Our great customer experience and innovative branded food solutions, supported by our Supply Chain, drive our expansion and value generation.

Our ability to create aspirational and world class brands which continue to be the consumer’s choice is essential to our success. We create sustainable long-term value outcomes for our stakeholders by using our inputs in efficient business processes. Our inputs and outcomes are provided in more detail in the following pages and should be read in the context of our strategic objectives.

Shared financial value as an outcome

We share our success with our key stakeholders and contribute to economic development, income opportunities and wealth creation in the markets where we operate. In 2024, we allocated R4 835 million (2023: R4 152 million) in shared financial value.

Our six capitals commentary

Financial capital

With macro-economic volatility in South Africa and other markets, rising variable costs impacted profitability and our margins, while elevated interest rates made using debt more expensive.

Key decisions made in 2024

  • We secured R181 million in long-term financing for our Midrand Campus, which increased our debt levels.
  • We invested R573 million in inventory holding to secure supply and lock in better pricing.
  • We returned R410 million to shareholders through dividends.
  • We invested R184 million in capital expenditure for growth.
  • The Group completed the acquisition of a 51% majority shareholding in Famous Brands Restaurant Holdings Ltd located in Mauritius with a portfolio of 10 Company-owned restaurants.
Future capital availability

The Group’s sound financial position and longstanding relationship with our primary lender provide access to future capital.

We remain focused on organic growth across all our markets but will also evaluate acquisitions that align with our strategy.

Intellectual capital

A fiercely competitive operating environment means that competitors are willing to cut prices to attract consumers, and the barrier to entry is lower for independents. We continue to maintain and win market share due to agile marketing campaigns, high value offerings, loyalty programmes and excellent customer experience.

Key decisions made in 2024

  • We impaired Signature Brands trademarks by R12.9 million due to change in brand strategy.
  • We acquired a 45% shareholding interest in Munch Software as our strategy to digitalise our POS systems.
  • We expanded our loyalty programmes which resulted in 761 208 participants.
Future capital availability

We will continue to invest in our portfolio of Brands in our chosen categories in line with our strategy. We have the right legal frameworks to protect our intellectual property.

Manufactured capital

While imported equipment and international technologies are more expensive due to a weakening Rand, these investments may unlock operational efficiencies and increase competitiveness. New technology can involve expensive implementation costs and ongoing licencing fees, which are often Dollar-based. Consumer-facing technology investments are expensive, and selecting the right platforms, partners, and software is challenging.

Key decisions made in 2024

  • We rolled out a warehouse management system in Logistics across our eight sites.
  • We invested in new sprinkler systems in manufacturing sites for improved employee safety.
  • We installed solar systems to increase our energy independence.
Future capital availability

We will invest in essential maintenance, refurbishment and expansion across our Manufacturing and Logistics divisions to create more capacity.

We will continue to grow our footprint through Company-owned restaurants and master licence arrangements in our selected growth markets.

Human capital

South Africa and several other countries are facing a skills shortage for specialist talent who are in high demand and come at a higher price point. We must provide an attractive employee value proposition to retain our specialist employees including recruiting appropriately qualified non-executive directors to support the delivery of our strategy.

Key decisions made in 2024

  • We revised our salary band ranges.
  • We continued to leverage HR technology to improve our HR processes and the overall employee experience.
  • Adopted a new Long-term Share Plan to attract, retain and reward executives.
Future capital availability

The availability of human capital is expected to remain scarce in the short, medium and long term. We will enhance our employee value proposition to attract, retain and incentivise our talented workforce. We focus on investing in training, development and retention.

Social and relationship capital

Our South African franchise partners are operating under difficult conditions due to poor economic growth, high food inflation and load shedding. Franchise partners in other markets also face challenges due to tough economic conditions, including inflation. In addition, our consumers are looking to Famous Brands for affordable options, loyalty programmes and quality products.

Our objective is to implement and report on our ESG projects as part of the long-term sustainability of our business to benefit our various stakeholders.

Key decisions made in 2024

  • We offered load shedding financial support to South African franchise partners to ensure their sustainability, which reduces the profitability of our Brands division.
  • We offered highly attractive pricing to consumers which means that we sacrificed margin in our Supply Chain.
  • We undertook a detailed evaluation of our SDG goals to align with our strategy objectives and investments.
Future capital availability

We have confidence in our world class brands and reputation for ethical franchise management which make our franchise propositions appealing.

We will continue to support the growth of our existing and new franchise partners across all our selected markets.

Natural capital

Securing the supply of certain commodities has become more difficult due to geopolitical conflicts that reduce supply and disrupt shipping. Climate change, causing droughts and extreme weather events, also affects agricultural production in South Africa and other regions.

In South Africa, local suppliers may struggle to meet commitments due to load shedding disruptions. Water interruptions, exacerbated by load shedding, are increasingly common. Load shedding continues to disrupt our operations while increasing operating costs and capex requirements.

Key decisions made in 2024

  • We continued to invest in solar installations to bolster our energy independence and reduce our environmental impact.
  • We implemented water-saving projects at our Manufacturing plants.
  • We use debt-financing with pricing reducing when we achieve our sustainability targets.
Future capital availability

Natural capital resources, including water, are constrained. In our Gqeberha operations, we face regular water shortages. We have plans to implement water reduction and recovery projects at various plants.

Climate change is making some commodities scarcer and more costly. We will mitigate this by expanding our supplier base, both locally and internationally and by supporting emerging Black-owned suppliers.