Annual Integrated Report 2019

The region continues to grow. Revenue was up 3,7% to R31,1 billion (2018: R30,0 billion). Trading pro t rose 9,4% to R2,15 billion (F2018: R2,0 billion), with lower revenue growth but higher margins re ecting the strategic shift away from the lower-margin customers. Bidfood Australia had a solid year. Sales were slightly down on last year which re ects a good result considering the exit of further low-margin business from September 2018 onwards. Foodservice performed well, bene ting from the freetrade customer focus being aligned with the strategy of splitting the major metropolitan branches effected in F2018. All three regions are tracking well, particularly the Melbourne branches. Supply Solutions (imports) continues to perform well off the back of ongoing upstream integration developing further own brand lines and other light manufacturing opportunities. Management’s approach to driving growth in a large, mature business is the strategic broadening of the offered product range to our existing extensive customer base. Our move into liquor following the Festival acquisition has been challenging, but opportunities abound in the medium term, given improved operational performance. Produce has struggled for some years as a standalone business and management has entered into a contract to sell this business. Further capex has been invested on organic expansion in foodservice. Bolt-on acquisition opportunities remain, however, nothing is imminent. Bidfood New Zealand delivered a credible performance delivering solid trading results. Revenue gains and improved margins more than offset higher expenses arising from labour costs and increased capacity. All branches focused on productivity improvements. Labour availability continues to be a challenge, increasing pressure on wage rates. All segments of the business continue to develop pro tably with ongoing innovation and product development, particularly in value-add processing. All the F2018 new builds are delivering a positive return. Further investment has been committed to ensure we maintain this growth trajectory. Australasia Intellectual capital Intellectual capital Revenue R31,1bn 2018: R30,0bn 2018: R2,0bn Trading pro t R2,2bn 9,4% 3,7% Capex investment 2019 R1 211m 2018: R618m Depots ( m 2 ) 297 383 8% 2018: 274 678 2018: 1 320 Vehicles (#) 1 308 1% Bidfood Australasia has strong, collaborative relationships with leading brands from around the world. Bidfood is focused on building mutually bene cial partnerships with our suppliers so that both businesses can grow alongside each other. We recognise the critical role each supplier plays in our business and those of our customers. Our purchasing teams work closely with all our trading partners to monitor activity, while keeping up with the latest trends and product innovation available both nationally and internationally, ensuring we are rst to market. Food safety is our number one priority . Poor food safety practices in the food supply chain can have a devastating effect on our customers’ businesses. Bidfood’s certi ed HACCP based food safety programme ensures products have been sourced from food safe compliant suppliers and handled in a food safe environment, maintaining the cool chain right to your door. The programme is independently audited every year. Manufactured capital Manufactured capital The focus for this division, in line with group strategy, is on free trade growth. This means focus on growth at the correct margins. Free trade growth is a key driver for the metro strategy where we have increased the number of branches in urban areas. We are seeing some great results from the implemented metro regions and are working with other urban areas to get the right structure in place to maximise the sales and the service opportunities this strategy presents. The Bidfood “Last-Mile Strategy” – it’s all about getting closer to the customer Bidfood NZ reports the 20 th year of continuous sales and profitability growth and the future looks bright See: AFS, Note 7.1 page 112 Depots 88% Vehicles 10% IT 2019 capex 2% Financial capital Financial capital Richlands branch in Brisbane opens being the last major piece of the Australian metro strategy. 32 / Bid Corporation Limited Annual integrated report 2019