Bidvest Group Limited

Services

STATURE

We remain the Group’s biggest employer and a business that adds value across the national economy. Scale increased as businesses from Travel and Aviation as well as Rental and Products – previously separate divisions – were consolidated into a wideranging Services division.

Consolidation creates a unique platform for the development of integrated solutions for corporate customers and state-owned companies. The expanded division can create a bespoke mix of services for customers specific requirements, meeting outsourcing needs that were previously addressed in a fragmented and uncoordinated fashion. The potential for efficiency gains and cost savings is substantial.

Services now employs 83 850 people.

We are a division of sector leaders: Prestige is South Africa’s biggest contract cleaner, Steiner is the foremost washroom services company, our security business is the industry’s second largest and Bidvest Facilities Management is the biggest hard services facilities manager. We run the country’s biggest indoor plant company, water cooler company and corporate travel business and represent three of the biggest brands in world travel. We’ve also built one of the leading brands in aviation services, airport lounges, cargo and ground handling.

We are a trusted partner in government efforts to professionalise the service industry and a contributor to the Contract Cleaning Sector Decent Work Programme. We are strong and well resourced, but local autonomy keeps us nimble and responsive.

MANAGEMENT

Consolidation of three divisions into one opened up new opportunities for managers and teams, creating renewed enthusiasm across the business.

Unbundling at corporate level coincided with stepped-up divisional efforts to develop a new generation of middle and senior managers. Our operations are increasingly characterised by youthful management and the implementation of new ideas.

VISION AND INNOVATION

We are a corporate partner, solution finder and efficiency generator. Our vision is to become and remain Africa’s leading integrated facilities management provider.

Our mission is to create total solutions for corporates looking for a reliable partner who delivers one-stop outsourced expertise.

Our expanded offering enabled us to strongly communicate the benefit of wideranging, integrated support service (security, office and industrial cleaning, laundries, garden maintenance, irrigation, water and beverages, hygiene and pest control services, catering, lift maintenance, engineering support and technical services) covered by one contract and one invoice, via one point of contact.

Innovation is built in as corporates increasingly look for partners who add value to their own strategies (eg carbon footprint reduction).

NEW FOCUS

Focus is a longstanding Bidvest strength. Divisional consolidation brought a new opportunity – harnessing knowledge of one’s own business complemented by possible synergies with sister companies to add further value for customers.

TRANSFORMATION

Our commitment to empowerment has shaped our business over many years. Transformation has become a strategic asset and a source of competitive advantage. We redoubled empowerment initiatives well ahead of the implementation of new codes. Our businesses are rated individually. Our biggest employers, Prestige, Protea and Bidvest Facilities Management, are all rated with a level 2 BEE status.

Transformation enables us to deepen our relationship with like minded businesses, helping us achieve high contract retention levels while seeking strategic business gains.

Increasing black female representation across all levels is a priority. We have also prioritised black advancement into responsible positions and in 2016 appointed black CEOs within our facilities management and aviation businesses. A black chief technical officer was appointed in the travel cluster and a black CFO was appointed at our Royal Mnandi catering business. Early in the new period, a new black CEO took over the leadership of our cleaning operations.

We commit to our people’s continuous development and our training spend was R203 million (2015: R180 million). Upskilling is also integrated into our enterprise development initiatives. We frequently assist new suppliers by transferring basic business skills.

Strategic commitment to empowerment contributed to several tender successes and supported wider public sector penetration.

CONTINUITY

The Bidvest qualities of self-reliance, entrepreneurship and local autonomy are part of our DNA. We ensure focus by keeping structures lean.

In future, self-reliance will be accompanied by mutual assistance and collaboration as we pursue our integration mission.

INDUSTRY CONTEXT

Low business confidence and low economic growth put pressure on all businesses. However, some improvement occurred in the hospitality sector. Margins came under pressure as corporates intensified their search for cost efficiencies.

KEY FEATURES

• The smooth integration of three divisions was a considerable achievement.
• Revenue of R12,4 billion (2015: R12,6 billion) was generated. Trading profit was R1,5 billion (2015: R1,4 billion).
• All teams did well to deliver savings and improve asset management. Margins were maintained.
• We commit to worker safety. Regrettably, in 2016 three fatalities were reported, down from seven in 2015. The number of lost-time injuries showed a pleasing reduction from 938 to 772.
• Investment in the future was maintained and R434 million (2015: R551 million) was spent on facilities and equipment. In February 2016,
  Pureau moved into its new custom-designed factory.

YEAR AHEAD

Services will seek double-digit profit growth while widening the customer base. Tough trading conditions may persist, but the division is positive about prospects in view of its enhanced total solutions proposition.

Acquisition opportunities will be scrutinised and the possibility of international exposure will be considered.

The division will look to grow jobs, though a key factor is the hoped for extension of employment tax incentives designed to encourage job creation for under 29s.