Annual integrated report 2018

Fresh sales fell, but margins were well managed. Meat continues to gain traction as we refine our route-to-market model. Overall both the Fresh and Meat divisions were profitable, but still not at desired levels. The new Festival acquisition performed below expectation and will improve in the future once fully integrated. Social and relationship capital was not neglected. Donations were made to the Daniel Morecombe Foundation and Kick Start for Kids while many branches supported local charities. Human capital in our high-employment economy remains a focus area. An employee assistance programme was launched, offering free counselling sessions to any employee or family member going through a difficult time. The intervention addresses a growing need as the number of Australians diagnosed with depression continues to climb. New Zealand did well to grow revenue and trading profit in a sluggish market. Business confidence dipped and GDP growth slowed. Lower unemployment added to wage pressures while higher fuel costs impacted all markets. The business’s investment in new distribution centres to handle continued growth demonstrated our sustained commitment to the development of our manufactured capital. This spending added to the cost base. Foodservice performed solidly and Imports put in another stellar performance. Hamilton moved to a new distribution centre, as did Nelson, Timaru and Invercargill. Fresh had a challenging year as extreme weather conditions disrupted supply and impacted pricing. Processing results were mixed. Newly acquired Prepared Foods failed to meet initial expectations and additional investment was required. The Auckland logistics operation did well, taking on additional QSR volumes while ice cream sales went up. IT served up new order entry and scales projects, now in use at most branches. The latest version of the Progress database was upgraded. Sustainability Sustainability and social outreach are important components of the work we do in Australasia. Our suppliers, customers and the communities within which we work are environmentally and socially aware and expect the highest standards from us. Natural capital Fuel consumption, energy, water and waste are the key focus areas that drive our environmental initiatives. They are the foundation of our environmental management procedures, which include the implementation of the ISO 14001 environmental management system at all our Australian sites. A 5% increase in fuel consumption was recorded in a year in which revenue was dampened by investment activities relating to the expansion of our presence in major cities. There was a change in fleet mix, with investment into smaller, more fuel-efficient vehicles for better inner-city reach. The full benefit of fleet spending, in revenue and fuel efficiency terms, will become evident in the year ahead. Installed in all vehicles are GPS fleet monitoring systems that enable efficient route planning and accurate data capture of road usage and related tax and fuel rebates, as incentivised by the Australian government. New Zealand has begun trials of hybrid cars in the sales fleet. Efforts to ensure optimum fuel efficiency are ongoing. In total, 80% of New Zealand grid-electricity is generated from hydro, wind and solar renewable sources. The applied emissions factor does account for this in calculating the carbon footprint. Deployment of various energy-efficiency technologies is at the forefront of our drive to reduce electricity consumption across both New Zealand and Australia. Smart LED lighting and motion sensors have been installed in all our Australian branch warehouses. Solar panel arrays have been installed at selected sites. New Zealand has committed to a trial of solar panels at the Hobsonville distribution centre (DC). This is currently under construction and is due to be completed in June 2019. In addition, New Zealand intends that all future depots and warehouses will be equipped with solar power as upgrades and expansion occur. LED lighting and motion sensors have been fitted in existing DCs and are standard in all new DCs. Australia has committed to the installation of efficient refrigeration, insulation and solar initiatives in all new depots. In addition, all current sites are fitted with timers on the air-conditioning. All lighting is turned off when offices are closed. Water consumption is another key area of focus. The Auckland plant, our largest site in New Zealand, has installed a 200 kilolitre rain-harvesting tank that gathers rain water for use in irrigation and the washing of our fleet. Australia reported 29% increase in water consumption being the full year effect of the 2017 acquisitions of Pye, Central Choice, Primo and Festival. The acquisition of Prepared Produce, a fresh food processing business, in the current year has increased water usage due to the nature of the operations. 27 Bid Corporation Limited Annual integrated report 2018 This is Bidcorp Ifc – 13 Leadership review 14 – 23 Divisional reviews 24 – 47 ESG review 48 – 59 Financial statements 60 – ibc