Group strategy

This year marks 115 years of contribution to the communities and societies to which we belong. It is a proud history that we are committed to upholding. Our transition to a new leadership has provided an opportunity to think strategically about the future and reflect on our past performance.

Completely revisiting the corporate level strategy has allowed us to reflect on the group and the businesses we have today, our performance against the goals previously set and, as an organisation, we have considered what we as a business want to achieve over the medium term and what legacy we want to leave for future generations. This laid the foundations for a bold ambition, clarity of what was required from each of the business and the group and a clear pathway to achieve this.

Our ambition is bold – to double the intrinsic value of our business every four years.

Achieving our ambition by: Facing our challenges

Over the last five years, our revenues (including discontinued operations) have increased in line with inflation, but return on equity has been below our internal target of 15%. This has limited our ability to create value for shareholders.

Our vision is bold – to delight our customers and maximise shareholder value.

Our vision is grounded in the understanding that we must run a successful business that generates superior returns for our shareholders in order for us to create value for stakeholders and contribute meaningfully to the societies in which we operate.

After this intensive process, which concluded in March when the board approved the group’s new strategy, we are well placed to deliver on the bold ambition.

Forging a new path

During the corporate level strategy review process, we considered all aspects of the group and its businesses. This review caused us to reflect on the following items:

  • What is the full potential of each business in the portfolio today in the context of the constraints of their existing markets?
  • Are there opportunities within each of our chosen business segments to further expand the group?
  • What else would we need to deliver on our growth for value ambitions?

Our new strategy seeks to create value by balancing our long-term growth ambitions while focusing on achieving acceptable returns for our shareholders in the medium term. This will continue to be underpinned by our responsible citizenship programme. In order to adapt to this new operating context and achieve our ambition, the group will drive the strategy by addressing three critical levers in the short to medium term:

Our vision will remain while these levers will change over time as we implement our strategy and adapt to a changing environment. As this change occurs we continue to find the right levers to pull to ensure the ongoing creation of shared value for our stakeholders.

Our strategy: Progress against our strategic goals

Our revised strategy seeks to balance our long-term growth ambitions with medium-term returns for our stakeholders, underpinned by our responsible citizenship programme. We believe that in order to double the intrinsic value of our business every four years, we must deliver against our strategic pillars on an ongoing basis.

Deliver top quartile shareholder returns

Drive profitable

Instil a high-performance culture

Deliver top quartile shareholder returns

Objective Progress

Our objective is to be the investment of choice by delivering top quartile returns to our shareholders, as measured by the return we generate on the capital invested

During the year, we undertook a strategic review to identify and address underperforming areas of the business through targeted interventions and projects focused on improving efficiency, while exploring acquisitive opportunities

Key performance indicators
  Measure   Target   Performance
  Return on equity   ≥15.0   10.5%*
  Return on invested capital   13.0   11.2%*

Drive profitable growth

Objective Progress

To deliver on our ambition, we actively drive profitable growth across all businesses, to ensure we meet the expectations of our stakeholders

During the year, we reviewed and revised the measures used to assess the profitability of our operations, moving towards a more balanced view of value creation

Key performance indicators
  Measure   Target   Performance
  Economic profit (Rm)   >0   –286
  Economic profit delta (Rm)   >0   574
  Free cash flow (Rm)   >0*   3 410

Instil a high-performance culture

Objective Progress

To deliver, we need to ensure we instil a
high-performance culture that emphasises
and rewards delivery

During the year, we embarked upon a progress of understanding the human capital capabilities we need to support our new strategic ambition. We identified key talent within the business and have developed interventions to support their growth

Key performance indicators
  Measure   Target   Performance
  Work-related fatalities   Zero   3
  Lost-time injury frequency rate (LTIFR)   ≤0.5   0.75
  Total direct training spend per employee   ≥R8 000   R6 472
  Diversity and inclusion (2020 targets)        
  % women of total headcount   ≥35%   27%
  % women in middle management level and above   ≥40%   36%
  % African, Indian and coloured (AIC) employees of total headcount   ≥75%   74%
  % AIC employees in middle management level and above   ≥50%   42%
  Rating level under the dti codes   Level 4 or better   Level 3