Contribution to headline earnings | 30 June 2024 R million |
30 June 2023 R million |
---|---|---|
RCL Foods | 1 000 | 488 |
Heineken Beverages | ||
– entity contribution | (573) | (75) |
– IFRS 3 charge | (22) | (6) |
Distell | ||
– entity contribution | – | 555 |
– IFRS 3 charge | – | (32) |
Siqalo Foods | ||
– entity contribution | 452 | 344 |
– IFRS 3 charge | (2) | (80) |
Capevin | 79 | 14 |
934 | 1 208 | |

RCL Foods Limited (RCL Foods)
Effective interest 80.2%
Profile: RCL Foods is a holding company with diversified interests that focuses on two divisions: Food (Groceries, Baking and Sugar) and Rainbow (chicken, including Epol Animal Feed). On 1 July 2024, the Foods and Rainbow divisions separated into independent companies. Rainbow Chicken Limited (Rainbow) was separately listed at the end of June 2024 and unbundled by RCL Foods with effect from 1 July 2024.
Corporate information
Sustainability measures (including Rainbow)
Financial highlights | Year ended 30 June 2024 | |
---|---|---|
R million | % | |
Revenue from continuing operations (1) | 40 511 | 7.2 |
Operating profit from continuing operations(1) | 1 989 | 152.7 |
Headline earnings from continuing operations(1) | 1 268 | 134.8 |
Headline earnings from total operations | 1 265 | 108.1 |
(1) | Include the results of Rainbow as Remgro will retain its 80.2% interest in Rainbow subsequent to the unbundling. |
For the year ended 30 June 2024, RCL Foods’ headline earnings from total operations (comprising both continuing and discontinued operations) increased by 108.1% to R1 265 million (2023: R608 million). Remgro’s share of the headline earnings from total operations amounted to R1 000 million (2023: R488 million).
The Vector Logistics segment was classified as a discontinued operation in the prior year. The sale of Vector Logistics was completed on 28 August 2023. Although RCL Foods classified Rainbow as a discontinued operation, the results of Rainbow were added back to RCL Foods’ continuing operations as Remgro will retain its 80.2% interest in Rainbow subsequent to the unbundling of Rainbow by RCL Foods on 1 July 2024.
RCL Foods’ revenue from continuing operations for the year ended 30 June 2024 increased by 7.2% to R40 511 million (2023: R37 783 million). The increase was attributable to higher sales pricing necessitated in response to sustained high input costs. Within Rainbow, revenue increase was largely attributable to higher volumes and higher realised prices.
The underlying view of RCL Foods results excludes material once-offs and accounting adjustments. The underlying results exclude IFRS 9 (fair value adjustments), the special levy raised by SASA on the sugar business unit in the prior year, insurance proceeds received in the current and prior year relating to the Komatipoort fire, and CGU (cash generating unit) impairments.
The RCL Foods Value-Added Business (Groceries, Baking, Sugar) has delivered an improved set of underlying results. Revenue increased to R26 017 million (2023: R24 349 million), largely attributed to higher market prices in Sugar, the recovery in Pet Food volumes, and the 12-month inclusion of the Sunshine Bakery business acquired in the second half of the prior financial year. EBITDA increased by 36.8% to R2 301 million (2023: R1 682 million) largely driven by strong performance in Sugar. Despite an easing of food inflation in the second half of the financial year, prices remained high compared to the prior year with food inflation averaging 7.1% over the current year, resulting in sustained pressure on consumer spending. Price increases were necessitated in response to the input cost pressure and averaged 6.8% across the Groceries and Baking segments. Savings initiatives resulted in improved margins, mostly offsetting the impact of lower market demand. Lower levels of load shedding also made a notable contribution towards the positive performance.
In the Groceries business unit, revenue of R5 313 million was 5.5% higher than the prior year (2023: R5 034 million), and underlying EBITDA increased by 22.6% to R497 million (2023: R406 million). The EBITDA margin improved from 8.1% to 9.4%. The improved performance is attributable to a better sales mix as well as improved Pet Food margins and service levels. The cost of production has been reduced due to lower levels of load shedding in the second half of the financial year.
In the Baking business unit, revenue of R9 137 million was 5.9% higher than the prior year (2023: R8 625 million), and underlying EBITDA decreased by 5.8% to R516 million (2023: R548 million). The underlying EBITDA margin declined from 6.4% to 5.6%. The gains in the Speciality and Milling were offset by a disappointing performance in the Bread, Buns and Rolls operating units. The Sunshine Bakery business has now been successfully integrated into the Baking business unit. The Bread, Buns and Rolls operating unit faced intense competition pressure and margin pressure and a volume decline of 1.1% compared to the prior year. Sunbake implemented a bread price increase ahead of the market in October 2023 to recover sustained wheat costs, which led to a decrease in sales volumes.
In the Sugar business unit, revenue of R11 811 million was 6.4% higher than the prior year (2023: R11 101 million), and underlying EBITDA increased by 20.7% to R1 272 million (2023: R1 054 million). The underlying EBITDA margin improved from 9.5% to 10.8%. The strong underlying performance in the Sugar business unit was largely attributable to higher prices in both the local and export markets, an improved agricultural performance, as well as an outstanding result in the Molatek Animal Feed due to improved production efficiencies offsetting a higher molasses price. Sugar sales volumes were down 8% relative to the prior year where the market bought in ahead of the June 2023 price increase. The new Komatipoort raw sugar warehouse, which was destroyed in a fire in October 2021, was commissioned in June 2024. This will reduce Sugar supply chain costs and significantly derisk the business. The Molatek operating unit delivered a record year, driven by a sales mix geared towards higher-margin product sales, strong operational efficiencies and cost savings.
Rainbow’s revenue of R14 527 million was 7.9% higher than the prior year (2023: R13 464 million), and underlying EBITDA increased by 729.8% to R672 million (2023: R81 million). The underlying EBITDA margin improved from 0.6% to 4.6%. The increase in revenue is attributable to higher volumes in the retail wholesale channel and higher realised pricing. The underlying EBITDA increased despite the R203 million impact of the Avian Influenza during the period. The overall gain compared to the prior year can be ascribed to an enhanced agricultural performance, higher processing yield, effective cost management, improved pricing, increased retail and wholesale volumes, relief in commodity prices (albeit still at elevated levels) as well as reduced load shedding.
Heineken Beverages Holdings Limited (Heineken Beverages)
Effective interest 18.8%
Profile: Heineken Beverages was formed on 26 April 2023 following the merger of Heineken South Africa, Distell Group Holdings Limited (Distell) and Namibia Breweries Limited (Namibia Breweries). The company’s brand portfolio includes the global flagship brand Heineken as well as many other world-class brands, such as Savanna, Windhoek Lager and Nederburg. Heineken Beverages is firmly rooted in Southern Africa, directly employing over 5 000 people.
Corporate information
Sustainability measures
Financial highlights | Eight months to 31 December 2023 |
|
---|---|---|
R million | ||
Revenue (including excise duty) | 34 938 | |
Operating loss before additional | ||
IFRS 3 adjustments | (6 216) | |
Loss before additional IFRS 3 adjustments | (6 630) | |
Heineken Beverages has a December year-end and its results for the 12 months to 30 June 2024 were included in Remgro’s results for the year under review. Heineken Beverages’ contribution to Remgro’s headline earnings for the year under review amounted to a loss of R595 million (2023: loss of R81 million). The results for the prior year represent only two months of trading to 30 June 2023 and is thus not comparable to the current year and, as a result, meaningful insights from the results will only be forthcoming following a longer trading period. These results include amortisation and depreciation charges of R22 million (after tax) (June 2023: R6 million) relating to the additional assets identified when Remgro obtained significant influence over Heineken Beverages. Excluding the Remgro IFRS 3 charges, the loss attributable to Remgro would be R573 million (June 2023: R75 million).
Heineken Beverages’ headline earnings for the 12 months ended 30 June 2024, amounted to a loss of R3 047 million (2023: loss of R429 million). These results include amortisation and depreciation charges of R1 369 million (after tax) (June 2023: R320 million) relating to the additional assets identified when Heineken Beverages obtained control over Distell and Namibia Breweries on 26 April 2023 (IFRS 3 adjustments). Excluding the IFRS 3 adjustments the loss of Heineken Beverages amounts to R1 678 million (June 2023: loss of R109 million).
Operating results for the 12 months ended 30 June 2024 were impacted by a constrained consumer environment and aggressive competitor behaviour – while at the same time focusing efforts on integrating the standalone operations of the constituents of Heineken Beverages into a single operation.
In South Africa, within the cider and ready-to-drink categories, strong revenue growth from Savanna and Bernini were standout performances. Outside of South Africa and Namibia low single-digit revenue growth was achieved, with the spirits and wine portfolios providing the strongest growth support.
In the beer segment, the introduction of the returnable glass bottle of Heineken in South Africa after the first quarter to March 2024 provides a more affordable yet cost-effective consumer proposition. Increased investment in support of the Heineken returnable glass bottle launch and revitalisation of the other beer brands will subsequently follow.
Heineken Beverages is well-positioned to capture significant growth opportunities in South Africa and relevant markets in Africa. The business will be able to leverage and optimise the manufacturing footprint of Heineken SA, Distell and Namibia Breweries, leading to more efficient use of its assets and driving increased profitability of the combined business as it grows.
Siqalo Foods Proprietary Limited (Siqalo Foods)
Effective interest 100.0%
Profile: Siqalo Foods manufactures spreads which it sells under market-leading trademarks.
Corporate information
Sustainability measures
Financial highlights | Year ended 30 June 2024 | |
---|---|---|
R million | % | |
Revenue | 3 594 | (4.1) |
Operating profit | 518 | 38.1 |
Headline earnings | 452 | 31.4 |
Siqalo Foods manufactures spreads, which are sold under market-leading trademarks such as Rama, Flora, Stork and Rondo within the Southern African customs union territories.
Siqalo Foods’ contribution to Remgro’s headline earnings for the year under review amounted to R452 million (2023: R344 million), excluding additional IFRS 3 amortisation of R2 million (2023: R80 million) accounted for by Remgro.
The trading environment remains a challenge due to elevated interest rates, high inflation and volatile commodity prices and exchange rates. To recover margin from prior commodity cost drivers and to offset the impact of inflation and continued cost pressure, the business increased prices in September 2023. Siqalo Foods has experienced a 6.7% decrease in volumes for the year under review as consumer spend is negatively impacted by the elevated inflationary environment. Oil commodity markets have stabilised at pre-Russia-Ukraine War levels, which has assisted to offset the decrease in volumes resulting in a 23.3% overall increase in operational EBITDA. There was a negative R5 million (2023: R26 million) impact of IFRS 9 fair value adjustment on commodity and foreign exchange contracts entered as part of the raw material procurement strategy. IFRS 9 fair value adjustments are excluded from operational EBITDA.
The spreads category growth remains constrained with a decline of 0.4% in volume over the last 12 months in comparison to the prior year. Siqalo Foods’ market share performance remains steady in the category, with a slight decline of 2.8 percentage points on its 12-month moving average volume market share to 61.0% as of 30 June 2024 compared to 63.8% in the prior year. The business focus for 2024 and 2025 remains to recover profit margins while growing the brands and volumes in the long term.
A management services contract remains in place with RCL Foods that governs certain services that RCL Foods’ Shared Services platform provides to Siqalo Foods on an arm’s length basis. The result is an innovative alternative business model, leveraging the capabilities within the wider Remgro Group of companies.
Capevin Holdings Proprietary Limited (Capevin)
Effective interest 33.6%
Profile: Capevin was unbundled from Distell at the end of April 2023 as part of the Heineken/Distell transaction. With the disposal of the Gordon’s Gin brand to Diageo during the year, the largest remaining asset of Capevin is the Scotch Whisky business – CVH Spirits. The company owns award-winning brands which include the single malt trademarks of Bunnahabhain, Deanston, Tobermory and Ledaig as well as the blended Scotch whiskies of Scottish Leader and Black Bottle.
Corporate information
Sustainability measures
bottling operations
Financial highlights | Year ended 30 June 2024 | |
---|---|---|
R million | % | |
Revenue from continuing operations | 2 659 | (8.2) |
Operating profit (1) | 313 | (29.8) |
Profit from continuing operations (1) | 249 | (28.9) |
(1) Excluding goodwill impairment. |
Capevin’s contribution to Remgro’s headline earnings, which consists of Remgro’s portion of Capevin’s results for the year ended 30 June 2024, amounted to R79 million while the comparative two months to June 2023 was R14 million.
With regards to Gordon’s Gin, all the contractual volumes were successfully achieved and the deferred portion of the Termination Consideration amounting to R300 million has accordingly been received. The deferred portion was paid in equal tranches, in January 2024 and the final portion in May 2024. The total termination consideration received from Diageo in the 2024 financial year amounted to R1 billion (as approved by the Competition Commission of South Africa in July 2023).
In addition to the Scotch whisky assets, Capevin also owns a small number of properties in Stellenbosch from which it earns rental income.
Capevin’s profit from continuing operations, which excludes Gordon’s Gin, due to it being classified as a discontinued operation, and the impairment of goodwill in the comparative year, decreased by 28.9% to R249 million. This decrease is primarily driven by the exit of the distribution of Wine and Amarula brands. Capevin previously managed the sales, distribution and marketing of Wine (e.g. Nederburg) and Amarula on behalf of Heineken Beverages in their international markets but during the current financial year, these brands were carved out and returned to Heineken Beverages. In addition to the financial impact of exiting the distribution of Heineken’s portfolio, the overall Scotch whisky sector also saw a significant slowdown in shipments to global markets compared to the previous financial year. The ongoing geopolitical and macroeconomic uncertainty, combined with the inflation and interest rates, significantly impacted performance. The continuous cost pressure on consumers, and a decrease in disposable income, resulted in a lower demand and downtrading. In particular, the economic slowdown in China has resulted in a significant decline in revenue.
Despite the volatile and challenging global trading environment, certain of CVH Spirits’ Scotch Whisky brands performed resiliently. Scottish Leader in Taiwan delivered a strong performance and continues to maintain its position as the second-largest blended Scotch brand in the country. Overall Scottish Leader’s net revenue has increased by 6% in the past year. However, the sales performance of CVH Spirits’ Single Malt category, which consists of Bunnahabhain, Deanston, Tobermory and Ledaig, has been more challenging as consumers traded down given lower disposable income resulting in a single digit decline in revenue. Nevertheless, looking forward, CVH Spirits believes that its portfolio of premium single malts with its scarcity, unique point of difference, and strong heritage positions itself as an attractive option for both customers and consumers. CVH Spirits has also maintained its strategy in distilling and laying down additional whisky in casks for long-term demand.
During the year, CVH Spirits continued to distribute and manage the wider portfolio of Heineken Beverages’ Wines in Europe and Amarula Cream across key international geographies. Both the South African Wine category and Amarula Cream had a challenging year under review with revenue and gross profit showing a double-digit decline to the prior year. Supply chain challenges and ongoing shipment delays from South Africa also contributed to this performance. The distribution of Wine and Amarula was transitioned back to Heineken Beverages at year-end.