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PERFORMANCE REVIEW
36
Tiger Brands Limited Integrated Annual Report
2014
Divisional review
The year under review
Operating income for the Grains division
increased by 14% to R1,9 billion and the
operating margin improved to 17,5%
compared to 16,8% in the prior year.
The results for the year reflect a creditable
performance in the competitive markets and
challenging macro-economic environment in
which the Grains business operates and
demonstrates a second year of volume growth
after some years of declining volumes.
The operating performance was primarily
driven by volume growth combined with
internal efficiencies and pricing restraint across
most categories. In line with strategy, marketing
investment was increased by 25% for the
year under review to further enhance the
sustainability of the businesses’ performance.
Milling and Baking
The Bakeries business remains an important
contributor to operating income in this division.
Whilst subject to ongoing pressure on raw
materials, labour and distribution costs, the
strategy of moderating price increases and
focusing on internal efficiencies and ongoing
innovation paid dividends. A reasonable level
of volume growth for the period translated into
satisfactory growth in operating income.
The Wheat Milling business was able to show
a significant improvement in operating income
as the volume growth and market share
recovery, which had commenced in the
previous year, accelerated during 2014.
In addition, the environment allowed for some
recovery in margins following the significant
decline in the previous year.
After five successive years of volume decline
and despite immense challenges in managing
through an extremely volatile pre-harvest
period, the Maize Milling business was able
to report a satisfactory growth in income and
a modest recovery in volume. The product
Grains
Salient features
Good volume growth across most categories
Strong volume and profit performance in
Wheat Milling
Bakeries remains a solid performer
Successful integration of Pasta business
Marketing investment increased by 25%
(R’million)
2014
2013
%
change
Turnover (Rm)
10 948,6
10 052,7
9%
Operating income before
abnormal items (Rm)
1 918,9
1 689,7 14%
Operating margin (%)
17,5%
16,8%