Sustainable value for all
While the Group is diverse and widely spread, Bidvest strives for integration in terms of value creation across all its divisions and its broad group of stakeholders.
This invariably means an assessment on the key stakeholders that impact meaningfully on the Group. COVID-19 and the consequential impact on our society has also gathered the Group's thinking and heightened our commitment to delivering measurable value in terms of its environmental, social and governance aspects.
Creating value for Equity and debt investors:
Current and potential shareholders, and the broader investment community, together with lending and financing institutions.
Objectives
Ongoing dialogue through results presentations and Company announcements; Investor meetings/ roadshows; Internet updates; Engagement with Group leadership.
Key issues raised:
- Group strategy.
- Financial performance.
- M&A pipeline.
- Funding plan.
- ESG metrics linked to incentives.
Value created
- R2 billion distributed to providers of capital (FY2020: R1 billion) by way of a total dividend.
- 26% increase in normalised HEPS to 1,292 cents.
- R61 billion market capitalisation, +30%.
- 27% increase in Company value over the last five years (excluding food services).
- R2 billion in payments to debt providers.
- Hosted investor briefing sessions to enhance market knowledge base.
- Continued reinforcement of importance of the functional governance structure and ethical behaviour as well as refinement of sustainability metrics.
- Active engagement with funders and debt institutions to re-arrange and secure additional financing facilities.
- Specific ESG targets introduced.
Creating value for Employees and trade unions:
As one of the largest private employers in South Africa and with businesses in Ireland and the United Kingdom, Bidvest has a broad base of people ranging from security and cleaning teams, manufacturing and logistics people, financial and administrative professionals, as well as IT, sales and customer support specialists and experienced leadership and management teams that oversee the day-to-day implementation of business activities.
Objectives
The creation of a safe and conducive working environment that provides fair and sustainable income and offers career advancement opportunities. We encourage involvement between managers with local trade unions; advance employment equity and skills development forums within Bidvest; obtain feedback by way of employee surveys and Group ethics line.
Key issues raised:
- Market-related remuneration.
- Protecting livelihoods.
- Bribery, corruption and cyber security awareness.
- Health and safety, particularly during the pandemic.
- Securing, retaining and development of necessary skills.
Value created
- R372 million was invested in skills development.
- 85% of skills spend on Black employees.
- 440 interns and appretences were employed within the Group.
- 585 bursary beneficiaries.
- R230 million dispersed to employees and communities to ease the impact of COVID-19.
- Mobile clinics travel to various Group businesses to dispense vaccination.
- 77% of the workforce are Black; 44% women.
- 80% Black representation at board level.
- 50% at Exco.
Creating value for Communities, including community-based organisations, non-profit and non-governmental organisations:
As a microcosm of South African business, Bidvest’s activities extend throughout the country, Ireland and in the United Kingdom. Our society is therefore broad in characteristic, diverse and extends across a large geographic footprint.
Objectives
Enhance the direct engagement and support with local communities and organisations with regards to socio-economic and other specific needs.
Key issues raised:
- Improving the lives of those in the communities.
- Use expertise and other resources to give back to communities.
- Enhancing local procurement and employment.
Value created
- 121,343 Bidvest family members who contribute meaningfully to their own communities and societies (FY2021: remuneration R26 billion).
- Second largest private employer in South Africa.
- R5 billion in employee taxes paid to governments.
- Group level 4 B-BBEE rating. 58% of individual businesses Level 1-3.
- 6,866 individuals benefitted from learnerships, apprenticeships, internships.
- R27 million spent on CSI initiatives.
- R10 million saved in electricity costs through reduced usage.
- 15% reduction in Group water intensity.
- 6% reduction in Group emissions intensity.
- 37,000 food hampers distributed.
- Participated in the government workstream to ensure effective distribution of COVID-19 vaccines across South Africa.
- R10 million donation to the Presidents GBV fund.
Creating value for Government, governing and regulatory bodies:
Operating across many different sectors, results in interaction with numerous authorities and regulators. These entities, and other public sector partners, provide the laws, regulations and guidelines that the Group implements to ensure strict compliance in terms of its operating practices.
Objectives
Focus is on regulatory submissions and compliance. We strive for face-to-face engagement, and Bidvest representation on industry bodies.
Key issues raised:
- Ongoing compliance with regulatory frameworks and good governance.
- Tender processes and adjudication.
- Local procurement and employment.
Value created
- Maintained sound governance policies and procedures.
- Constructive engagement with various tender boards.
- Introduced local partners and procurement elements in various contracts.
- Participated in B4SA initiative to engage government on reopening of economy during lockdown.
- Contributed to the post-lockdown economic recovery plan.
- Implementation and continuous monitoring of basic security control disciplines using ALICE, resulted in an improved IT risk landscape across the Group.
Creating value for Partners and potential partners:
Within certain Group businesses, Bidvest forms partnerships where the source of product and service is best held externally, but which are necessary to ensure delivery of a valued added offering. Bidvest values these relationships and actively promotes this working concept in the search for new partners that will ultimately add substance to Bidvest's overall offering.
Objectives
Expand the database of international, regional and industry contacts. Ensure relevant market intelligence, and engage leaders in specific niche areas where Bidvest sees growth opportunities.
Key issues raised:
- Scope for complementary growth.
- Prospects for entry into new markets.
- Potential to better serve existing customers by forming an alliance or a relationship, thereby anticipating emerging needs.
Value created
- Constant evaluation of market developments, new technologies and solutions.
- Enhanced communication with brand principals, industry leaders and entrepreneurs.
- Interaction with investment bankers with regards to M&A opportunities.
- Within six weeks, Adcock Ingram formulated, retooled equipment and completed necessary regulatory requirements to commercially produce 2ml saline diluent used to reconstitute the Pfizer COVID-19 vaccine.
Creating value for Customers:
The Group services over 300,000 customers through some 550 facilities across its operating footprint, and with a focused B2B philosophy. The Group always attempts to ensure compliance to a customer centric ethos, which is best achieved through the segmentation of the portfolio into logical, decentralised, offerings that enable a much closer focus on the needs and demands of the respective customers.
Objectives
Monitor internal call centres for customer feedback and independent complaint channels. Group ethics line has a direct feedback line to executive members. Bidvest website is used for two-way information sharing. A Group product and service brochure is provided each year to create better understanding. Direct calls can be made to divisional chief executives, customer visits are welcomed and we obtain insight from Group sales representatives and client relations teams.
Key issues raised:
- Compliance to a customer-centric ethos.
- Increasingly complex and value- sensitive business environment.
- Retain and grow key customers.
- Demands for higher Black ownership.
- Tenders and procurement decisions deferred due to lockdown.
Value created
- Meet and exceed customer needs and expectations through innovative solutions and broader product ranges - for example, Protea Coin developed a cable theft device; Bidvest Prestige is using an environmentally friendly disinfectant.
- Focus on key senior relationships with strategic customers.
- PHS's hygiene pool has shown growth for 29 consecutive months.
- Pragmatic and commercial approach to Black ownership.
- Business development team converted R1.4 billion of the opportunity pipeline into sales.
Creating value for Suppliers:
Companies that provide goods and services to the Group, which include outsourced services, including consultants.
Objectives
Communication with key suppliers on market trends and requirements, as well as product innovations.
Key issues raised:
- Clear communication channels supporting accurate and timely information to all parties.
- Long-term sustainable support of small and/or Black-owned supplier companies.
- Financial and operational challenges faced by certain suppliers.
- Security of supply.
Value created
- R20 billion procurement spend in South Africa.
- Established alternative supply channels.
- Engaged with suppliers on product innovation.
- Supportive long-term relationships with small and Black-owned businesses to ensure their sustainability.
- Continued efforts to streamline logistics chain.
- Proactively sourced high-demand product.