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PERFORMANCE REVIEW
40
Tiger Brands Limited Integrated Annual Report
2014
Divisional review
continued
Consumer Brands – food businesses
continued
in meeting demand, which impacted the first-half
financial performance. These issues were
subsequently resolved, with the second half
reflecting the benefits of the factory
consolidation.
We maintain our continued focus on innovation
in this highly competitive category, particularly
in respect of new variants in our power brands
such as Oros, Energade, Rose’s and Hall’s.
Value Added Meats
This business is focused on the Value
Added Meats category and recorded a
respectable financial performance for the year.
Turnover increased by 9% to R1,9 billion
(2013: R1,7 billion) and operating income by
9% to R131 million (2013: R120 million). The
Enterprise brand gained market share despite
constrained demand. The strategic focus was
on operational efficiencies, improved on-shelf
availability, greater route to market capabilities,
as well as innovation. We are seeking to
extend the depth and breadth of the product
range and expand into locations outside our
traditional market such as forecourts and
smaller retailers. The business introduced a
number of innovations to products during the
year such as the resealable Vienna packets.
Snacks & Treats
This business is focused on sugar confectionery,
chocolates, gums, jellies and hard boiled
sweets. It operates in a very price-sensitive
category which demands continuous
innovation. Turnover increased by 7% to
R2,1 billion (2013: R1,9 billion) and operating
income by 1% to R309 million (2013:
R305 million) with operating margins
negatively affected by significant raw material
cost increases, particularly in cocoa and hazel
nut costs. Volumes remained flat year on year.
A new R160 million gums and jellies plant was
commissioned in Durban in July 2014, resulting
in increased capacity and enhanced capability
which will enable further innovation in this
sub-segment of the sugar category.
Beverages
The business posted an overall pleasing
performance with a particularly good
improvement in the second half. Turnover
increased by 9% to R1,1 billion (2013: R1,0
billion), while operating income grew by 19% to
R127 million (2013: R106 million). In the 2013
financial year, three beverage factories were
consolidated into a single facility to optimise
operational efficiencies. Delays in
commissioning the facility resulted in constraints