4%
R3,4bn
Revenue
2019: R3,2 billion
-51%
R103m
Operating income
2019: R212 million
Revenue (R’bn)
2020
2019
2018
Operating income (before IFRS 2) (R’bn)
2020
2019
2018
Revenue (R’bn)
2020
2019
2018
Operating income (before IFRS 2) (R’bn)
2020
2019
2018
Revenue (R’bn)
2020
2019
2018
Operating income (before IFRS 2) (R’m)
2020
2019
2018
Revenue (R’bn)
2020
2019
2018
Operating income (before IFRS 2) (R’m)
2020
2019
2018
14
13
13
1
1
2
10
9
10
0,8
1,0
1,0
3
3
2
510
546
341
3
3
4
103
212
320
www.tigerbrands.com
5
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.
Revenue
Operating income
Grains
Consumer
Brands – Food
HPCB
Exports and
International
● 47%
● 33%
● 9%
● 11%
2019: 46%
2019: 33%
2019: 9%
2019: 12%
● 46%
● 31%
● 19%
● 4%
2019: 44%
2019: 32%
2019: 17%
2019: 7%
Milling and Baking
› Baking
Other grains
› Pasta
Milling
› Flour
› Maize
› Sorghum
› Oat-based
breakfast (Jungle)
› Rice
Beverages
› Concentrates
› Sports drinks
› Ready-to-drink
Groceries
› Condiments and
ingredients
› Spreads
› Canned fruit and
vegetables
Snacks & Treats
› Sugar
› Chocolate
Home Care
› Sanitary cleaners
›
Insecticides
Baby
› Nutrition and
wellbeing
Personal Care
› Camphor cream
and lotions
› Hair care
Campho r
Exports
International
operations
› Central Africa
(Chococam)
Deciduous fruit
› Langeberg
and Ashton
Food (LAF)
Market share %*
Grain
Maize
Flour
Bread
Cereals
Pasta
Rice
Market share %*
Groceries
Spread
Condiments
Canned fruit
and vegetable
Snacks and treats
Chocolate
Sugar
Beverages
Concentrates
Sports drinks
Ready-to-drink
Market share %*
Home care
Personal care
Camphor cream
Baby
Wellbeing
Nutrition
Homogenised
baby food
27
11
28
34
23
34
42
39
38
44
52
20
12
38
36
43
34
17
39
5
91
38
9
57
85
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* Market share limited to South Africa.
Source: Nielsen.
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Tiger Brands Limited Integrated annual report 2020
Group profile continued
Many of our brands hold number 1 or number 2 positions in market share and equity in their
respective categories and have celebrated many external awards for being South Africa’s
most loved brands
Equity
Volume share
Value share
#1
#1
#1
#1
#1
#1
#3
#2
#2
#2
#3
#3
#2
#1
#3
#1
#1
#1
#1
#1
#1
#1
#1
#2
#1
#1
#1
#1
#2
#1
#3
#3
#3
Source: Kantar Brand Health Tracker; Nielsen, September 2020.
We currently export our products
to 33 markets in Africa
› Almost 80% of total export sales
from five markets – Mozambique,
Zimbabwe, Zambia, Nigeria
and Cameroon
Mali
Niger
Chad
Burkina Faso
Guinea
Sierra Leone
Ghana
Liberia
Nigeria
Cent Afr Rep
Cameroon
Sudan
Equatorial Guinea
Rep of
Congo
Gabon
Uganda
Rwanda
DRC
Kenya
Seychelles
Tanzania
Malawi
Mozambique
Angola
Zambia
Madagascar
Mauritius
Reunion
Namibia
Zimbabwe
Botswana
Swaziland
Lesotho
South Africa
Manufacture
Current exports
Out of scope*
* Botswana, Namibia, Lesotho and
Swaziland are serviced by the
domestic business.
www.tigerbrands.com
7
Chief executive
officer’s review
As we approach Tiger Brands’ centenary, amidst the turbulence of an already fragile
economy devastated by the impact of Covid-19, the company is facing a critical inflection
point. Looking at Tiger Brands’ recent history, we have seen the company set back by a
series of failures with little in the way of meaningful successes. Understandably, many of
our stakeholders are looking at us with a degree of healthy scepticism, questioning
whether the company will be able to effect the long-awaited turnaround and recover from
its under-par performance.
The company’s executive team, assembled largely over the last two years, is fully
aware of the significant challenges that the company faces. As a team, we are
determined to ensure the creation of a Tiger Brands that will thrive and grow into
its second century, a company fit to compete in the “new normal”. There
is no doubt that this is going to be challenging, but I believe that we have the
capability to turn this around, with the right strategy, operating model and
management team in place to ensure our resilience and growth. In this report,
we seek to provide our investors and other interested stakeholders with the
information needed to make an informed assessment of our ability to create
long-term value.
A positive response to the Covid-19 pandemic
Although this was a challenging year, we are beginning to see signs of
stabilisation, suggesting that we are turning a corner and building momentum.
Noel Doyle
Chief executive officer
A particular highlight among all the challenges has been Tiger Brands’
response to the Covid-19 pandemic, with the company acting positively
and proactively to protect both lives and livelihoods.
In responding to the pandemic, our main objectives were to keep our employees
safe, to ensure the consistent availability of our products, and increase food
support to communities most in need.
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Tiger Brands Limited Integrated annual report 2020
Chief executive officer’s review continued
In the face of Covid-19, we acted rapidly to protect the
safety and wellbeing of employees, prioritising remote
working where possible, introducing health screening and
testing for staff at essential services sites, accompanied by
daily deep cleaning and rigorous hygiene and sanitisation
protocols, as well as numerous other measures to ensure
employee wellbeing. I am saddened to report that 11 of
our employees died after contracting the virus. I extend my
deepest sympathies to the families of all those who have
been severely affected. In the context of these profound
challenges, the response of our staff was superb, with
record levels of attendance at essential sites during the first
six weeks of lockdown, notwithstanding high levels of
anxiety and uncertainty around the science of the virus
at the time.
Following the introduction of the government’s strict
lockdown requirements in late March 2020, Tiger Brands
was quick to ensure a continuous supply of product in
response to initial panic buying and pantry loading. We
developed and implemented response protocols to ensure
product safety, worked with suppliers, logistics and
customers to limit disruptions, and provided effective
communication to address concerns around food security.
These efforts were accompanied by a strengthened focus
on our numerous community food and nutrition
programmes for families, school children and frontline
healthcare workers and hospitals.
The role of Tiger Brands as an “essential service
provider” highlighted the importance of our
business as a key contributor to food and nutrition
security in South Africa, as well as reminding us of
our responsibilities in protecting the wellbeing of
our employees and communities. This has brought
new life to the societal purpose at the heart of
our company, “to nourish and nurture more
lives everyday”.
Subdued performance in a tough trading
environment
Our financial performance this year reflects the tough
operating environment, with the combination of reduced
consumer spend and rising input costs placing pressure
on volumes and our ability to recover costs. In addition,
the year’s performance reflects the impact of Covid-19
in terms of related costs and supply chain disruptions.
Notwithstanding the difficult trading environment, the
company experienced sustained demand in certain
categories in the second half due to increased at-home
consumption influenced by Covid-19 response measures.
However, there were corresponding headwinds in terms of
consumer demand in Snacks & Treats, Beverages, Out of
Home and Baby. Exports were adversely affected by a
trademark dispute with a former distributor in Nigeria,
restricting sales into that country for most of the year.
The subsequent resolution of this dispute resulted in the
resumption of sales into Nigeria, which has provided
positive momentum going into the new financial year.
In addition, a rebound of our export volumes into
Mozambique is evident after several years of
underperformance.
Revenue from continuing operations increased by 4%,
underpinned by price inflation of 6% and partially offset by
an overall volume decrease of 2%. Declining volumes in
certain categories, coupled with the inability to fully recover
significant raw material cost push, placed gross margins
under pressure, resulting in group operating income
declining by 18% to R2,6 billion (2019: R3,2 billion).
In August this year we entered into two separate sale-of-
business agreements for our VAMP business units. The
acquisition of the abattoir business at Olifantsfontein
by Molare Proprietary Limited became effective on
28 September 2020, while the disposal of the VAMP
processing facilities was successfully concluded post
year-end. A significant outcome that we achieved in
selling these businesses as going concerns is that we
safeguarded the jobs of almost 1 000 employees, a key
consideration given the escalating unemployment in the
country.
www.tigerbrands.com
9
Our strategic priorities: balancing short-
term impact with long-term growth
In 2017, we completed a comprehensive review and
update of our five-year growth strategy in which we agreed
a clear set of commitments for each of the four strategic
focus areas – Drive Growth, Be Efficient, Great People and
Sustainable Future. Our strategic focus this year has been
on delivering against these commitments and embedding
the strategy more broadly across the company. We have
placed particular emphasis this year on driving those
operational initiatives that will improve the performance
of our current portfolio and deliver an effective turnaround
over the short term, while setting us up for longer-term
growth.
It is important to recognise that while any initiatives we
take should be limited to those that will have a meaningful
impact with a higher probability of success, our response
cannot have the luxury of a single-minded focus.
Ensuring a much-improved performance in FY21 is
a non-negotiable to restore investor confidence –
and to secure the time needed for our turnaround
strategies and investments to show results – but
this cannot be done at the expense of longer-term
growth.
In managing our time and resources we need to find the
right balance between the short-term pressure to deliver
results, and the need to facilitate longer-term growth,
recognising that we are behind in this regard.
In seeking to find this balance, we have identified the
following five immediate priorities for restoring value:
› We will be accelerating the pivot towards consumer
and shopper orientation, strengthening our focus on
meeting consumers’ needs. While we are mindful of
other key consumer trends – such as health and
nutrition, “snackification”, at-home consumption, and the
shift to e-commerce – our priority focus for the next three
years will be on delivering value to the consumer, given
the particularly constrained consumer environment. In
addition to driving our relevance in the value segment by
building the clear benefits of our current brands through
marketing best practice, we will meet the needs of the
value consumer by driving innovation and renovation
in our product portfolio, implementing price-ladder
opportunities within specific brands and categories,
and identifying commercially viable opportunities to
manufacture private label products to our benefit.
› A critical enabler of our growth plan is to improve
our supply chain. We are placing particular focus on
restoring competitiveness in our manufacturing activities,
improving overall equipment effectiveness and service
levels, reducing wastage, and completing our key site
optimisation planning, with a continued emphasis on
ensuring robust food quality and safety systems across
the company.
› We will maintain a relentless focus on reducing costs
›
across all areas of the income statement in a systemic,
urgent but measured fashion, with a view to ensuring the
sustainability of these cost savings. To deliver on our
ambitious efficiency targets, this year we introduced a
step-change in how we engage the business on cost
savings, changing our governance structure, introducing
clear steps from the identification to realisation of
savings, implementing stronger levels of transparency
and accountability, and beginning to improve our SKU
rationalisation through the development of a process
map and the roll out of activity-based costing.
In addition to improving our current performance, we will
be creating the right platforms for us to grow. In terms
of organic growth: we are optimising our portfolio,
focusing on those categories with high attractiveness
and competitive strength that should be protected,
invested in and grown; we are driving innovation within
existing and into adjacent categories; we are pursuing a
range of customer and channel initiatives, underpinned
by trading terms that work for us as well as the
customer; and we are identifying and realising
opportunities for category growth in selected African
markets. While our primary focus is on driving organic
growth, we are continuing to explore opportunities for
inorganic growth.
› Delivering on these objectives is ultimately dependent on
us having the right culture. Our fifth priority focus is thus
on igniting our people to instil an agile performance-
based culture where calculated risk taking is
encouraged, recognised and rewarded. For too long,
too many of our teams have been internally focused and
risk-averse, acting in silos and focusing on short-term
returns. Our goal is to create a culture of accountability
that delivers long-term growth through consumer-
focused innovation.
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Tiger Brands Limited Integrated annual report 2020
Chief executive officer’s review continued
While our immediate priority is on addressing the
commercial exigencies we face, we have not lost sight of
our strategic commitments to a sustainable future – and
our associated goals on health and nutrition, enhanced
livelihoods, and environmental stewardship – and it is
encouraging to see some initial progress made this year.
It is fair to say that in the past Tiger Brands has been
somewhat insular from its broader role and responsibilities
in society. Recognising the significant social and
environmental challenges within the food system, it is
imperative that the company is clearer in acknowledging
and managing its broader societal responsibilities. Going
forward, we will be more active in using our influence for
the greater good, with a confidence borne of competence,
but tempered with genuine humility.
To deliver effectively on all of these priorities, we
have revised our operating model with the aim
of providing the individual business units with
the benefits of Tiger’s scale, but with sufficient
autonomy, accountability and flexibility so that this
benefit is not eroded by the inertia of command and
control from the centre.
The Tiger we are looking to build is not the clichéd oil
tanker – too big, too bulky, too cumbersome to make
the necessary changes – but rather a convoy of sleek
destroyers, close enough to each other to maximise
mutual benefit, but far enough away to avoid a single
catastrophic incident and nimble enough to be able to
make their own evasive and offensive moves. A convoy
that changes shape and composition from time to time,
but retains its essential form, with the individual business
units focusing on excellence in execution, and intimacy
with consumers and customers.
Maintaining our strategic enablers
Delivering on these strategic priorities requires a continued
focus on good governance, robust food quality and safety
systems, employee health and safety, and stakeholder
responsiveness, all areas that we review in more detail in
this report. There are two issues that I wish to mention
briefly upfront.
Firstly, on employee health and safety. While Tiger’s
response to protecting employees during the pandemic
has been admirable, we still have work to do in areas of
our occupational health and safety. I am saddened to
report that there were three work-related fatalities this year.
In February 2020, Adam Makhado was involved in a motor
vehicle accident, and in July 2020, Mboniseni Innocent
Sithole died in an attempted robbery in Daveyton. Both
were employees of Albany and were delivering bread at the
time of the incidents. In October 2019, a contractor at
Davita, Kuda Sithole, suffered fatal internal injuries when
the machine he attempted to instal fell on him. My sincere
condolences go out to the families. We have provided
support and counselling to the families of our employees
and are implementing appropriate response measures to
minimise the potential for future such incidents. There
continues to be a concerning number of violent route-to-
market incidents, particularly with bread deliveries. We
acknowledge the magnitude of the challenge and are
resolute in addressing it. Our immediate efforts include
undertaking regular risk assessments of all delivery routes
and developing tailored response measures. We are
exploring longer-term solutions such as enhanced use of
technology for more effective security provision, as well as
the use of digital payment systems.
The second issue to highlight is our continued strong
emphasis placed on food safety and quality and the
various measures we have taken to ensure that we have
robust management systems, qualified people and a
strong quality culture embedded across the organisation.
We have further strengthened our audit and assessment
processes, achieving external certification for all our
manufacturing facilities against globally recognised food
safety standards such as FSSC 22000 and HACCP, and
started the certification process for our warehouses. It is
encouraging to report that we maintained an improving
trend on our quality KPIs, ending the fiscal year with zero
public recalls, a 25% reduction in market-place incidents
and another 5% reduction in consumer and customer
complaints.
Outlook
There is no doubt that we face some tough times ahead,
with an already weak economy further impacted by the
after-effects of Covid-19 lockdown measures, the
economic downturn is likely to be significant. The
anticipated volatility of the rand and increasing levels
of unemployment will negatively impact both the supply
and demand dynamics of our business, with consumer
disposable income under profound pressure. Huge
uncertainty remains regarding the longer-term outlook for
the Covid-19 pandemic. Recent developments in Europe
and elsewhere suggest the potential for a second wave,
placing possible pressure in terms of export bans and port
facilities in terms of imported inputs. At the same time, as
markets open up, we are likely to see less consumer
funds dispersed across a broader range of categories,
highlighting the need for an absolute emphasis on value
offerings and cost containment.
Given this challenging outlook, I believe our strategic
approach and revised operating model presents the right
foundation to ensure our resilience, enabling us to harness
the diversity of our product portfolio, the strength of our
heritage brands, the quality of our customer relationships
and distribution networks, and the health of our balance
sheet to absorb the anticipated headwinds. Doing so
requires that we find that critical balance between
delivering a short-term turnaround that stakeholders
understandably are expecting, but not at the expense
of longer-term growth.
www.tigerbrands.com
11
Appreciation
This has been an incredibly eventful and challenging start
as CEO of Tiger Brands. Despite the significant challenges,
at a personal level it has also been stimulating thanks to
the dedication demonstrated by Tiger’s employees and my
colleagues on the executive team, particularly in their
response to Covid-19. I wish to extend my thanks to my
colleagues on the executive team for their support, and
to the Tiger Brands’ board for their advice under the
leadership of our chairman, Dr Khotso Mokhele. After
thirteen years on the board, and almost four years
as chairman, Dr Mokhele will be stepping down with effect
from December 2020. I wish to thank him for his dedication
and contribution to the company and wish him well in his
future endeavours.
We are pleased to welcome Ms Geraldine Fraser-Moleketi
who was appointed as independent non-executive director
and chairman designate in September 2020. She will
assume the role of chairman with effect from January
2021, bringing valuable experience and fresh perspectives.
We have also been joined on the board this year by Ian
Burton and Olivier Weber, both of whom have extensive
expertise in leading innovation and growth in the FMCG
sector globally.
We face some challenges ahead, but I am confident that
together the company’s employees and leadership teams
will ensure that Tiger Brands delivers on its potential in
creating long-term value.
Noel Doyle
Chief executive officer
19 November 2020
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Tiger Brands Limited Integrated annual report 2020
Our business model
Tiger Brands creates value and delivers on its purpose by producing, marketing and
distributing everyday branded food, home and personal care products, predominantly
in South Africa with a growing market presence across Africa.
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Social and relationship capital
› Committed workforce
› Investor confidence
› Constructive relationship with
government and regulators
› Positive supplier and customer relations
› Trusted brand and reputation with
consumers and society
› Stable operating context contributing
to sustained market demand
Our people
› Strong and diverse board
› Experienced executive team
› 11 188 permanent employees
(2019: 10 543 permanent)
› Enabling environment
› Adequate governance structures
› Improved reward and personal
development opportunities
Our brand and reputation
› Strong brand and reputation
› Unique product formulations
and trusted recipes
› Research and development capacity
› Governance and business systems
Manufactured capital
› 40 manufacturing facilities
› 29 sites
› Logistics and distribution
Financial capital
› Equity
› Borrowings
› Cash generated from operations
Natural resources capital
› Local and imported raw
materials and ingredients
› Water and energy for production
› Fuel (diesel and petrol) for distribution
as well as manufacture
› Fertile soil and conducive
agricultural conditions
Wheat
Our external
environment
› Muted consumer spend in a
weak economy
› Increasing competition and
power shifts in food retail
› Changing consumer dynamics
and growing complexity
› Increasing stakeholder pressure
for responsible business
leadership
› Covid-19 compounding the
impact of existing trends
Rice
Maize
Oats
Throughput of primary
agricultural products
transformed into
Sorghum
branded food items.
Tomatoes
and beans
Our top 10 risks
1.
Albany route-to-market
Fruit
and nuts
Sugar
2. Negative impact of
Covid-19
3.
Business continuity
vulnerabilities
4. Operating environment
5.
Food safety and product
quality
6. Occupational health
and safety
7.
Information and cyber
security
8. Data and information risk
9.
Attract and retain critical
skills
Cocoa
10.
Intensifying competition
www.tigerbrands.com
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Our core target consumers are middle-income consumers, the largest
and fastest growing segment. Our core category is food with immediate
adjacencies in beverages, snacks and treats.
Value chain
activities
Procurement
Procuring raw materials,
ingredients and packaging
from local and international
markets
Manufacturing
Converting raw materials into
quality food, home and
personal care products, using
Tiger Brands’ proprietary
formulations
Research and development
Monitoring consumer tastes
and trends, and investing in
product and process research
and development, to ensure
that we maintain a leadership
position
Packaging and logistics
Packing our products in
branded packaging, and
distributing these products as
efficiently as possible to
consumers through a network
of customers that include
retailers, wholesalers and the
general trade
Marketing and branding
Supporting these activities
with our strategic marketing
and branding initiatives, and
our focused corporate social
investment activities
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Our revenue streams comprise:
› Grains (47%)
› Consumer Brands (33%)
› Home, Personal Care and Baby (9%)
› Exports and International division (11%).
Material revenue differentiators
›
The group’s long-standing market-
leading position in branded food and
beverages
› Our “power brands”, most of which are
rated first or second in their respective
categories and that have received many
external awards for being South Africa’s
most loved brands
› A robust marketing strategy to ensure
our brands remain relevant and
top-of-mind, supported by increased
and targeted investment
Far-reaching distribution capabilities
The strength and quality of our
relationships with our customers
› Strong consumer insights informing
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category strategies.
Milling and Baking
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Other grains
Groceries
Snacks & Treats
Beverages
Social and relationship
✓ Provision of affordable nutrition
✓ Economic opportunities across
value chain
✓ Community impact of operations
✗ Contribution to non-communicable disease
Outcomes on page 16.
Our people
✓ Investment in employee skills and motivation
✓ Investment in employee health and safety
✓ Enhanced employee and board diversity
✗ Some negative health and safety incidents
Outcomes on page 16.
Our brand and reputation
✓ Investment in maintaining brand equity
✓ Innovation launches including in health and
nutrition, value and convenience
Outcomes on page 16.
Manufactured capital
✓ Investment in modernising plant
and equipment
✗ General wear and tear/depreciation
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Outcomes on page 17.
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Our most significant cost streams
are:
› Raw material procurement
› Employee wages and benefits
› Sales and distribution expenses
› Electricity and fuel
› Marketing expenses
› Regulatory compliance costs
› Maintenance and upgrading of plant and
equipment
› Other administrative costs.
Material cost differentiators
› Our ability to leverage scale through
a centralised procurement hub
› Standardisation and simplification of
group processes, systems and practices.
Financial capital
✓ Dividends
✓ Return on net assets
✓ Return on equity
✓ Return on invested capital (ROIC)
✓ Favourable funding terms
Outcomes on page 17.
Natural resources
✓ Investments in numerous mitigation measures
✓ Innovation in products, processes and
consumption
✗ Raw material extraction
✗ Energy use and GHG emissions across
value chain
✗ Water use and potential contamination
✗ Habitat impacts across supply chain
✗ Environmental incidents
Outcomes on page 17.
OUR BUSINESS MODEL / OUR BUSINESS
14
Tiger Brands Limited Integrated annual report 2020
Our business impacts
Investing in the capital stocks
Our actions to sustain value
› Product and process innovation
including on health, convenience,
e-commerce and value
› Active engagement with suppliers
› Trading terms that are fair, equal and
available to all customers
› Regular investor communication
› Structured engagement with
›
regulators; continued focus on
compliance and societal contributions
Increased food support to
communities most in need during the
National Disaster period
Outcomes of our activities
Generally positive relations across key stakeholder groups:
✓ 25% reduction in market-place incidents
✓ 5% reduction in consumer complaints
✓ R13 billion BBBEE supplier spend
✓ Recognised role in ensuring stability of food supplies during initial
✓
panic buying with lockdown
Increased investment in community food and nutrition programme during
pandemic, with additional nutritional support to frontline healthcare
workers
Continuing concerns in certain areas
✗ Pending listeria Class Action lawsuit and ongoing associated reputational
concerns
✗ Some investor uncertainty on long-term results in tough market
Material inputs
› Committed workforce
› Investor confidence
› Constructive relationship
with government and
regulators
› Positive supplier and
customer relations
› Trusted brand and reputation
with consumers and society
› Stable operating context
contributing to sustained
market demand
Capital trade-offs
› Our success as a business depends ultimately on the quality of our relationships with key stakeholders. These stakeholders have different and sometimes
›
conflicting priority interests (see page 16); balancing these competing interests requires trade-offs as we prioritise certain outcomes over others.
Investing in social and relationship capital also often requires short- and medium-term financial capital inputs, placing heightened pressure on margins in
the short term, but generally generating positive return across most capitals over the longer term. This trade-off between delivering short-term results – to
enhance investor sentiment and attracting necessary financial capital – against the need to deliver longer-term sustainable growth, is one of the more
challenging trade-offs affecting businesses generally.
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See page 46 and sustainability report.
Our actions to sustain value
› Three-pillar people strategy focusing
on building a diverse talent base,
developing leadership capacity, and
creating a great place to work
› Employee reward and personal
development opportunities
› Sustained focus on promoting
›
›
diversity and employment equity
Identified as an essential service,
prioritised employee health and safety
during the lockdown period
Implemented an incentive scheme for
the initial lockdown period to reward
those employees at essential site level
bravely ensuring continuity of supply
and production
Outcomes of our activities
Improving employee motivation in a more challenging Covid-19
context
✓ During the initial lockdown phase, 100% attendance at all essential
manufacturing and distribution sites and almost 90% attendance of our
outsourced merchandising service provider, Tiger Brands Field Services
✓ Voted number 1 employer of choice in manufacturing sector by
graduates
✓ Recognised as a Top Employer 2020
Enhanced board diversity
✓ 60% black and 47% female on board
✓ Recent appointments bring extensive FMCG knowledge as well as global
experience and contemporary skills in digital concepts and innovation
Enhanced employee diversity
➠ African employees comprised 95% of internal appointments
Managed impacts on employee safety
✗ Two route-to-market fatalities (2019: 1) and one contractor fatality
➠ 0,34 lost-time injury frequency rate (2019: 0,38)
Material inputs
› Strong and diverse board
› Experienced executive team
› 11 188 permanent
employees
(2019: 10 543 permanent)
› Enabling environment
› Adequate governance
structures
› Improved reward and
personal development
opportunities
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Capital trade-offs
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Labour remains one of our most significant costs. In the context of tough operating conditions there has been a strong drive to identify opportunities for
further labour efficiencies and productivity gains across our operations. While reducing labour costs has benefits in terms of financial capital, it has
potentially significant negative implications in human and social capital.
Investing, attracting, retaining and developing executive talent is a material cost, depleting financial capital in the short term, but resulting in returns in most
capital stocks in the longer term.
›
› We made significant financial investments this year in protecting the safety and wellbeing of our employees in response to Covid-19, reorganising some
areas of the business for remote working, introducing robust testing and hygiene protocols at our essential services facilities, and providing additional staff
wellness and support facilities, all of which contributed to enhanced social capital
See page 42.
Our actions to sustain value
› Drive innovation and renovation for
value specific consumer needs
› Deploy marketing best practice toolkit
›
across the business
In response to Covid-19, provided
meal tips and showed versatility of
products such as Crosse & Blackwell
reimagining food
› Drive relevance in value segment by
building the clear benefits of our
current brands
Outcomes of our activities
Sustained a strong brand presence
✓ Completed purpose journeys on majority of the billion rand brands with
✓
evident impact
Ingram’s “Your Skin, Your Brave” campaign had a positive impact on
spontaneous awareness in a category dominated by large global
competitors and helped modernise brand perceptions
Innovation launches, including:
✓ Value: Launched extra value packs e.g. Jungle 1kg + 100g free,
Induna maize, specific packs for discount channels and Brookes Crush
✓ Price pack architecture: Jungle plus 500g refills
Material inputs
› Strong brand and reputation
› Unique product formulations
and trusted recipes
› Research and development
capacity
› Governance and business
systems
Capital trade-offs
› Tiger Brands’ legacy is built on the strength of our brands and the quality of our products, which in turn depends on our proprietary product recipes,
our capacity to innovate in response to changing consumer preferences, our robust food quality and safety systems, and our innovative marketing and
consumer engagement. Maintaining our leadership in these areas is key to long-term growth, but often has short-term implications on financial capital.
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See page 37.
www.tigerbrands.com
15
Our actions to sustain value
› R937 capital expenditure in
manufacturing capability and
technology
› Prioritised key value items during
›
Covid-19 lockdown phases
Initiated a new capex approval
process
Outcomes of our activities
✓ Ensured availability of our products and sustained food security
throughout the Covid-19 lockdown phases
✓ 96% on-shelf availability
Some challenges remain
✗ Overall gross margin compression
✗ Supply chain challenges in Groceries
✗ Growth in private label penetration
Material inputs
› 40 manufacturing facilities
› 29 sites
› Logistics and distribution
Capital trade-offs
›
Investing in plant and equipment is beneficial for longer-term growth, and often leads to cost-efficiency and reduced environmental impacts, but can impair
short-term financial performance.
› Modernising facilities may lead to job losses, negatively impacting social and human capital. Any job losses generally contribute to reduced consumer
spend and undermine market growth.
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See page 40.
Our actions to sustain value
›
Implementation of fit-for-future
operating model with clear lines of
accountability
› Continued drive on operational
efficiency
› Strong corporate governance
structures
› Acceleration of portfolio optimisation
initiatives
Outcomes of our activities
✓ Disposal of VAMP
✓ 21,6% return on net assets (RONA) (2019: 26,1%)
✓ R97 million paid in net interest (2019: R0,2 million net interest received)
✓ R3,0 billion cash generated from operations (2019: R3,5 billion)
✓ Savings of R474 million (2019: R616 million)
✓ Total dividend per share declared: 670 cents (2019: 1 061)
✓ 10,5% return on equity (2019: 13,9%)
✓ ROIC 11% < weighted average cost of capital (WACC) 12,7%
(2019: 14,2% > 12,5%)
› Clear guiding principles in response to
✓ Cost of equity of 14,2% (2019: 11,7%)
the growth of private label
Material inputs
› Equity
› Borrowings
› Cash generated from
operations
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Capital trade-offs
› Ensuring sustainable growth in financial capital sometimes involves making significant capital investments in the short term – for example to maintain and
optimise plant and equipment, invest in R&D, and develop employee talent – or alternatively involves divesting from certain businesses and/or closing plant.
Some of these activities to optimise financial capital may be more efficient and have positive benefits in terms of safety and the environment, but come at
the cost of employment opportunities, undermining social capital and contributing to broader downward trends in consumer spend.
› Our strategic direction informs the allocation of capital to balance the short-term interests of certain stakeholders with long-term growth objectives.
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See page 50.
Our actions to sustain value
› Continued energy and water efficiency
measures, with supporting mitigating
plans to ensure continuity of
production
Investment in innovations to optimise
packaging and reduce waste
›
› Partnerships to reduce food waste
and packaging waste
Outcomes of our activities
Some progress in mitigating impacts
✓ Absolute water use down 8,84%; water intensity down 5,86%
✓ 8,23% reduction in emissions intensity
✓ Absolute energy use down 5,34%; energy intensity down 5,69%
Challenges remain in certain areas
✗ Although we have improved our environmental governance and
legislative adherence through key industry partnerships, monitoring and
responding to community concerns continues to be an important factor
for Tiger Brands
✗ Reliability of electricity and water supply
✗ Adverse weather conditions impacting the supply, cost and quality of
raw materials
Material inputs
› Local and imported raw
materials and ingredients
› Water and energy for
production
› Fuel (diesel and petrol)
for distribution as well as
manufacture
› Fertile soil and conducive
agricultural conditions
Capital trade-offs
› Although natural capital is a critical input for all of our activities, our means of generating value across the other capitals often involves some negative
impact on natural capital which is sometimes only apparent in the longer term. The global food system is recognised as having a significant impact on
biodiversity and habitat loss, climate change and packaging pollution, placing direct pressure on some of the resources we depend on, and heightening
consumer and regulatory pressure for more sustainable practices.
› Given our dependency on natural capital, as well as the potential impact on reputational capital, we strive to minimise environmental impacts across our
value chain by investing in mitigating measures in our processes, products and packaging. These measures may themselves have trade-offs – for example
using more packaging to reduce food waste, or investing in carbon-efficient technologies that reduce jobs. Balancing these trade-offs is an important
challenge affecting all businesses in resource-related sectors, and increasingly requires collaboration and innovation.
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See page 46 and sustainability report.
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Tiger Brands Limited Integrated annual report 2020
Our key relationships
Recognising the critical importance of understanding and being responsive to our
stakeholders’ interests, we have introduced a structured stakeholder relations strategy
to ensure a consistent and proactive approach to engagement across the group.
In 2017 we undertook a dedicated engagement process
to develop a baseline appreciation of stakeholders’
perceptions regarding our existing engagements, and to
identify opportunities to foster increased inclusivity. Since
October 2018, we have been working with various
stakeholder groups to develop and implement site-specific
stakeholder engagement plans. During 2020, we spent
more time in our host communities undertaking social-
mapping exercises. The results of these exercises have
enabled us to be more responsive to specific community
needs, and to co-create impact programmes with
communities to bring about mutually agreed change. In the
table below we identify those stakeholder groups that have
a substantive impact on our ability to create value, briefly
outlining their contribution to value creation, our means of
engaging with them, and each stakeholder group’s primary
interests relating to our business activities. Although we
appreciate that there is often substantial diversity of
perspective and interest within each group, we believe that
the interests listed below are a sufficiently accurate
reflection of each group’s most material interests regarding
Tiger Brands’ activities and performance.
Employees
Provide the experience, productivity and skills needed to deliver our strategy
How we engage
› CEO and
executive-led
engagements
› Category
executives and
factory
management-led
engagements
› Internal website
› Data-free mobile
communication
application
› Newsletters and
email
› Internal videos
› News boards
› Employee hotline
› Employee
engagement
sessions
› One-on-one
consultations
› Thrive employee
wellbeing
programme
communications
Material interests
Our response
› Talent and career
development
› Employee relations
›
Inspirational leadership
and transparency
› Enabling environment
› Teamwork and
collaboration
› Protocols, practices
and processes
› Diversity and inclusion
› Employee safety during
Covid-19
› Rationale for
commercial decisions
in particular disposals
› Ongoing Class Action
litigation
› Launched partnership engagement sessions with our union
leaders led by the CEO and executive team on business
and employee matters; in future these will be conducted
biannually. (See page 45)
› The Voice of Tiger, which is our company experience and
engagement pulse survey launched in November 2020.
The survey gives all our employees a confidential, digitally-
enabled platform to give feedback to Tiger Brands on how
they experience the organisation, culture and leadership by
responding to a set of benchmark questions. The results
will be used to design actions to further progress our
culture transformation journey, improve employee
experience and accelerate winning performance across the
organisation. The comprehensive survey will be conducted
once a year going forward but regular short and focused
dip-stick surveys will take place quarterly.
› Continued with Heart of the Tiger employee dialogues on
values and winning behaviours.
› Revived and communicated our employee value
proposition and employer brand. (See page 44)
› Completed fit-for-future organisational restructure.
(See page 42)
› Key changes made to business leadership.
› 79% of leadership positions filled internally, with African
employees comprising 95% of internal promotions this
year; 46% female and 54% male. (See page 43)
› Prioritised safety of work force and employee wellbeing
over the period of National Disaster. (See page 44)
› Regular communication through various channels and
platforms.
www.tigerbrands.com
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Customers
Our retail and wholesale customers, provide consumers with ready access
to our product
How we engage
› One-on-one
personal
engagements
› Business forums
› Collaborative
forecasting and joint
business planning
Material interests
Our response
› Product provided on
› Played a vital role in ensuring the ongoing
agreed terms
› Trading terms that are fair,
equal and available to all
› Portfolio rationalisation in
the context of disposals
› Optimal consumer
propositions
› Reducing packaging
footprint
availability of essential food items during the
period of National Disaster, especially during the
initial lockdown period. (See page 52 and
sustainability report)
› Various customer engagements to ensure
clarity on expectations, including through jointly
developed business plans. Launched the
Perfect Store Initiative. (See page 3)
› Created Tiger hampers in various configurations
cognisant of store formats, time of month and
shopper specific.
› Exploring alternative sampling options such as
new pack sizes, online partners and digital
solutions.
› Working closely with customers to reduce
packaging footprint.
Media
Contribute to brand reputation and enhance stakeholder awareness of our
products and performance
How we engage
› CEO/CFO
engagement as
appropriate
› Dedicated media
section on our
website
› Media releases
› Social media
presence
Material interests
›
Increase access to
management and
information
› Media governance
› Fair treatment of
consumers
› Food security
› Ongoing Class Action
litigation with potential
liabilities
› Operational performance
Our response
› All queries on consumer-related enquiries
addressed within specified timeframes.
› Strengthened media governance and protocols.
› Enhanced media monitoring and analysis.
› See earlier responses on consumers.
›
Interviews, press statements and opinion
editorials.
Interviews, engagement with legal
representatives and press releases.
› Access to the CEO and press releases.
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Tiger Brands Limited Integrated annual report 2020
Our key relationships continued
Consumers
By purchasing our products, and believing in our brand, they provide the basis
for revenue growth
How we engage
Material interests
Our response
› Food safety
› Product quality
› Product affordability
› Health and nutrition
› Dedicated
consumer section
on website
› Packaging
information
› Consumer care line
› Digital platforms
› In-store
engagement
› Focus groups
› Social media
›
Implemented a detailed quality strategy to
ensure a robust integrated management
system. (See page 41 and sustainability report)
› Achieved external certification of all
›
manufacturing facilities. (See page 40)
Introduced Tamper Evident packaging
innovation on Albany bread.
› Provided food security information during
Covid-19. (See page 7)
› Strong focus on ensuring that product quality
meets or exceeds consumer expectations
achieving reductions this year in customer
complaints and market place incidents.
(See page 40)
› Strive to mitigate inflationary pressures through
cost-saving initiatives and operational
efficiencies. (See page 40)
› Specific packs for discount channels.
(See page 37)
› Launched value brands such as Induna Maize.
(See page 37)
› Launched several healthier/more nutritious
products including Jungle cereal bars, Purity
snacks and Koo Black Beans. (See page 37)
› Tips on nutrition and home cooking.
www.tigerbrands.com
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Government
Provides the regulatory framework and informs the socio-economic context
essential for our activities
How we engage
› One-on-one
engagements
› Engagements on
draft regulations
› Public forums
› Industry consultative
bodies
› Parliamentary
processes
Material interests
› Consumer and Customer
Protection and National
Disaster Management
Regulations
› Growth and development
of local agricultural sector
Impact of portfolio
rationalisation on labour
›
Our response
› Supported government’s broader national effort
by deferring price increases of products for the
initial period of the lockdown.
Initiated engagement with the regulators around
the future construct and interpretation of the
Consumer and Customer Protection and
National Disaster Regulations.
›
› Active partnerships to promote agri-sector
development and smallholder farmers.
(See page 46 and sustainability report)
› Engaged with local and relevant national
government departments on developments
with regards to the impact of disposals.
Suppliers
Provide the services and raw materials that form the basis of our
products and activities
How we engage
› Supplier forums
› Site visits
› Supplier
assessments
› One-on-one
engagements
› Website
Material interests
› Timely payment and
fair terms
› BEE/SME supplier
development
› Health and safety
standards
Our response
› Negotiate with strategic suppliers to secure
requirements at reasonable cost.
› Strong drive in place to promote supplier and
enterprise development, investing in smaller
suppliers to diversify the supply base and create
real transformation to our supplier base.
(See page 40 and sustainability report)
› Engage with relevant suppliers on appropriate
health and safety standards.
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Tiger Brands Limited Integrated annual report 2020
Our key relationships continued
Investors
Provide the financial capital needed for long-term growth
How we engage
› Annual and interim
reports
› One-on-one
meetings, non-deal
roadshows, investor
conferences
› SENS
announcements
› Dedicated investor
relations
› Website
Material interests
› Gross margin
compression due to poor
strategy execution
› Ability to sustain
premiums in a value-
orientated economy and
the loss of market share
particularly to private label
› Supply chain disruptions
› Ongoing Class Action
litigation with potential
liabilities
› Company culture, talent
acquisition, succession
and retention
› Dividend policy in the
context of a strong
balance sheet
Our response
›
Implemented a fit-for-future operating model
that enables a focused and relevant solution for
each of our categories. (See page 42)
› Acceleration of portfolio optimisation initiatives.
(See page 50)
› Resolution of dispute in Nigeria supporting
recovery in Export performance. (See page 50)
› Drive relevance in value segment by building
clear benefits of our current brands.
(See page 37)
› Meet the needs of consumers seeking value
using innovation and renovation. (See page 37)
› Select commercially viable opportunities to
manufacture private label. (See page 37)
› Specific commitments to drive efficiency,
maximise product availability and deliver
customer service excellence. (See page 40)
› Further optimised our processes with the aim
of ensuring optimal on-shelf availability and
meeting speed-to-market deadlines for
innovation execution. (See page 37)
Initiated a new capex approval process
introducing a capital review committee with
the aim of expediting approvals and improving
overall project delivery. (See page 40)
›
› Frequent updates on the Class Action process
providing background and context on
developments. (See page 23)
› Newly appointed chairman designate and
additional members with extensive expertise in
leading innovation and growth in the FMCG
sector globally. (See page 62)
› Employer branding campaigns were well
received, with 140% increase in followership on
Tiger Brands’ LinkedIn profile. (See page 42)
› Voted number 1 Graduate Employer of Choice
in the manufacturing sector, and second in the
FMCG sector in the South African Graduate
Employers Association 2020 survey.
(See page 42)
› Certified as Top Employer. (See page 42)
›
Improved succession ratio from 1:1 to 3:1 for
senior executive leadership roles.
(See page 42)
› After withholding the interim dividend, resumed
dividend payments with the total ordinary
dividend in FY20 aligning distributions with the
dividend policy of 1.75x cover based on full
year headline earnings. Paid a special dividend
in FY19 and FY20. (See page 50)
www.tigerbrands.com
21
Communities
Provide the social capital and licence to operate for the business to succeed
How we engage
› Community social
mapping to identify
opportunities to
share value
› Community
mobilisation and
interaction on SED
projects
Material interests
› Food security and related
nutrition issues
› Food support during
Covid-19
› Stimulate economic
activity to support and
sustain community
enterprise development
and job creation
Our response
› Partner with government and developmental
agencies to promote nutrition, health and
education, and contribute to community
development and poverty eradication.
(See page 46 and sustainability report)
› Freed-up R3,5 million in capital through
voluntary salary sacrifices from our senior
leadership
› Assisted our partners with an additional
12 000 food hampers through our Family Food
Programme, with a total of 105 648 hampers
distributed this year
› Adapted our School Nutrition Programme to
distribute 15 000 food hampers to homebound
school children (Tiger Brands Foundation)
› Continued our support of 4 500 students
through our Plates4Days programme
› Donated R9 million worth of bread to various
organisations, including to frontline healthcare
workers at Charlotte Maxeke and Nelson
Mandela Children’s Hospitals and others
› Re-focused our distribution of near-dated
stock and donated 1 000 units of hand sanitiser
and 10 000 food hampers to vulnerable
communities by Food Forward SA
› Supported job creation through the
manufacture of Tiger Brands Covid-19 Safety
Packs
(See page sustainability report)
Initiatives in place on enterprise and supplier
development, and community investment.
(See page 46 and sustainability report)
›
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Tiger Brands Limited Integrated annual report 2020
Chairman’s review
This has been a profoundly unsettling year for all of us – as individuals, families,
communities and employees. The social and economic disruption caused by the
Covid-19 pandemic came on top of an already very fragile economy and social
fabric in South Africa, presenting significant further challenges for consumers,
retailers and businesses more broadly. Tiger Brands’ performance this year reflects
the impact of these challenges and underscores the need for a rapid and radical
turnaround to restore the company’s legacy; its response to the pandemic and
more positive performance towards the year-end give cause for optimism.
Khotso Mokhele
Chairman
Prior to the pandemic, consumer spending in South Africa was already severely
constrained by falling GDP and low wage growth, high unemployment and debt
levels and increasing costs, resulting in consumers buying and spending less,
and shopping smarter. This reduced consumer spend was accompanied by
rising input costs and increased competition, placing sustained pressure on
volumes, market share and margins. The response measures to the pandemic
added to these challenges, prompting an unprecedented downturn in economic
activity, pushing up input and operating costs due to rand weakness and
disruption in supply chains caused by Covid-19. Although Tiger Brands has
benefited from being classified as an essential service and from the increase
in at-home consumption, a combination of regulatory and market pressures
constrained the ability to recover costs.
This tough operating context contributed to another year of disappointing results,
with group operating income and HEPS from continuing operations down 18%
and 23%, respectively. Following the board’s decision to withhold an interim
dividend given the very uncertain outlook at the time, an ordinary final dividend
of 537 cents per share was declared for the year ended 30 September 2020
in line with the dividend policy of 1,75x cover. In addition to the above, the
company declared a special dividend of 133 cents per share as a result of the
once-off proceeds received from the disposal of its VAMP business. The special
dividend, together with the gross final cash dividend, brings the total distribution
for the year to 670 cents per share.
This year’s disappointing performance understandably has added increased
pressure on the company leadership team to demonstrate its ability to turn
things around, and to deliver a sufficiently convincing performance over the short
term, without compromising longer-term growth. Notwithstanding this year’s
numbers, I believe that the various changes introduced in the last two years,
and the progress made this year in embedding these changes, provides a solid
foundation for this turnaround.
www.tigerbrands.com
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Tiger’s response to the Covid-19 pandemic
The Tiger Brands’ board and leadership team have
devoted considerable time and effort this year to ensuring
an effective response to the Covid-19 pandemic. I would
like to commend the employees and leadership team
for pulling together quickly and effectively in ensuring
employee safety, maintaining a secure supply of food,
and supporting affected communities with the provision
of food hampers. Numerous measures were taken to
protect the safety and wellbeing of employees during the
lockdown, both for those working in our essential service
factories, and those working remotely from home. The
company introduced customised screening, testing,
self-isolation and re-integration protocols, enhanced
existing sanitation practices, staggered shifts where
feasible, ensured active employee engagement, and
provided private transport and a special incentive for
essential workers during the lockdown period. The
employee response has been phenomenal, collectively
ensuring that the company played a critical role in
maintaining the country’s food security during the
lockdown. It is particularly saddening to report that
11 employees died as a result of contracting the virus.
I extend my heartfelt condolences to all the affected
families.
In response to the severe socio-economic impact
of the lockdown on more vulnerable communities,
Tiger Brands enhanced its community food and
nutrition programmes during the pandemic,
donating an additional 12 000 food relief hampers
to augment its existing monthly donations, and
extending this beyond communities, students and
scholars to include frontline healthcare workers
and hospitals.
To contribute to the company’s relief initiatives, the board
of directors and executive committee together agreed to
forfeit up to 30% of salaries and fees for three months,
raising R3,5 million for the salary sacrifice initiative that
supported various specific projects proposed by
employees.
Maintaining a strong focus on food safety
In addition to ensuring regular food supply over the
lockdown period, we further strengthened our focus
on food quality and safety. Following the tragic listeriosis
incident in February 2018, the board has recognised the
need to drive and sustain a significant improvement in
Tiger Brands’ central oversight of food safety and quality,
and to enhance the quality of risk reporting to the board
and its committees. As I mentioned in previous reports,
food safety is now a standing agenda item for the risk and
sustainability committee, supported by clear reporting lines
and regular internal assessments and data management
processes that are aligned with the Global Food Safety
Initiative (GFSI). Last year we introduced an integrated
short-term incentive scorecard – applicable to executive
directors – that includes specific provision for food quality
as a key performance indicator.
The company made further progress this year in
embedding a strong quality culture across its sites
and among its suppliers and third-party manufacturing
partners. Quarterly self-assessments were conducted at
all manufacturing facilities against the GFSI tool; these
facilities were also externally audited and maintained
certification against the globally recognised FSSC22000
and HACCP system. All warehouse facilities have also
been externally audited in preparation for certification
next year. It is pleasing to see that the company’s
quality performance has continued to improve, with a
5% reduction in consumer and customer complaints,
a 25% reduction in marketplace incidents and zero
public recalls.
Update on the listeriosis Class Action
lawsuit
In August this year Tiger Brands reached agreement to
sell the value-added meat processing business to two
separate groups of bidders. The business had been
earmarked for sale prior to being affected by the 2018
listeriosis outbreak. The sale and disposal process in no
way affects Tiger Brands’ commitment to following due
process as part of the ongoing listeriosis Class Action
litigation, and to ensuring that an equitable resolution of
the litigation is reached expeditiously.
In June 2020 the Gauteng Division of the High Court ruled
in favour of Tiger Brands, compelling third parties to
provide epidemiological information required for the Class
Action lawsuit. All the third parties who applied for leave to
appeal against the High Court order were granted leave
to appeal to the Supreme Court of Appeal (SCA) on
15 September 2020. It is expected that the SCA will likely
hear the appeal during 2021. Only one third party did not
apply for leave to appeal.
The company has been dealing with ongoing requests
from the plaintiffs’ legal representative to provide
documentation around the food safety systems at its
Polokwane factory. This remains the subject of ongoing
pre-trial proceedings in respect of which the company’s
legal defence team has engaged and continues to engage
with the plaintiffs’ attorney as part of the discovery
process. As an affected party, Tiger Brands is committed
to abiding by the legal process to ensure that a resolution
of the matter is reached in the shortest possible time in the
interest of all parties, particularly the victims of listeriosis.
The company, in cooperation with its legal representatives,
is continuing with its efforts to expedite the process to
ensure a speedy resolution of the Class Action.
CHAIRMAN’S REVIEW / OUR OUTLOOK 24
Tiger Brands Limited Integrated annual report 2020
Chairman’s review continued
Progressing on its growth strategy
In September this year, the board spent two days with the
executive team to reflect on its performance over the year
and review the company’s strategic roadmap. The strategic
framework remains much the same as the five-year growth
strategy agreed last year, with four clear strategic focus
areas: Drive Growth, Be Efficient, Great People and
Sustainable Future.
As is reviewed throughout this report, the company
has made some solid progress against each of these
commitments. It has rationalised elements of its portfolio,
introduced significant changes to improve its innovations
processes and capabilities, launched various value-driven
innovations and new healthy product lines, and delivered
growth in both existing and new distribution channels. It
has introduced a more systemic approach to unlocking
savings and efficiencies across the business, with much
clearer lines of accountability, delivering savings this year
of ~R470 million. A new capex approval process was also
initiated this year, and some significant capital investments
were approved to increase capacity, enhance efficiency
and deliver new innovation opportunities. Despite some
of the challenges under the pandemic, progress has been
made in instilling and embedding a much stronger culture
of accountability that encourages customer-led innovation,
underpinned by an explicit commitment to delivering
broader societal value in the areas of health and nutrition,
enhanced livelihoods and environmental stewardship.
Given Tiger Brands’ recent run of disappointing
performance – and recognising the increased pressure
from stakeholders to provide compelling evidence of an
ability to deliver a turnaround – the board has approved
a revised operating model and a clear set of immediate
priorities aimed at delivering visible results over the short
term, while laying the foundation for longer-term growth.
These priorities are presented by Noel Doyle in his CEO
review, and I believe that, together with the revised
operating model and refreshed leadership team, they
provide good cause for optimism.
Changes in the leadership team
We have seen several important changes this year in
Tiger Brands’ leadership, both within the board and
executive team. As was announced in August 2020,
after 13 years on the board and almost four years as
chairman, I shall be stepping down with effect from
31 December 2020. To facilitate a smooth handover, I am
pleased to report that with effect from 1 September 2020,
Ms Geraldine Fraser-Moleketi took on the role of
independent non-executive director and chairman
designate and will assume the role of chairman from
1 January 2021. Ms. Fraser-Moleketi currently serves as
lead independent director of Exxaro, non-executive director
of Standard Bank Group and Standard Bank South Africa,
and Chancellor of the Nelson Mandela University,
She also serves in a leadership capacity on various
intergovernmental bodies, and previously held various
cabinet positions under former Presidents Nelson Mandela
and Thabo Mbeki. With her extensive local and global
leadership experience in business and government, she
brings a hugely valuable combination of skills, experience
and independent perspective to drive accountability and
help steer the company on its new growth path.
We made two additional board appointments this year,
with Ian Burton and Olivier Weber both joining the board
with effect from August 2020. This follows the resignation
of Mr Monwabisi Fandeso in February 2020. Ian Burton is
a seasoned FMCG business leader with a track record of
executing business turnaround strategies, including most
recently for Mars Wrigley in the Asia Pacific and China
regions; he brings extensive global experience and valuable
insights on using digital innovation to drive business
growth. Olivier Weber has had a 30-year career in the food
and beverage sector, with various management roles
including leading the PepsiCo Food businesses in Latin
America before pursuing entrepreneurial interests; he
currently runs his own snacks business in the USA and
Mexico. Together their extensive FMCG knowledge, global
experience and important skills in digitalisation and
innovation will significantly enhance the board´s
deliberations and inform the group’s strategic direction.
We have also seen some important changes
at an executive level. Following the retirement of
Lawrence Mac Dougall, and the appointment of former
CFO Noel Doyle as CEO in February 2020, Deepa Sita
joined the executive team and board as CFO from
October 2020. Ms Sita was previously vice president:
integration and strategy for Massmart Wholesale, and
before that interim CEO for the Masscash division.
Ms Pamela Padayachee served as acting CFO in the
interim period from February 2020. Within the executive
committee, we are also pleased to welcome Trevor
Sanderson as the company’s chief supply chain officer with
effect from February 2020, and Joe Ralebepa as chief legal
officer from January 2020. Trevor has over 27 years of
experience in supply chain and manufacturing leadership,
with roles at Unilever, SAB Miller and AB-InBev, both locally
and across Africa. Joe joined the company from the
Massmart Group where he served in the role of group legal
executive, general counsel and company secretary, and
previously held executive legal roles at British American
Tobacco South Africa and Coca-Cola Africa.
These are significant changes in Tiger Brands’
leadership, and I am confident that they will make
an important contribution to delivering the step-
change in performance that many of our
stakeholders are expecting.
www.tigerbrands.com
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Ensuring good governance
To maintain accountability on the board’s performance, we
undertook an internal self-assessment in which each board
member rated the board’s performance on a range of
criteria. The feedback was frank and constructive. While
the overall rating was consistently good, some important
opportunities for improvement were identified. The quality
of the board discussion on substantive strategic issues is
seen to have improved significantly in the past two years;
this has been aided more recently by new board
appointments, although was seen to be slightly
constrained by the immediate challenges presented by the
Covid-19 pandemic. The recent appointment of the new
CEO was welcomed, seen as bringing improved levels of
openness, frankness and transparency, and provide a
good indication of the beginning of stabilising the business.
It was emphasised, however, that for this turnaround to
be fulfilled, the board will need to be less tolerant of any
instances of underperformance and strengthen its driving
accountability on the effective execution of solutions.
Given recent changes in the sector overall as well as the
increasing impact of issues such as climate change, water
security, and supply chain resilience, it was suggested that
the board needs to carefully consider the skills required for
a future fit business, while ensuring an appropriate age and
generational mix. This will be important if Tiger Brands is to
truly become an African leader that delivers on its purpose
and nurtures and nourishes the continent.
Appreciation
My last full year as chairman of the board has been one of
the most challenging of my 13 years as a non-executive
director on the Tiger Brands board. It has been an
incredible privilege serving on the board, and I have
learned a huge amount from the many members of the
Tiger Brands team that I have engaged with over the years.
I wish to thank all my colleagues on the board for their
valuable support and insight in fulfilling our governance
responsibilities, and all those on the Tiger Brands executive
committee and the employees who have shown incredible
dedication in striving to deliver value in this particularly
trying environment. Looking to the future, I am confident
that under the leadership of Ms Fraser-Moleketi and
Noel Doyle, Tiger Brands will successfully execute its
strategy for long-term growth and deliver on its purpose
of nourishing and nurturing more lives every day.
Khotso Mokhele
Chairman
19 November 2020
CHAIRMAN’S REVIEW / OUR OUTLOOK 26
Tiger Brands Limited Integrated annual report 2020
Interview with
chairman designate
Geraldine Fraser-Moleketi
Chairman designate
In his CEO review, Noel Doyle suggests that Tiger Brands is
at a “critical inflection point”. We are in the midst of a pandemic
with a deep recession likely, and the company is under
pressure to deliver a significant turnaround; you’ve certainly
chosen an interesting time to join Tiger Brands’ board. How
do you see the company being positioned in the next 10 years
and your role in taking it forward?
It’s early days for me to outline how the company should be positioned over the
next 10 years, but I will share some initial general thoughts on this. In terms of
my role, I am not going to do any of this alone. As with any successful company,
we will be acting collectively, leveraging our various skills and resources to ensure
we protect Tiger Brands’ long-term interests, recognising that its ability to create
value for itself is ultimately dependent on the value it creates for its stakeholders,
society and the broader environment. As chairman, I will be operating within a
board that acts collectively in fulfilling our oversight and stewardship function,
holding the executive to account on both the development and execution
of strategy.
Looking at the company and its prospects, I agree with Noel that Tiger Brands
is at an important inflection point, and this makes it a particularly interesting and
exciting time to be taking on the challenge. After several years of disappointing
performance, the company and its management team are understandably under
pressure to deliver a visible change in fortune, and they recognise the urgent
need to turn the company around. And as Noel points out in his statement, the
leadership team needs to do so in a manner that delivers sufficiently compelling
change over a short period, but not at the expense of longer-term growth, a
challenging balancing act at the best of times.
For Tiger Brands to rise to this challenge, not only does it need to recover its
former position, but it needs to be far more ambitious and audacious in delivering
on its core purpose.
You asked about the next 10 years. This is also the timeframe for delivering
on the global Sustainable Development Goals, food security is a foundation to
delivering on all the SDGs. The Covid-19 pandemic has shown up the fault lines
in society and highlighted in particular some of the deep challenges around
inequality, including specifically in the areas of health and nutrition. In my view,
this should inform the company’s forward-looking vision, and this is where I think
the company can be more ambitious and audacious.
www.tigerbrands.com
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I believe that some of the more exciting opportunities are in
markets across Africa, where we are likely to see stronger
levels of economic growth than in South Africa. While
I appreciate that some investors and board members
might be cautious – given Tiger Brands’ and other South
African companies’ recent experiences on the rest of the
continent – I believe that the company is correct to expand
its current export strategy, learning from past mistakes
and building on its success story in Cameroon.
It’s early days, but what are your first
impressions of the company?
I’ve only been actively engaged since the beginning of
September. So far, I’ve participated in the company’s
strategic planning process and in the most recent board
committee meetings. What has struck me in these
engagements is that the executive team and the board
have a very strong commitment to turning the company
around. They both clearly recognise the challenges the
company faces, and have a clear understanding of what
needs to be done to stabilise the business and reclaim its
leading position. I am also confident that the executive
team recognises that there is a strong expectation for
improved accountability.
Looking ahead, Tiger Brands should be associated with
quality, excellence, sustainability and sound governance,
underpinned by a culture of agility and innovation, and
by a strong commitment to ensuring full accountability for
decisions and actions. These are my measures of success.
I believe that Tiger has the right attributes to achieve these
outcomes and I am looking forward to the challenge.
To ensure Tiger Brands’ success over the next decade, the
opportunity lies in leveraging its standing as a leading food
company in Africa to reclaim and carve out its role in this
space. To this end, the company has an opportunity to
give real shape and meaning to sustainable development,
and to the recent interest in Environmental, Social and
Governance (ESG) issues. Promoting food security,
addressing hunger and delivering healthy nutrition is
absolutely core to the company’s business, and it needs to
make this link more overtly with the broader sustainability
agenda. Tiger Brands has initiated some solid foundational
work in this area, and there is significant opportunity to
further integrate these goals into the company’s strategic
thinking.
What are some of the priority challenges
that you believe need to be addressed?
There are several key challenges facing the company, most
of which I think are well known both inside the organisation
and externally by its key stakeholders. One of our most
important priorities is to improve the supply chain to ensure
efficiency, product availability, and customer service
excellence. Technology and the digital arena is another
important area, which I believe can significantly support the
company’s efficiency agenda, and the company also needs
to maintain a strong focus on food safety and quality.
Finally, informed by the operating environment and a
value-orientated consumer, we will need to be relentless
in reducing costs. Delivering on these ambitions will
require that we have the right talent in the right places,
underpinned by a strong culture of accountability. We have
seen some significant changes recently in the company’s
leadership team, which augurs well for the future.
The immediate macro-economic outlook
is challenging. Where do you see the
opportunities?
It’s clear that we are facing some significant macro-
economic challenges in South Africa, with the pandemic
compounding an already fragile economy. In this context,
there are still opportunities for delivering organic growth,
for example through consumer-based product innovation,
especially in the value segment of the portfolio, as well as
by driving innovation in the company’s route-to-market.
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Tiger Brands Limited Integrated annual report 2020
Our operating
environment:
material trends
The impacts of Covid-19 and the associated lockdown restrictions have significantly
increased complexity in our operating context, amplifying the existing challenges of a
constrained consumer environment, growing competition, and changing consumer and
regulatory expectations. Despite the very challenging business context, consumer packaged
goods (CPG) companies in South Africa have performed comparatively well against other
sectors, benefiting from being an essential service and from the increase in at-home
consumption.
This year we have identified five trends in our operating environment that have a material impact on Tiger Brands’ ability
to create value. Each of these trends presents both risks and opportunities that continually informed the development of
our growth strategy.
Muted consumer spend in a weak economy
Tiger Brands depends on a strong economy and healthy consumer demand to drive sales of its premium branded products.
The South African economy remains weak, with a volatile exchange rate and the majority of households under significant financial pressure.
Pre-Covid-19, the economy contracted by 1,4% in the fourth quarter of 2019, following a contraction of 0,8% in the third quarter. This
technical recession was profoundly impacted by the national lockdown introduced at the end of March 2020, with the economy slipping
into a recession much faster and deeper than
expected. Consumer confidence has dropped to its
lowest level since 1985, with heightened job losses
further denting consumer spend, reducing demand
for discretionary and premium products,
and increasing demand for “value” offerings. Volumes
and margins remain threatened, and cost recovery
ahead of inflation becomes difficult.
Household consumption and real disposable income
D A T A T O B E
S U P P L I E D
4
8
6
Key features of this trend impacting value creation
include:
› Flat economic and wage growth
› Muted consumer spending
› Continuing rand/dollar volatility
› Generally rising input costs
› High consumer debt levels
› Very high unemployment.
2
0
-2
-4
2007
2009
2011
2013
2015
2017
2019
– Household consumption
– – – Real disposable income
Source: SARB, Stats SA
e
g
n
a
h
c
%
y
-
o
-
Y
Our response
›
In an effort to protect margins in the subdued market, we have kept a strong focus on driving productivity and securing cost efficiencies
across the value chain (see page 40).
› During the year, various significant investments were approved aimed at enhancing efficiency and realising innovation opportunities
(see page 41).
› We placed a strengthened emphasis on boosting economic opportunities and improving the livelihoods of thousands of people across our
value chain, including through a deliberate focus on supporting black/black women farmers and owned enterprises (see page 46 and
sustainability report).
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Increasing competition and power shifts in food retail
Tiger Brands increasingly depends on its ability to adapt in a maturing market.
Food retail has diversified, with increasing online engagement and digital sales. New producers are establishing strong premium brands and
successful niche products. While supermarkets remain the leading distribution channel in packaged food, the channel is seeing strong
competition from mixed retailers. Retailers have hardened their procurement practices, and in many instances have further increased uptake
of private label, which is doing well in shelf stable and dairy products. This has contributed to increased pressure on returns, volumes and
market share, intensified price competition, and heightened promotions, inspiring differentiation towards richer value-propositions that
undercut margins. These dynamics challenge our historic brand advantage but are inspiring us to become more agile.
Key features of this trend impacting value creation include:
› Heightened competition from brands and private label
›
›
›
› Weaker volumes, price competition and margin pressure.
Increased promotional activities
Innovation in products, process and approach
Increasing differentiation to enhance value offerings
Our response
› We seek to mitigate the risks and realise the opportunities associated with the changing retail and consumer dynamics by delivering on our
strategic ambition to drive growth. We have identified opportunities to optimise our product portfolio, respond to the growth in private label
brands, and win at the point of purchase (see page 37).
› We have been implementing channel-specific category management methodologies and will be continuing to embed appropriate digital
technologies that enhance the monitoring of the return on investment of our promotional activity, while meeting customers’ needs, and we
have been using new pricing expertise to help drive brand growth and customer support.
› We made further progress this year in launching new products to address consumer expectations for quality, convenience, healthier foods
and affordable pack sizes. Despite the heighted competition we retained the lead in packaged food, with a 26% value share (see page 4).
Changing consumer dynamics and growing complexity
Convenience foods, health and wellness, affordability, and e-commerce heighten need for innovation
Shifting patterns of consumer behaviour are leading to significant changes in the food system, driven by trends such as rapid urbanisation
and globalisation, increasing digital connectivity and mobility, and the rising number of single households and at-home consumption. Dietary
shifts reflect these changing global patterns and economic aspirations, with growing public health concerns offset by the strong uptake of
processed products, convenience foods, and snacks and beverages. With more meals now consumed at home, consumers are looking for
inspiration for home cooking and baking. On the surface is the everyday impact of deepening economic pressure on households; not only
are consumers buying and spending less, but shopping smarter and more ethically, seeking not only greater value-for-money, but greater
value-for-all.
Key features of this trend impacting value creation include:
› A dramatic rise in e-commerce following the Covid-19 lockdown restrictions
› More meals consumed at home
› Health and wellness trend gain momentum across packaged food
Increasing price consciousness and decreasing brand loyalty
›
Increasing demand for “more value”
›
Improving perception of private labels.
›
Our response
› We continually review consumer trends to identify opportunities for product and process innovation and to optimise our product portfolio.
We have an exciting product pipeline across a range of categories that specifically include innovations for value-seeking consumers,
supported by a robust marketing and communication plan highlighting the benefits and relevance of our current brands within the value
segment.
› Covid-19 has accelerated the adoption of e-commerce behaviour amongst consumers, with South African food retailers reporting a 700%
increase in web traffic volumes. In addition, there is evidence that there is a 70% likelihood of consumers continuing to buy groceries online.
In response to this trend, Tiger Brands has listed on major e-tailing and retailers’ online platforms.
› We believe that there are valuable opportunities in the health and nutrition sector, and have been driving innovation in this area including
launching new healthy product lines in the Baby and Personal Care categories, introducing consumer-relevant health claims in various
brands, and beginning the process of including portion control messaging on the back of packs in the Snacks & Treats category.
› Through the diversity of our portfolio we are able to address the full range of consumers’ shopping needs, particularly those in the
middle-income bracket.
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Tiger Brands Limited Integrated annual report 2020
Our operating environment: material trends continued
Increasing stakeholder pressure for responsible business leadership
Tiger Brands recognises the importance of building an ethical and sustainable business practice.
South Africa’s food system is one of the least healthy globally, characterised by high levels of obesity, lifestyle-induced non-communicable
disease (NCD) and persistent hunger and malnutrition. Increasing consumer and investor activism on environmental, social and governance
(ESG) issues, and emerging regulatory interventions, reflect a growing concern to address the negative nutritional, health and environmental
outcomes of the food system, placing greater pressure for industry action, transparency and accountability. The Sustainable Development
Goals (SDGs) provide a benchmark for clear targets and an increasing number of global industry initiatives demand collective action.
Enhanced regulatory and voluntary interventions have introduced new marketing, health and environment-related control mechanisms,
regulations and taxes. An increased possibility of litigation threatens resources and reputation. Higher income consumers are more willing to
trade-off on price for health and sustainability, with increasing demand for brands-with-purpose, sustainable and local products, plant-based
proteins, ethical marketing and front-of-pack nutrition labels. These shifts challenge some traditional business approaches and encourage the
adoption of purpose-led innovation.
Key features of this trend impacting value creation include:
› Pressure to align with global agreements and voluntary initiatives
› Pressure to address environmental concerns such as climate change, water, plastics and sustainable agriculture
› Pressure to promote social transformation on issues such as race, gender and income inequality, and land rights
›
› Growing demand for purpose-led brands and products.
Increasing regulatory intervention on public health, obesity and NCDs
Our response
›
In delivering on our purpose, we have made important progress this year on our commitment to enabling consumers to improve their health
and wellbeing. We have updated our nutritional standards against global guidelines, introduced a three-tier product offering approach
informed by these guidelines, and made progress in establishing a baseline and setting targets for more nutritious products as a percentage
of our total portfolio (see page 46 and sustainability report).
› We have continued to invest significantly in driving quality and food safety across the company to ensure that we have robust management
systems, qualified people, and a strong quality culture. We have strengthened our audit and assessment processes, achieving external
certification for all our manufacturing facilities against globally recognised food safety standards, and starting the certification process for
our warehouses (see page 46 and sustainability report)
› We are striving to reduce our environmental impact through innovative solutions, including optimising energy and water usage, developing
innovative products and packaging, leveraging our brand and marketing, and implementing circular economy initiatives that stimulate
economic opportunities (see page 46 and sustainability report).
www.tigerbrands.com
31
Covid-19 compounding the impact of existing trends
Covid-19 and the associated economic shutdown has deepened some of the existing trends, negatively impacting consumer spend, further
driving the uptake of e-commerce and at-home consumption, and heightening consumer concerns on health and wellbeing. Spending
patterns have shifted to staples and essentials, with consumer choice shaped primarily by price, value and convenience. Regulations that
capped gross and operating margins on essential products, prohibited price increases and further challenged cost recovery. Direct costs
to business included elevated distribution costs and stock challenges, supply chain disruptions, and the purchase of personal protective
equipment. There has been an accelerated growth of home consumption and online shopping, and reduced ability to influence choice
in-store. The lockdown increased the consumption of digital channels in South Africa by 72%, with continued growth anticipated over the
next months. With consumers spending more time online and on social media, advertising has focused increasingly on digital channels.
Throughflow at retail outlets was impacted by shorter opening hours, social distancing and customer limitations, prompting consumers to
shop less often for bigger baskets. The lockdown restrictions have exacerbated poverty, inequality and public health concerns, juxtaposed by
some encouraging examples of a collective humanitarian effort, with consumer and stakeholder activism potentially invigorated by the call to
“build back better”. While the future remains particularly uncertain, as a food company and essential service, Tiger Brands is better placed
than most to maintain its resilience.
Our response
The key focus of our response has been to ensure the availability of our products, ensure employee safety and wellbeing, and increase our
community food support for those in need (further details are provided in our online sustainability report):
› Following the Declaration of a state of National Disaster, we took various steps to ensure a continuous supply of product in response to
initial panic buying, developed and implemented response protocols to ensure product safety, worked with suppliers, logistics and
customers to limit disruptions, and provided effective communication to address consumer concerns around food security
› To protect employee safety and wellbeing, we prioritised remote working where possible, introduced health screening and testing for staff at
essential services sites accompanied by rigorous hygiene and sanitisation protocols, and provided additional access to wellness support
services along with various other measures
› We expanded our existing community food and nutrition programmes for families and school children and extended these to provide for
frontline healthcare workers and hospitals, with numerous new initiatives funded by the voluntary forfeiture of a portion of senior leadership
salaries and fees.
To realise growth opportunities in a “new normal”, we are implementing measures to capitalise on the recent uptake of e-commerce and home
cooking, the changes in in-store shopping dynamics, and the heightened levels of price consciousness and personal health and wellbeing
(see page 37).
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Tiger Brands Limited Integrated annual report 2020
Material risks
and opportunities
Over the last two years, we have fundamentally improved
the rigour with which the universe of relevant risks is being
assessed. As a result, the risk register is a comprehensive
and well-considered view of the risks the group is likely to
face. We thoroughly interrogate the various mitigating
strategies to ensure a proactive response to the material
risks, and we have enhanced the monitoring of response
plans to ensure their effectiveness.
The Tiger Brands’ board has ultimate responsibility for
overseeing the group’s risk management processes. The
board is assisted by the risk and sustainability committee
who are responsible for ensuring that the risk management
process complies with relevant standards and governance
requirements. Senior management in each division and
business unit is responsible for managing risks in their
respective areas. Oversight of risk management at
divisional level rests with the relevant executive
committees. Divisional and business unit risk registers are
updated quarterly; the risk and sustainability committee
meets three times a year.
The risk and sustainability committee determines the risk
appetite, tolerance and velocity (the time taken to feel the
impact of a risk after it materialises) to the board. The
board reviews and approves this annually, ensuring that the
company effectively identifies, 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 and division, culminating in risk
reporting at a group level.
Each risk is evaluated in terms of its likelihood and impact,
both on an inherent (actual impact) and residual (after
mitigating action) basis. The group risk profile is reviewed
quarterly and is continually revised after considering
changes to the local and regional macro-economic
environment, recent political and legislative developments,
socio-economic challenges and technological
advancements. Through our combined assurance model,
the risk and sustainability committee evaluates and
approves the level of assurance provided for all group
risks.
Risk appetite and tolerance
Risk appetite refers to the level of risk that Tiger Brands’
management is prepared to absorb before mitigating
actions are implemented; risk tolerance refers to the
company’s strategic capacity to accept or absorb the risk.
Our top 10 risks
The following heat maps reflect the top 10 inherent and
residual risks for Tiger Brands in the 2020 financial year;
these are the risks identified as having the most material
implications for Tiger Brands and its employees.
Inherent risk map
Residual risk map
Catastrophic 5
Critical 4
t
c
a
p
m
I
Significant 3
Minor 2
Insignificant 1
R1
R2
R3
R4
R5
R6
R7
Catastrophic 5
R5
R6
R1
R9
R8
R10
Critical 4
R7
R9
R10
R2
R3
R4
t
c
a
p
m
I
Significant 3
Minor 2
Insignificant 1
1
Unlikely
2
Possible
3
Likely
4
Almost certain
Likelihood
1
Unlikely
2
Possible
3
Likely
Likelihood
R1
R2
R3
R4
R5
Albany route-to-market
Negative impact of Covid-19
Business continuity vulnerabilities
Operating environment
R6
R7
R8
R9
Occupational health and safety
Information and cyber security
Data and information risk
Attract and retain critical skills
Food safety and product quality
R10
Intensifying competition
R8
4
Almost certain
www.tigerbrands.com
33
The following table briefly reviews the implications, mitigation measures and the year-on-year trend in the risk rating, for each
of the top 10 risks.
Material risks
Implications for value
Mitigating actions
1.
Albany
route-to-market
Risk trend
2019 ranking (2)
2.
Negative impact
of Covid-19
Increasing levels of violent crime against
drivers in the bakery route-to-market can
result in:
› employee and service provider loss
of life
› distribution disruptions
›
› potential loss of market share.
reputational and brand damage
The high rate of Covid-19 infections and
the response measures implemented by
government and business, increased
market uncertainty and challenged risk
management through the following:
› economic shutdown and reduced
growth
Risk trend
2019 ranking (n/a)
3.
Business continuity
vulnerabilities
› production setbacks and declining
›
stock levels
increased operational costs and revenue
loss
› employee unease, absenteeism, job
›
loss and loss of life
› declines in customer experience and
brand reputation.
Disruption at our facilities – for example,
following a significant technical
breakdown, floods or fire, political or
labour unrest, and/or interruption of IT
services, energy or water supply – can
lead to:
›
interruptions in production, resulting in
lost sales, and reduced market share
and reputation
› damage to plant and equipment
increased production costs.
›
Risk trend
2019 ranking (6)
4.
Operating
environment
Risk trend
2019 ranking (1)
› Weakened consumer demand off the
back of lower economic growth
negatively impacts volumes, and has
heightened the consumer focus on
shopping on promotion, negatively
impacting profitability
› The rising cost of utilities, labour, general
input costs and regulatory requirements,
is increasing the cost base at a higher
rate than inflation, weighing on margins.
› All delivery routes are continually risk assessed, and
tailored response measures developed
› Security assessment reports have been compiled for
all facilities to address security-related improvement
opportunities
› A limited number of security service providers have
been appointed to service the bakeries. This will
promote compliance to the relevant legislation,
monitoring and management of key performance
indicators per bakery while ensuring overall
cost efficiency
› Exploring technological solutions for more effective
security provision at a reduced cost
› Exploring and piloting digital payment systems.
› An executive committee Covid-19 task team was
set-up to manage our response across customers,
communities, employees and operations
› Measures have been implemented to align with
government, limit travel, accommodate sick leave,
distribute and digitise work arrangements, prioritise
manufacturing of critical products, bolster factory and
staff hygiene, and support delivery of food to
community beneficiaries
In ensuring the ongoing availability of essential food
items throughout the lockdown alert levels, our
approach included daily meetings, running scenarios
and collaborating across the value chain to ensure
minimal disruptions, meet demand and continue to
support national food security.
› A business continuity steering committee has been
established and consists of a multi-disciplinary team
including IT, Supply Chain, HR, Finance, Corporate
Affairs, Internal Audit and Group Risk. The steering
committee is in the process of finalising a roadmap
which encompasses specific business continuity
training as well as consideration of best practice
standards such as the ISO 22301 as well as the
evolving practices and standards released as a result
of the Covid-19 pandemic. Business continuity plans
are in place for all high-priority packaging and raw
materials across the business; a formal management
process for the group’s manufacturing facilities is in
place. This includes IT business continuity and annual
technical testing of the IT disaster recovery plans
› A network upgrade project is currently underway to
implement secondary network links at all Tiger Brands’
sites. This will ensure that there is no disruption to site
connectivity when the primary network connection
is lost
› Annual external risk, control and environmental audits
inform improved business-continuity planning and
disaster-recovery processes
› Appropriate insurance cover is reviewed annually, and
disaster-recovery plans are in place.
› Driving growth through customer strategies focused on
winning at the point of purchase and building on the
strength of our existing brands
› Creation of a health and nutrition strategy
› Being efficient by unlocking costs and cash through
incremental supply chain savings and driving
continuous improvement efficiencies
› A people strategy focused on talent, leadership and
creating a great place to work
› A sustainability strategy is aimed at health and
nutrition, enhanced livelihoods and environmental
stewardship.
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Tiger Brands Limited Integrated annual report 2020
Material risks and opportunities continued
Material risks
Implications for value
Mitigating actions
5.
Food safety and
product quality
Challenges with food safety and product
quality can have significant implications in
terms of:
›
›
›
› disruptions to production
› expensive product recall
› potential litigation.
loss of life
reputational and brand damage
loss of market share
Occupational health and safety incidents
can result in:
›
loss of life of employees and service
providers
reputational and brand damage
regulatory non-compliance costs
loss of market share.
›
›
›
Increasing interconnectivity, globalisation
and commercialisation of cybercrime are
driving greater frequency and severity of
cyber incidents, including data breaches.
› This can compromise the confidentiality,
integrity and availability of information
and technology resources, leading to
disclosure of commercially sensitive
information, intellectual property and/or
disruption to operations
In addition to non-compliance risks, the
release of any personal information also
has negative reputational and brand
implications.
›
Risk trend
2019 ranking (3)
6.
Occupational health
and safety
Risk trend
2019 ranking (4)
7.
Information and
cyber security
Risk trend
2019 ranking (5)
› Enhanced good manufacturing practice (GMP)
standards and food safety system certification
standard (FSSC 22000) implemented across the
group, supported by standardised quality self-
assessments for all our manufacturing sites, training
of quality teams, and a robust supplier quality
management process
› Manufacturing, group legal and regulatory compliance
functions collaborate to ensure products comply with
regulatory standards and meet consumer preferences
› Entrenched partnership with Stellenbosch University to
remain at the forefront of scientific trends, through the
Centre for Food Safety
› Adoption of European Hygienic Engineering and
Design Guidelines (EHEDG) in terms of manufacturing
hygiene standards.
› Robust safety programme implemented across the
group, supported by self-audits, annual independent
audits, and behavioural safety and awareness
initiatives, reinforced with disciplinary action
› Safety improvement targets signed off annually for
each division and manufacturing site
› Standardised occupational health and hygiene
programme and fitness to work standards have been
operationalised at all manufacturing sites.
› Various external security specialist providers are utilised
to ensure that we enhance our security posture
› Penetration testing is part of the standard project
lifecycle approach
› The new Cyber Security Bill has been drafted and is
out for public comment. The conditions and impact of
the Bill need to be assessed against our current
processes and controls
IT policies have been established to support the
group’s approach to managing information security
› The cybersecurity landscape is monitored with a view
›
to implementing the latest security practices and
revising existing controls to safeguard the group
against cybercrime and maintaining cyber resilience
› Operational Technology (OT) Security Assessment will
be performed on our top five manufacturing facilities
in FY21
› Finalisation of cyber insurance, inclusive of our OT
environment
› Coverage of our vulnerability management programme
(i.e. security threat management programme) has been
extended to the entire Tiger domain, inclusive of the
site environments across the country
› Appropriate measures are in place to safeguard against
threats to information and cyber security that are a
consequence of remote working arrangements. These
include firewall monitoring that includes the virtual
private network, endpoint and full disk encryption,
email exchange management by service provider
Mimecast and network vulnerability scans.
www.tigerbrands.com
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Material risks
Implications for value
Mitigating actions
8.
Data and information
risk
Risk trend
2019 ranking (7)
9.
Attract and retain
critical skills
Risk trend
2019 ranking (8)
10. Intensifying
competition
Risk trend
2019 ranking (16)
› Suboptimal information management
could lead to inconsistent data quality,
compromising decisions and
contributing to privacy/identity
management and information security
risks
Increased regulation is placing additional
demand on system capabilities and IT
teams and presents implications in
terms of compliance and potential
non-compliance costs.
›
The formation of a Tiger-wide Data Governance Council
(DGC) has been approved.
› As part of the PoPIA compliance programme, a privacy
compliance governance is being implemented through
the Tiger Information Office to adequately manage and
safeguard the processing of personal information
across Tiger
› The DGC will coordinate and streamline data risk
management and governance across Tiger and will
report to the risk and sustainability committee of the
board.
› A loss of critical skills can negatively
impact our ability to deliver our strategy
and maintain business viability and
profitability
› An inability to ensure sufficient level
of diversity in the executive team and
across the employee base also
undermines our effectiveness and
has reputational implications.
Comprehensive people strategy is in place to attract,
develop, reward and retain talent, with provision for:
› Performance management and incentive structures
aligning performance to group objectives
› Proactive talent mapping and engagement plans
by role and function to drive talent acquisition
› Skills development and leadership initiatives
› Robust induction and onboarding programme
›
Initiatives have been developed to improve employee
engagement and experience across Tiger Brands
Implementation of the engagement/employee
experience survey will enable the organisation to track,
report and close gaps on culture transformation and
employee engagement.
›
Intensifying competition poses an
increasing challenge to our market
performance, threatening:
› Loss of consumers and market share
› Retailer dominance and customers
›
becoming competitors
Inability to compete in high value
categories
› Erosion of brand equity and profit
margins.
› Review of business, with a fit-for-future restructure
and updated strategic growth drivers
› Key account forums and joint business plans
established with key customers
› Enhanced research and analytics, with monitoring
of customer and brand strategies and performance
Increased investment in, and enhanced execution
of R&D, innovation and marketing
›
› Development of private label and value-brand
strategies
› Drive for talent and high-performance culture.
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Our strategy
Delivering on our purpose
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 products to middle-income consumers. Our portfolio also includes leading brands in
the Home, Personal Care and Baby sectors.
We nourish and nurture more lives every day
DRIVE GROWTH
Winning category,
channel and customer
strategies
BE EFFICIENT
A cost-conscious
and effective
supply chain
GREAT PEOPLE
A winning mindset
and great place
to work
SUSTAINABLE FUTURE
Sustainable
company, community
and planet
› Optimising our
product portfolio
› Unlocking costs
and cash
› Responding to the growth
› Fuelling growth through
in private label
› Realising commercial
opportunities in health
and nutrition
› Delivering growth through
our innovation pipeline
› Winning at the point
of purchase
› Driving growth in Africa
› Realising opportunities
for inorganic growth.
customer service
excellence
› Leveraging scale and
increasing responsiveness
to be “advantaged and
agile”
› Delivering digital
optimisation.
› Building a diverse talent
› Enabling consumers
base to deliver our growth
strategy
› Developing leadership
capability to inspire
winning performance
› Creating a great place
to work to energise a
consumer-obsessed agile
team.
›
to improve their health
and wellbeing
Improving the livelihoods
of thousands of people
› Significantly reducing our
environmental footprint.
1
We treat each
other with care and
respect
2
We deliver
with passion and
excellence
Our values
3
Safety and quality
are non-negotiable
for us
Winning behaviours
4
We embrace
diversity and
inclusivity
5
We act with integrity
and accountability
in all we do
Consumer
obsession
Teamwork
Empowered
accountability
Focused
execution
www.tigerbrands.com
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Performance
summary 2020
✓ Positive response to the
Covid-19 pandemic
✓ Optimised innovation and
renovation to deliver
against value specific
consumer needs
✓ Share gains in bread, liquid
concentrates and baby
snacks
✓ Acceleration of portfolio
optimisation initiatives:
› Disposal of VAMP
› Evaluating a number of
proposals regarding the
exit of Deciduous Fruit
Drive growth
Winning category, channel and customer strategies
To deliver on our growth ambition through winning category, channel and
customer strategies, we will be optimising our product portfolio, driving
an innovation pipeline, realising commercial opportunities in health and
nutrition, and winning at the point of purchase. This will be accompanied
by our strategy to drive growth in Africa while positioning us to explore
alternative growth opportunities.
Optimising our product portfolio
In response to sustained margin contraction across many of our product lines,
and to deliver long-term growth, we are continually evaluating and optimising
our product portfolio. We have adopted a structured approach to identify those
categories with high attractiveness and competitive strength that should be
invested in and grown, those where we will focus on improving profitability, and
those to be evaluated further for possible exit through a carefully structured
process.
Informed by this assessment we see particular potential for further growth in
Baked Goods, Baby, Breakfast, Snacks & Treats, Beverages, Home Care,
Exports and Chococam, with opportunities for enhanced profitability in Other
Grains, particularly Rice and Pasta, Groceries and Sorghum-based products.
We are investing in product and process innovation, driving further process
efficiencies, and/or expanding production capacity in these areas.
In rationalising our portfolio, and following a thorough evaluation of all
alternatives, the board approved the sale of our Value Added Meat Products
(VAMP) and the Deciduous Fruit (LAF) business as well as the closure of
Deli Foods in Nigeria and the subsequent disposal of related fixed assets.
The disposal of VAMP and Deli Foods was successfully concluded this year,
and we continue to explore opportunities regarding the sale of LAF. Following a
careful review of recent performance, and an assessment of market prospects,
we are reviewing the following business units over the medium term: Maize and
Personal Care.
4% volume growth
Consumer relevant innovations deliver 5,1% of sales
Achieved compliance with our Eat Well Live Well
nutritional profile across more than a quarter of our portfolio
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Our strategy continued
Drive growth continued
Deliver growth through our innovation
pipeline
We see consumer-based innovation as a critical
lever for sustainable growth. As part of our
innovation drive, this year we introduced changes in
three key business areas: we restructured our R&D
activities to create more direct accountability in each
business unit, while introducing key new roles to
improve our innovation capability; we strengthened
our ideation process, refining our innovation pipeline
and introduced better processes for prioritising
innovation opportunities; and we have driven a
stronger business focus on ensuring the successful
commercialisation of the identified innovation
opportunities. We are working further on building
a culture of innovation, strengthening our
commercialisation capabilities, increasing our
science and technology acumen, and developing
a more agile approach.
Although Covid-19 had a material impact on our
innovation pipeline this year as we prioritised known
value items (KVIs) during the pandemic, at the end of
the fourth quarter, we were able to launch nine new
innovations in time for the high-demand summer
and holiday seasons.
In terms of meeting consumers’ value-specific
needs, we launched, among others: the 12.5kg
Induna Super Maize Meal; Jungle Plus 500g refills;
new 2kg offerings in pasta; an alternative size in
the All Gold Jam Tub in the convenience and value
seeking space and the launch of fragranced lotions
and creams in the Dolly Varden range.
Realising the commercial opportunities in
health and nutrition
We believe that there are valuable business opportunities
associated with leading the health and nutrition agenda in
South Africa and across the continent. We seek to realise
these significant opportunities through our recently agreed
health and nutrition strategy, and the associated stretch
commitments, and in so doing to deliver on our core
purpose of nourishing and nurturing more lives every day.
The strategy includes three key focus areas: renovating
our existing product range to make more of our products
compliant with our Eat Well Live Well standards, while
striving towards global best practice; innovating to develop
more nutritious, affordable food products; and educating
consumers – in partnership with government, academia
and NGOs – in a manner that allows them to make better
informed decisions about their wellbeing.
We made further progress this year in delivering in each
of these three areas. We introduced clear and simple
consumer relevant health claims in various brands,
including Jungle, Brookes Low-Cal and Albany, and we
began the process of including portion control messaging
on the back of packs in the Snacks & Treats category.
We launched new healthy product lines in the Baby and
Personal Care categories, and we participated in a
consultative process on the adoption of progressive
front-of-pack food labels.
Leveraging the strength of our brands
We have continued to see growth in the sale of private
label products in South Africa, including in some of our
priority product categories, driven in part by the sustained
pressure on consumer disposable income. Given that
Tiger Brands is the category leader from a brand equity
perspective in more than half of the categories we operate
in, our strategic response to the competitive threat of
private label is to build explicitly on the strength of our
existing brands. To protect and further enhance our brand
leadership, and to realise growth opportunities in a
post-Covid-19 operating context, we are implementing
measures to capitalise on the recent uptake of
e-commerce and home cooking, the changes in in-store
shopping dynamics, and the heightened levels of price
consciousness and increased sensitivity to personal health
and wellbeing, underpinned by world-class marketing.
Winning at the point of purchase
Last year we communicated a series of specific
commitments aimed at securing growth at the point of
purchase. These commitments were in three focus areas:
delivering growth in existing and new channels; becoming
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more efficient and driving ROI; and building the sales force
of tomorrow. In the context of challenging market
conditions, increased competitive intensity and growing
retailer bargaining power, we made good progress this
year against most of our commitments, achieving many
of our stated targets.
We expanded our reach in general trade, identifying
and trialling different route-to-market models, and
significantly increased our geo-mapping of stores and
wholesale partners. We enhanced our online presence,
establishing our e-commerce structure and accounts,
and we progressed in developing other non-traditional
shopping destinations in certain categories, though falling
short of our growth ambitions in neighbouring countries.
We successfully implemented jointly developed business
plans with some of our major customers, and secured
revenue growth through strengthened cross-category
promotion and customer segmentation, improving our ROI
on promotional activities. Through enhanced use of Big
Data, with digital dashboards rolled out with two key
retail clients, we have improved in-store execution and
delivered material efficiency gains. In delivering on our
goal of building a more effective and diverse salesforce,
we have finalised a competency framework for the
salesforce, conducted management training and run
roadshows in all regions.
For the year ahead, we have updated our growth ambitions
and specific commitments within the same broad focus
areas. We have set ourselves ambitious targets, including
on expanding our reach in general trade, growing in
e-commerce and alternative channels, delivering a step
change in neighbouring countries, and further optimising
our sales force and people capabilities. We will also be
embedding our revenue management capabilities and
deliver improved customer performance and behaviour
aligned with Tiger Brands’ strategic drivers.
Driving growth in Africa
Our ambition is to organically grow our Africa export
business by building on our current established presence
across the continent. We will drive category growth
through carefully chosen brand investments, by developing
superior routes to markets, and by investing in key
capabilities. Informed by a thorough understanding of the
opportunities and risks in this sizeable market, we have
classified the countries for potential growth into four
categories:
› Expand: in countries where we are established and
profitable with a developed route-to-market (such as
Cameroon), we will leverage our existing presence and
capabilities, and invest to reach full potential and grow
market share.
› Develop: in countries where we currently have multi-
category presence and are developing in-market
capability (such as Nigeria, Mozambique, Zambia and
Zimbabwe), we will invest in people, brands and
infrastructure to increase our ability to win and grow
market share.
› Trade: in countries that present identified export trading
potential (such as some of the SADC and East African
markets), we will focus on opportunistic sales and
identify future growth potential without currently investing
in capability.
› Explore: in untested markets (for example in West and
North Africa) that present potentially attractive in-country
and category opportunities, we will explore these
opportunities and develop a business case indicating
the best entry approach.
While we made some progress this year in delivering on
our stated growth ambitions, we were severely impacted
by various external and internal headwinds. These include:
significant economic challenges in Zimbabwe and Zambia,
with currency devaluation of 200% and 40% respectively;
Covid-19 related stock shortages in certain markets; a
decline in growth of a key retail customer; and an inability
to trade in Nigeria due to the trademark dispute; as well
as supply constraints in certain product lines. We have
learned from these challenges and are taking remedial
actions. We remain confident of our ability to deliver
growth in the region.
In looking to win trade in the identified key markets, we will
be prioritising product categories to drive volume growth,
investing in prioritised brands and where necessary
developing new products. We have engaged selected
partners to ensure an optimised and effective route-to-
market in priority countries, underpinned by clear
standards and processes with each partner. We have
made further investment in building capability with the
appointment of a chief growth officer – Rest of Africa,
based in Nairobi.
Realising opportunities for inorganic
growth
Although our primary focus is to drive organic growth
by delivering on the initiatives outlined above, we are
continuing to explore alternative growth opportunities.
These include specific opportunities that are core and/or
near adjacencies to our current business and underpinned
by clear consumer trends, while various participation
options are being explored.
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Our strategy continued
Be efficient
A cost-conscious and effective supply chain
To enable profitable growth through an effective supply chain, we have
specific commitments to drive efficiency, maximise product availability,
and deliver customer service excellence.
Unlocking costs and cash
Delivering sustained cost savings is critical to the success of our business
strategy. This year we have introduced a step-change in how we engage
the business on cost savings with the aim of ensuring a more systemic and
widespread approach to unlocking savings and efficiencies across the business,
and to enhance the quantity and quality of projects that are being identified and
tracked. We have changed the governance structure, introduced clear steps
from identification to realisation of savings, improved transparency, and driven
stronger levels of accountability to ensure appropriate ownership of expenses. To
help us identify cost savings and efficiencies, and to create a further pipeline of
opportunities across the business units, we have set up revenue management
capability in the business. We are looking to improve our SKU rationalisation by
developing an accurate product costing model through the roll out of activity-
based costing.
Through these various measures, we secured R474 million in savings across our
supply chain in FY20. We have committed to delivering R470 million in savings
and efficiencies across our supply chain in 2021.
Quality – perfect
execution
Cost –
focused on big
bets: MUV
procurement
logistics
Efficiencies –
focused OEE
improvement in
key sites
Underpinned by
SSHE
New OD
COE’s
MECP
Site optimisation
Strategic
investments
Improved
service levels
From operational and
short-term focus
To balancing strategic
and longer-terms focus with
short-term priorities
OEE – Overall equipment effectiveness, MUV – Material usage variance, SSHE – Safety, security, health and
environment, OD – Organisation design, COE – Centre of excellence, MECP – Manufacturing excellence
customs and practice
Performance
summary 2020
✓ R74 million procurement
✓ R302 million in
manufacturing savings
✓ R98 million in logistics
savings
✓ New capex approval
process initiated
✓ 5% reduction in consumer
and customer complaints
✓ 25% reduction in
marketplace incidents,
with zero public recalls
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Fuelling growth through customer service
excellence
We made further progress this year in embedding a
customer service mindset across the business and began
the implementation of the Centralised Customer Service
Centre. We have continued to invest in manufacturing sites
and have engaged with key customers on collaborative
forecasting and joint business planning.
We maintained a strong focus on product quality and
consumer safety, implementing a detailed quality strategy
to ensure that we have robust integrated management
systems, qualified people and a strong quality culture
embedded across the organisation. We further
strengthened our internal and external audit and
assessment processes, conducting quarterly self-
assessments against the Global Food Safety Initiative
(GFSI) requirements and achieving external certification for
all our manufacturing facilities against globally recognised
food safety standards such as FSSC 22000 and HACCP.
All our warehouse facilities were audited by an international
certification body, in preparation for certification in FY21.
Tiger Brands joined the European Hygiene Engineering and
Design Group (EHEDG) and will use their guidelines as the
manufacturing hygiene standards across our operations.
On food quality, we maintained an improving trend, ending
the fiscal year with zero public recalls, a 25% reduction in
market-place incidents and another 5% reduction in
consumer and customer complaints.
Site optimisation supported by strategic
investments
We initiated a new capex approval process this year,
introducing a capital review committee that ensures
appropriate ownership and accountability of the business
case and introduced revised delegations of authority with
the aim of expediting approvals and improving overall
project delivery. During the year, various significant
investments were approved aimed at increasing capacity,
enhancing efficiency and realising innovation opportunities.
One of our most significant projects was the R208 million
capital investment in a brand new, state-of-the-art oat
mill in Maitland, Cape Town. The mill includes several
innovative features that have improved production
efficiencies and significantly increased output, while
reducing the operation’s carbon footprint. As part of
our commitment to enhancing livelihoods by providing
opportunities for inclusive economic participation, a
significant portion of the spend was allocated to local
suppliers through civil engineering, building construction
and engineering installations, and 120 people were
employed in the construction of the new mill.
We have identified 15 “game changer” projects over
the next several years – with capital expenditure of
~R1,5 billion per annum – focusing on capacity in
categories with a sustained increase in demand, enhancing
efficiencies, maintaining compliance, and replacing ageing
plant. These projects include a new bakery and mill,
upgraded pasta extrusion and packing lines and new lines
in beverages, the installation of standby generators, solar
PV systems and steam boilers, and various digitalisation
and automation projects.
In the near term, several opportunities across the supply
chain have been identified that will drive improved
efficiencies and cost savings. We will prioritise the
improvement of overall equipment effectiveness (OEE)
through best practice application by focusing, among
others, on key lines and processes, line capability studies
and maintenance practices. These efforts will be driven by
monthly steering groups. In addition, we will enhance
controls and implement a tracker and review process to
monitor materials usage. Although significant inroads have
been made with regards to procurement and continuous
improvement initiatives over the years, the next phase will
require cross functional collaboration to accelerate the
delivery of a robust savings pipeline.
Delivering digital transformation
Delivering digital optimisation and providing integrated IT
and information solutions is critical to realising our vision
of developing an effective, best-in-class supply chain.
During the year, several automation projects were
completed, including the latest form fill and seal technology
at Davita, in-line PET blow moulding equipment at
Beverages, and online labelling technology at the Groceries
plant.
We have approved an IT strategy aimed at harnessing
artificial intelligence, real time data, IoT (Internet of Things)
and big data analytics to enable more informed data-driven
decisions, deliver operational efficiencies, boost
productivity, and ensure compliance. A detailed digital
roadmap has been developed to assist in delivering
improvements in stock availability and inventory modelling,
ensure better traceability across the supply chain, enhance
forecast accuracy, and improve customer collaboration.
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Tiger Brands Limited Integrated annual report 2020
Our strategy continued
Great people
A winning mindset and great place to work
To enable us to win in the market through unleashing the power of our
people, we continue building a diverse talent base, developing leadership
capability, and creating a great place to work, supported by our
commitment to execution excellence. Through our people strategy, our
goal is to ignite a culture of consumer obsession, agility, and a growth
mindset that will accelerate innovation and winning performance.
Talent
Building a diverse talent base and core capabilities to deliver our growth
strategy
We continued our focus this year on building commercial and supply chain
capability across the organisation. This was supported by targeted talent
strategies, where we prioritised building pipelines for scarce and critical skill roles
specifically in bakeries and manufacturing by leveraging key partnerships with
selected service providers.
As part of our ongoing journey to improve the employee experience and create a
great place to work, we undertook various campaigns – both internally through
our communication portals and externally via social media – to communicate our
employee value proposition and employer brand. These included the Youth
Month Campaign, Women’s Month Campaign, Rising Star Awards and Rising
Star Female Forum. These employer branding campaigns were well received, as
reflected by the 140% increase in followership on Tiger Brands’ LinkedIn profile,
from 100 000 in September 2019 to 239 000 in September 2020.
In looking to attract talent for our Africa operations, we have commenced the
rollout of our Africa talent plan and appointed new talent in some of our African
operations. We have developed a customised Africa management trainee
programme, and sourced management trainees for Mozambique, Zambia
and Nigeria.
We maintained a strong focus throughout the year on promoting employee
diversity, with African, Coloured and Indian employees making up 95% of internal
appointments this year. Through our gender equity strategy, we are working to
improve the representation, engagement and development of women in core
functions and at leadership levels. The gender equity strategy includes a specific
focus on three core areas: our RISE women in leadership development
programme that focuses on developing women through action learning business
projects; the Tiger Women’s Network that focuses on enabling women to
overcome the barriers that women traditionally encounter in the workplace; and
function-specific development programmes that equip women with core
technical skills, strengthen leadership capability and improve the overall talent
pipeline of female talent. Through these programmes we aim to increase overall
female representation at all levels, especially in management, to 44% by 2023.
We also aim to increase women participation in leadership development, career
growth and progression initiatives to 50% by 2023.
We have recently developed and commenced the implementation of a
generational diversity management strategy, where our goal is to ensure
co-existence of multiple generations, foster a sense of belonging and
connectedness amongst generations, and improve the employee experience
of each generational group at Tiger. Next year we will be launching our young
professionals networking forum (NexGen Tiger), as a platform to enable inclusive
Performance
summary 2020
✓ Completed our fit-for-
future organisational
structure
✓ 79% of leadership
positions filled internally
✓ Key changes made to
business leadership at
executive and category
leadership levels
✓ Introduced a digital
on-boarding framework
✓ Voted number 1 employer
of choice in the
manufacturing sector by
graduates for the first time
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networking, development and engagement among young
professionals across the business. Through this forum we
aim to amplify the voices of the young professionals at
Tiger Brands, and bring to bear a different perspective
that will help deliver winning performance.
Our diversity profile
ACI actual
ACI target
Top
management
2020: 50%
Senior
management
2020: 55%
Middle
management
2020: 62%
Junior
management
2020: 80%
Semi-skilled
2020: 97%
Unskilled
2020: 100%
ACI: African, Coloured, Indian.
2020: 55% 2021: 55%
2022: 64% 2023: 64%
2020: 59% 2021: 63%
2022: 64% 2023: 65%
2020: 69% 2021: 70%
2022: 71% 2023: 76%
2020: 79% 2021: 80%
2022: 81% 2023: 85%
2020: 97% 2021: 96%
2022: 96% 2023: 96%
2020: 100% 2021: 100%
2022: 99% 2023: 99%
Gender diversity profile
70%
30%
R97 million invested in
skills development
4 827 employees trained through
academy programmes
146 new employees successfully on-boarded,
with 28 through our new digital platform
763 learnerships, apprenticeships and workplace
experience students
We recognise the challenge of achieving our employee
diversity targets at more senior management levels and we
are proactively addressing this through targeted talent
sourcing, internal placements, promotions and various
leadership development programmes as set out below.
Next year, our talent focus will be on further enhancing our
marketing, sales and commercial skills and deepening our
supply chain capabilities, by executing targeted talent
strategies. We will also maintain our focus on executing
fit-for-purpose learning and skills development, and further
embed just-in-time digital learning across Tiger.
Leadership
Developing leadership capability and capacity to inspire
winning performance
To ensure that we develop inspirational leaders who are
talent magnets, agile and drive a culture of innovation
and winning performance, this year we rolled out two
leadership development programmes across the
organisation: LIFT and Game Changer.
› The LIFT programme is targeted at employees who have
recently been appointed into a leadership role or those
being considered for such a transition.
› The Game Changer leadership development programme
was implemented as part of our culture transformation
journey to develop leaders with the intention and skills to
actively create and inspire winning opportunities in daily
interactions with colleagues at all levels.
In line with our promise to continually develop our leaders
and ensure that they receive developmental feedback
from multiple stakeholders, we launched the MultiRater
feedback tool during the performance year-end review
period. This gave leaders an opportunity to receive
feedback regarding their behaviour as aligned to Tiger
Values, Winning behaviours and leadership competences.
We also recently launched mentorship circles for emerging
leaders looking to learn and benefit from more experienced
leaders.
79% leadership positions filled internally
against a target of 40%
36 successors identified for senior executive
leadership roles, improving our succession ratio
from 1:1 to 3:1
141 leaders attended the LIFT programme
against a target of 141
162 leaders attended the Game Changer
programme against a target of 206
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Tiger Brands Limited Integrated annual report 2020
Our strategy continued
Great people continued
Our leadership competencies
LEADS
PEOPLE
LEADS
PERFORMANCE
LEADS
SELF
LEADS
INNOVATION
LEADS
PARTNERSHIPS
›
Inspires winning
performance
› Nurtures and
grows talent
› Shapes strategy
› Achieves results
through others
› Market focused
› Consumer obsessed
› Builds partnerships
› Builds teams
Our leadership development programmes
Programme
Target audience
LIFT leadership programme
Lead operators
EDGE leadership programme
Frontline leaders
GAME CHANGER leadership
programme
All leaders
SOAR leadership programme
Leaders of leaders
REIMAGINE Tiger Leadership
Development programme
Enterprise leaders
Great place to work
Creating a great place to work to energise a consumer-
obsessed and agile “One Tiger” team
A key focus of our people strategy is to instil an agile
performance-based culture that delivers on our identified
winning behaviours of consumer obsession, teamwork,
empowered accountability and focused execution. We
began our culture transformation journey in October 2018
with the alignment of our teams on our aspirational culture,
and a refresh of our values and winning behaviours.
We have continued to make progress this year in
embedding our winning culture. Our employee value
proposition (EVP) has been firmly defined and forms the
basis of our actions to improve the employee experience
and to enhance our ability to attract, develop and retain
talent. An important development this year was the launch
of our THRIVE employee wellbeing programme, which
covers employee health management, psychosocial
wellbeing and broader risk management activities. This
was a key enabler in our response to the Covid-19
pandemic and through our comprehensive multi-pronged
approach we were able to support both our employees
and their families.
Since starting on this culture change programme, we have
conducted numerous “Heart of the Tiger” dialogues with
staff to deepen the internalisation of our refreshed values
and winning behaviours, learn from their experiences and
perspectives, and evaluate our progress in instilling the
winning culture. Informed by this feedback we are taking
various actions to drive the necessary shift in culture.
Although we have established and embedded a clear
reward and recognition strategy and have made some
progress in making our reward strategy more competitive,
we recognise the need to improve business performance
in order to retain key talent through our short- and long-
term incentive plans.
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72 Leader-led culture transformation
engagements completed
174 “Heart of the Tiger” team dialogues
undertaken, engaging 9 226 employees
Voted number 1 graduate
employer of choice in the manufacturing sector, and
second in the FMCG sector in the South African
Graduate Employers Association 2020 survey
Once again certified as
Top Employer
by Top Employer Institute
To deliver a further step-change in driving a culture
of innovation, consumer obsession and winning
performance, we will be taking measures to enable
a work environment that liberates people to focus
on the consumer and our purpose. To this end, we
have completed our Voice of Tiger employee
experience survey to enable us to evaluate our
progress, identify opportunities for improvement
and execute actions to further progress our winning
culture. We will review our delegations of authority
and our leadership meeting cadence to encourage
more agile decision-making and execution. We will
rigorously prioritise annual deliverables enabling
category teams to deliver on fewer more focused
priorities, and we will be standardising transactional
processes and enabling them through technology
and digital platforms. To drive innovation, we will be
implementing cross-functional teams to accelerate
the speed of execution of “big bet” performance
improvement and innovation projects.
Employee relations
One of the company’s strategic intents is to establish and
maintain a meaningful collaborative relationship with our
key stakeholders, including our representative trade unions
and employees. This year the company held its first
top-to-top engagement facilitated by the CEO with key
trade unions. This engagement was used to reflect on
Tiger Brands’ performance and to share the company’s
broad strategy and plans. The engagements were
preceded by a collaborative approach with the trade
unions on the company’s response to Covid-19 within
the company’s operations across the country.
Early in the year, Tiger Brands initiated a fit-for-future
structure review programme to drive savings and optimise
the business towards improved consumer focus, cost-
efficiency, ownership, accountability, agility and speed of
execution. The implementation of this initiative was initially
deferred as a result of the Covid-19 pandemic, but with
the impact of the lockdown exacerbating the already
challenging business environment, the need for
this restructuring became even more apparent, and the
process was initiated in May 2020. A careful and structured
workforce transition process was implemented to support
our people during the restructuring process. This included
upfront engagement with teams and individuals, the
prioritising of redeployment opportunities for our people
across the organisation through available vacancies, and
mindful management of the people exiting their positions
with the company. The process resulted in the optimisation
of 493 positions and the retrenchment of 393 employees.
During the period under review, we launched a sexual
harassment campaign aimed at educating both employees
and managers.
Although the employee relations environment remains
stable, a challenging operating environment and low
inflation has resulted in challenged wage negotiations
throughout the country.
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Tiger Brands Limited Integrated annual report 2020
Our strategy continued
Sustainable future
The sustainability report for 2020 is available at
www.tigerbrands.com and includes comprehensive
and detailed disclosures with regards to our sustainable
future strategic pillar.
Sustainable company, community and planet
To deliver on our core purpose of nourishing and nurturing more lives every
day, our sustainable future strategic objective comprises three clear focus
areas: health and nutrition; enhanced livelihoods; and environmental
stewardship. These are underpinned by our critical anchors relating to:
ethical behaviour; purpose-led culture; food safety and quality; ethical
supply chain practices; safety, health and environment; responsible
marketing; and transparency, partnerships and stakeholder
responsiveness.
Health and nutrition
We have committed to enabling consumers to improve their health and wellbeing
by providing food products that are more nutritious and affordable, developing
best-in-class nutritional standards, and leveraging our brand and marketing
activities to promote consumer nutrition. In driving progress on these
commitments, we have updated our nutritional standards against global
guidelines, introduced a three-tier categorisation of our products using these
guidelines, and begun to assess our product range against these criteria. We
have begun implementation of a product lifecycle management system which
will assist us in establishing a baseline and setting targets for more nutritious
products as a percentage of our total portfolio. We launched several new, more
nutritious and healthier product lines in our Snack, Baby and Personal Care
categories, reduced sugar in our Bakery, Cereals and Beverages portfolios, and
voluntarily enriched some core products with micronutrients commonly deficient
in South African diets. We introduced clear and simple consumer-relevant health
claims in various brands, have begun the process of including portion control
messaging on the back of packs in Snacks & Treats, and participated in a
consultative process on the adoption of progressive front-of-pack food labels.
Performance
summary 2020
✗ Two employee and one
contractor fatalities;
lost-time injury frequency
rate of 0,34 (2019: 0,38)
✓ R12 billion spend on
BBBEE verified suppliers
✓ R32 million committed to
socio-economic
development
✓ 105 648 high-quality,
nutrient dense and fortified
food packages distributed
✓ 4,2% reduction in total
scope 1 GHG emissions
(8,2% reduction in
emissions intensity)
year-on-year
✓ 8,8% reduction in water
usage (5,9% reduction in
intensity) year-on-year
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Environmental stewardship
Recognising the significant environmental impact of the
agri-food value chain, both globally and nationally, we have
committed to improving our environmental performance by
implementing innovative solutions that optimise energy and
water consumption in our operations, reduce the negative
impacts of packaging, and minimise waste, effluent and
emissions. We are exploring opportunities for circular
economy initiatives that stimulate sustainable economic
opportunities, as well as leveraging our brand and
marketing to inspire positive behaviour change in
consumers.
We made further progress this year in reducing the impact
of our operations, focusing on the most material issues:
improving energy and water efficiency, reducing
greenhouse (GHG) gas emissions, and striving for zero
waste to landfill operations. As a result of various energy
efficiency measures, we achieved an absolute energy
reduction of 5,3%, while absolute Scope 1 GHG emissions
were down 4,2% year-on-year. We have undertaken
industrial water-efficiency assessments and installed smart
metering systems at our most water-intensive operations,
contributing to an 8,8% reduction in total water use. As
part of our drive to a circular economy, we have entered
into various industry partnerships this year aimed at
“closing the loop” with both food and packaging waste,
and we have committed to achieving the targets in the
SA Plastics Pact, launched in January 2020.
Enhanced livelihoods
We have committed to improving the livelihoods of
thousands of people by providing opportunities across our
value chain for inclusive economic participation, including
the provision of financial and non-financial support to
black-owned and black women-owned enterprises and
smallholder farmers, through our supplier and farmer
development programmes, and preferential procurement
policies. In addition, we contribute at least 1,5% of net
profit after tax annually, towards socio-economic
development activities that promote sustainable thriving
communities.
This year we launched the Dipuno Enterprise
and Supplier Development Fund, committing
R100 million in investment by 2025 to black-owned
and black women-owned small enterprises and
smallholder farmers. An initial capital investment
of R45 million was made to the Dipuno Fund to
provide loans and technical support to beneficiaries,
and to provide for a small operating budget.
We have since approved projects to the value of
R12 million and disbursed R8 million, with a further
R15 million worth of applications under review. Towards
our target of facilitating the creation of 1 000 new jobs, we
have established our Smallholder Farmer Programme and
Agriculture Aggregator Model to support small black and
black woman-owned farming and agri-processing
enterprises. Since its establishment last year, our
agriculture aggregator model has supported 50 emerging
entrepreneurs through business incubation training and
created 100 new jobs in the small farmer sector.
In line with our recently revised socio-economic
development strategy, and as part of our response
to the Covid-19 pandemic, we invested R32 million on
community development initiatives. During the year, we
achieved several milestones including: distributing over
93 000 high-quality, nutrient-dense and fortified food
packages; reaching 30 000 direct and indirect beneficiaries
each month through the Tiger Brands food and nutrition
support programme; and training almost 600 community
members in food gardening and community skills
development. In addition, 12 648 food packages were
distributed to vulnerable communities during the various
stages of lockdown.
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Tiger Brands Limited Integrated annual report 2020
Our strategy continued
Sustainable future continued
Occupational health and safety
Ensuring zero injuries and delivering strong behavioural
safety, health and security performance through visible,
felt leadership is a top priority. We have a holistic health
and safety programme with clear roadmaps and
deliverables. This is supported by a behavioural safety
programme that drives leadership accountability and
responsibility, and effective auditing to ensure that process
safety management is implemented properly. Despite our
best efforts, we are saddened to report that in this fiscal
year, two employees and one contractor lost their lives
while working for Tiger Brands. As is mandatory, our
operations carry out a detailed investigation for every
fatality, involving a multi-disciplinary team and senior
management. This year, multiple behavioural safety
initiatives were delivered at our operations, which resulted
in an improvement of our recordable injury rate. As at the
end of September 2020, our lost-time injury frequency rate
(LTIFR) improved to 0,34 from 0,38 in 2019. Despite the
improvement, it is evident that we need to work harder,
and so we continue to deliver capacity-building and safety
initiatives with the aim of establishing and embedding a
safety culture across the organisation. In addition to our
extensive response to mitigating the health impacts of the
Covid-19 pandemic, we continued our monitoring and
management reporting on critical health issues, conducted
site occupational hygiene surveys and health risk
assessments, ran various employee awareness raising
campaigns, and delivered wellness support to employees.
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49
Aligning with the Task Force for Climate-
related Financial Disclosures (TCFD)
While working to improve our annual reporting and
sustainability disclosure, we have started to look at aligning
more closely with the recommendations of the Task Force
for Climate-related Financial Disclosures (TCFD). The TCFD
takes a different approach to tools like the CDP Climate
Change Programme, by aiming to integrate climate-related
disclosure within annual financial filings and reports. The
intention behind the TCFD’s approach is to align climate
reporting more closely with a company’s regular reporting
practices, towards making it both easier for companies
and more digestible (and useful) for investors. The focus is
on providing investors with clear, financially relevant and
decision-useful information through an internalised
mechanism (annual reporting) in which companies are
already invested.
At a time when the demands of multiple sustainability
reporting frameworks and standards place an excessive
burden on companies and a time when we are looking to
concentrate our efforts towards improving our disclosure,
we find that aligning with the TCFD approach will help us
gain more ground in this arena.
Transparency, partnerships and
stakeholder responsiveness
Recognising the importance of transparency and
partnerships, we are committed to playing an active role
in industry forums to help shape sustainable consumption
standards, tools and best practices. We are a member
of industry bodies such as the National Business Initiative
(NBI), Manufacturing Circle, Business Leadership South
Africa, Consumer Goods Council of South Africa (CGCSA),
South African Agricultural Processors Association (SAAPA),
South African Fruit and Vegetable Export Council
(SAFVEC), South African Fruit Juice Association (SAFJA),
and the Coalition for Ethical Operations.
We are working with South Africa’s Council for Scientific
and Industrial Research (CSIR) on assessments to enhance
manufacturing industry competitiveness through resource
efficiency and cleaner production, and we partner with
various NGOs and academic bodies, including the Centre
for Food Safety at Stellenbosch University.
As signatories to the We Mean Business initiative, we
have committed to adopting a science-based emissions
reduction target, promoting responsible corporate
engagement on climate policy, and reporting climate
change information in mainstream reports as a fiduciary
duty. Other key relationships include our partnership with
the United Nations Industrial Development Organisation
(UNIDO) and our participation in the Strategic Water
Partnership Network (SWPN).
Recognising the critical importance of understanding and
being responsive to our stakeholders’ interests, we have
introduced a structured stakeholder relations strategy
(see page 16).
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Tiger Brands Limited Integrated annual report 2020
Financial review
Tiger Brands’ earnings for the year ended 30 September
2020 were impacted by the ongoing difficulty of maintaining
margins in a tough trading environment compounded by the
challenges of Covid-19.
Overview
In a year that has been catastrophic for many businesses in South Africa, Tiger
Brands has been in the fortunate position of playing a pivotal role in ensuring
food supply during the initial lockdown periods. This allowed the company to
support the livelihoods of its employees even when sites were temporarily closed
in line with lockdown regulations. This resulted in strong cash flow generation
further supporting the company’s healthy balance sheet and allowing
management to focus on operational execution.
Notwithstanding this, the results for the year have been disappointing, reflecting
the challenges faced by the company in maintaining margins in what was an
already difficult consumer environment before the onset of the Covid-19
pandemic.
The second half of the year was affected by the closure of non-essential facilities
in Home Care and Sorghum beverages, the cost of complying with the
Consumer and Customer Protection and National Disaster Regulations (pricing
regulations) as well as the cost of health and safety measures. Furthermore,
supply chain efficiencies were adversely impacted by temporary disruptions from
Covid-19 infections at site level and within the supply chain.
Lockdown measures created favourable tailwinds from a volume perspective
in certain businesses including Wheat, Milling, Bread, oat-based breakfast
offerings (Jungle), Pasta and Groceries. However, there were corresponding
headwinds in terms of consumer demand in Snacks & Treats, Beverages, Out
of Home and Baby. A dispute with a former distributor in Nigeria continued to
adversely impact the performance of Exports. These developments had
a negative effect on profitability from continuing operations in the second half.
However, enhanced efficiencies, cost reduction measures as well as the revised
operating model resulted in a significantly lower year-on-year decline compared
with the year-on-year decline reported in the first half.
As previously reported, Deli Foods and VAMP have been treated as discontinued
operations with the comparative information restated accordingly. The acquisition
of the abattoir business at Olifantsfontein by Molare Proprietary Limited became
effective on 28 September 2020, while the disposal of the VAMP processing
facilities was successfully concluded post-year-end.
Revenue from continuing operations increased by 4%, underpinned by price
inflation of 6% driven largely by currency weakness for most of the year, partially
offset by an overall volume decrease of 2%. A decline in volumes in certain
categories, coupled with the inability to fully recover significant raw material cost
push, placed gross margins under pressure, resulting in group operating income
declining by 18% to R2,6 billion (2019: R3,2 billion).
Income from associates decreased by 5% to R352 million. A strong underlying
performance from Carozzi as well as a commendable performance from National
Foods in a very difficult economic climate, which has been accounted for in line
with IAS 29 Financial Reporting in Hyperinflationary Economies, was partly
offset by weak results from UAC Foods. In addition, income from associates
last year included three months’ earnings from Oceana which was unbundled
in April 2019.
Deepa Sita
Chief financial officer
Pamela Padayachee
Acting chief financial officer
The preparation of these results has
been supervised by Pamela Padayachee
CA(SA) (acting chief financial officer) and
Deepa Sita CA(SA), chief financial officer
of Tiger Brands Limited.
+4% y-o-y
R29,8bn*
Revenue
2019: R28,6 billion
-18% y-o-y
R2,6bn**
Operating income
2019: R3,2 billion
* From continuing operations.
** Before impairments and abnormal items.
www.tigerbrands.com
51
Net financing costs for the year increased by R96 million.
The reclassification of operating leases into short- and
long-term lease liabilities in accordance with IFRS 16
accounted for R28 million of this increase, while higher
average debt levels during the year had a further
R31 million impact.
The effective tax rate before abnormal items, impairments
and income from associates, increased from 29,5% to
31,0%, largely due to the lower pre-tax profit before
abnormal items, impairments and income from associate
companies, and a reduced benefit in respect of special
investment allowances claimed on qualifying capital
projects in the current year.
Earnings per share (EPS) from continuing operations
decreased by 66% to 886 cents (2019: 2 617 cents). This
was principally due to the fact that earnings in the previous
financial year benefited from the capital surplus of R2 billion
arising from the fair value gain relating to the unbundling of
the company’s interest in Oceana, including the capital
profit realised on the disposal of the company’s residual
shareholding in Oceana. Headline earnings per share
(HEPS) from continuing operations declined by 23% to
1 196 cents (2019: 1 556 cents). The lower rate of
decrease in HEPS relative to the rate of decrease in EPS,
is mainly due to the exclusion in the prior year of the
aforesaid capital surplus as well as the cost of impairments
in both 2019 (R213 million) and 2020 (R547 million) from
the calculation of headline earnings.
EPS from total operations decreased by 74% to 612 cents
(2019: 2 333 cents), while HEPS from total operations
decreased by 29% to 940 cents (2019: 1 322 cents).
The total after tax loss for the period from discontinued
operations amounted to R453 million (2019: R470 million).
Segmental operating performance
Domestic revenue increased by 4% to R26,4 billion
underpinned by price inflation of 6%, less the impact
of an overall volume decline of 2%. The mixed topline
performance, together with the impact of higher raw
material input costs and additional Covid-19 related costs,
led to a decline in operating income to R2,6 billion (2019:
R3,0 billion).
Total revenue for the Exports and International businesses
increased by 4% to R3,4 billion. This was driven by an
improved second half performance from our business
in Cameroon as well as a better second half in Exports.
Operating income, however, reduced by 51% to
R103 million.
Further details of the performance of our operations are
provided in our operational review (see page 52).
Cash flow and capital expenditure
Cash generated from operations declined by 15% to
R3,0 billion, in line with the decline in cash operating profit.
With the FY20 interim dividend withheld and a special
dividend paid in the prior year, net cash inflow from
operating activities increased to R1,6 billion (2019:
R617 million). Although overall capital expenditure levels
declined 15% to R937 million, replacement capex
increased 10% to R659 million. The group ended the year
in a net cash position of R1,8 billion compared with a net
cash position of R1,2 billion in the previous year.
Ordinary and special dividend
An ordinary final dividend of 537 cents per share has been
declared for the year ended 30 September 2020. The total
ordinary dividend for the year of 537 cents per share aligns
the distribution with Tiger Brands’ dividend policy of
1,75x cover based on full year headline earnings per share.
Given the company’s healthy balance sheet and the fact
that there are no imminent acquisitions or exceptional
capex requirements, the company has also declared a
special dividend of 133 cents per share as a result of the
once-off proceeds received from the disposal of its VAMP
business. The payment of the special dividend is subject
to South African Reserve Bank approval.
The special dividend, together with the gross final cash
dividend, brings the total distribution for the year to
670 cents per share (2019: 1 061 cents per share).
Shareholders are referred to the accompanying dividend
announcement for further details (see page 91).
Outlook
Looking ahead, it is likely that the current significant
economic downturn will persist over the near and medium
term. The anticipated volatility of the rand and increasing
levels of unemployment will negatively impact both the
supply and demand dynamics of our business. The
continuing pressure on consumer disposable income
highlights the need for an enhanced focus on value
offerings, as well as cost reduction initiatives and operating
efficiencies.
Despite the challenging environment, the reconfiguration of
our operating model, clear plans to compete effectively in a
value economy as well as the successful execution of key
strategic initiatives should position the group favourably to
reverse the trend of declining profitability from continuing
operations.
Appreciation
Thank you to our local and international shareholders for
your continued investment in the company and to the
broader investment community for your interest and
engagement. We acknowledge our colleagues in the
finance department who constantly strive towards best
practice and improved disclosure and extend thanks to the
audit committee for their guidance throughout the year.
FINANCIAL REVIEW / OUR PERFORMANCE 52
Tiger Brands Limited Integrated annual report 2020
Operational review
GRAINS
Strategic outlook
Our vision is to remain a leader in Milling and
Baking. Our identified priorities over the
medium term are to lead innovation, and
continue to build on our brands’ purpose
to effect differentiation, while focusing on
enhanced supply chain efficiencies. We will also
be investing in maintaining superior route-to-
market execution. In addition, we will seek to
strengthen our brands visibility as tasty, quality
nutrition, with strongholds developed and
maintained in targeted geographies. In the
ready-mix category, we aim to continue to lead
the market, while driving value propositions
through innovation. In other grains, we will
maintain our market leadership through
differentiated communication, purpose-driven
campaigns and targeted pricing, while
expanding into adjacent products and
categories, and innovating to capitalise on
growing trends. This will be supported by
realising further manufacturing and supply
chain efficiencies.
Revenue increased 5% to R13,9 billion, reflecting price
inflation of 8%, while overall volumes declined by 3%. Price
increases realised were insufficient to offset the impact of
significantly higher raw material costs, resulting in operating
income declining by 14% to R1,2 billion and the operating
margin compressing to 8,9% from 10,9%.
After a challenging start to the year, Milling and Baking
enjoyed a reasonable recovery in the second half, driven
predominantly by Maize, Bakeries and Sorghum-based
products. Revenue from Milling and Baking increased by
5%, reflecting an overall volume decline of 3%. Operating
income declined by 10% to R1,1 billion.
Despite the second half recovery, adverse category
dynamics as well as constrained pricing amid volatile
underlying raw material prices, resulted in a sub-optimal
operating profit performance from Maize for the year.
Bakeries continued to experience year-on-year margin
compression driven by marginal volume losses, while the
current operating environment did not allow for the full
recovery of cost increases. Sorghum-based products
experienced a particularly difficult period, largely due to the
impact of restrictions imposed during the lockdown period.
Following a tough start to the year, Other Grains
experienced a meaningful recovery in the second half,
driven primarily by Jungle and Pasta. The second half
recovery resulted in year-on-year revenue for the overall
segment increasing by 5% to R4,0 billion, comprising price
inflation of 7% and an overall volume decline of 2%.
Volume declines were largely driven by Rice due to
above-inflationary price increases caused by significantly
higher raw material costs. Pasta volumes, on the other
hand, benefited in the second half from increased at-home
consumption, supported by a marked improvement in
factory performance. Similarly, increased demand in the
breakfast category resulted in an improved overall
performance from Jungle.
The increased promotional activity in the Rice category
at the start of the year coupled with pricing regulation
constraints, was the primary reason for operating income
in Other Grains declining by 43% to R114 million.
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Financial highlights
+5%
R13,9bn
Revenue
2019: R13,2 billion
-14%
R1,2bn
Operating income
2019: R1,4 billion
Revenue by segment
Mill Bake
Breakfast
Sorghum
Maize
Pasta
Rice
● 56%
● 6%
● 7%
● 9%
● 4%
● 18%
2019: 56%
2019: 5%
2019: 8%
2019: 8%
2019: 4%
2019: 19%
Performance summary
✓ Maize, Bakeries and Sorghum-based products report a second half
recovery
✓ Cost recovery in bread challenged offset by market share gains
✓ Promotional campaigns and packaging relaunch in Jungle well received
✓ Pasta benefits from increased at-home consumption in H2
✗ Adverse category dynamics persist in Maize
✗ Significant fluctuations in raw material costs difficult to pass through in Rice
Operating facilities
Mpumalanga
› Milling and Baking (Bakeries)
Gauteng
› Milling and Baking
North West
› Sorghum-based breakfast and beverages (Potchefstroom)
Free State
› Milling and Baking
KwaZulu-Natal
› Milling and Baking (Bakeries and milling)
› Other Grains (Rice)
Western Cape
› Milling and Baking
› Other Grains (Jungle)
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Tiger Brands Limited Integrated annual report 2020
Operational review continued
CONSUMER BRANDS – FOOD
Strategic outlook
Our strategic objective is to accelerate growth
by strengthening our master-brand portfolio,
while defending our leading positions through
increased marketing investment and innovation.
In addition, we will develop strong shopper
propositions and seek to expand our current
portfolio into category adjacencies and boost
differentiation through enhanced labelling and
packaging. We will be restoring
competitiveness in our manufacturing activities
by eliminating waste and improve overall
equipment effectiveness aimed at unlocking
savings to improve capacity and reduce
conversion costs.
In Consumer Brands – Food, an improved top-line
performance in Groceries was partially offset by the impact
of reduced demand in Snacks & Treats, Beverages and
Out of Home. Overall revenue grew by 3% in line with price
inflation of 3%, while total volumes remained unchanged.
The subdued revenue growth together with above-inflation
cost increases, resulted in negative operating leverage with
operating income declining by 20% to R829 million (2019:
R1,0 billion).
Groceries’ revenue increased by 9%, supported by volume
growth of 4% and 5% price inflation. Despite pricing
constraints and supply chain challenges in the first half,
profitability improved with operating income increasing by
9% to R354 million. This performance was assisted by a
favourable sales mix, optimal promotional activity and rigid
cost control.
Despite a recovery in demand in the second half, revenue
in the Snacks & Treats category decreased by 5% to
R2,1 billion, largely driven by a volume decline of 6%.
Demand was adversely impacted across all segments
during the various lockdown stages as spending was
diverted to essential items and the decline in shopping
occasions reduced the opportunity for impulse purchases.
Operating income declined by 46% to R170 million as a
result of lower volumes, factory under-recoveries and
higher expenses due to Covid-19 related costs.
Similarly, the Beverages business was impacted by
Covid-19 restrictions in the second half, with year-on-year
revenue marginally up following reasonable growth in the
first half. Operating income fell by 20% to R238 million due
to an unfavourable product mix as well as higher
conversion and distribution costs.
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Financial highlights
+3%
R9,7bn
Revenue
2019: R9,4 billion
-20%
R829,6m
Operating income
2019: R1,0 billion
Revenue by segment
Groceries
Snacks and Treats
Beverages
Out of Home
● 57%
● 22%
● 16%
● 5%
2019: 54%
2019: 24%
2019: 16%
2019: 6%
Performance summary
✓ Volume growth in Groceries driven by spreads and canned vegetables;
profitability benefits from favourable product mix, optimal promotional
activity and cost control
✓ In Beverages, Oros flavoured innovations drive category growth; channel
specific innovation with Brookes Crush launch
✗ Snacks & Treats volumes decline due to lockdown stages impacting
consumer spend
✗ Covid-19 restrictions in H2 offsets reasonable H1 growth in Beverages
Operating facilities
Limpopo
› Groceries (Musina)
Gauteng
› Groceries (spreads, condiments and ingredients)
› Beverages (Roodekop)
KwaZulu-Natal
› Snacks & Treats
Western Cape
› Groceries (Paarl)
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Tiger Brands Limited Integrated annual report 2020
Operational review continued
HOME, PERSONAL CARE AND BABY (HPCB)
Strategic outlook
We are looking to deliver growth in Home
Care, off the back of existing brand strength
supported by affordable product innovation. We
will be launching several unique innovations
as well as looking to drive geographic expansion
of some of our leading brands into new markets
in Africa.
In Personal Care, our picture of success is for
Ingram’s to be developed into a leading master
brand with innovation-led growth, aided by
improved profitability. Progress has been made
in focusing the portfolio, with work underway to
improve on-shelf availability and distribution
of the retained portfolio.
Our strategic priorities in Baby Care are to
consolidate our position as a consumer-centric,
business, developing a Purity master-brand that
delivers on its mission to help every South
African child realise their full potential. We are
focused on improving factory efficiencies and
site logistics, and enhance the value proposition
with improved labelling, as well as leveraging
baby feeding expertise through our recently
launched Purity Owned Parenting Platform and
Journey Journal App.
Overall revenue in HPCB increased by 5% to R2,8 billion
due to a sustained strong performance from Home Care.
The strong volume uplift in Home Care was attributable
to increased demand and effective in-store execution.
Revenue for the year increased by 12%. However, the
business was adversely affected by trading restrictions
which were introduced in the early stages of the lockdown,
and depressed the overall growth in operating income to
an increase of only 5% when compared to the prior year.
Personal Care enjoyed a strong overall recovery in the
second half, driven by a well-executed Ingram’s winter
campaign. Revenue for the full year increased by
3% to R661 million on the back of 7% price inflation and
a volume reduction of 4%. A weak first half together
with Covid-19 related cost pressures in the second half,
resulted in lower profitability with operating income
declining by 11% to R79 million.
Volumes across the Baby Care segment were affected by
adverse demand dynamics during the various lockdown
stages, with revenue declining marginally to R975 million.
Operating income fell sharply to R111 million (2019:
R151 million) as a result of the lower sales volumes
combined with overhead under-recoveries and additional
Covid-19 related costs.
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Financial highlights
+5%
R2,8bn
Revenue
2019: R2,7 billion
-6%
R510,4m
Operating income
2019: R545,6 million
Revenue by segment
Personal Care
Baby Care
Home Care
● 23%
● 35%
● 42%
2019: 24%
2019: 37%
2019: 39%
Performance summary
✓ Strong volume uplift in Home Care due to increased demand and effective
in-store execution
✓ Well-executed Ingram’s winter campaign boosts revenue in Personal Care
✓ Progressed rationalisation of tail-end brands in Personal Care with the sale
of eight brands
✗ Baby Care segment affected by adverse demand dynamics during the
various lockdown stages; strong innovation launches to benefit FY21
Operating facilities
Gauteng
› HPCB (Isando)
Western Cape
› Baby
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Tiger Brands Limited Integrated annual report 2020
Operational review continued
EXPORTS AND INTERNATIONAL
Strategic outlook
Our ambition is to organically grow our Africa
export business by building on our current
established presence across the continent.
Informed by a thorough understanding of the
opportunities and risks across this market,
we have classified the countries for potential
growth into four categories – expand, develop,
trade and explore (see page 39). To win in
identified key markets, we will be prioritising
product categories to drive volume growth,
investing in targeted brands and where
necessary developing new products. We have
engaged selected partners to ensure an optimal
route-to-market in priority countries, and we are
investing in building key capabilities in each
market with dedicated support functions that
are tailored to local conditions. At Chococam
in Central Africa, we will be driving further
innovation within the core business, securing
efficiencies through facility upgrades, and
embedding a performance-driven customer-
centric culture.
Total revenue for the Exports and International businesses
increased by 4% to R3,4 billion. This was driven by an
improved second half performance from our business
in Cameroon as well as a better second half in Exports.
Operating income, however, reduced by 51% to
R104 million.
The performance of the Exports segment was negatively
affected by the trademark dispute with a former distributor
in Nigeria. The subsequent resolution of the dispute
resulted in the resumption of sales into Nigeria, which has
provided positive momentum going into the new financial
year. In addition, a rebound of our export volumes into
Mozambique is evident after several years of
underperformance as the improved distributor model
gains traction.
Revenue in the Deciduous Fruit business was largely
unchanged due to an improved second half performance.
Despite the recovery in revenue, the business recorded an
operating loss of R78 million (2019: R8 million loss) due to
the negative effects of lockdown restrictions in certain
export markets as well as adverse foreign exchange
movements relative to the previous year.
Chococam’s performance during the year was muted.
A 7% decline in revenue in local currency terms was
a consequence of lower volumes in a challenging macro-
economic environment, compounded by the effect of the
Covid-19 pandemic. Revenue in rand terms increased
by 4% to R942 million. Operating income decreased by
14% in rand terms to R149 million (23% reduction in local
currency), due to significant raw material cost push, the
effect of lower volume throughput on factory overhead
recoveries and a 5% excise tax on gross sales introduced
earlier in the year.
www.tigerbrands.com
59
Financial highlights
+4%
R3,4bn
Revenue
2019: R3,2 billion
-51%
R103,3m
Operating income
2019: R212,1 million
Revenue by segment
Exports and
International
Central Africa
(Cameroon)
Deciduous Fruit
● 42%
● 28%
● 30%
2019: 42%
2019: 28%
2019: 30%
Performance summary
✓ Improved second half performance driven by better performance from
Cameroon and Exports
✓ Positive momentum in Nigeria following trademark dispute resolution
post-year-end
✓ Deciduous Fruit disposal progressed
✗ Chococam performance impacted by higher raw material input costs and
5% excise tax introduced earlier in the year
Operating facilities
Cameroon
› Chococam
South Africa
Gauteng
› Powdered soft drinks (Jolly Jus) and Benny seasoning for export markets
Western Cape
› Deciduous Fruit (LAF)
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Tiger Brands Limited Integrated annual report 2020
Operational review continued
ASSOCIATES
Financial highlights
-5%
R352m
Earnings
2019: R371 million
+3%
18%
Contribution to headline earnings from
continuing operations
2019: 15%
Chile
Empresas Carozzí (24,4% held)
Empresas Carozzí S.A., a Chilean company with
headquarters in Santiago, is one of the largest and
most respected South American food producers. It has
manufacturing operations in Chile, Peru and Argentina, and
additional commercial branches in Ecuador and the United
States. Carozzí has two main business areas: fast-moving
consumer goods (and pet food), with its main markets in
Chile and Peru, and agro-industrial products (business-to-
business) that are sold worldwide.
The effects of the Covid-19 pandemic led to a shift in
demand, with growth reported in Carozzí’s basic product
range (flour, rice and pasta), while indulgent categories
such as chocolates, biscuits and snacks all experienced a
decline in volumes. In addition, the effects of the pandemic
coupled with the drought in Chile adversely impacted the
agro-industrial division. This was offset in part, by solid
cost control during the year.
Nigeria
UAC Foods (49% held)
UAC Foods is a leading manufacturer and marketer of
convenience foods in Nigeria, with respected brands in
snacks, dairy products and beverages. The snacks
category comprises Gala sausage roll, Funtime cupcakes,
Funtime coconut chips, and the new Funtime Groundnut
chips. The dairy category includes the Supreme range of
ice-cream and yoghurt products, while the beverage
category includes Swan Natural Spring Water.
UAC Foods performance was adversely impacted by
Covid-19 with lower volumes particularly in the snacks and
dairy segments. Lower volumes as well as higher input and
distribution costs and increased promotional activity further
impacted profitability.
Zimbabwe
National Food Holdings Limited (37,4% held)
National Foods is a leading branded food manufacturer
in Zimbabwe. In addition to maize and flour milling, the
company produces a range of food products, including
stockfeed, snacks and treats, rice, peanut butter and oil.
National Foods financial results were prepared in
accordance with the requirements of IAS 29 Reporting in
Hyperinflationary Economies.
Volumes for the period declined by 25% compared to the
same period last year.
Revenue, however, increased reflecting higher selling prices
following the progressive removal of most grain subsidies.
Gross margin increased by 48%, below the increase in
revenue as the group focused on being competitively
priced. Profit after tax increased by 75%.
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Tiger Brands Limited Integrated annual report 2020
Our leadership team
The Tiger Brands board
Tiger Brands’ board of directors plays a critical role in the governing of the business. Its
diversity lends important perspective and depth to the group’s direction. We are therefore
committed to building a board that is diverse in terms of race, gender and experience.
Non-executive directors
KHOTSO MOKHELE (65)
Chairman
Appointed: August 2007
Experience
› General management and strategy
› Risk management
› Auditing and accounting
› Governance
› Stakeholder relations
› Information and communication
technology
Other directorships
Non-executive director of AECI, Mapitso
Consortium, MTN Group, Hans Merensky
Holdings, Kenosi Investment Holdings.
Former chairman of ArcelorMittal South
Africa, Impala Platinum and Adcock Ingram
and Chancellor of the University of the
Free State.
Committee membership
Nomination and governance (Chair)
Investment (Chair)
Remuneration
GERALDINE FRASER-MOLEKETI (60)
Chairman designate
CORA FERNANDEZ (47)
EMMA MASHILWANE (45)
Appointed: September 2020
Appointed: March 2019
Appointed: December 2016
Experience
› Leadership and strategy
› Governance
› Public administration
› Stakeholder relations
› Sustainability leadership
Other directorships
Lead independent director of Exxaro and
non-executive director of Standard Bank
Group and Standard Bank South Africa.
Chancellor of the Nelson Mandela University,
chair of the Advisory Council of the
Mapungubwe Institute for Strategic
Reflection (MISTRA) and the chair of the
Committee of Experts on Public
Administration (CEPA) of the United Nations
Economic and Social Council.
Experience
› Finance and investment
› Governance and general management
› Leadership and strategy
› Auditing and accounting
Other directorships
Lead independent director of Spur
Corporation and non-executive director
of Sphere Holdings and Capitec Bank.
independent trustee of National
Empowerment Fund and Allan Gray
Retirement Fund. Previous roles included,
managing director: Sanlam Investment
Management and CEO of Sanlam Private
Equity. Partner: Tiso Private Equity,
investment associate: Ethos Private Equity,
chief executive: Sanlam Investments
Institutional Business, and investment
principal: Sanlam Private Equity and former
non-executive director of Group Five
Limited.
Committee membership
Risk and sustainability (Chair)
Audit
Experience
› Auditing and financial management
› Governance
› Corporate finance
› Banking, finance and FMCG
Other directorships
Co-founder and CEO of MASA Risk
Advisory Services and MASA Chartered
Accountants Incorporated. Non-executive
director of Famous Brands, Capitec Bank
and Merchantile Bank. Previously head of
internal audit at Nkonki Incorporated and
non-executive director of Murray & Roberts.
Committee membership
Audit (Chair)
Risk and sustainability
MAKHUP NYAMA (63)
MAYA MAKANJEE (58)
DONALD WILSON (63)
MARK BOWMAN (54)
Appointed: August 2010
Appointed: August 2010
Appointed: June 2019
Appointed: June 2012
Experience
› General management
› HR and remuneration
› Governance
› Information and Communication
Technology
› Remuneration and risk
Other directorships
Chairman of SMEC SA, non-executive
director of Marsh Inc and director of Zensar
SA, Makhup Properties and Kapela Holdings
and its subsidiaries. Former non-executive
director of BDO Inc and Xon Holdings and
Group Chief Executive of SAAB Grintek.
Committee membership
Risk and sustainability
Social, ethics and transformation
Experience
› Strategy and general management
› Stakeholder relations and reputation
management
› Human resources
› Sustainable development
› FMCG in Africa
Other directorships
Non-executive director of Mpact, Truworths
International, Datatec, AIG South Africa and
trustee of Nelson Mandela Foundation.
Committee membership
Social, ethics and transformation (Chair)
Nomination and governance
Remuneration
Experience
› Finance and general management
› Governance, leadership and strategy
› Mergers and acquisitions
› Stakeholder engagement
Other directorships
Director of BHBW Holdings (Pty) Ltd.
Former group finance director of Barloworld
Limited and executive director finance of
Sappi Limited.
Committee membership
Audit
Remuneration
Investment
Nomination and governance
Experience
› Strategy and general management
› FMCG sector in Africa
› Corporate governance
› Mergers and acquisition
› Remuneration
Other directorships
Non-executive director of Dis-Chem,
Mr Price Group, Grand Parade Investments
Limited, Signall Mill Products and The
Alternative Power (Pty) Ltd.
Committee membership
Remuneration (Chair)
Nomination and governance
Investment
www.tigerbrands.com
63
MICHAEL AJUKWU (64)
GAIL KLINTWORTH (57)
MAHLAPE SELLO (58)
OLIVIER WEBER (57)
Appointed: March 2015
Appointed: August 2018
Appointed: October 2019
Appointed: August 2020
Experience
› General management and strategy
› Mergers and acquisitions
› Governance
› Risk management and marketing
› Business turnaround and culture
transformation
Other directorships
Non-executive director of Marilan Alimentos
and a strategic adviser to the Advent Group
in Brazil.
Experience
› Legal and commercial
› General management and leadership
› Governance and strategy
› Stakeholder relations
Other directorships
Non-executive director of Life Healthcare
Group Holdings. Panellist with Arbitration
Foundation of Southern Africa. Previously
served on the board of Murray & Roberts
and held the position of chairman from 2013
to 2017. Former chairman of the Advertising
Industry Tribunal of the Advertising
Standards Authority of South Africa.
Committee membership
Social, ethics and transformation
Experience
› Stakeholder relations
› Risk and general management
› Corporate finance
› West Africa
› Banking, finance and FMCG
Other directorships
Independent non-executive director of MTN
Nigeria and Sterling Bank Plc. Non-executive
director of Novotel hotel, Port Harcourt,
Nigeria and International Breweries Plc
(subsidiary of AbInbev).
Committee membership
Risk and sustainability
Experience
› General management and governance
› Sustainability leadership and strategy
› Stakeholder relations
› Brand and reputational management
› Marketing
Other directorships
Non-executive board advisor to MAS
Holdings, chair of Globescan, Shell
Foundation, Integrity Action, Savo Project
Developers. Advisory board roles with SIG
Combibloc and the Wheeler Institute of
Business and Development, London
Business School.
Previous roles include: CEO of Unilever
South Africa; business transformation
director: The business and sustainable
development commission; group customer
and responsible business lead: Old Mutual
PLC; global chief sustainability officer:
Unilever PLC; Global EVP Savoury: Unilever
PLC.
Committee membership
Social, ethics and transformation
Executive directors
IAN BURTON (53)
Appointed: August 2020
Experience
› Business leadership and strategy
› Mergers and acquisitions
› FMCG
› Innovation and digital insights
Other directorships
Director of IB Consultants International
Board diversity
as at 1 October 2020
NOEL DOYLE (54)
CEO
Appointed: July 2015*
Experience
› Leadership and strategy execution
› Accounting and auditing
› Corporate finance
› Mergers and acquisitions
› FMCG in South Africa and Africa
Other directorships
Empresas Carozzí SA (Chile), National
Foods Holdings
Committee membership
Social, ethics and transformation
* Appointed CEO in February 2020.
DEEPA SITA (43)
CFO
Appointed: October 2020
Experience
› Strategy execution
› Corporate finance
› Mergers and acquisitions
› Governance and leadership
Board committee membership key
Audit committee
Social, ethics and transformation
committee
Remuneration committee
Nomination and governance
committee
Risk and sustainability
committee
Investment committee
2020
Board tenure
2020
Gender diversity
2020
Demographic diversity
FY22 target:
50% women and
black representation,
respectively.
0 – 3 years
● 54%
● 13%
● 13%
● 20% >9 years
6 – 9 years
3 – 6 years
● 53% Male
● 47%
Female
● 60% Black
● 40% White
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Tiger Brands Limited Integrated annual report 2020
Our leadership team continued
Executive committee
Our executive committee facilitates the effective control of the group’s operational activities
in terms of its delegated authority approved by the board. It is responsible for developing
policies and strategy for recommendations to the board and for the implementation and
execution in line with the board’s mandate. The executive committee meets at least monthly
and more often as required.
NOEL DOYLE (54)
Chief executive officer
Appointed: July 2012
Experience
› Accounting and auditing
› Corporate finance
› Mergers and acquisitions
› Governance
› FMCG in South Africa and Africa
DEEPA SITA (43)
Chief financial officer
Appointed: October 2020
Experience
› Strategy execution
› Corporate finance
› Mergers and acquisitions
› Governance and leadership
BECKY OPDYKE (41)
Chief marketing officer
Appointed: October 2018
Experience
› FMCG in USA, SA and globally
› Marketing and brand leadership
› Commercial
TREVOR SANDERSON (53)
Chief supply chain officer
Appointed: February 2020
Experience
› FMCG
› Supply chain management
MARY-JANE MORIFI (58)
Chief corporate affairs and
sustainability officer
Appointed: December 2016
Experience
› Corporate affairs
› Sustainability
› Oil and gas and mining sectors
JOE RALEBEPA (49)
Chief legal officer
Appointed: January 2020
Experience
› Legal, compliance and risk
› Corporate governance
› Mergers and acquisitions
› FMCG and retail
www.tigerbrands.com
65
LUIGI FERRINI (53)
Chief customer officer
Appointed: May 2020
Experience
› FMCG in South Africa and globally
› Sales strategy and execution
› Customer management and
customer relations
PAMELA PADAYACHEE (46)
Acting chief financial officer
Appointed: February 2020
Experience
› Accounting and auditing
› Corporate finance
› FMCG
KAMAL HARILAL (47)
Chief strategy officer
Appointed: April 2018
Experience
› FMCG in South Africa and Africa
› Strategy development and execution
› Mergers and acquisitions
› Corporate finance
S’NE MAGAGULA (47)
Chief human resources officer
Appointed: May 2018
Experience
› Human resources leadership
› Oil and gas sector in South Africa
and Europe
YOKESH MAHARAJ (48)
Chief growth officer: Consumer
Brands
Appointed: July 2018
Experience
› FMCG in South Africa and Africa
› Sales and distribution
› Human resources
CLIVE VAUX (69)
Executive: Corporate finance
Appointed: February 2000
Experience
› Executive leadership in FMCG
› Corporate finance
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Tiger Brands Limited Integrated annual report 2020
Creating value through
good governance
The Tiger Brands board provides effective leadership and strategic direction in the best interest of the company and
its stakeholders. The board embraces the principles of ethical leadership and good corporate governance aligned to the
King IV Report on Corporate Governance, the JSE Listings Requirements, the Companies Act and other relevant laws and
regulations. The board confirms compliance with the requirements of these regulations and legislation, as well as the
company’s memorandum of incorporation. In executing its mandate, the board regularly reviews its business model to
ensure that it supports long-term value creation, that effective systems of risk management and internal control are in place,
and that a culture of ethical leadership has been established across the group.
Our governance report provides a summarised review of those governance activities pertaining to value creation. This
includes an overview of the skills and diversity of our leadership team (see page 62), a review of the board’s priority focus
areas during the year (see page 67), and a detailed summary of our remuneration policies and practices (see page 69).
Additional information on the responsibilities, powers, policies, practices and processes of the board, including on the
application and explanation of the King IV principles, is addressed in the board charter, board sub-committee terms of
reference and the company’s memorandum of incorporation on our website: https://www.tigerbrands.com/sustainability/
ethicsgovernance.
Board
Special
board
Audit
committee
Special
audit
committee
Risk and
sustainability
committee
Remuneration
committee
Nomination
and
governance
committee
Social,
ethics and
transformation
Ad hoc:
investment
Number of meetings
KDK Mokhele
MO Ajukwu
MJ Bowman
I Burton1
NP Doyle2
MP Fandeso3
CH Fernandez
GA Klintworth
LC Mac Dougall4
GJ Fraser-Moleketi5
M Makanjee
TE Mashilwane
MP Nyama
OM Weber1
DG Wilson6
M Sello7
6
6
6
6
3
6
1
6
6
1
2
6
6
6
3
6
6
5
5
5
5
1
5
1
5
5
1
–
5
5
5
1
5
5
3
2
3
3
3
2
2
2
3
3
3
3
3
4
4
4
4
4
4
4
4
4
2
3
2
3
1
3
3
–
3
3
3
3
1 I Burton and OM Weber appointed to the board on 3 August 2020.
2 NP Doyle appointed member of social, ethics and transformation committee on 1 February 2020.
3 MP Fandeso resigned from the board on 28 February 2020.
4 LC Mac Dougall resigned from the board on 31 January 2020.
5 GJ Fraser-Moleketi appointed to the board on 1 September 2020.
6 DG Wilson appointed member of nomination and governance committee on 28 February 2020.
7 M Sello appointed to the board on 1 October 2019 and member of social, ethics and transformation committee on 20 August 2020.
www.tigerbrands.com
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The following table briefly sets out the main areas of discussion and review by the board and its sub-committees during the
year in fulfilling its fiduciary responsibility of ensuring long-term value growth.
Board focus areas in FY20
Committee
Strategy
DRIVE
GROWTH
BE
EFFICIENT
GREAT
PEOPLE
SUSTAINABLE
FUTURE
Strategy review
Reviewed the company’s priorities and opportunities for sustainable growth
Considered the impact of Covid-19 across the group and the response plan
Good governance, succession planning and leadership
Assessed board structure for its experience, skills, diversity and ability to create value
Identified, assessed and recommended skilled candidates for board appointments
Assessed directors retiring by rotation
Assessed independence of the non-executive directors
Inducted performance assessment of chairman and chief executive officer (CEO)
Monitored the succession plans for chairman, CEO and key executives
Progressed on board diversity targets
Risk management
Considered the impact of Covid-19 on the group strategic risks and implementation
of appropriate risk responses
Monitored the group health, safety, security and environmental sustainability initiatives
Environmental, social and governance (ESG) initiatives
Considered ESG matters and engagements with stakeholders
Monitored the sustainability strategy and engagement to identify close loop/circular
economy opportunities and food waste initiatives
Considered and made an input to sustainability reporting
Divestment decisions
Approved and monitored the execution of the disposal of the Value Added Meat
Products business
Approved the disposal of the Deciduous Fruit business
Technology and information (IT) and business continuity plan
Assessed organisational resilience on IT environment, information security and cyber
threats
Assessed the investments and value delivered of IT strategic projects
Assessed the business continuity management plans
Approved the IT scorecard
Board
Board
N&G
N&G
N&G
N&G
N&G
N&G
N&G
R&S
R&S
R&S
R&S
R&S
Board
Board
R&S
R&S
R&S
R&S
Remuneration
Considered the remuneration strategies aligned to the company’s people strategy
and business strategy
Adopted the remuneration policy that is fair and promote responsible pay and attract
and retain talent to enable the execution of our strategy
Ensured that the company remunerates directors and executives fairly and responsibly
and appropriate remuneration disclosure
Proposed wage negotiation mandate was considered and approved
Engaged with shareholders on the remuneration policy
Considered the benchmarking exercise of the non-executive directors’ remuneration
REMCO
REMCO
REMCO
REMCO
REMCO
REMCO
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Tiger Brands Limited Integrated annual report 2020
Creating value through good governance continued
Board focus areas in FY20
Committee
Strategy
DRIVE
GROWTH
BE
EFFICIENT
GREAT
PEOPLE
SUSTAINABLE
FUTURE
Transformation and people strategy
Monitored progress on the employment equity plans as well as culture transformation
journey
Prioritised the response actions for management of the spread of Covid-19 and impact
on the employees, their families, consumers and communities in which the company
operates
Monitored progress on development of employees, employee wellbeing programme
and employee engagement plans
Stakeholder relations and sustainable development
Monitored engagements with regulators and other stakeholders
Monitored the socio-economic development initiatives and the implementation of the
enterprise development strategy
Monitored the activities relating to consumer relationships including advertising, public
relations and compliance with the consumer protection laws
Audit processes
Ensured the integrity of the group’s financial and integrated reporting
Considered the amendments to the JSE Listings Requirements and developed
a roadmap for implementation
Monitored compliance with the implementation of the requirements of the Protection
of Privacy of Personal Information Act
Assessed the impact of Covid-19 on group financial performance and internal controls
Considered and approved the combined assurance model
Assessed the effectiveness and resourcing of the internal audit function
Assessed the effectiveness, independence and objectivity of the external auditors
SETCO
SETCO
SETCO
SETCO
SETCO
SETCO
AC
AC
R&S
AC
AC
AC
AC
Committees:
AC – audit committee
REMCO – remuneration committee
R&S – risk and sustainability committee
SETCO – social, ethics and transformation committee
N&G – nomination and governance committee
www.tigerbrands.com
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Remuneration
and performance
Section 1: Background statement
Statement from the chairman of the remuneration
committee
Dear stakeholder
On behalf of the remuneration committee (the committee), I am pleased to
present the 2020 remuneration report which, in compliance with best practice
reporting as recommended by the King IV™* Report on Corporate Governance
for South Africa (King IV™ Code for Corporate Governance), highlights:
› Key components of our remuneration policy
› Alignment of our remuneration policy with the Tiger Brands’ business strategy
and priorities
Implementation of the policy for the year ending 30 September 2020 (FY20).
›
During the period under review, the Tiger Brands Executive Leadership Team
once again focused its efforts on ramping up the execution of four strategic
priorities to enhance the company’s ability to proactively navigate the prevailing
market conditions:
1. Drive Growth: In response to the challenging trading conditions and the
Covid-19 pandemic, we executed a fit-for-purpose category, channel and
customer strategy.
2. Be Efficient: Accelerated measures to deliver cost efficiency and improve
our supply chain.
3. Great People: Continued to execute our people strategy and culture
transformation to instil a winning mindset in our people and create a great
place to work.
4. Sustainable Future: Progressed the implementation of the company’s
sustainability strategy with a particular focus on health and nutrition,
enhanced livelihoods and environmental stewardship.
As can be expected, the execution of our business priorities and business results
were significantly impacted by the Covid-19 pandemic, which warranted a review
and re-prioritisation in some instances of our focus areas at our various
operations. An executive leadership task team was established to proactively
address the impact of the pandemic on our business, people, consumers and
communities in which we operate. To demonstrate leadership from the top,
members of our board and executive leadership team voluntarily sacrificed up to
30% of their salaries and fees for three months, raising R3,5 million to support
our community initiatives. Further, we implemented a special incentive to
motivate and reward our frontline employees who continued to work during
the first month of lockdown in South Africa.
* Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its
rights are reserved.
Mark Bowman
Chairman
Remuneration committee
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Tiger Brands Limited Integrated annual report 2020
Remuneration and performance continued
During the period under review, enhancements were made
to the remuneration strategy to improve alignment of
critical business key performance indicators (KPIs) to
measure and reward performance against our strategy.
As such, the remuneration committee approved the
implementation of a revised short-term incentive (STI)
scorecard that drives the achievement of key performance
indicators as well as maintains a balance between the
focus on financial, strategic and sustainability measures.
The STI group and business unit weightings were also
revised to increase focus on delivery of results at the
category team level. Further amendments were also made
to the group and business unit scorecards, thereby
improving line of sight for employees in the frontline of
our business.
These changes to the short-term incentive structure
further align to our reward framework, which follows a
“total reward” approach, consisting of guaranteed pay
and variable pay, a range of market relevant benefits and
professional growth opportunities that recognise individual
and team performance. This holistic approach enables us
to attract, motivate and retain talented high-performing
people (see further details on page 72).
Shareholder voting outcomes
In line with our commitment to remunerate our people in a
fair and equitable manner, we maintain strong relationships
with stakeholders, and strive towards high standards of
disclosure of our remuneration approach to ensure that
there is a clear understanding of our remuneration policy
and the practices that have been implemented.
The non-binding advisory votes by shareholders at the
2020 and 2019 annual general meetings (AGM) are
summarised as follows:
% vote in favour
February
2020
February
2019
Remuneration policy
Remuneration implementation
Non-executive directors’ fees
76,55%
78,71%
99,01%
76.33%
99,42%
97,45%
The following common themes were highlighted by shareholders in 2020:
Shareholder feedback
Remuneration committee action/response
The premium paid to non-resident
non-executive directors in terms of
fees is deemed excessive
Considering the need to have a team of non-executive directors who are both
commercially and technically astute, as well as to ensure diversity and independence
in strategic decision making, we have appointed an appropriate number of non-
resident non-executive directors to our board. Market benchmarking indicates that
the current 130% premium is below the market median for non-resident non-
executive directors. Generally, market practice for non-resident non-executive
directors’ fees is typically between two and three times the fees paid to SA non-
executive directors. This has once again been contextualised in the FY20
remuneration report in the outcome of the market survey.
Specific STI targets are not
disclosed
We will endeavour to enhance STI target disclosure.
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 AGM are against the remuneration policy or
implementation report:
› Tiger Brands will seek to actively engage with dissenting
shareholders by inviting them to one-on-one meetings
and, where necessary, will issue a SENS announcement
requesting shareholders to appropriately engage on their
specific concerns
› Tiger Brands will consider the shareholder concerns and
report on the outcome of the engagements and
measures taken, in its next integrated report.
Remuneration committee objectives and
activities for FY20
In FY20 the committee undertook the following activities:
› Approved salary increase mandate for employees on
total remuneration packages (TRP)
› Approved the remuneration for executive directors and
executive committee members
› Approved the STI and LTI performance conditions,
targets and weightings in respect of FY20/21
› Recommended for approval to the board the non-
executive directors’ (NEDs) fee increases
› Approved a single remuneration benchmarking peer
group for both executive directors and NEDs
› Oversight of the Covid-19 response.
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71
Focus areas for FY21
The committee is committed to remaining up to date with
the latest remuneration market trends and best practice,
business needs, as well as our responsibilities to Tiger
Brands’ people, shareholders and communities to ensure
that our remuneration practices enable and support the
delivery of the business strategy.
Key focus areas will include:
› Embed the STI integrated scorecard and LTI scheme to
align our people with business objectives and ignite
winning performance
› Review the minimum shareholding policy to further align
the interests of executives with stakeholders
› Cement and refine our approach to monitor and address
identified pay inequities
› Continue to review our reward mechanisms and
practices with a view to introducing innovative reward
strategies to:
– Ignite winning performance
– Attract, retain and motivate key talent.
External advice provided to the committee
in FY20
In reviewing our remuneration offering to ensure that it is
competitive, fair, transparent and responsible, we enlisted
the services of PwC South Africa to assist us with design,
market practice and survey data. The committee is
satisfied that PwC South Africa is independent.
Voting at AGM
As required by the King IV Code on Corporate
Governance, the remuneration policy and implementation
report which follow, will be tabled for separate non-binding
advisory votes by shareholders at the upcoming AGM in
February 2021. 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 are
committed to engaging with shareholders as required to
discuss issues of concern.
On behalf of the committee, I am confident that our
remuneration policy has achieved the desired outcomes for
FY20 and is aligned with the company’s strategic goals.
Mark Bowman
Chairman – Remuneration committee
10 November 2020
REMUNERATION AND PERFORMANCE / OUR GOVERNANCE 72
Tiger Brands Limited Integrated annual report 2020
Remuneration and performance continued
Section 2: Overview of remuneration policy
Tiger Brands’ people strategy
The remuneration strategy is aligned to the Tiger Brands’ people strategy, which is geared to enable the execution of
the business strategy and accelerate business performance. The people strategy is comprised of three pillars: TALENT,
LEADERSHIP and GREAT PLACE TO WORK underpinned by the foundation of EXECUTION EXCELLENCE.
Our remuneration principles have been designed to support the execution of the people strategy, and are premised on our
belief that great people and great brands are at the core of our success. Our reward framework is holistic, encompassing
the monetary elements of reward, as well as non-financial aspects such as growth, development, the work environment
and culture.
DEVELOP
TALENT
INSPIRE
WINNING
PERFORMANCE
EMPLOYEE
VALUE
PROPOSITION
Guaranteed
package
Benefits
Short-
term
incentive
Long-
term
incentive
Recognition
Great
people
delivering
winning
performance
The following are the key objectives of our remuneration policy:
› Strengthen our ability to competitively attract and retain talent to enable the execution of our strategy
› Align Tiger Brands’ annual and long-term performance to the delivery of the strategy
› Align Tiger Brands’ people performance with shareholder interests
› Motivate and stimulate high performance across Tiger Brands through competitive short and long-term incentives
› Cement the foundation for fair and responsible pay we have already built
› Ensure that reward mechanisms are simple and provide line of sight to all employees.
BUSINESS STRATEGYPEOPLE STRATEGY www.tigerbrands.com
73
The following tables summarise the various remuneration elements (guaranteed package, short-term incentive and long-term
incentive) that Tiger Brands offers at different levels of employment:
Guaranteed package (excluding bargaining unit employees)
Description
Guaranteed package (GP) offered to people on a total remuneration package (TRP) comprises base pay, allowances,
retirement and medical benefits. It is reviewed annually based on personal performance (KPIs linked to individual
performance agreements (IPA) for each TRP employee which is agreed to at the commencement of every year), business
performance (linked to budget), behaviours aligned with the company values and market competitiveness (national and
sector benchmarks).
Benchmarks
Benchmarking for executive directors is based on a peer group of companies and is reviewed on a bi-annual basis. The peer
group is determined using the closeness metric formula, based on:
› Total assets
› Turnover
› Market capitalisation.
Companies included in the peer group comprise:
Factor
Executive directors
Survey type
Bespoke survey
Public data of South African companies listed on the JSE, based on the
closeness metric is used to determine an appropriate peer group
Comparator
group*
Aspen Pharmacare Ltd
AVI Ltd
Clicks Group Ltd
Distell Group Ltd
Imperial Holdings Ltd
Massmart Holdings Ltd
Mr Price Group Ltd
Pick n Pay Stores Ltd
Pioneer Foods Ltd#
RCL Foods Ltd
The Spar Group Ltd
Woolworths Holdings Ltd
Rest of exco, senior
management and
below
Exco – Mercer
executive survey
Remchannel survey –
senior management
and below
National and consumer
goods circles
* From FY20 the comparator group for executive directors and non-executive directors’ remuneration benchmarking has been merged.
# Although Pioneer Foods delisted, the company was included in the current period benchmarking as the data was still relevant. However, it will be excluded
in future.
Anchor point
Tiger Brands has anchored its current pay position at the 65th percentile of the national
market. We aspire to achieve a normal distribution around the anchor point based on
individual performance, talent/potential, experience and in certain instances, tenure. It is
important to note that guaranteed packages are not automatically adjusted to the anchor
point. The performance-based increases granted in the organisation (including those for
executive directors and executive committee members) are managed within the overall salary
increase budget and the pay progression model as discussed below.
Benefits
Benefits include retirement fund contributions, funeral cover, permanent health insurance,
death-in-service cover, medical aid contributions and travel allowances (where applicable).
Pay progression model
The intention of the pay progression model is to competitively reward performance and to
actively align our remuneration to the market. The pay progression model will, gradually over
time and within the confines of our salary increase budget, correct the guaranteed packages
for high-performing people to align them closer to the market. The model considers the
employee’s salary positioning in relation to the pay scale as well as performance when
granting an increase, while ensuring that the company remains within the overall salary
budget.
REMUNERATION AND PERFORMANCE / OUR GOVERNANCE 74
Tiger Brands Limited Integrated annual report 2020
Remuneration and performance continued
Short-term incentive
Description and link to strategy
The operating model for Tiger Brands enables us to
maximise the potential of our people in line with our
business goals. To ensure that our reward approach is
aligned with our operating model, we have revised and
simplified the STI scheme to align the contributions of all
our people to a One Team Tiger bottom line, thereby
creating greater potential for reward across the board.
The STI scheme is summarised below.
› The STI outcomes are determined based on a multiple of
the on-target percentage of guaranteed package, which
comprises three performance factors:
– A group performance factor focused on group financial
and non-financial metrics
– A business unit performance factor focused on
business unit financial and non-financial metrics
– An individual performance factor focused on individual
performance objectives and allows for differentiation in
rewarding high performers.
The primary intention of the STI is to improve business
performance by focusing participants’ attention on annual
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. This drives high
performance by explicitly creating line of sight in linking
group, business unit and individual performance.
› All permanent employees on a guaranteed package
in Paterson grades CU and above, are eligible to
participate.
› The STI is paid annually in cash to qualifying people who
are employed by the organisation on the payment date.
› 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.
Payment of an STI is subject to the overriding condition
that the group/business unit meets or exceeds the agreed
entry threshold in respect of its earnings before interest
and tax (EBIT).
Calculation
STI = Annual guaranteed package X on target % X {group
performance factor (0 to 200%) + business unit
performance factor (0 to 200%) + individual performance
factor (0 to 200%)}.
Pre-determined weightings will be applied to each of
the performance factors. In respect of the Individual
Performance Factor, participants will be rated on a rating
scale ranging from 1 (poor performer) to 5 (exceptional
performer).
Target and maximum
In FY20 the following ranges of STI awards applied to the various categories of people covered by this report:
CEO, CFO and executive directors
Executive committee members
Other participants (Paterson grades CU to E band)
On-target
percentage of
guaranteed
package
60
50
8,5 to 30
Maximum
of on-target
percentage
200
200
200
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75
Group and business unit performance factors
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 in the form of a balanced scorecard. Below is the group STI scorecard
for FY20 that applied to the CEO, CFO, executive directors, executive committee members and other participants:
Strategic
objective
Growth*, **
Efficiency*, **
People and
sustainability*
Strategic
objective
weighting
Key performance
indicator
Key
performance
indicator
weighting
65% Sales volume growth
Brand health
Absolute gross margin
EBIT
15% Cost savings initiatives
Net working capital
20% Quality
7,5%
7,5%
10%
40%
10%
5%
10%
Threshold
score = 50%
On-target
score = 100%
Stretch
score = 200%
90%
97%
95%
95%
90%
105%
100%
100%
100%
100%
100%
100%
110%
103%
105%
105%
110%
95%
Reduction in execution-related marketplace
incidents year-on-year by
10%
15%
20%
Safety (LTIFR)
5%
Reduction in lost time injuries year-on-year by
EE – ACI Opportunity
Utilisation
5%
10%
50%
15%
70%
20%
90%
* The actual targets have not been provided as they are linked to budget and considered commercially sensitive information.
** For the key performance indicators within the growth and efficiency strategic objectives, the targeted percentages for “threshold”, “on-target” and “stretch” as
set out above per key performance indicator represent the targeted percentage achievement of the underlying budgeted amounts.
The group, business unit and individual performance weightings applicable to the various employee categories are
detailed below:
Employee category
Group
Business unit
Individual
CEO, CFO and executive directors
Executive committee members
Other participants (Paterson grades CU to E band)
80%
80%
10% to 40%
0%
0%
40% to 70%
20%
20%
20%
Changes for FY21
In order to further align our STI on target percentages with market practice and to motivate winning performance through our
categories delivering on our business objectives, the following changes will be applicable from FY21 onwards:
Executive committee members
Other participants (Paterson grades CU to E band)
On-target
percentage of
guaranteed
package
60
8,5 to 50
Maximum
of on-target
percentage
200
200
The following group, business unit and individual performance weightings will be applicable to the various employee
categories:
Employee category
Group
Business unit
Individual
CEO, CFO and executive directors
Executive committee members
Other participants (Paterson grades CU to E band)
80%
80%
0% to 40%
0%
0%
40% to 80%
20%
20%
20%
REMUNERATION AND PERFORMANCE / OUR GOVERNANCE 76
Tiger Brands Limited Integrated annual report 2020
Remuneration and performance continued
Long-term incentive – Management (Paterson grade D and above)
Description
We have aligned our LTI to our reward approach and operating model, taking into consideration the following principles:
› Strengthen our ability to competitively attract and retain talent to enable the execution of our business strategy
› Align Tiger Brands’ management’s performance to our long-term strategy and, in particular, to unleashing the power
of our people objective.
In FY20, we awarded performance shares to executive directors, executive committee members, senior management and
middle management. Grants of specific retention shares were made to selected senior management and key people whose
contribution has been identified as being critical to achieving our business strategy.
The table below provides further details regarding the performance and restricted shares:
Instrument
Performance shares
Restricted shares
Employee category
Performance
shares multiple
Employee category
Award
mechanism
CEO
CFO
Executive committee members
Senior management and below
81,3% CEO
81,3% CFO
61,0% Executive committee members
10,6% – 27,7% Senior management and below
Restricted
shares multiple
–
–
–
14,5% – 16,3%
Calculation
›
(GP x performance share multiple/share price) x
performance multiplier
›
(GP x restricted share multiple/share price) x
performance multiplier
Performance
multiplier
Vesting
› The personal performance multiplier is used to modify the standard quantum of performance shares
and restricted shares, based on an individual’s personal sustained performance and potential
› This is a discretionary percentage ranging from 0% to 200%
› Three-year vesting based on anniversary of award
› Three-year time-based vesting based on
anniversary of grant
HEPS growth (weighted at 50%):
› 0 – less than CPI + GDP
› 25% vesting (threshold) – CPI + GDP
› 100% vesting – CPI + GDP +2%
› 200% vesting (stretch) – CPI + GDP +4%
The HEPS calculation is performed on an annual compound basis over the three-year vesting period
Linear vesting to apply between threshold and stretch
ROIC – (weighted at 50%):
› 0 – less than WACC +1%
› 25% vesting (threshold) – WACC +1%
› 100% vesting – WACC +2%
› 200% vesting (stretch) – WACC +5% and above
Performance
conditions
applicable to
performance
shares
The measurement will be the average ROIC over the three-year vesting period
Linear vesting to apply between threshold and stretch
Share price
› Based on the volume-weighted average price (VWAP) for a Tiger Brands share calculated for the
10-trading day period ending immediately prior to the date of award/grant
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77
Historical LTI information
The original Tiger Brands 2013 Share Plan (LTIP)
comprised the following instruments:
› Performance vesting shares (full value shares with a
three-year vesting period, performance vesting criteria
linked to the FINDI30 Index in terms of shareholder
return)
› Restricted shares issued as bonus-matching shares
(full value shares with a three-year vesting period, no
performance criteria)
› Restricted shares issued as deferred bonus shares and
company-matching shares (full value shares with a
three-year vesting period, no performance criteria)
› Restricted shares as retention specific shares for African,
Coloured and Indian (ACI) employees in D band and
above (full value shares with a three-year vesting period,
no performance criteria)
› Share appreciation rights (SARs).
The allocations of SARs were subject to performance
vesting criteria. Apart from a 5% vesting of the third
tranche of SARs allocated in FY14, all the tranches
of SARs allocated in subsequent financial years that
would have vested in FY19 have been forfeited due to
performance criteria not having been met. This trend was
identified in FY19 as an area of concern to the company
as the mechanism was ineffective in providing key people
with a vested interest in the company.
In mitigation of this risk, the allocation of SARs was
discontinued (the last allocations of SARs were made
in June 2019) and, as set out above the company
commenced with the award of performance shares, (i.e. full
value shares that are subject to performance conditions),
and the grant of restricted shares with effect from FY20.
The practice of granting restricted shares in the form of
“bonus-matching shares” (which were linked directly to the
achievement of an STI in the previous financial year) was
also discontinued as from FY20. In addition, the voluntary
deferral of a portion (25%, 33% or 50%) of participants’
STI awards into restricted shares (“deferred bonus shares”)
which were matched by the company on a 1:1 basis in the
form of “company-matching shares” was also discontinued
(due to shareholders raising best practice concerns and an
historical low uptake from participants). All previous grants
of bonus-matching shares, deferred bonus shares and
company-matching shares will continue to vest in
accordance with the rules of the LTIP.
Below is a description of the share instruments no longer
utilised.
Share appreciation rights
The last grant of share appreciation rights was made on
5 June 2019. The vesting and performance conditions of
the share appreciation rights are set out hereunder.
Vesting
Vesting is time-based according to the following pattern:
Year from allocation date
0
1
2
3
4
5
Vesting
1/3
1/3
1/3
Performance metrics
The allocations of SARs during the 2019 financial year are subject to the performance criteria as set out in the table below:
Metric
Measurement
Weight Metric
HEPS growth
(real)
Compound annual growth
ROIC
Average ROIC measured over
three, four and five years for
each one-third tranche
HEPS: Headline earnings per share.
ROIC: Return on invested capital (after tax).
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
50% ROIC < WACC +1% No vesting
ROIC = WACC +1% 25% vesting
ROIC > WACC +1%
but < WACC +2%
ROIC => WACC +2% 100% vesting
Pro rata vesting on a linear scale
REMUNERATION AND PERFORMANCE / OUR GOVERNANCE 78
Tiger Brands Limited Integrated annual report 2020
Remuneration and performance continued
For SARs allocated in December 2016, September 2017
and December 2017, the performance vesting condition is
as follows:
Metric
Weight
0% vesting
Maximum
100% vesting
HEPS
100%
CPI and below CPI +GDP
The last grants of deferred bonus shares and company-
matching shares were made in December 2017.
Vesting
Vesting of deferred bonus shares and company-matching
shares takes place on the third anniversary of the date
of grant:
Pro rata vesting on a linear scale of 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).
SARs allocated before December 2016
The SARs performance vesting conditions for previous
allocations 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 the
corresponding percentage of the allocation to vest are as
follows:
HEPS growth (real)
Vesting outcome
>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%
Bonus-matching shares
The last grant of bonus-matching shares was made in
December 2018.
Vesting
Vesting takes place on the third anniversary of the date
of grant:
Year from grant date
0
1
2
3
4
5
Vesting
100%
Performance metrics
There are no further performance conditions to determine
vesting, which is therefore time-based.
Deferred bonus shares and company-matching
shares
Previously the CEO, CFO, executive directors and
members of the executive team could voluntarily defer a
portion (25%, 33% or 50%) of their STI into deferred bonus
shares, which were then matched by the company on a
1:1 basis.
Year from grant date
4
1
2
3
0
5
Vesting
100%
Performance metrics
There are no further performance conditions to determine
vesting.
BEE shares
The following two schemes were 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. For all rights allocated on or before 31 July
2010, settlement may take place at any time after the
initial lock-in period, i.e. 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 out of shares that may become
available as a consequence of forfeitures.
› 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
– The trust provides bursaries for tertiary education to
dependants of permanently employed black people
who might not otherwise be able to afford this cost.
Dilution
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 2020,
the aggregate number of shares that may be acquired by
participants under the various schemes was 2 728 933
(2019: 2 543 551), which represents approximately 1,4%
of the number of issued ordinary shares. This is in line with
JSE regulations.
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79
Minimum shareholding policy
We have a minimum shareholding policy, where senior executives are expected to build up their personal shareholding in the
company over a specific period of time. In the case of the CEO, the target is 200% of guaranteed package while the target
for executive directors and members of the executive committee is 100% of guaranteed package. Senior executives who
were in service when the policy was adopted in 2016 have six years to build up their shareholding from date of adoption.
Senior executives appointed after adoption have six years to build their shareholding from date of appointment. They may
use any vesting LTIs or their own resources to acquire these shares.
Current minimum shareholding summary
Name
Date of engagement
GP*
Number
of shares
held
Original
value of
shares
held
Current
value of
shares
held** % of GP
Target
% of GP
Years
remaining to
meet target
NP Doyle
1 July 2012
10 000 000
12 775
4 199 926
2 437 087
42%
200%
2
* GP as at 30 September 2020.
** Value calculated with reference to the closing price of a Tiger Brands share as at 30 September 2020, i.e. R190,77.
Malus and clawback
A malus and clawback policy is in place with the intention
to minimise risk.
With respect to malus, if 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 (i.e. STIs and LTIs) before the end of the
vesting or payment period. In the case of clawback, 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
occurring 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.
Illustrating potential remuneration outcomes
The variable pay arrangements described above 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
alongside, it should be noted that:
› STI represents the cash component of short-term
performance
› LTI represents the total award of performance vesting
shares.
Total remuneration potential for members of executive
management for the year ended 30 September 2020
CEO (R’000)
Maximum
On-target
Minimum
10 000
12 000
20 000
10 000
6 000
10 000
10 000
■ GP
■ STI
■ LTI
CFO (R’000)
Maximum
On-target
Minimum
7 221
8 665
14 442
7 221
4 333
7 221
7 221
■ STI
■ GP
■ LTI
Members of executive committee (average) (R’000)
Maximum
On-target
Minimum
4 942
4 942
7 410
4 942
2 471
3 708
4 942
■ STI
■ GP
■ LTI
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).
REMUNERATION AND PERFORMANCE / OUR GOVERNANCE 80
Tiger Brands Limited Integrated annual report 2020
Remuneration and performance continued
Sign on and specific retention payments
In exceptional circumstances (mainly for the recruitment and retention of critical and/or scarce talent), Tiger Brands will
award a sign on/retention payment which will be subject to the following conditions:
› Employees remaining in the service of Tiger Brands as a permanent employee for an uninterrupted period of 24 months
from date of the payment. Should the employee or Tiger Brands decide to terminate the employment relationship for any
reason, excluding those listed below, before the expiration of 24 months, the employee will be required to repay Tiger
Brands the full gross amount. There will be no pro rata refunds. Should Tiger Brands terminate the employment
relationship because of operational reasons (for example, retrenchment or redundancy) or ill health, or if termination
occurs as a result of death, the employee will not be required to repay Tiger Brands.
Payments on termination of employment
Remuneration
policy component
Voluntary termination
(i.e. resignation)
Involuntary termination
(retrenchment, retirement, death)
Guaranteed
package
Medical aid
Paid up to last day of service
Paid up to last day of service including notice period, where
applicable.
Benefit continues to last day
of service
Benefit continues up to last day 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.
Retirement and
risk plans
Employer contributions paid until last day of service. Employee is entitled to the value of the
investment, but all risk benefits cease on termination of service.
Other benefits
Not applicable
No pro rata bonus paid
Short-term
incentives
Long-term
incentives
Severance package in respect of retrenchments – one or two
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).
All unvested awards (other than
certain deferred bonus shares)
will be forfeited
Depending on the nature of the instrument 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.
www.tigerbrands.com
81
Targeted remuneration for the twelve-month period ending
28 February 2021 was based on the 65th percentile of the
peer group, which is aligned with our internal anchor point.
Non-resident non-executive directors are paid a premium
in comparison to resident 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 non-executive directors’ fees effective
from 1 March 2021 appear in the notice of AGM of
shareholders to be held on 17 February 2021. Details of
non-executive directors’ fees paid in the review period
appear on pages 88 and 89.
Voting statement
This remuneration policy is subject to a non-binding
advisory vote by shareholders at the upcoming AGM.
External board appointments
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 board or sub-committees
of external companies. Details of executive committee
members serving on the boards of associate companies
appear on pages 64 and 65.
Non-executive directors
Fees and approval process
Non-executive directors are paid an annual retainer that
reflects 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 relevant 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, turnover
and total assets. As these are similar metrics to that of the
benchmark group for executive directors it was decided
that from FY20, in line with King IV and in terms of the
current requirements of the organisation, a single
comparator group be adopted for the non-executive
directors and executive directors’ remuneration
benchmarking. The revised comparator group is detailed
on page 73.
REMUNERATION AND PERFORMANCE / OUR GOVERNANCE 82
Tiger Brands Limited Integrated annual report 2020
Remuneration and performance continued
Section 3: Implementation report
In this section of the remuneration report we explain the implementation of our remuneration policy, providing details of
the remuneration paid to our executive directors and members of the executive committee and senior management for
the financial year ended 30 September 2020.
Salary adjustments
The remuneration committee approved an overall guaranteed package salary increase budget of 6% for the period
1 December 2019 to 30 November 2020. This included executive management.
An additional budget was ringfenced and is managed centrally to correct pay disparities.
2020 guaranteed package
The following increases to guaranteed packages were implemented in the reporting period for executive directors. New
amounts were effective from 1 December 2019:
Executive directors
LC Mac Dougall*
NP Doyle**
1 Dec 2019 to
30 Nov 2020
1 Dec 2018 to
30 Nov 2019
% increase
10 014 615
10 000 000
9 537 728
6 877 238
5,0%
45,4%
Retired on 31 January 2020.
*
** Promoted to CEO on 1 February 2020. Annual increase 1 December 2019 of 5% to R7 221 100.
An average increase of 5% (2019: 6%) was awarded to executive directors and members of the executive committee in
comparison to an average increase of 5,4% (2019: 5,32%) for the rest of the company.
2020 short-term incentive
As indicated in the policy section, the STI for executive directors is based on the combination of a group performance factor
and individual performance component.
Executive directors
The group performance factor for executive directors is weighted according to the table below. Results for FY20 were
as follows:
Strategic
objective
Strategic
objective
weighting
Growth
65%
Efficiency
15%
Key performance
indicator
Sales volume growth
Brand health
Absolute gross margin
EBIT
Cost savings initiatives
Net working capital
Quality
People and
sustainability
20%
Safety (LTIFR)
EE – ACI Opportunity
Utilisation
Key
performance
indicator
weighting
7,50%
7,50%
10%
40%
10%
5%
10%
5%
5%
Threshold
score = 50%
Target
score = 100%
Stretch
score = 200%
Achievement
Actual result Weighted result
90%
97%
95%
95%
90%
105%
100%
100%
100%
100%
100%
100%
110%
103%
105%
105%
110%
95%
Not achieved
Threshold
achieved
Not achieved
Not achieved
Not achieved
Threshold
achieved
Reduction in execution-related marketplace incidents
year-on-year by
15%
10%
20%
Reduction in lost time injuries year-on-year by
10%
50%
15%
70%
20%
90%
Stretch
achieved
Target
achieved
Stretch
achieved
–
–
–
–
–
–
–
–
–
–
–
The targeted percentages for “threshold”, “target” and “stretch” as set out above per KPI represent the targeted percentage achievement of the underlying
budgeted amounts.
Linear vesting will apply if the actual result falls between “threshold” and “target” or between “target” and “stretch”. Note for 2020, the EBIT threshold was not
met to trigger payment of the STI. This is an overriding condition of the scheme. Therefore the weighted result for each KPI was zero in FY20.
www.tigerbrands.com
83
For the review period, in addition to the financial targets above, the following KPIs as per the balanced scorecard applied
to the CEO and CFO. The level of achievement is reflected alongside each KPI in the table below.
The FY20 individual performance factor is the aggregated result of assessing the KPIs for the relevant executive, as follows:
Executive directors
The individual performance factor for executive directors is weighted according to the table below. The results for FY20 were
as follows:
LC Mac Dougall
NP Doyle
Key performance indicators
Not met Partially met Met
Exceeded
Top-tier financial results
Revenue
Gross margin
Cost savings
Return on net assets
Market performance
On-shelf availability
Innovation rate
Brand health*
Compliance
Zero high level audit findings
Reduction in consumer
complaints
Safety (LTIFR)
BBBEE implementation
People
Improved employee engagement
Percentage of leadership
positions filled internally
Diversity and inclusion
Individual KPIs
%
achievement
of target
70% – 99%
70% – 99%
<70%
70% – 99%
100%
<70%
70% – 99%
0%
<70%
>100%
100%
70% – 75%
>100%
70% – 75%
Not met Partially met Met
Exceeded
%
achievement
of target
70% – 99%
70% – 99%
<70%
70% – 99%
100%
<70%
70% – 99%
0%
<70%
>100%
100%
70% – 75%
>100%
70% – 75%
* Brand health is measured on an individual category and not on an aggregated basis.
Name
LC Mac Dougall**
NP Doyle***
GP*
On-target %
Actual group
performance
factor %
Actual personal
performance
factor %
2020 STI#
(Rand)
2019 STI#
(Rand)
10 014 615
10 000 000
x
x
60%
60%
x
x
–
–
+
+
–
–
–
–
–
–
* Annual guaranteed package in rand as at 30 September 2020.
** Retired 31 January 2020. Eligible for STI on a pro-rata basis.
*** Promoted to CEO 1 February 2020.
# STI is pro-rated for the number of months the employee participates in the scheme in the case of a no-fault termination.
REMUNERATION AND PERFORMANCE / OUR GOVERNANCE 84
Tiger Brands Limited Integrated annual report 2020
Remuneration and performance continued
2020 long-term incentives
Long-term incentive awards made during the year to executive directors are set out below:
Long-term incentive awards to executive directors for FY20
Name
LC Mac Dougall#
NP Doyle*
LTI personal
performance
multiplier**
GP
100,0%
200,0%
10 014 615
7 221 100
Performance vesting shares
Award %
81,3%
81,3%
Number
47 220
65 880
Face value
Expected value
8 142 617
11 741 792
10 015 419
14 442 405
** The personal performance multiplier is used to modify the standard quantum of performance shares and restricted shares, based on an individual’s personal
sustained performance and potential. This is a discretionary percentage ranging from 0% to 200%.
# Allocated on 30 March 2020 at VWAP of R172,44.
* Allocated on 7 September 2020 at a VWAP of R178,23.
LTI awards vesting or with a performance period ending in 2020
The outcome for awards due to vest in FY20, and whose performance conditions ended by 30 September 2020, are shown
below. This applies to all eligible participants.
LTI measures
Real HEPS
growth
Performance
condition result
% vesting
N/A
N/A
N/A
100% (time-based vesting)
100% (time-based vesting)
100% (time-based vesting)
–
–
–
LTI allocation
Company-matching shares granted in FY17
Deferred bonus shares granted in FY17
Bonus-matching shares granted in FY17
Share appreciation rights granted in FY15 – third tranche
Share appreciation rights granted in FY16 – second tranche
Share appreciation rights granted in FY17 – first tranche
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.
www.tigerbrands.com
85
Single total figure of remuneration
The following tables disclose total remuneration received and receivable by executive directors and executive management
for the period 1 October 2019 to 30 September 2020:
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
* Retired on 31 January 2020.
** Promoted to CEO on 1 February 2020.
Member of executive committee
Key
CXO1
CXO2
CXO3
CXO4
CXO5
CXO6
CXO7
CXO8
CXO9
CXO10
CXO11
CXO12
Total
LC Mac Dougall*
NP Doyle**
FY2020
(R’000)
FY2019
(R’000)
FY2020
(R’000)
FY2019
(R’000)
%
%
3 094
109
55
3 258
–
3 258
–
128
259
3 645
8 973
329
160
9 462
–
9 462
–
–
–
9 462
(61,5%)
6 996
1 270
–
8 266
–
8 266
–
315
421
9 002
5 832
961
30
6 823
–
6 823
4 446
–
–
11 269
(20,1%)
FY2020
(R’000)
FY2019
(R’000)
3 710
3 841
5 193
5 017
4 056
5 776
3 297
3 770
1 738
5 274
5 347
2 660
3 598
3 740
4 688
5 052
6 967
–
–
1 689
6 680
5 057
6 888
–
49 679
44 359
Notes:
CXO6 appointed on 6 January 2020.
CXO7 appointed on 15 January 2020.
CXO9 resigned on 31 January 2020.
CXO10 resigned on 31 August 2020.
CXO11 retired on 31 March 2020.
CXO12 acted for the period February 2020 to September 2020.
Number and value of LTI share awards
Disclosure of the quantum and value of awards for the CEO and CFO outstanding at the beginning and end of the reporting
period, as well as new awards made in the period, are provided in the tables on pages 86 and 87, with the cash value of
awards settled during the reporting period indicated in the value-based tables.
REMUNERATION AND PERFORMANCE / OUR GOVERNANCE 86
Tiger Brands Limited Integrated annual report 2020
Remuneration and performance continued
Name and awards
Award date
Vesting date
LC Mac Dougall
2016 Deferred bonus shares
2016 Company matching shares
2016 Bonus matching shares
2020 Performance shares
2016 SARs
2016 SARs
2017 SARs
2018 SARs
Total
NP Doyle
2016 Company matching shares
2016 Deferred bonus shares
2016 Bonus matching shares
2020 Performance shares
2014 SARs
2015 SARs
2016 SARs
2016 SARs
2017 SARs
2018 SARs
Total
07/12/2016
07/12/2016
07/12/2016
30/03/2020
24/05/2016
07/12/2016
11/12/2017
06/12/2018
07/12/2016
07/12/2016
07/12/2016
07/09/2020
28/02/2014
04/02/2015
09/02/2016
07/12/2016
11/12/2017
06/12/2018
07/12/2019
07/12/2019
07/12/2019
30/03/2023
24/05/2020
24/05/2021
07/12/2019
07/12/2020
07/12/2021
11/12/2020
11/12/2021
11/12/2022
06/12/2021
06/12/2022
06/12/2023
07/12/2019
07/12/2019
07/12/2019
07/09/2023
28/02/2017
28/02/2018
28/02/2019
04/02/2018
04/02/2019
09/02/2020
09/02/2021
07/12/2019
07/12/2020
07/12/2021
11/12/2020
11/12/2021
11/12/2022
06/12/2021
06/12/2022
06/12/2023
Grant
price
(ZAR)
–
–
–
–
317,64
317,64
368,11
368,11
368,11
385,29
385,29
385,29
254,79
254,79
254,79
–
–
–
–
236,55
236,55
236,55
358,22
358,22
271,19
271,19
368,11
368,11
368,11
385,29
385,29
385,29
254,79
254,79
254,79
Opening
number
Granted
during
the year
Forfeited
Performance
during
the year
condition
achieved
Settled
during
the year
Closing
number
Face value
at award
(ZAR)
Cash
received
(ZAR)
Value of
shares
Closing fair
acquired
value vesting
(ZAR)
(ZAR)
699
699
699
–
12 908
12 908
11 774
11 775
11 776
3 223
3 224
3 224
20 588
20 588
20 588
134 673
1 140
1 140
1 710
–
6 526
6 526
323
1 117
4 138
8 200
8 201
12 112
12 112
12 112
16 432
16 433
16 433
18 895
18 896
18 897
181 343
–
–
–
47 220
–
–
–
–
–
–
–
–
–
–
–
47 220
–
–
–
65 880
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
65 880
128 943
128 943
128 943
47 220
8 142 616,80
8 244 139,80
12 908
11 774
6 526
6 526
323
4 138
8 200
12 112
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
699
699
699
1 140
1 140
1 710
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
12 908
4 100 097,12
11 775
11 776
3 223
3 224
3 224
20 588
20 588
20 588
4 334 495,25
4 334 863,36
1 241 789,67
1 242 174,96
1 242 174,96
5 245 616,52
5 245 616,52
5 245 616,52
8 201
2 224 029,19
12 112
12 112
16 432
16 433
16 433
18 895
18 896
18 897
4 458 548,32
4 458 548,32
6 331 085,28
6 331 470,57
6 331 470,57
4 814 257,05
4 814 511,84
4 814 766,63
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
24 682
2 097
155 114
40 375 062
386 829
95 944
95 944
144 839
114 261
114 261
170 470
65 880 11 741 792,40
– 11 204 211,60
1 117
400 131,74
33,51
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
67 379,76
50 161,50
32 030,72
11 828,41
13 121,68
18 860,40
377 583,92
456 641,84
460 553,56
9 732 302
54 946,70
51 597,12
32 944,64
60 305,44
66 882,31
96 133,05
346 534,30
419 113,28
422 725,89
37 825
3 990
205 408
56 720 612
336 727
398 992
12 755 428
www.tigerbrands.com
87
Name and awards
LC Mac Dougall
2016 Deferred bonus shares
2016 Company matching shares
2016 Bonus matching shares
2020 Performance shares
2016 Company matching shares
2016 Deferred bonus shares
2016 Bonus matching shares
2020 Performance shares
2014 SARs
2016 SARs
2016 SARs
2017 SARs
2018 SARs
Total
NP Doyle
2015 SARs
2016 SARs
2016 SARs
2017 SARs
2018 SARs
Total
07/12/2016
07/12/2016
07/12/2016
30/03/2020
24/05/2016
07/12/2016
11/12/2017
06/12/2018
07/12/2016
07/12/2016
07/12/2016
07/09/2020
28/02/2014
04/02/2015
09/02/2016
07/12/2016
11/12/2017
06/12/2018
07/12/2019
07/12/2019
07/12/2019
30/03/2023
24/05/2020
24/05/2021
07/12/2019
07/12/2020
07/12/2021
11/12/2020
11/12/2021
11/12/2022
06/12/2021
06/12/2022
06/12/2023
07/12/2019
07/12/2019
07/12/2019
07/09/2023
28/02/2017
28/02/2018
28/02/2019
04/02/2018
04/02/2019
09/02/2020
09/02/2021
07/12/2019
07/12/2020
07/12/2021
11/12/2020
11/12/2021
11/12/2022
06/12/2021
06/12/2022
06/12/2023
134 673
47 220
–
–
–
–
–
–
–
–
317,64
317,64
368,11
368,11
368,11
385,29
385,29
385,29
254,79
254,79
254,79
236,55
236,55
236,55
358,22
358,22
271,19
271,19
368,11
368,11
368,11
385,29
385,29
385,29
254,79
254,79
254,79
699
699
699
–
12 908
12 908
11 774
11 775
11 776
3 223
3 224
3 224
20 588
20 588
20 588
1 140
1 140
1 710
–
6 526
6 526
323
1 117
4 138
8 200
8 201
12 112
12 112
12 112
16 432
16 433
16 433
18 895
18 896
18 897
47 220
65 880
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
181 343
65 880
Award date
Vesting date
Grant
price
(ZAR)
Opening
number
Granted
during
the year
Forfeited
during
the year
Performance
condition
achieved
Settled
during
the year
Closing
number
Face value
at award
(ZAR)
Cash
received
(ZAR)
–
–
–
–
12 908
–
11 774
–
–
–
–
–
–
–
–
24 682
–
–
–
–
6 526
6 526
323
–
4 138
8 200
–
12 112
–
–
–
–
–
–
–
–
37 825
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
699
699
699
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
47 220
–
12 908
–
11 775
11 776
3 223
3 224
3 224
20 588
20 588
20 588
–
–
–
8 142 616,80
–
4 100 097,12
–
4 334 495,25
4 334 863,36
1 241 789,67
1 242 174,96
1 242 174,96
5 245 616,52
5 245 616,52
5 245 616,52
2 097
155 114
40 375 062
1 140
1 140
1 710
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3 990
–
–
–
–
–
–
65 880 11 741 792,40
–
–
–
400 131,74
–
–
2 224 029,19
–
4 458 548,32
4 458 548,32
6 331 085,28
6 331 470,57
6 331 470,57
4 814 257,05
4 814 511,84
4 814 766,63
–
–
–
1 117
–
–
8 201
–
12 112
12 112
16 432
16 433
16 433
18 895
18 896
18 897
205 408
56 720 612
128 943
128 943
128 943
–
–
–
–
–
–
–
–
–
–
–
–
386 829
95 944
95 944
144 839
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
336 727
Value of
shares
acquired
(ZAR)
Closing fair
value vesting
(ZAR)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
8 244 139,80
–
67 379,76
–
50 161,50
32 030,72
11 828,41
13 121,68
18 860,40
377 583,92
456 641,84
460 553,56
9 732 302
114 261
114 261
170 470
–
–
–
– 11 204 211,60
–
–
–
–
–
–
33,51
–
–
–
–
–
54 946,70
–
–
–
51 597,12
–
32 944,64
–
60 305,44
–
66 882,31
–
96 133,05
–
346 534,30
–
419 113,28
–
422 725,89
–
398 992
12 755 428
REMUNERATION AND PERFORMANCE / OUR GOVERNANCE 88
Tiger Brands Limited Integrated annual report 2020
Remuneration and performance continued
Interests of executive directors in BBBEE schemes
No executive directors were awarded shares in terms of the Black Managers Trust Scheme for the year ended
30 September 2020.
Non-executive directors’ remuneration 2020
The non-executive directors’ remuneration paid for the year ended 30 September 2020 is disclosed below, excluding VAT
in rand:
Committee
MO Ajukwu
MJ Bowman
I Burton
MP Fandeso
CH Fernandez
GJ Fraser-Moleketi
GA Klintworth
M Makanjee
TE Mashilwane
KDK Mokhele
MP Nyama
M Sello
YGH Suleman
OM Weber
DG Wilson
Notes
Board fees
Audit committee fees
Investment
committee fees
Remuneration
committee,
nomination and
governance
committee fees
Social, ethics and
transformation
committee fees
Risk and sustainability
committee fees
Extraordinary fees in
respect of special
board meeting
Ad hoc work/
meetings
Total FY2020
Total FY2019
3
2*
5
879 542
375 519
108 750
209 087
426 587
190 588
13 364
237 854
26 833
108 750
888 192
426 587
1 854 115
374 618
426 587
379 892
335 880
232 702
101 175
25 970
111 088
199 013
1
4
250 125
370 774
190 588
13 364
97 671
347 442
74 050
296 252
151 062
151 062
52 870
22 987
22 987
52 870
22 987
22 987
22 987
22 987
22 987
22 987
1 279 854
1 531 197
649 724
805 643
108 750
–
309 970
126 646
936 414
434 251
108 750
–
1 173 764
1 102 971
759 675
722 635
889 821
898 687
1 877 102
1 917 855
649 842
649 109
475 544
–
250 125
–
231 924
–
695 384
195 566
* Member of the nomination and governance committee only.
1. M Sello appointed 1 October 2019.
2. MP Fandeso resigned 28 February 2020.
3. I Burton appointed 3 August 2020.
4. OM Weber appointed 3 August 2020.
5. GJ Fraser-Moleketi appointed 1 September 2020.
Non-executive directors’ remuneration FY21
The following table reflects no change in the non-executive directors’ fees from 1 March 2021, excluding VAT, subject to the
approval of shareholders at the AGM on 17 February 2021:
Forum
Main board
Audit
Remuneration and nominations
Risk and sustainability
Social, ethics and transformation
Hourly fees*
Extraordinary meetings**
Capacity
Chairman
Member
Chairman
Member
Chairman
Member
Chairman
Member
Chairman
Member
Current rate
effective
March 2020
Proposed rate resident
board members –
effective March 2021
Proposed fees to be
paid to non-resident
board members –
effective March 2021
2 077 929
435 000
344 869
194 325
245 897
114 844
302 061
154 024
202 915
103 883
4 572
22 987
2 077 929
435 000
344 869
194 325
245 897
114 844
302 061
154 024
202 915
103 883
4 572
22 987
–
1 000 500
–
–
–
–
–
354 255
–
238 930
10 516
52 870
* Hourly fees are for the sole purpose of the calculation of fees for the investment committee meetings which are held on an ad hoc basis.
** Payment of fees for extraordinary meetings are at the discretion of the chairman of the board and chairman of the remuneration committee.
Non-binding advisory vote
This implementation report is subject to a non-binding advisory vote by shareholders at the AGM on 17 February 2021.
www.tigerbrands.com
89
Interests of executive directors in BBBEE schemes
No executive directors were awarded shares in terms of the Black Managers Trust Scheme for the year ended
30 September 2020.
Non-executive directors’ remuneration 2020
The non-executive directors’ remuneration paid for the year ended 30 September 2020 is disclosed below, excluding VAT
in rand:
Notes
Board fees
Audit committee fees
Investment
committee fees
Remuneration
committee,
nomination and
governance
committee fees
Social, ethics and
transformation
committee fees
Risk and sustainability
committee fees
Extraordinary fees in
respect of special
board meeting
Ad hoc work/
meetings
Total FY2020
Total FY2019
Committee
MO Ajukwu
MJ Bowman
I Burton
MP Fandeso
CH Fernandez
GJ Fraser-Moleketi
GA Klintworth
M Makanjee
TE Mashilwane
KDK Mokhele
MP Nyama
M Sello
YGH Suleman
OM Weber
DG Wilson
879 542
375 519
108 750
209 087
108 750
888 192
3
2*
5
426 587
190 588
426 587
379 892
335 880
1 854 115
374 618
426 587
1
4
250 125
13 364
237 854
26 833
232 702
111 088
199 013
101 175
25 970
370 774
190 588
13 364
97 671
347 442
74 050
296 252
151 062
151 062
52 870
22 987
22 987
52 870
22 987
22 987
22 987
22 987
22 987
22 987
1 279 854
1 531 197
649 724
805 643
108 750
–
309 970
126 646
936 414
434 251
108 750
–
1 173 764
1 102 971
759 675
722 635
889 821
898 687
1 877 102
1 917 855
649 842
649 109
475 544
–
–
231 924
250 125
–
695 384
195 566
* Member of the nomination and governance committee only.
1. M Sello appointed 1 October 2019.
2. MP Fandeso resigned 28 February 2020.
3. I Burton appointed 3 August 2020.
4. OM Weber appointed 3 August 2020.
5. GJ Fraser-Moleketi appointed 1 September 2020.
Non-executive directors’ remuneration FY21
The following table reflects no change in the non-executive directors’ fees from 1 March 2021, excluding VAT, subject to the
approval of shareholders at the AGM on 17 February 2021:
Forum
Main board
Audit
Remuneration and nominations
Risk and sustainability
Social, ethics and transformation
Hourly fees*
Extraordinary meetings**
Capacity
Chairman
Member
Chairman
Member
Chairman
Member
Chairman
Member
Chairman
Member
435 000
344 869
194 325
245 897
114 844
302 061
154 024
202 915
103 883
4 572
22 987
Current rate
Proposed rate resident
effective
March 2020
board members –
effective March 2021
2 077 929
2 077 929
Proposed fees to be
paid to non-resident
board members –
effective March 2021
1 000 500
435 000
344 869
194 325
245 897
114 844
302 061
154 024
202 915
103 883
4 572
22 987
–
–
–
–
–
–
–
354 255
238 930
10 516
52 870
* Hourly fees are for the sole purpose of the calculation of fees for the investment committee meetings which are held on an ad hoc basis.
** Payment of fees for extraordinary meetings are at the discretion of the chairman of the board and chairman of the remuneration committee.
Non-binding advisory vote
This implementation report is subject to a non-binding advisory vote by shareholders at the AGM on 17 February 2021.
REMUNERATION AND PERFORMANCE / OUR GOVERNANCE 90
Tiger Brands Limited Integrated annual report 2020
Shareholders’ diary
Financial year-end
Annual general meeting
Reports and accounts
30 September
17 February 2021
Announcement of results and dividend declaration for the six months ending 31 March 2021
May 2021
Announcement of results and final dividend declaration for the year ending 30 September 2021
November 2021
Integrated annual report for the year ending 30 September 2021
December 2021
Dividends 2021
Ordinary shares
Interim dividend
Final dividend
Declaration
Payment
May 2021
July 2021
November 2021
January 2021
www.tigerbrands.com
91
Declaration
of final dividend
The board has approved and declared a final ordinary dividend (ordinary dividend) and special dividend for the year ended
30 September 2020, as follows:
Dividend
Ordinary
Special
Total
Gross amount
537 cents
133 cents
670 cents
Withholding tax
%
20
20
20
Net amount
429,60000 cents
106,40000 cents
536,00000 cents
Payment of the special dividend is subject to South African Reserve Bank (SARB) approval.
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 total dividend has been declared out of income reserves
› The local dividends tax rate is 20% (twenty percent) effective 22 February 2017
› The gross total dividend amount of 670 cents per ordinary share will be paid to shareholders who are exempt from the
Dividend Tax
› The net total dividend amount of 536,00000 cents per ordinary share will be paid to shareholders who are liable for 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 ordinary and special dividend:
Declaration date
Finalisation announcement in respect of the special dividend,
due to the receipt of SARB approval
Last day to trade cum the ordinary and special dividend
Friday, 20 November 2021
Tuesday, 5 January 2021
Tuesday, 12 January 2021
Shares commence trading ex the ordinary and special dividend
Wednesday, 13 January 2021
Record date to determine those shareholders entitled to the
ordinary and special dividend
Payment date in respect of the ordinary and special dividend
Friday, 15 January 2021
Monday, 18 January 2021
Share certificates may not be dematerialised or re-materialised between Wednesday, 13 January 2021 and
Friday, 15 January 2021, both days inclusive.
By order of the board
JK Monaisa
Company secretary
Bryanston
19 November 2020
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Tiger Brands Limited Integrated annual report 2020
Company information
Tiger Brands Limited
Incorporated in the Republic of South Africa
Share code: TBS
ISIN: ZAE000071080
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
Private Bag X9000, Saxonwold, 2132
American Depository Receipt (ADR) facility
ADR Administrator
The Bank of New York Mellon
Investor relations
Nikki Catrakilis-Wagner
Erene Kairuz
Telephone: +27 11 840 4000
Website address
www.tigerbrands.com
Contact details
Companysecretary@tigerbrands.com
Investorrelations@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.
www.tigerbrands.com
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