Creating value for our stakeholders
Ensuring sustainable value for all stakeholders
Whereas most definitions of a business are demand-driven, ours is largely supply driven. Bidvest provides products and services that are essential for everyday use into selected key markets. The markets are chosen for their scale and growth potential as we continually seek to participate in the expansion and development of momentum in these sectors.
Our 34 years of operating experience has demonstrated that meaningful growth can only be achieved, and real value can only be created, when the needs of our entire stakeholder group are taken into consideration. This makes the management of our stakeholder relationships specifically important, and why we continually strive to ensure that our ambition of meaningful stakeholder interaction, and reward, is successfully achieved. This is being done by embedding stakeholder needs, and measuring the return, into the selected capital inputs of our value creation model. This ultimately enables us to deliver on our overriding purpose of “People and Products Behind a Brighter Future”.
Our key stakeholders provide us with capital:
Social and relationship capital is where we focus our efforts to achieve an inclusive economy. We aim to improve our proposition to the entire range of stakeholders across our value chain. The value we build through ongoing engagement, information sharing and working together with all stakeholders is important, as it ensures that we can deliver quality products and services. It also advances our ongoing contributions to socio-economic wellbeing, with an objective of adding to the development of inclusive economic growth.
Human and intellectual capital is our key competitive advantage. Value is achieved because of the knowledge and experience delivered by the people that comprise Bidvest. Their knowledge, skills, talents and experience ultimately determine our capacity to accomplish goals. We have a performance, value-driven culture that encourages innovation and disruption, within an empowering decentralised operating structure to ensure maximum delivery of the agreed objectives within each division.
Our manufactured and natural capital enables us to invest in and upgrade our services capabilities, distribution centres, storage and handling facilities, branch network and other infrastructure. These are all critical to generating the income for disbursement by way of salaries, contributions to the host-country fiscus, dividends and social contributions. Our ecosystems and natural assets, specifically, energy, fuel and water, are managed to reduce usage and lessen impact on the environment and our societies.
Financial capital includes the economic resources that fund our business, backed by a strong balance sheet that provides an ability to attract capital for continued growth. We are focused on enhancing long-term relationships with investors and funders, as we strive for financial sustainability.
Equity and debt investors
Current and potential shareholders, and the broader investment community, together with lending and financing institutions
Objectives
Bidvest aims to achieve investor and debt market trust by providing clarity on the Group's strategic ambitions, explaining the businesses and divisions, introducing key leadership and providing clear feedback on performance, while ensuring understanding about mutual expectations.
How we engage
Engagement topics
Value created
How we engage
- Ongoing dialogue through results presentations and Company announcements
- Investor meetings/roadshows
- Website updates
- Engagement with Group leadership
Engagement topics
Group strategic direction
Maintaining the performance momentum
Margin management
Market share gains
Growth pipeline and clarity on geographic expansion
Currency risk
Funding capacity and future plans
ESG metrics linked to incentives
Financial Services division turnaround
Risk to value creation
- Uncertainty or misunderstanding about strategy and asset base results in negative sentiment and lack of investor interest
- Non-performance leads to trust being eroded
- No or little interaction with leadership results in Group objectives not being properly understood
- More expensive cost of debt and capital
Opportunities
- Continued capital value and dividend growth
- The return of international travel allows face-to-face access and interaction with global investors and funders
- Geographic diversification allows for a broader investor base
- Innovation and digital communication enhance the frequency of investor and debt market interaction
Value created
Demonstrating investor confidence through the Group's commitment to the highest standards of governance
R3bn distributed to providers of equity capital (FY2021: R1bn) by way of the total dividend
Group HEPS
1 442 cents
+22%
Market capitalisation
R70bn
+15%
Nearly 60% increase in Company value since food services unbundling (May 2016)
R2bn in payments to debt providers
Hosted investor briefing sessions to enhance market knowledge base
Delivered better than target performance on STI sustainability metrics
Geographic spread of shareholders (%)
Employees and trade unions
As one of the largest private employers in SA and with businesses in Ireland, the UK and Australia, Bidvest has a broad base of employees 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
Bidvest strives for 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. Across the Group, management strives to ensure equal opportunities for growth and development.
How we engage
Engagement topics
Value created
How we engage
- Main focus of employee engagement occurs within Group companies
- Individual employee and group forum interaction is encouraged
- Individual company and Group wide newsletters
- Digital applications within certain businesses
- Employee wellness and support systems in place
Engagement topics
Market-related remuneration, reward and benefit
Bribery, corruption and cyber security awareness
Health and safety, particularly during the pandemic
Post COVID wellness
Career advancement
General company and Group news
Risk to value creation
- Securing, retaining and development of necessary skills
- Breakdown in communication leads to unclear directives
- Distorted messages as a consequence of the size of the Group
- Cost of living and other economic pressures lead to workplace work stoppages
Opportunities
- Enhancing the employee value proposition leads to an ability to attract and retain skills needed to achieve the Group's strategic intent
- Sustainable job creation and work preservation
- Continued Group growth provides additional opportunity for career advancement
- Enhanced performance leads to higher reward
Value created
Second largest private employer in SA
126 468 Bidvest family members who contribute meaningfully to their own communities and societies (R29bn remuneration)
1 041 employees with disabilities
Diversity targets achieved – 93% of SA employees are black and 47% are female
R4bn in employee taxes paid to governments
Career development programmes and other training initiatives to enhance the skills base
R545m spend on skills development and bursaries
LTIFR
Regrettably we had 11 fatalities: 2 security officers were killed in the line of duty; 5 employees in vehicle accidents; 2 due to workplace incidents and 2 personal circumstances
5 596 learner-, apprentice- and internship programme participants. 406 learners permanently employed
729 bursary beneficiaries
Communities, including community-based organisations, non-profit and non-governmental organisations
As a microcosm of SA business, Bidvest's activities extend throughout the country, Ireland and in the UK. Our society is therefore broad in characteristic, diverse and extends across a large geographic footprint
Objectives
To improve the welfare of our various communities, we enhance direct engagement and support with regards to socioeconomic and other specific needs.
How we engage
Engagement topics
Value created
How we engage
- Through various national, regional and community programmes, specifically aimed at individual development and advancement, job creation, health, wellness and safety
- Deliberation and engagement with local community, welfare, education, health and other support groups in key operating regions
- Participation on local community forums, where relevant
- Actively seek support initiatives to guide and develop small- to mediumowned businesses, and assistance for business development programmes
Engagement topics
Socio-economic aspects affecting communities
Providing Group resources to improve wellbeing of communities
Enhancing local procurement and employment
Sustainability enhancements and support
Risk to value creation
- Disconnected communities create misunderstanding of Group intent
- Diminished employment and supplier base
- Disrupted and fragmented communities impact Group businesses, and operating efficiencies
Opportunities
- Mutual understanding and clarification of needs will ensure improved benefit to many communities in urgent need of assistance
- Increased job creation, and an enhanced supplier base
- Lower our, and customers', environmental footprint through innovative products and services
Value created
Numerous initiatives in place to build sustainable societies
R148m socio-economic support spend
Group Supplier Diversity Programme launched
Wellness and food support programmes established
Advocacy work through UN Global Compact Network SA
Water intensity reduced by 13% and 26% compared to FY2021 and FY2019, respectively
Total water usage (kilolitres)
Emission intensity reduced by 14% and 29% compared to FY2021 and FY2019, respectively
Scope 1 & 2 emissions (tons)
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
Continually enhancing understanding and engagement is essential to contribute, and respond, to national imperatives. A focus on regulatory and policy submissions as well as compliance are key focus areas.
How we engage
Engagement topics
Value created
How we engage
- Strive for face-to-face engagement, and Bidvest representation on industry bodies
- Participation and submission into various government and industry requests for dialogue as well as written proposals and/ or responses
- Using digital communication channels for selected commentary
Engagement topics
Socio-, political and economic issues impacting the nations in which the Group is active
B-BBEE development and advancement, as well as ongoing equity plan implementation
Ongoing compliance with regulatory frameworks and good governance
Tender processes and adjudication
Local procurement and employment
Crime and corruption prevention
Risk to value creation
- Non-compliance leads to operational disruption and possible penalty
- Default in taxation and other regulated payments results in reputational, operational and financial damage
- A lack of industry participation on numerous initiatives, including upholding standards, impacts business collaboration and sector development
- Lack of infrastructural development obstructs business operations and growth
Opportunities
- Private and public sector working together will support economic growth activity
- Clear understanding of national priorities will advance and improve growth, business processes, employment and fiscal contributions
- Improved essential supply and provision, such as power, security, rail and public transportation, education and health will enhance and accelerate the national imperative
Value created
A combined R38bn paid in taxes to host countries (FY2021: R33bn)
No material regulatory fines or violations
Group Level 2 B-BBEE rating:
73% of individual businesses Level 1-3;
98% Level 1-4
Constructive engagement with various tender boards
Introduced local partners and procurement elements in various contracts
Engagement with Transnet on public private partnership in dry bulk terminal
Significant improvement in basic security control disciplines using ALICE
Group IT risk score
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 value 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.
How we engage
Engagement topics
Value created
How we engage
- Direct interaction
- Sessions to achieve regulated deliverables
- Industry bodies
- Partner forums, including conferences
- Proposal and tender processes
Engagement topics
Market impacts
Supply constraints and impediments
Product and service quality and pricing
Industry development
Bundled service and product provision
New product and service offerings
Risk to value creation
- Disjointed partnership structure leads to business interruption
- Diminishing partnership base causes inefficiency, a deterioration in advice, pricing disorders, all resulting in planning challenges
Opportunities
- An available and improving skill-set and experience base continues to enhance the overall Group product and service offering
- Efficiencies, costs and quality improves with sound advice
Value created
Strong partnership base formed over many years
Renewed and/or extended licence agreements
Launched new products and services
Partnership with two banks to offer solar solution to home loan customers
ALICE partnered with audit firms to build capability to audit certain financial information at scale with limited human interaction; and digitised the digital transformation assessments conducted by a technology service provider
Bidvest partnered with the Black Management Forum and established the Women's Empowerment Desk
A leadership development programme, in partnership with a service provider, personalised for each Exco member and divisional CFO
PHS and Htf partnered on Project SEARCH to support young people with learning disabilities into paid full-time employment
Customers
The Group services over 300 000 customers through some 550 facilities across its operating footprint. 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.
How we engage
Engagement topics
Value created
How we engage
- Planned procurement and supply processes
- Regular contact with key customers
- Ongoing contact with vast customer base through marketing and other promotional activities
- Training and development interventions
- Digital platforms, including customer care systems
- Industry and product specific events
Engagement topics
Market normalisation
Compliance to a customer-centric ethos
Increasingly complex and value sensitive business environment
Retain and grow key customers
Requirements for higher Black ownership
Tenders and procurement opportunities and decisions
Risk to value creation
- Declining acceptance of product and service offering potentially reduces revenues, profits, and sustainability
- Interruptions to customer supply
- Non-compliance with customer protection legislation causes operational disruption and reputational damage
- Customer affordability, driven by declining consumer spend, detrimental to sustainable growth and ongoing societal contributions
Opportunities
- Everyday essential product range continues to attract larger market interest
- Hygiene and wellness offering finding good market acceptance, creating a platform to enhance international growth
- Decentralised structure enables focused customer attention, and reaction when required, and strategic agility enabled when market dynamics or customer expectations change
- The Group's advancing use of technology, innovation and data usage improves the customer experience and expectation
Value created
Revenue up 13% to R100bn
Invested in working capital, particularly inventory to meet customer demands
Services division split to enhance focus and customer offering, and better define geographic expansion
Gained market share
Turnkey solutions to customers, include the monitoring of RBCT rail line, Transnet pipeline, telecom towers, etc
Focus on key senior relationships with strategic customers
Pragmatic and commercial approach to Black ownership
New products, services launched:
AERAMAX Professional and BIOZONE air purifiers that remove harmful germs, allergens from the air
Patented, water-efficient washroom water products – FLOWSAVER – save customers > 2.6mn m3 of water annually
Plastic-free biodegradable bags to dispose sanitary waste into PHS bins
Energy efficient waste baling machines for a more cost effective waste streams
Security uniforms with incorporating more sustainable fabric
Introduction of 2 cobots, Leoscrub and Rex
Suppliers
Companies that provide goods and services to the Group, which include outsourced services, including consultants
Objectives
Ensure a procurement base that enhances the relationship model between the Group and supply company. To achieve this, the communication with key suppliers on market trends and requirements, as well as product innovations is a key focus area
How we engage
Engagement topics
Value created
How we engage
- Managed at a decentralised level
- Supplier systems (including audits) in place to inform improve regulatory, standards, financial, legal and quality issues
- Procurement teams pursue regular, and where possible direct face-to-face, communication through various channels
- Trade, product, industry and sector events
Engagement topics
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
Enhancing communication channels
Risk to value creation
- A lack of collaboration to enhance efficiencies will reduce the Group's key cost focus
- Misunderstanding causes delays and market supply frustrations
- Declining product and service quality leads to negative impacts on overall business deliverables
Opportunities
- Supplier diversity programme underway to support long-term relationships with small and Black-owned businesses to ensure their sustainability
- Significant focus on expanding and growing the supplier base that meets the expectations of the Group's ESG Framework
- A better, more informed and efficient supply chain enhances growth and stakeholder return
Value created
R47bn procurement spend in SA. R8bn procured from black-owned and black woman‑owned SME businesses
Continually establishing alternative supply channels
Engaged with suppliers on product innovation
Engaging with select suppliers of Noonan and PHS to understand complete supply chain footprint
Continued efforts to streamline logistics chain
Bidvest integrated Supplier Diversity Programme overview:
