Risks and opportunities

CEO, Lindsay Ralphs, “Our decentralised business model is an effective risk management tool. We can’t control macro conditions but we can control how we respond.”

The Bidvest board appointed a risk committee to assist in recognising all material risks to which the Group is exposed and ensuring that the requisite risk management culture, policies and systems are in place and functioning effectively. Risks are assessed on a enterprise-wide level and their individual and joint impact considered. Internal Audit (IA) assist in evaluating the effectiveness of the risk management process and comment on this in their own assessment reports. Management is accountable to the board for implementing and monitoring the processes of risk management and integrating this into day-to-day activities. Divisional risk committees are engaged to actively focus management on critical issues faced at a business and industry level. The key strategic risks are reported to the Group risk committee for consideration at board level. The risk committee membership is reviewed annually.

The material risks identified below have emerged as a result of analysing and understanding the direction in which each entity is moving as well as the overlay of the Group's strategy and macro conditions. Our strong risk management disciplines allow us to convert risks into opportunities. Additional risks are discussed in the Annual Governance report. The icons link to our strategy.

For the complete risks and opportunities, please refer to the Annual Governance report, page 23-24.

  Increasingly complex and value-sensitive business environment   Remaining competitive and relevant   Fostering positive long-term relations with key suppliers   Developing and maintaining high calibre staff   Cost-effective, enabling IT systems and support structures   Asset management

 

Management focuses on key senior customer relationships to derive mutually beneficial contract outcomes.

A proliferation of regulatory and governance requirements add costs in an already price-sensitive market while consuming management time and resources. Innovative solutions are required.

Visibility into related party transactions and potential conflicts of interests receive deliberate attention, facilitated by our governance structures and independent ethics facility.

Impact on KPIs:

  • HEPS growth
  • ROFE
  • Strategic metrics
 

We are a customer-centric organisation. The protection of our core business strength and reputation is critical.

We encourage creative approaches and innovation and embrace the ability to adapt quickly and proactively to changing customer requirements, market dynamics and digital advancement.

Bidvest constantly evaluates its digital strategies.

Impact on KPIs:

  • HEPS growth
  • ROFE
  • Strategic metrics
  • TSR vs peer group
 

This remains a cornerstone of the way we do business and is recognised as a major strength. Management is constantly challenged to grow these relationships.

Bidvest builds sustainable, value-adding relationships.

Impact on KPIs:

  • HEPS growth
  • TSR vs peer group
 

We focus on maintaining and rewarding a high performance culture.

We encourage entrepreneurial attitude and develop people through training academies, graduate and learnership programmes and recognition.

The short/medium-term disruption in the event of sudden departures due to lack of skilled management is well understood.

Impact on KPIs:

  • Strategic metrics
  • HEPS growth
 

Group IT governance framework supports effective and efficient management of people, technology and information. Specific attention is given to cyber security.

Our Group internal audit ensures adherence to the IT frameworks and guidelines.

Comprehensive Group-wide property damage and business interruption insurance is in place.

Impact on KPIs:

  • HEPS growth
  • ROFE
 

Management actively monitors and drives performance in asset management, particularly working capital. This receives the focused attention of the audit committee and divisional boards.

Credit risk and inventory levels are crucial. We respond by staying close to customers.

Impact on KPIs:

  • HEPS growth
  • ROFE
  • TSR vs peer group

 

Bidvest’s decentralised model allows us to be nimble, adapt and implement value-adding solutions and structures at operational level.

 

Agility, a can-do attitude and appropriate digital strategies result in innovative solutions and open up additional opportunities.

 

Constant communication and monitoring of demand changes allow our businesses to be proactive and part of the solution.

 

Bidvest understands that people create wealth, companies report it. Home-grown talent thrives in our entrepreneurial, decentralised model.

 

Enable and empower the decentralised business model in the most cost effective manner, to operate optimally and grow.

Encourage more enablement of business through digital innovation.

 

Ambitious working capital targets and dynamic sourcing support returns and add value to customers.

Our strong financial position allows us to remain acquisitive.