WATCH: Tiger Brands lifts earnings, flags geopolitical risks

Hinzugefügt: 2026-06-03

[00:00:07]Welcome back. Now, food producer Tiger Brands has reported today a resilient set of interim results supported by strong volume growth and improved margins as it continues to navigate a competitive consumer environment. The group reported a 1.3% increase in revenue to 17.9 billion rand despite ongoing pressure in consumer spending and a value-seeking behavior. Looking ahead, management cautions that geopolitical uncertainty could weigh more heavily in the second half. Well, joining us now to unpack the numbers is the company's CFO Tushar Govender.

[00:00:45]Tushar, hi. Good to chat to you.

[00:00:47]You know, looking at what's been going on and these numbers and with inflation and our repo rate going up, fine, this is where we are now, but your numbers are really really good. What's driving your group operating income? What's keeping it up at the moment?

[00:01:05]>> Thank you very much, Ry. Good to be with you this afternoon.

[00:01:08]Uh you know, as you said, our consumers are facing a really exceptionally tough time. The South African economy isn't firing on all cylinders.

[00:01:19]Uh geopolitical instability is going to impact inflation ultimately. So, it remains really tough from an operating environment perspective.

[00:01:28]What we at Tiger Brands have done is focused on some core back-to-basic principles. How can we make our great brands more affordable for our consumers cuz affordability is really where you start becoming relevant to a constrained consumer.

[00:01:46]And to drive that affordability, which you've ultimately seen in the volume growth that you referenced as well as the expanding operating margins, we focused across the supply chain, whether it's conversion costs, management of waste, logistics, value engineering, either lightweighting packaging or improving our recipes. And all of those initiatives have allowed us to find the right price point and drive the volume growth which creates operating leverage.

[00:02:16]>> If you could break this down a little bit, I mean milling and baking along with grains, where are the areas where you've seen growth and where are your areas of concern? Because it's a mixed bag.

[00:02:28]>> Uh absolutely, Ray.

[00:02:31]With regards to milling and baking, we've really been focusing our growth efforts in what we call the general trade channel or the traditional trade and trying to expand our product offering into that channel, you know, going to the right number of stores, the mom-and-pop stores, the Spar stores, making sure we optimizing that route, the number of loads delivered there, the frequency of delivery, and ultimately that focus on the general trade has also allowed us in milling and baking to expand our offering.

[00:03:06]You would recall from our previous presentations and the one today, we are investing in a game-changing facility. It's the largest bakery in the southern hemisphere. That's certainly going to step change our ability to compete in the marketplace, but in the meantime, we're looking for those incremental gains in driving channel expansion in general trade and optimizing our conversion costs.

[00:03:33]>> But looking at that as well, I mean some of your your disposal of assets, I'm looking at your Randfontein facility. A section of Beacon Chocolates as well that also caught my eye.

[00:03:44]Are you slimming down and now focusing like you said on baking or certain divisions?

[00:03:51]>> Uh And Ray, what we did about 2 years ago, as we started with this transformation journey with Tiger, we revisited our capital allocation framework and identified assets that were non-core and core to Tiger Brands. So, the assets that you referenced are those that have been identified for non-core as non-core where we believe we don't have a sustainable competitive advantage or the return on invested capital is going to be muted and we therefore embarked on a portfolio exit strategy or a disposal strategy on those assets. And it's been progressing well cuz you would have seen as a consequence of that portfolio honing, we honing, we've optimized our balance sheet, moved return on equity from early teens to mid-20s. So, it's really been a strategy well executed.

[00:04:43]>> I have to ask about Black Cat Peanut Butter. You are keeping them.

[00:04:48]>> Absolutely, Ray. It's a firm favorite of mine as well. Absolutely.

[00:04:52]>> Great. Just checking. Just >> Yeah, and and by the way, that's just just so that you know, seeing that you're a fan, it's reached its hundredth year in terms of that's how long the brand has been around. So, it's celebrating 100 years of existence.

[00:05:04]>> Gosh. Gosh, that really is quite something. We started out the interview.

[00:05:09]In fact, I led into this interview about consumers and people worrying about the bottom line. In other words, consumer spend's going to go down. Are you worried about that as well?

[00:05:20]>> Absolutely, Ray. I think with the high unemployment rates in South Africa, the fact that our economy isn't showing the growth that it should, and then in addition to that, you've seen the fuel increase as a consequence of the Middle East crisis, our consumers are under pressure. We certainly believe that and in a constrained consumer environment, this is why affordability becomes so crucial in order to execute and drive that growth you've you've referenced the 4.5%.

[00:05:52]>> Yeah, quite a Tushar, thank you so much for joining us on Business Line. I do appreciate you taking the time. That was Tushar Govender, the CFO of Tiger Brands.