Our strategy is designed to achieve our vision of being the leading innovative branded franchised and food services business in South Africa and selected markets.
Our strategy sets a framework for the Group to focus on creating value in the short, medium, and long term. Each year, the Board reviews strategy implementation and endorses a three-year corporate strategy in tandem with the Group Budget and Business Plan.
Our strategy achievements over the past five years include:
- Grew our revenue 8% to R8 billion (2023: R7.4 billion).
- Increased our market share for Leading Brands in South Africa.
- Expanded by 150 new restaurants in our South African footprint.
- Supported our franchise partners through COVID-19 with R158 million in financial relief.
- Provided energy relief to support the sustainability of our franchise partners for sales generated during load shedding.
- Executed our strategy to optimise our Logistics footprint.
- Reduced our Manufacturing plants from 14 to 11 to improve profitability and enhance operational efficiencies.
- Improved our B-BBEE contributor score from a Level 7 to a Level 2 in 2023 and maintained the same level in 2024.
- Returned R410 million in dividends to shareholders.
- Formalised and refined our ESG strategy with improvements every year.
Our strategy process
The Exco, collectively develop the three-year Corporate Strategy (this year, 2025 to 2027) alongside the annual Group Budget and Group Business Plan. The process involves a comprehensive analysis of the operating environment, undertaking a strengths, weaknesses, opportunities, threats review and determining the required resources and capabilities.
2024 strategy execution at a glance
Healthy financial metrics
- 8% revenue growth.
- Margins stable despite inflationary conditions.
- 13% increase in capex to fund our future growth.
Steady progress with long-term initiatives
- Digital enablement in our restaurants.
- Success of the delivery hub concept.
- Ten-year Logistics strategy execution nearing completion.
Famous Brands is growing
- 137* new restaurants opened.
- 27 net new restaurants.
- One new market opened.
- 14 Retail products launched.
| * | 11 Fego Caffés converted to 10 Mugg & Bean and 1 to Vovo Telo. |
1. Create supply chain of the future
Remodelling our Supply Chain is a key pillar of our strategy. This not only fortifies the Group’s long-term sustainability but also bolsters our aspiration of providing high quality output, reducing waste and use of natural resources.
Performance in 2024
We continued to improve our Supply Chain focusing on rollout of technology and creating capacity.
- We rolled out the new warehouse system at our distribution centres, with one final distribution centre to be completed in 2025.
- We began to redevelop our Midrand Campus to optimise our Gauteng Logistics network to relocate our cold storage facility to Midrand.
- We continued to roll out systems (financial, compliance management and people management).
- We invested in solar installations to increase our energy independence from Eskom.
- We continued to execute our ESG strategy to reduce our greenhouse gas (GHG) emissions and water usage.
Focus areas for 2025
- Develop a roadmap for refurbishment or relocation of our manufacturing plants.
- Complete the rollout of the new warehouse management system across all distribution centres.
- Relocate the Gauteng cold storage facilities to Midrand.
- Explore use of state of the art technologies.
Key metrics
We gauge our performance by revenue growth and operating profit growth, ensuring a robust and secure future for our stakeholders.
Link to remuneration
Our Long-Term Share Plan includes KPIs regarding efficient operating practices, such as reducing GHG emissions and water usage.
Read more about our operational performance for 2024
2. Lead in the brand categories we compete in
We are passionate about creating great consumer experiences through innovation, flawless execution, and continuous improvement. The food services industry is highly competitive, and we must ensure our brands are differentiated through their irresistible consumer appeal.
Performance in 2024
We continued to focus on organic growth in our Leading Brands portfolio in South Africa, SADC and AME markets. We maintained and won market share in South Africa and received 19 awards across the portfolio. We continued to invest in consumer-facing technology to enhance our consumer experience and own delivery capabilities. This included acquiring a strategic shareholding in Munch Software.
- Net restaurant growth of 27 across our markets.
- Entered Côte d’Ivoire with first restaurant opened.
- Grew our franchise networks in South Africa and selected AME markets.
- We revised our operating structure for AME to lower costs and renew our focus on difficult AME markets outside of SADC.
- Invested in technology, capacity and capability to remain at the forefront and competitive within the home delivery marketplace.
- Enhanced the consumer experience across our online platforms and brand applications.
- Continued to provide value offerings to entice the price-sensitive consumer.
- Supported own delivery and continued to roll out the delivery hub concept in South Africa.
- Invested in Manufacturing and Logistics capabilities.
- Introduced 14 new Retail products.
Focus areas for 2025
- Increase our drive thru presence in South Africa.
- Continue to roll out the delivery model to enhance our own delivery capabilities.
- Enter the Egyptian market.
- Grow Leading Brands in SADC and selected AME markets.
Key metrics
We measure our performance through internal research metrics and like-for-like sales growth1.
| 1 | Like-for-like sales refer to sales reported by all restaurants across the network, excluding restaurants opened or closed during the year. |
| 2 | SBG Securities research available at https://thevault.exchange/?get_group_doc=275/1678176549-SBGSFamousBrandsInitiation-Preparingtofeast.pdf |
Link to remuneration
We consider our Google rating across our brands and net store growth in South Africa, AME and the UK as KPIs in our 2024 Group Scorecard for STIs.
Our growth areas
We recognise that we need to increase our drive thru footprint to meet consumer demand for this channel. In 2024, we opened five new drive thrus and we plan a further rollout in 2025.
Smaller formats with lower capital and operating costs are key to our growth strategy. This includes the Mugg & Bean On-The-Move and Debonairs Pizza Express concepts. Milky Lane employs the hub and spoke model to capitalise on vending opportunities through ice cream carts.
We continue to grow in the AME region with a narrow but deep focus on selected markets. We restructured the AME management structure to lower costs and provide focus on more difficult markets.
We continue to drive frequency and loyalty among consumers with our brand apps and loyalty programmes. Both Wimpy and Mugg & Bean apps have an over 70% redemption of loyalty points.
Our partnership with Pick n Pay for The Roastery has been successful. We have a presence in 40 stores and interest from both Pick n Pay corporate stores and franchised stores.
Our Retail division continues to scale with a 35% increase in revenue to R368 million and 14 new products introduced. Retail provides important brand extensions and allows us to capitalise on at-home consumption.
Read more about how we manage our brands.
3. Prioritise our franchise partners
Our franchise partners represent our brands, which translates into our success. We develop close, mutually beneficial relationships with them. We regularly interact with the national franchise forums for each brand, and set metrics are evaluated. These metrics are strategic and, therefore, not disclosed.
Performance in 2024
We considered our franchise partners in every major strategic decision. We monitored our menu pricing closely and often absorbed price increases in our Supply Chain to offer franchise partners highly competitive pricing.
- Provided financial support to South African franchise partners to assist them in coping with higher load shedding levels.
- Reconfigured the design or revamp of restaurants to address electricity supply shortage.
- Where necessary, supported franchise partners with renegotiations with landlords.
Focus areas for 2025
- Close the alternative power solutions gap in South Africa.
- Explore opportunities of water solutions at restaurant level.
Link to remuneration
Net store growth in South Africa, AME and the UK as KPIs in our 2024 Group Scorecard for STIs. We will only grow our networks if we support our franchise partners to thrive.
Read more about how we manage the franchise partner relationship and how we are working with South African franchise partners on managing load shedding.
4. Optimise capital management
We focus on organic and acquisitive growth in South Africa and selected markets. We ensure that capital is correctly deployed to meet operational requirements, service debt, support future growth and pay dividends to shareholders when appropriate.
Performance in 2024
Our net debt:EBITDA ratio increased as our capital needs increased, and we drew down on our facility. Our debt levels remain comfortable, and we are well within our bank covenant.
- Secured long-term financing for redeveloping our Midrand Campus.
- Acquired a 45% shareholding in Munch Software for our consumer-technology strategy and 51% shareholding in Company-owned stores in Mauritius for restaurant network growth.
- Focused on working capital management to boost free cash flow.
- Tightly controlled the capital investment programme and made sound capital investment and budgeting decisions.
- We increased our investment in inventory holdings to secure better pricing and reduce the risk of product shortages in some key commodities.
Focus areas for 2025
- Continue to pay down credit facilities.
- Completing the Midrand Campus redevelopment and relocating our cold storage facility.
- Investment to refurbish our Manufacturing operations.
- Continue to improve working capital management.
- Initiate refinancing plans.
Read more about our capital management in our Group Financial Director’s report.
Key metrics
Our net debt:EBITDA ratio is a measure of our liquidity position and financial health.
