Integrated Report 2020

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Group chief executive officer’s review

The past year has been extraordinary and challenging and one of two distinct halves. Dominated by the Covid-19 pandemic in the second half to February 2020, we were on track to deliver our guidance for financial performance that we communicated to the market at our interim results 2020. This was severely impacted in the second half, particularly in the last quarter of our financial year during the peak of the Covid–19 pandemic. During a time of great uncertainty, we had to navigate many unforeseen challenges and I am proud of how Imperial and its people have risen fearlessly to these challenges, demonstrated resilience and captured the opportunities.

Our primary focus remains on protecting our people and operations from Covid-19 infection. This, while still delivering high service levels to our clients and supporting our countries and communities in a time of great need. Why we exist and what we do matter, and I am humbled to lead the way for our 25 000 people – who through this crisis have demonstrated that as a business we will continue to do what is expected of us, even in the most challenging of times. Our purpose has become clearer through the crisis. We make a difference to people’s lives and based on our strategy, we will play a key role in the development of Africa and its people.

Reflecting on the past financial year, as a business and as a leadership team we had to navigate many unforeseen challenges due to Covid-19; we undertook a significant strategic review and process to position the business for resilience and value creation; we are transforming our culture and organisational design to operate as ‘One Imperial’ for the first time; we made tough decisions to exit and dispose of underperforming and non-core businesses; we made critical new senior appointments; and we had to swiftly adapt to new ways of working.

The actions that we took as a business in the past 12 to 18 months have contributed to Imperial’s resilience in a time when many other companies are floundering. Therefore, despite the unprecedented changes together with challenging trading conditions exacerbated by the Covid-19 pandemic, Imperial increased revenue from continuing operations, generated strong free cash flow, maintained a strong balance sheet and effectively managed costs, as reflected in our 2020 financial results.

At the same time, while the virus added complexities to our day-to-day operations, we have not deviated from our strategic journey of transforming Imperial from a portfolio of regional businesses to an integrated end–to–end Market Access and Logistics business – with the strategic intent of becoming 'One Imperial' and a ‘Gateway to Africa’. We recorded significant strategic progress in F2020 towards achieving this intent and transformation. The amplified efforts from our teams across the business ensured that we delivered a strong financial position in the F2020 year that will support our growth and strategic ambitions from the 2021 financial year onwards.


Imperial plays a critical role in the supply of essential services and products in the countries in which we operate – delivering medication, food and other necessities. During the crisis, our primary focus is to protect our people and operations from infection and to ensure that all our operations are safe and hygienic. Our operations have strict access control procedures, additional hygiene, stringent cleaning and disinfecting processes. Staff training has been customised to heighten awareness of risks and necessary preventative measures with online training provided and Covid-19 induction programmes in place. Various platforms have been created where best practice information is shared – and where collective problem solving and solution sharing can take place.

Dedicated resources to support and monitor Covid-19-related risk have been appointed at each operation to ensure that communication reaches all operational levels; to take control of suspected Covid-19 cases in accordance with the necessary protocols; and to ensure compliance by means of documented compliance inspections.

Staff not required at the operations have been requested to work from home, while others have been placed on different shift systems or in different offices to increase social distance. In many operations, a two team methodology is in place to ensure continuity in the event of one team testing positive for Covid-19.

Effective, ongoing internal and external communication has been key to our organisational response to Covid-19. All employees have been provided with practical, easy to understand information in the form of mailers and posters - as well as divisional communiqués which outline actions specific to regional operations.

Up to the end of July 2020, 385 employees tested positive, with the majority making a full recovery. Sadly, 11 of our colleagues succumbed to the virus and we have extended our deepest condolences to their families and colleagues.

As reflected in our F2020 results, most of our businesses have seen significant impacts on volumes due to lockdown restrictions. The month of April was the worst affected with South Africa trading at c.55% of volumes, African Regions c.70% and Europe c.50%. Many of our markets have now eased lockdown restrictions and significant recovery has been recorded during July and August 2020 across our operations - although volumes remain at pre-Covid-19 levels. We lost revenue of c.R4,0 billion and operating profit of c.R1,0 billion during the lockdown peak from March to May 2020.

A variety of initiatives were introduced to support stakeholders and countries of operation, such as adding capacity to assist clients in meeting increased demand. We contributed R5 million each to the Solidarity Fund and Giving for Hope Foundation and R500 000 to the Gift of the Givers Foundation in South Africa. Imperial sourced and delivered PPE and sanitisers to public and private sectors in South Africa and Europe. We partnered with charity organisations, providing vehicles and resources to deliver food parcels and other basic needs to communities most impacted by the crisis. Over 75 000 patients were screened for Covid-19 through the Unjani Clinics, a CSI initiative supported by Imperial. The Imperial non-executive directors reduced their fees by 25% from April until end June 2020 and the group executive committee took a 25% cut in salaries for the same period. We continued to pay salaries of c.R160 million to staff not required at the operations between March and June.

Throughout the pandemic, we have retained our focus on maintaining a sound financial position, generating cash and executing our strategic imperatives to make us resilient for the future.

The pandemic has provided lessons for us that will fundamentally change the way we live and work in the future. Being an essential services provider with a unique value proposition, Imperial is well positioned to capture the many opportunities that will arise from changing market trends, which include:

  • Shortening supply chains and support for local manufacturing - significant logistics and market access opportunity.
  • As clients rethink their supply chains, there will be greater demand for visibility and resilience - providing data and technology solutions will be a key differentiator.
  • Clients will look to outsource more and focus on core capabilities which will present a strong pipeline of new opportunities.
  • Further changes in industry structures, consumer behaviour, marketing positioning must be anticipated and accommodated. The logistics industry is resilient and will become more relevant and stronger as these changes take place.
  • Consumer behaviour will change and the rise of the contact free economy will continue. Ecommerce, online consumer engagement, telemedicine, etc will shape business models, which provides an excellent opportunity in Africa as current service levels have significant room for improvement.
  • Remote and flexible working conditions will increase. This will present opportunities for efficiencies and cost saving.
  • Increased demand for products and investment in capacity in the healthcare industry. Imperial is ideally positioned based on our end-to-end value chain – with sourcing, procurement, distribution, market access, mobile clinics etc - and c.21% of our revenue is generated from the healthcare industry.
  • With greater government and regulatory intervention and scrutiny, there is increasing pressure on businesses to holistically and visibly embrace the principles of ESG.
  • Organisations will need to give priority to employees, communities and financial performance.

The Covid-19 crisis has further amplified the need to position Imperial for growth and longevity well beyond the pandemic. Our decisive strategic actions over the last 18 months have stood us in good stead and the tough decisions we made as a business have contributed to Imperial's resilience as we now navigate these uncertain times.


Strategic positioning

We are transforming Imperial from a portfolio of regional businesses to an integrated, end–to–end market access and logistics business. It is our strategic intent to become the 'Gateway to Africa' - transforming from an asset-heavy, 3PL logistics player to an innovative, asset-right business. Our ability to build this business and serve our clients and principals in some of the most challenging markets in Africa is a key differentiator for Imperial. We will seek to grow the business both organically and through strategic acquisitions in Africa and selected markets - remaining a business of scale and unlocking increasing value for our clients, principals, shareholders and other stakeholders.

The core strategic focus of Imperial is therefore to grow our African footprint and facilitate trade flows into and out of Africa. This will result in Imperial having an integrated logistics and market access offering, positioned as 'One Imperial' and focused on Africa - which leverages our competitive advantages and capabilities mainly in the healthcare, consumer, chemicals, industrial and automotive industry verticals. To leverage expertise across the business, be a more client-centric organisation, and better position ourselves for the future - given ever-changing macro and industry trends - we are focusing our service offering and positioning on capabilities in these core industries and less so on regions. Allowing us to more effectively deliver integrated solutions across our networks and regions, this 'One Imperial' approach will deepen our competitiveness and relevance - and retain our market share and industry legitimacy. As mentioned earlier, Imperial will therefore operate within two overarching solutions - market access and logistics - and within three businesses: Market Access, Logistics Africa and Logistics International, with Logistics encompassing contract logistics, freight and LLP services.

As Imperial embarks on this growth journey, IT, digital and data will be positioned at the heart of the business - as technological prowess will determine the strength of Imperial's differentiation, market relevance, customer experience, and revenue. Another critical part of our growth strategy is to leverage cross-selling and upselling opportunities between our market access and logistics solutions - integrating digital and data into our business models and growth plans.

We are also focused on developing and retaining top talent, integrating ESG practices and preparing our business for a post-pandemic world. This is to ensure that Imperial will be a resilient, sustainable business that demonstrates its purpose through its actions and initiatives, focusing on people, profit and planet.

Achieving our strategic ambitions will require that we make significant capital investments in digital and data initiatives, technology, and strategic acquisitions over the next five years - as well as assess and align our international portfolio with our core competitive advantages.

Despite significant progress having been made in achieving key strategic milestones, we have a long road ahead in ensuring that we transform the culture of the business so that we can effectively operate as and reap the benefits of a 'One Imperial' group. Through this journey, our focus remains on delivering the best from our current operations by making them lean, servicing our clients profitably, executing flawlessly and growing organically, while still executing on our strategy for growth.

Our strategy is categorised according to the following six pillars:

  1. Operate as 'One Imperial', offering unique end–to–end solutions (one-stop shop): Our clients, customers and principals want to engage with a business that is able to provide integrated and innovative solutions, and that facilitates local relevance to enable them to compete and win in their chosen markets. Clients and principals want simplicity, flexibility and visibility of their supply chains and route-to-market. Imperial's value proposition to its clients, customers and principals is accordingly to provide end–to–end access to markets – with the flexibility to adjust to different needs. Operating as 'One Imperial' with one brand positioning, one collaborative culture, one strategy and group-wide systems and processes to facilitate one client experience is necessary and will provide end–to–end visibility, efficiency and insights for us and our clients and principals. Our scale and unique integrated logistics and market access solutions – alongside a deep understanding of the industries in which we operate – will drive resilience for both Imperial and our clients.
  2. People are our greatest asset: With ongoing investment in our talent pipeline – and a focus on leveraging skills and expertise across the group – our strategy will ensure that the business is well–equipped with talented and skilled people and expertise, systems and processes that enable strategic execution and efficiency.
  3. Extensive Africa footprint providing end–to–end market access and logistics solutions, serving as a 'Gateway to Africa': As a leading market access and logistics business in over 20 countries in Africa, Imperial takes principals' and clients' products to some of the fastest growing and most challenging markets in the world – reducing the complexity involved in operating in those markets. Expanding our footprint and scale – and with enviable local knowledge and footprint - we provide end–to–end access to markets, customers and consumers. Our focus is now to expand on this geographical footprint on the African continent.
  4. International footprint and expertise: We understand the demands of the African continent and have the proven expertise to partner with multinational clients wanting to enter and grow in emerging economies. Our broad, multinational client base benefits from our strong logistics expertise and experience, with access to first-world technology and industry trends. This will ensure that we provide quality, customised and fit–for–purpose solutions and a seamless client experience which includes reduced complexity and risk – facilitating trade flows into and out of Africa. Through our broad spectrum of expertise, we will also grow outside of Africa in selected markets that enhance our 'Gateway to Africa' strategy.
  5. Go digital, be digital, enable digital: Imperial's digital strategy centres on the use of best-in-class and emerging technology to provide clients, principals and customers with the innovative solutions they require to differentiate themselves from their competitors. We embrace market disrupters and leverage innovation so that our relevance and service offering will not only survive - but thrive – well into the future. Digitalisation, data, new technologies, point of sale integration and automation – including the rise of ecommerce, online consumer engagement, point of sale devices and telemedicine – shape our business models and help futureproof our business and our industry. Investment in and prioritising digital and data initiatives as core enablers to our strategy, which includes expanding our services into ecommerce, ecommerce fulfilment, point of sale integration and digital freight exchanges, will be critical in transforming Imperial as well as improving efficiency, facilitating revenue growth and creating new revenue streams.
  6. Integrating ESG practices: As a purpose–driven organisation, Imperial focuses on people, profit and planet. We make a difference to people's lives and play a key role in the development of Africa and its people. Imperial enables access to quality products and services for millions of people in our countries of operation. This includes food, fuel, medicine, and countless other products that improve everyday life. In delivering our purpose and protecting our licence to operate, we proactively manage and invest in ESG as part of our daily course of business.
Progress against strategy

2019 and 2020 have been years of significant strategic focus, rationalisation and restructuring as we undertook the following:

  • Refined our strategic vision and intent as 'Gateway to Africa' and 'One Imperial'.
  • Simplified and reduced complexity by reorganising from regions into capabilities.
  • Assessed, addressed and exited non-core, low return on effort and underperforming businesses.
  • Significantly reduced costs.
  • Concluded strategic acquisitions.
  • Defined our path as a transformational organisation rather than a transactional one.
  • Placed significant focus on our people and organisational design, digital, data and ESG as core enablers of our strategy.
Growing our Africa footprint

In the past 12 months we concluded acquisitions to the value of c.R900 million (mainly in the second half) in our Market Access and Logistics Africa businesses. We added significant new principals to our Market Access segment and expanded our capabilities into demand generation, light contract manufacturing and brand partnership services. Through acquiring 60% shareholding in Axis Group International, we added sourcing and procurement capabilities to industries other than healthcare. Effective August 2020, Imperial acquired a 49% shareholding in Pharmafrique Proprietary Limited (trading as Kiara Health) for approximately R76 million. Pharmafrique is a pharmaceutical manufacturing and healthcare services company based in Johannesburg which serves as the local manufacturing partner for a global leader in generic and biosimilar medicines. This acquisition is in line with Imperial's strategy to backward integrate into contract manufacturing as part of our market access service to multinationals on the continent. Access to this capability will create a pipeline of new principals and products for our market access and logistics services in the healthcare industry in South Africa. Going forward we will prioritise our capital allocation for those areas that most amplify our primary strategic positioning and focus, being the 'Gateway to Africa' offering market access and logistics solutions.

Despite numerous unsuccessful management efforts and initiatives undertaken over the past months to return Pharmed to profitability, Imperial has entered into an agreement to sell the company to the Arrie Nel Pharmacy Group. We believe that this business would be better placed to grow in the hands of Arrie Nel - where the closer alignment of strategic focus and capital allocation capabilities will enable the required growth investments. We anticipate this deal to be concluded in the first quarter of F2021. The disposal of Pharmed does not represent our exit from the healthcare industry in South Africa but merely the exit from non-core wholesale activities.

Logistics Africa – rightsizing and reorganising for growth

We appointed a new CEO in March and have been simplifying the structures, operating model and processes - and accordingly transforming the business and mindset under this new leadership. This will result in c.R200 million per annum of cost savings from F2021, providing the platform for growth.

We have reorganised our commercial and business development structures to sell as 'One Imperial'. This involved moving Managed Solutions Southern Africa (cross-border and Namibia road freight management) into Logistics Africa from Market Access - to allow for the creation of a focused asset-light road freight management capability in the region.

Imperial exited the CPG business in South Africa within the original cost estimate - retaining c.1 800 jobs and R1,6 billion revenue in other parts of the group - and also consolidated significant parts of our freight business in South Africa.

Digital, data and IT

As Imperial embarks on its growth journey, IT, digital and data will be positioned at the heart of the business - as technological prowess will determine the strength of Imperial's differentiation, market relevance, customer experience, and revenue. We are accordingly progressing significant and focused investments in IT, digital and data which will include the roll-out of one finance, HR and communication systems across the group, and 10 digital and data projects. These projects will be led by our chief digital officer - a new and critical role for our business. In F2020, our USD20 million venture fund in partnership with Newtown Partners continues to record significant activity, leveraging disruptive innovation and new technologies for competitive advantage. We concluded three investments in our venture fund: digital distributor, digital freight forwarder and point-of-care diagnostics enabler; and are progressing well with the acquisition of ecommerce fulfilment and ecommerce capabilities.


Another critical part of our growth strategy is to leverage cross-selling and upselling opportunities between our market access and logistics solutions. In order to ensure that this remains top of mind for business, I have established a monthly One Imperial Commercial Strategy Forum which includes the CEOs and commercial heads from our Market Access and Logistics businesses, as well as our chief digital officer. Imperial is also considering the creation of a commercial lab to explore the most effective options for selling as 'One Imperial', in line with our value proposition, or clients' needs and expectations. Furthermore, we have recently appointed industry heads in our Market Access business (consumer and healthcare) to drive sales and value proposition to clients, principals and customers from a 'One Imperial' perspective.

Our people

We remain focused on developing and retaining top talent and entrenching a 'One Imperial' culture. Common values for the business have been established in close liaison with staff at various levels and are being implemented. Creating a more diverse workforce through developing and employing more females, broader race groups, younger people and people with diverse skills sets and experience is a key performance area for Imperial.

In the last 12 to 18 months, we made the following key appointments at executive and senior management level:

  • Appointed a group chief people officer.
  • Appointed a group digital officer.
  • Key black and female management appointments made at both group and divisional executive committee and senior management levels including the following:
    • First female (Indian) appointed to the executive committee.
    • First black female managing director (MD) appointed in South Africa to manage Imperial Advance.
    • First female MD appointed in Market Access to manage Imres.
    • Black male appointed as chief commercial officer in Logistics Africa (South Africa).
    • Black male appointed as MD of Imperial Health Sciences business in South Africa.
    • Black female appointed to the Logistics Africa executive committee as chief people officer.
    • Newly appointed coloured female CFO for Logistics Africa.
    • Three Indian males appointed as group head of functions (M&A, legal and risk).
    • Indian male appointment as MD of market access healthcare in South Africa.
    • Newly appointed female as the vice-president for group organisational effectiveness.

We have commenced transformation of our culture which is key to achieving our 'One Imperial' strategic intent and established a shared set of values to drive a fundamental shift in our current culture. We have also advanced our global and regional women's forums and initiatives. Imperial was recognised as the top company for students to work for under the transport and logistics segment in the recent South African Graduate Employers Association study. This bears testament to the success of our revamped graduate programme and our increased brand visibility and positioning.

While we have made progress against our people and transformation-related objectives in the past 12 months, there is still work to be done and I am driving this hard to ensure that we transform our business on all levels. Our remuneration policy and related KPIs at both group and divisional levels for F2021 have been aligned to focus more on delivery against strategic objectives, organic growth of each business and cash flow generation. We have also made good progress on developing a people balance sheet and putting in place formal performance measurement processes to identify, develop and retain our talent.

Integrating ESG and brand positioning

As we are integrating ESG practices and preparing our business for a post-pandemic world, significant progress has been made in ensuring that Imperial has the relevant ESG policies and strategies in place to drive strategic group initiatives, develop key stakeholder relationships and continue to grow our impact and reach through our various CSI initiatives. I am also pleased to report that Imperial is now a signatory of the UN Global Compact, which includes adopting the Women's Empowerment Principles contained therein. Initiatives to communicate Imperial's story, client, people and investor propositions, and improve brand visibility as part of 'One Imperial' have progressed significantly and will be rolled out to stakeholders from September.

International business

In aligning our international portfolio, the first step was to undertake a phased disposal of our shipping business - with the European shipping business sold in July 2020 at an attractive profit after tax multiple of c.15 times. While the proceeds of the sale of the European shipping business are being used to optimise the financial position of Imperial in the short term - and provide capacity to facilitate growth in the medium term - the significant impact of Covid-19 has required us to prioritise our capital allocation for those areas that most amplify our primary strategic positioning and focus. While we continue to explore potential air/ocean opportunities, all options are being explored for our International business to ensure that it supports our 'Gateway to Africa' strategy.

Operating performance

Imperial delivered its market guidance for the first half of F2020 but the second half's trading performance was severely impacted by the decline in volumes across all regions due to various levels of Covid-19 restrictions, partially offset by new contract gains and acquisitions. While revenue in H2 F2020 grew by 7% mainly due to the benefit of new contract gains and acquisitions, continuing operating profit was down 100% (R1,1 billion) largely due to the impact of Covid-19 on revenue, associated once-off costs and impairments, and further restructuring mainly in South Africa to reduce costs.

Despite challenging conditions Imperial pleasingly increased revenue from continuing operations by 5%; generated strong free cash flow with a cash conversion of 72%; maintained a strong balance sheet with net debt:EBITDA well within banking covenants; effectively managed costs; and recorded significant progress against our strategy. Imperial's contract renewal rate across its operations on existing contracts remains strong at c.80%, with an encouraging pipeline of new opportunities. New business revenue of approximately R6,2 billion per annum was secured to the end of June 2020, up 11% compared to the prior 12 months.

Market Access

The Market Access business delivered a solid performance in challenging circumstances, growing revenue by 18% to R12,4 billion and decreasing operating profit marginally by 1% to R710 million. Despite the negative impact of Covid-19 on trading and volumes, results benefited from significant new contract gains of c.R1,7 billion annualised revenue and the inclusion of new acquisitions concluded in the second half of the 2020 financial year.

Our strong position as a leading healthcare and consumer market access player in Africa stood us in good stead, particularly during the pandemic. While our healthcare businesses performed well and we are still able to service various channels in most markets in our consumer business, demand has reduced due to lower activity, mainly in markets where sales of liquor and tobacco were negatively impacted due to Covid-19-related trading restrictions. Most countries in which we operate have now relaxed their Covid-19 restrictions and some level of recovery has been evident since May 2020. We expect a steady recovery in revenue as lockdown restrictions ease although our healthcare medical supplies and kitting business (Imres) continues to benefit from a strong order book, although the supply and delivery of products from India and the lack of air freight capacity impacted performance negatively.

Logistics Africa

In an already difficult, low-growth and increasingly competitive trading environment - exacerbated by the impacts of Covid-19, Logistics Africa recorded revenue growth of 3% but operating profit declined by 34%. Results were negatively impacted by Covid-19-related trading restrictions, associated once-off costs and lower margins in the healthcare businesses in South Africa. Results were supported by new contract gains of c.R2 billion annualised revenue, the benefit of cost-saving initiatives undertaken in F2019 and excellent cost management during Covid-19.

Around 90% of this business is currently in operation. We anticipate normal trading to return in the short to medium term given that lockdown restrictions on alcohol and tobacco have been lifted. This business will also benefit from further cost reduction initiatives of c.R200 million planned in F2021.

Logistics International

Most impacted by the Covid-19 pandemic, revenue and operating profit from Logistics International decreased by 7% and 78% respectively in Euro terms. Revenue of
c.€78 million was lost during the peak of Covid-19 as this business has significant exposure to the automotive and industrial sectors (c.65% of revenue), where the impact of the pandemic was most severe. The high fixed cost base (c.50%) in this business, once-off impairments due to Covid-19 and low water levels in South America negatively impacted operating profit. The Rand performance was negatively impacted due to the translation of losses incurred in Q4 F2020 in Logistics International into Rand at significantly weaker exchange rates. The average exchange rate in Q4 F2020 was R19,77/Euro versus R16,50/Euro for the first nine months of F2020.

A marked decrease in volumes across most operations resulted in the operating margin declining to 0,7% from 3,1% in the prior year.

Results for the 12 months were supported by the benefits of the significant cost-cutting initiatives in the prior year, contract renewals and new business gains of c.R2,5 billion (€128 million) per annum of annualised revenue. All businesses in Logistics International are currently in operation, and while volumes remain impacted, there is a steady increase.

Managing the material matters

Imperial defines material issues as those factors most likely to influence the decisions of our stakeholders in relation to the capital inputs they provide to the group, and the outcomes they expect to derive in return. This year, we sought to test the material issues identified for the previous year in the context of shifts in Imperial's operating environment and consequent changes in its risks and opportunities (amplified by Covid-19), the development of Imperial's strategy and its business transformation.

Accelerating strategic growth is the departure point for our value creation story. In the last few years, Imperial has become significantly smaller due to the unbundling of Motus and the disposal of non-strategic and underperforming businesses. More critically, our deployment of capital has yielded only mediocre growth and returns well below our global and local peers. To create shareholder value, we must return to a sustainable trajectory of profitable growth through accelerated organic growth and selective strategic acquisitions, which meet our required rate of returns and investment criteria. Our strategy aims to almost double revenue over the next three to five years and is supported by strategic deployment of capital to ensure long-term value creation.

We need to unlock value through a clear strategy and growth path that leverages our competitive advantages in Africa; positioning the group as the 'Gateway to Africa' to our multinational clients and principals, giving them access, visibility, reliability and flexibility in some of the fastest growing and most challenging markets in Africa, and partnering with them in improving efficiencies in their supply chain and the quality of life of their customers across the continent we serve.

Optimal capital management will play a crucial role in achieving our strategy, within our means and risk tolerances; creating a leaner and more efficient finance structure and operating model will enhance this critical underpin, enabling responsive and responsible capital allocation that is forward looking and aligned with our strategic direction.

Our people are the most critical enablers of our strategy - central to the effectiveness of our business transformation and key to improving our performance. Our culture is fundamental to enabling our people to deliver on our strategic and operational objectives, as well as to competitive differentiation, ethical conduct, diversity and inclusion, collaboration and innovation and disruption; it is the connective tissue that binds together an organisation and ultimately determines 'how things are done'.

We are focusing on how our organisational culture will be changed in the short to medium term to demonstrate the value of our people. Our priorities indicate how we will revitalise our organisation with values that inspire and unite our people, creating a sense of meaning and belonging, while transforming our leadership and investing in our people and organisational capabilities, to align these to our strategy, and ensure they support our culture journey.

We will create and sustain value by ensuring that structures and processes are efficient, future-fit and support our strategic aims. Our systems, processes and practices are core enablers of our strategy and performance. Efficient and integrated processes and systems underpin our ability to perform on every level and deliver our strategic imperatives. Particularly as we shift towards a 'One Imperial' culture and structure, the quality and connectivity of our systems and processes will play a vital role in our success or failure.

We need to optimise and integrate current systems and practices to support operational excellence and sustainable performance, positioning IT, digital and data initiatives at the heart of our enterprise, to deliver new growth and revenue streams, a step-change in efficiency and the possibility of disruptive innovation. We understand that our technological prowess will impact our ability to differentiate, remain relevant, ensure client satisfaction, and to grow our revenue. This will require significant investment over the short to medium term but will ensure that we are able to continue to generate value for our shareholders and clients into the future.

We are committed to becoming a purpose-driven organisation that creates sustainable, long-term value for all stakeholders. This includes investing in integrating ESG practices in 'business as usual' across the organisation. Being a responsible corporate citizen underpins our industry, market and country legitimacy, which is a competitive advantage for multinational clients and principals that expect conduct that is beyond reproach, and which minimises their supply chain risk and enhances their reputation in difficult and complex markets. Our legitimacy ensures that we are recognised as a trusted partner, with the highest standards of governance and ethics.

This is in essence the foundation of our value creation proposition, and focuses on the steps we are taking to understand and measure our positive and negative impacts, to enable us to generate shared value for all our stakeholders and enhance our reputation, the ultimate measure of the credibility of the 'One Imperial' brand.


This is a difficult and demanding time for us as the virus continues to spread. Many of our markets are facing increasing uncertainty and volatility, being in various levels of lockdown and restrictions. We therefore anticipate the Covid-19 pandemic will continue impacting our operations and performance in the short term. However, a significant recovery was recorded across the business in July and August 2020.

At this stage, for the 2021 financial year, subject to stable currencies, steady recovery in volumes and revenue on the back of easing Covid-19 restrictions, and a recovery in economies in which we operate from current levels, we expect Imperial's continuing operations to deliver revenue, operating profit and continuing HEPS growth compared to the 2020 financial year, as well as good free cash flow generation with a cash conversion ratio of between 70% and 75%.

Imperial's balance sheet is strong and resilient, with sufficient headroom in terms of capacity and liquidity to facilitate our strategic growth aspirations. The dividend will be reassessed at the interim results in February 2021 based on trading conditions in the next six months.

While we will continue to meet the demands and manage the implications of the pandemic in the short term, we will spend significant time and energy on delivering our strategy – to transform our business to one that delivers strong growth, returns and cash flows.

Expressing gratitude

I extend my sincerest thanks to our board members and my executive colleagues for their unconditional support and guidance especially during this unprecedented crisis. My appreciation also goes to our shareholders, funders, clients, principals and clients for their confidence in Imperial and their patience and support as we navigate through the challenging landscape. To our over 25 000 employees, who are the backbone of our business, I express my thanks for your loyalty, dedication and commitment through a difficult and extraordinary year. Together we impact millions of lives for the better. I look forward to working with all stakeholders as we continue to build a great business – one that is strong and resilient, that operates as 'One Imperial', and is beyond possibility.

Mohammed Akoojee

Group chief executive officer