The region covers a vast area and macro-economic factors vary considerably. However, pleasing revenue and trading growth was achieved across all businesses in the region.

Bidvest Australia remains the major contributor and the state of the Australian economy is material for regional performance. Australia was lifted by a return to strong resources growth. However, measures by government to stimulate the economy came to an end. Government measures to curb spending contributed to a decline in consumer confidence (evident by mid-year) and downtrading set in.

In common with other economies in the early stages of recovery, there was a shift to in-home eating.

New Zealand did not have the benefit of a resources-led recovery and the trading environment remains challenging. Job losses are a concern. Unemployment at 7,3% may appear low against a southern African yardstick, but is twice the level of three years ago and a major worry as until recently New Zealand was considered a full-employment economy.

One effect is much reduced out-of-home eating. New Zealand’s hospitality industry has contracted as a result.

A much stronger recovery was under way in Singapore and Asia. Singapore’s economy recovered slowly in the six months to December 2009, but business sentiment and consumer confidence picked up significantly after that.

In Singapore, unemployment dropped and by year-end was close to the pre-crises level. Bank rates remained low in line with global efforts to spur growth. Malaysia’s economy rebounded and commodity prices recovered.

Competition intensified. Overall inflation in Singapore was slightly below 1%. Food inflation was more than twice as high, though price fluctuations were less pronounced than previously.

The opening of major resorts has resulted in an increase in spending by tourists and knock-on benefits for Singapore’s foodservice. Casual dining and family restaurant chains remain the strongest contributors to our foodservice business. Teenagers and young families continue to eat out.

The island nation has seen a shift to value-added products and services. The big demand is for finished products rather than raw material.

In Greater China, the economic recovery has been so strong that recruitment of skilled personnel has become difficult. Our customers face the threat of big increases in rents and wages. They therefore seek savings elsewhere. This mindset means our businesses face continued pressure on margins from price-sensitive customers.

Regional prospects overall remain positive and further growth is projected.

Sustainable development

Economic performance – Women are excelling at every level in our organisation. Our annual report to the Equal Opportunities for Women in the Workplace in Australia shows women now represent 29% of our national and regional managers, though overall representation is at 24%.

Environment – Tightening legislation in Australia is compelling us to measure more aspects of our carbon footprint, such as indirect energy usage. While there has been a significant increase in the amount of ethanol-based fuel used, renewable energy is still priced at twice that of coal-derived energy (electricity), hampering efforts to innovate in this area. All depots are introducing water-saving measures and all our companies run campaigns and programmes to reduce the use of resources (eg paperless office systems) and recycle more.

Human resources – Employee-based consultative committees monitor workplace activities, enabling us to engage with employees, understand issues of common concern and take corrective action as required. While staff turnover is up following restructuring, absenteeism has fallen 13%, indicating improved satisfaction and wellness levels. Bidvest Academy courses have been successfully registered with national authorities, enabling university accreditation; 302 trainees participated.

Health and safety – We have begun a certification process for AS/NZS 4801 (safety management systems). Desk audits have begun and site audits are scheduled. Audits are ongoing for asbestos, risk from dangerous goods and risks related to buildings. Staff receive training in areas such as fire safety for advisers, fire safety and evacuation, workplace health and safety, rehabilitation and return to work and fatigue management for drivers. The number of claims has dropped significantly from a peak in 2009. The value of claims has dropped to 60% of 2007 levels.

Society – Our Bidvalues statement defines and forms the basis of our organisational structure. Oversight of business ethics and auditing of incidents of fraud and corruption are carried out by both internal and external audit. No fines of significance were incurred for non-compliance with national laws and regulations.

Product responsibility – The Bidvest Quality Management System provides consistency within the division, encouraging efficiencies and savings. We have provided staff training in customer care and service, and substantial improvements in the way they work and higher levels of customer satisfaction have been reported.

BIDVEST AUSTRALIA

Teams put in a reasonably good performance. Sales were up by about 5% while trading profit rose 10%. Second-half trading conditions were substantially worse than the first. Food price deflation was evident for much of the year.

Operational efficiencies drove continued improvements in our cost of doing business (total expenses as a percentage of sales).

Technology continues to be an enabler of good sustainability practice. Our e-commerce tool FindFoodFast maintained a good rate of growth. Energy and other savings were fostered by further roll-out of paperless warehousing, our track and trace technology and dynamic routing.

Benchmarking entrenches a total business sustainability approach to our operations. Measurement and incentivisation are not restricted to financial matters. They cover all aspects of the business. Primarily, we measure ourselves against budgets and prior year. All comparable businesses are measured against one another as well as against their own targets.

Bidfresh was launched to mark our entry into the produce and portion-control meat market. This development began in October 2009 with the purchase of a small, underperforming business that was subsequently rebranded as our first Bidfresh operation.

Our new Hobart facility opened in September and in January a new freezer complex was commissioned at John Lewis, Adelaide, tripling our frozen foods capability. In April, we acquired, Kele, a central Queensland foodservice wholesaler. The acquisition increases our exposure to an area of Australia that shows good growth potential thanks to the buoyant resources sector. Expansion to Cairns was completed and our Perth branch is being further extended to cater for increased demand.

Bidvest has become a familiar name in Australia. We trade as Bidvest across a large geographic footprint and all our 600 trucks carry the corporate livery. Our people are passionate about the brand and live the Proudly Bidvest culture.

Our largest challenge is continued expansion from an already large base while training enough talented and competent people to drive sustainable growth. Talent retention has again become crucial as employment has picked up on the back of renewed growth in the resources sector.

In the coming year, we face the prospect of continued food deflation and low consumer confidence. Over three to five years, our principal objective is to grow our revenues to AUD2 billion (currently AUD1,7 billion) and to achieve annually compounded growth in earnings before interest and tax of high single digits or more.

BIDVEST NEW ZEALAND          

Pleasing trading profit and revenue growth were achieved, despite tough market conditions. Non-financial performance was also satisfactory. We maintained initiatives to reduce waste, recycle, support the community, train staff and lower vehicle emissions.

Wage costs were well contained, the debt collection rate went up, occupancy costs fell and vehicle costs remained stable. ROFE increased marginally following increased investment in land and buildings. Margins were well managed and interest rates at historical lows kept lending costs at acceptable levels. Cash flows remained strong.

The operational focus is on building up targeted food categories to specific customers, increasing the value per drop while delivering a comprehensive service that leaves few gaps for competitors.

Our “Smart Choice” house brand continues to increase its percentage share of total sales and profitability from imported products continues to grow. Logistics division performed well on the “Streets” ice-cream account. Fresh produce made a pleasing contribution and offers continuing growth opportunities.

Our prime vendor strategy gained momentum. This initiative is a total food supply service delivered to customers through e-commerce. Sales through e-commerce show continued strong growth.

Last year’s implementation of the Bidvest brand identity went well and helped maintain high levels of motivation.

Further investment in infrastructure is about to be committed. New distribution centres are planned. Substantial investment in IT will be made to further enhance the reliability of our national platform. Further growth in revenue and trading profit is projected.

SINGAPORE

Revenue increased marginally, but trading profit recovered to pre-financial crisis levels. A strong second-half performance reflected robust market conditions. Cash flow was healthy and working capital well controlled.

We restructured the foodservice division, moving from product to customer focus while reducing the number of customers served by individual sales staff. The customer-centric strategy contributed to strong foodservice growth.

We acquired a Halal food-processing business and upgraded our food quality system. We hold both HACCP and Halal certification. We expanded our delivery fleet and now specify Euro 4 engine standards. In Malaysia, we consolidated inventory into a third-party logistics centre, resulting in fewer transfers and faster delivery.

We continue to build our own brands for the foodservice and retail markets and position them as value-for-money quality products. In addition, we created a gourmet fine food division, Aequitas Gourmet, to spearhead our entry into the fine-dining market.

Though confidence has returned, our Malaysian greenfields operation, Avid Foodservices, faced continued challenges as a small operator in a mature market. A concerted effort to build sales is under way.

We plan to grow our value-added solutions and off-the-centre-of-the-plate products. In 2011 we will pursue further sales and profit growth.

GREATER CHINA

Angliss, with operations in Hong Kong, Macau, Beijing, Shanghai, Guangzhou and Shenzhen, achieved record trading profit and confirmed its position as the region’s leading foodservice business. The core Hong Kong site achieved strong trading profit growth off of marginally higher revenue. ROFE improved strongly.

We focused on higher margin foodservice business rather than trading activities. We broadened the customer-base and introduced new products such as our Laughing Cow range, and new lines such as lobster and Japanese perishable foods. Established brands like Anchor, 1855 and AACo did well, helping us grow market share.

To improve delivery efficiencies we introduced 24-hour stockpicking in our warehouse and opened a new production centre to increase production capacity and position us for growth in the ready-to-eat and ready-to-cook sector.

Liquidity and debtors were well controlled. Cash flows were good. We employed a dedicated supply chain manager to improve logistics efficiency, reduce warehouse costs and optimise stock levels.

We opened a new training centre.

Greater China anticipates continued growth by adding further value to the existing range while building our presence in the ready-to-eat and ready-to-cook market.