Tiger Brands (TBS) H1 2025 earnings summary

Executive summary

• Achieved 2.6% underlying volume growth, reversing years of decline, with revenue up 1.9% to R18.5bn and operating income up 29.9%, driven by portfolio optimization and cost efficiencies.

• Special dividend of R1.8bn (1,216cps) and interim dividend of 415cps declared, supported by a net cash position of R5.9bn after R4.3bn in non-core disposals and strong operational cash generation.

• Portfolio reshuffling advanced with disposals of Baby Wellbeing, Carozzi, Karachi, and maize operations; LAF transaction progressing through regulatory approval.

• Share buyback program executed, totaling R1.25bn by May 2025, contributing to a significant turnaround in net debt position.

• Strong balance sheet and improved working capital enable continued investment in logistics, mega DCs, and bakery consolidation.

Financial highlights

• Revenue: R18.5bn, up 1.9% year-over-year, with like-for-like volume growth of 2.6%.

• Operating margin improved to 9.9% (up from 7.7%), gross margin to 29.6% (up from 28.5%).

• ROIC reached 20% (Tiger methodology) and 15.7% (above WACC of 13.1%).

• Cash conversion ratio at 66%, with net working capital days reduced to 12.1.

• EPS (total operations) up 50.9% to 1,347c; HEPS up 34% to 951c.

Outlook and guidance

• Focus on portfolio optimization, cost leadership, capital allocation discipline, and brand rejuvenation.

• Short- to medium-term guidance: underlying volume growth of 1–3%, revenue growth to exceed inflation, and operating margin to exceed single digits.

• Continued investment in logistics, mega DCs, and super bakery project, with R1.8bn in approved CapEx.

• Management expects to deliver in line with guidance despite macroeconomic and consumer pressures.