Operational Review Bidvest South Africa
Total Page:16
File Type:pdf, Size:1020Kb
24 The Bidvest Group Limited Annual Integrated Report 2015 Operational review Bidvest South Africa South Africa Lindsay Ralphs | Chief executive, Bidvest South Africaa Overview Our people are personally accountable for contracts, relationships and Overall performance was satisfactory, with some pockets of excellence outcomes. in what was an extremely challenging period, not just for our divisions, We are nimble and responsive. but for South Africa as a whole. In tough times, customers look for service providers who deliver The national economy struggled to deliver meaningful growth and solutions that fit their needs, who do not waste time, and who get the several sectors faced severe pressure. job done. Even so, Bidvest South Africa grew turnover to R87,4 billion (2014: This ability to cut the frills and deliver is a key differentiator across all R80,0 billion) while trading profit rose to R5,1 billion (2014: R4,9 billion). teams in Bidvest South Africa. Both turnover and profit reached record highs; a product of both organic and acquisitive growth. The B-BBEE environment has changed quite significantly. This change is exacerbated by the divergent views in the public sector on how to ROFE fell to 42,5% (2014: 49,4%). We continued to invest in our achieve these objectives. Further complexities are presented by the people, with training investment including learnerships and bursaries up additional requests of various stakeholders – this, in an attempt to meet 24,0% to R507,3 million (2014: R381,3 million). their own B-BBEE requirements and commercial objectives. These At a time when job cuts were rife in many industries, we did all we requirements vary and at times fall outside the framework of the Codes could to grow or save jobs and our headcount fell slightly through of Good Practice on B-BBEE. contracts that ended. Though staffing varied in line with contract This will, however, not deter Bidvest from continuing its path of fluctuations, we engaged in no significant retrenchments. transformation and we will do so in a manner that is socially, ethically Exceptional results from Electrical, Industrial, Paperplus, Rental and and commercially viable. Products, and Services were achieved. They are not our largest divisions, but their flexibility enables them to rapidly pursue opportunities. People Bidvest will continue to support and drive the transformation agenda I thank all our people for their contribution in a difficult year. The balance just as aggressively as we have in the past. Improving our B-BBEE sheet reflects acceptable levels of all-round performance. Balance position as a Group is demonstrated in the continued improvements sheets never itemise the individual effort and dogged pride in over the past few years. The Bidvest Group achieved a Level 2 status performance that are necessary for growth in a largely stagnant (2014: Level 3) in the recent B-BBEE verification process. economy. I salute our people for their sheer hard work. People are our principal asset. What we sell is their expertise and their Succeeding against the odds ability to add value. Industries such as construction, manufacturing and mining experienced extremely difficult times. Figures from Statistics South Africa for the We are proud of our people. They often work in quite basic services June quarter show quarter-on-quarter contraction of 6,3% by that don’t enjoy a high profile. Our people also feel pride in the overall manufacturing and 6,8% by mining, yet divisions like Electrical and team; as showcased by the annual Bidvest Unity Walk. Industrial still achieved growth. This 10-kilometre charity walk is one of South Africa’s biggest mass We are not one single centralised business. We have many moving participation events and occurs simultaneously in Johannesburg, parts. Within each division several independent businesses focus on Cape Town, Durban and Port Elizabeth. At the last event, specific customer groups. These operations are led by hands-on registrations by staff and guests topped 64 000, enabling big support managers who stay close to developments. for designated charities. We have intense operational focus. What we do not have is a bureaucracy. 25 The Bidvest Group Limited Annual Integrated Report 2015 Sustainability performance is reported at board level within each 2015 2014 division and to the Bidvest Group board. Management accountability at local and divisional level helps ensure sustainability B-BBEE score Level 2 Level 3 improvements while delivering savings on fuel and utility costs. Fatalities 7 2 GHG carbon emissions Direct emissions Scope 1: People numbers Biggest contributors: Bidvest Services 54 040 (tonnes of CO2) 2015 | 113 040 Bidvest Rental and Products 45 563 (tonnes of CO2) 2014 | 118 695 Bidvest Freight 25 934 (tonnes of CO2) Fuel usage (Megalitres) 2015 2014 32,9 Ç 24,3 Ç 28,0 21,2 % people who belong to trade unions 27,4% 29,1% 2015 2014 2015 2014 2015 2014 LTIFR for 200 000 hours worked 107 63 Diesel Petrol Performance Coal usage (Tonnes) 2015 2014 Performance was underpinned by account gains in a highly competitive Laundries 14 762 È 16 576 environment, market share improvements and acquisitions. Several bolt-on acquisitions were completed. We also benefited from the Indirect emissions Scope 2: 12-month effect of the Mvelaserve transaction concluded in Biggest contributors: October 2013. Bidvest Freight 43 523 (tonnes of CO2) The rand’s steep fall affected input costs and had major impact on price Bidvest Paperplus 28 419 (tonnes of CO2) levels at a division, such as Automotive. Uncertain power supplies Bidvest Automotive 26 276 (tonnes of CO2) affected every division, while steps to mitigate these effects added to cost pressures. 2015 2014 Electricity usage (Gigawatt-hours) 169,8 È 177,5 Planet Our environmental performance is a key focus area. A sustainability committee is in place at every division mandated to drive good 2015 2014 environmental practice. Water (Megalitres) 2 250 È 2 805 26 The Bidvest Group Limited Annual Integrated Report 2015 Operational review Bidvest South Africa 1 000 – On other occasions, new concepts widen a previously narrow franchise – a process that has revitalised Execuflora and is currently underway at 800 – Financial Services. 600 – Rebalancing also occurs in the Office environment. Stationery volumes stall, but office technology from a brand like Konica Minolta achieves 400 – dynamic growth 200 – Acquisition 0 – A significant transaction was concluded late in the period when the Plumblink plumbing supplies and bathroom accessories chain was acquired for R430 million. Bidvest Office Bidvest Freight Bidvest Services Bidvest Financial Bidvest Financial Bidvest Electrical Bidvest Industrial Bidvest Paperplus Bidvest Automotive Consumer Products Early in our new year, work began on Plumblink’s integration into Industrial. Management remains in place, continuity is assured and Bidvest Travel and Aviation Bidvest Rental and Products rapid consolidation is expected. Megalitres Water usage contributors The acquisition takes Industrial into a new, but complementary, market segment – plumbing contractor supplies. To a degree, this sector is 2015 2014 recession-resistant as plumbing repairs by professionals rarely constitute discretionary spending. % of water recycled and reused 6% 0,8% One significant disposal occurred – our sale of the Protea Coin assets in transit business. Products and services Structural change Product and service development occurs continuously in all operations. A much-expanded Services division was created early in 2015 by This can be tactical and opportunistic, involving new product consolidating Travel and Aviation and Rental and Products into introductions and range extension. Strategic innovation is also evident. Services. At the same time, Car Rental exited Travel and moved into We operate in the trading, services and distribution environment. These Automotive while G. Fox was integrated into Industrial. are well-established industries and many of our businesses are quite The Super Services structure creates a comprehensive base for mature. However, mature businesses are not stagnant businesses – at expansion into bundled services. least, they are not at Bidvest. Traditionally, our old Bidvest Services division had a strong “soft To survive and thrive it is necessary to take a dynamic approach to services” offering covering hygiene, cleaning, laundry, security and one’s industry. As traditional activities come under threat, reinvention indoor plants. In contrast, the operations we acquired during the becomes essential. Mvelaserve transaction had a compelling “hard services” offering – This process is seen clearly at a business like Paperplus. Its traditional technical support, call centre management, data management including print volumes are being eroded, but new digital offerings are constantly intelligent reporting, and infrastructure maintenance services. explored. The Paperplus voter registration product exported to The enlarged Services division offers perhaps the most comprehensive Tanzania is bio-metrics and digitally based. Years ago, registration range of soft and hard services in South Africa’s corporate outsourcing papers would have been printed and filed, now the data is digitally market, enabling energetic pursuit of bundled services and facilities recorded and stored. management opportunities. The strategy will be spearheaded by the Reimagining the industry is also evident in other divisions. For instance, Total Facilities Management Company