Value creation model
CEO
Our values
The Bidvest Group has a performance driven, decentralised business model that continuously seeks scale and growth through its diverse portfolio. We do this by maintaining a strong balance sheet, exercising financial discipline through considered capital allocation, and pursuing organic and acquisitive growth opportunities in the identified areas of strategic focus to deliver value.
We promote and support our entrepreneurial management teams that empower many enterprises across our diverse areas of operation to be catalysts for value creation. We further support our teams to create an ecosystem of businesses that actively supports and adds value to our customer base, focuses on cash generation and returns, but at the same time strengthens society and enables it to function efficiently and sustainably. We foster innovation and an environment in which employees thrive, which in turn drives our advance across markets, geographies and society.
Business model
Whereas most definitions of a business are demand-driven, ours is largely supply driven. We’ve chosen what we believe are significant markets and developed products and services around the areas of operation. These products and services are essential and part of the every day activities of our customers. While we have a very diverse range of products and services, the customer profile is fairly similar. This makes the management and quality of our stakeholder relationships specifically important in that we want to remain focused on those interventions that are meaningful for enhanced stakeholder interaction with the Group.
Social and relationship capital: As we increasingly acknowledge the need for an inclusive economy, we aim to improve our proposition to the 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 ensure that we can deliver the highest 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: Our key competitive advantage is gained by our people through their knowledge and intellectual property, together with our well-established brand and reputation. The knowledge, skills, talents and experience of our people 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.
Manufactured and natural capital: We invest in and upgrade our services capabilities, distribution centres, storage and handling facilities, branch network and other infrastructure, which 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: 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.
Functional governance structure:
- Diverse and experienced leadership;
- Majority independent non-executive board;
- Code of Ethics and Authority matrix;
- Formal reporting structures; and
- Clear and simple key performance indicators.
Our operating environment:
- Recognising that South Africa’s economic growth is constrained in the absence of structural reforms and investment;
- Dealing with government policy and regulation;
- Responding to technology advances to enhance Group businesses;
- Volatile socioeconomic conditions (exacerbated by COVID-19);
- Out-of-home hygiene market which is increasingly resilient and supported by structural growth drivers;
- Increased health and wellness awareness by consumers; and
- Increase in outsourcing and bundled spend remains strong.
Material matters:
- Global supply chain constraints;
- Challenging economic outlook and constrained consumer spend;
- Increasing regulation and cost of doing business;
- Ongoing COVID-19 impacts, notably the hybrid way for working and learning;
- Cyber assaults;
- Loss of agency and distribution rights, port leases and licences; and
- The shortage of skills.
An intimate understanding of the factors that drive value enables us to identify our areas of strategic focus.
Creating value
The concept of value creation is deeply embedded in Bidvest. This is closely aligned to all our efforts to create value for each stakeholder group, which in turn drives our focus on optimising the value of our products and services, at a sustainable cost to society.
We use our capital inputs to help us define enablers to ensure the successful delivery of our Purpose
Considerable direct economic and social value generated in FY2021
For more detailed information about the Group’s governance processes and material focus areas, risks and responses, please refer to the Annual Environmental, Social and Governance Report and throughout this report.