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Overall appraisal
Exciting growth in all regions characterised
the year under review. Currency effects
may diminish the profit in rand. They cannot
diminish the ongoing strides made by
teams in all Bidcorp geographies in home
currencies.
Last year’s unbundling from Bidvest was
a momentous step. After such radical
change, there is an obvious temptation to
move forward slowly. This did not happen
at Bidcorp.
The pent-up energy of local teams drove us
forward as our people went all out to achieve
strategic differentiation as foodservice
specialists who relish the task of delivering
unique foodservice solutions.
We know we have got a lot on our “plate”.
Foodservice is an intensely competitive
industry. But all the indications are that
Bidcorp is well positioned to optimise
potential in all targeted market segments.
Significant progress has been made
to differentiate our offering versus our
competitors.
Results
Bidcorp results were highly satisfactory.
Headline earnings per share (HEPS) moved
9,4% higher to 1 181,0 cents (pro forma
comparison with 2016: 1 080,0 cents).
Basic earnings per share (EPS) rose
by 16,7% to 1 207,1 cents per share
(PF2016: 1 034,0 cents).
A model that has worked for
many years
Most business models work when the
going is good and economic conditions
are buoyant. The real test comes when the
business cycle gets tough.
Our model has been shaped by business
conditions in many different markets at
all stages of the market cycle, including
periods of intense pressure on businesses
and consumers. To succeed in challenging
circumstances, an entrepreneurial mindset
and rigorous financial discipline are required,
especially in fragmented markets.
Our decentralised business model enables
management to exploit opportunities by
remaining close to local challenges.
Resilience, local accountability and
entrepreneurship remain the defining
characteristics of the Bidcorp business and
continue to serve us well.
The continuing relevance of our model is
evident in all Bidcorp markets. For example,
consider the progress made by our South
American businesses. In this part of the
world, economic conditions are often difficult
and the politics usually uncertain, but still
our operations grow and develop. Challenge
appears to have an invigorating effect on
Bidcorp managers and people. The business
benefits immeasurably as a result.
A good time to let go
Certainly, Bidcorp has shown itself to
be a sturdy addition to the JSE and has
performed in line with expectations. The
business is in good hands; at business
unit level, regionally and strategically. Chief
executive, Bernard Berson, has shown
himself to be a strong, capable leader with
the capacity to secure sustained growth.
The executive chairmanship was always a
transitional arrangement and it is now clear
the transition has been well managed. I can
step away from the executive and assume
a non-executive position on the Bidcorp
board in the knowledge that the business is
strongly positioned and the future bright.
Sovereign rating
Today, South Africa accounts for only a
small part of Bidcorp volumes, but this does
not lessen the commitment to the group’s
home country. Senior management are close
to socio-political developments and fully
support the growth of democracy and efforts
to secure a better life for all South Africans.
Downgrading of South Africa’s sovereign
rating to subinvestment levels by two
major ratings agencies was therefore a
big disappointment. Our country kept its
investment grade for 17 years. Achievement
of this status after the isolation of the
apartheid years was a signal the rainbow
nation was vibrant, growing and had
the discipline needed to meet long-term
objectives.
Downgrading after so much hard work
was therefore a blow. At Bidcorp, we are
disappointed, but there is no reason to be
downcast. South Africa has huge potential
and resourceful people. It has repeatedly
proved its ability to bounce back and will do
so again.
Non-executive chairman’s report
Integrity without compromise
Serious consideration has been given to
the continued audit services by KPMG Inc.
following the grave allegations made against
them in South Africa. Bidcorp’s activities are
approximately 90% outside of South Africa
and are independently audited by KPMG
International in these jurisdictions.
In short, the opinion of the Bidcorp board is
that the group retain the services of KPMG
as our global auditors, based on the current
information that has been presented and the
response of the KPMG International team.
Bidcorp welcomes the independent
investigation which will be undertaken by
KPMG International and awaits the outcome
thereof.
Appreciation
Bidcorp’s growth is impressive. This would
be impossible without loyal customers and
reliable suppliers. We thank them all for their
support in an exciting, but challenging year.
The Group’s people and managers put in a
tremendous amount of hard work to ensure
our 2017 year was a highly successful one.
I thank them for their efforts. They did us
proud.
Newcomers to Bidcorp also made telling
contributions. Numerous acquisitions were
made during the year, including the Guzmán
business in Spain. New staff members
should be congratulated for settling in so
quickly. Bidcorp is delighted to have them on
board.
Finally, I also wish to extend my thanks to
my fellow directors and the senior executive
team. This exceptional group of people put in
a sterling performance in 2017.
The year to come
The period following our separate JSE listing
was notable for high energy levels and total
commitment by businesses in all markets.
I see no sign of the energy flagging as we
move forward.
Bidcorp people can see that the strategy
of a free trade focus is paying off while
opening up new opportunities. Sizeable
growth potential exists in all channels. Teams
in all geographies are enthusiastic about
prospects.
Business conditions may remain challenging
in some markets, but this should not impede
the push for continued growth – both organic
and acquisitive – in the year to come. I am
confident Bernard Berson and his team
will continue to deliver a superior level of
performance.
Brian Joffe
Non-executive chairman
Resilience, local accountability and entrepreneurship
remain the defining characteristics of
the Bidcorp business and continue
to serve us well.
13
Annual integrated report 2017
Bid Corporation Limited