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BIDCORP ANNUAL INTEGRATED REPORT 2021
Annual
Integrated
Report
2021
www.bidcorpgroup.com
Building a brighter future Building
a brighte
r
future
Bidcorp is an international broad-line foodservice group, Navigating this report
listed on the Johannesburg Stock Exchange, and present
in developed and developing economies on five continents.
ESG
It’s all about the food, service and technology OUR CAPITALS
Environmental
sustainability
OUR STAKEHOLDERS
Financial
HC Human capital FC capital Social Employees Customers
engagement and
responsibility
Social and
What’s on
Intellectual
SC relationship IC capital Communities Suppliers
capital Sound
governance
Manufactured Natural
MC NC Authorities Investors
our plate
capital capital
WHO WE ARE
Bidcorp 2021
About this report 1-3 OUR SDGS
Bidcorp:
Global footprint 4-5
• is a complete foodservice 2021 Annual reporting suite
Why invest in Bidcorp 10
solution serving customers in Strategy in action 11 We are committed to transparent reporting to our stakeholders. Remu-
more than 35 countries Engaging with our stakeholders 18-25 The following reporting frameworks were applied in preparing Notice neration
• people are entrepreneurial Bidcorp business model 14-17 this report: AIR AFS of AGM report
and incentivised to be so Value creation and response 37-43 • The Companies Act, No 71 of 2008, as amended
Environmental sustainability 25-29 (Companies Act)
• has a proven decentralised
business model and best • The JSE Listings Requirements
practices are shared Leadership reviews
Chairman’s message 8-9 • The King IV Report on Corporate Governance for South
• growth is organic, acquisitive- Chief executive officer’s report 12-13 Africa 2016 (King IV)*
organic through bolt-ons, and Chief financial officer’s report 32-36
acquisitive • The Global Reporting Initiative’s Standards (GRI)
Operational reviews
• believes that balance sheet • The International Integrated Reporting Framework
strength with conservative Bidfood Australasia 46-51
gearing is a key competitive Bidfood United Kingdom 52-57 • United Nations Sustainable Development Goals (SDGs)
advantage Bidfood Europe 58-63
• is at the forefront of Bidfood Emerging Markets 64-69
foodservice digital commerce Bidcorp Corporate 70-71 Click here for the full 2021 annual reporting suite
with its proprietary technology
Governance reviews
• embraces environment, social Board of directors 74-79
and governance criteria within Good governance creating value 80-81 Throughout the document we make reference to supplementary sources of
its day-to-day operations information or additional information that might be found in this report.
and integrated reporting Ancillary information These icons will direct you to the other information:
framework Board of directors curricula vitae 84-85
Shareholders’ information 86-87 Cross-reference content Click here for more information
• business model has been within this report on the company’s website
tested and proven through the Shareholders’ diary 87
COVID-19 (COVID) pandemic Glossary 88
Administration 89
Feedback
This is our primary report to our For further information, contact
shareholders and other stakeholders investorrelations@bidcorp.co.za
Bid Corporation Limited I> Annual integrated report 2021 1
2021 Annual
Integrated Report This report tells the Bidcorp value creation story
The Bidcorp board endorses the concept of integrated thinking, which underpins
corporate citizenship, stakeholder inclusivity, sustainable development, and delivers a
robust integrated reporting outcome. Our annual integrated report is the output of a
group-wide integrated communication and engagement process, capturing the many
Approval by the board
It is the board’s responsibility to
ensure the integrity of the annual
integrated report. The audit and risk
committee and the social and ethics
independent value creation stories produced by each of our businesses around the world,
Scope and boundary committee acknowledge their
which combines to deliver the value created by the group over the course of the past year.
Bid Corporation Limited (‘Bidcorp’ or ‘group’) reports the consolidated financial and responsibility to ensure the integrity of
non-financial information gathered from the global spread of the group’s businesses in Sustained value creation, and the reporting thereof, is the result of embedding integrated this annual integrated report. The
this annual integrated report for the year ended June 30 2021. Bidcorp’s geographic thinking within our organisation, understanding the process is continuous, and board has accordingly applied its
reach spans over 35 countries on five continents. Due to the expanse of local acknowledging the inherent relationships between our six capitals, the trade-offs made in collective mind to the content of the
geographic regulations, we focus the information in this report on those areas that we pursuing value creation, and the responsibility we have to the outcomes delivered. We report and in the opinion of the board,
consider material to the long-term sustainability of the group as a whole. strive to report transparently, reflecting both the value created and preserved, as well as believes it addresses all material
the value eroded. By understanding how these elements interact, we are better able to issues and presents fairly the
In line with the guidelines from the Integrated Reporting Committee of South Africa, Assurance deliver sustained value for all of our stakeholders in the short, medium, and long term. integrated performance of the
we report using the recommended six capitals as a platform to inform this review, We have adopted the King IV principles on organisation and its social and
while striving for concise, relevant reporting. This report contains relevant For an understanding of the various elements of our value creation story, refer to
corporate governance recognising the environmental impacts.
page 14 – 17.
comparisons to previous periods and is consistent with information and performance board, management, internal, and external
indicators included in internal management reporting. This value creation story process is governed by the board, assured through our combined The Bidcorp board has authorised the
assurance providers as key assurance role
assurance model, and delivered through the collaboration of our decentralised, 2021 annual integrated report for
players in ensuring the business has an
The annual integrated report is our primary report to stakeholders. It is principally independent businesses sharing their stories. Our decentralised operational approach is release on October 28 2021.
effective control environment and a strong
aimed at providers of financial capital, being our shareholders and debt providers; aligned through a shared strategy and value creating business model, as we deliver on
ethical climate. While third-party assurance Stephen Koseff
however, it considers the information needs of all our stakeholders. our promise to build a brighter future together.
has not been sought for all information Chairman
There has been no material change in the scope and boundary of this report contained in this report, certain information For more insight into each Divisions value creation story, refer to pages 46 – 71.
compared to the prior year. has been independently assessed and Bernard Berson
The board assumes accountability for the group’s performance. The board guides and
verified: Chief Executive Officer
Click here more insight into the value creation story, refer to bidcorpgroup.com/ oversees the business in the context of material and emerging risks and opportunities to
where-we-operate.php • The consolidated annual financial ensure that the strategy remains aligned to long-term sustainable value creation. The David Cleasby
statements were audited by external management team is tasked with navigating these risks and opportunities, and managing Chief Financial Officer
Materiality auditors, PricewaterhouseCoopers Inc., the day-to-day operations efficiently and sustainably.
Tasneem Abdool-Samad
The Bidcorp board has considered the legitimate interests of all our key stakeholders a qualified opinion was issued. Refer to For more insight into the value creation, preservation, and erosion in management’s Independent Non-Executive Director
the 2021 annual financial statements for response to the risks and opportunities, refer to pages 37 – 43.
in determining information that is considered material for inclusion in this report. We
the full report Board oversight includes the environmental, social, and governance Paul Baloyi
demonstrate the connectivity between our strategy, business model, stakeholder
Click here for the 2021 annual financial (ESG) issues forming part of its decision-making process to support Independent Non-Executive Director
interests, and management’s response to our risks and opportunities analysis. The
material issues are monitored by management on an ongoing basis and have been statements. sustainable stakeholder value creation. The social and ethics committee Building Brian Joffe
reported herein. • Broad-based black economic meets on a quarterly basis, with a robust and engaged agenda to a brighter Independent Non-Executive Director
understand, challenge, and inspire the journey to building a brighter
We apply the principle of materiality in assessing what information should be included empowerment (B-BBEE) performance
future. Quarterly reviews of key ESG performance indicators provide a future Keneilwe Moloko
in our annual integrated report. This report focuses particularly on those risks and was independently assessed and verified
sound foundation for measuring the level of impact our efforts have made Independent Non-Executive Director
opportunities that impact materially on our six capitals, and therefore on the group’s by EmpowerDex
to protect the environment in which we operate. Nigel Payne
ability to be a sustainable business that consistently creates and preserves, • Non-financial disclosures and For more insight into the value creation journey in environmental sustainability, refer to Lead Independent Non-Executive
minimising the erosion of value creation for all. performance data is reviewed quarterly by pages 25 – 29. Director
Identifying our material matters is a group-wide responsibility and requires input from the board and validated through internal
This report is prepared in accordance with the International Framework of the
each of the business management teams, assessed within each divisional structure, financial control review processes Clifford Rosenberg
International Integrated Reporting Council (IIRC), including enhancements published in
and consolidated for group review and consideration. Material matters change over Independent Non-Executive Director
The board is ultimately responsible for January 2021.
time, influenced by many factors, including changes in our economic, natural, and combined assurance by setting the direction Helen Wiseman
social environments, evolving consumer needs and trends, advancements in The annual integrated report is drafted by the group’s investor relations team, supported
concerning the arrangements for assurance Independent Non-Executive Director
operating systems and technology, disruptions in our competitive landscape. by the businesses reporting and marketing teams, detailed internal management and
services and functions.
board reports, interviews with executive management, and the many engagements with
As an outcome of the group’s annual risk review, the board agreed that all material key stakeholders throughout the course of the year.
risks and opportunities identified and presented to stakeholders last year remain Financial performance
relevant for 2021. In this report, we have provided a summary
of the financial results for the year ended
June 30 2021. Bidcorp’s audited 2021
Forward looking statements annual financial statements prepared in
This report may contain forward looking statements regarding financial accordance with the recognition and
prospects of the group and specific businesses. All forward looking statements measurement criteria of International
are solely based on the views and considerations of the directors. These Financial Reporting Standards, is
statements involve risk and uncertainty as they relate to events and depend on available as part of the annual
circumstances that may or may not occur in the future. The group does not reporting suite, on the group’s website
undertake to update or revise any of these forward looking statements, www.bidcorpgroup.com.
whether to reflect new information, future events or otherwise. These forward
looking statements have not been reviewed or reported on by the group’s
external auditors.
2 Bid Corporation Limited I> Annual integrated report 2021 Bid Corporation Limited I> Annual integrated report 2021 3
Bidcorp, operating as Bidfood in most
geographies, has a decentralised
model which encourages the
Global Local
entrepreneurial spirit contained in each
of its businesses. Each business is
directly responsible for product range,
footprint offering
and their buying and sales approach.
The cultural differences is what
differentiates us, keeping us connected
to our local stakeholders.
Bidcorp Group
Revenue Corporate Services
R114,8bn
Corporate cost A lean head office team,
Trading profit supporting financial consolidation,
R106m
R4,8bn meeting governance and reporting
requirements. With a team
Employees
Employees developing market-leading IT
61 solutions, and offering supply
22 552 chain support.
Carbon emissions
287 982 tCO2
Further details, see pages 70 – 71.
Bidfood United Kingdom
Bidfood Europe
Bidfood Emerging Markets
Bidfood Australasia
Bidfood United Kingdom Bidfood Europe Bidfood Emerging Markets Bidfood Australasia
Revenue For more than 20 years as a leading foodservice wholesaler, Revenue With nine reporting management teams reaching over Revenue With a geographic footprint over four continents, this division includes Revenue Operating in Australia and New Zealand for over 20 years,
R25,0bn Bidfood has supplied fresh, frozen, ambient food, beers, wines, R35,7bn 13 countries, this division is characterised by leading R21,1bn operations in Africa, South America, Asia, and Europe. African
operations manufacture and distribute ingredients for the meat, poultry,
R33,0bn these businesses offer a full end-to-end national distribution
service. Bidfood is a one-stop wholesale solution distributing
spirits, catering essentials, and catering equipment to customers foodservice distributors in their respective countries, offering
dairy and bakery industries; as well as being a market-leader in products to the foodservice and catering industry, offering a
Trading profit in a wide range of sectors. Working behind the scenes to supply Trading profit unparalleled end-to-end value-add foodservices. Supplying Trading profit multi-temp foodservice offering ambient, chilled and frozen food
Trading profit comprehensive product and services range as the customer
over 60 000 products to nearly 45 000 customers. With a premium brands across a wide range of product lines, and a
R0,4bn depot network spanning the country, a truly local presence is
R1,1bn significant presence in Own Brand manufacturing and
R0,9bn products to the horeca market. Asia and the Middle East have R2,5bn determines. The division leads the group in ecommerce
established themselves as a foodservice player in their markets, whilst innovation, developing and driving the globally available online
Employees experienced. The multi-temperature supply chain ensures the Employees distribution, Bidfood Europe is fast becoming recognised as Employees still distributing exclusive high-end speciality products into the western Employees “myBidfood” customer engagement solution, setting us apart
full consolidation experience of frozen, ambient, and chilled a leading foodservice distributor in the horeca sector. Our
5 753 products on the same delivery truck. Recently doors have 6 605 industry-leading innovations in operational efficiencies, and
5 920 styled food market. South America sources and distributes frozen,
chilled and ambient local product into the independent street market
4 213 from our competitors.
been opened to the public, offering home delivery and “click ground-breaking product and menu development, these across Brazil, Chile and Argentina.
Carbon emissions and collect” solutions direct from the depots.
Carbon emissions businesses deliver smart solutions exceeding customer
Carbon emissions Carbon emissions
62 500 tCO2 79 107 tCO2 expectations. 76 832 tCO2 69 543 tCO2
Bidfood SA Crown Food Chipkins Puratos Middle East
Netherlands Czech/Slovakia Poland Belgium Baltics Turkey Mainland China Hong Kong Macau Singapore
Bidfood UK Bidfresh UK Italy Spain Portugal Germany Malaysia Vietnam Brazil Chile Argentina Australia New Zealand
Further details, see pages 52 – 57. Further details, see pages 58 – 63. Further details, see pages 64 – 69. Further details, see pages 46 – 51.
4 Bid Corporation Limited I> Annual integrated report 2021 Bid Corporation Limited I> Annual integrated report 2021 5
Building Bidfood Australia
Fuel efficiencies gained
in using electric trucks
a brighter
future
Gruppo DAC, Italy
Angliss, China
Bidfood Netherlands
As we move towards a net-zero goal, alternate
environmentally efficient transport methods need
NEXT UP:
to be investigated and employed. The use of
electric vehicles by Bidfood is one such option.
Bidfood currently uses 24 electric vehicles, in most Leadership
instances still on a trial basis, with a view to
Chairman’s message 8–9
expand. Alternate fuels are also being explored
such as hydrotreated vegetable oil (HVO) (bio-fuel), Strategy in action 10 – 11
compressed natural gas (CNG), and battery
powered refrigeration solutions. Chief executive officer’s report 12 – 13
We won’t stop until we have found the right Value creation business model 14 – 17
solution to reduce our emissions.
Bidfood Belgium
6 Bid Corporation Limited I> Annual integrated report 2021 Bid Corporation Limited I> Annual integrated report 2021 7
Chairman’s
message Management has continued to future-proof the group by deploying
value-adding technology, ecommerce and analytics, much of it
Appreciation
I would like to recognise the Bidcorp board, to which we welcomed
developed in-house. Understanding that the highest standards of
food safety and responsible sourcing are critical to our licence to Mrs Keneilwe Moloko as an independent non-executive director in
Every good business leader knows the importance of people July 2021. A sincere thank you to my fellow directors, Bernard and
operate, we have also kept investing to ensure the safest, most
and culture. As the father of management consulting Peter ethical and transparent food-handling standards. his executives, and the global Bidcorp team for their unwavering
commitment during the most extenuating of circumstances.
Drucker put it: “culture eats strategy for breakfast”. Nowhere
is this more evident than here at Bidcorp, where our nimble, Safety and wellbeing I also thank our many customers and suppliers for their ongoing
The safety and wellbeing of employees remains a top priority. With support and assure them that we remain committed to the highest
owner-managed businesses have proven resilient and have most of our people required to be physically present at work levels of quality and service.
acted as a foundation for growth and stability. through all levels of the national lockdowns, it is reassuring to see
the seriousness with which management teams are approaching Outlook
the mental-health effects of COVID on their staff. For at least the foreseeable future our fortunes will remain tied
Established more than 30 years ago by renowned Tragically seven employees succumbed to the pandemic over the to how fast and how effectively vaccines are rolled out, as well as
South African entrepreneur Brian Joffe, this decentralised past year. Mrs Dolly Mokgatle, who had served on the board since the effects of possible further COVID variants.
ethos – underpinned by a strong brand, systems, and October 2016 as a member of the Social & Ethics and Nominations Encouragingly, we have seen how many of our more developed,
processes – has been critical to the group’s strong recovery committee’s sadly passed away. She will be sorely missed for her larger markets have recovered in recent months, despite mixed
from COVID’s devastating impact on the hospitality, tourism, dignified and wise counsel to the board. I also deeply regret the lockdown experiences.
and leisure sectors. onsite fatality of an employee in Durban, South Africa. On behalf of
the board, I extend our deepest condolences to our colleagues’ We are grateful for the support packages provided by governments
While the pandemic has moved from critical to chronic stage,
loved ones during these most difficult times. in many of the countries we operate, enabling us to keep as many
conditions remain unpredictable with sudden lockdowns,
of our people as possible in employment. How and at what pace
differing in severity, across different geographies. Many
of our businesses continue to operate in volatile environments ESG and sustainability national leaders unwind the fiscal and monetary support measures
The sustainability agenda, fuelled by commitments to be made at they put in place will be key to our customers’ short- and
characterised by escalating geopolitical tensions, trade
the 26th UN Climate Change Conference (COP26) in Glasgow, medium-term prospects. However, given authorities’ response
protectionism, staff shortages, supply chain disruptions, and
continues to accelerate, and is increasingly central to the way we to the pandemic, I am optimistic that appropriate levels of support
various environmental, social and governance challenges.
do business. Two years ago, we had committed to cutting our will be maintained until such time as the wheels of business start
It is against this backdrop that I am proud that Bidcorp has carbon emissions by a quarter by 2025. We have made significant spinning on their own.
returned a solid performance for the 2021 financial year. progress in achieving this objective. The board is now engaging We ended the year well capitalised and well placed to take
Bidcorp CEO Bernard Berson and his small head office team management on adding additional emissions categories to our advantage of market opportunities when they arise. In the interim,
have distinguished themselves by providing a clear and robust 2030 environmental targets. we continue to practise prudent balance sheet management,
roadmap for navigating the unpredictable global environment.
Our investments into energy efficiency and self-generated electricity a strategy that has enabled us to resume dividend declarations
They have dealt decisively with a limited number of under-
illustrate the positive financial impacts of integrating sustainable consistent with our dividend policy.
performing businesses, as well as fraud only recently
discovered in Hong Kong, which fortunately is not material to practices, while diminishing our environmental impacts. As we After passing so many very severe tests in the last year, we face
the group’s performance. strive for greater transparency, we have increased and developed an uncertain future with renewed confidence. We remain optimistic
our reporting on our climate-related risks and opportunities and and hope to return to the pre-COVID levels of activity this year,
Despite these headwinds, I am privileged to have witnessed overall performance as detailed in the natural capital content and assuming the absence of large disruptions.
the strength of Bidcorp’s culture: people coming together to sustainability report. See pages 25 – 29.
swap war stories and learn from each other’s experiences.
Furthermore, across the world we are involved in local community
Under the most testing conditions, instead of being and sustainability projects, including providing food and care
weakened, our businesses became stronger, all of which packages to the most vulnerable. We partner with specialists in
speaks to the diversified but disciplined group of highly various areas to ensure optimum impact and minimal duplication.
effective teams. Alignment ensures focus on national and international priorities.
Stephen Koseff
Many interventions dovetail with the UN’s sustainable
Performance development goals.
Chairman
Bidcorp supplies food and related services to restaurants,
airlines, hotels, hospitals, and other institutions across more We aspire to the highest governance standards in all our markets.
than 35 countries. Many have suffered devastating impacts Heightened vigilance is crucial to Bidcorp’s ongoing sustainability
due to COVID lockdown restrictions. Yet Bidcorp has been with the continual enhancement of measures and internal risk
able to report a strong recovery for 2021, with the board controls to alert management to emerging issues. Investments into
declaring a final cash dividend to shareholders of 400 cents product quality and compliance with safety standards, cyber
per ordinary share. security, ethical sourcing, and increasing transparency and good
practices through the supply chain, remain a priority.
The group benefitted from people ordering from restaurants to
The safety and wellbeing of employees eat-at-home while institutional customers remained resilient.
remains a top priority. It is reassuring to see Many of our businesses have bounced back strongly as
the seriousness with which management demand rapidly returned when economies opened up.
teams are approaching the mental-health Enhanced by excellent working capital management, cash
generation and debt reduction, coupled with good asset
effects of COVID on their staff.
management, cost cuts and nimble trading, Bidcorp has
shown strengthened resilience to macro shocks.
8 Bid Corporation Limited I> Annual integrated report 2021 Bid Corporation Limited I> Annual integrated report 2021 9
Bidfood investment case Strategy in action
Bidfood strategy
Why invest in Bidcorp . . . Bidcorp is a foodservice business largely focused on growing the independent sector, protecting
margins through value-add services, and market-leading, customer-inspired technology solutions.
1 2 3 How we measure our success
Customers
Focus on higher margin freetrade/independent • Growing customer base
Our
• Mix of customers
Our markets have significant Innovative digitisation Stable empowered business • Supporting our customers
runway for growth strategy management team • Ecommerce uptake
• Fundamentals of the foodservice • Online real-time responsive platform • Decentralised, stand-alone business How we measure our success
Services
industry are positive in every reporting bespoke to the foodservice industry environment holding each management Our “direct-to-chef” model continues to deliver • Margin management
Our
geography team responsible and accountable for • Annual sales growth
• We continue to focus on the right
• Using AI tools and analysis to track
trends and behaviours their performance improved results • Free Cash Flow generation
customer mix of growing high margin • Entrepreneurial culture, responding • Trading profit results
independent business to change, embracing opportunities
• Fragmented competitive landscape with agility to meet challenges as they
with few players operating at scale are presented
Category development, Own Brand, value-add How we measure our success
suppliers
• Market-leading positions with a • Experienced senior management • Sustainably sourced supply chain
team, foundation for a tight knit team
light manufacturing, and growth of high value
Our
growing footprint in Europe, Asia • Locally sourced
Pacific, and Latin America in each region
• Own Brand range development
specialist products • Supply chain disruptions proactively managed
How we measure our success
Decentralised, empowered, entrepreneurially • Employee turnover
people
• Gender diversity monitoring
led businesses that are locally accessible and
Our
• Transformation
locally relevant • Job retention statistics
• Investing in training
How we measure our success
Protecting our environment, nurturing our
environment
• Carbon emissions tracking
4 5 6
• Carbon efficiency ratio translating each
product sources, and investing for long-term
Our
business into a comparable unit
• Ensuring energy efficiency in each investment
sustainable growth decision
• Waste management a top priority
Strong balance sheet with Good investment returns Demonstrable
adequate capacity for since creation in 1989 commitment to ESG
organic and acquisitive
growth
Outlook We committed to reducing our carbon emissions by 25% by 2025,
we remain on track and committed to this target, adjusting for
scale and activity level. Reducing our carbon footprint just makes
“To complicate is simple, to simplify is complicated… good business sense – solar installations generally have a four-year
• Conservative gearing, cash- • Proven track record with a history of • Highest standards of corporate
generative business model achieving superior returns governance has contributed to Everybody is able to complicate. Only a few can simplify.” payback period, when considering the cost of grid-electricity and
Bidcorp’s sustainable value creation – Bruno Munari that we get 20 years of renewable power generation through a
• Bidcorp has ample balance sheet • Growth success stories in every
over 32 years solar installation.
capacity to accelerate consolidation in division of the group
To survive and thrive, we simply simplify what we do, we just keep
what remains a fragmented market • Compound annual growth in revenue • Ethical and effective leadership,
globally committed to a group-wide code of
selling baked beans – but there is a story behind this simplicity. We recognise the stewardship role Bidfood has to play in the
of 10% since 2011 We are technology-reliant and technology-centric, we are able to food supply chain. Seafood and meat products are sourced from
• Ready to engage and embrace new conduct, based on principles of trust,
• Pandemic-era (from March 2020 to transparency, accountability, integrity, provide a superior customer service, better and more efficiently, certified sustainable suppliers, our supply chain is held to the
acquisition opportunities in new June 2021) free cash flow generation
territories and bolt-on opportunities and honesty through the application of technology. It’s embedded in our DNA. highest ethical standards, and we ensure our packaging is
of £291 million It’s embedded in our customers DNA too. recyclable and waste responsibly addressed.
We remain open to acquisition opportunities, but at the same time The uncertainty we face at this time, is really COVID uncertainty,
we are responsible in our approach. The correct opportunities will and we can’t make any predictions about what the next few
present themselves, but we will not be reckless even though we months have in store. We remain true to our nimble and adaptable
have the fire power. The short-term investments will be into organic business model, implemented independently around the world, fit
growth into our existing markets – rolling out new facilities, building for the local market’s needs. We remain cautiously optimistic about
capacity, and bolt-on acquisitions. the year ahead.
10 Bid Corporation Limited I> Annual integrated report 2021 Bid Corporation Limited I> Annual integrated report 2021 11
Chief executive
officer’s report Whilst saluting everyone who works for Bidcorp, wherever
they are, I must also acknowledge the consistent, inspirational
The single biggest disappointment of the year was the fraud we
uncovered at the Miumi division of our Angliss Greater China
leadership provided by our executives in-country and at head business. We were doubly disappointed that trust had been
At Bidcorp we have never pretended to know how COVID betrayed in such a cynical and protracted fashion and that we had
office. Most of these individuals have many years of service in our
would impact our businesses and our results. group and so, when they told their teams that we were slowly but not uncovered this criminal activity sooner. We took decisive action
surely moving towards the light at the end of the tunnel, their though, and are confident that many valuable lessons have been
After all we endured in 2020, when many thought things could learnt, controls tightened, and all the downside accounted for.
teams believed them.
not possibly get any worse, this year they promptly did. And
outbreaks, restrictions, and lockdowns became even more It was vitally important to keep our people believing because it Appreciation
is literally the people element that sets us apart – as we saw so I need to express my heartfelt thanks and congratulations to each
unpredictable, sudden, and sporadic. vividly this year. And it is our people who will take us to the next and every one of our nearly 23 000 employees for their exceptional
level. We don’t want our staff being distracted by new buzzwords sacrifices and hard work in the past year.
and paradigm shifts and having to adjust to more complex ways
In 2021 we had very limited ability to predict when, where, of doing what they’ve always done extremely well. So we are I am sure that their more than 320 000 customers appreciate their
and to what extent the pandemic would hit our markets but determined to keep simplifying our business. We know what commitment as much as I do.
we always knew that wherever we operate, we had the right works. We will keep embedding technology into our business’s My thanks also go to our chairman, Stephen Koseff, and the board
men and women, with the right attitude and skills. We knew DNA – to make what our people do simpler and better. And to for their unwavering support in a very difficult year.
the people of Bidcorp had what it took to get the job done, to make our customers’ experience simpler and better. Which
constantly adapt, and to keep delivering for their customers
and to look after their teams.
means efficiencies and savings for us and for them. Despite all Outlook
that we underwent in the recent past, we keep advancing and
I have no doubt that 2022 will be another abnormal year although
Bidcorp’s customers were among the worst affected enriching our tech agenda. I have no intention of attempting to forecast when, where, or how
businesses anywhere in the world. Hotels, restaurants, Our chairman, Stephen Koseff, in his report, has mentioned how that will transpire.
caterers, events airlines and the cruise industry all saw their keeping our people safe from COVID was our top priority. As we
activities either severely and repeatedly interrupted or brought From what we’ve repeatedly seen this past year, consumers’
deeply mourn the seven employees we lost this year to the virus, appetite for out-of-home dining, socialising, and leisure travel
to a complete standstill. And there were very few people
I’m satisfied that we did everything we possibly could to keep our remains as strong as ever – quite possibly even stronger. Inevitably,
gathering for leisure and sports events. But our people kept
workplaces and our people safe. It is one of my greatest hopes as our customers’ fortunes will rebound (as I said, often sharply and
sourcing, kept delivering and, when things improved (often
CEO to be able to report zero COVID-related deaths among our rapidly) and so will ours. In September, constant currency group
suddenly and dramatically), they were there to immediately
help their customers take full advantage of every upturn. workforce. sales were 98% of September 2019 levels and 117% of
September 2020 sales with the UK and Europe gathering
The performance of all our people across 35 countries was One measure of the value we put on our human capital is that we
momentum.
nothing short of phenomenal. The stories of their ended the 2021 financial year with a head count only 4% below
achievements are so numerous and so varied that I simply that of 12 months earlier – while sales volumes fell by 5%. Once We hope that relaxed travel restrictions will make it possible for
couldn’t do justice to even a minority of these in the divisional again, we trimmed the fat but not the muscle. us to better investigate opportunities for meaningful acquisitions
overviews I traditionally include in this message. So I leave just – of which there is likely to be a growing number, particularly in
One illustration of our teams’ resilience which I would like to developing markets. Although we have almost zero debt and
some of that detail to other parts of this report (see Divisional
mention concerns the disturbing July 2021 civil unrest in South significant headroom, our investment practices will likely be limited
reviews pages 46 – 71).
Africa. During the turmoil, our Cornubia site outside Durban was to smaller, bolt-on acquisitions and investing in organic growth
More than in any other year, in 2021 when COVID was a looted and badly damaged while two Crown Food Group retail such as property, plant and equipment.
daunting fact of life in every one of the 12 months, the factory marts were also vandalised. However, thanks to the
strength of our local teams showed just how resilient our concerted action of our teams in KwaZulu-Natal and the heartening Somewhat clouding our outlook are emerging signs of food and
decentralised model of empowered, entrepreneurial local support received from local communities, all three affected cost inflation, growing labour scarcities in our developed markets,
management structures really was. It might be a cliché given and continuing uncertainty about the strength of global supply
operations were up and running after only a week.
the nature of our business but it’s true that they all, more than chains. But whatever happens in the uncertain months ahead,
ever, really delivered the goods. Just part of our success this year was derived from our deliberate our group will be well equipped to deal with the upside and any
shift in focus to the correct customer segments and continued new or continuing headwinds.
Make no mistake, soldiering on under these circumstances towards our “sweet spot” in the middle of the market. In doing so,
was not easy – especially as only a small minority of we played the pandemic to our advantage by getting closer to both
employees could work remotely. But, day after day, they our customers and our suppliers. In time this will mean more
all kept treading the same straightforward path we have sustainable, mutually beneficial business relationships for us all. We
always followed. also managed to maintain gross margins at the same time that we Bernard Berson
It was thanks to our global team that we ended the year in effectively kept a lid on expenses – which declined by 13,4% – by Chief executive officer
remarkably good shape with an exceptionally strong balance no means out of kilter with our revenue decline. And we
sheet, our powder dry and our systems, supply chains, our consistently generated strong cash flows.
The strength of our local teams showed just reputation and relationships all in great shape.
Another area of good progress was the growth in our value-add
how resilient our decentralised model of light manufactured offering. This is an area which allows us to
empowered, entrepreneurial local achieve more predictable revenues at acceptable margins and
management structures really was. with fairly limited investment. On the subject of investments, in the
year we did not execute any significant acquisitions but we remain
alert to opportunities. Likewise, capital expenditure was below
historical levels.
12 Bid Corporation Limited I> Annual integrated report 2021 Bid Corporation Limited I> Annual integrated report 2021 13
Creating value for our stakeholders
The Bidcorp business model sets out the five key processes we implement around the world, in our decentralised,
autonomous manner, which creates the long-term sustainable value for our stakeholders – through the effective
and efficient use of our capital inputs, keeping customer service at the heart of our approach.
Capital inputs discussed in our value creation response pages 38 – 43.
We are committed to creating value for our people through providing exciting employment opportunities
Human across all functions of our business.
Responsible procurement Value-add processing
HC
capital Promoting from within and developing the team to ensure strong succession plans are in place. Our suppliers are specialists in their product, as well as Through listening to our customers, Bidfood has
ethical and sustainably minded, located as close to the identified opportunities for value-add light processing
* Value creation response: “Talent Continuous investment in training to build a high-performance culture, both within functional roles and with
regards to health and safety in the workplace. source of the food as possible. We source both quality and bespoke manufacture to make our customers’ lives
management”, “Competitor landscape”,
foods and a large range of catering equipment and easier.
“Customer environment”, “Hospitality sector Actively driving transparent and meaningful engagement with employees and with their representative
lockdown” and “Macro political volatility”. non-food essentials.
forums and unions. Around the world we have our own purpose-built
We are proud to say we take a sustainability-based facilities offering additional value-add services, as
approach to product sourcing, minimising the impact of directed by customer needs and identified market
We strive to create value for our customers by listening to them – understanding what their needs are and our carbon footprint, whilst ensuring fair labour practices trends.
Intellectual responding with products, solutions, tools and service levels to make their lives easier. are at the forefront of all stages of our supply chain.
IC capital
Our online ecommerce tools enable our customers to engage in real-time, to place orders on a tablet,
MC NC SC IC
mobile phone, or laptop, with a delivery time as quick as within the operating day.
* Value creation response: “Supply chain NC FC HC
Bidfood is providing and growing a portfolio of leading Own Brand products, to meet our customers’ needs
security”, “Customer environment”,
and availability demands.
“Competitor landscape” and
“Information security”. Many of our customers are finding resources are scarce, we are able to offer processed value-add products
such as sous vide meals and pre-prepared fruit and veg, at locally situated depots to ease this burden.
Our financial resources include equity and debt funding, and earnings generated and retained by the group.
FC Financial We rely on our financial resources to fund our organic and acquisitive growth strategy, invest in infrastructure Warehousing and distribution efficiencies
capital development and maintenance, systems and technologies, upskill and develop our staff, and to responsibly
invest to reduce our carbon footprint. We invest in depots and vehicles equipped with state-of-the-art
* Value creation response: “Hospitality sector We strive to provide our investors with value through consistent financial returns. Proactive, transparent efficient and sustainable capabilities. We utilise tools such as
lockdown” “Funding growth”, “Supply chain communications, quarterly trading updates and engaging reporting ensures the shareholders are informed of voice-pick technology in warehouses and onboard-telematics in
Capital inputs
the performance of the company. vehicles to ensure improved efficiencies and accuracies in service.
Business
security”, “Information security”, “Climate
change”, “Talent management” and Pandemic-era (from March 2020 to June 2021) free cash flow generation of £291 million (excluding sale and Coupled with anti-error systems, we commit to reduced preparation
“Regulatory landscape”. leaseback transactions and dividends) error rates and overall improved working conditions for our
World class trading margin of 4,2%. All months profitable in 2021 despite lockdowns workforce.
Manufactured
Bidcorp invests in owned-assets, strategic to our operational growth strategy.
model Our fleet is equipped to simultaneously distribute products at
positive and negative temperatures, with modular compartments
equipping us to deliver to specific customer and product
requirements.
MC capital
We use physical infrastructure within our operations that includes our depot footprint, our distribution capacity
and information technology platforms. We rely on this manufactured capital to procure, transport, store and
distribute our products – enabling us to serve customers quickly, efficiently and reliably. MC SC HC NC
* Value creation response: “Supply chain Continuing to invest in modern energy-efficient vehicles and depots is key to responsibly catering for future
security”, “Customer environment”, “Food growth.
safety” and “Climate change”.
Bidcorp owns 73% of our properties and 85% of our vehicles (2020: 70% of properties and 82% of vehicles).
We strive to create value for our communities through continued investment of time, money and support Market-leading innovation
SC
Social and into local social development initiatives to improve the lives of people and their families in the communities
around our businesses. Our in-house developed ecommerce solution is a market- leading Customer service excellence
relationship capital
customer communication, transaction and information portal
Empowering our community to support themselves, in doing so contributing to our value chain, through Our mission is to deliver service excellence.
learnership programmes and subsequent employment opportunities. We invest in social and education connecting us directly. Customers have online touch access to
* Value creation response: “Information
security”, “Climate change”, “Food safety”, initiatives, focusing on programmes such as healthy eating. products offered by Bidfood divisions such as real-time availability Everything we do has the customer at heart,
“Regulatory landscape” and “Macro political and pricing, product and sourcing information, planning and costing and is led by research and insights, be it into
We have developed relationships with our stakeholders, governed by our values and the enduring principle
volatility”. that doing good is good business. facilities, as well as intuitive complementary product suggestions. food trends to keep a step ahead of the
curve, or the latest technological advances
By using technology to deliver operational efficiency, implementing
allowing us to continuously develop our
smart solutions faster through sharing of learning and ideas
service offering.
Group target of 25% reduction in group reported emissions by 2025 based on the 2018 reported carbon across our businesses, Bidfood is ahead of the pack. Continual
emissions on a like-for-like basis. upgrading, modernisation, and simplification of our global IT
NC Natural capital
Each of our operations implementing real, relevant, impactful solutions to contribute to group target and to infrastructure, from farm to fork. HC SC IC
make a meaningful difference.
* Value creation response: “Climate Recycling initiatives and identification of unique industry specific environmental and sustainability initiatives MC IC FC
change”, “Food safety”, “Supply chain are reported in each business and are shared practices among group companies.
security” and “Funding growth”.
Bidcorp is committed to ‘Building a brighter future’ – this is a top priority for the group.
Capital inputs discussed in our value creation response pages 38 – 43.
14 Bid Corporation Limited I> Annual integrated report 2021 Bid Corporation Limited I> Annual integrated report 2021 15
Creating value for our stakeholders continued Capital outputs ensuring we deliver the right products, at the right price, to the right customer.
Making our customers’ lives easier with our value-add, light manufacturing and ecommerce
engagement. We are positioned locally, source locally and deliver regularly to our customers.
HC Human capital FC Financial capital SC ocial and
S IC Intellectual MC anufactured
M NC Natural capital
relationship capital capital capital
R14 billion paid in salaries, wages and 44 369 (2020: 45 388) public shareholders, Capex investment in the year of R2,0 billion 15% decrease in total carbon emissions
benefits (2020: R15 billion). holding 99,96% of the 335,4 million shares R14,0 million donated to charities and Bidcorp served 321 653 customers, reported.
includes PPE and intangibles (2020:
Capital outputs
in issue. community projects. 7% more than last year.
Nearly 200 000 hours of staff training R2,9 billion) invested into: • Scope 1 emissions down 10%
recorded. We distributed a final cash dividend of Senior citizen programmes, community 50% of all revenue was generated by
ecommerce platforms in 2021. • 81% into depots • Scope 1+ aircon emissions down 33%
400,0 cents to shareholders. projects, sponsorships, donations and
R37 million spent on training, a 3% increase education programmes are just some of the • 14% into vehicles • Scope 2 emissions down 16%
from 2020. R1,2 billion (2020: R1,4 billion) paid in taxes BidOne’s myBidfood accounts for 32% of
many initiatives owned by each of our the ecommerce group sales. • 5% into IT
to tax authorities in more than 35 countries • Scope 3 emissions down 14%
Number of work-related fatalities: 1 businesses in their individual and group
around the world. efforts to make a difference. Of total revenue: Focused balance sheet management. Municipal water used down 13%
(2020: 0).
An effective tax rate of 27,1% (2020: • Independent customers make up 56%; Bidcorp owns 73% of our properties and Refer to Environmental Sustainability
4% reduction in headcount in 2021. Food recycling and donation projects national accounts 31%.
26,7%). 85% of our vehicles. pages 28 and 29.
throughout group, food donated to global
30% female workforce. • Own Brand products make up 20%. Gross capex % of revenue is 1,7%
Cash and cash equivalents of R8,1 billion food banks.
(2020: R7,0 billion). • 32 596 suppliers; 1% increase on last 44% of PPE capex was expansionary
Operations group-wide identified food
year. (2020: 49%).
support programmes to assist and help the
most vulnerable through the pandemic. • Offering 369 726 product SKUs made
up of 36% Frozen; 28% Chilled; 30%
Ambient; and 6% Non-food.
Workforce of 30% women, providing and Throughout COVID, a strong balance sheet Bidcorp is recognised as a valued Global lockdowns reduced eating-out-of- New modern, energy-efficient depots Group target set of 25% reduction in group carbon
promoting gender diversity (2020: 30%). and focused working capital management responsible contributing member of the home market activity. Our teams classified opened in New Zealand (Christchurch), emissions by 2025 (based on 2018 reported
Improved technical capability and capacity ensured the group weathered the crisis local communities, participating in feeding as essential services, were able to work Germany (Bergkirchen), and Australia emissions).
through our skills development and survived. schemes, food bank recycling and other and provided care packages, home delivery (Cairns and Dandenong). Enhanced operational resilience, reduced related
programmes. Non-IFRS 16 EBITDA interest cover at a such charitable projects around the world. and retail support using our bespoke Investments into PPE, positioning the costs and environmental footprint.
healthy 19,3x (2020: 15,5x). In South Africa, YES candidates are platforms to enable this. group for anticipated organic growth, to
Progress towards creating a more diverse 10% decrease in fuel emissions, investigating
and inclusive workforce and culture. Free cash inflow of R4,7 billion upskilled and employed. Digital strategies have enhanced employee ease in the short term as the businesses alternate fuel options.
and customer satisfaction levels; navigate the COVID recovery.
Outcomes
Improved top talent retention and (2020: free cash inflow of R2,7 billion). Successfully operating and protecting our 16% decrease in scope 2 emissions using solar in
staff while navigating the political ecommerce platforms have been developed Automated picking and warehousing is
engagement levels. Compound annual growth in revenue of into a customer AI experience, anticipating many of our depots.
10% since 2011. upheavals and societal demonstrations changing the way warehouse management
Improved leadership capability and that take place across our orders, offering recipe suggestions and is done. Our product and service offerings assist our
succession strength. Bidcorp remains well capitalised and jurisdictions from time to time. product substitutes, and tracking global and customers to achieve their own sustainability
retains adequate headroom for further local eating trends for customer insight. related objectives.
Improved overall employee performance
as evidenced by staff workplace survey organic and acquisitive growth. Strengthening of our locally sourced,
results. value-add products such as sous vide
meals to develop the premium local
independent customer, protecting
our environment through minimising the
supply chain journey.
We leverage financial capital to maintain
our competitive market position, supported
by ourdonations
Cash decentralised,
impactentrepreneurial
financial capital in
Capital trade-offs
structure,
the innovating
short term, but in and delivering
supporting reputable
Our investment in training and development We leverage financial capital to maintain charities and governmentsolutions.
bespoke locally relevant initiatives for job
impacts on financial capital, but has our competitive market position, supported Positioning ourselves close to the customer
creation, the value
MC created
HC IC far outweighs the Our global foodservice and light value add
significant benefit in terms of human, social by our decentralised, entrepreneurial allows us to deliver unrivalled service levels,
immediate cost. processing utilises and impacts natural
and relationship capital and enables us to structure, innovating and delivering COVID lockdowns resulted in economic Investment in our digital capabilities to sourcing local products and offering the
capital however, these activities positively
have the people capabilities required to bespoke locally relevant solutions. FC (Short
devastation globally, term)
with significant engage, inform and equip our customers value-add processing options that
impact on human, manufactured,
deliver the business strategy. volatility inSC HCequity
debt and (Long markets.
term) ahead of the curve has required financial customers are willing to pay for, may mean
intellectual, and financial capitals, through
FC MC IC Bidcorp
We elected to to
are committed preserve
sourcing cash
fromuntil the
local investment to deliver long-term returns and changing product suppliers and terminating
employment, transport and infrastructure
HC SC FC COVID lockdowns resulted in economic full impacthowever
suppliers, of the crisis on group
stringent healthearnings
and customer retention. substandard sources.
development, identifying new ways of doing
We remain committed to providing our devastation globally, with significant could be
safety reasonably
standards oftenmitigated.
means the Due to
smaller IC SC FC MC SC business, and financial investment for
employees with fair remuneration and volatility in debt and equity markets. performance
supplier in H2tonomeet
is unable finalourdividend was
rigorous long-term returns.
declared. This prudent action has preserved We continue to grow and focus on the There is a possibility that our investment in
incentivisation. Top priority during the Bidcorp elected to preserve cash until year standards consistently, and therefore some independent customer that appreciates the manufactured capital could negatively FC (Short term) HC MC
COVID pandemic was job protection and end providing some room to recover before the group’s
product linesliquidity
are notand financial
always capital
available.
but some shareholders are disappointed. value-add, premium service provided by impact our investment in human, social and FC (Long term) NC
the safety of our stakeholders. paying out full year dividends. SC our local team and Own Brand range. relationship capital.
FC S&RC We are mindful of our global reach and our
HC SC SC FC (Long term) SC (Long term) IC FC NC MC FC real impact.
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