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30 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

Social and relationship

capital

Social and relationship

capital

• Our brands enjoy a high level of brand

awareness and trust.

• We have longstanding, mutually beneﬁcial

relationships with partners in 19 countries.

• We maintain healthy relationships with

our joint venture partners and associate

companies.

• We have strong relations with regulators and

maintain the highest levels of compliance.

• We invested R16 million in CSI initiatives

to support the communities in which we

operate (2022: R3.7 million).

• We donated R2.5 million in food aid to those

in need in South Africa

(2022: R1.5 million).

• We are executing a transformation strategy

to transform our business and maintain an

acceptable B-BBEE status.

Human capital Human capital

• We have culture-building initiatives to

support a high-performance with 4 197

employees.

• R11.4 million invested in employee training

and development (2022: R13.3 million) and

we trained 1 426 employees (2022: 404) in

South Africa, Botswana and Kenya.

• R912 million paid in remuneration.

• We have experienced management and a

diverse set of skills at Board level.

Intellectual capital Intellectual capital

• A portfolio of valuable brands with strong

prospects.

• R587 million invested by our franchise

partners into marketing funds to develop

and promote our brands (2022: R506 million).

• 17% increase in Leading Brands total media

investment (2022: 85%).

• R23.7 million in research and development

spend (2022: R19 million).

Our business model

Our creative branded food solutions and distinctive consumer

experience fuel our sustainable growth and value creation.

Our ability to create aspirational and market-leading brands that delight our consumers is key to our success.

We maintain our capacity to 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 (page 57).

Business activities

Branded food services

We are Africa’s leading franchisor with

a long track record of developing and

growing strong restaurant brands.

Our core competencies include:

• Franchise partner selection and onboarding

as well as management and support.

• Site selection.

• Brand management and marketing.

• Operations management.

• Product, format and concept innovation.

• Research and development.

Inputs

Manufactured capital Manufactured capital

• 10 Manufacturing plants that are either

wholly or partly owned subsidiaries and 8

Logistics distribution centres.

• 105 trucks in our ﬂeet.

• 88 Company-owned restaurants and a

Company-owned head oﬃce in Midrand.

• Call centre operations, online ordering

platforms and brand applications to support

the own delivery channel.

• R11 million capital invested in IT

infrastructure and Supply Chain Campus

(2022: R5.8 million).

Financial capital Financial capital

• A highly cash generative business that is

relatively capital light with a sound balance

sheet.

• A long track record of attractive shareholder

returns.

• Disciplined allocation of capital to initiatives

that yield good returns at relatively low risk.

Natural capital Natural capital

• The Group purchased 27 879 MWh of electricity (2022: 29 301 MWh) and generated 713 MWh from renewable energy (2022: 650 MWh).

• We are on a journey to improve our sustainability practices and contribute to the SDGs.

• Our Environmental and Climate Change Policy outlines our responsible practices with targets to reduce our carbon footprint, eliminate waste and reduce

our water usage.

Supply Chain

Across the Supply Chain we leverage our professional

procurement capability and buying power to secure the

best possible prices for goods and services.

We manufacture products that are sold directly to our

franchise partners and retail.

Our mature Logistics operations distribute our products

throughout South Africa and export across our borders.

Our head oce provides shared services across the Group.

The back end of our business supports the front

end.

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Outputs

Outcomes

Financial capital

We manage and allocate our capital appropriately to create long-term value for our shareholders.

R7 444 million 488 cents per share 363 cents per share

Revenue

(2022: R6 476 million)

HEPS

(2022: 356 cents per share)

Dividends

(2022: 200 cents per share)

Manufactured capital

Ongoing investment in Company-owned

restaurants, facilities, equipment, ﬂeet and IT

allows us to remain relevant to consumers

and support our franchise partners. Eﬃcient

Manufacturing and Logistics ensure we

provide high-quality, competitive products

to our franchise partners. We continued to

invest in consumer-facing technology,

cyber security initiatives and our IT

infrastructure.

We opened 152 restaurants

(2022: 118 restaurants),

Revamped 176 (2022: 149).

The majority of these restaurants

are franchised.

We invested R162 million in capex

across our four divisions

(2022: R140 million).

100% of our plants were certied

through the Food Safety System

Certication (FSSC) 22000 or Food

Standards Agency (2022: 100%).

Intellectual capital

We continued to grow and develop our

brands together with our franchise

partners. We assess the value of our

brands twice per year. We monitor our

reputation across our brands through

online tracking tools.

27 awards won in 2023 across Leading

Brands and Signature Brands.

348 trademarks, patents and

registered designs.

Human capital

Our business model relies on having the

right people with the right skills in the

right jobs to create value. We invest in

upfront and ongoing training for our

franchise partners and their employees

to ensure that all stores deliver on their

brand promise.

77% overall score for employee

engagement in the annual Voice Your

View survey (2022: 77%).

2.41% employee turnover (2022: 0.84%).

76 lost time injuries (2022: 51)

and zero fatalities (2022: zero).

Social and relationship capital

We are a brand-led and franchise partner

operated business where our franchise

partners are our primary consumers. Our

business model depends on strong,

mutually beneﬁcial relationships with

stakeholders to secure our reputation

and enable us to meet our growth

objectives. We are committed to

community upliftment through our

CSI initiatives. We contribute to the

development of the countries in which

we operate through investment and

paying our taxes.

R16 million in nancial support to

South African Casual Dining Restaurant

franchise partners (2022: R25 million)

Level 2 B-BBEE contributor status

(2022: Level 4).

Natural capital

We transform food commodities into

restaurant and retail products, and this

has unavoidable environmental impacts.

We have reduced our annual plastic

usage by 108.9 tonnes per year by

implementing more environmentally

friendly packaging. We have committed

to eliminating all single-use plastic across

our restaurant network by 2025. This will

be replaced by fully recyclable or

biodegradable alternatives. We are

committed to reducing our food waste.

R5 million invested in energy solutions

in 2023.

728 tonnes of cardboard and paper

recycled (2022: 444 tonnes), 113 tonnes

of plastic recycled (2022: 99 tonnes)

and 55 tonnes of metal recycled

(2022: 68 tonnes).

Restaurant brands

A portfolio of 17 restaurant brands across 2 887 outlets (franchised, Company-owned and master licence).

Occasion

Category Format

A range of restaurant products and ingredients that are sold directly to our franchise partners.

Waste

52 144 146 tonnes of carbon dioxide equivalent (tCO2e) scope 1, 2 and 3 GHG emissions.

1 719 tonnes of general waste to landll (2022: 1 556 tonnes).

Food waste generated in operations.

Discarded product packaging.

Consumer-inspired

Our business model

32 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

Shared ﬁnancial value as an outcome

Stakeholder sharing in ﬁnancial value created

Value

2022

Value

2023

Providers of capital

Shareholders receive dividends and beneﬁt from funds retained for future growth opportunities.

Read more in our Group Financial Director’s report on page 22.

R44 million R356 million

Providers of debt

The Group services its obligations through consistent payment of interest.

Read more in our Group Financial Director’s report on page 22.

R128 million R118 million

Employees

Employees beneﬁt from remuneration, performance bonuses, participation in incentives

schemes, and other retention programmes.

Read more in our remuneration report on page 134.

R851 million R995 million

Enterprise and supplier development

Famous Brands supports Black-owned enterprises to grow and participate in its value chain.

Read more in our transformation report on page 100.

R2 450 million R4 200 million

Socio-economic development

Our socio-economic development spend is allocated to support childhood development

and children ﬁghting cancer.

Read more in our CSI report on page 107.

R3.7 million R16.9 million

Retained for future growth

Famous Brands retains ﬁnancial reserves to invest in potential growth areas.

Read more in about our strategy on page 57.

R333 million R233 million

Government

Famous Brands pays its tax obligations in the markets where we operate.

R184 million R194 million

Total wealth distributed R3 994 million R6 113 million

Our six capitals commentary

Financial capital

Key capital trade-oﬀs in 2023 Challenges Future availability of the capital

– Challenging operating

conditions, investment in

inventories and the purchase of

the Midrand Campus for a cash

consideration limited our ability

to pay back interest-bearing

debt.

– We often sacriﬁced operating

margin at our Manufacturing

division to ensure competitive

pricing for our franchise partners.

– Measured investment in Capex

to ensure ﬂexible cash availability.

– Rising input costs impact

proﬁtability and our margins.

– Higher interest rates make debt

more expensive.

– Consumer conﬁdence limits

growth opportunities.

Local economic conditions put

pressure on ﬁnancial capital. The

Group’s sound ﬁnancial position

and longstanding relationship with

our primary lender provide access

to future capital.

We remain focused on organic

growth, although we will consider

acquisitions that align with our

strategy.

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Our business model

Manufactured capital

Key capital trade-oﬀs in 2023 Challenges Future availability of the capital

– We placed the dough plant

investment on hold as

projections did not meet the

required returns.

– Imported equipment is

increasingly expensive due to

the Rand’s poor performance.

– New technology across the

Manufacturing and Logistics

divisions includes expensive

implementation costs and

ongoing licencing fees. These

are often Dollar-based.

– Consumer-facing technology

investments are expensive and

selecting the right technology

and partner can be challenging.

– General country-wide civil

disruptions negatively impact

our delivery channels.

– Load shedding disrupts

operations and requires

signiﬁcant investment to

continue operating.

We will invest in essential

maintenance and expansion across

our Manufacturing and Logistics

divisions.

Intellectual capital

Key capital trade-oﬀs in 2023 Challenges Future availability of the capital

– We impaired goodwill in the

investment of Venus Solutions

Limited and a trademark brand

name in Signature Brands.

– A ﬁercely competitive operating

environment means that

competitors are willing to cut

prices to attract consumers.

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.

Human capital

Key capital trade-oﬀs in 2023 Challenges Future availability of the capital

– Relevant skills with expected

remuneration.

– There is a skills shortage in

South Africa and emigration

continues to erode the current

availability of skills.

– Digital and data skills are in

high demand and at a higher

cost.

– Recruitment of appropriately

qualiﬁed and experienced

non-executive directors is

diﬃcult due to a small talent

pool at this level.

– Poaching of staﬀ by

competitors.

The future availability of human

capital is expected to remain scarce

in the short, medium and long-

term. We will continue to enhance

our employee brand to attract,

retain and incentivise our talented

workforce.

Key focus on relevant training and

development.

34 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

Social and relationship capital

Key capital trade-oﬀs in 2023 Challenges Future availability of the capital

– We provided ﬁnancial support

to our franchise partners in

Casual Dining Restaurants

to ensure their continued

sustainability. This impacted

our short-term proﬁtability.

– Our franchise partners are under

increased pressure due to poor

economic conditions and load

shedding.

The current economic conditions

are not conducive to attracting new

franchise partners, especially for our

Signature Brands. However, our

strong brands and reputation for

ethical franchise management

makes our franchise propositions

appealing. We will continue to grow

our networks and several franchise

partners are developing multi-

franchise and multi-brand networks.

There are fewer potential franchise

partners in Africa due to lower

availability of funding. Here, we will

continue to grow our footprint

through Company-owned stores.

Natural capital

Key capital trade-oﬀs in 2023 Challenges Future availability of the capital

– We accelerated our energy

solution investments, impacting

our proﬁtability but ensuring

greater energy independence.

– Increased reliance on diesel

generation to ensure smooth

operations negatively aﬀected

our carbon footprint.

– The Russia/Ukraine war has

disrupted the supply of certain

commodities.

– Local suppliers may be unable

to meet commitments due to

load shedding interruptions.

– Water interruptions are

increasingly common.

– Climate-change is aﬀecting

agricultural production.

We acknowledge that natural

capital resources, including water,

are constrained. In our Gqeberha

operations, we face regular water

shortages. We are investigating

water reduction and recovery

projects at various plants.

Climate-change will make some

commodities scarcer and more

expensive. We will need to counter

this by expanding our supplier base,

both locally and internationally.

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Our business model

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

Operating context

Turbulent economic conditions

South Africa faces several economic headwinds, including

low growth, persistently high inﬂation, increased load

shedding and growing unemployment and inequality.

The prices of certain ingredients continue to drive up food

prices while packaging pricing is also rising.

Consumers have felt a deeper punch in their pockets. They

have less disposable income, eat at home to save money

and expect more for their spend. With less consumer

spending, competition has become more concentrated.

The branded food market remains competitive as brands

seek to attract and retain a ﬁnancially constrained consumer.

According to Euromonitor data, the size of the South African consumer food service market is estimated at R102 billion.

The sector is expected to exhibit a ﬁve-year CAGR to 2026 of 14% to a market size of R155 billion, with much of this

growth expected in the Quick Service Restaurant category.

The food services industry constantly evolves, and staying ahead of trends helps restaurant brands remain competitive.

From embracing sustainability practices to oﬀering incredible value or creating unique dining experiences, brands have

several opportunities to win over consumers.

According to a

TransUnion Fourth

Quarterly report

released in February

2023, 67% of

consumers surveyed

have reduced their

discretionary

spending, including

dining out and

entertainment.

Load shedding impacts consumer sentiment and results in

lost sales and higher operating costs for restaurants. Load

shedding also increases costs for our Manufacturing and

Logistics operations. There are further indirect costs related

to delayed deliveries to restaurants.

The market for potential franchise partners has shrunk

due to economic conditions. The restaurant industry is

highly exposed to load shedding, which reduces franchise

demand for restaurant brands.

We operate in a vibrant but highly competitive industry with strong growth prospects.

36 Integrated Annual Report 2023

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Operating context

How we respond

We deliver an unbeatable oﬀering that meets consumer quality, service

and price requirements. Our oﬀerings are accessible across every format

and channel. As the tough economic environment aﬀects consumer

spending, we will diversify our oﬀerings across the value/price

spectrum. We continue to grow our delivery services as consumers

gravitate towards eating at home. Our Retail brands are ideally placed

to give consumers a taste of their favourite brands at home.

Our procurement team negotiates the best pricing on bulk food

items. They investigate alternative suppliers and options should an

item become unaﬀordable.

Wherever practical and possible, generators are installed in restaurants

by the franchise partner. We also consider energy eﬃciency and

alternative sources of power in restaurant design. Our Manufacturing

and Logistics divisions rely on generators, negatively impacting the

Group’s carbon footprint. We are investing in solar installations at

some Logistics and Manufacturing operations to reduce our

dependence on Eskom.

We work hard to ensure our value proposition is highly attractive to

potential franchise partners. We remain committed to assisting our

franchise partners in weathering the current economic conditions.

Read more about how we manage the franchise partner relationship

on page 43.

Key economic indicators

Unemployment

South Africa’s oﬃcial unemployment rate is

32.7%, according to the Stats SA Quarterly

Labour Force Survey for Q4 2022. Almost four

out of ﬁve (78.3%) unemployed persons have

been looking for work for a year or longer.

Economic growth

According to Stats South Africa, the

South African economy expanded by 2.0%

between 2021 and 2022, from R4.50 trillion

to R4.60 trillion. The economy has only

grown 0.3% from the 2019 pre-pandemic

reading of R4.58 trillion.

Inﬂation

In a report published by Stats South Africa,

South Africa’s headline consumer inﬂation rose

to 7.0% year-on-year in February 2023 from

6.9% in January 2023. Prices for food and

non-alcoholic beverages increased by 13.6%

over 2022. This reading is the highest since

April 2009, which was also 13.6%. Annual

inﬂation for bread and cereals was 20.5%.

38 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

Shifts in consumer behaviour

While consumers have returned to dining out post the pandemic, many have become accustomed to home-cooked meals

or ordering-in. With many consumers working in hybrid and remote jobs, mealtimes have become more ﬂexible and spread

across the day. This can be seen by the increased demand for snacking, sandwiches and all-day breakfasts. Evening sit-down

trade has not recovered to pre-pandemic levels, and those who venture out tend to make earlier bookings.

Mega trends

Flexitarianism on the rise

Restaurants will continue to add

plant-based options to their menus

and veganise recipes or take a dish

that traditionally contains meat or

dairy and ﬁnd a plant-based

substitute.

Chicken is a star performer

Chicken represents the largest

fast-food category in South African

and other African markets. South

Africans consume about 28 million

chickens per week.

Eating for health

More consumers are health

conscious and want to eat fresher,

healthier food. For many, healthy

eating means reducing the

consumption of processed food,

sugar, fat, salt, and for some, red

meat.

Consumers and the planet

Sustainability is an increasingly consumer issue, as they

use their spending power to support brands that align

with their values. Consumers are more likely to shop

sustainably if doing so requires no changes to their

lifestyle and no additional costs.

Local shopping is lekker

Time-poor consumers demand convenience. Smaller and

more accessible local shopping centres have enjoyed

increased foot traﬃc while the delivery channel continues

to grow. Brands oﬀer consumers convenient and safe

experiences by evolving dining into drive-thru formats.

How we respond

With the shift from restaurant dining to home-dining, we will amplify our delivery services (both own delivery

and through third-party food aggregators) to extend our footprint. We continue to roll out smaller formats at

convenient locations and grow our drive-thru restaurant footprint. Our menus and packaging are designed to

meet the needs of an at-home dining experience in taste and presentation.

In 2023, we acquired a majority shareholding in Lexi’s Healthy Eatery, a Casual Dining plant-based Restaurant

brand. There is potential to grow the brand by developing plant-based Retail products that leverage the Group’s

well-established route -to-market. We will include more plant-based options on our menus.

We provide easy-to-understand information about ingredients and kilojoules across our Leading Brands’ menus

to accommodate health-conscious consumers. We comply with industry legislation regarding salt and sugar

consumption and continuously monitor it. Some menus provide low-kilojoule meal oerings.

While we do not have an exclusive chicken brand in our portfolio, we oer many chicken options on most

menus. We are also trialling a Steers Fried Chicken brand, and if successful, we will roll out this concept further.

From a sustainability perspective, we are introducing more environment-friendly packaging, reducing single-

use plastic use and minimising food wastage.

Read more about our sustainability journey on page 84.

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Operating context

The technology evolution continues

Consumer expectations are always changing. Magniﬁed by the COVID-pandemic, the digital experience is an integral

part of consumers’ decision-making process. This includes how consumers ﬁnd restaurants, order food, and pay for it.

The advent of appealing, user-friendly apps, coupled with changing consumer expectations, has unlocked food delivery

as a major category.

The digital consumer is looking for convenience, options and simplicity, and the industry is leveraging data to create a

holistic and interactive digital experience for consumers. Younger consumers are fast-paced and on the move, and their

biggest currency is time. They may prefer to pre-order a meal to skip the queues, view the menu on a brand’s website or

app, use food services apps to order from multiple eateries and prefer alternative payment methods.

This pressure on traditional restaurants could be tightened further by the proliferation of “dark kitchens”, a restaurant with

no front of house for consumers, and other delivery-ﬁrst and delivery-only restaurant models.

Social media is increasingly used to complain about or criticise brands that do not meet expectations. Additionally,

consumers are looking for a dining experience. Interesting décor and backgrounds make for shareable content.

According to McKinsey, the global food

delivery market in 2021 was worth more

than $150 billion, having more than tripled

since 2017.

How we respond

We design restaurants to attract more foot trac from younger consumers. This includes free Wi-Fi where

appropriate, oering various ways to order and growing our presence on social media platforms. Our brand

campaigns drive sales and increase consumer engagement. We use online monitoring tools to track our brands’

reviews and other social media activity.

We will continue investing in consumer-facing technology, ensuring we make the right choices. Famous Brands

is rolling out digital menu boards, digital payment options and self-ordering terminals at its restaurants. We are

always exploring technology as an avenue to enhance the overall consumer experience at restaurants and

through delivery.

Read more about our investments in consumer-facing technology on page 82.

40 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

Stakeholder management

As a people-orientated business, strong and long-lasting stakeholder

relationships are the cornerstone of our ability to generate shared value over

the short, medium and long term.

Our key stakeholders are those individuals and organisations that have an impact on or are aﬀected by our operations.

We strive for constructive engagements with stakeholders to understand and respond to their interests and concerns.

Our stakeholder management approach relies on the management principles of positive partnerships, consultation and

teamwork to achieve common goals.

Our stakeholder management framework

The responsibility for stakeholder management is shared across the Group.

Members of the Exco and representatives of functional disciplines engage

directly with stakeholders. Members of the Board may also engage directly

with stakeholders when required.

The functional disciplines embed monitoring stakeholder engagement,

including:

– Investor input and feedback through investor roadshows, one-on-one

access, and virtual events.

– Formal consumer feedback through consumer service channels.

– Monitoring social media for negative and positive reviews.

– Community involvement through CSI activities.

– The Human Resources (HR) department provides a union relationship

monitoring mechanism.

– Employee feedback through annual surveys.

– Franchise partner feedback through regular engagement, national

representative forums and annual franchise forums.

The Social and Ethics Working Group supports the Social and Ethics

Committee on an executive level to ensure eﬀective stakeholder

management within Famous Brands. The Working Group reports to the Social

and Ethics Committee regularly.

While the Social and Ethics Committee is primarily responsible for

overseeing stakeholder management, other Board Committees are also

involved. The Audit and Risk Committee supervises engagement with the JSE,

funder institutions, shareholders and investors. The Remuneration Committee

is involved with interactions with shareholders regarding remuneration

decisions.

Where necessary, concerns and stakeholder communications improvement

opportunities are escalated to the responsible senior executives, Exco or the Board.

Social and Ethics

Working Group

Functional disciplines

BOARD

Social and Ethics

Committee

Executive Committee

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Stakeholder management

Stakeholder communications

The Group’s stakeholder engagement strategy guides interactions with stakeholders. Our engagement strategies are

based on the degree to which our stakeholders impact us, our impact on them, and how we interact with them. We

tailor our engagement channels to the needs of the stakeholder, and these include electronic and written

communication, direct interaction, franchise partner and employee speciﬁc platforms as well as the media.

We use the following criteria to prioritise the relative importance of our wide range of stakeholders:

– Our dependence on the stakeholder’s support to achieve our strategic goals.

– The stakeholder’s inﬂuence on our performance.

– The signiﬁcance of the risks and opportunities linking the stakeholder to the Group.

– The risks we face should we not engage constructively with the stakeholder.

Evaluating the quality of relationships with our stakeholders

We follow an internal assessment of our stakeholder relationships and have the following three categories:

The relationship is established and generates value, but can be improved

Mutually beneﬁcial, good relationship, some opportunity for improvement

Strong, mutually beneﬁcial relationship

1. Shareholders, market analysts and prospective investors

Exco member accountable

Darren Hele,

Deon Fredericks and

Celeste Appollis

Relationship quality Key risk

Deterioration of investor

conﬁdence.

Key strategic

matters

Our shareholders and prospective investors provide ﬁnancial capital for growth, while market analysts guide our

valuation and prospects. Shareholders, market analysts and prospective investors seek reassurance that Famous Brands

presents an attractive investment proposition and sustainable growth and are interested in:

– Return on invested capital, regular dividend payments and sustainable earnings growth.

– Prudent capital allocation.

– An appropriate and well-considered remuneration structure.

– Strong corporate governance and ethical and competent leadership.

High-power, low

interest

Stakeholders have a

great deal of inﬂuence

on the Group, but

have little interest in it.

We aim to keep them

satisﬁed.

High-power, high

interest

Stakeholders have a

great deal of inﬂuence

and signiﬁcant interest

on the Group. We

want to fully engage

with and satisfy these

stakeholders.

Low-power, low

interest

Stakeholders have

little inﬂuence on the

Group, no interest in

its activities.

Lower-power, high

interest

Stakeholders have

little inﬂuence but

are interested in the

Group. We consult

them and keep them

adequately informed.

Government and

regulators

Consumers and

prospective consumers

Trade unions

Business partners and

suppliers

Civil society and

communities

Shareholders, market

analysts and prospective

investors

Funding institutions

Franchise partners

Employees

42 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

We respond by clearly and regularly communicating our investment case and delivering on our strategy to build

conﬁdence in management and the business’s long-term potential. Management has extensive industry experience and

is guided by a highly competent Board. Management endeavours to lead by example and, through behaviour and

policies, instil good corporate governance practices throughout the business.

The Group has a considered approach to gearing and leverage in line with ensuring an appropriate capital structure.

Over the years, we also made considerable progress in maturing our risk management processes.

Our remuneration and reward structures align management’s interests with shareholders. In 2023, in response to

shareholder concerns, we have reconsidered our Remuneration Policy and have proposed a revised Long-Term Share Plan.

Read more about our ﬁnancial performance on page 22, corporate governance on page 110 and how we approach

remuneration on page 134.

2. Funding institutions

Exco member accountable

Darren Hele,

Deon Fredericks and

Nelisiwe Shiluvana

Relationship quality Key risk

Breach of debt covenants

and undertakings to the

primary lender.

Key strategic

matters

Funding institutions provide ﬁnancial capital for growth and facilitate balance sheet support. They seek a mutually

beneﬁcial relationship where their funding supports our Group’s development, which makes Famous Brands a better and

bigger consumer. They expect Famous Brands to apply responsible capital management and timely payment of interest

and capital as well as compliance with debt covenants.

We have a track record of meeting our funding obligations and have cultivated support and long-term relationships with

our bankers. We ensure that covenants are met, and we proactively manage our debt maturity proﬁle.

3. Franchise partners

Exco member accountable

Darren Hele,

Derrian Nadauld and

Philip Smith

Relationship quality Key risk

Deteriorating relationship

due to our failure to meet

their expectations.

Key strategic

matters

Quick fact:

Statistics from the Franchise

Association of South Africa

estimate that the country’s

franchise industry contributes

around 15% (R721billion) to GDP.

The Small Business Institute notes

that approximately 70% of small

businesses in South Africa fail in the

rst ve years. Franchisees have an

advantage over other

entrepreneurs as they receive

ongoing assistance from

franchisors.

Our franchise partners represent our brands and are our primary source

of revenue. They are looking for a franchisor who is responsive to their

needs and is prepared to invest in the relationship. They expect:

– Return on investment.

– Strong brands, quality products and eﬃcient marketing spend.

– Eﬃcient and competitive Supply Chain.

– Advice on selecting high potential location restaurants.

– Ongoing business management support.

We view our partnerships as long-term relationships which require

ongoing attention and our franchise partners’ insights and contributions

are welcomed. Our dedicated operations teams ensure our franchise

partners receive support in managing a successful restaurant in the

areas of ﬁnance, marketing, design and development, training and

procurement. Our Manufacturing and Logistics operations strive to

supply high-quality products on time consistently.

We will continue to evolve and improve our engagement with them to

enable us to harness the unique and valuable insights they can provide.

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Stakeholder management

Managing the franchise partner relationship

We have mature franchise systems and

decades of experience growing successful

franchise brands.

We use full business format franchising, where our franchise partners uses the franchisor’s entire business

concept, including the name, trademarks, copyright, know-how and other intellectual property.

As a franchisor, we take our obligations to our franchise partners seriously. This means that we regularly engage

with our franchise partners, provide ongoing business support and continually enhance our brands.

Franchise

partner

recruitment

We receive a steady stream of franchise partner applicants, largely from referrals from our existing

franchise partners, landlords and our broader network. Franchise partners are attracted to our

brands, long track record, and reputation for sound and ethical franchise network management.

We encourage applicants to talk to at least three of our existing franchise partners to better

understand the brand and what it takes to run a restaurant. Our franchise disclosure

document contains all the contact details of our existing franchise partners for that brand.

While most aspirant franchise partners will require bank funding, they should have enough

unencumbered cash to keep their monthly repayments manageable and cover working

capital requirements.

When assessing potential franchise partners, we look for proof of people skills, organisational

ability and some ﬁnancial and business management knowledge. We complete criminal and

credit checks on all new applicants. Strong people management skills and experience are

essential as operating a restaurant requires directing employees and interacting with

consumers. Our franchise partners must have some entrepreneurial spirit but should also

accept operating within the framework of a franchise system. We seek franchise partners

who commit to being owner-operators and not investors.

Many of our new sites will be allocated to our existing franchise partners who have

expressed an interest in building a multi-franchise network.

Lease

negotiation

The right site, ﬂoor size, and favourable rental terms are essential to ensure any franchise

business’s initial and ongoing success. We assist with site selection, negotiating and

managing franchise partner leases, key landlord relationship management and rental

benchmarking. We often step in to support our franchise partners with rental

renegotiations, considering changes to economic conditions and foot traﬃc to the site.

Developing a

site

We use geographic information system technology to determine whether a site is viable.

This type of technology provides demographic data for an area, including population, age

brackets and income, while tracking economic activity, competitor activity, and transport

ﬂows into the area. We can analyse whether the site is over or under-traded and have the

consumer numbers to support the business case.

We support the franchise partner by managing all new restaurant ﬁt-outs. This ensures that

the look and feel of all new restaurants meet our stringent requirements. We have speciﬁc

equipment requirements and work with the franchise partner to select and manage

equipment suppliers and contractors. We can negotiate the best pricing for our franchise

partners through our longstanding industry relationships. Restaurants do not open until

Famous Brands signs oﬀ the site.

We open a Company-owned restaurant where a site meets all our criteria but cannot ﬁnd

a suitable franchise partner, and sell it once the right applicant is identiﬁed.

44 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

Franchise

documentation

We provide a franchise partner applicant with a disclosure document to assist them in

evaluating the franchise opportunity. It is only provided after they have signed a non-

disclosure agreement. The document includes extensive information about the franchisor,

the franchise, ﬁnancial projections, full costs and fee breakdown.

Our franchise partners sign a franchise agreement when joining a franchise. This legal

document outlines the terms and conditions the franchise partner and franchisor must

adhere to. Our franchise information system is a repository for legal documents, including

franchise and lease agreements. The typical franchise agreement is for ﬁve years, after

which it is either renewed or terminated.

Our franchise partners receive access to an online operations manual that includes

information on our brand and operational standards and recipes.

Onboarding Our comprehensive onboarding process usually takes 14 weeks for a new franchise partner.

The process includes training our franchise partners and their employees and support to

select and interview employees.

For Leading Brands, franchise partners can access an online training platform with modules

on operating the various franchises. We also oﬀer training in a classroom format and

practical in-store training, both at the new restaurant and at other restaurants.

Before a restaurant opens, we host a soft opening event for friends and family to allow the

franchise partner to test the systems and employees.

Engagement Our franchise partners received a visit from their franchise manager at least once per month.

During this visit, the franchise manager will conduct an operational audit and consult with the

franchise partner on the business’s health. The franchise manager will discuss the upcoming

menu promotions and incentives oﬀered to our franchise partners if they achieve their targets.

Franchise managers look after between 20 to 25 franchise outlets. Our franchise partners

can escalate their concerns to an operations manager or regional manager.

Our franchise partners receive a monthly newsletter on upcoming promotions and topical

industry issues. Leading Brands franchise partners have access to an online portal to access

marketing material for local marketing activities.

We have set up National Franchise Forums for each brand. This is intended to be a consultative

forum where our franchise partners provide input. Through regional roadshows, Famous

Brands shares its plans for the year ahead.

Margin support Our franchise partners beneﬁt from our vertically integrated Supply Chain. We source

products, negotiate pricing and ensure that products meet our standards. We are mindful

of keeping our price increases low and not passing through frequent increases. Price

certainty assists our franchise partners with their planning.

Number of restaurants per SA franchise partner (%)

19.06

26.55

9.36

9.16

5.83

Two stores

One store

Four stores

Five stores

Three stores

Seven stores

Six stores

Nine to 30 stores

Eight stores

16.49

25.62

11.83

8.37

5.63

2022 2023

Number of restaurants per SA franchise partner (%)

19.06

26.55

9.36

9.16

5.83

Two stores

One store

Four stores

Five stores

Three stores

Seven stores

Six stores

Nine to 30 stores

Eight stores

16.49

25.62

11.83

8.37

5.63

2022 2023

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Stakeholder management

4. Consumers and prospective consumers

Exco member accountable

Darren Hele,

Derrian Nadauld,

Philip Smith and

Andrew Mundell

Relationship quality Key risk

Loss of market share due

to failure to meet our

consumers’ demands.

Key strategic

matters

Our consumers’ continued loyalty and patronage are essential to our ongoing sustainability. We maintain and gain

market share by meeting consumer demands and leading in the categories where we compete. We value and act

on our consumers’ feedback. Consumers trust our brands to deliver:

– Strong value oﬀerings, including location accessibility and convenience.

– Positive total experience, including menu innovation and a strong dining experience.

For our brands to maintain and gain market share, they must remain relevant, accessible and oﬀer value. We enhance the

consumer experience through innovation, excellent execution and continuous improvement. We maintain our standards

through the following:

– Regular restaurant reviews and audits to ensure our high standards are maintained.

– Prioritising food quality and safety across the Supply Chain.

– An ongoing restaurant revamp programme to continue to meet our consumers’ expectations.

– Innovation to keep up with evolving trends.

– A call centre to manage queries and complaints and monitoring online and social media reviews to identity issues.

Read more about how we respond to consumer trends in our operating context on page 36 and our investments in

consumer-facing technology on page 82.

5. Civil society and community

Exco member accountable

Darren Hele, Philip Smith

and Jabulani Mahange

Relationship quality Key risk

Reputational damage to

Famous Brands due to the

actions of an unethical CSI

partner.

Key strategic

matters

Our continued license to operate depends on a sound relationship with civil society and the community. Our CSI

partners seek sustained, dependable support and an association with a reputable brand. Civil society expects Famous

Brands to operate in a way that reduces our negative impact on the environment. We are also expected to treat our

consumers, employees and communities responsibly.

Average tenure of SA franchise partners (%)

23.34

12.58

23.34

16.96

10.93 Two to four years

Less than two years

Five to 10 years

15 to 20 years

10 to 15 years

More than 20 years

21.82

11.86

26.97

16.72

13.31

2022 2023

Average tenure of SA franchise partners (%)

23.34

12.58

23.34

16.96

10.93 Two to four years

Less than two years

Five to 10 years

15 to 20 years

10 to 15 years

More than 20 years

21.82

11.86

26.97

16.72

13.31

2022 2023

46 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

Supporting the community is a key component of brand building for our Leading Brands, who run programmes to

support long-standing CSI partners. In addition, our franchise partners also support the communities where they

operate, both in South Africa and outside our borders. We have sponsored university-level sporting programmes that

develop future South Africa sporting stars.

Read more in our CSI report on page 107.

Our environmental policy outlines our commitment to responsible environmental practices. It identiﬁes critical focus areas and

objectives regarding reducing our environmental footprint and contributing to a more sustainable operating environment.

Read more about our sustainability journey on page 84 and our environmental report on page 91.

6. Business partners and suppliers

Exco member accountable

Darren Hele,

Derrian Nadauld and

Andrew Mundell

Relationship quality Key risk

Our suppliers and business

partners lose conﬁdence in

our ability to fulﬁl their

agreements and contracts.

Key strategic

matters

Our suppliers and business partners support Famous Brands in fulﬁlling our obligations to our franchise partners by

supplying important products and services. Many of our business partners contribute to the Group’s strategy execution

and expect timely payment, fair treatment and a long-term, mutually beneﬁcial relationship.

Our contractual arrangements facilitate quality and food safety adherence and transparent, healthy relationships with

suppliers. B-BBEE status and compliance are important when selecting suppliers or business partners. Our procurement

and planning teams interact with suppliers frequently to ensure successful partnerships. We are working to improve our

internal processes and fulﬁlment of commitments to suppliers.

Suppliers which are B-BBEE-compliant are eligible to participate in our annual supplier awards.

Read more in our transformation report on page 100.

7. Employees

Exco member accountable

Darren Hele,

Jabulani Mahange

Relationship quality Key risk

Failure to attract and retain

the right calibre and skills

required to meet our

strategic objectives.

Key strategic

matters

Our people are our most valuable asset and we strive to create a safe, harmonious and productive work environment.

Employees expect Famous Brands to recognise their contributions and invest in their growth and development. They

want their leaders and managers to demonstrate ethical and competent leadership. We oﬀer our employees:

– Fair remuneration and recognition.

– Equal opportunities and career development.

– Training and skills development.

– Safe working environment and job security.

– Good corporate governance and ethical and competent leadership.

Our employees are appropriately remunerated, incentivised and developed. We support the principles of transformation

in South Africa, and our transformation policy and strategies aim to uplift historically disadvantaged individuals. We are

committed to creating a learning culture. In addition to training our employees, we conduct extensive training for our

franchise partners and their employees.

Read more in our human capital report on page 95, remuneration report on page 134 and transformation report

on page 100.

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Stakeholder management

8. Trade unions

Exco member accountable

Jabulani Mahange

Relationship quality Key risk

Poor labour union

relationships lead to

animosity and potential

strikes.

Key strategic

matters

Famous Brands protects employees’ rights, including the rights to non-discrimination and freedom of association.

Famous Brands has recognition agreements with three trade unions, and 39% of employees are unionised. Trade unions

seek the following on behalf of their members:

– Sustainable earnings growth and job security.

– Fair remuneration and recognition.

– Equal opportunities, training and career development.

– Safe working environment.

We acknowledge and respect the role of unions and engage professionally and cordially to ﬁnd common ground on all

matters. By demonstrating that we are an employer of choice and a good-faith partner, we can continue to enhance our

existing mutually respectful relationship.

Read more in our human capital report on page 95.

9. Government and regulators

Exco member accountable

Darren Hele, Celeste Appollis,

Deon Fredericks,

Nelisiwe Shiluvana,

Ntando Ndaba and

Jabulani Mahange

Relationship quality Key risk

Failure to ready the

business to comply with

new legislation.

Key strategic

matters

Famous Brands is a responsible corporate citizen that pays its tax, complies with legislation and regulations and is

committed to the principles of transformation. In addition, we support the government’s developmental agenda

through our CSI activities and our responsible use of natural resources.

We have systems and structures in place to monitor changes to legislation and assess the implication of any changes on

our operations and communicate this to relevant stakeholders. Maintaining our Level 2 B-BBEE status is an important

management priority.

48 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

Our risk management

process

Famous Brands is subject to various

risks, including compliance, ﬁnancial,

operational, information technology

and strategic risks. The Board and

management are accountable for

risk management and ﬁnd an

appropriate balance between taking

risks and exercising prudence.

Our risk management framework

aligns with the Committee of

Sponsoring Organizations of the

Treadway Commission Framework

and has remained solid and mostly

unchanged over the past year. Since

our strategic choices reduce risks,

risk management and the Group’s

business strategy go hand in hand.

Famous Brands is careful to avoid

subjecting the Group to risks that

exceed the risk appetite.

Risk management is the

responsibility of the Audit and Risk

Committee, which provides regular

updates to the Board. The Audit and

Risk Committee sets out the Group’s

risk appetite based on the level of

risk it is willing to accept in pursuit of

the Group strategy.

At an operational level, the Group’s

current and potential risks are tracked

by a specialised Risk Forum

comprising Exco members and

representatives from Internal Audit

and other divisions. This forum also

allows Famous Brands to realise

innovation opportunities by exploring

the opportunities related to risks.

In line with good governance

practices, every local and foreign

legal entity has a duly constituted

Board. We have an established

Risk management

Our risk appetite level largely remains cautious rather than aggressive.

This has made the Group more resilient and adequately responsive to

difficult local and global socio-economic conditions.

process to ensure that these entities

prepare their own risk register, which

is tabled at entity Board meetings.

Together with the Risk Forum, the

Committee and the management

team foster a culture of risk

governance and awareness

throughout the Group. The Group

receives expert advice from our

Group Risk Executive on properly

incorporating risk management

procedures into daily operations.

The Group Risk Executive and other

risk specialists are involved in the

development and execution of

business strategy, including

implementing key action plans.

They are present in project teams as

a sounding board on potential issues.

Key risks are identiﬁed based on the

following:

–Risk-bearing capacity: The

capacity to absorb risk-related

losses without threatening the

Group’s ongoing sustainability

based on its current business

model.

–Risk appetite: The amount and

type of risk the Group is willing

to accept in pursuing its strategic

objectives.

–Risk tolerance: The acceptable

levels of variation relative to

achieving the Group’s strategic

objectives.

Compliance monitoring

Famous Brands is developing a

comprehensive regulatory

compliance framework to map the

relevant legislative universe across

each geography. This framework

aims to lessen the chance of not

meeting regulatory requirements.

We track our Protection of Personal

Information Act (POPIA) compliance

and use the internal audit assurance

process to identify improvement

areas. The Group is in the process

of aligning business operations

to data protection laws across all

our markets.

In the new ﬁnancial year, we will

explore implementation of a

governance, risk and compliance

(GRC) tool to facilitate the

assessment and consistent

management of regulatory

compliance in all our markets.

Famous Brands conﬁrms

that there were no unexpected

or unusual micro risks that

materialised outside of our

risk appetite.

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Risk management

Improving our risk

management in 2023

Enhancing data risk

management

In 2023, data risk management was

prioritised and the Master Data

Department now reports to the

Group Risk Executive. The Master

Data Department acts as a core data

gatekeeper to ensure that data is

clean, appropriately integrated and

secured. We are exploring ways to

drive robust data analytics through

this department to provide better

data risk insights to the business.

Insurance model and insurer

risk reduction requirements

The insurance market continues to

harden with insurers repricing risk

and revaluating the risks they will

cover. In 2022, Famous Brands

completed a Group-wide insurance

review, and in 2023 we completed

the work to optimise our insurance

model. We are conﬁdent that this

work has ensured that our insurance

model is appropriate and will address

uninsurable and diﬃcult to insure

risks in the medium to long-term.

In 2024, we will commence

optimisation of the insurance cell

captive with our partners.

In addition, we are implementing the

insurance risk reduction requirements

set by our insurer. This included

improving how we secure and protect

our physical operations and assets.

Implementing the three-

year IT security plan

In 2021, we completed a security

gap analysis with an external service

provider to understand our maturity

level and benchmark our security

environment against relevant

industry standards such as the

National Institute of Standard and

Technology (NIST) and ISO 27001.

The ﬁndings from this report were

utilised to develop Famous Brands

three-year IT security roadmap, to

assist the group in maturing their

IT security environment.

In 2023, the IT security team

together with their strategic partners

worked through implementing year

two of the three-year IT security

roadmap. We have made signiﬁcant

strides in improving the overall

security maturity over the past two

years. These improvements include

maturing the following:

– Application security

– Data security

– Endpoint and mobile security

– Security operations

– Human security

– Infrastructure protection

– Network security

– Threat management

– Identity and access management

With the support of an independent

cyber security expert, we continue

to conduct annual penetration test

and breach attack simulations, to ﬁnd

and exploit vulnerabilities in our

environment. This is over and above

the vulnerability management

programme implemented this year.

Famous Brands continue to focus

on human security, where we are

investing in employee training and

awareness programs to ensure that

all employees understand and

adhere to security protocols.

We have set ambitious targets for 2024

to continue our upward trajectory in

terms of security maturity. This will

well-position the Group to stay ahead

of evolving security threats and

maintain the trust of its consumers,

stakeholders and partners.

Focus areas for 2024

Famous Brands continues to

enhance its risk management

capabilities, with the following

being focus areas for 2024:

– Reinforce business resilience against

business interruption events.

– Deployment of tools to drive risk

management automation and

analytical capability.

– Optimise the cell captive

insurance model.

– Enhance ESG risk management

capability.

– Implementation and

enhancement of the three-year

IT security roadmap/plan.

50 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

Key risks

The Group’s top ten key risks are deﬁned below, along with their

potential impact, our mitigating actions, and the potential upside

they oﬀer. We have identiﬁed both internal and external risks. We

indicated impact categories based on the tolerance levels across

the four areas: ﬁnance, reputation, consumer and employee. The

likelihood is based on the probability of occurrence.

Quick fact:

According to the World Economic

Forum’s Global Risk Report 2023,

the world’s top current risks are

energy, food ination and the

overall cost of living crisis. Over

the next two years, the cost of

living crisis remains the number

one threat, followed by natural

disasters and trade and

technology wars.

Likelihood

Almost

Certain

Likely

Possible

Unlikely

Rare

Not Signiﬁcant

Minor

Moderate

Major

Critical

Impact

1 2 3

4 5

7 8

1 Sustainable revenue growth post

COVID-19 still uncertain due to

macro risk factors

2 Information security breach

through cyber and internal attacks

3 Onerous capital requirements on

consumer-facing technology to

maintain competitive edge

4 Unreliable electricity supply

negatively impacting Supply Chain

and restaurants

5 Supply chain disruptions

6 Inability to respond appropriately

to business disruption

7 Increasing regulatory environment

8 Uncertainty over franchise partner

sustainability and proﬁtability post

the COVID-19 impact

9 Ineﬃcient ﬁnancial systems and

processes

10 Loss of reputation and severe

brand damage

Inherent risk

Inherent & Residual Risk Rating

12 12 12

9 9 9 9

16 16 16 16

12 12 12 12 12

Residual ratingInherent rating

10987654321

Inherent & Residual Risk Rating

12 12 12

9 9 9 9

16 16 16 16

12 12 12 12 12

Residual ratingInherent rating

10987654321

Inherent risk heatmap

OUR STRATEGY SUSTAINABILITY GOVERNANCE REMUNERATION FINANCIALS SUPPLEMENTARY

INFORMATION

Risk management

1. Sustainable revenue growth post COVID-19 still uncertain due to macro risk factors

Potential

root causes

Potential impact

on value

Residual mitigation

actions

Strategic matters

Opportunities

– Leverage our presence

in AME.

– Leverage ﬂexible trading

formats, including

potential growth in the

drive-thru format.

– Leverage own home

delivery capability.

– Leverage business

intelligence and consumer

relationship management

(CRM) technology.

– Menus and basket

innovation.

– Retail product growth.

– Consumers face

extreme pressure

due to high inﬂation,

increasing energy

costs, rising interest

rates, and a slow

economic recovery.

– Increased local

and global political

instability, including

the continuation of the

Russia/Ukraine war.

– Competition from

third-party food

aggregators remains

ﬁerce.

– Operating

margin pressure.

– Impact on

shareholder

returns.

– Market share

decline.

– A strategic plan is in

place to deliver on

diﬀerent formats and

channels. The big

box format legacy

around Casual Dining

Restaurants is being

addressed via a smaller,

more agile footprint.

– Company-owned

store defence strategy

is in place to protect

key sites and overall

market share.

– Cash generation and

preservation remain

critical.

– A ten-year strategic

plan is in place with

a key focus on

growing our brands

in South Africa and

selected markets.

2. Information security breach through cyber and internal attacks

Potential

root causes

Potential impact

on value

Residual mitigation

actions

Strategic matters

Opportunities

Beneﬁts from enhanced

technology.

– Potential IT structure

misalignment

with complexities,

governance and risks

associated with the

Group’s technology

stack.

– Failure to adequately

address identiﬁed IT

security and general

control vulnerabilities.

– Loss of

intellectual

property.

– Regulatory

contraventions.

– Systems

downtime.

– Reputational

damage.

– Famous Brands with

its strategic partners

are eﬀectively

implementing a

three-year IT security

plan which includes

enhanced cyber

security control

measures.

– Cyber security plan

has been overlayed by

combined assurance

model which provides

both internal and

external assurance.

52 Integrated Annual Report 2023

OUR 2023 REPORT GROUP PROFILE INVESTMENT CASE LEADERSHIP REPORTS BUSINESS MODEL

3. Onerous capital requirements on consumer-facing technology to maintain competitive edge

Potential

root causes

Potential impact

on value

Residual mitigation

actions

Strategic matters

Opportunities

– Market share gains.

– Operational eﬃciencies

achieved.

– Enhanced consumer

experience across multiple

touchpoints.

– Competitors are

investing ahead of

the curve in response

to current and future

consumer trends.

– COVID-19 has

accelerated the

consumer shift to

convenience enabled

by technology.

– Cashﬂow

pressure.

– Revenue loss.

– Market share

erosion.

– Group-wide

enterprise

architecture and

structure strategy

is in place to cover

operating system

architecture and

consumer-facing

technology.

– Execution of key

consumer-facing

technology initiatives.

– Regular enhancements

of online experience,

payment processes,

data analytics and

consumer relationship

management.

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