Annual Integrated Report 2019

Europe Financial capital Revenue R43,7bn 2018: R38,7bn 12,7% Manufactured capital Manufactured capital Bidfood Europe boasts an impressive 508 020sqm of depot space; supported by a eet of 2 828 vehicles to deliver 145 907 product SKU’s, sourced from 7 190 suppliers to serve our 137 021 customers! Capex investment of R813,3m in 2019 includes investment into a new state-of- the-art construction and automation project in the Netherlands. Production will be relocated to the new, almost fully automated warehouse. The rst delivery from the new warehouse is expected to happen in November 2019. The new Baltics depot is functioning well, presenting great opportunity to expand the product range in the next year. Investing 2018: R1,6bn Trading pro t R1,9bn 15% Europe continues to perform well, with most businesses delivering higher revenues and solid trading results. Our eastern European businesses have shown record revenue growth but have experienced wage pressures throughout the region. Revenue rose 12,7% to R43,7 billion (F2018: R38,7 billion) while trading pro t rose 15,0% to R1,9 billion (F2018: R1,6 billion). Netherlands continued to improve despite a tightening labour market. Trading pro t growth and margin improvement was pleasing. Its business simpli cation journey with product range rationalisation and IT infrastructure recon guration is starting to bene t the overall cost base. Investment into future capacity will be undertaken. Further gains in the horeca channel more than offset a slowdown in other areas of the business, notably the health and care and catering sectors. Focus on the freetrade sector is being supplemented by import activities and delivering increased customer value. Belgium performed well in both the horeca and institutional segments. Sales were above budget and F2018 and gross margins improved. All customer segments showed growth, except the catering channel. Own brand product development continues and the roll-out of our ecommerce customer offering is ongoing. Italy performed strongly despite macro- economic uncertainty. The integration of the D&D acquisition made in F2018 continues. Growth in the freetrade sector supported pleasing sales and trading Belgium introduces myBidfood successfully at Langens and De Clerq. Harmonisation of the ERP platform continues for the next two years. See: AFS, Note 7.1 page 112 Depots 62% Vehicles 34% 2019 capex IT 4% Financial capital pro t. Sales within the group continue to grow. Czech Republic and Slovakia delivered another excellent performance. Increased sales, higher prices and better margins offset signi cant wage pressures, driven by labour shortages. Timeous investments in distribution and production facilities were bene cial to ensure we can effectively service our growing customer base. The Czech economy is in uenced by greater Europe, whose growth is slowing but we are con dent we can maintain momentum. Poland continues to go from strength to strength, registering record sales. Strategic investments in infrastructure in previous years and managements’ portfolio focus on the freetrade sector provided the base for the excellent performance. The National Accounts segment improved margins through dedicated contract management. Wine is growing into an important category and is expanding into spirits. Smart Food, the subsidiary that serves Asian restaurants, is expanding its geographic reach. Ecommerce initiatives are developing and are expected to assist further growth going forward. Iberia’s overall performance was poor. Frustock (Portugal) was good, however, Guzmán (Spain) underdelivered. Progress in Spain is being made internally on improving the business platform and IT systems. Barcelona as a region is still economically “soft’’, offset by good growth in Madrid and Lisbon. Management’s focus in F2020 will be on IT systems stabilisation, growing the independent customer base and cost reduction. Igartza, acquired in August 2018, performed well. Baltics achieved double digit sales growth, driven by a strong foodservice focus. Completion of the new depot in Kaunas provides the base from which to grow. Both Latvia and Lithuania recorded a trading pro t. Germany remains a business in transition as we structure the platform ahead of any regional expansion. Sales ticked up, gross margins were maintained but expenses remained too high. Additional management support has been deployed to assist our local operators. Germany remains a medium-term market opportunity for us. Investment into depots • Mallorca branch opens and streamlines the old Food4 network, Spain • 5th depot opens in Chulmec, Czech • 17th branch in Hardewijk, Netherlands • New factory for portion control beef, pork and game opened in Opava, Czech • New purpose-built depot opens in Kaunas, Baltics Capex investment 2019 R813,3m 2018: R776,8m 44 / Bid Corporation Limited Annual integrated report 2019