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The digital template is not imposed on other
regions, but without exception our local
managers see the benefit of accelerating the
pace of business development in their own
areas by borrowing from this tried and tested
model. Costs are cut and duplication avoided.
Divisional snapshot
All teams can be congratulated on impressive
gains in a watershed year.
Australasia put in a strong performance,
underlined by a great finish to the year. The
“all about the food” focus drove impressive
trading profit and margin growth in both
Australia and New Zealand. The foodservice
space became increasingly competitive, but
our team has more than held their own.
United Kingdom performance was
impacted by currency effects as the rand
strengthened by 20% against sterling.
However, trading profit was up strongly and
exceeded expectation. Free trade volume
growth of 8% was achieved. Logistics
again disappointed. Corrective actions in
this non-core area are being implemented,
and we will be significantly downscaling our
exposure in this segment over the next few
years, hopefully not at significant costs to
the group.
Europe delivered very pleasing results. In
constant currency terms, trading profit rose
20,5%. Opportunities flowing from buoyant
economic conditions in eastern Europe were
maximised. In Spain, exciting growth potential
opened up and our Italian business delivered
impressive gains across all categories.
Emerging Markets delivered commendable
results in sometimes volatile conditions.
Bidcorp Food Africa recorded excellent
results on strong penetration of the
independent channel. Greater China finished
the year strongly, underpinned by substantial
mainland contributions. Hong Kong revenue
was well up. Singapore delivered good
growth following its transition to a core
foodservice focus. Brazil recorded excellent
results despite political uncertainty and
economic challenges. Chile made continued
gains. Middle East division performed well,
significantly improving revenue and trading
profit. Turkish losses persisted; however, we
are confident of the potential of this business
in a large market.
Appreciation
The people of Bidcorp put in a tremendous
effort in a challenging year. Their ability to
outperform in lacklustre business conditions
is a continuing source of competitive
advantage and I thank them for it.
I am also grateful for the continued support
of our esteemed suppliers and loyal
customers. Without them, business growth
would be impossible.
In addition, I extend sincere appreciation to
my chairman and long-time colleague and
mentor, Brian Joffe, for his many years of
leadership and wisdom, and Bidcorp’s board
for its guidance and vision. Setting long-term
goals requires insight and knowledge, but
it takes fortitude to stick with the task when
tough choices have to be made and I thank
my directors for their strategic stamina.
The 2017 base
Our first full year was highly satisfying as so
many strategic elements were put in place
and such pleasing progress was made.
However, it was hardly dramatic and was
certainly not revolutionary.
At the time of our listing, we set out certain
key goals, mainly focused on in-country
growth (organic and acquisitive) in existing
territories, complemented by additional gains
as we explored new national markets. In
2017, we again executed on that strategy.
Keeping your head down and doing what
you said you were going to do hardly makes
for exciting reading at year-end. However,
there is a lot to be said for living up to your
promises and we derive a lot of satisfaction
from that.
We understand the foodservice sector
and have the experience and knowledge
to make fair profits while building enduring
relationship. That was our 2017 focal point
and 2018 will be much the same.
We also understand that business is not a
bunch of numbers. The figures that matter
are people, not zeros. The ability of our
people to achieve incremental gains in niche
after niche was the key to our success in the
review period.
We also witnessed greater cooperation
across international markets as businesses
shared best practice and exchanged ideas.
This was not driven by head office gurus with
spreadsheets, but by working managers with
common issues and opportunities.
The people on the ground drove the
business and did an amazing job of it. We
expect more of the same in the coming year.
The future
In 2018, we project continued growth in all
regions. Our stable management teams are
close to their markets. We therefore expect
another year in which they deliver above-
average returns no matter what the business
conditions.
There are always challenges to confront,
but, in our view, there is more good news
out there than bad.
Worldwide, the foodservice industry
is characterised by growth and new
opportunities, even in markets with
ageing populations and modest economic
prospects. Out-of-home eating continues
to grow; so does the appetite for new
taste experiences and cuisine with an
international flavour.
Within Bidcorp, portfolio rebalancing will
continue at a pace that suits our local teams.
This includes dealing with the Logistics UK
business which will be exited in the medium
term.
In Australia, 87% of volumes are already
accounted for by foodservice sales, with
strong foodservice focus. Other regions are
making the same journey and achieving
similar gains. Benefits will become increasingly
apparent as the new year progresses.
Businesses in existing markets continue to
build momentum, via organic growth and,
where appropriate, via bolt-on acquisitions.
This is evident in markets in which we have
long-established positions such as Australia,
New Zealand, the UK and South Africa.
In more recent Bidcorp markets, we see
tremendous future upside. For example,
exciting potential exists in Spain – where we
now have critical mass – and Italy. European
economies look stronger, suggesting new
growth possibilities in both western and
eastern Europe.
Entry into new national markets is already
under way. We obtained a foothold in the
German, Austrian and Portuguese markets
in the first quarter of the new period. Other
territories are being investigated.
South America offers enticing opportunities
and attractive valuations. In this region,
further acquisitive growth in existing Bidcorp
markets may well be considered in tandem
with entry into new countries.
Exciting possibilities are also evident in other
emerging markets.
We will always see international stresses and
strains. We are not about to change that.
Bidcorp is all about the food and for our part
we see a world of opportunity.
Bernard Berson
Chief executive
17
Annual integrated report 2017
Bid Corporation Limited