In a surprising turn of events, Noel Doyle, the CEO of Tiger Brands, a prominent South African consumer goods company, is stepping down from his position. The decision, which was reportedly reached jointly between Doyle and the board, comes as the company faces several challenging headwinds. Tjaart Kruger, a seasoned executive with a wealth of experience in the Fast-Moving Consumer Goods (FMCG) sector, is set to take the helm from November 1, 2023.
Noel Doyle’s tenure as CEO was marked by a series of significant challenges, including the COVID-19 pandemic, civil unrest, global supply chain disruptions, and soaring inflation rates. The company, under Doyle’s leadership, managed to stabilize its underlying operating profit trajectory while implementing vital improvements in key internal operational metrics.
Tiger Brands issued a statement regarding the change in leadership, noting that Tjaart Kruger would assume the role of CEO. Kruger brings over 30 years of leadership experience within some of South Africa’s largest FMCG companies, making him a valuable addition to the organization.
Kruger’s career path includes prior experience at Tiger Brands, where he served as the managing director of the pharmaceuticals and grains divisions from 2001 to 2007. His most recent leadership role was as CEO of Premier Foods from 2011 to 2021, where he successfully oversaw the expansion and growth strategy of Premier Foods.
Kruger’s appointment includes a 26-month contract, a move intended to provide stability to the company and its key stakeholders while accelerating Tiger Brands’ value-creation strategy. Noel Doyle, despite his resignation as CEO, will remain available until March 31, 2024, ensuring a seamless transition in leadership.
The board of Tiger Brands has also initiated a process to identify a suitable successor for the CEO role, ensuring an orderly transition at the end of Tjaart Kruger’s tenure.
Financial Challenges
Tiger Brands’ leadership change occurs during a particularly challenging period for the company. In its voluntary trading statement for the year ending September 30, 2023, the group highlighted the ongoing difficulties in fully recovering higher input costs, which persisted in the second half of the fiscal year, leading to marginally lower volumes.
These challenges, combined with the year-on-year impact of incremental retrenchment costs of approximately R100 million, proved to be significant. These factors could not be offset by the group’s cost reduction initiatives, which were intended to reach the previously guided target of R460 million.
While some segments of Tiger Brands, including Beverages, Home & Personal Care, Tiger Food Services Solutions (formerly known as Out of Home), Exports, and Deciduous Fruit, performed well, others experienced poor performance. Rice, Bakeries, Groceries, and Snacks & Treats all faced difficulties, with the latter two businesses operating in categories marked by absolute volume declines.
In light of these challenges, Tiger Brands expects a drop in earnings per share (EPS) by approximately -9% to -2% compared to the 1,762.2 cents reported in the previous fiscal year. Furthermore, headline earnings per share (HEPS) from total operations are anticipated to fluctuate between -5% and +2% compared to the 1,702.4 cents in the prior year. It is worth noting that the variance between EPS and HEPS is attributed to the non-recurrence of certain capital profit items accounted for in EPS, which were excluded from HEPS in the previous fiscal year.
As Tjaart Kruger prepares to take the helm of Tiger Brands, the company faces economic challenges that will test his leadership skills. The shift in leadership and the company’s financial performance in the coming months will be closely monitored by investors and the industry at large.
