Business overview

Our business model

The business model is underpinned by four strategic drivers as well as the group's strong brands, manufacturing capability and distribution reach, which arguably gives our group a sustainable competitive advantage. By successfully executing this business model, we create value for all our stakeholders.

Our business model [2MB]



Our capitals

  Financial capital   Manufactured capital   Natural capital   Human capital   Intellectual capital   Social and relationship capital
  Financial capital   Manufactured capital   Natural capital   Human capital   Intellectual capital   Social and relationship capital
  • Funding received from providers of capital and financial resources available to the group
  • The physical infrastructure used to convert raw materials and ingredients into high-quality food, home and personal care products in branded packaging; inbound/ outbound logistics – we receive imported and locally produced raw materials, ingredients and packaging from suppliers and distribute finished products via third-party transport and leased fleet to customers.
  • Natural resources consumed to convert raw materials
  • Employees’ skills, capabilities, development and experience
  • Remuneration practices and recruitment strategy
  • Company knowledge, systems, processes, intellectual property such as formulations, and, most importantly, brands
  • Stakeholder relationships and engagement, corporate reputation and values
  • Governance and safety systems

Input by capital

  Financial capital   Manufactured capital   Natural capital   Human capital   Intellectual capital   Social and relationship capital
  • Equity financing: R17,3 billion
  • Borrowing: R991 million
  • Low gearing levels and strong cash generating capabilities
  • Cost of sales: R19,2 billion
  • Sales and distribution: R3,7 billion
  • Other operating expenses: R1,5 billion
  • Production facilities: 44 manufacturing facilities
  • Capital expenditure: R720 million
  • Raw materials
  • Energy
  • Fuel
  • Water
  • Board of directors with a diverse range of corporate leadership and industry expertise
  • Twelve executive committee members
  • Capabilities have been enhanced in key disciplines
  • Marketing investment: R845 million
  • Innovation, R&D: 5,3% of net sales
  • Maintain positive relationships with stakeholders including government, regulators, investors, suppliers, service providers and customers and invest in the well-being of our communities through corporate social investment initiatives
Sustainability report



Our activities




Profit formula


Our revenues


Our costs


Outcomes and trade-offs

The group’s value-creating business model is focused on producing, marketing and distributing food, home and personal care products. We generate profit by procuring raw materials and ingredients and convert these as efficiently as possible into high-quality food, home and personal care products; seal them into branded packaging; and distribute to consumers through a network of customers that includes retailers, wholesalers and the general trade. Our purpose is to nourish and nurture more lives every day.


The majority of our revenue is generated in South Africa from grains, consumer brands – food, home, personal care and baby, with the balance from exports as well as our international businesses in Cameroon and Nigeria. Tiger Brands has defined its core as the manufacturing, marketing and distribution of everyday branded food to middle-income consumers. Key revenue differentiators include the group’s overall market-leading position and the number 1 or 2 position of most of our brands, increased marketing investment to ensure our brands remain relevant and top of mind, our far-reaching distribution capabilities and the relationships with our customers.


Our aim is to achieve sustainable savings based on targeted spending, clear policies and compliance. We have an established cost-conscious culture and a proven track record of procurement savings and supply chain efficiencies. In addition, we are focused on optimising indirect costs to deliver savings in sales activities as well as general and administrative costs. Key cost differentiators include our ability to leverage a centralised procurement hub as well as the standardisation and simplification of processes, systems and practices.


Our business activities affect our capitals. Our aim is to ensure that trade-offs have a positive effect overall. Given the challenges we faced in FY18, we created little value for shareholders, but we did create value for employees, particularly those in our value added meat products unit who have benefited from focused training and are now working in a world-class facility.

We invested in our social and relationship capital through stakeholder engagement, particularly with government and regulators, as well as shareholders, through joint business planning with our customers, and through our corporate social investment initiatives. Signifi cant investments in our manufactured and intellectual capitals were balanced with acceptable reductions in natural capital for sustainable growth.


Key external impacts

Exchange rates Commodity prices and demand/supply dynamics Security of raw materials supply Legislative/regulatory change Weather patterns and climate change, including water scarcity
Business Model Thumbnail

Our activities

Outcomes and trade-offs


Actions to enhance/mitigate outcomes in 2018


Financial capital Financial capital

  • Continued access to financial capital through investor and financial market confidence
  • Net interest paid R55 million
  • Dividends paid R1,9 billion
  • Dividend policy: 1,75x cover (based on HEPS) from FY19
  • Revenue R28,5 billion
  • Interest cover 59x
  • Operating income* R3,3 billion
  • Cash generated from operations R3,3 billion
  • Return on equity 18,6%
  • Long-term strategy remains compelling and relevant
  • Identified priorities to facilitate focused execution
  • Clear Africa strategy, building on what we have in South Africa
  • Embed operating model through revitalised ways of working
CEO & CFO’s reports
Annual financial statements

Manufactured capital

Manufactured capital
  • R12 billion spent with BBBEE-verified suppliers including R2 billion with black-owned enterprises
  • Ongoing investment in the group’s manufacturing architecture, distribution capability and technology to promote and sustain growth
  • On-shelf availability 97%
  • Continuous improvement – R707 million
  • Prudent and diligent approach to capex approvals
  • Focus on appropriate business restructuring
Strategy section

Natural capital

Natural capital
  • Depleting natural resources through our supply chain and operations
  • Water consumption down 19,3%
  • Significant water savings from facilities in the water-stressed Western Cape
  • CO2 emissions down 4,17% (intensity trend)
  • Incinerated 4 500 tons of processed meat products due to Listeria outbreak
  • 156 tons of non-recyclable packaging reduction since FY15
  • Assessed the impact of climate change and the drought in the Western Cape on our operations and supply of raw materials and implemented mitigating measures to ensure continuity of production and supply
  • Energy efficiency and water-saving initiatives continued, and we support the new Energy Efficiency Accord in South Africa. We have mitigating plans in place to ensure continued production in spite of an unstable electricity grid
  • We have enhanced waste reduction and are in the process of implementing the relevant legislation
  • We continue to optimise packaging by light weighting where possible
CEO report
Overview of non-financial performance
Sustainability report

Human capital

Human capital

  • Creating employment, developing employees through skills training and workplace experience, promoting fair labour practices
  • Capabilities appointed in line with new operating model
  • One fatality in a route-to-market incident
  • Lost-time injury frequency rate on target at 0,27
  • Management trainee programme ranked second in SAGEA awards (SA Graduate and Employee Associate)
  • Fair labour practices – nil reported cases of unfair practices (this was after year end)
  • Black Managers Trust II terminated in December 2017 in line with our plan. On termination, R575 million (pre-tax) was paid to employees
  • Invested R61 million or 1,8% of total payroll on training
  • Recognised by Top Employers Institute as a Top Employer 2019 for excellence in employee conditions
  • Strengthened, experienced executive team
  • Key skills gaps addressed
  • Structure capability and new process embedded
  • Centralised R&D function established and fully resourced
  • Detailed plans on career development
  • Establish long-term human capital planning
Overview of non-financial performance
Remuneration committee report
Sustainability report

Intellectual capital

Intellectual capital
  • Developing new and streamlining existing business processes and systems, maintaining our market-leading brand portfolio
  • Tiger Brands has a 100% penetration in South Africa. Every household buys at least one Tiger Brands product
  • In the categories we compete in, we have 26% volume share and improved brand equity for most key brands
  • Top three in 80% of categories we compete in; 41% are number 1 brands
  • Innovation 5,3% of revenue
  • Increasing marketing investment by outspending our competitors as measured by share of voice
  • 100% compliance to current sodium targets
  • 11% reduction in sugar across the portfolio in past five years
  • 25% of net sales from wholegrain, fibre-rich grains, vegetables and fruit
  • Leading the industry in modern food-labelling practices in South Africa through Eat Well Live Well initiative to empower consumers to make more informed decisions about their dietary intake
  • 5% of net sales fortified voluntarily with micronutrient enrichment
  • The group has 5 brands generating in excess of R1 billion in net invoiced sales and 10 brands in excess of R500 million
  • Health and wellness underpins our R&D to ensure our brands remain relevant and make a meaningful contribution to the health challenges affecting our communities. Focus is to provide affordable everyday nutrition
  • IT investment
  • Centralised reporting platforms being implemented
Operational review



Social and relationship capital

Social and relationship capital
  • Total socio-economic development (SED) spend of R32 million
  • Over 200 engagements with shareholders, investors and analysts
  • The Thusani Trust provides bursaries for the children of qualifying black employees; 381 students have graduated since 2007
  • Tiger Brands Foundation provides breakfast meals to 67 500 learners across the country. By September 2018, over 65 million breakfasts had been served
  • Responsible supply chain practices
  • Considered investor feedback and addressed in remuneration policy
  • Black Managers Trust
  • Relationship with Stellenbosch University (Food Safety Centre)
  • Supplier development fund
Our stakeholders
Social, ethics and transformation committee report
Remuneration report
Sustainability report


          * Before IFRS 2 charges impairments and abnormal items.