The Bidvest Group Limited ANNUAL INTEGRATED REPORT 2012
Download options
Search

Bidvest at a glance

 

        Description of business       Results       Sustainable development  
  Bidvest
South Africa
 
    The division includes a variety of service and product offerings across southern Africa.       Realigned and refocused businesses achieved positive revenue and earnings growth in challenging market conditions. Revenue increased from R59,0 billion (2011) to R62,7 billion (2012). Trading profits increased by 13,0% to R3,9 billion. impressive contributions from Bidvest Automotive (32,9%) and Bidvest Office (27,7%). Substantial market-share gains and efficiency improvements.       Audit, risk and sustainability structures in place in each division, including formalised reporting systems.  
 
Automotive  
    One of South Africa’s largest motor vehicle groups offering leading motor brands through
116 dealerships, as well as vehicle auctioneering.  
    Pleasing result with trading profit 32,9% higher at R502,4 million (2011: R378,1 million) while revenue rose to R19,1 billion (2011: R18,6 billion). New vehicle sales rose in line with market conditions. Used-car sales sluggish. Expense reduction continued and the cost-base of central services was cut by 30,0%. Retail operations restructured into six franchise silos.       Electricity usage decreased compared to data in June 2011, ensuring the target of 10% decrease will be achieved by the end of the calendar year. Diesel and petrol consumption reduced by 14,0% and 5,0%, respectively. Water targets have been implemented by the local teams. HIV and Aids awareness campaigns form part of staff wellness campaigns. Customer complaints saw a decrease of 22,3%.  
 
Electrical  
    A leading distributor of electrical products and services.       Achieved a measure of growth despite ongoing recessionary conditions in construction sector. Revenue rose to R4,3 billion (2011: R4,1 billion) while trading profit increased 14,1% to R207,6 million (2011: R181,8 million). Expenses well controlled in a year of transition as operations were rationalised. Voltex Retail had a pleasing performance; Sanlic a poor year; Waco showed improvement.       Partnering with Eskom as the 48th corporate in their 49M campaign, encouraging South African population to save energy. Efficient lighting systems have been implemented and energy management software is being developed to monitor water and energy consumption and costs. The division has installed Bidtrack fleet management system to track fuel economy and improve routing. CSI spend increased.  
 
Financial Services  
    A comprehensive range of banking and insurance products and services, specialising in foreign exchange and insurance.       Divisional trading profit rose 13,1% to R586,7 million (2011: R518,9 million). Innovation drove growth at Bidvest Bank with a customer base of more than 1,5 million by year-end. Bidvest Insurance delivered solid results as it diversified its activities and maximises opportunities within existing distribution channels.       Implementation of Treating the Customer Fairly programme has ensured the bank will be ready for when this requirement becomes a mandatory programme. Training spend increased. CSI spend was R3,5 million and was spread over 28 initiatives. Bidvest Bank excelled in their B-BBEE development, achieving a rating of Level 2 in August 2012.  
 
Freight  
    The leading private sector freight management group in sub-Saharan Africa, consisting of several independent businesses focusing on terminal operations and logistics, international clearing and freight forwarding, logistics and marine ships agency and insurance services.       Resilient performance underpinned by firm commodity volumes; trading profit rose 7,5% to R952,7 million (2011: R886,2 million). Revenue moved 8,4% higher to R20,9 billion (2011: R19,3 billion). IVS achieved record profits and costs were well controlled; BPO had a tough year impacted by lower volumes; Bidvest Panalpina Logistics with profit growth above expectation and DRC business sold.       Bidvest Freight recorded one fatality and despite ongoing safety training, the injury rate increased to 1,9. Training investment increased by 17,0%. CSI projects are ongoing for the businesses.  
 
Industrial  
    Offers a full range of Yamaha products, Nissan forklifts and imports, electrical appliances, houseware products, packaging closures and catering equipment.       Disappointing results with revenue flat at R1,5 billion while trading profit fell 30,9% to R81,8 million (2011: R118,4 million). Difficult year for Afcom and Buffalo Executape; Berzacks and Bloch & Levitan facing continued pressure; Bidvest Materials Handling impacted by slowdown in customer capex; Vulcan rebounded well following rationalisation while Yamaha impacted by pressure on consumer spend.       CSI spend increased with two of the division’s companies taking part in the Bidvest World Chefs tour. Rally to Read and Reach for a Dream are two initiatives supported by companies in the division. Recycling is a focus area and waste is kept where possible to a minimum. B-BBEE levels were maintained.  
 
Office  
    A leading distributor of office products, including stationery, furniture (seating and desking) and technology (copying, digital printing and cash-handling systems).       An exceptional performance with strong results at the technology companies, Konica Minolta SA, Océ SA and Global Payment Technologies. Revenue rose 13,6% to R4,2 billion (2011: R3,7 billion) with trading profit 27,7% higher at R275,1 million (2011: R215,4 million). Restructured furniture businesses showed significant improvements while challenges remained in furniture manufacturing; Waltons successfully restructured.       Various environmentally friendly products and initiatives are used by the division’s companies to reduce the carbon impact. CSI spend increased by 14,0%. Training spend increased to R15,5 million ensuring highly trained people give the division a competitive advantage.  
 
Paperplus  
    A leading manufacturer, supplier and distributor of commercial office products, printer products, services, and stationery and packaging products, through a wide network of outlets in southern Africa and provider of outsourced customer communication services.       Volumes impacted by private sector cost cuts, subdued exports and low general print demand. Trading profit improved marginally to R328,1 million (2011: R325,6 million) with a 4,1% revenue increase to R3,9 billion (2011: R3,7 billion). Email Connection performed exceptionally well; additional capacity created for Sprint Packaging and a certified food safety facility established; disappointing performance from Silveray Statmark; good year for Kolok.       Although energy efficiency is a priority, electricity and fuel consumption increased due to increased business. The division helps reduce paper waste by providing electronic alternatives and environmentally friendly packaging and recycled papers. CSI spend increased to R2,2 million mainly focused in schools. A graduate training/learnership programme is being developed and will roll out in 2013. The injury rate has reduced to 2,0.  
 
Rental
and Products
 
    Products and services designed to enhance the working environment through hygiene rental equipment, consumables, laundries, indoor plants, drinking water, water coolers and specialised clothing.       Outstanding performance by Steiner and G.Fox helped division grow trading profit by 19,8% to R383,8 million (2011: R320,3 million) while revenue increased 20,8% to R2,1 billion (2011: R1,7 billion). Major contract renewals and new business gains boosted Steiner result while G. Fox positively impacted by Alsafe acquisition. Pureau and Silk by Design performed well. Execuflora, Laundries and Hotel Amenities had disappointing results.       Various initiatives underway to ensure recycled products are used as alternative. Investigation being done into the feasibility of building a water recycling initiative for the laundry businesses. Water usage increased due to increased business. Training spend increased by 17,0%, CSI increased to R2,1 million.  
 
Services  
    A range of outsourced services in cleaning, security and landscaping as well as specialised services to the industrial sector.       Performance mixed in challenging environment. Trading profit up 11,5% to R215,4 million (2011: R193,2 million) and 5,4% revenue increase to R3,1 billion (2011: R2,9 billion). Strong contributions from Prestige Cleaning and Magnum Security; costs well controlled; Bidtrack good performance; rationalisation continued at TMS and Topturf.       Internal targets are set to ensure a decrease in the carbon footprint. The carbon emissions have reduced due to a reduction in fuel usage. Health and safety are the key areas of concern, and despite the best efforts there were three fatalities. CSI spend increased to R1,6 million.  
 
Travel
and Aviation
 
    Provides travel-management services, aviation services, airport lounge access and car rental through its extensive locations and distribution channels.      Pleasing overall performance with trading profit 18,2% higher to R319,4 million (2011: R270,3 million) with 9,6% increase in revenue to R2,0 billion (2011: R1,9 billion). Bidtravel results exceeded expectation; Bidair Services impacted by pricing pressures in competitive tendering; good volume growth at Bidvest Lounges; cargo volumes suffered as services curtailed; Budget Car and Van Rental good growth.       Although a relatively low emitter, efforts to reduce the carbon footprint are ongoing in the companies. Safety is a priority and it shows in the reduction of the injury rate. Training spend increased to R17,1 million and is essential for the longevity of the division. CSI spend increased significantly to R4,4 million covering many different CSI projects.  
 
  Bidvest
Foodservice
 
    Market-leading foodservice product distributors in its chosen geographies, operating through strategically located independent business units servicing the catering, hospitality, leisure, bakery, poultry, meat and food-processing industries.       Foodservice revenue grew 18,6% to R70,8 billion (2011: R59,6 billion). Rand weakness accentuated revenue growth in Europe and Asia Pacific. Asia Pacific now comprises the largest contributor to the foodservice cluster. In South Africa, margin pressure increased and competitor activity was intense.       Food safety, energy and fuel efficiency as well as potential environmental impacts are main focus areas.  
 
Asia
Pacific
 
    Australia, New Zealand, Singapore, Hong Kong and Greater China and Chile.       Positive finish to year at Bidvest Australia took revenue up to A$1,9 billion (2011: A$1,8 billion) with trading profit growth of 4,5% to A$84,3 million. Bidvest New Zealand exceeded expectations and grew revenue 15,1% to N$29,0 million up 13,1% although slowdown in foodservices market. Angliss Greater China put in pleasing effort with revenue up 12,8% to HK$2,5 billion (2011: HK$2,3 billion) and trading profit up 20,8% to HK$102,7 million. Revenue fell at Angliss Singapore by 3,9% to S$333,6 million and trading profit down by 54,7% to S$5,3 million.       Training spend and employee numbers increased. Water usage increased marginally across the division. CSI spend increased across the division.  
 
Europe  
    United Kingdom, Belgium, the Netherlands, Czech Republic, Slovakia, Poland, Saudi Arabia and the United Arab Emirates, Lithuania, Latvia and Estonia.       Overall UK results improved. 3663 First for Foodservice revenue up by 7,7% to £1,1 billion and trading profit 2,3% to £35,1 million. Bidvest Logistics returning to trading profit with better trading volumes. Deli XL Netherlands impacted by lower sales with revenue down 2,8% to €722,7 million. Deli XL Belgium grew revenue growth by 14,8%. Bidvest Czech Republic and Slovakia faced challenging conditions while Nowaco Baltics settled in well. Farutex Poland grew revenue while operations in Dubai and Saudi Arabia performed well.       Training spend increased to R14,6 million. Divisional absentee rate dropped to 4,0%. CSI spend increased especially in 3663 and Deli XL Netherlands. Recycling of rainwater at 3663 has saved eight million litres of water. Deli XL Netherlands has set targets to reduce carbon emissions by 20% in 2015.  
 
Food
Southern
Africa
 
    Southern Africa.       Results below expectation although revenue rose to R6,1 billion (2011: R5,4 billion). Trading profit fell to R309,3 million (R2011: R356,1 million). All businesses impacted by cost pressures above inflation. Investment in IT, food safety, technical skills and new premises laid foundation for future growth. Foodservice delivered good growth although margins declined. Bidfood Ingredients impacted by cost increases and margin pressure. Patleys recorded a poor performance resulting from a breakdown in management controls.       Water consumption has increased overall but NCP Yeast the predominant user has decreased its usage. Investment in new technology, food safety and technical skill laid the way for growth.  
 
  Bidvest
Namibia
 
    Bidvest Namibia is the holding company for Bidvest’s interests in Namibia, which include fishing and similar commercial businesses to those of Bidvest in South Africa.       Strong performance drove revenue 39,3% higher to R3,0 billion (2011: R2,1 billion) while trading profit rose 18,1% to R637,7 million (2011: R540,2 million). Strong results by fishing businesses underpinned by good horse mackerel volumes and firm prices. Margins impacted following acquisition of FMCG distributor. Turn-around strategies and improved management skills in Bidcom yielding positive results. Corporate hygiene services launched by Steiner.       Continued relationship with ministry of fisheries ensures the sustainability of marine resources. Waste management is a high priority. Recycling and energy efficient lighting systems are managed by sustainability champions. Bidvest Fisheries reported one fatality.  
 
  Bidvest
Corporate
 
    Provides strategic direction, financial, risk and sustainability management, marketing, investor relations, corporate communications, corporate finance, houses investments and provides executive training to the Group. Adds value by identifying opportunities and implementing Bidvest’s decentralised entrepreneurial business model.       Disposal of a portion of interest in Mumbai International Airport for a profit of R399,1 million concluded in October 2011. Bidvest Properties completed new regional office and distribution centre for Waltons. Corrective action taken at Ontime Automotive following losses at specialist vehicle delivery and rescue and recovery businesses.       Introduction of a custom built information reporting tool allows for more meaningful sustainability data to be collected. Flexibility from the tool allowed some of the divisions to start reporting on a quarterly basis. The extent of review assurance provided by Deloitte on certain specific indicators has increased in the current year. While GHG emissions increased by 4,5% to 725 828 tonnes CO2 emissions intensity decreased by 7,5% to 5,3 tonnes CO2 per R millions revenue. Property portfolio growing. CSI spend increased.