This is Bidcorp

Chief financial officer's report

Chairman's statement

Chairman's statement

Stephen Koseff

performance by
operations worldwide
Expansion into new international
HEPS rises
9,1% to 1 286,3 cents
(2017: 1 179,2 cents)
underpins Bidcorp
Honour to succeed
Brian Joffe
as chairmam
  Final dividend of
280,0 cents
takes total distribution
to 560,0 cents

In a generally supportive environment, Bidcorp grew its market share, achieved efficiencies and drew substantial benefit from its strategic focus on a foodservice industry that continues to flourish. The result was robust cash generation that supported an already strong balance sheet.

In 2018, Bidcorp put in a highly satisfactory performance, delivering growth in all group geographies while reinforcing the strategy of clear focus on foodservices and the freetrade segment of our industry.

It is testimony to the dedication and professionalism of management and staff that they achieved solid market share gains despite some unavoidable disruption as our businesses continued the strategic task of rebalancing product portfolios and the customer mix.

Impressive momentum by continuing operations enabled a 9,1% increase in headline earnings per share to 1 286,3 cents (2017: 1 179,2 cents) while basic earnings per share rose 1,1% to 1 223,9 cents (2017: 1 210,5 cents).

A final cash dividend of 280,0 cents per share – a rise of 12% – took the total distribution to 560,0 cents; a commendable performance for a business in only its second full year as a distinct listed entity.


I am proud to chair an organisation with such a fierce commitment to sustained growth, irrespective of economic conditions and competitive challenges in markets from Africa and South America; to Europe, Asia and Australasia.

I take over as chairman from one of Africa's most successful entrepreneurs and visionary business leaders, Brian Joffe. Our association goes back 30 years to the days when Brian, then head of Bidvest, was making his first acquisition. He bought a R23 million business and turned it into one of South Africa's biggest job creators and a platform for global expansion. I witnessed that process first hand, so I am well aware I have big shoes to fill.

Brian, of course, was also instrumental in the founding of Bidcorp and did an outstanding job on the group's JSE listing in May 2016.

Thankfully, Brian has agreed to stay on as a director of Bidcorp. I look forward to continuing our association and working with him and my fellow directors on enabling the group to continue on a sustained growth path.

Global environment

Bidcorp optimised opportunities in 2018 as global economic growth continued. The group's diversified geographic base proved beneficial as some national economies faltered while others maintained strong momentum.

Growth moderated in some West European jurisdictions while it remained buoyant in East Europe. Chinese growth, despite geopolitical tensions, remained close to 6,5%. However, downside risk rose late in our financial period in some Asian markets. The British economy demonstrated its resilience and made continued, though modest, gains. Australia and New Zealand continue to do well.

Emerging Markets were volatile, though South America showed signs of economic recovery. South Africa faced continued pressure, but a measure of growth was achieved.

In this generally supportive environment, Bidcorp grew market share, achieved efficiencies and drew substantial benefit from its strategic focus on a foodservice industry that continues to flourish. The result was robust cash generation that supported an already strong balance sheet.

Continued expansion

Over the past 12 months, a series of bolt-on acquisitions and investments took the group into new markets, including Germany, Austria, Portugal and Vietnam, while strengthening Bidcorp's existing position in regions in which we see long-term potential.

Diversity is not only a function of geographic reach. We are a people-driven organisation and all gains are underpinned by the talent and strong work ethic of autonomous local teams. The development of talent on the ground keeps us rooted in our chosen markets and ensures our offering remains relevant.

Diversity is also evident in our comprehensive product offering. Range development is constant as Bidcorp stays close to customers and responds to new demands. This process – a key feature of performance in 2018 – is assisted by the group's use of technology as both an ordering tool and a means of building customer relationships.

Innovative, future-focused investment

For Bidcorp, online means staying on message and making good on our promise to deliver quality, tailor-made solutions, no matter how big or small the customer. Those expectations are increasingly communicated across digital platforms that enable us to take our business in new directions in the knowledge that innovation is likely to achieve rapid acceptance by customer groups, especially in Bidcorp's key area of focus, the freetrade or independent channel.

To make sure we listen and keep on listening, we continually invest in digital platforms. Responsive ecommerce systems have become a means of attaining and retaining competitive advantage. In the review period, Bidcorp made further strategic gains as a result of the continued inhouse development of these tools. Infrastructure investment is another key element of the group's growth strategy and was maintained in 2018.

Health and reputation

Bidcorp is an international enterprise represented across five continents but ensures local relevance through close alignment with markets and communities. Local initiative and know-how are supported by local product sourcing and sustainable business practice.

Our businesses stay close to customers, their preferences and concerns and in 2018 the group again demonstrated its sensitivity to environmental and health issues as outbreaks of foodborne disease caused growing unease among consumers in several markets.

The listeria outbreak in South Africa was perhaps the most worrying development. Our business was not directly involved. Nonetheless, Bidfood South Africa stepped up the relevant safeguards and ensured food safety awareness remained at a high level.

The group's enduring commitment to consistently high product quality and rigorous compliance with food safety protocols proved to be a key factor as the Bidcorp brand continued to enjoy the high regard of the general public in South Africa and markets worldwide.


We thank our customers and suppliers for continuing to maintain their close relationship with Bidcorp. This contributed hugely to our high rate of growth in 2018. We aim to be the foodservice partner of choice for those who supply us and those who order from us. We have the utmost regard for our partners and hope to see the relationship deepen still further in 2019.

I also applaud our managers and their people for their hard work and spirit of innovation. Our people are rightly valued for their ability to solve problems at pace while maintaining a positive mindset in the face of operational challenges. These qualities had particular relevance in those markets that were deeply impacted by last year's dairy crisis.

In addition, I am deeply appreciative of the contribution of senior management and my colleagues on the Bidcorp board. Their strategic vision makes it possible to achieve steady, group-wide gains, no matter how volatile and changeable some markets become.

Future focus

Global challenges are expected to persist in the year ahead. Indeed, geo-political tensions may well increase. Some fear the introduction of tariffs and other constraints on the free movement of goods could put a brake on world trade, perhaps stalling global growth.

In these circumstances, it is important that we do not to lose sight of the positives.

The foodservice industry continues to grow worldwide. At the same time, our group's successful focus on the freetrade segment of the market has demonstrated that significant gains are possible for those who add value for the independent operator.

We continue to work through our legacy issue regarding the non-core logistics business in the UK. This may take us a bit longer than anticipated but it is important that we find a solution that is in the best interests of all stakeholders involved.

We have seen that opportunities abound for nimble businesses closely aligned to market needs.

In an uncertain world, it is difficult to say what impacts we can expect on currencies and interest rates. What we can say, with a much higher degree of certainty, is that Bidcorp businesses will make the most of market developments.

The group is well positioned to benefit from our sustained investment in people, systems and infrastructure. We anticipate the contribution of newly acquired operations to be more meaningful as these businesses are integrated into the group.

In 2019, further acquisitions could well support renewed gains, though organic growth is again expected to be the principal driver of growth.

Another growth driver is closer collaboration across Bidcorp geographies while the sharing of knowledge and pooling of experience have the potential to deliver significant savings.

I am therefore confident that Bidcorp, as a well-resourced, full service foodservice business, is ideally positioned to maintain its record of sustained growth and consistent enhancement of shareholder value.

The group's entrepreneurial culture and value-add philosophy served us well in 2018. They will do so again in 2019.

Stephen Koseff