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Integrated Annual Report

Governance

Investment Committee report

Investment Committee report

As the Group’s revenue comes under pressure in South Africa, we must invest in securing new sources of growth and carving our savings and efficiencies in our operations. We take a risk-aware capital allocation approach and favour capital-light investments outside of South Africa.

Fagmeedah Petersen-Cook

Fagmeedah Petersen-Cook

Chairman

Mandate

The Investment Committee supports the Board in discharging its oversight responsibilities regarding the Group’s capital allocation decisions. The Committee assists the Board in considering investment opportunities, approving acquisitions, disposals and capex, and reviewing the performance of previous investments.

Attendance and composition

Members

  • F Petersen-Cook (Chairman) (2/2)
  • NJ Adami (1/2)*
  • SL Botha (1/2)*
  • CH Boulle (2/2)
  • TF Mosololi (2/2)
  • WP Mzimba (2/2)

Invitees

  • CEO
  • Group Financial Director
  • N Halamandaris
  • Group Risk Executive
  • Company Secretary

Relevant skills profile of members

Committee members are highly skilled in investments, business strategy, and finance

* Stepped down from the Board in July 2024.

Investing for sustainable growth and efficiencies

Consumer-facing technology investments

Consumer expectations regarding digital engagement are shaped by their experiences in other sectors, including banking and retail. Investing in consumer-facing technology remains a priority to meet these expectations, unlock efficiencies and upselling opportunities. In 2025, we made significant strides toward creating digital platforms that deliver a consistent experience across multiple brands and markets, while simplifying our technology landscape. This included enhancing our e-commerce capabilities and introducing digital menu boards and self-service terminals at our restaurants.

The 2024 strategic acquisition of a 45% shareholding interest in Munch Software, a POS provider, is yielding strong commercial benefits for the Group. This investment provides Famous Brands with strategic influence on the Munch Software development roadmap, cost savings for franchise partners, and more frequent software updates and standardisation across the SA CDR network. Importantly, the Munch Software POS provides future opportunities for vertical integration with our Supply Chain.

Read more about our consumer-facing technology investments here.

Expansion outside of South Africa

The restructuring of our operations outside of South Africa into SADC and AME, completed in 2024, provided improved focus on the different capital risks in these regions. The AME markets are more difficult to manage, less profitable and require a different approach. We continue to invest in AME to set a foundation for future growth and sustainability. We remain optimistic about the medium to long-term prospects of this region.

The purchase of the Mauritius restaurants from a franchise partner, completed in 2024, has been successful. We have invested in operational stability and in capacitating employees to deliver consistently high-quality brand experiences. We are preparing the business for a sale, as we do not seek a Company-owned model in Mauritius.

Several African markets face economic headwinds and a decline in democratic principles. This requires that we approach investment decisions in these markets with caution, considering supply chain and execution challenges. Fortunately, the franchising model is relatively capital-light, and we share the risks with our master licensees and franchise partners.

Supply Chain investments

In June 2025, the project to redevelop the Midrand Campus was delivered on time and within budget. The project, for which we secured project financing in October 2024, will enhance our Logistics footprint and provide improved efficiencies for the Group and franchise partners. Our new cold storage facility is built using the latest technologies, which will reduce our energy consumption, a significant input cost for these types of facilities. We exited our Crown Mine cold facility lease at the end of May 2025.

This year, we completed the implementation of the warehouse management system across all distribution centres. The system delivers better business intelligence, planning, and scheduling capabilities. It also provides better business insights across the value chain to handle consumer demand and supply chain disruptions.

Manufacturing technology is an important lever to enable more efficient scaling, lower costs to serve, and greater innovation across our Supply Chain, ultimately benefiting both franchise partners and consumers. In 2025, we recommended the allocation of capital to technologies that provide automation capabilities, improve production yields, reduce waste and enhance the quality of raw ingredients. Many of these investments have short payback periods due to immediate cost savings and additional production capacity.

Ensuring operational resilience remains a priority through investing in solar installations. For 2026, this will include solar plants at our Midrand Campus and the Famous Brands Coffee Company. We are also investigating bolstering our water recycling, filtration and storage projects for our Manufacturing plants to safeguard against water supply and quality issues. A planned water recycling project at the Famous Brands Cheese Company will reduce our input costs in this water-intensive plant while supporting the Group in achieving its ESG targets.

In May 2024, the Investment Committee recommended the purchase of the remaining 38% shareholding of the Famous Brands Coffee Company for Board approval. The transaction, which was effective 1 March 2024, gives Famous Brands full operational control of a proven business with strong growth prospects. Importantly, it will also support the Group in managing price challenges and volatility in the coffee commodity space.

Read more about our ESG performance here.

Our focus areas for 2025

During the year in review, the Committee evaluated and oversaw the following key investments:

  • Consumer-facing technology projects and leveraging value from the Munch Software strategic shareholding.
  • Monitoring the Midrand Campus redevelopment and construction of new cold storage facility.
  • Overseeing Supply Chain investments, including the deployment of the warehouse management system and new manufacturing technologies.
  • Recommending the acquisition of the remaining 38% shareholding in the Famous Brands Coffee Company.
  • Supporting the Board in evaluating investment opportunities outside of South Africa.
  • Allocating funding to our cell captive insurance vehicle to manage our high-incidence insurance risk.

Priorities for 2026

Our focus areas for 2026 include the following:

  • Overseeing continued investment in consumer-facing technology.
  • Monitoring Supply Chain investment aimed at unlocking further efficiencies and operational resilience.
  • Assisting the Board in evaluating investment opportunities outside of South Africa.
  • Evaluate implications of King IV and the JSE’s proactive monitoring recommendations for the Committee Charter.

Conclusion

The Committee is satisfied that it has fulfilled its responsibilities per its terms of reference for 2025. I will attend the AGM to answer questions regarding the Committee’s activities.

Fagmeedah Petersen-Cook

Chairman: Investment Committee

20 June 2025

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