Tiger Brands Integrated Annual Report 2015

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Operational review continued
44 Tiger Brands Limited integrated annual report 2015
Rm 2015 2014
%
change
Turnover 2 147,1 1960,2 10
Operating income* 443,6 398,5 11
Operating margin (%) 20,7 20,3
*Before abnormal items.
Performance
The success of this collective effort is reflected in operating
income rising 11% to R444 million, and an operating margin
of 20,7%.
Home care
Growth was driven by the pest segment, although margins
improved across all categories except fabric care. The
marketing investment in this category rose by 38%.
Personal care
Exceptional performance was noted in the body care
category. Continuous improvement programmes resulted in
better margins in all categories except the highly competitive
hair care segment. The marketing investment increased by
112% in this category.
Baby care
The nutrition and well-being segments recorded satisfactory
top-line growth of 9%, although margins contracted in the
nutritional segment due to input costs not being fully
recovered in pricing. Purity launched a range of core
pouches in July 2015 to increase its market share.
Marketing investment rose by 18%.
Outlook
Moderate growth is expected in 2016. Ongoing priorities
are continuous cost reductions, improving efficiencies
(specifically forecast accuracy, service levels and equipment
efficiency) and continued innovation in line with strategy.
The Isando reconfiguration project will be completed in June
2016 and these benefits, as well as the recent investment in
pouches for the baby nutrition segment, will support
performance. In the longer term, we are confident the
division is well positioned with leading brands to drive
market growth and share recovery, and expand into new
segments in core brands through sustained innovation.
Salient features
❍❍Marketing investment increased by 59%
❍❍Key efficiency benchmarks achieved
❍❍Exceptional performance achieved in major categories
– Body care and pest categories
Segment overview
This division houses a portfolio of entrenched brands, many
with a heritage and pedigree built over years, including:
❍❍Personal care: Ingram’s, Dolly Varden, Status, Perfect
Touch, Protein Feed, Kair and Lemon Lite
❍❍Home care: Doom, Jeyes, Airoma, Peaceful Sleep
and Dyrange
❍❍Baby care: Purity and Elizabeth Anne’s
Strategy
The division is focused on supporting the long-term
competitiveness of its brands with appropriate investment in
marketing, research and new product development.
During the year, the focus was on reinvesting in core brands
and strengthening business disciplines. As part of a detailed
strategy with clear targets, the division concentrated on
pricing, costs, service levels, consumers and its own people.
Home, Personal Care and Baby
Neil Brimacombe
Business executive: Exports and International (excluding Nigeria);
Home, Personal Care and Baby