Wrap Text
Reviewed group results and dividend declaration
for the year ended 30 September 2015
TIGER BRANDS LIMITED
Registration number: 1944/017881/06
Incorporated in the Republic of South Africa
Share code: TBS ISIN: ZAE000071080
Reviewed group results and dividend declaration
for the year ended 30 September 2015
Key financial indicators
Solid domestic performance
- Domestic operating income up 11% to R3,6 billion
- Improved grains margins
- Domestic operating margin up from 14,5% to 15,2%
- HPC turnaround gains momentum
- Groceries recovery sustained
Nigeria
- Decisive action taken on Tiger Branded Consumer Goods Plc (TBCG, formerly Dangote Flour Mills ("DFM"))
Commentary
Overview
The group recorded a solid performance driven by its core South African businesses. However, this was partially offset
by underperformance in certain of its International operations.
Domestic operations
In an increasingly competitive and demand constrained domestic environment, volumes were maintained and turnover grew
by 6%. Operating income for the domestic business increased by 11% to R3,6 billion with the domestic operating margin
increasing from 14,5% to 15,2%, demonstrating the strength and resilience of the group’s brands in challenging trading
conditions and the successful execution of the group’s strategic intent, particularly with regards to increased innovation,
higher marketing investment and ongoing cost management. Particularly pleasing was the improved performances of the
Groceries, Home and Personal Care businesses which recorded improved margins and double digit profit growth. The Grains
business achieved a solid result, regaining its market leading position in the bread category, while improving its overall
margins.
Exports and International
Continued progress is reflected in these results from Chococam and Langeberg & Ashton Foods (L&AF). However, the
results were significantly impacted by the irregularities at Haco, addressed in detail in the interim results, and the
failure of a key distributor in Mozambique in the fourth quarter. These issues have been addressed with an improved second
half performance from Haco and the recent appointment of a new distributor in Mozambique.
Nigeria
Following the sharp drop in the price of crude oil and the resultant devaluation of the naira, the macro-economic
environment in Nigeria has deteriorated significantly. This, together with the continuing losses at TBCG, led the Board of
Tiger Brands to initiate a strategic review of its Nigerian operations.
After considerable and lengthy deliberations and having explored several options, the Board of Tiger Brands took the
decision not to advance any further funding to TBCG and to impair its investment. In addition, it was also necessary to
further impair the group’s investment in Deli Foods. The financial impact of these impairments in the current year
amounted to R1,9 billion. Tiger Brands is currently exploring various alternatives with respect to its shareholding in TBCG.
To this end, it will, together with the Board of TBCG endeavour to find a suitable solution for TBCG’s operations going
forward.
Financial performance
Group turnover increased by 5% to R31,6 billion (2014: R30,1 billion), underpinned by 1% volume growth and pricing
inflation of 4%. Operating income of R3,7 billion was up 3% on the prior year after accounting for a R29 million IFRS 2
share option charge (2014: R105 million) and foreign exchange losses of R134 million in TBCG.
Profit before tax decreased by 20% to R2,1 billion (2014: R2,7 billion) after accounting for net financing costs of
R397 million, income from associate companies of R603 million and abnormal charges of R1,7 billion, the bulk of which
relates to the impairment of the group’s investment in TBCG. This impairment fully covers Tiger Brands’ residual exposure in
respect of TBCG. With effect from mid-November 2015 when the Board of Tiger Brands took the decision not to extend
further financial support to TBCG, this business will be accounted for as a discontinued operation.
Income from associates of R603 million was 1% up on the prior year. Oceana Group Limited delivered another solid set
of results, contributing R309 million to the group’s earnings, thereby reflecting a 10% increase on prior year. Empresas
Carozzí increased by 4% to R207 million, while UAC Foods and National Foods Holdings recorded weaker earnings, with
their contribution to group earnings down 25% and 26% to R33 million and R54 million respectively.
Net financing costs of R397 million were in line with the prior year, despite higher domestic borrowing rates and
increased levels of debt in TBCG.
The group’s income tax expense of R1,2 billion (2014: R832 million) represents an effective tax rate of 37,3%
(2014: 28,1%) based on total profits before abnormal items and associate income. The lower tax rate in the prior year was
primarily due to special investment allowances claimed on qualifying capital projects completed during the year, as well as a
prior-year deferred tax adjustment. The current year tax rate was negatively impacted by the non-recognition of a
deferred tax asset in respect of losses and other timing differences arising in TBCG in the current year as well as the
de-recognition of the balance of TBCG’s net deferred tax asset brought forward from 2014. Excluding the impact of the above
tax adjustments relating to TBCG, as well as the release in 2015 of surplus tax provisions, the group tax rate is 29,3%.
After accounting for the minority shareholders’ share of after tax losses in TBCG and Haco, non-controlling interests
from continuing operations in the income statement amounted to R785 million (2014: R127 million).
Profit attributable to ordinary shareholders from continuing operations decreased by 13% to R1,7 billion (2014: R2,0 billion),
while earnings per share from continuing operations decreased by 14% to 1 068 cents (2014: 1 243 cents).
Headline earnings per share from continuing operations decreased by 1% to 1 786 cents (2014: 1 804 cents), including
the effect of the TBCG deferred tax asset impairment. In the prior year, TBCG disposed of its packaging subsidiary,
Dangote Agrosacks, which was consequently disclosed as a discontinued operation. Headline earnings per share from total
operations decreased by 2% to 1 786 cents (2014: 1 816 cents).
Adjusted headline earnings per share from continuing operations, excluding the TBCG deferred tax asset impairment,
increased by 6% to 1 920 cents (2014: 1 804 cents).
Strategic focus
The group’s key strategic focus in recent years has been to profitably defend and grow its market shares, while
expanding on the rest of the continent. To achieve this, a multi-pronged action plan is being implemented:
Marketing and innovation: Understanding that the group’s primary asset is its portfolio of leading brands, we continue
to support our brands through increased marketing investment and innovation. In the current year, marketing investment
increased by 12% to R845 million while our rate of innovation improved to 3,5% from 3,3%, helping to support the
continued leadership of our brands in core categories.
Manufacturing facilities: The group continues to invest in its facilities to improve efficiencies and support its
drive for innovation. Over the past year, R882 million was spent on various capital projects in execution of this objective
and to provide for expansionary growth.
People: Skills development is a key element to achieving our strategic goals. We have invested in our existing talent
pool and brought on board new skills that have enhanced the breadth and depth of our leadership teams. Tiger Brands
continues to perform favourably against its peers in country wide benchmarks such as the Top Employers’ survey. During the
year, Noel Doyle was appointed as Chief Operating Officer. His vast industry knowledge and experience provides
operational focus and ensures better collaboration across the group.
Supply chain and route-to-market: In an intensely competitive and constantly evolving trading environment, building an
efficient and effective route to market and supply chain capability is essential to ensuring that we continue to win
with our customers and consumers. Accordingly, the group has streamlined its supply chain structures to drive efficiencies
and is on track to fully realise its target of R500 million cost savings, using the 2014 financial as a base, arising
from changes to its manufacturing architecture and the centralisation of procurement, finance and various administrative
functions. Customer facing structures have also been enhanced with the introduction of technology to improve our market
reach and the development of joint business planning initiatives to drive category growth.
International growth: Following the group’s decision not to provide any further financial support to TBCG, the longer
term objective of international growth will require renewed focus and drive, to ensure the delivery of sustainable
profitable growth.
Operating performance
Grains
The Grains division recorded a 7% increase in operating income for the year to R2,1 billion, while the operating
margin improved from 17,5% to 18,1%. Bakeries reported an increase in operating income despite significant competition.
Volumes declined in the first half but growth resumed in the second half following a deliberate and measured response to
competition, focused on product quality and the functional attributes of the Albany brand. This was supported by tactical
pricing initiatives which proved successful, with Albany regaining its market leadership in the bread category during the
fourth quarter of the year.
The Wheat Milling business delivered another solid performance, growing operating income and volumes at improved
margins. While there was a decline in international wheat prices during the year, this was largely offset by an increase in
the local wheat tariffs.
South Africa experienced drought in many of its maize producing regions during the growing season and this resulted in
a significant increase in maize prices during the year. Nevertheless, the Maize Milling business reported strong growth
in revenue and operating income, driven by a focus on product quality, brand investment and careful price point
management.
An excellent performance was achieved in the Rice and Pasta categories, which delivered market share growth and double
digit increases in operating income.
Consumer Brands - Food
This division reported a pleasing performance with turnover up by 7% to R10,1 billion and operating income rising 12%
to R1,1 billion, despite challenging trading conditions and higher input costs. The overall operating margin improved
from 10,3% to 10,8%.
Groceries recorded an excellent financial performance for the year. Turnover rose 7% to R4,3 billion while operating
income increased by 28% to R411 million. Market shares improved across most categories compared to the prior year,
notwithstanding pricing adjustments taken to recover costs and the more intensely competitive trading environment.
The commissioning of the new mayonnaise plant in Boksburg, Johannesburg was completed in June 2015, with improving
production and supply chain efficiencies noted.
After a relatively subdued first half, turnover in the Snacks and Treats category increased by 4% to R2,1 billion and
operating income by 2% to R315 million. The overall operating margin declined to 14,7%, primarily driven by raw material
cost push. In 2015, Beacon chocolates underwent a successful product reformulation and brand relaunch which is being
supported by further marketing investment and innovation. Capital expenditure of R70 million has been committed to upgrade
the chocolate facility in 2016.
Beverages performed well with turnover up 5% to R1,2 billion while operating income grew by 9% to R138 million. The
operating margin increased from 11,4% to 11,8%.
The Value Added Meat Products division produced a solid result, reflecting top-line growth of 10% and a 12% increase
in operating income to R146 million, assisted by high levels of product innovation. The division achieved an operating
margin of 7%.
Home, Personal Care and Baby (HPCB)
In line with the strategy of re-investing in its core brands, the marketing investment for the Home and Personal Care
businesses (excluding Stationery) increased in aggregate by 72%. This assisted in driving improved market shares in core
categories and resulted in a 24% increase in operating income to R218 million and an operating margin of 17,3%. In Home
Care, growth was driven by the pest segment, where Doom gained significant market share, while the improved performance
in Personal Care was driven by the hand and body care segment.
The nutrition and well-being segments within Baby Care recorded satisfactory top-line growth of 7%, although margins
contracted to 26,7% in the nutrition category due to input costs not being fully recovered in price. Purity launched a
comprehensive range of baby food pouches in July 2015, which will enable it to compete more effectively in the baby
nutrition segment with this convenient, more affordable format.
Exports and International
Total turnover for the Exports and International division was in line with the prior year at R4,6 billion. Operating
income declined by 24% to R527 million. This was affected by prior year adjustments at Haco of R50 million, relating to
supplier rebates and allowances which were incorrectly recorded in 2014, including the effect of pre-invoicing of goods
to the value of R106 million in the 2014 financial year. The Exports division was impacted by the business failure of a
key distributor in Mozambique during the fourth quarter, resulting in lower volumes compared to the previous year and a
bad debt write-off of R23 million. The relevant distributor has since been replaced.
Turnover at L&AF was in line with last year at R1,4 billion, while operating income, which benefited from the weaker
rand, increased by 58% to R95 million. During the year, L&AF expanded its operations into dried fruits, a complementary
and value added category, after installing new equipment.
Nigeria
The initiatives implemented by management at TBCG on quality, distribution and innovation are reflected in overall
volume growth of 20%, with flour volumes increasing by 18% and pasta volumes up 59%. The volume growth did not, however,
result in any appreciable improvement in the level of operating losses as competition intensified in the deteriorating
macro-economic environment. In particular, the results were impacted in the third quarter by the delayed pass through of
raw material price increases arising from the naira’s devaluation in February 2015, as well as by fuel shortages and
labour disruptions in the country’s trucking and port servicing industries.
The business also made good progress in driving innovation. In this regard, smaller consumer pack sizes were
successfully introduced for semolina and wholemeal products under the Tastic brand, while new Tastic pasta products were launched
after the year end.
The performance of Deli Foods was affected by currency devaluation and the breakdown of a key production line in the
first quarter. The new replacement line was commissioned in November 2015.
Cash flow
The group generated operating cash flows of R3,6 billion which were deployed in funding capital expenditure of R882
million, dividends of R1,6 billion and tax payments of R1,2 billion. The group’s working capital requirements increased
due to the normalisation of stock levels at Groceries, following the prior year’s production disruptions in baked beans
and the timing of raw material procurement at year end. During the year, the group’s associate Oceana acquired the entire
issued share capital of Daybrook Fisheries, a fishing company based in Louisiana in the United States. The acquisition
was partly funded by a rights offer, with Tiger Brands’ participation amounting to R525 million.
Capital expenditure
The group continues to manage its capital expenditure programme prudently, focusing on return on capital while
ensuring adequate investment in maintaining and replacing assets to sustain optimal operational efficiency and capability.
Capital expenditure for the year amounted to R882 million.
Outlook
The outlook for the year ahead remains challenging, with low domestic economic growth, rising costs and job security
concerns weighing on the South African consumer. These factors are exacerbated by the weak rand which is fuelling
inflationary pressures and intensifying the competitive trading dynamics already evident. The macro-economic outlook for the
rest of sub-Saharan Africa is muted, while currency devaluations and foreign exchange liquidity are additional risks.
However, Tiger Brands has the brands, people and capability to address these challenges. In addition, the group will
continue to focus relentlessly on cost savings and efficiencies, as well as further investment in innovation, customer
engagement and brand development.
As announced on 25 September 2015, Peter Matlare will step down as the group’s Chief Executive Officer (CEO) with
effect from 31 December 2015. The search for a successor is currently underway.
Noel Doyle has been appointed interim CEO, with effect from 1 January 2016.
Declaration of interim dividend number 142
The Board has approved and declared a final dividend of 611 cents per ordinary share (gross) in respect of the year
ended 30 September 2015.
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)
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 192 069 868 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, 8 January 2016
Shares commence trading ex the final dividend Monday, 11 January 2016
Record date to determine those shareholders entitled to the final dividend Friday, 15 January 2016
Payment in respect of the final dividend Monday, 18 January 2016
Share certificates may not be dematerialised or re-materialised between Monday, 11 January 2016 and Friday, 15 January
2016, both days inclusive.
By order of the Board
AC Parker PB Matlare
Chairman Chief executive officer
Sandton
Date released: 19 November 2015
Preliminary condensed consolidated income statement
R’million Note Reviewed Audited %
year ended year ended change
30 September 30 September
2015 2014
Turnover 31 557,6 30 072,0 5
Cost of sales (21 611,4) (20 540,2) (5)
Gross profit 9 946,2 9 531,8 4
Sales and distribution expenses (3 671,4) (3 495,1) (5)
Marketing expenses (845,1) (755,6) (12)
Other operating expenses (1 776,0) (1 725,1) (3)
Operating income before abnormal items 2 3 653,7 3 556,0 3
Abnormal items 3 (1 709,6) (1 055,5) (62)
Operating income after abnormal items 1 944,1 2 500,5 (22)
Finance costs (413,8) (429,0) 4
Interest received 16,3 26,3 (38)
Investment income 0,8 1,5 (47)
Income from associated companies 602,8 596,9 1
Profit before taxation 2 150,2 2 696,2 (20)
Taxation 4 (1 208,2) (832,4) (45)
Profit for the year from continuing operations 942,0 1 863,8 (49)
Discontinued operation
Profit for the year from discontinued operation 7 - 41,0
Profit for the year 942,0 1 904,8 (51)
Attributable to:
Owners of the parent 1 727,1 2 020,2 (15)
- Continuing operations 1 727,1 1 990,3 (13)
- Discontinued operation - 29,9
Non-controlling interests (785,1) (115,4)
- Continuing operations (785,1) (126,5)
- Discontinued operation - 11,1
942,0 1 904,8 (51)
Basic earnings per ordinary share (cents) 1 068,1 1 261,6 (15)
- Continuing operations 1 068,1 1 242,9 (14)
- Discontinued operation - 18,7
Diluted basic earnings per ordinary share (cents) 1 050,9 1 230,7 (15)
- Continuing operations 1 050,9 1 212,5 (13)
- Discontinued operation - 18,2
Headline earnings per ordinary share (cents) 1 785,5 1 815,7 (2)
- Continuing operations 1 785,5 1 804,4 (1)
- Discontinued operation - 11,3
Diluted headline earnings per ordinary share (cents) 1 756,7 1 771,2 (1)
- Continuing operations 1 756,7 1 760,2 -
- Discontinued operation - 11,0
Preliminary condensed consolidated statement of comprehensive income
R’million Reviewed Audited
year ended year ended
30 September 30 September
2015 2014
Profit for the year 942,0 1 904,8
Other comprehensive income, net of tax 299,2 (28,5)
Net loss on hedge of net investment in foreign operation (1) 7,6 (3,2)
Foreign currency translation adjustments (1) 90,5 114,1
Share of associates other comprehensive income (1) 281,7 -
Net gain/(loss) on cash flow hedges (1) 7,0 (5,1)
Net loss on available for sale financial assets (1) (91,3) (117,4)
Remeasurement raised in terms of IAS 19R (2) (14,5) (40,8)
Tax effect (1) 18,2 23,9
Total comprehensive income for the year, net of tax 1 241,2 1 876,3
Attributable to:
Owners of the parent 1 995,1 1 944,7
Non-controlling interests (753,9) (68,4)
1 241,2 1 876,3
1 Items that may be subsequently reclassified to profit or loss. During the current year R95,6 million was
reclassified to profit or loss on the available-for-sale financial asset derecognised in terms of the Black
Managers Trust Participation Rights Scheme and Thusani SPV. During 2014, R94,3 million of the foreign currency
translation reserve, relating to Dangote Agrosacks, was reclassified to profit or loss.
2 Comprises a net actuarial gain of R6,9 million (2014: net actuarial loss of R40,8 million) and unrecognised
loss due to asset ceiling of R21,4 million (2014: Nil).
Preliminary condensed consolidated segmental information
R’million Reviewed Audited %
year ended year ended change
30 September 30 September
2015 2014
Turnover
Domestic operations 23 630,6 22 373,2 6
Grains 11 375,4 10 948,6 4
Milling and baking 8 160,5 8 043,0 1
Other Grains 3 214,9 2 905,6 11
Consumer Brands 12 255,2 11 424,6 7
Groceries 4 265,4 3 968,7 7
Snacks & Treats 2 137,1 2 054,5 4
Beverages 1 166,8 1 107,9 5
Value Added Meat Products 2 095,1 1 896,2 10
Out of Home 443,7 437,1 2
Home, Personal Care and Baby (HPCB) 2 147,1 1 960,2 10
Personal care 630,9 564,2 12
Babycare 803,0 747,2 7
Homecare 713,2 648,8 10
Domestic intergroup sales - -
International & Exports* 4 617,4 4 578,7 1
Exports 1 872,4 1 846,5 1
International operations - Central Africa* 706,5 659,1 7
International operations - Eastern Africa* 762,6 803,6 (5)
Deciduous Fruit 1 434,0 1 440,1 -
Other intergroup sales (158,1) (170,6) 7
Nigeria 3 309,6 3 120,1 6
Total from continuing operations 31 557,6 30 072,0 5
Discontinued operation - 186,9
Total group 31 557,6 30 258,9 4
Operating income before abnormal items
Domestic operations 3 595,1 3 252,2 11
Grains 2 060,8 1 918,9 7
Milling and baking 1 680,5 1 596,5 5
Other Grains 380,3 322,4 18
Consumer brands 1 539,5 1 375,8 12
Groceries 410,6 320,4 28
Snacks & Treats 314,9 309,4 2
Beverages 137,8 126,6 9
Value Added Meat Products 146,3 130,8 12
Out of Home 86,3 90,1 (4)
Home, Personal Care and Baby (HPCB) 443,6 398,5 11
Personal care 129,7 112,8 15
Babycare 214,2 210,2 2
Homecare 99,7 75,5 32
Other (5,2) (42,5) 88
International & Exports* 526,7 691,1 (24)
Exports 364,4 423,6 (14)
International operations - Central Africa* 115,8 103,5 12
International operations - Eastern Africa* (48,9) 103,6 (147)
Deciduous Fruit 95,4 60,4 58
Nigeria (438,9) (281,9) (56)
Total before ifrs 2 charges 3 682,9 3 661,4 1
IFRS 2 charges (29,2) (105,4) 72
Total after ifrs 2 charges 3 653,7 3 556,0 3
Discontinued operation - 30,8
Total group 3 653,7 3 586,8 2
* Segmental reporting has been revised during the current year, with International operations being further segmented
into Central and East Africa operations. The comparative disclosures have been restated accordingly.
Preliminary condensed consolidated statement of financial position
R’million Reviewed Audited
year ended year ended
30 September 30 September
2015 2014
ASSETS
Non-current assets 13 237,0 14 123,7
Property, plant and equipment 4 641,2 5 867,6
Goodwill 2 239,1 2 411,2
Intangible assets 1 993,9 2 115,5
Investments 4 312,3 3 422,5
Deferred taxation asset 50,5 306,9
Current assets 11 617,3 10 728,3
Inventories 5 670,0 4 700,6
Trade and other receivables 4 895,7 4 867,4
Cash and cash equivalents 1 051,6 1 160,3
Total assets 24 854,3 24 852,0
Equity and liabilities
Issued capital and reserves 13 830,1 13 177,4
Non-controlling interests (52,5) 769,8
Total equity 13 777,6 13 947,2
Non-current liabilities 2 059,2 1 532,9
Deferred taxation liability 200,3 279,1
Provision for post-retirement medical aid 643,1 626,4
Long-term borrowings 1 215,8 627,4
Current liabilities 9 017,5 9 371,9
Trade and other payables 4 796,8 4 441,6
Provisions 523,3 664,6
Taxation 73,4 243,6
Short-term borrowings 3 624,0 4 022,1
Total equity and liabilities 24 854,3 24 852,0
Net debt 3 788,2 3 489,2
Preliminary condensed consolidated statement of changes in equity
R’million Share capital Non- Accumulated Shares held by
and premium distributable profits subsidiary and
reserves empowerment
entities
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 share capital and share premium 22,1 - - -
Disposal of Agrosacks - - - -
Acquisition of non-controlling interest - TBCG - (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 empowerment shares - - 152,5 -
Sale of shares by empowerment entity - - - 2,1
Balance at 30 September 2014 139,4 2 086,3 13 198,8 (2 671,9)
Net profit - - 1 727,1 -
Other comprehensive income - 277,7 (9,7) -
Total comprehensive income - 277,7 1 717,4 -
Issue of share capital and share premium 9,1 - - -
Subsidiary - legal reserve transfer - 3,3 (3,3) -
Transfers between reserves - 276,8 (185,4) -
Share-based payment - - - -
Dividends on ordinary shares - - (1 574,6) -
Total dividends - - (1 732,9) -
Less: Dividends on empowerment shares - - 158,3 -
Purchase of Tiger shares by empowerment entity - - - (71,0)
Sale of shares by empowerment entity - - - 204,0
Balance at 30 September 2015 148,5 2 644,1 13 152,9 (2 538,9)
Preliminary condensed consolidated statement of changes in equity (continued)
R’million Share-based Total attributable Non-controlling Total
payment to owners of interests equity
reserve the parent
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 share capital and share premium - 22,1 - 22,1
Disposal of Agrosacks - - (145,1) (145,1)
Acquisition of non-controlling interest - TBCG - (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 empowerment shares - 152,5 - 152,5
Sale of shares by empowerment entity - 2,1 - 2,1
Balance at 30 September 2014 424,8 13 177,4 769,8 13 947,2
Net profit - 1 727,1 (785,1) 942,0
Other comprehensive income - 268,0 31,2 299,2
Total comprehensive income - 1 995,1 (753,9) 1 241,2
Issue of share capital and share premium - 9,1 - 9,1
Subsidiary - legal reserve transfer - - - -
Transfers between reserves (91,4) - - -
Share-based payment 90,1 90,1 - 90,1
Dividends on ordinary shares - (1 574,6) (19,4) (1 594,0)
Total dividends - (1 732,9) (19,4) (1 752,3)
Less: Dividends on empowerment shares - 158,3 - 158,3
Purchase of Tiger shares by empowerment entity - (71,0) - (71,0)
Sale of shares by empowerment entity - 204,0 (49,0) 155,0
Balance at 30 September 2015 423,5 13 830,1 (52,5) 13 777,6
Preliminary condensed consolidated statement of cash flows
R’million Reviewed Audited
year ended year ended
30 September 30 September
2015 2014
Cash operating profit 4 416,9 4 541,2
Working capital changes (811,6) (348,0)
Cash generated from operations 3 605,3 4 193,2
Finance cost net of dividends received (70,7) (119,0)
Taxation paid (1 158,8) (967,3)
Cash available from operations 2 375,8 3 106,9
Dividends paid (1 643,0) (1 467,2)
Net cash inflow from operating activities 732,8 1 639,7
Purchase of property, plant and equipment (881,6) (982,9)
Proceeds from disposal of property, plant, equipment and intangible assets 53,7 26,0
Disposal of subsidiary - 496,4
Exercise of share options held in BMT 285,7 -
Investment acquired (525,4) -
Proceeds received on insurance claims 7,5 43,2
Proceeds received on repayment of loans 4,2 2,5
Net cash outflow from investing activities (1 055,9) (414,8)
Proceeds from issue of share capital 9,1 22,1
Acquisition of minorities shareholding in TBCG - (74,1)
Long and short-term borrowings raised/(repaid) 66,9 (1 056,5)
Net cash inflow/(outflow) from financing activities 76,0 (1 108,5)
Net (decrease)/increase in cash and cash equivalents (247,1) 116,4
Effect of exchange rate changes 46,2 51,6
Cash and cash equivalents at the beginning of the period (1 925,9) (2 093,9)
Cash and cash equivalents at the end of the period (2 126,8) (1 925,9)
Cash resources 1 051,6 1 160,3
Short-term borrowings regarded as cash and cash equivalents (3 178,4) (3 086,2)
Cash and cash equivalents at the end of the period (2 126,8) (1 925,9)
Other salient features
R’million Reviewed Audited
year ended year ended
30 September 30 September
2015 2014
Capital commitments 1 119,4 978,0
- contracted 148,5 244,5
- approved 970,9 733,5
Capital commitments will be funded from normal operating cash
flows and the utilisation of existing borrowing facilities.
Additional commitments of R580,6 million will be approved in 2016.
Capital expenditure 881,6 982,9
- expansion 203,8 427,7
- replacement 677,8 555,2
Contingent liabilities
- guarantees and contingent liabilities 16,9 70,8
Inventories carried at net realisable value 126,5 49,3
Write-down of inventories recognised as an expense 97,4 86,8
Notes
1. Basis of preparation and changes to the group’s accounting policies
The preparation of these results have been supervised by O Ighodaro, Chief Financial Officer of Tiger Brands Limited.
The condensed consolidated financial statements are prepared in accordance with the requirements of the JSE Limited
Listings Requirements for preliminary reports and the requirements of the Companies Act of South Africa. The Listings
Requirements require preliminary reports to be prepared in accordance with the framework concepts and the measurement
and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting
Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The
accounting policies applied in the preparation of the condensed consolidated financial statements are in terms of IFRS
and are consistent with those applied in the previous consolidated annual financial statements.
The review has been conducted in accordance with International Standards on Review Engagements 2410 (revised), Review
of Interim Financial Information Performed by the Independent Auditor, Ernst & Young Inc. and their unmodified review
conclusion is available for inspection at the company’s registered office. Any reference to future financial performance
included in this announcement has not been reviewed or reported on by the group’s external auditors. The auditors’ review
report does not necessarily report on all the information contained in this announcement/financial results. Shareholders
are therefore advised that in order to obtain a full understanding of the nature of the auditors’ engagement they should
obtain a copy of the auditors’ review report together with the accompanying financial information from the issuer’s
registered office.
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 quoted market prices.
R’million Reviewed Audited
year ended year ended
30 September 30 September
2015 2014
2. Operating income before abnormal items
Depreciation (included in cost of sales and other operating expenses) 662,1 679,1
Amortisation 23,8 38,1
IFRS 2 charges (included in other operating expenses)
- Equity settled 90,1 61,0
- Cash settled (60,9) 44,4
Nigeria foreign exchange loss 134,3 -
3. Abnormal items
Impairment of property, plant and equipment (1 410,9) (145,3)
Impairment of intangible assets (280,0) (916,4)
Write-off of other related assets (72,9) (3,1)
(Loss)/profit on disposal of plant, equipment and vehicles (7,3) 14,8
Insurance claim income 7,5 43,2
Historical statutory liabilities 7,0 (36,4)
Profit on sale of empowerment available for sale financial assets 47,0 -
Acquisition costs - (12,3)
(1 709,6) (1 055,5)
Reviewed Audited
year ended year ended
30 September 30 September
2015 2014
% %
4. Tax rate reconciliation
The reconciliation of the effective rate of taxation with the statutory
taxation rate is as follows:
Taxation for the year as a percentage of income before taxation 56,2 30,8
Deferred tax asset not recognised on impairment of plant, equipment and vehicles (21,5) -
Expenses and provisions not allowed for taxation (2,8) 10,8)
Assessed losses not recognised (5,6) (0,2)
Non-recognition or prior year unearned losses (7,7) -
Non-recognition of other current year timing differences (3,8) -
Non-recognition of other prior year timing differences (3,1) -
Tax effect of bad debt provision not recognised on group basis 1,0 -
Impact of exchange rate differences 1,1 -
Additional investment allowances - 1,6
Prior year adjustments 7,5 1,4
Withholding taxes (1,4) (1,2)
Income from associates 7,9 6,2
Effect of differing rates of foreign taxes 0,4 0,1
Other sundry adjustments (0,2) 0,1
Rate of South African company taxation 28,0 28,0
5. Impairment
Goodwill is tested for impairment annually (as at 30 September) and when circumstances indicate the carrying value
may be impaired. The group’s impairment test for goodwill and intangible assets with indefinite lives is based on the
value-in-use calculations. During the current year, R1 690,9 million has been impaired, mainly within the Nigeria segment,
namely, TBCG impairment of property, plant and equipment (R1 371,0 million) and Deli Foods goodwill and intangible asset
impairment (R250,4 million). HPCB intangible asset impairment (R29,6 million) and other property, plant and equipment
impairment (R39,9 million).
R’million Reviewed Audited
year ended year ended
30 September 30 September
2015 2014
6. Reconciliation between profit for the year and headline earnings
Continuing operations
Profit for the year attributable to owners of the parent 1 727,1 1 990,3
Loss/(profit) on sale of plant, equipment and vehicles 9,8 (11,1)
Impairment of intangible assets 269,6 869,4
Impairment of property, plant and equipment 933,2 78,2
Profit on sale of empowerment shares (39,1) -
Write-off of other related assets (5,2) 1,5
Insurance claim income (5,4) (31,1)
Headline earnings adjustments - Associates
- Profit on sale of non-current assets (3,0) (7,9)
Headline earnings for the year 2 887,0 2 889,3
Tax effect of headline earnings (5,8) (52,9)
Attributable to non-controlling interest (475,7) (46,8)
Discontinued operation
Profit for the year attributable to owners of the parent - 29,9
Gain on remeasurement to fair value on transfer of net assets to held for sale - (11,8)
Headline earnings for the year - 18,1
Tax effect of headline earnings - -
Attributable to non-controlling interest - 6,8
7. Analysis of profit from discontinued operation
Turnover - 186,9
Expenses - (156,1)
Operating income before abnormal items - 30,8
Profit on remeasurement to fair value on transfer of net assets to held for sale - 18,6
Operating income after abnormal items - 49,4
Finance costs - (5,0)
Profit before taxation - 44,4
Taxation - (3,4)
Profit for the year from discontinued operation - 41,0
Attributable to non-controlling interest - (11,1)
Attributable to owners of parent - 29,9
Cash flows from discontinued operation
Net cash outflows from operating activities - (23,9)
Net cash inflows from investing activities - 97,0
Net cash outflows from financing activities - (72,2)
Net cash inflows - 0,9
8. Subsequent events
With reference to the cautionary announcement issued on 16 November 2015, given the ongoing challenges in the Nigerian
market, the Board of Tiger Brands has taken the decision not to extend further financial support to TBCG. Tiger Brands will
endeavour to work with the Board of TBCG in relation to the funding of TBCG's operations going forward.
With effect from mid-November 2015, TBCG will be reflected as a discontinued operation when preparing the FY2016
annual financial statements as TBCG accounts for the majority of the Nigeria segment as reflected in the 30 September 2015
condensed consolidated annual financial statements.
There were no other material subsequent events that occurred during the period subsequent to 30 September 2015, but
prior to these condensed consolidated annual financial statements being authorised for issue.
Corporate information
Independent non-executive directors
A C Parker (Chairman), B L Sibiya (Deputy Chairman), Y G H Suleman (appointed 13 July 2015), S L Botha, K D K Mokhele,
M P Nyama, R D Nisbet, M Makanjee, M J Bowman, M O Ajukwu (appointed 31 March 2015), R M W Dunne (resigned 31 May 2015)
Executive directors
P B Matlare (Chief Executive Officer), C F H Vaux, O Ighodaro (Chief Financial Officer),
N P Doyle (Chief Operating Officer) (appointed 13 July 2015)
Company Secretary
T Naidoo
Investor relations
Nikki Catrakilis-Wagner (011) 840 4841
Physical address
Tiger Brands Limited
3010 William Nicol Drive, Bryanston
Postal address
PO Box 78056, Sandton, 2146, South Africa
Telephone: (011) 840 4000
Facsimile: 011 514 0477
Sponsor
JP Morgan Equities South Africa (Pty) Limited
1 Fricker Road, Corner Hurlingham Road, Illovo, 2196
Share registrars
Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001 PO Box 61051, Marshalltown 2107,
South Africa.
Telephone (011) 370 5000
Website: www.tigerbrands.com
Date: 19/11/2015 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
