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WWW.PIONEERFOODS.CO.ZA
2016
INTEGRATED REPORT
CONTENTS
2 Realising potential through business viability
4 About this report
6 Group at a glance
16 YEAR AT A GLANCE
REALISING POTENTIAL
Global food and beverage consumer context
16 and trends
18 Realising potential through value creation
Realising potential through strategy
30 implementation
38 Chairman’s report
40 Chief executive officer’s report
44 Financial review
50 OPERATIONAL REPORTS
50 Operational report: Essential Foods
54 Operational report: Groceries
62 Operational report: International
70 SUSTAINABILITY REPORT
Over the past four years, Pioneer Foods
created an exceptional platform for
72
85
Sustainability themes, goals and enablers
Corporate social investment
growth. The anomalous challenges of
88 B-BBEE
the past year interrupted our stride
88 Communication and stakeholders compared to the momentum gained
94 Enterprise development previously. However, significant
95 Environment potential remains to create value
106 CORPORATE GOVERNANCE through our six strategic themes.
Board of directors and executive – PM Roux,
108 leadership team
Compliance
Chief Executive Officer
118
126 Risk report
134 IT governance report
136 Remuneration report
151 Value-added statement
152 Summary consolidated financial statements
GREYMATTER & FINCH # 10163 INTEGRATED REPORT | 2016 1
INTEGRATED REPORT | 2016 1
REALISING POTENTIAL
REALISING POTENTIAL
THROUGH BUSINESS VIABILITY
Pioneer Foods is one of the major contributors to food security and nutrition in South Africa. Through our
business activities, we offer consumers a choice of food and beverage products that we produce as responsibly
and cost-effectively as possible, in collaboration with a network of producers and suppliers. Through our Shared value creates business
networks, we are able to create and optimise opportunities to generate shared value, and deliver positive and
sustainable outcomes for all involved. To ensure that we can continue to do this, while we grow our ability to
viability. This is achieved by
serve different markets, we are impelled to increase long-term shareholder and social value as we decrease our
use of materials and their possible negative impact on society and the environment. We actively manage the
realising the long-term
trade-offs between economic viability and social and environmental responsibility. potential of the Group –
This integrated report will provide insight into our shared value creation through commercial and non-
commercial activities – all of which are aimed at realising sustainable food security. On the commercial side,
an undertaking that informs
we source, process, package and market our products through a range of power brands. Our non-commercial
activities support projects such as feeding schemes, and education and health initiatives that empower
the core theme of this report.
communities to participate in securing their own food for the future.
Pioneer Foods’ approach to shared value
When we as a Group are the best we can be, we know that we have created the best possible value for the
communities within which we operate and sell our products. We do not measure this purely in financial terms.
Profitability is important, but it is equally important that, through our business activities, we make progress in
addressing uniquely South African social and environmental challenges. Shared value highlights
The six capitals provide an effective mechanism to test our assumptions about shared value. They spur us on
to analyse the way our business uses, transforms, renews, creates or destroys the resources offered by the
capitals. If it is not approached from a responsible, long-term point of view, it has the capacity to decrease
shared value.
This integrated report includes a chapter on Pioneer Foods’ business model, which explains the six capitals and SHAREHOLDER VALUE OF THE PIONEER FOODS EDUCATION AND
how these inform our strategy. The outcome of our business model is shaped by stakeholder expectations, as
well as an evolving business approach that started with philanthropy and moved towards corporate social
responsibility. For Pioneer Foods, the test today is how much shared value we create.
R1.5 BILLION
created over the past three years through the
COMMUNITY TRUST (“PFECT”) SPENT
R12.1 MILLION
We have included four examples of initiatives where Pioneer Foods applied the principle of shared value in distribution of dividends, lowering the dividend on community and education-related
selecting and investing in community projects. We focus on the individual as much as on the collective. You can cover and through the 99% capital appreciation programmes since its establishment in 2012
read more about our approach in the account of Loyiso Mbete’s journey towards owning a profitable business, in the share price
ENERGY-EFFICIENCY AND OPTIMISATION
school children receiving the essential nutrition to help them learn, the safe space created at the Mbekweni PROJECTS DELIVERED SAVINGS OF
INFRASTRUCTURE INVESTMENTS OF
R1.9 BILLION R66.7 MILLION
Youth Centre for young people in a township, and our support of new farmers in Napier.
When attempting to quantify the impact of these initiatives, it is necessary to measure our success over time.
Social value often accumulates along a different timeline to economic value. to build and optimise production and distribution over the past three years
Pioneer Foods further requires that shared value initiatives be of such a scale that they have a noticeable facilities over the past three years delivered 8%
financial impact on the value network. One of our other challenges in creating shared value lies in the extent to
which primary agricultural production falls beyond the boundaries of our operations. By involving suppliers in
planning, and engaging with stakeholders like government on enablers such as tariffs and legislation, we extend
more capacity
COMMUNITY BENEFICIARIES RECEIVED
R443 MILLION
R34.1 MILLION
value created for more than 5 737 beneficiaries
our influence on and participation in the shared value creation process as far as possible. of the Phase I Broad-Based Black Economic
Empowerment (“B-BBEE”) scheme launched
over the past three years through our support in 2006
of corporate social investment (“CSI”) projects
contributing to the general health and well-being
of society
2 PIONEER FOODS INTEGRATED REPORT | 2016 3
REALISING POTENTIAL
ABOUT THIS REPORT
Scope and boundary
This integrated report covers the South African These investments include: The summary consolidated financial statements for
and international operations of the Pioneer Food • Heinz Foods SA (49.9%) the financial year can be found on page 152. Forward-looking statements
Group Ltd (“Pioneer Foods”) or (“the Group”) The integrated report and a complete set of annual
• Bowman Ingredients (SA) (50%) All statements other than those of historical facts
for the financial year from 1 October 2015 to financial statements are available on the Group’s
included in this report are forward-looking
30 September 2016. The integrated report (“report”) • Bokomo Namibia (50%) corporate website at www.pioneerfoods.co.za.
statements. Where the Group expresses or
addresses financial and non-financial information to • Bokomo Botswana (50%) The integrated report can be requested in print
implies an expectation or belief as to future
enable stakeholders to make an informed decision format from the company secretary, Jay-Ann Jacobs
•
Food Concepts Pioneer, Nigeria (50.1%) events or results, such expectation or belief is
about the Group’s performance during the past (Jay-Ann.Jacobs@pioneerfoods.co.za).
expressed in good faith and believed to have a
financial year and about our future strategies to •
Alpen Food Company South Africa (50%)
realise potential.
Assurance reasonable basis. However, forward-looking
• Amigear Ventures, Botswana (49%) statements are subject to risks, uncertainties and
Pioneer Foods follows a combined assurance model
The report covers the three operational divisions, •
Future Life Health Products (50%) other factors that could cause actual results to
to optimise the assurance coverage obtained from
including South African and international operations, differ materially from future results expressed,
The structure of this report is predominantly the management, internal and external assurance
and consists of: projected or implied by such forward-looking
same as in the previous year and the content remains providers. This entails three levels of internal and
statements. Such risks include, but are not
1 Essential Foods, which manufactures wheat
and maize products and pasta, packs rice,
beans and other dried vegetables, and has
inclusive of the financial performance, social and
environmental initiatives and governance structures
that support Pioneer Foods in its ability to create
external assurance, with details of accountabilities
set out in the risk report on page 126.
limited to, commodity price volatility, currency
fluctuations, increased production costs, political
The financial statements included in this report were and operational risks in the countries in which the
large bakery operations. value in the short, medium and long term.
independently audited by PricewaterhouseCoopers Inc. Group operates, governmental regulation and
2 Groceries, which produces breakfast cereals, International operations contribute 15% to revenue; An assurance statement by Ernst & Young Inc. (EY) judicial outcomes. Pioneer Foods gives no
rusks, cake mixes, baking aids, dried fruit therefore, the reporting emphasis is on South Africa. that relates to selected non-financial data guarantees or warranties that any of the future
products, nuts, sweet and savoury spreads, Non-financial indicators relate to wholly owned is available on the Pioneer Foods website at events, expectations or results referred to in the
ready-to-eat salads, long-life fruit juices, fruit South African operations, unless specifically http://bit.ly/PioneerFoodsEYAssurance2016. The KPIs forward-looking statements will happen or
concentrate mixtures and dairy fruit blends. indicated otherwise. included in the scope of EY's assurance are indicated materialise. Furthermore, the Group is under no
with an LA in the report. Pioneer Foods’ B-BBEE obligation to release publicly any revisions to
Reporting approach
3 International, which comprises a fruit juice
and industrial dried fruit export business,
in-country breakfast cereals and fruit snacking
This report considers international and South African
reporting guidelines and best practices, including:
verification by Empowerdex is also available on
the website at www.pioneerfoods.co.za.
forward-looking statements reflecting events and
circumstances after the date of this report, or to
reflect the occurrence of unanticipated events,
operations in the United Kingdom, as well as The Group adheres to a range of health and safety
• The revised King Code on Governance Principles except as may be required under applicable
bakery operations in Nigeria and milling and standards, which provide further external verification
for South Africa (“King III”) securities laws.
distribution joint ventures in Namibia and and are listed on page 74 of the sustainability report.
Botswana. • The JSE Listings Requirements
• International Financial Reporting Standards (“IFRS”)
The results of the equity-accounted joint venture
• The Companies Act, Act 71 of 2008, as amended
investments based in South Africa, Nigeria, Botswana Navigational icons Board approval
and Namibia do not form part of the International • The Department of Trade and Industry’s
The following icons have been applied throughout The Board, assisted by the audit committee, is
segmental results. (dti’s) B-BBEE Codes of Good Practice
the report to improve usability and to highlight responsible for the integrity and completeness of this
• International Integrated Reporting Council (“IIRC”) the integration between the relevant elements of report. The Board reviewed the 2016 integrated report
Framework the report: on 17 November 2016 and is satisfied that it is a fair
The Group also determined content by applying the Pioneer Foods’ website: and accurate representation of the Group’s
principle of materiality. The risk process, which www.pioneerfoods.co.za performance and prospects.
involved an executive review and the recent
implementation of a risk management tool, formed Page reference
the basis of the process, which is integrated within all
divisions and functions. It provided the Group with a
strategic view of the external environment and
associated opportunities and risks. All matters that
substantively affect Pioneer Foods’ ability to create
shared value are addressed in this report.
4 PIONEER FOODS INTEGRATED REPORT | 2016 5
REALISING POTENTIAL
GROUP AT A GLANCE Pioneer Foods is the second largest listed fast-moving
consumer goods (“FMCG”) company in South Africa with a
market cap of R40.4 billion at 30 September 2016, producing and
distributing a range of branded food and beverage products.
Pioneer Foods The Group operates mainly in South Africa, providing wholesale, retail and informal
trade customers with products of a high standard. Pioneer Foods exports to more
ESSENTIAL FOODS GROCERIES INTERNATIONAL
was established manufactures produces breakfast comprises a well-
than 60 countries across the globe.
in 1997 and wheat and maize
products and
cereals, rusks,
cake mixes, baking
established fruit
juice and industrial
The Group operates a number of world-class facilities, producing a range of
products that includes some of the most recognisable and best-loved brand names
listed on the pasta. The division
packs rice, beans
aids, dried fruit
products, nuts,
dried fruit export
business with a
in South Africa, such as the following power brands: Ceres, Liqui-Fruit, Safari,
Sasko, Spekko, Bokomo, Weet-Bix and White Star. Many of these brands
Johannesburg and other dried sweet and savoury footprint across maintain leading positions in their respective market categories:
vegetables; and spreads, ready-to- Africa, Europe,
Stock Exchange has large bakery eat salads, long-life North America,
(“JSE”) in 2008. operations. fruit juices, fruit Asia and the Middle
It has three
concentrate
mixtures, ice teas
East. Furthermore,
the division
Market position (value)
and dairy fruit manages in-country
main divisions: blends. breakfast cereals
and fruit snacking
operations in the
1 2
United Kingdom,
as well as joint
venture bakery
operations in
Nigeria and milling
and distribution
joint ventures
in Namibia and
Botswana.
DIVISIONAL WHITE STAR CERES*
CONTRIBUTION Essential Foods (Maize meal) Groceries (Long-life fruit juices)
WEET-BIX SASKO
REVENUE
R12.9 R4.7 R3.0 Groceries (Breakfast cereal) Essential Foods (Bread and
wheaten flour)
BILLION BILLION BILLION LIQUI-FRUIT
Groceries (Long-life fruit juices) SPEKKO
Essential Foods (Rice)
OPERATING PROFIT
R1 249 R542 R484 SAFARI
International (Dried fruit)
MILLION MILLION MILLION
BOKOMO
Groceries (Breakfast cereal)
OPERATING MARGIN 9.7% 11.5% 15.9% * Ceres is also a significant global brand.
6 PIONEER FOODS INTEGRATED REPORT | 2016 7
REALISING POTENTIAL
GROUP AT A GLANCE CONTINUED Pioneer Foods’ ability to realise the
potential of its brands is confirmed by the
2016 HIGHLIGHTS recognition received through a range of customer, industry
and packaging awards. During the past year, we achieved
+10%
REVENUE FROM
+6%
OPERATING PROFIT* FROM
the following:
CONTINUING OPERATIONS: CONTINUING OPERATIONS:
R20.6 BILLION
2015: R18.7 billion
R2.27 BILLION
2015: R2.15 billion Liqui-Fruit won three awards at Bokomo, ProNutro Toddlers
* Adjusted for the impact of the Phase I B-BBEE transaction and items of a capital nature the 2015 Flexographic Technical Association Moir’s instant custard
and
and dessert all received Ask Africa
+7%
HEADLINE EARNINGS*:
+10%
TOTAL DIVIDEND PER SHARE:
of South Africa (“FTASA”) Print Excellence
Awards for its packaging. KASI Star Brands Awards for brands
R1.64 BILLION 365 CENTS
that are used most loyally by South Africa’s
township consumers.
2015: R1.53 billion 2015: 332 cents
Every year the Sunday Times Top Brands
* Adjusted for the impact of the Phase I B-BBEE transaction
celebrates South Africa’s best known and
COMMERCIAL SUSTAINABILITY loved brands. Moir’s jelly and ProNutro
HIGHLIGHTS HIGHLIGHTS Weet-Bix claimed first place in the both received Ask Africa Youth Brand
cereal category at the 2016 awards, with Awards.
Execution of fixed capital investments: Estimated R34.4 million saved due to
• Epping bakery upgrade overall energy-saving projects (improved from Bokomo Corn Flakes in fifth
• Aeroton bakery upgrade R11.7 million in 2015) place and ProNutro in tenth place.
• Weet-Bix new production line CDP, formerly the Carbon Disclosure Project,
• Instant maize porridge capacity upgrade score of 100 – Band B (improved from Band White Star was awarded South The Marmite “Battle of the
Record raisin profitability C in 2015) Africa’s top maize meal brand for the Spreads” campaign won a range of
R69 million of value created for beneficiaries
Peterborough facility move and upgrade fifth year in a row, while Sasko received awards, including an African Crystal
of the Phase I B-BBEE scheme in 2016
Groceries margin expansion
Acquisition of 100% in Streamfoods in the UK for
The Pioneer Foods’ breakfast programme fourth place in the essential foods Award, 2015 Assegai Award, Nkosi
consumer category. Lastly, Liqui-Fruit
provided daily nutrition to more than
R165 million, expanding the UK exposure to the Award, Black Spear, 2015 New
21 450 primary school children
fruit snacking category
received a third place in the fruit-based
The installation of large, commercial solar Generation Award, 2015 AMASA Award
Acquisition of a 50% equity interest in
systems at five Pioneer Foods’ manufacturing and a 2016 Bookmark Award.
Future Life for R200 million, effective 1 Dec 2015 drinks category.
facilities with a combined size of 2.5 MWp
Rice market share and profitability Pioneer Foods was included in the FTSE/JSE
Bakeries sustained progress Responsible Investment Index
R10 million committed to the private-sector-
led South African SME Fund to support smaller
enterprises that have a high impact on
8 PIONEER FOODS
job creation INTEGRATED REPORT | 2016 9
REALISING POTENTIAL
The growing
international business
GROUP AT A GLANCE CONTINUED
=21%
of operating profit Divisional profiles
UK
Germany ESSENTIAL FOODS GROCERIES INTERNATIONAL
Switzerland
SOUTH AFRICA SOUTH AFRICA SOUTH AFRICA
North America
• 5 wheat mills in • 4 beverage plants in • 2 dried fruit
Bethlehem, Durban, Bloemfontein, operations in
Krugersdorp, Ceres (2), and Upington and
Malmesbury and Wadeville Worcester
Port Elizabeth • 4 cereal facilities in
• 3 maize mills in Aliwal Atlantis, Clayville, UNITED KINGDOM
Pioneer Foods is the second largest listed FMCG company in North, Estcourt and Epping and Wadeville • 2 breakfast cereals
South Africa, producing and distributing a range of branded Klerksdorp • 1 snacks and operations in
food and beverage products. The Group operates mainly in China • 2 rice and legume treats plant in Peterborough and
South Korea
plants in Cape Town Pietermaritzburg Wellingborough
South Africa, providing wholesale, retail and informal trade Philippines
Japan PRODUCTION and Durban • 5 accompaniments • 1 fruit snacking
customers with products of a consistently high standard. • 1 pasta plant in and baking facilities operation in Wisbech
FOOTPRINT
Pioneer Foods exports to more than Malmesbury in Bonnievale,
NIGERIA
60 countries across the globe. • 14 bakeries in Aeroton,
Bloemfontein, Brits,
Johannesburg,
Malmesbury, Ndabeni • 3 bakeries in Abuja,
Cape Town (Epping and Saldanha Ibadan and Lagos
and Claremont),
BOTSWANA AND
Algeria Krugersdorp,
Nigeria NAMIBIA
Ghana Ladysmith, Mokopane,
Mozambique Olifantsfontein, Port • 2 wheat and maize
Zimbabwe mills in Gaborone and
Botswana Elizabeth, Polokwane,
Namibia Shakaskraal, Tubatse Windhoek
Mauritius
Democratic Republic of Congo and Worcester
South Africa
• Wheat flour • Breakfast cereals • Long-life juices
• Maize meal • Dried fruit • Dried fruit
• Rice • Baking aids • Kids’ fruit snacking
• Bread • Desserts • Breakfast cereals
• Pasta • Meals and salads • Baking ingredients
• Beans and legumes • Spreads • Maize meal
• Base flavours • Wheat flour
PRODUCT • Nuts
CATEGORIES • Snack bars
Number of permanent employees
• Rusks
• Long-life juices
• Sparkling juices
SOUTH AFRICAN INTERNATIONAL • Carbonated soft drinks
OPERATIONS OPERATIONS • Ice teas
• Dilutables
8 348LA 340
10 PIONEER FOODS INTEGRATED REPORT | 2016 11
REALISING POTENTIAL
GROUP AT A GLANCE CONTINUED
ESSENTIAL FOODS GROCERIES INTERNATIONAL
• Sasko • Bokomo • Bokomo
• Spekko • Weet-Bix • Ceres
POWER BRANDS • White Star • Safari • Safari
• Liqui-Fruit • White Star
• Ceres • Liqui-Fruit
• Select Rice • ProNutro • Fruitree
• Nice Rice • Moir’s • Champion
• Blue Bird Maize Meal • Marmite • Moir’s
• Champion Samp • Bovril • Fruit Bowl (UK)
• Pasta Grande • Redro
• Imbo • Peck’s Anchovette
OTHER BRANDS • Crossbow • Werda
• Smash
• Maizena
• Fruitree
• Wild Island
• Daly’s
Divisional comparatives
Revenue 2016 2015 % change
ESSENTIAL FOODS R12.9 billion R11.3 billion 14.2
GROCERIES R4.7 billion R4.8 billion* (2.1)
INTERNATIONAL R3.0 billion R2.6 billion 15.4
Operating profit 2016 2015 % change
ESSENTIAL FOODS R1 249 million R1 278 million (2.3)
GROCERIES R542 million R435 million 24.6
INTERNATIONAL R484 million R445 million 8.8
* Comparative includes revenue for biscuits, Pepsi and Maitland Vinegar
12 PIONEER FOODS INTEGRATED REPORT | 2016 13
REALISING POTENTIAL
2016 Value Creation Challenges
• Political instability
• Volatile rand
• Significant wheat duty
• Drought impact on maize and other crops
• Currency devaluation in African countries
• Constrained consumer spending
• Low GDP growth
ACTUAL SHARE PRICE PERFORMANCE RANDS MARKET CAPITALISATION (R’BN) RETURN ON AVERAGE SHAREHOLDERS FUNDS (%)* REVENUE (R’BN)
200 45 35 25
+10%
180 40
30
160 20
35
140 25
30
120 15
25 20
100
20 15
80 10
15
60 10
10
40 5
5
20 5
0 0 0 0
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012* 2013* 2014* 2015 2016
* Adjusted for the annual impact of the Phase I and in 2012 the once-off impact of the * Excluding Quantum Foods
Phase II B-BBEE transactions and items of a capital nature
HEADLINE EARNINGS PER SHARE (CENTS)* RETURN ON AVERAGE NET ASSETS (%)*
OPERATING PROFIT – CONTINUING OPERATIONS (R’M)*
1000 30
2500
900 6%
25
800
2000
700
20
600
1500
500 15
400
10 1000
300
200
5 500
100
0 0
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 0
12 13 14 15 16
* Adjusted for the annual impact of the Phase I and in 2012 the once-off impact of the * Adjusted for the annual impact of the Phase I and in 2012 the once-off impact of the
Phase II B-BBEE transactions Phase II B-BBEE transactions * Adjusted for the annual impact of the Phase I and in 2012 the once-off impact of the
Phase II B-BBEE transactions and items of a capital nature
14 PIONEER FOODS INTEGRATED REPORT | 2016 15
REALISING POTENTIAL
GLOBAL FOOD AND BEVERAGE
CONSUMER CONTEXT AND TRENDS
Consumer caution and implementing innovative initiatives to complement
and enhance the Department of Health’s (“DoH’s”)
The rise of the cautious consumer has been clear for mandate and in particular, DoH’s “Healthy Food
some time, but “mercurial consumption” now seems Option Initiative” which was coordinated under the
the norm. Consumers’ shopping, brand and category auspices of the Consumer Goods Counsel SA’s Food
repertoires continue to grow as critical, cash-strapped Safety Initiative (the FSI).
shoppers seek out favourite brands at best prices, but
will also shift loyalties and proactively trial new things. The latter included, among others:
Traditional ideas about brand loyalty are being tested • Product reformulation – i.e. by reducing sugar
like never before. content in specific product categories
This trend also continues to blur traditional market • Package sizes (smaller product offerings)
segmentation models, as consumers become harder • Front of pack nutritional labelling
to categorise. It is not uncommon now for the same
shoppers, however financially constrained, to shop at
Brands with purpose
premium and aspirational stores as well as cheaper In response to both these global themes, many global
outlets on the same shopping trip. Consumers’ brands are now embracing social issues as part of their
confidence in being able to choose and decide what brand’s “purpose”. Large food companies collaborating
is right and best is deepening, fuelled by connectivity with local non-governmental organisations (“NGOs”)
and access to information. to improve economic conditions and the environment,
or minimising CO2 output and water usage, have
A related point globally, and to a lesser extent in South
become more mainstream.
Africa, is the growing importance of the millennial
consumer that breaks many stereotypes regarding Changes in the value network
expected behaviour of “young” people. They seek The shared value business model is gaining global
variety, are highly sceptical, are less brand loyal and are traction. According to the United States Department
100% online all the time. And they desire immediate of Agriculture, in its study “Food Value Chains:
responses to everything. The cautious consumer in Creating Shared Value to Enhance Marketing
2016 has also become a demanding one. Success”, the model is characterised by a
Health concerns commitment to transparency, collaborative planning
and the exchange of market intelligence among
The second major theme this year has been the supply chain partners (which is similar to the evolving
normalisation of health concerns, specifically when it customer model with retailers mentioned above). The
comes to food. Consumers are increasingly model has the potential to deliver solutions that yield
concerned about the health benefits of the food they tangible benefits to each participant in the system.
consume. A demand for transparency and origin
typifies the scrutinisation of labels and ingredients External factors that have contributed to the rise of
and online searches and, generally “Big Food” food value chain enterprises include refined customer
companies have not been responsive enough. At the segmentation, escalating demand for specialised,
same time, a desire for authenticity has made highly differentiated food products, and the increasing
“processed” seem somehow bad or unhealthy. appeal of food items that are produced in accordance
with responsible social or environmental standards.
This scepticism can be described as “factory fear”,
One of the emerging challenges in the shared value
Current consumer trends, globally and locally, reflected in a wariness of what’s inside products.
Consequently, mothers and providers have becoming model is how ethics-based operating principles are
defined and maintained in a food value chain, and
can broadly be grouped under two main themes: increasingly protective, and governments have obliged
by promulgating stricter legislation in attempts to how these principles are communicated successfully
to buyers and consumers. This also highlights the fact
growing consumer caution and concerns about health. remove “suspect” ingredients, forcing food companies
to comply with higher standards, including the that a shared value business model requires shared
challenge of demystifying labels. Rising consumer leadership and succession-planning strategies within
protection legislation across the developed world has value-chain partnerships to be successful over the
been followed by the same trend in emerging long term.
economies, but often without sufficient thought as to Read more about Pioneer Foods’ response to the
the effects of these interventions on affordability. evolving context and trends in the next section, and
Pioneer Foods has been instrumental, together with in the chief executive officer’s report from page 40.
the rest of the industry players, insofar as developing
16 PIONEER FOODS INTEGRATED REPORT | 2016 17REALISING POTENTIAL
REALISING POTENTIAL
THROUGH VALUE CREATION
In terms of JSE market capitalisation, Pioneer Foods Pioneer Foods’ business model is further premised
is currently the second largest FMCG company on the concept of the One Pioneer parenting
among the South African food producers, which advantage through the centralisation of select
includes Tiger Brands, AVI and RCL. functional capabilities. Over the past three years, the
The Group’s size and scale positions it as a significant Group created:
player with the ability to have a major impact on
stakeholders in terms of availability of food and • a shared service centre (consisting of
employment, and as a buyer in the agricultural sector. human resources (“HR”), finance and sales
Its power brands hold leading market share positions, administration);
which translate into millions of consumer purchase
decisions, tons of produce and litres of beverages. • outsourced information technology (“IT”);
Pioneer Foods’ customers comprise formal and • established a centralised logistics
informal food retail. The bargaining power in South services centre; and
Africa resides with formal retailers, who have a high • made progress in the centralisation of the
concentration of buying power. procurement function.
The informal (local and traditional) market is active
and growing, and predominantly served through The divisional restructuring to support this operating
wholesalers. The informal market is growing at a model was completed in 2015, with the creation of
slower pace than formal retail, where competition the International division. The adjusted operating
between the four major groups – Woolworths, model resulted in cost savings through improved
Shoprite, Pick n Pay and Spar – results in continued efficiency and optimisation of capacity, and extended
improvement in outbound logistics and optimised Pioneer Foods’ reach into global markets.
store formats. There is an opportunity for food
producers to start distributing directly to the
informal market.
In the UK, Pioneer Foods is well positioned in the
breakfast cereal category as a private label
manufacturer and supplier to the larger UK retail
chains. Streamfoods, with Fruit Bowl as the leading
brand, is a new addition.
Read more about consumer trends affecting the
Group’s business model on page 17.
Pioneer Foods relies on all six capitals as input into its
business model. Our business model enables our value
creation network, supported by current and future
business viability plans, to position the Group as the
leading South African FMCG company with a strong
African footprint and globally recognised scale.
18 PIONEER FOODS INTEGRATED REPORT | 2016 19REALISING POTENTIAL
REALISING POTENTIAL THROUGH VALUE CREATION
CONTINUED
The strategy is supported by a strong Pioneer Foods brand positioning. The infographic below shows the
The following diagram illustrates Pioneer Foods’ distinctive capabilities and how these ensure coherent integration between the brand essence and consumer insights.
value creation:
Integrity, empowerment, Long track record of firsts in
passion South Africa
Culture and ethos The Pioneer looks for new Many awards that
Track record of
of urgency, high opportunities and possibilities acknowledge this
being able to it y Rea
performance and to find a better way na l s on
continuous
maintain
rs o
Deeply momentum
pe
to
improvement entrenched
b
Values and
eliev
cost and
efficiency
mantra
ESSENCE
e
Realising
Performance Performance potential
Disc
anatomy Ability to Agility and anatomy
focus on and ability to
ri
m
fit
manage critical make quick e ina
relationships decisions I can experience a better Ben tor Pioneering history
life; live life better Legacy of 100 years
DISTINCTIVE Helps me and my family to in food
CAPABILITIES realise our potential
Clarity of articulated
Emphasis on
corporate plan and
leadership
Strength Sustainable outcomes driven
visibility
in soft
commodity
big
shareholder
approach CONSUMER INSIGHT
procurement positions I want to make the most of this life.
I want to live a better life and to live life better.
OUR PEOPLE COMPETITIVE SPACE
Consumers: moms and kids Other beverage and food
The Group’s value creation activities are focused
Staff companies
by the six strategic themes, which are explained in
Stakeholders
detail on page 31.
Investors
MISSION
SHAPE FOCUS ON EMBED RESET THE BUILD HIGH- ADOPT
We believe in nourishing lives with trusted, well-loved
A WINNING BUILDING STRATEGIC COST BASE PERFORMING SUSTAINABILITY brands, empowering families to get more out of life.
CORPORATE OUR POWER CUSTOMER AND STEP UP TEAMS BEST PRACTICES
PORTFOLIO BRANDS MANAGEMENT PRODUCTIVITY IN ALL WE DO
20 PIONEER FOODS INTEGRATED REPORT | 2016 21REALISING POTENTIAL
REALISING POTENTIAL THROUGH VALUE CREATION
CONTINUED
Realising potential technology and logistics is addressed through graduate
placement programmes and apprenticeships.
through the six capitals
The Group’s human capital profile continues to
The Group’s governance processes and sustainability transform to reflect the society within which it
initiatives, combined with its six strategic themes, operates, in line with its B-BBEE strategy and targets.
support the intent to ensure business viability over the
long term and to create value for stakeholders. The Read more about human capital in the sustainability
following section explains how the Group uses, applies report on page 77.
and transforms the capitals to create value.
Read more in the sustainability report from page 70
and the governance report from page 106. The Group’s (South African
Financial capital operations) 8 348LA permanent
Pioneer Foods generates financial capital through
revenue earned from sales of a diversified basket of
employees provide physical and
products spread over several geographies and markets intellectual input into Pioneer
(urban and rural). These societal needs define our
markets and enable our financial value creation. Foods’ business activities.
The Group is highly cash generative and has sufficient
debt capacity to enable Pioneer Foods to invest in
growth: organically and acquisitively. The Group also
Manufactured capital
uses financial capital in its continuous long-term capital Pioneer Foods operates mills, bakeries, processing and
expenditure programme, which positions it well to take packaging plants in South Africa, the UK and Nigeria. In
advantage of future market growth opportunities. South Africa, it has a significant national distribution
fleet. The location of facilities and warehouses creates
Read more in the financial review from page 44 and in
a significant competitive advantage as it combines
the annual financial statements.
proximity to main markets with coastal infrastructure.
Human capital This creates the ability to deal effectively with imports,
The Group’s (South African operations) storage and distribution as the Group’s procurement
8 348LA permanent employees provide physical adapts to supply cycles, especially in commodities. The
and intellectual input into Pioneer Foods’ business Group continuously optimises its manufactured capital
activities. Through their individual and combined through relocation, upgrades and further capital
competency, they are able to implement the Group’s investment to ensure it maintains a lean, efficient
strategy and create a competitive advantage. organisation with high capital efficiency. The FSSC
22000 Food Safety System Certification has been
Pioneer Foods’ consumer and customer orientation adopted for application at all manufacturing sites to
requires a high-performance culture and effective ensure compliance with food safety requirements.
leadership. This culture is reinforced through sound Manufactured capital will be further optimised through
performance management practices and recognition. a standardised world-class preventative maintenance
The annual gala event, Pioneer Foods’ Excellence system at all manufacturing sites, and the setting of
Awards, recognises and celebrates individual
Pioneer Foods has to ensure the future excellence, value ambassadors and community
overall equipment effectiveness improvement
targets. Continuous improvement is supported by
availability, conservation and regeneration champions. Management’s agility, experience,
intellect, energy and drive constitute some of the
training in world-class manufacturing principles at
the Pioneer Foods’ Manufacturing Academy, and
of all the capitals used in its business activities. Group’s key competencies. enhanced by outsourced technical training.
Skills shortages in human capital are one of Pioneer Read more about the optimisation of manufactured
Foods’ strategic risks. This is mitigated through targeted capital in the chief executive officer’s report on
recruitment and an annual investment of R24.6 million in page 40.
training and bursaries. Structural skills scarcity in
22 PIONEER FOODS INTEGRATED REPORT | 2016 23REALISING POTENTIAL
REALISING POTENTIAL THROUGH VALUE CREATION
CONTINUED
Intellectual capital A further aspect of social and relationship capital takes the form of PFECT as an
empowerment trust that supports community and education-related programmes
Pioneer Foods’ intellectual capital input is rooted in its diversified
through dividends and CSI contributions from Pioneer Foods.
portfolio of brands and ability to innovate competitively. The
Pioneer Foods portfolio includes some of the most recognisable Read more about social and relationship capital and PFECT in the sustainability report
and best loved brand names in South Africa. A significant from page 87.
number of the Group’s brands are either number one or two in Natural capital
their respective market categories. The ability to increase
intellectual capital relies on the effectiveness of Pioneer Foods’ Natural capital in the form of raw material and packaging is the most significant input into
recruitment capability and the quality of people the Group is able the business, as all business activities support the conversion and packaging of these
to attract. Differentiating themes in the Group’s attraction plan materials into branded food and beverage products. Wheat, other grains and fruit
include rewarding excellence, high-performance teams and a concentrates form the majority of raw materials, with smaller volumes of fruit, rice, beans
rapidly evolving Group, summarised in the Employee Value and legumes also being sourced. The Group uses water and energy as inputs in its
Proposition (“EVP”): processing facilities, and fuel for its distribution fleet.
“If you have passion for results, excellence, quality, growth Natural capital inputs were at risk in 2016, especially in terms of inputs such as wheat,
and development; and take pride in the work you do, then maize and fruit juice concentrate, which are scarce due to the current severe drought in
Pioneer Foods is your destination of choice.” South Africa. This resulted in higher input costs due to imports, which are, in turn,
affected by the weak currency and import tariffs.
The EVP informs branded recruitment actions measured by a
Talent Brand Index (“TBI”). Pioneer Foods has more than doubled Continuous improvement in the conversion of raw materials is a production priority
its TBI from 10% to 24% in 2016. governed by an integrated management system and sophisticated demand planning.
Investment in research and development ensures that the Group supports the long-term
Innovation includes product engineering capabilities and the ability availability of raw material given climate change, consumer consumption trends, and
to apply market research and consumer need states to develop technological factors that can impact future supply.
products, range extensions and new packaging. This is
strengthened by the application of technology in its production The sustainable use of non-renewable resources will ensure a competitive advantage for
facilities and the recent implementation of integrated demand the Group through efficiencies and will mitigate against future risk. In 2016, the Group
planning to optimise the planning process and opportunities saved 8 327 tCO2e from various energy-saving projects and 86 000 m3 in the first year of
identified across customers, channels, markets and brands. its water-saving programme. These savings equate to R34.4 million.
The Group’s systems capability is continuously evolving Read more about natural capital in the sustainability report from page 95.
through SAP. Realising potential through commercial and non-commercial
Read more about intellectual capital in the governance report on value creation
page 106.
Pioneer Foods creates value from its core business activities of strategic sourcing,
Social and relationship capital production, distribution, marketing and selling of a diverse range of food and
Pioneer Foods’ network of stakeholder relationships includes beverage products in collaboration with a network of producers, business partners
engaging with government on a number of levels, contracting and service providers.
with customers, interacting with consumers through brand The infographic on the next page summarises the implementation of Pioneer Foods’
activation, and developing suppliers. Supplier and enterprise strategy by considering and testing all decisions against the twin objectives of
development is a focus area in terms of B-BBEE, with strengthening brand positions and expanding margins, thereby creating shared value
Pioneer Foods’ contribution predominantly in primary for the Group and its stakeholders.
agriculture projects and logistics. While these projects grow
All strategic options and decisions to achieve growth are tested against these objectives,
to achieve scale, Pioneer Foods continues to expand its formal
which are supported by a clear understanding of success drivers for delivery. Strategic
network of suppliers, creating a shared platform for growth.
risks are considered continuously – also for the opportunities they may create.
The Group created significant social and relationship value
The infographic on page 21 illustrates how Pioneer Foods’ commercial activities are
through its Phase I B-BBEE scheme, launched in 2006, which
shaped by our operating context and customers to deliver positive, long-term financial
benefited more than 11 000 employees. The scheme has
results, while our non-commercial activities are shaped by our viability initiatives and
generated R443 million in pre-tax value for employees since
stakeholder relationships.
inception. The main purpose of the scheme was to broaden and
increase direct black ownership and economic participation by
employees of the Group.
24 PIONEER FOODS INTEGRATED REPORT | 2016 25REALISING POTENTIAL
REALISING POTENTIAL THROUGH VALUE CREATION
CONTINUED
Realising potential through strategy
TWIN OBJECTIVES
STRENGTHENING BRAND POSITIONS EXPANDING MARGINS
Market position Innovation Cost management Increasing volumes
A significant number of the Group’s Continuous innovations include range extensions, The Group’s cost containment and The Group’s ability to generate profitable
brands are either number one or two in new products, packaging upgrades and relaunches efficiency ethos enable its ability to deliver top-line growth through volume increases
their respective market categories, with based on market, consumer and product portfolio operating leverage. Most notable cost requires investment in capacity to meet
the further potential to strengthen the segmentation to ensure the full commercial reductions were from the containment of future demand, brand and marketing support,
equity of the power brands. opportunity for each is realised. Innovation is also conversion costs and outbound logistics. and the ability to understand changing
Read more about our brand market informed by consumer health and nutrition trends Read more about cost management in the consumer need states. Volume growth is
positions and awards on page 7, page 9 and opportunities. financial review on page 44 and operational further supported by strategic customer
and page 12. Read more about innovation in the operational reports from page 50. management and accurate demand planning.
reports from page 50. Read more about volume performance per
product category in the operational reports
from page 50.
LTUR AL EV
SUCCESS DRIVERS CU OL
TO DATE: UT
IO N
LENTLESS F
RE O
CU
SO
N VALU
R T F OLI O OP
PO T
IM
ED
ADERSHIP
ISA
LE
R
IV
T ION
ER
S
W B U S I N ES
NE S
O
PE
R AT
I NG M
OD
E
L
26 PIONEER FOODS INTEGRATED REPORT | 2016 27REALISING POTENTIAL
REALISING POTENTIAL THROUGH VALUE CREATION
CONTINUED
HEART OF SUPPORTING MBEKWENI BREAKFAST
Read more KAYAMANDI NEW FARMERS YOUTH CENTRE PROGRAMME
page 98 page 100 page 102 page 104
COMMERCIAL ACTIVITIES
The Group’s commercial activities include the sourcing,
processing, packaging, distribution and marketing NON-COMMERCIAL ACTIVITIES
of food and beverage products through a range
of power brands to formal and informal
OPERATING CONTEXT Through its partnerships, the Group is involved in various
community projects in education, the environment and food
retail customers. AND CUSTOMERS security. These projects focus on vulnerable groups, such as
Retailers and consumer goods women, youth and children, primarily in township and rural
FIVE YEAR HEADLINE EARNINGS* – R’M companies are searching for more ways communities. The Group also invests in feeding schemes.
to benefit from growth opportunities SUSTAINABILITY
12 731 together. The promise of margin
improvements and cost cutting from
AND RELATIONSHIPS
supply chain efficiencies encourages Global brands are increasingly embracing social
13 853
efforts to share customer data and and environmental issues to ensure sustainable
insights. Pioneer Foods collaborates with value creation. Consumer goods companies are
1 242 a network of producers, business forcing stronger alliances with public health
14
partners and service providers to organisations and research institutions, while
leverage scale and streamline expanding their engagement with government on
15 1 534 its operations. policy issues. Pioneer Foods invests in building
stakeholder networks to increase social and
relationship capital.
16 1 637
0 330 660 990 1320 1650
FIVE YEAR OPERATING PROFIT* – R’M
12 1 182.8**
13 1 152.7** HOW WE DO BUSINESS INPUT AND OUTPUT OUTCOMES
The Group depends on all six capitals as the stores Read more about how we use and transform the Pioneer Foods is one of the major contributors to
14 1 680.1** of value through which Pioneer Foods creates six capitals from page 23. food security and nutrition in South Africa.
products and services. The Group’s activities result Read more about our products and brands in the Through our business activities, we offer
in an increase, decrease or transformation of the divisional profiles on pages 6, 11 and 12 and the consumers a choice of food and beverage
15 2 152.7**
capitals, with the most significant impact on natural operational reports from page 50. Commercial products that we produce as responsibly and
capital as raw material is converted into food and opportunities are created to deal with physical cost-effectively as possible, in collaboration with
beverage products. waste, and the product recovery process is a network of producers and suppliers.
16 2 273.2**
The availability, quality and affordability of the governed responsibly. Waste through non-
0
* Adjusted 460of Phase I920
for impact and II B-BBEE1380 1840and items
equity transactions 2300 capitals are managed with a long-term investment efficiency is addressed in all operations as a
of a capital nature view and due consideration of agricultural cycles, leading budget indicator.
** Continuing operations only
the impact of climate change and shifting
consumer patterns.
28 PIONEER FOODS INTEGRATED REPORT | 2016 29REALISING POTENTIAL
In driving a growth agenda to
2018, the Group remains
committed to the six strategic
REALISING POTENTIAL The strategy was revised and strengthened under
the banner of “Towards 2020 – Create The Future”.
themes, while considering and
THROUGH STRATEGY IMPLEMENTATION measuring our impact on the
The Pioneer Foods’ Board reviewed the Group strategy after evaluating the progress made to 2016. The Board
considered global and local food and beverage trends as important considerations for the strategy to 2018.
environment and people.
The main strategic focus areas are:
VISION • Grow Groceries faster than Essential Foods
To be the leading South African FMCG company with a strong African • Grow International faster than the South African business growth
• Obtain leadership positions in six of seven power brands
footprint and globally recognised scale. • Secure acquisitions
• Rationalise stock keeping units
• Presence in selective private labels
Shape a winning • Maintain bakeries momentum
The different elements of the vision statement are measured and defined according to the following: corporate portfolio • Strengthen the Groceries portfolio mix
Financial indicators: return on invested capital, return on equity, earnings before • Deliver integrated demand management
• Ensure investment rate is maintained on a cents per unit level
LEADING interest and tax and earnings per share • Capitalise on digital marketing
Market share | Top 40 index | Employer of choice • Maintain media efficiency
• Achieve an innovation step-change
Mainstream food and beverage branded goods • Ensure a fastidious focus on brand health metrics
Focus on building our
FMCG Selective private label power brands
Strategic alliance with global brands (with equity participation)
• Implement consolidated trading terms position
• Build human capital capability
STRONG AFRICAN All big African markets
FOOTPRINT
GLOBALLY Highly focused and relevant global expansion Embed strategic
customer
RECOGNISED SCALE Global acquisitions where appropriate management
• Obtain a lean efficient organisation
The growth agenda will be driven by three strategic vectors: • Achieve world class benchmarking in:
– Manufacturing
– Procurement
– Shared service centres
– Logistics
OPTIMISE STEP-CHANGE TRANSFORM Reset the cost base • Contain energy costs
and step up • Contain employee costs
productivity
• Embed optimised and effective operating model
Continuing with business as Implementing step-change Driving a fundamental • Ensure engaged and cohesive talent
usual ... but doing it better performance enhancements transformation of the shape • Transform and deepen talent bench strength
and size of the business • Further entrench the performance culture and values
• Incremental increase in market • Weet-Bix market share • Acquire a medium-sized local or Build high-
share (Power Brands) • Bakery capital investment roll-out offshore company performing teams
• Leverage new product development • Alpen performance
capabilities • Heinz performance • Reduce both direct and indirect energy usage
• Channel and geographic expansion • Africa in-country beverage • Reduce water usage
through penetration focus/local and production • Reduce waste removal expenditure
traditional
• Bolt-on acquisitions – UK focus • Increase our enterprise supplier development and corporate social investment contributions
• Cost savings and efficiency focus
• Distribution evolution
• Trade term strategy Adopt sustainability
• IT step-change (ERP agility)
• Sales and operational planning best practices in all
(S&OP) enhancements • Network optimisation and
manufacturing architecture we do
• Procurement
• Strategic Service Centre
30 PIONEER FOODS INTEGRATED REPORT | 2016 31REALISING POTENTIAL
REALISING POTENTIAL THROUGH STRATEGY
IMPLEMENTATION CONTINUED
Group five-year financial review 2016 2015 2014 2013 2012*
2016 2015 2014 2013 2012* R'm R'm R’m R’m R’m
Consolidated statement of cash flows
R'm R'm R’m R’m R’m
Net cash profit from operating activities 2 667.9 2 512.2 2 133.9 1 556.3 1 514.9
Consolidated statement of comprehensive income
Working capital changes (774.5) (546.4) 27.5 66.8 (266.2)
Revenue 20 599.7 18 748.2 21 290.0 19 811.1 18 609.8
Accrual for Competition Commission penalties paid – – – (216.7) (216.7)
Profit before items of a capital nature and income tax 2 297.9 1 814.5 1 541.2 930.9 922.0
Cash effect from hedging activities (174.6) 16.2 (7.8) 22.7 (32.2)
Before adjustments 2 253.1 2 121.3 1 728.5 1 076.8 1 047.1
Settlement of share-based payment liability** (69.2) (189.4) (75.0) (32.7) (31.0)
Broad-based employee share incentive scheme
Cash effect of forward purchase contracts related to
share-based payment charge 22.9 (306.8) (187.3) (145.9) 35.6
share-based payments 25.2 – – – –
Broad-based employee share incentive scheme hedge 21.9 – – – –
Income tax paid (451.1) (475.5) (386.4) (233.1) (257.7)
Once-off share-based payment charge on B-BBEE
Net cash flow from operating activities* 1 223.7 1 317.1 1 692.2 1 163.3 711.1
equity transaction – – – – (160.7)
Net cash flow from investment activities** (982.9) (422.7) (392.7) (1 287.2) (753.0)
Items of a capital nature 21.3 (75.9) (123.0) (220.2) (5.4)
Net cash surplus/(deficit) 240.8 894.4 1 299.5 (123.9) (41.9)
Income tax expense (629.0) (606.3) (451.9) (210.6) (311.9)
Net cash flow from financing activities (1 204.9) (414.1) (347.0) (167.5) 75.6
Profit for the year 1 690.2 1 132.3 966.3 500.1 604.7
Net cash, cash equivalents and bank overdrafts
Attributable to:
on unbundling of Quantum Foods – (105.6) – – –
Owners of the parent 1 690.2 1 130.4 965.2 498.6 603.6
Net cash and short-term borrowings from business
Non-controlling interest – 1.9 1.1 1.5 1.1
combination and disposal of subsidiary – – – – (11.3)
1 690.2 1 132.3 966.3 500.1 604.7
Effect of exchange rate changes on cash and
cash equivalents (7.1) – – – –
Operating profit before items of a capital nature 2 318.0 1 845.9 1 583.6 1 008.0 1 036.8
Net (decrease)/increase in cash, cash equivalents
Headline earnings for the year 1 675.7 1 227.3 1 055.1 706.7 606.2
and bank overdrafts (971.2) 374.7 952.5 (291.4) 22.4
Notes:
Consolidated statement of financial position
* Not restated for the impact of IFRS 11 – Joint Arrangements and IAS 19 (revised) – Employee Benefits.
Property, plant and equipment, intangible assets and
** Cash payments to employees under the BEE Phase I employee share scheme was reclassified from financing activities to net
biological assets 5 561.8 5 087.7 6 005.8 5 996.6 5 393.7
cash flow from operating activities for 2012 to 2016.
Deferred income tax 3.9 0.2 6.8 77.2 2.7
Investments in and loans to associates and joint ventures 861.2 574.0 408.4 350.9 56.9
2016 2015 2014 2013 2012*
Non-current trade receivables and available-for-sale
R'm R'm R’m R’m R’m
financial assets 145.1 166.1 93.4 79.7 73.2
Segments**
Non-current derivative financial instruments 439.7 – – – –
Revenue
Current assets 6 518.8 6 343.0 6 395.8 5 230.0 5 079.6
Essential Foods 12 854.8 11 334.5 10 651.9 10 314.4 9 940.4
Total assets 13 530.5 12 171.0 12 910.2 11 734.4 10 606.1
Quantum Foods – – 3 591.4 3 575.6 3 097.6
Groceries: 4 695.1 4 797.4 4 773.1 6 169.6 5 869.8
Capital and reserves attributable to owners of the parent 7 867.3 6 958.7 6 102.4 6 581.3 6 184.9
International 3 049.8 2 616.3 2 273.6 – –
Non-controlling interest – 12.3 10.4 9.3 8.2
20 599.7 18 748.2 21 290.0 20 059.6 18 907.8
Total equity 7 867.3 6 971.0 6 112.8 6 590.6 6 193.1
Less: Internal revenue – – – (248.5) (298.0)
Non-current borrowings 1 333.3 1 300.2 1 513.5 1 457.3 497.7
20 599.7 18 748.2 21 290.0 19 811.1 18 609.8
Provisions, non-current derivative financial instruments
Note:
and share-based payment liability 429.1 506.2 362.3 381.0 227.4
* Not restated for the impact of IFRS 11 – Joint Arrangements and IAS 19 (revised) – Employee Benefits.
Deferred income tax 582.4 471.8 644.1 671.9 652.4
** Segment revenue and segment results were restated to consolidate the Groceries: Cereals and other and Groceries: Beverages
Current liabilities, excluding accruals for Competition
segments into a single Groceries segment.
Commission penalties and forward contracts on
own equity 2 825.1 2 921.8 4 277.5 2 633.6 2 820.0
Current liability – accrual for Competition
Commission penalties – – – – 215.5
Current liability – accrual for forward contracts on
own equity 493.3 – – – –
Total equity and liabilities 13 530.5 12 171.0 12 910.2 11 734.4 10 606.1
Note:
* Not restated for the impact of IFRS 11 – Joint Arrangements and IAS 19 (revised) – Employee Benefits.
32 PIONEER FOODS INTEGRATED REPORT | 2016 33You can also read
