RFG Holdings Limited (RFG) Earnings Call Transcript & Summary

Warm welcome from [indiscernible]. Thanks everybody to the RFG 2021 annual results presentation for the year ended September 2021, and we all welcome to those questions on the webcast, which we look at after the presentation. If we look at the RFG presentation topline, myself will cover the review of the year and the financial review will be covered by Tiaan Schoombie my colleague. I will then go over through the trading review, make some comments on the capital investments and then the strategy and outlook. Just before I start, Took over as CEO as of the 1st of October from Bruce Anderson to Hanekom. So if you look at the review of the year, some comments, good operating performance in COVID-19 impacted environment with stronger H2 result with the good recovery in fruit juice and international canned fruit volumes. Our normalized operating profit increased by 9%. Unfortunately, result was impacted by an adjustment for prior year electricity costs, which will be mentioned during the financial review. Significant input cost pressure, particularly in the second half of the financial year. And our international volumes, which was lower for the full year owing to global and local shipping and logistic challenges. The acquisition of Today frozen pie business will be effective from February 2022. And with this, I hand over to Tiaan Schoombie, who will go through the financial review.

Good morning, everyone. Group revenue grew by 1.5% to ZAR 6 billion for 2021. The regional revenue grew by 4.1%, but whilst the growth was partially negated by international revenue, which decreased by 8.2%. The Rand strength during the year negatively impacted international revenue by approximately ZAR 136 million. However, the natural hedge in the business partially compensate for this when it gets to operating profit. The operating profit declined by 4.9% to ZAR 373 million for the year. Regional operating profit grew by 6.1% year-on-year, but international operating profit was down by 86.5% granted off a relatively low base in 2020. The operating profit includes net foreign exchange gains of ZAR 26 million in the current year compared to net losses of ZAR 55 million in the prior year. And these gains and losses are the gains and losses that are recognized on revaluation of foreign currency-denominated assets and liabilities. The biggest in the -- at the moment being trade receivables, and then obviously, cash on hand from time to time in C accounts. We incurred an impairment loss of -- sorry, of ZAR 16 million in the first half of the year already relating to the KZN properties, which were disposed of during the year and the proceeds from that amounted to ZAR 25 million. As Pieter has mentioned, the results include a once-off adjustment for electricity cost of ZAR 27 million, this costs go back to the 2019 financial year, but we had to recognize this in the second half of the current year, late in the second half of the currency -- current year. We were made aware of this. Net interest expense is ZAR 22 million lower than the prior year due to lower interest rates in the current year. Headline earnings increased by 1.4% to ZAR 230 million. We've diluted HEPS increasing by 1%. The dividend per share that was declared amounts to ZAR 0.291 per share versus ZAR 0.288 per share in the prior year, and this is consistent with the dividend policy, the group has been applied since its listing. Excluding these one-off costs, normalized operating profit growth by 9% to ZAR 419 million, and the normalized operating margin improved by 40 basis points to 7% for the year. The regional operating profit grows by 17.9% to ZAR 412 million, and the margin improved by 100 basis points to 8.6%. International operating profit ever is ZAR 28 million lower year-on-year, and the margin declines from 2.8% to 0.6%. The normalized headline earnings increases by 18% to ZAR 253 million. Group revenue grew at a compounded annual growth rate of 6.7% since the 2017 financial year. The drivers of turnover growth in the current year. Volume growth contributing 1.1% price mix changes, 2.7%, but stronger Rand negated that by 2.3%. Over the last 3 years, revenue growth set out there. On this slide, just a few points to note, following the negative volume growth in 2020, it's good to see that the group achieved positive volume growth in 2021 despite lower export volumes. And then in terms of the currency, the significant negative contribution to revenue growth of the stronger Rand compared to the prior year. Excluding the impact of currency and acquisitions, Revenue in this year grew by 3.8% versus 4.6% in 2020 and 6.3% in 2019. The revenue analysis by half in 2019 and 2020, basically the same revenue in each half of the respective years; however, 2020 second half revenue was adversely impacted by the lockdown following the outbreak of the COVID-19 pandemic. But good to see the turnaround in 2021, where good growth in the second half of the year compared to the first half despite the impact of the stronger Rand. That impact of ZAR 136 million mainly arose in the second half of the current year. Segmental revenue contribution Fresh staying flat on 29%, Regional Long Life growing to 32%, and that's at the expense of international, which has gone from 21% in 2020 to 19% in the current year. Just a 5-year analysis by half of the normalized operating profit. You can see in the last 3 financial years, the second half were more profitable than the first half or more profit were contributed in the second half versus the first half. What's important to note here is that, again, is the impact of international in 2020 versus 2021. International made a profit in the second half of 2020 of ZAR 82 million and in 2021, in the second half, only ZAR 7 million. So the point I'm making is that the results is largely impacted by the performance, by international. There's really a stunning performance in the current year by Regional. Then this slide basically talks to my previous comment. As you can see over the last 5 years, very, very muted contribution to group operating profit by the International segment. Earnings and dividends over the last 5 years, again, not the growth that we would like to see. But nevertheless, good to see that earnings are still growing since the lowest of 2018. International revenue by currency. A big swing towards U.S. dollars in the current year. And then the impact of that swing because as you can see in the bottom right-hand corner, the rates that -- the average rates that were realized in 2021, basically in line with those realized in 2019 and materially down on the rates that were materially realized in 2020. So the impact on that, again, like I've mentioned earlier, in 2021, it reduced turnover by approximately ZAR 136 million, but in 2020 and 2019, respectively, contributing an additional ZAR 173 million and ZAR 78 million to revenue. In terms of currency hedging. Like we've advised before, following the increase in the natural hedging in the business, we've stopped the previous practice of enter into foreign exchange contract because the hedge gives us adequate hedge. So that natural hedge covers approximately 40% of foreign sales or that's international revenue, if you want. And in the regional segment, albeit that there's a significant natural hedge, also at play there, it goes into the day-to-day management of pricing and margins because our competitors are often in a similar position to us, and when they said headwinds or tailwinds obviously in the market that plays out through the pricing that's offered and we have to offer. Working capital, higher at 26.2% of revenue versus 24.9% last year. It is reflected in the working capital days, which is net working capital days that has gone up by 4 days to 120. And the reason for that being inventory is higher than by 3 days at 101 days, and that's due to slower export volumes in the current year or lower volumes in the current year and bigger deciduous crop. And trade payables also 4 days longer. That, again, is a result of higher export shipments towards the end of the current financial year. And that's as a result of shipping challenges that we are experiencing, which is not unique to our business. Free cash flow. It's down by 213 [indiscernible] year-on-year. And again, the main contributors to that is an increased investment in working capital, higher income tax payments in the current year, and that's a result of a normalization of the timing of our provisional tax payments, higher capital expenditure partially offset by bigger proceeds on disposal of assets, the biggest being the KZN properties. Capital management. The free cash flow of ZAR 227 million went towards payment of dividends, interest and loan and lease payments. That gave rise to a funding requirement of [ ZAR 176 million ], and that was funded through raising of new medium-term loans to the amount of ZAR 75 million and ZAR 101 million increase in net short-term borrowings. Ratios. Net debt to equity improving to 39.4%. Net debt to EBITDA, in line with the prior year. Obviously, impacted by the lower EBITDA in the current year. The return ratios fall down on the prior year, but if one would exclude the one-off cost, it would be slightly up on the prior year. And then in terms of the '22 financial year, just to normalize or to synchronize our financial years because we work on a 52-week financial year. '22 will be a 53 week here, and that extra week has already been taken in October of this year. So the first month of our '22 financial year. As a result of that, there will be 3 income tax payments in 2022, which will obviously impact cash generation and free cash flow. The effective income tax rate is expected to be in line with the 28% corporate rate that will still prevail for the group. The business is no longer exposed to the impact of mark-to-market valuations of FECs, and we're working hard to normalize the working capital situation as early as possible in '22. Thank.

Thank you very much, Tiaan. I will cover the rest of the presentation. At this time, segmental revenue contribution consist of Long life foods contribution up from 50% to 52%, and that was mainly owing to recovery in fruit juice volumes, which I will mention of a bit later in my presentation as well. Fresh foods were consistent with the prior year, and the lower international revenue due to exchange rate and the lower volumes to that percentage from 19%. If I look at the regional performance, I think really pleasing performance. Revenue up for 4.1% with Long Life up by 5.1% and Fresh foods business, up by 2.3%, but specifically pleasing is the normalized operating profit up by 17.9% to ZAR 412 million. Normalized operating profit margin by 100 basis points to 8.6% from 7.6% which is also pleasing. And just giving you a breakdown of the turnover growth. Volumes increased by 2.4% and then 1.7% price/mix. Some point, Fruit juice and pies were affected by the lockdown restrictions, and that was mainly in H1. As you would know, we're very strong in the 200 milliliter pack size in fruit juice. And obviously, with the closing of the schools, we were mainly affected by that. And then sales were also impacted in the second half by Gauteng strike and KZN civil unrest. I think good to know there is a sustained recovery in fruit juices. Volume growth of 52.7% in H2, as I had mentioned, our strength in the 200 milliliter small pack sizes, specifically to the schools and then a 10% volume growth for the full year. Fresh foods volume down by 2% for the full year, but in the second half, up by 2.4%. Ready meals and dairy products were resilient in current weak consumer climate and Pie sales recovered and grew volumes by 6.7% in second half. Also an important strategic driver for us is our performance in rest of Africa. The sales of our long life foods increased by a very pleasing 11.5% to ZAR 361 million and in fact the accounts for about 11.8% of regional long life sales. Our specific growth drivers are fruit juice, dry foods, canned meat and vegetables. We've got excellent long-term relationships with major distributors and our customers in the Africa. And as you can see on the map, we sell into 1 other African countries. If I look at the market shares, by starting off looking specifically at our market share as manufacturer, as you know that we're also involved in effective dealer and brand. And If you look at the first slide, 3 of them, in the #1 position, the Jams, Canned fruit, and Canned meat & meals, and then Canned vegetables, the solid 2 position, and then in long life fruit juices also #2 position. Obviously, with the picking up in the second half of our 200 milliliter small packs in juices specifically, we will continue to drive that. Regarding specifically our Brand Share. In Jams, as Rhodes brand with #2 position as well as the Canned food #1 position, keeping that position intact. Canned pineapple as well as canned tomato then canned vegetables at #2 position. If I look at our Brand Shares. The very strong Bull Brand, we are about probably #1 with the 62.9% share. And then specifically increasing is our growth that we continue to achieve specifically from brand perspective in Infant meals moving from to 11.3% share, the #2 share. 100% fruit juice also the #2 and then with Bisto brand and Coatings & crumbs, Southern Coating is #1 brand in those specific categories. And then also one of our strategic growth categories are Spices, herbs & pepper with Hinds brand, very pleasing to see a 5.2% share that we received in the September '22 year. Obviously, also very important for us is to focus on new products, specifically with regards to Rhodes brand, some additional flavour extensions in our juice category, also extends range extensions in spices and then we've also upgraded the Rhodes tomato range. Then we've managed to secure the Pick n Pay private label fruit juice range, which we started to pack at the last part of [indiscernible] and then also relaunched the Spar Pressed and Squeezed fruit juice range and also entered into an agreement with Clicks on Friday night for baby puree range. As we are Woolworths being one of our big customers, also some new products that we launched there and also specifically to mention also entering the plant protein category with those products. If I then move over to the international business, looking at trading performance there. If you look at the map of the world, you can see quite a nice spread. We were continued to focus on -- specifically on the revenue management there. When looking at our price volume margins in those specific countries and looking at opportunities to expand also into other parts of the world. I'll also make a mention of that here in my strategy review. If I specifically look at the trading performance of the International business, revenue down by 8.2%, as mentioned by Tiaan and also the normalized operating profit down to ZAR 7 million and our normalized operating profit margin only 0.6%. If I look at the breakdown of the turnover growth, it was -- volume was declined by 3.3%, Forex negative 11%, as mentioned by Tiaan and then a price/mix increase of 6.1%. We also made mention of the net foreign exchange gains on revaluation of Forex assets and FEC revaluations in the prior year of ZAR 26 million, which compared to the loss of ZAR 55 million in 2020. Some comments there, Strong volume recovery in the second half, although, as mentioned, ended the year at 3.3% lower, with H1 volumes down by 20.7% and then recovered well in H2 volumes up 8%. I think important to note that we continue to see a good demand for our SA premium quality canned fruit and fruit snacks in plastic cups. Unfortunately, we still got the impact of shipping backlogs and local congestion, which we foresee that will continue at least for the next year. Currently, 80% of our exports are from our Tulbagh plan and the balance from Eswatini, and we expect to see a shift to 70%/30% over the next 4 years as our new pineapple crops in Eswatini come on stream. There is couple of comment on Capital Investments. Our manufacturing facilities are well spread across the South Africa and Eswatini with 14 facilities. Important to note and, make a bit of mention of that also in my strategy comment. We are well capitalized with over ZAR 1.7 billion that we invested in facilities in the past 5 years. So we've got ample capacity available to increase utilization and then our ability to scale production as shown during the COVID-19 lockdown period. If you look at the CapEx investments. We aimed at generating efficiency gains. We will be very strict on CapEx. Looking at 3-year payback period, if we look at the 2021, we expensed CapEx of ZAR 220 million -- sorry ZAR 222 million, certain products might be delayed, just making mention of some of the major expansion projects at the end of the year. We installed the new fruit juice line. We upgraded our Gauteng bakery and pies. We are in the process of putting up a new warehouse at fruit juice plant in Wellington. And some other expansions, given expansion expenditure of ZAR 93 million. Our ratio of maintenance CapEx/turnover is 1.9%, against 2020 of 1.5%. We plan to spend CapEx in the region of ZAR 200 million for the FY 2022 year. I am proud to make mention of our renewable energy project. We completed our first solar installation at the fruit juice in Wellington, and this is our first site moving us towards the renewable energy, and we're in process looking at some other sites in the rest of the -- in the country as well. We've also, as I made mention, busy with expansion -- expanding our warehouse at that specific Wellington facility. I have made mention of our capital investment programs just gives you some info on our maintenance CapEx. And compared to the prior year, and as make mentioned, plan has been ZAR 200 million in the '22 financial year. Moving over to Strategy and Outlook. Important to note, we like [indiscernible] by a specific strategic purpose that we focus on being a diversified food group, value-added meal solutions, market-leading brands, partnerships and alliances and world-class manufacturing facilities. Looking specifically at the strategic drivers within those points to mention from diversified food group perspective, we will continue to expand our African footprint beyond the current 16 countries. I've shown you the successes that we've managed to achieve over the past year. We will continue with bolt-on acquisitions, which are available. I also made mention of the today pie business, which complements our offering and provide us access to top end retail. And moving over to value-added meal solutions. Very important for us to continue with the product development and innovation, and we'll continue with the range and pack format extensions across RFG brands. I also made mention of new private label ranges, specifically the Pick n Pay private label on the juice side as well as the Clicks on the baby food side, and we will continue with our relationship with the major food retailers to grow into private label as well. Focusing on market-leading brands. Obviously, we've been sure that we invest in our core brands, which has got high growth opportunities and then looking at further lateral product extensions. So we will continue to grow brands shares, particularly in categories recently entered through acquisition. Looking at partnerships and alliances, we will continue to expand our brand into selected Asian markets and also pursue expansion opportunities in South America And then increase buyer own brands export to the U.S.A. I think important to note from international perspective, it's very important to ensure that we do focus on our revenue management to ensure that we sell for the most profitable customers. From a manufacturing facility, I make mention of the spend that we had over the prior years. We will continue to invest in our facilities -- in our production facilities and also looking at capacity expansion and then continue with global food safety certification. If I then look at specifically on brand. We did a lot of cleanup with regards to our brands in the past year, and we'll continue to focus on our core brands with high growth presential. Specifically, our Rhodes brand, where we see significant potential to grow into new and adjacent categories. Then on Hinds, Bull Brand, and Magpie brands, we see good potential to extend deeper into those specific categories that they originally. There has been very important, obviously, very much need to ensure that is focus on driving shareholder value. From organic growth perspective, we will continue to focus specifically on our fruit juice, dry foods, and baby foods. Where we see some good opportunity going forward. I think we've got an excellent production base. And if you make good investment when we be sure that we create some capacity to grow up our brand shares in these categories, but there's a lot of bedroom available in our current business to ensure that we continue our growth trajectory. And then from an acquisitive perspective, we will be busy. We will integrate the Today pie business as of the 1st of February, which is an important part of our growth category as well, the pie business specifically. Then obviously, very important for us is integration of ESG into operations and our management systems, focusing really hard on the those because specifically environmental efficiency targets set for 2025 across energy, water and waste management as well as GHG emissions. We focus very much on that on a monthly basis at all the plants with specific metrics that we put in place. And our transformation and empowerment is reflected in current level 3 BBBEE rating, which we're extremely proud of and we focus very much on governance and oversight and aligned with best practice standards. We've got a very high experienced management team and as of the 1st of October, I've got a new team in place with really well qualified and well experienced executives in all the positions, and we've got extremely strong domestic and international customer relationship. We will continue to focus on those as we understand the importance of that for our business. Obviously, also very important, continue to focus on cash generation and reducing gearing. Like Tiaan mentioned our debt-to-equity ratio that decreased. If I just look at specifically some financial targets that we put ourselves, we want to look at from a revenue growth perspective, ensure that we've got a minimum growth of GDP plus CPI plus 2%. Obviously, we would like very months to achieve greater than that, but that's target that we set ourselves from a revenue growth perspective. Continue to focus on the operating profit margin to get closer to that 10%. We made a mention of the good progress that we've made on our regional business, moving over -- from a normalized profit perspective, moving up by 100 basis points. But we side towards a 3% operating profit margin. And then also, obviously important from a shareholder perspective, our internal equity, looking at -- to get you a WACC-plus 2%. There is a couple of comments on the Outlook. From a Regional perspective, we hope to see a normalization of the economy and the momentum of the COVID-19 vaccination program increasing, which will obviously be positive for consumer spending. We do see the consumer continues to be constrained and under pressure. We hope to see some strong organic growth and will continue to increase our net sales. And then, obviously, generate further operating efficiencies to counter significant input cost pressure that we see in the last couple of months and continue to see specifically from a software -- from commodity perspective. We will continue ourselves into the rest of Africa. And we'll see that, that will be maintained. And obviously, we need to bed down Today acquisition to support growth in our pie category as of the 1st of February, and we expect the contribution to operating profit from the second half. Looking at some comments from the International perspective. Demand, as I may mention, for our canned products remain strong in global markets. And we're excited to get the -- to see some growth revenue experience, we're looking forward to a good fruit season. But unfortunately, we do see a somewhat strange still at ports, and we need to ensure that we manage that diligently. We will continue to evaluate new markets and expand our sales of long life fruit juice in the broader international market where we see opportunities that has been mentioned. Volumes expected to recover as shipping backlog reduces in the next 12 to 18 months. Then from a Group perspective. I had mentioned after Today acquisition as of the 1st of February that we're currently busy working on. But we will continue to evaluate strategic acquisition opportunities that's aligned to the group's core product categories. But I think very important to note taking into consideration adding share value. Those are my comments, and we are welcome to answer any questions with regard to anything that you need to do know. Thank you.

Pieter, the first question we have this morning is from Rajay Ambekar from Excelsia Capital. He asks, please, can you comment on input costs in general, but also specifically on cans? Are you exposed to any risks similar to what Tiger experienced on their cans? And are you able to pass on these higher input costs?

Yes. Thank you very much for that question. I might have been mentioned of the [indiscernible] that we experienced, and we do continue to experience price increases from a cost perspective in most of our categories. Going back to the specific question, on can, I think a lot of the [ template ] gets imported from the East. And obviously, with the used increases in freight cost, we did get huge cost increases cans specifically. So yes, we are currently in the process of recovering those costs in the market, although not easy to recover, but recovered all of the cost as of yet and we foresee there will be a lag in the recovery of those costs. Specifically from a comment that was made with regards to our competitors issues that [indiscernible]. I think our quality systems are in place, and we're quite comfortable that we are fine and we haven't experienced similar concerns that they've experienced. Just maybe to comment further on the high cost. So I mentioned, we continue to see those, and we foresee that in the next in H1 of our financial year, we will continue to see cost increases, but we will continue to see that we can recover first in the market, albeit difficult with current continually under pressure.

Well, then a question for Tiaan from Peter Cromberg of Mergermarket. He says net debt to equity has dipped to below 40%. Does RFG plan to further reduce leverage? Or does this plan to take on additional borrowings in the year ahead?

Yes. It all depends on what transpires in the acquisition front. The CapEx, ZAR 200 million CapEx that we planned for '22, we plan to fund that from cash the business will generate. And yes, so we're not at liberty to quote numbers, but the acquisition of the Today business won't do much to our leverage. It won't really increase it materially. So yes, as Pieter stated, we are looking for more acquisitions. So depending on that, we don't plan to raise any additional debt to what we've currently. But on the balance sheet, in fact, we're working actively in trying to reduce debt further over the next financial year. We do have lower capital repayments on the long-term debt schedule for the current year, just as -- due to the way that repayments are structured. So we're targeting lower debt with everything being staying as it is at the moment.

Thanks, Tiaan. Then I've got a question here from Katleho Moeketsi from Afrifocus Securities. She says thank you for the presentation. Please, can you share your views on the private label segment? Is it growing in South Africa?

Yes. Thank you for that question. I mentioned several times in my presentation on private labels. Obviously, for us, it's of strategic importance to our business. And we've got very good relationships with the South African retailers, where we back private labels. And as Tiaan mentioned, we're increasing I exposed to private label because we see private label as an important part of the business. I think from a South African perspective, there will be continuous growth in private label but are still seeing, in general, the South African brands are still very strong in all of the categories, but private label will start taking up route to play in those categories, and we plan to be part of that.

Thanks, Pieter. Then another question from Katleho. Please can you speak to the pricing environment in South Africa? Were you able to push through price increases and which product categories were most receptive?

Yes. If you look at pricing, as I mentioned, from an economic perspective and the high unemployment rate, obviously not easy to push price through in the market. Yes, we did get pricing, not to the extent that we would have liked to achieve those. Specific categories that I might mentioned on the template where we really got exceptionally high price increases of 20% and some, more of 50% [indiscernible] from a canning perspective. So every product that's related to cans is really the big one. And as I said, we managed to get some increases there, but not to the extent that we would have loved to get.

Then a question from [ Mary More from Alison Co Fund Managers ]. Mary asks how does the sales process work in the rest of Africa from your factory to the store shelf?

Yes. It's very much company specific. Obviously, if you look at some of the bigger retailers, we supply to the DC, the distribution centers of the country, in South Africa, then they will export that themselves into their stores or specifically in those countries. And then -- but in most of the countries, we've got a distributor model where we sell to a distributor, and the distributor will forward to those -- to their customers in the country, but it's a bit of a hybrid model. We don't have our own distribution facilities outside of South Africa. And so the general comment would be is made by a distributed model where we sell and they sell to the customers...

Thanks, Pieter. And then the second question from Peter Cromberge. Following the acquisition of the Today frozen pie business, what assets and markets are likely to be of interest from an acquisition point of view?

Yes. I think the comment that we made is that, obviously, we look at acquisitions that align to the group core product categories. So those will be the ones that we need to focus on. And if you look at [indiscernible] it's easy to see. There's a big categories we play where we sold a relatively small market shares. So obviously, any acquisitions within those categories will be attractive to us, but not to say that there is no other categories that we also like to enter with acquisitions. But obviously, if you can -- it share our value and it makes sense towards our business. I don't think we will invest in anything that's food and beverage. But if it makes sense in that regard, and we will look at that, but taking clearly into consideration adding shareholder value to our business. And the reason why I make that comment, I think we've got a lot of [indiscernible] also looking our current product ranges and with the capacity that we could [indiscernible] to drive the business as it is. But obviously, we will continue to do get any acquisitions that available and can drive [indiscernible].

Thanks, Peter. Another question from [ Mary More ]. Should we still expect to see these big swings in international profitability due to foreign currency translations and other FX impacts?

Yes. That's powerful of course in that business. We all know our vulnerable, if I may use that word, South African [indiscernible]. And even in this current financial year, which is -- we're only 6 or 7 weeks into it, we've seen the end trading as around the 40 to 14, 15 levels. And this morning earlier, it was back at 15 50. So yes, so we will remain -- we will see the same trend, but we look at that business as a cyclical business, obviously. And over time, we expect it with all the swings and roundabouts to yield an acceptable return to the business. Unfortunately, in the last 3 or 4 years, that hasn't been the case. But besides the impact of the currency, which we unfortunately can't do a lot about it, except for creating a bigger natural hedge within the business. We're working out at all the other elements that -- to improve the profitability of that business.

Yes. Just to add on to what Tiaan said, I think we've got a very instant 2 facilities, international businesses, [indiscernible], I think we've got a very -- we've got 2 efficient businesses there. And as you may mentioned, from a segmental revenue contribution perspective, it's now 19%, down from the 21% in 2020, but we will see over a period of time that we can get the returns that we would be looking for.

Right. Then there's a question here from [indiscernible] HSBC. How do you separate costs between the international business and regional long life? Do they have separate manufacturing resources?

Yes. There's obviously cost that's operation specific. And if you go down another level plant specific, and we manage the business where each plant has got its own income statement and obviously cost gets allocated accordingly. So yes, so up to a plant operating profit, it's very specific to each plant. And then there's the head office cost and other costs like marketing, et cetera, which are allocated based on activity. That's how we manage it. So that, in our belief, is a fair way of allocating cost.

Yes, just to also add on to Tiaan's comments. We also recently appointed international Managing Director who specifically looks after the 2 Internet -- 2 manufacturing sites and also taking the commercial is also involved with that. So it's very much [indiscernible] part of business. And that's -- as Tiaan has explained, we very much manage that in very much detail to ensure that the costs are affected correctly between the specific segments.

Right, Pieter, then there's another question from Mary More. He says, what is the current average capacity utilization for RFG as a whole? And do you need to invest to grow volumes out of these current facilities?

Yes. I think maybe I mentioned specifically on the [indiscernible] true perspective. If you look at our Tulbagh facility, very much on capacity there, and we don't foresee to expand in that regard. We had a maximum there for a couple of thousand tonnes that it goes up and down, but that's not materially in the business. If I then look at the -- some of the other growth areas, specifically from a fruit juice perspective, I think we've got probably between 15% to 25% capacity available within that facility and also might mentioned we've had increased warehouse [indiscernible] stake at that facility, so that will open up also more space for further expansion. So from a fruit juice perspective, I think it's a nice [indiscernible] I feel very much similar. Also big category, a lot of capacity available there, also not very capital intensive part of our business and is mainly from full seal equipment. And then in some of the other categories, which would cause a capacity available, but not to the extent of that [indiscernible] to be able to get our projects for the next 2 to 3 years.

Right. And Mary asks, any news on the Langeberg and Ashton business in a potential sale? Are they direct competitors of yours?

Yes, they obviously are direct competitors of ours. There's only 2 [indiscernible] in South Africa and that's us and Langeberg and Ashton. And I'm obviously, don't have a lot of information on that. I'm sure when our competitors release their results that will make some comment with regards to the setting off of that. And the last [indiscernible] actually communicated by them in the press release, that they still obviously perceive looking at [indiscernible] for that business.

Thanks, Pieter. No more questions on the webcast, so we can call the presentation to a close. Thanks.

Yes. Thank you very much, to all -- to everybody for listening, and thank you very much for the questions. Enjoy.