Operational review




Revenue declined to

R12,8 billion


Operating income declined to

R1,9 billion


Operating margin down to


(FY17: R13,3 billion)   (FY17: R2,4 billion)   (FY17: 17,7%)
% contribution to Grains revenue
% contribution to Grains revenue

Salient features


* Mill bake includes the wheat-to-bread value chain and flour milling.
** Nielsen 3mm September 2018.

  • Wheat-to-bread value chain holds volumes
  • Launched thick slices (value) and Bread-a-Betix (health and wellness) in the bread category
  • Golden Cloud #1 retail brand in flour**
  • Jungle biggest cereal brand in the country, driven by Crunchalots and Muesli
  • Strong performance in rice delivers share gains in Tastic

Revenue declined 4% to R12,8 billion, reflecting significant price deflation of 7%, while overall volumes grew by 3%. The increase in volumes was not sufficient to offset the impact of margin pressures, with operating income down 20% to R1,9 billion. The operating margin reduced to 14,8%. In one of its most challenging years yet, the Grains division maintained overall market share and improved its share in a number of categories, including flour, breakfast and rice.

Revenue in Milling and Baking decreased 7%, influenced by price deflation across the entire segment, particularly maize (24%). Operating income declined by 17% to R1,5 billion. The wheat-to-bread value chain, which maintained overall volumes for the year, was unable to sustain its first-half performance due to market dynamics restricting input cost recovery in the second half.

Other Grains recorded revenue growth of 2% to R3,9 billion, with 9% volume growth. This strong growth in volumes was driven by an outstanding performance in rice, with Tastic improving market share. Pasta and noodles also delivered a solid performance. However, the operating income decline of 32% to R342 million reflects the intensity of competition in the main meal carbohydrate segment.

Our investment in key brands paid off with another sterling performance in the Sunday Times Top Brands survey. Tastic was ranked number 1 essential food for the second consecutive year and included in the top 10 most-loved South African brands.

In the final quarter of the year, Jungle achieved a significant milestone as the biggest cereals brand in the country. This was driven by the relaunch of muesli and Crunchalots in the kids' cereal segment while the core segment of cooking and instant oats achieved record market shares.