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TIGER BRANDS LIMITED - Voluntary trading update for the 4 months to January 2018

Release Date: 21/02/2018 07:16
Code(s): TBS     PDF:  
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Voluntary trading update for the 4 months to January 2018

TIGER BRANDS LIMITED
“Tiger Brands” or “the Company”
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080

VOLUNTARY TRADING UPDATE FOR THE 4 MONTHS TO JANUARY 2018

In line with the Company’s previously announced outlook for
2018, trading during the first four months of the financial
year was characterised by intense competition in a low growth,
value-driven consumer environment.

Group revenue for the four months ended 31 January 2018
declined by 5%, compared with the corresponding period last
year, driven by overall price deflation of 1% and volume
declines of 4%. The decrease in revenue was aggravated by
price deflation in some soft commodities and higher levels of
discounting in the domestic business as the group seeks to
manage its competitiveness on shelf. The overall volume
decline was driven mainly by the Home and Personal Care
categories and Exports. Home Care’s performance was impacted
primarily by lower demand due to a delayed pest season and an
unfavourable product mix, whilst Personal Care was negatively
affected by increased competition and overall market
contraction. The results of the Deciduous Fruit business have
been particularly impacted by rand strength and the Export
business continues to be negatively affected by foreign
currency liquidity issues, tight credit management and the
relative strength of the rand.

The consolidated gross profit margin percentage has improved
compared with the corresponding period last year, benefiting
from a stronger exchange rate and lower raw material costs.
This improvement has resulted in an increase in gross profit
notwithstanding the decline in revenue.

With regards to the protracted drought in the Western Cape, we
have taken the necessary measures to ensure the sustainability
of our operations and to mitigate supply challenges.
Accordingly, all Western Cape manufacturing sites have, over
the past three years, implemented fit-for-purpose plans for
conservation, sourcing and building storage capacity.
Consequently, provided there are no restrictions on the use of
borehole water, we do not foresee supply disruptions at this
stage. We also recognise the impact of the drought crisis on
all stakeholders, including employees and the broader
community and are working with our staff and NGOs to raise
awareness around water optimisation and relief efforts.
The Group’s performance for the remainder of the 2018
financial year is likely to be impacted by the slow start to
the year. Any meaningful recovery remains dependent on an
improved consumer environment which may be influenced by
measures to be announced in the budget speech later today. We
will continue to focus on driving cost saving initiatives
while optimising product mix, applying tactical promotional
activity to drive volume growth, whilst protecting margins,
and working with our customers to drive channel and
distribution growth.

As previously reported, all suspensive conditions with regard
to the disposal of Haco Tiger Brands (E.A.) Limited were
fulfilled and the transaction was successfully concluded in
December 2017.

The information above has not been reviewed or reported on by
the Company´s auditors.

Bryanston
21 February 2018

Sponsor
J.P. Morgan Equities South Africa Proprietary Limited

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