Annual integrated report 2018

The region performed strongly, in spite of growth tracking below trend, and both Australia and New Zealand set new records. “Financial capital” remained robust. Revenue moved 2,0% higher to R30,0 billion (2017: R29,4 billion). Trading profit rose marginally by 0,8% to R2,0 billion (2017: R2,0 billion). Results reflect continued focus on the successful freetrade strategy and the management mission to remain ‘all about the food’. Human capital remained a focus area. We continued to grow jobs and skills investment rose. The future continues to look bright. Australia put in a strong performance, supported by a domestic economy that is still “cooking”. Interest rates remained low and business investment in non-mining activities outweighed declining mining investment. Unemployment is at 5,4%, wage growth is 2,1% and inflation 1,9%. Trading profit lagged the prior year at the half-year mark, but by year-end was up 2,5%. This was an outstanding result in a year of transformation and some internal disruption. Revenue rose 4,7%, though this included the sales contribution from recent small acquisitions. The sales effort was exceptional as three of the biggest branches went through major changes during the year. Margins were maintained, despite pressures in Foodservice. As expected, expenses increased as new branches bedded in, further strengthening manufactured capital. Payroll costs were well contained. Robust metropolitan representation is a key ingredient of the growth strategy going forward and meaningful progress was made in the review period. Strong bases were established in Australia’s most densely populated cities – Melbourne, Sydney and Brisbane – creating platforms for long-term gains. Benefits are already apparent. Foodservice performed reasonably well. The number of Foodservice branches rose to 39, all of which were profitable. Melbourne’s branches made outstanding gains in the throes of their restructure. The new alcohol category was poured out to Foodservice branches. “Decanting” continues in the new period. Freetrade sales again grew. Supply Solutions made big progress. New product development was the key feature of the year with over 100 new product lines introduced. The team also began the processing of an own-brand cheese. Customer response has been highly favourable. Australasia Manufactured capital Product segmentation (%) 2018 2018 2017 Frozen 37 37 Chilled 25 26 Ambient 34 34 Non-food 4 3 Chief executives Rachel Ruggiero Phil Struckmann Australia New Zealand Market segmentation (%) 2018 2018 2017 Logistics 5 5 Chain 19 20 Independent 75 73 Retail 1 2 Own brand 16% of 2018 divisional revenue Financial capital + 2,0% Revenue + 0,8% Trading profit 2018 2017 0 10 20 30 R30,0bn R29,4bn 2018 2017 0 1 2 3 R2,0bn R2,0bn Pictured: an example of New Zealand’s Dewfresh own brand product. 26 Bid Corporation Limited Annual integrated report 2018