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Audited Group Results and Dividend Declaration for Year Ended 30 September 2014
Tiger Brands Limited
Registration number 1944/017881/06
Incorporated in the Republic of South Africa
Share code: TBS ISIN:ZAE000071080
Audited group results and dividend declaration for the year ended 30 September 2014
Key financial indicators
Continuing operations
Group turnover R30,1 bn +11%
Operating income* R3,6bn +15%
HEPS 1 804 cents +15%
TOTAL OPERATIONS
HEPS 1 816 cents +11%
Total dividend per share 940 cents +9%
EPS 1 262 cents -22%
*Before abnormal items
Commentary
INTRODUCTION
Tiger Brands has achieved a solid set of results in a difficult trading environment, overcoming a disappointing
first-half performance to grow operating income by 15% for the full year. Headline earnings per share from
continuing operations increased by 15% to 1 804 cents. However, earnings per share from continuing operations
declined by 21% to 1 243 cents, largely due to impairments relating to the group’s investment in Dangote
Flour Mills (“DFM”).
Group turnover increased by 11% to R30,1 billion, underpinned by 4% volume growth and below inflationary pricing of
5%. Currency movements added a further 2% growth to turnover. Operating income increased by 15% to R3,6 billion, with
the group’s overall operating margin improving from 11,4% to 11,8%.
The domestic businesses grew operating income by 7% to R3,3 billion. Whilst this performance was negatively affected
by a 9% decline in the Home Care, Personal Care and Baby (“HPCB”) business, operating income from the domestic food
businesses increased by 12% to R2,9 billion.
The Exports and International businesses, excluding Nigeria, continued to reflect pleasing growth, increasing turnover
by 16% to R4,6 billion and operating income by 20% to R691 million.
Significant progress has been made in addressing the challenges in DFM and, as a result, the net reported loss before
interest and tax for the Nigerian businesses improved by 27% to R282 million (2013: R384 million). As indicated at
the half year, DFM has now conducted a review of the utilisation levels of its assets and, based on current market
realities, has decided to impair certain of these manufacturing assets. The related impairment, amounting to R105
million, is in addition to the R849 million impairment of goodwill and other intangibles recognised at the half year.
Tiger Brands remains committed to the Nigerian market and will continue to fix and optimise the DFM business, whilst
investing into adjacent categories that are expected to deliver long-term profitable growth.
Overview
Domestic operations
The group continues to make steady progress in executing against its long-term strategic objectives. Over the last few
years, the group has directed its focus to regaining market share in its core domestic businesses through investment
in its brands and increased levels of innovation. This remains a key objective even though total market volumes have
been impacted by the ongoing financial pressure being experienced by consumers.
The group has retained its leading brand positions in all of the key categories in which it participates, through a
strong focus on price and volume management, supported by increased marketing and brand-building activities. Good
progress has been made in regaining volume shares in what continues to be a highly competitive domestic trading
environment. In 2014, domestic volume growth of 4% was achieved.
Improved operational efficiencies and various cost saving initiatives have supported the increased investment in
marketing and brand building, and have also mitigated the effect of above-inflationary increases in raw material, labour
and other input costs that were experienced in 2014. Input cost pressures were exacerbated by the weak rand, contributing
to a decline in the overall domestic operating margin from 14,9% to 14,5%. Margins were also affected by consumer
down-trading, which has resulted in manufacturers competing more intensely on pricing.
Increased focus is being given to the company’s HPCB business, which underperformed in the year under review,
recording a 9% year-on-year decline in operating income. This decline was largely driven by intense competition,
particularly in the home care and personal care segments. Whilst volumes grew in certain niche categories, operating
margins were negatively affected by increased value offerings and aggressive competitor activity. The group continues to
invest in its innovation capability and will increase the level of marketing support for core brands in order to drive
long-term sustainable growth in these categories.
International operations
International expansion into the balance of the African continent remains core to Tiger Brands’ growth strategy and,
as such, the group will continue to invest in its international businesses. The existing businesses in Nigeria remain
a key focus area, with the priority being to fix and grow these businesses.
Although the short-term challenges relating to DFM persist, there are encouraging signs of improvement as remedial
actions to improve product quality, reduce the fixed cost base and drive top-line growth start to bear fruit. These
initiatives are expected to have a meaningful impact on the future financial performance of DFM and include changes
implemented to strengthen the management team and to facilitate better alignment with the domestic Grains business. The
business case for DFM’s entry into adjacent and related categories is expected to be finalised early in the 2015 financial
year.
Prospects for growth in the rest of Africa remain promising. Consumers are seeking aspirational brands and increased
variety, but the reality of low disposable income levels places limitations on consumer spending. In this environment,
product format, pack size and price points remain key to achieving success. Tiger Brands continues to believe that
expansion into the balance of the continent will be a significant growth vector in the medium to long term.
FINANCIAL REVIEW
Consolidated income statement
After accounting for net financing costs of R403 million, abnormal charges of R1,1 billion and associate income of
R597 million, profit before tax amounted to R2,7 billion (2013: R3,2 billion). This represents a 17% decline on the
prior year. The abnormal charges largely relate to asset impairments amounting to R954 million, which were recognised
in relation to the group’s investment in DFM.
The group also recognised further impairments of R68 million relating to the Deli Foods acquisition goodwill as well
as certain non-core domestic trademarks. In addition, certain domestic assets were derecognised, having been deemed
surplus to requirements following a review of the group’s manufacturing architecture.
Net financing costs of R403 million have increased by 6% relative to the prior year due to higher domestic borrowing
rates. In addition, the average level of debt in DFM increased due to its ongoing losses. The refinancing of DFM’s debt
structure is still under consideration.
Income from associate companies increased by 16% to R597 million (2013: R515 million), reflecting strong growth in
particular from Oceana Fishing (share of earnings up by 13% to R282 million) and National Foods Holdings (up 88% to
R72 million). The growth in earnings from Empresas Carozzi and UAC Foods was more muted, up 7% to R199 million and
6% to R44 million respectively.
The group’s income tax expense of R832 million (2013: R837 million) represents a 28,1% (2013: 30,6%) effective rate of
tax on total profits before abnormal items and associates’ income. The marginally lower tax rate was primarily due to
special investment allowances claimed in respect of qualifying capital projects completed during the year as well as a
prior adjustment in respect of deferred tax.
As a result of the minority shareholders sharing in the losses of DFM, non-controlling interests amounted to a credit
of R127 million (2013: R119 million). Net profit after tax from continuing operations declined by 22% to R1,9 billion,
mainly as a result of the abnormal items referred to above.
As previously reported, the group sold its interest in DFM’s packaging subsidiary, Dangote Agrosacks, in December
2013. The profit contribution from Dangote Agrosacks for both the 2013 and 2014 financial years has been disclosed as
arising from a discontinued operation. Including the profit contribution from Dangote Agrosacks of R30 million (2013:
R61million), profits attributable to ordinary shareholders decreased by 22% to R2,0 billion and earnings per share from
total operations also declined by 22% to 1 262 cents (2013: 1 613 cents).
Headline earnings per share from continuing operations increased by 15% to 1 804 cents (2013: 1 574 cents) after
adjusting for the above-mentioned impairments and certain other capital items. Including discontinued operations, headline
earnings per share from total operations increased by 11% to 1 816 cents (2013: 1 629 cents).
Financial position
The group continues to manage its capital expenditure prudently, focusing on return on capital whilst ensuring
adequate investment in the maintenance and replacement of assets to sustain optimal operational efficiency and capability
as well as building capacity for growth. During the year, the net book value of the group’s investment in property, plant
and equipment increased to R5,9 billion (2013: R5,5 billion). Capital expenditure of R983 million exceeded the total
depreciation charge of R679 million.
The group continues to maintain a strong balance sheet, with ordinary shareholder funds of R13,2 billion (2013: R12,8
billion). Net debt improved from R4,5 billion in 2013 to R3,5 billion as at 30 September 2014. The net debt to EBITDA
ratio improved to 0,8 times (2013: 1,2 times).
Cash flow
The group once again demonstrated its strong cash-generating capability, improving operating cash flows by 6% to R4,2
billion. Working capital continues to be well managed, with the increase in debtors largely attributable to higher sales
achieved in the month of September 2014. Cash generated from operations was applied to fund the group’s tax obligations
of R967 million, dividends of R1,5 billion and capital expenditure of R983 million. In addition, the group repaid
borrowings of R1,1 billion. DFM sold its interest in Dangote Agrosacks for a consideration of R497 million less cash of
R1 million held by the business at disposal. Tiger Brands also acquired an additional 2,3% interest in DFM for R74 million
as part of the mandatory offer to DFM minority shareholders following the initial acquisition of the group’s interest in
DFM in October 2012.
Free cash flow of R2,1 billion (cash available from operations after accounting for capital expenditure) marginally
exceeded the group’s attributable profit after tax of R2,0 billion.
FINAL DIVIDEND
A final dividend of 611 cents per share has been declared for the year ended 30 September 2014. This dividend, together
with the interim dividend of 329 cents per share, brings the total dividend for the year to 940 cents, which is an
increase of 9% on last year's total dividend of 865 cents.
OUTLOOK
The group expects to sustain the positive momentum that was achieved during the year under review, despite a continued
difficult trading environment in both the domestic and international businesses.
By order of the Board
AC Parker PB Matlare
Chairman Chief Executive Officer
Sandton
18 November 2014
DECLARATION OF FINAL DIVIDEND No. 140
The Board has approved and declared a final dividend of 611 cents per ordinary share (gross) in respect of the year ended
30 September 2014.
The dividend will be subject to the Dividends Tax that was introduced with effect from 1 April 2012. In accordance
with paragraphs 11.17 (a) (i) to (x) and 11.17 (c) of the JSE Listings Requirements the following additional information
is disclosed:
• The dividend has been declared out of income reserves;
• The local Dividends Tax rate is 15% (fifteen per centum);
• There are no Secondary Tax on Companies (STC) credits utilised;
• The gross local dividend amount is 611 cents per ordinary share for shareholders exempt from the Dividends Tax;
• The net local dividend amount is 519.35 cents per ordinary share for shareholders liable to pay the Dividends Tax;
• Tiger Brands has 191 948 268 ordinary shares in issue (which includes 10 326 758 treasury shares); and
• Tiger Brands Limited’s income tax reference number is 9325/110/71/7.
Shareholders are advised of the following dates in respect of the final dividend:
Last day to trade cum the final dividend Friday, 2 January 2015
Shares commence trading ex the final dividend Monday, 5 January 2015
Record date to determine those shareholders entitled to the final dividend Friday, 9 January 2015
Payment in respect of the final dividend Monday, 12 January 2015
Share certificates may not be dematerialised or re-materialised between Monday, 5 January 2015 and Friday,
9 January 2015, both days inclusive.
By order of the Board
IWM Isdale
Secretary
Sandton
18 November 2014
Condensed consolidated income statement
Audited Audited
Year ended Year ended
30 September 30 September
2014 2013
R’million Restated Change
Turnover 30 072,0 27 003,5 11%
Cost of sales (20 540,2) (18 565,7) (11%)
Gross profit 9 531,8 8 437,8 13%
Sales and distribution expenses (3 495,1) (3 143,4) (11%)
Marketing expenses (755,6) (649,9) (16%)
Other operating expenses (1 725,1) (1 561,7) (10%)
Operating income before abnormal items 2 3 556,0 3 082,8 15%
Abnormal items 3 (1 055,5) (2,4)
Operating income after abnormal items 2 500,5 3 080,4 (19%)
Finance costs (429,0) (399,4) (7%)
Interest received 26,3 20,6 28%
Investment income 1,5 17,0
Income from associated companies 596,9 515,1 16%
Profit before taxation 2 696,2 3 233,7 (17%)
Taxation (832,4) (836,6) 1%
Profit for the year from continuing operations 1 863,8 2 397,1 (22%)
Discontinued operation
Profit for the year from discontinued operation 41,0 158,0
Profit for the year 1 904,8 2 555,1 (25%)
Attributable to:
Owners of the parent 2 020,2 2 576,7 (22%)
- Continuing operations 1 990,3 2 516,0 (21%)
- Discontinued operation 29,9 60,7
Non-controlling interest (115,4) (21,6)
- Continuing operations (126,5) (118,9) (6%)
- Discontinued operation 11,1 97,3
1 904,8 2 555,1 (25%)
The 2013 amounts have been restated due to the adoption of IAS 19R.
Condensed consolidated income statement (continued)
Audited Audited
Year ended Year ended
30 September 30 September
2014 2013
Restated Change
Basic earnings per ordinary share (cents) 1 261,6 1 612,9 (22%)
- Continuing operations 1 242,9 1 574,9 (21%)
- Discontinued operation 18,7 38,0
Diluted basic earnings per ordinary share (cents) 1 230,7 1 572,9 (22%)
- Continuing operations 1 212,5 1 535,8 (21%)
- Discontinued operation 18,2 37,1
Headline earnings per ordinary share (cents) 1 815,7 1 628,6 11%
- Continuing operations 1 804,4 1 574,3 15%
- Discontinued operation 11,3 54,3
Diluted headline earnings per ordinary share (cents) 1 771,2 1 588,1 12%
- Continuing operations 1 760,2 1 535,2 15%
- Discontinued operation 11,0 52,9
The 2013 amounts have been restated due to the adoption of IAS 19R.
Condensed consolidated statement of comprehensive income
Audited Audited
Year ended Year ended
30 September 30 September
2014 2013
R’million Restated
Profit for the year 1 904,8 2 555,1
Other comprehensive income, net of tax (28,5) 523,6
Net loss on hedge of net investment in foreign operation* (3,2) (40,1)
Foreign currency translation adjustments* 114,1 512,5
Net loss on cash flow hedges* (5,1) (57,3)
Net (loss)/gain on available for sale financial assets* (117,4) 53,0
Actuarial (loss)/gain released in terms of IAS 19R (40,8) 43,1
Tax effect* 23,9 12,4
Total comprehensive income for the year, net of tax 1 876,3 3 078,7
Attributable to:
Owners of the parent 1 944,7 2 974,3
Non-controlling interests (68,4) 104,4
1 876,3 3 078,7
The 2013 amounts have been restated due to the adoption of IAS 19R.
* Items that may be subsequently reclassified to profit or loss. During the current year, R94,3 million
of the foreign currency translation reserve, relating to Dangote Agrosacks, was reclassified to
profit or loss.
Condensed consolidated segmental information
Audited Audited
Year ended Year ended
30 September 30 September
2014 2013
R’million Restated Change
Turnover
Domestic Operations 22 373,2 20 250,7 10%
Grains 10 948,6 10 052,7 9%
Milling and Baking 8 043,0 7 243,3 11%
Other Grains 2 905,6 2 809,4 3%
Consumer Brands 11 424,6 10 198,9 12%
Groceries 3 968,7 3 238,6 23%
Snacks & Treats 2 054,5 1 924,0 7%
Beverages 1 107,9 1 020,3 9%
Value Added Meat Products 1 896,2 1 736,3 9%
Out of Home 437,1 402,7 9%
Home, Personal care and Baby (HPCB) 1 960,2 1 877,0 4%
Personal care 564,2 582,7 (3%)
Babycare 747,2 717,0 4%
Homecare 648,8 577,3 12%
Domestic intergroup sales - (0,9)
International & Exports 7 698,8 6 752,8 14%
Exports and international 4 578,7 3 944,0 16%
Nigeria 3 120,1 2 808,8 11%
Total from continuing operations 30 072,0 27 003,5 11%
Discontinued operation 186,9 1 087,8
Total GROUP 30 258,9 28 091,3 8%
Operating income before abnormal items
Domestic Operations 3 146,8 2 892,0 9%
Grains 1 918,9 1 689,7 14%
Milling and Baking 1 596,5 1 399,9 14%
Other Grains 322,4 289,8 11%
Consumer Brands 1 375,8 1 345,9 2%
Groceries 320,4 295,1 9%
Snacks & Treats 309,4 305,0 1%
Beverages 126,6 106,4 19%
Value Added Meat Products 130,8 119,7 9%
Out of Home 90,1 80,4 12%
Home, Personal care and Baby (HPCB) 398,5 439,3 (9%)
Personal care 112,8 140,9 (20%)
Babycare 210,2 206,8 2%
Homecare 75,5 91,6 (18%)
IFRS 2 charge (105,4) (134,2) 21%
Other (42,5) (9,4)
International & Exports 409,2 190,8 114%
Exports and international 691,1 574,8 20%
Nigeria (281,9) (384,0) 27%
Total 3 556,0 3 082,8 15%
Discontinued operation 30,8 196,9
Total GROUP 3 586,8 3 279,7 9%
The 2013 amounts have been restated due to the adoption of IAS 19R.
Segmental reporting has been revised during the current year, with Pasta and Canned meats being removed
from the Groceries division and realigned to Other Grains and Value Added Meat Products respectively.
The comparative disclosures have been restated accordingly.
Condensed consolidated statement of financial position
as at 30 September 2014
Audited Audited
Year ended Year ended
30 September 30 September
2014 2013
R’million Restated
ASSETS
Non-current assets 14 123,7 14 474,8
Property, plant and equipment 5 867,6 5 498,7
Goodwill 2 411,2 3 173,2
Intangible assets 2 115,5 2 251,4
Investments 3 422,5 3 413,3
Deferred taxation asset 306,9 138,2
Current assets 10 728,3 9 485,5
Inventories 4 700,6 4 652,7
Trade and other receivables 4 867,4 4 199,9
Cash and cash equivalents 1 160,3 632,9
Assets classified as held-for-sale - 1 280,7
TOTAL ASSETS 24 852,0 25 241,0
EQUITY AND LIABILITIES
Issued capital and reserves 13 177,4 12 787,1
Non-controlling interests 769,8 1 028,4
TOTAL EQUITY 13 947,2 13 815,5
Non-current liabilities 1 532,9 2 397,1
Deferred taxation liability 279,1 363,5
Provision for post-retirement medical aid 626,4 580,9
Long-term borrowings 627,4 1 452,7
Current liabilities 9 371,9 8 329,8
Trade and other payables 4 441,6 3 987,1
Provisions 664,6 561,0
Taxation 243,6 131,5
Short-term borrowings 4 022,1 3 650,2
Liabilities directly associated with assets classified as held-for-sale - 698,6
TOTAL EQUITY AND LIABILITIES 24 852,0 25 241,0
Net debt 3 489,2 4 470,0
The 2013 amounts have been restated due to the adoption of IAS 19R.
Condensed consolidated statement of changes in equity
for the year ended 30 September 2014
Shares held by
subsidiary and
Share capital Non-distributable Accumulated empowerment
R’million and premium reserves profits entities
Balance at 1 October 2012 - Restated (refer note 6) 94,5 1 408,9 12 142,5 (2 675,6)
Restatement - IAS 19R - - (129,5) -
Balance at 1 October 2012 - Restated (refer note 6) 94,5 1 408,9 12 013,0 (2 675,6)
Net profit - - 2 576,7 -
Other comprehensive income - 366,6 31,0 -
Total comprehensive income - 366,6 2 607,7 -
Issue of shares 22,8 - - -
Acquisition of Dangote Flour Mills Plc - - - -
Transfers between reserves - 214,3 (214,3) -
Share-based payment - - - -
Dividends on ordinary shares - - (1 416,2) -
Total dividends - - (1 597,5) -
Less: Dividends on empowerment shares - - 181,3 -
Sale of shares by empowerment entity - - - 1,6
Balance at 30 September 2013 117,3 1 989,8 12 990,2 (2 674,0)
Net profit - - 2 020,2 -
Other comprehensive income - (45,9) (29,6) -
Total comprehensive income - (45,9) 1 990,6 -
Issue of shares 22,1 - - -
Disposal of Agrosacks - - - -
Acquisition of non-controlling interest - DFM - (49,7) - -
Distribution to Oceana Empowerment Trust Beneficiaries - (143,4) - -
Subsidiary - Legal Reserve Transfer - 25,8 (25,8) -
Transfers between reserves - 309,7 (309,7) -
Share-based payment - - - -
Dividends on ordinary shares - - (1 446,5) -
Total dividends - - (1 599,0) -
Less: Dividends on treasury and empowerment shares - - 152,5 -
Sale of shares - - - 2,1
Balance at 30 September 2014 139,4 2 086,3 13 198,8 (2 671,9)
Condensed statement of changes in equity (Continued)
for the year ended 30 September 2014
Total attributable
Share-based to owners of the Non-controlling
R’million payment reserve parent interests Total equity
Balance at 1 October 2012 - Restated (refer note 6) 332,5 11 302,8 392,7 11 695,5
Restatement - IAS 19R - (129,5) - (129,5)
Balance at 1 October 2012 - Restated (refer note 6) 332,5 11 173,3 392,7 11 566,0
Net profit - 2 576,7 (21,6) 2 555,1
Other comprehensive income - 397,6 126,0 523,6
Total comprehensive income - 2 974,3 104,4 3 078,7
Issue of shares - 22,8 - 22,8
Acquisition of Dangote Flour Mills Plc - - 541,2 541,2
Transfers between reserves - - - -
Share-based payment 31,3 31,3 - 31,3
Dividends on ordinary shares - (1 416,2) (9,9) (1 426,1)
Total dividends - (1 597,5) (9,9) (1 607,4)
Less: Dividends on empowerment shares - 181,3 - 181,3
Sale of shares by empowerment entity - 1,6 - 1,6
Balance at 30 September 2013 363,8 12 787,1 1 028,4 13 815,5
Net profit - 2 020,2 (115,4) 1 904,8
Other comprehensive income - (75,5) 47,0 (28,5)
Total comprehensive income - 1 944,7 (68,4) 1 876,3
Issue of shares - 22,1 - 22,1
Disposal of Agrosacks - - (145,1) (145,1)
Acquisition of non-controlling interest - DFM - (49,7) (24,4) (74,1)
Distribution to Oceana Empowerment Trust Beneficiaries - (143,4) - (143,4)
Subsidiary - Legal Reserve Transfer - - - -
Transfers between reserves - - - -
Share-based payment 61,0 61,0 - 61,0
Dividends on ordinary shares - (1 446,5) (20,7) (1 467,2)
Total dividends - (1 599,0) (20,7) (1 619,7)
Less: Dividends on treasury and empowerment shares - 152,5 - 152,5
Sale of shares - 2,1 - 2,1
Balance at 30 September 2014 424,8 13 177,4 769,8 13 947,2
Condensed consolidated statement of cash flows
Audited Audited
Year ended Year ended
30 September 30 September
2014 2013
R’million Restated
Cash operating profit 4 541,2 4 311,3
Working capital changes (348,0) (337,2)
Cash generated from operations 4 193,2 3 974,1
Finance cost net of dividends received (119,0) (108,6)
Taxation paid (967,3) (986,2)
Cash available from operations 3 106,9 2 879,3
Dividends paid (1 467,2) (1 426,1)
Net cash inflow from operating activities 1 639,7 1 453,2
Purchase of property, plant and equipment (982,9) (727,6)
Proceeds from disposal of property, plant,
equipment and intangible assets 26,0 31,1
Disposals 496,4 -
Acquisitions - (2 586,4)
Proceeds received on insurance claims 43,2 -
Other 2,5 1,1
Net cash outflow from investing activities (414,8) (3 281,8)
Proceeds from issue of share capital 22,1 17,8
Acquisition of minorities shareholding in DFM (74,1) -
Long- and short-term borrowings (repaid)/raised (1 056,5) 407,7
Net cash (outflow)/inflow from financing activities (1 108,5) 425,5
Net increase/(decrease) in cash and cash equivalents 116,4 (1 403,1)
Cash and cash equivalents transferred to assets held-for-sale - (20,4)
Effect of exchange rate changes 51,6 64,6
Cash and cash equivalents at the beginning of the period (2 093,9) (735,0)
Cash and cash equivalents at the end of the period (1 925,9) (2 093,9)
Cash resources 1 160,3 632,9
Short-term borrowings regarded as cash and cash equivalents (3 086,2) (2 726,8)
(1 925,9) (2 093,9)
The 2013 amounts have been restated due to the adoption of IAS 19R.
Notes
1. Basis of preparation and changes to the group’s accounting policies
The preparation of these results has been supervised by O Ighodaro, Chief Financial Officer of Tiger Brands Limited.
The condensed group consolidated financial statements for the year ended 30 September 2014 have been prepared in
accordance with IAS 34: Interim Financial Reporting as issued by the IASB, the South African Companies Act No 71 of
2008 and the Listings Requirements of the JSE Limited.
Ernst & Young Inc., Tiger Brands Limited’s independent auditors, have audited the consolidated annual financial
statements of Tiger Brands Limited from which the condensed consolidated financial results have been derived.
The auditors have expressed an unmodified audit opinion on the consolidated annual financial statements. The condensed
consolidated financial results comprise the condensed consolidated statement of financial position at 30 September 2014,
condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and
condensed consolidated statement of cash flows for the year then ended, and selected explanatory notes.
The audit report of the consolidated annual financial statements is available for inspection at Tiger Brands Limited’s
registered office.
The directors of the company take full responsibility for the preparation of the condensed consolidated financial results
and that the financial information has been correctly extracted from the underlying audited consolidated annual financial
statements.
The accounting policies adopted in the preparation of the condensed consolidated financial statements are consistent with
those applied in preparation of the group’s annual consolidated financial statements for the year ended 30 September 2013,
except for the adoption of IAS 19R: Employee Benefits, effective 1 October 2013, where the effect of these amendments are
explained in Note 6. In addition, IFRS 7 amendments, IFRS 10, IFRS 11 and IFRS 12 have been adopted with effect from
1 October 2013, however, they do not impact the annual consolidated financial statements of the group. The majority of the
group’s financial instruments measured at fair value in terms of IFRS 13, are noted as level 1 hierarchy, which are
valued based on a quoted price.
Audited Audited
Year ended Year ended
30 September 30 September
2014 2013
R’million Restated
2. Operating income before abnormal items
Depreciation (included in cost of sales and other operating expenses) 679,1 640,1
Amortisation 38,1 47,4
IFRS 2 (included in other operating expenses)
- Equity settled (including BEE-related IFRS 2 expenses) 61,0 36,2
- Cash settled 44,4 98,0
3. Abnormal items
Advisory and due diligence costs (Acquisition costs) (12,3) (15,0)
Net profit on disposal of property, plant and equipment 14,8 11,1
Impairment of goodwill and other intangible assets (916,4) (2,9)
Insurance claim income 43,2 -
Impairment of property, plant and equipment (145,3) -
Other (39,5) 4,4
(1 055,5) (2,4)
The 2013 amounts have been restated due to the adoption of IAS 19R.
4. Reconciliation between profit for the year and headline earnings
Continuing operations
Adjusting items after tax and non-controlling interests
Profit for the year attributable to owners of the parent 1 990,3 2 516,0
Adjusted for:
Profit on sale of property, plant and equipment (11,1) (3,0)
Impairment of intangible assets 869,4 2,9
Impairment of property, plant and equipment 78,2 -
Write-off of other related assets 1,5 -
Insurance claim income (31,1) -
Headline earnings adjustments - Associates
- Profit on sale of non-current assets (7,9) (0,9)
Headline earnings for the year 2 889,3 2 515,0
Tax effect of headline earnings adjustments (52,9) 2,3
Attributable to non-controlling interest (46,8) (2,9)
5. Analysis of profit from discontinued operation
Turnover 186,9 1 087,8
Expenses (156,1) (890,9)
Operating income before abnormal items 30,8 196,9
Profit/(loss) on remeasurement to fair value on transfer of
net assets to held for sale 18,6 (25,8)
Operating income after abnormal items 49,4 171,1
Finance costs (5,0) (47,6)
Profit before taxation 44,4 123,5
Taxation (3,4) 34,5
Profit for the year from discontinued operation 41,0 158,0
Attributable to non-controlling interests (11,1) (97,3)
Attributable to owners of the parent 29,9 60,7
Loss on sale of property, plant and equipment - 9,7
(Gain)/loss on remeasurement to fair value on transfer of
net assets to held-for-sale (11,8) 16,3
Headline earnings for the year 18,1 86,7
Tax effect of headline earnings adjustments - -
Attributable to non-controlling interest 6,8 (15,3)
Cash flows from discontinued operation
Net cash (outflows)/inflows from operating activities (23,9) 266,1
Net cash inflows/(outflows) from investing activities 97,0 (178,6)
Net cash outflows from financing activities (72,2) (227,8)
Net cash inflows/(outflows) 0,9 (140,3)
The 2013 amounts have been restated due to the adoption of IAS 19R.
6. Employee benefits - impact of transition to IAS 19R
The group adopted the revised IAS 19 Employee Benefits standard on 1 October 2013. This included changes to accounting
principles in respect of defined benefit plans and the post-retirement medical aid liability. The amendments eliminate
the option of the corridor approach and all the actuarial gains and losses are now recognised immediately in other
comprehensive income. The full net liability/asset is recorded in the statement of financial position, while the expected
interest income on plan assets is calculated using the same discount rate as that applied in calculating the present value
of the obligations. The changes in the fair value of the obligations are recorded in other comprehensive income where those
were included in the operating expenses previously. The amendments were applied retrospectively to September 2012. The
impact of the revised standard on the group is presented in the table below:
Audited Audited
Year ended Year ended
30 September 30 September
2013 2012
R’million Restated Restated
Statement of financial position
Decrease in opening retained income - 129,5
Decrease/(increase) in provision for post-retirement medical aid 28,5 (176,8)
Decrease/(increase) in payables for defined benefit fund 2,0 (1,5)
Increase/(decrease) in trade and other receivables 23,0 (1,5)
Decrease/(increase) in deferred taxation (15,0) 50,3
38,5 -
Profit or loss
Decrease in operating expenses (10,4) -
Increase in tax expense 2,9 -
(7,5) -
Other comprehensive income (OCI)
Actuarial movements in OCI (43,1) -
Tax on actuarial movements in OCI 12,1 -
(31,0) -
Net movement in total comprehensive income (38,5) -
There was no material impact on the group’s consolidated statement of cash flows or basic and diluted EPS or HEPS.
7. Capital commitments 978,0 780,3
- contracted 244,5 372,2
- approved 733,5 408,1
Capital commitments will be funded from normal operating cash
flows and the utilisation of existing borrowing facilities.
Capital expenditure 982,9 727,6
- replacement 555,2 540,3
- expansion 427,7 187,3
8. Contingent liabilities
- guarantees and contingent liabilities 70,8 78,8
The 2013 amounts have been restated due to the adoption of IAS 19R.
Tiger Brands Limited
Registration number 1944/017881/06
Incorporated in the Republic of South Africa
Share code: TBS ISIN:ZAE000071080
Telephone: 011 840 4000
Facsimile: 011 514 0477
Physical address:
Tiger Brands Limited
3010 William Nicol Drive,
Bryanston
Postal address:
PO Box 78056, Sandton
2146, South Africa
Sponsor
JP Morgan Equities South Africa (Pty) Ltd
1 Fricker Road, Corner Hurlingham Road,
Illovo, 2196, South Africa
Share registrars
Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg, 2001
Website: www.tigerbrands.com
19 November 2014
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