Packaged goods company Tiger Brands has appointed Tjaart Kruger as CEO, effective November 1, with Noel Doyle to step down as CEO, executive director and member of the company's social, ethics and transformation committee.

Following the board's yearly review of the company's strategy, it concluded that new leadership was required to respond to the challenges currently facing the company, Tiger Brands said in a statement on October 20.

“During his tenure as CEO, Noel and his team navigated the challenges of Covid-19, civil unrest, global supply changes and high levels of inflation. In this period, the company's underlying operating profit trajectory was stabilised and there have been many significant improvements in key internal operating metrics.

“The board thanks Noel for his contribution over 20 years of service with Tiger Brands and wishes him well for the future,” the company said.

Doyle will remain available to Tiger Brands until March 31 next year to facilitate a proper handover, it added.

Kruger is a South African Institute of Chartered Accountants-registered chartered accountant with a Programme for Management Development from Harvard Business School and has more than 30 years' leadership experience at multiple South African fast-moving consumer goods companies.

Further, he sharpened his career through previous experience at Tiger Brands, where he fulfilled the role of managing director of the pharmaceuticals and grains divisions over the period 2001 to 2007. His most recent leadership role was serving as CEO of Premier Foods over the period 2011 to 2021, successfully leading Premier Foods' expansion and growth strategy.

Kruger has signed a 26-month contract with Tiger Brands. The board believes his appointment will provide certainty to the company, the market and other key stakeholders and accelerate the execution of the company's strategy and value creation for shareholders.

“The board will commence a process to identify a suitable successor for the CEO role in due course to ensure an orderly transition at the end of Tjaart's tenure,” Tiger Brands said.

Tiger Brands' share price on the JSE rose by nearly 16% on the morning of October 20, following the announcement.

TRADING UPDATE
Meanwhile, the group warned that its operating income for the financial year ended September 30 would be lower than for the prior financial year. The ongoing challenges of fully recovering higher input costs persisted in the second half resulting in marginally lower volumes, Tiger Brands advised shareholders.

“This, together with the year-on-year impact of incremental retrenchment costs of approximately R100-million proved too significant to be offset by the group's cost reduction initiatives, which will end ahead of the R460-million target previously guided.”

Good performances from beverages, home and personal care, Tiger Food Services Solutions, exports and deciduous fruit were more than offset by poor performances in rice, bakeries (despite recording volume growth), groceries and snacks and treats, with the latter two businesses operating in categories marked by absolute volume declines, the company said.

Further, despite lower operating income, group earnings were supported by better-than-expected growth in income from associates.

Tiger Brands expects to report a 2% to 9% year-on-year decrease in earnings a share and a 2% to 5% year-on-year decrease in headline earnings a share.

The group's results are expected to be published on or about December 1.