Tiger Brands

Annexure A

BASIS OF PREPARATION

Non-IFRS measures, such as adjusted revenue from continuing operations, and adjusted operating income from continuing operations before impairments and abnormal items as well as adjusted earnings from continuing operations are considered to be pro forma financial information as per the JSE Listings Requirements. The pro forma financial information is the responsibility of the group’s board of directors and is presented for illustrative purposes only. Due to its nature the pro forma financial information may not fairly present the company’s results of operations.

The pro forma financial information is based on the condensed consolidated income statement for the year ended 30 September 2019. The pro forma financial information has been prepared to illustrate the impact of the company’s unbundling of Oceana as well as VAMP’s performance on the condensed consolidated income statement for the year ended 30 September 2019. The pro forma financial information is presented in accordance with the JSE Listings Requirements. The JSE Listings Requirements require that pro forma financial information be compiled in terms of the JSE Listings Requirements, the SAICA Guide on Pro forma Financial Information and any relevant guidance issued by the IRBA.

Ernst & Young Inc.’s independent reporting accountants’ assurance report on the pro forma financial information for the year ended 30 September 2019, as presented in Annexure A of the audited group results and dividend declaration for 2019, is available for inspection at the company’s registered office. The independent reporting accountants’ assurance report on the pro forma financial information for the year ended 30 September 2019 does not necessarily report on all the information contained in the audited group results and dividend declaration for 2019. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the independent reporting accountants’ engagement, they should obtain a copy of the independent reporting accountants’ assurance report together with the accompanying pro forma financial information for the year ended 30 September 2019 from the issuer’s registered office.

Table 1: Adjusted revenue from continuing operations

	2019  R’million	2018  R’million	% change
Revenue1	29 233	28 365	3%
VAMP revenue for the period1	(654)	(1 066)
Revenue excluding VAMP2	28 579	27 299	5%

1	This has been extracted from Tiger Brands' audited financial statements for the year ended 30 September 2019 and 30 September 2018.
2	Revenue from continuing operations excluding VAMP, the performance of which distorts the group’s performance as this had a significant year-on-year impact on normal operations.

Table 2: Adjusted operating income from continuing operations before impairments and abnormal items

	2019 R’million	2018 R’million	%  change
Operating income before impairments and abnormal items1	2 623	3 289	(20%)
VAMP losses1	547	252
Adjusted operating income before impairments and abnormal items2	3 170	3 541	(11%)

1	This has been extracted from Tiger Brands' audited financial statements for the year ended 30 September 2019 and 30 September 2018.
2	Total adjusted operating income after adjusting for the VAMP operating losses which had a siginificant year-on-year impact on normal operations.

Table 3: Adjusted earnings from continuing operations

	2019		2018
	R'million	EPS (cents)	R'million	EPS (cents)	% change cps
Earnings as reported (continuing operations)1	3 916	2 364	2 519	1 530	55%
Oceana equity-accounted earnings1	(31)	(18)	(420)	(255)
Oceana – profit on sale of associate investment2	(340)	(205)	–	–
Oceana – realised fair value gain on unbundling2	(1 630)	(984)	–	–
Adjusted earnings – excluding Oceana3	1 915	1 157	2 099	1 275	(9%)
VAMP – after-tax trading loss1	394	238	181	110
VAMP – impairments and abnormal items after tax2	21	13	328	199
Adjusted earnings (excluding VAMP and Oceana)4	2 330	1 408	2 608	1 584	(11%)

1	This has been extracted from Tiger Brands' audited financial statements for the year ended 30 September 2019 and 30 September 2018.
2	The effects of the Oceana unbundling as well as the VAMP losses have been removed as these had a significant year-on-year impact on normal operations. Items have been extracted from Note 3 – Impairments and Note 4 – Abnormal Items.
3	Adjusted earnings after adjusting for transactions related to the unbundling of the company’s interest in Oceana for the year.
4	Adjusted earnings after adjusting for transactions related to the unbundling of the company’s interest in Oceana and VAMP-related transactions for the year.