Santie Botha
CHAIRMAN
The year 2024 brought more headwinds than tailwinds, with a constrained consumer landscape, high inflation, persistent load shedding and infrastructure failures in critical areas such as water and port maintenance. Yet, despite these challenges and lower disposable income, consumers continued to support our restaurants, especially our Leading Brands portfolio. This is testament to our brands’ enduring appeal and our agility in responding to consumer needs, especially the need for better value. As always, we carefully evaluate our menu pricing to ensure the balance between being highly appealing to consumers and ensuring our franchise partners remain profitable. The demand for our Signature Brands portfolio remained more subdued as consumers cut back on their frequency of dining out, especially in the evening.
Some factors are outside our control, and others are within. For example, while load shedding is a persistent challenge, we can make decisions to bolster our energy independence. We see opportunities to grow in South Africa, and the Group continues to invest in the future and execute against our strategy. This includes ongoing investments in consumer-facing technology, building on our warehouse capabilities and systems, solar installations and introducing technologies to make our Manufacturing operations more efficient.
Our Retail division is scaling at pace in a highly competitive environment. In 2024, we launched 14 new products and grew our retail distribution footprint further. Our Wimpy range of potato chips and hash browns continued to be star performers and further increased market share. While the Retail division makes a relatively small contribution to overall revenue, it is growing, and it is an important enabler of extending our brands into at-home consumption.
Rethinking sustainability
We acknowledge that sustainability is a business imperative and that our business choices will contribute to a better world. We will continue to make responsible choices in where and how we source our products, the packaging types we use and how we support our consumers’ health. Since 2019, we have taken steps to improve our sustainability performance with several achievements recorded over the years. We began adopting the United Nations Sustainable Development Goals (SDGs) with the selection of five SDGs aligned to the Group’s operations.
In 2024, we reconsidered our SDG selection. We realised that while we were achieving our targets, some of the key performance indicators (KPIs) per SDG and SDGs per se were not an ideal match with our business objectives. With the help of a specialist consultancy, we reassessed our current SDGs. This process included interviewing key employees, reviewing Group policies and conducting in-depth workshops in terms of future impact. This culminated in the selection of six SDGs where the mix included three existing SDGs and three new SDGs. These SDGs were incorporated into a revised Sustainability Framework and supported by a proposed social and environmental management system (ESMS) to measure, monitor and report against the framework.
The Social and Ethics Committee approved these in March 2024. From 2025 onwards, we will track our progress against the selected (revised) six SDGs, which offer a better alignment with our core business activities and will allow us to make a meaningful contribution in our chosen impact areas.
Read more about our revised Sustainability Framework.
Board changes
As announced at our AGM in July 2023, I will step down from the Board at our upcoming AGM on 26 July 2024. Chris Boulle, currently an independent non-executive director, will become Chairman of the Company with effect from the 2024 AGM. Chris is well-acquainted with Famous Brands, having been appointed as a Board member in 2014. Chris is a highly reputable attorney with more than two decades of experience as a non‑executive director of listed companies. I wish him well in his role as Chairman.
Chris will take over as Chairman of the Nomination Committee and step down as Chairman of the Audit and Risk and Remuneration Committees. With his years of experience guiding remuneration decisions, he will remain a member of the Remuneration Committee. In October 2023, Chris stepped down as a member of the Social and Ethics Committee.
Chris will be further supported by Alex Maditse, who will assume the role of lead independent director at the AGM. Alex has been a member of the Board since 2019 and has served as the Chairman of the Social and Ethics Committee since October 2021.
Norman Adami, who has been a Board member since 2015, will retire at the AGM. We thank Norman for his valuable contribution during his tenure and especially his insights into strategy and operations management. We wish Norman all the best with his retirement.
In October 2023, William Mzimba was appointed as an independent non-executive director and a member of the Social and Ethics Committee. William was also appointed to the Investment Committee of the Board. William, who holds an MBA and a diploma in Datametrics (Computer Science), was the CEO of Vodacom Business and a member of the Vodacom Group Exco and Board. His prior roles include being the CEO and Chairman of Accenture in Africa for 12 years. He brings rare expertise in leveraging digital platforms for growth, exceptional strategic thinking as well as solid corporate governance experience.
In July 2023, Deon Fredericks, our former Group Financial Director, stepped down from his position and Board membership. He was replaced by Nelisiwe Shiluvana, who had been the Group Financial Director-designate since January 2023. Nelisiwe, who has also joined the Board, is an accomplished finance professional and an excellent choice to lead the finance function at Famous Brands. We thank both Deon and Nelisiwe for their collaboration in ensuring a seamless transition.
Looking forward
We acknowledge that our growth will come from the South African Leading Brands portfolio and careful expansion in other selected AME markets. We continue to reassess the role of our Signature Brands portfolio, which currently contributes 2.6% of our revenue. While these brands have strong inherent potential, they are less adaptable in strained economic conditions.
We believe that technology and the digital space will continue to be important in reaching and serving our consumers. It remains critical to our own delivery strategy and to our success in digital marketing. This philosophy requires that we make the right investments, build our technology skills capacity and find the right external resources to guide us on this journey. Cyber security will remain top of mind throughout the Group. We successfully completed our third-year IT security plan, and our Audit and Risk Committee approved the next IT security plan to enhance our defences in 2025.
Read more about our consumer-facing technology projects.
Our sustainability relies on the quality of our people. Succession planning, especially in South Africa, is crucial to ensure the appropriate depth of skills. In many instances, skills are becoming scarcer, which means we have to protect and retain the skills that we have. This has implications for the Remuneration Committee in terms of how we remunerate our present and future leaders and the KPIs we use to measure their performance.
Appreciation
I joined Famous Brands as Chairman in June 2012 when the Group had a significantly smaller restaurant network, fewer brands and a less developed Supply Chain. Since then, it has grown into a large business and has made significant progress in formalising its governance processes, solidifying its strategy, improving its risk management capabilities and entrenching better people practices, including succession planning.
Today, Famous Brands is Africa’s leading branded food service franchisor consisting of best-in-class brands supported by significant Manufacturing and Logistics operations. Despite its incredible evolution over the years, Famous Brands has retained its entrepreneurial flair and focus on operational excellence.
While the COVID-19 pandemic years were stressful and difficult for the Group, we made the right decisions as a Board to ensure the long-term sustainability of the business. During these tough times, I engaged with executive management daily, while the Board held special Board meetings two to three times a week.
Famous Brands in 2012
- Revenue of R2.1 billion.
- Operating profit of R413 million.
- 1 311 employees.
- 2 042 restaurants.
- Represented in South Africa, 15 African countries and the UK.
We entered the pandemic with high levels of debt, which has since been managed to more appropriate levels. It was a time that highlighted the calibre of the Famous Brands people, including the Board, who rallied to protect the business and introduced innovations and better processes, many of which remain embedded in the business today.
It has been a privilege to lead Famous Brands as Chairman and to work with two visionary and talented CEOs, Darren Hele and Kevin Hedderwick. I have also thoroughly enjoyed engaging with Board members and employees. Thank you to all for your contribution to the Famous Brands success story and to the continued success of our brands.
Finally, I thank our franchise partners for representing our brands and enabling our business model. Our franchise partners are highly resilient, and many have been with the Group for several years. Thank you for your continued support and faith in our brands.
I sincerely wish the Famous Brands team continued success into the future.
Santie Botha
Chairman