Our value story | Our risks and opportunities | Next: Group chief executive officer's review

Our risks and opportunities

We have refreshed our approach to risks and opportunities so that it aligns better with our strategic aspirations.

Our new approach is more inclusive and long term. It aims to protect and enhance value by not only managing risk but also encouraging innovation and improving performance.

Risk management approach

Our risk management processes have been redefined to clarify the link between risks and opportunities and the group's strategic pillars. Our risk processes support our ability to identify and mitigate the risks related to our transformational strategic business objectives.

Integrated risk management

Integrated risk management

Our revised risk policy and standards align to the group's new operating model and core business focus. The revisions to risk appetite and risk thresholds are linked to our strategic aspiration and will be used to guide management in their decision making.

The impact of, and our response to, COVID-19

We play a critical role in the supply of essential services and products in the many countries in which we operate; and we continue to focus on ensuring that people receive medication and food, as well as other essentials.

Our primary duty during the pandemic is to protect our employees, clients, principals, customers and suppliers from COVID-19 infection. Our stringent protective measures remain in place and include strict access control, as well as rigorous hygiene, cleaning and disinfecting procedures, with dedicated resources in place to monitor COVID-19 related risks at each operation.

Throughout the COVID-19 pandemic we have worked hard to maintain a sound financial position, generate cash, tightly manage costs and to execute our strategic imperatives. We will continue to address the risks presented by COVID-19 while delivering strategic progress to build a resilient and sustainable business with a clear purpose in a post-pandemic world.

We are a resilient and sustainable business supported by ongoing delivery against our strategic imperatives, within our means and tolerances for risk in a highly dynamic environment.

Risk management process


The first step is to identify threats and opportunities against clearly defined business goals. Given our strategic aspirations, what is the broad context of risk and opportunity in which we operate? And which risks and opportunities relate to which particular goals and targets?

Risk assessment

In the second step we home in on the detail, analysing and evaluating the risks and opportunities identified in the first step. Given our strategic ambitions, which are the truly significant risks (and opportunities) worth expending time and resources on?

Risk management

Here we monitor, measure, review and assure the risks identified in the previous steps. This is about active management of risks and opportunities, with the associated tasks and decisions demanded of management.

Key risk categories

Materiality, business principles and values

Risk management must support how we 'live' our values and abide by our business principles.


Risk management process must integrate ESG strategy and related initiatives.

Health and safety

Integrate health and safety risk management processes into all levels of business to endeavour to cause Zero Harm through our activities.

Client contracting

We must ensure that possible risk and potential reward are carefully considered in client contracting.

Business continuity management

A holistic approach to business continuity management that reduces threats to business operations and increases organisational resilience.

Asset protection

Focuses on safeguarding the wellbeing of our employees, as well as the preservation of Imperial assets and that of our clients, principals and customers, both onsite as well as en route.


Subcontractors are required to meet Imperial's operational standards, service level requirements, and to uphold Imperial reputation and perceived brand quality.

Legal and standards compliance

We have a zero-tolerance approach to non-compliance to legal and other statutory requirements.

Strategic planning and target setting

Accurate and timely risk information is used to inform business planning, budgeting and forecasting.

Digital and IT

Digital and IT governance and management is part of the overall enterprise governance and risk framework.

Mergers and acquisitions

Due diligence process for potential mergers and acquisition targets is undertaken to assess whether a particular merger/acquisition will meet the anticipated strategic and/or financial objectives.

Healthcare regulations

Identify and mitigate key risks specific to the healthcare industry (including pharmaceutical products and medical devices industry).

Top operating risks

Our methodology assigns a numerical value to risks and opportunities to help management prioritise the relevant ones.

Short-term risks






1. The ongoing impact of COVID-19

  • The negative impact on global economic growth and increasing supply chain disruption further exacerbated by waves of COVID-19 outbreaks.
  • Supply of sufficient quantities of vaccines remains sporadic and the roll-out of vaccination programmes is further slowed by negative perceptions to the vaccine.
  • Employees' health and wellbeing remains a priority.


  • Ongoing lockdowns impact earnings and profitability.
  • Inability to recover overhead costs due to unutilised or under-utilised assets; reduced productivity because of shutdown operations; low client volumes.
  • Border crossing delays caused by COVID-19 testing/quarantine requirements.


  • Stringent health and safety measures to prevent transmissions, continued vigilance around prevention protocols.
  • Maintain ongoing communication with customers and principals.
  • Contingency plans are in place to mitigate effects of shutdowns/delays in supply chains.
  • Implemented strict cost and cash flow management.

2. Protection of margins and revenue

  • Growth, margins, and profitability of businesses are affected; explore opportunities to maintain returns expected by shareholders.


  • Cash flow generation impacted.
  • The contraction of the South African economy impacts revenue growth. Current revenue base to be protected.
  • Some competitors are also experiencing challenges, which creates opportunities to increase our market share.


  • Reorganised the group as 'One Imperial' with a 'Gateway to Africa' strategy, positioning ourselves for long-term growth.
  • Rationalisation of clients and contracts, focusing on customer profitability.
  • Focus on retaining existing client relationships that are profitable.
  • Review of business development and sales capabilities to deliver new and substantial contracts.
  • Continue to focus on cost management and reducing overhead costs.
  • Potential acquisitions will be explored to grow profitability and margins.

3. Exchange rate volatility

  • Availability of hard currency to pay suppliers of imported products remains a challenge in certain areas.
  • Higher working capital requirements in Nigeria due to shortage of hard currency.
  • Sourcing of US Dollars at higher rates may create losses that cannot be fully recovered by re-pricing.


  • Currency volatility may cause losses or gains, impacting margins.
  • Reduced sales due to the unavailability of product.
  • Liquidity constraints increase as it becomes more difficult to source US Dollars at affordable rates.


  • Our hedging strategy mitigates the impact of currency volatility. It includes forward contracts, buying hard currency and options; and is monitored by group treasury and management.
  • When the cost of managing currency risks becomes excessive, we engage principals to explore options for price support.

4. Non-performing businesses

  • Businesses are not performing to anticipated minimum ROIC/WACC requirements.
  • Increased competition in markets.
  • Inability to reduce cost base.
  • Increased risk of disintermediation.


  • Expected returns/profits are not achieved.
  • Profits and margins can be impacted.
  • Underutilisation of assets.


  • Perform ongoing reviews of profitability of contracts with principals and renegotiate underperforming contracts.
  • Review capital requirements to reduce invested capital where appropriate, and continually enhance balance sheet management.
  • Assess management skills in operations to upskill teams with necessary skillsets as required.
  • On-board new principals to ensure the group has the scale to service the market optimally.
  • Exit or restructure underperforming entities in sub-scale markets and geographies.
  • Diversify into new markets.

5. Political/social risks and civil unrest

  • External social pressure impacting on business ethics and behaviour.
  • Civil unrest could result in road closures and traffic disruption, looting and burning of vehicles.
  • Increasing protests against employment of foreign drivers.
  • Impact of expropriation of land without compensation discussions by government remains uncertain.


  • Negatively impacts on productivity and client service levels.
  • May result in damage to assets and financial losses.
  • Potential harm to personnel.
  • Impact on cross-border movement.


  • Strong internal communication and planning to ensure operations continue with minimal disruption.
  • Regular interaction with authorities to resolve issues relating to burning of vehicles and intimidation of drivers.
  • Review of security measures at warehouse sites.

6. Competition

  • New entrants in markets.
  • Loss of contracts.
  • Rate reductions on contracts renewals.
  • Aggressive pricing from competitors.


  • Reduced margins.
  • Risk of reduced relevance in markets.
  • Inability to convert potential new work.


  • Securing existing and new relationships as 'One Imperial' and strategic partnership approach with clients.
  • Offering a diverse and comprehensive service supported by scale and footprint.
  • Flexible and innovative commercial models.
  • Business development team focused on proactively managing and growing pipeline opportunities.

7. Skills shortage

  • Lack of availability of professional skills in the market.
  • Lack of labour force availability at short notice.


  • Increasing costs.
  • Existing capacity cannot be fully utilised due to shortage of skills.
  • There are some opportunities given that lower demand for labour has made temporary workers more available. But in some geographical areas there are still issues.


  • A clear and compelling employee value proposition keeps Imperial attractive for employees.
  • Assess recruiting concepts.
  • Give guidance and stability about business model and company strategy.
  • Reduce number of temporary workers where possible.

8. Global shortage of semiconductors

  • Shortage of semiconductors is influencing production in many industries.
  • The impact is most apparent in the automotive industry, where the shortage is leading to supply chain risk for vehicles.


  • Current supply and demand imbalance for semiconductors.
  • Production forecast for new vehicles reduced impacting revenue and profits.


  • Quantify the impact on our business plans and develop response strategies.
  • New business is being considered in other industries to compensate for the impact on the automotive industry.

9. Cyber security and privacy

  • Increased risk of cyber-attack that may result in loss of data, IT failure, manipulation or fraud.
  • Reputational risk.
  • IT risks due to continually increasing data volumes, growing networking, increasing dependency on IT technology.


  • System downtime impacting sales and operations.
  • Loss of principals/clients due to inability to fulfil orders.
  • Financial penalties due to lack of protection of information.


  • Undertake cyber security assessments to assess current controls and identify gaps.
  • Additional controls to be implemented where necessary to close the identified gaps.
  • Awareness programmes focusing on cyber security and privacy, including POPIA training.
  • Data protection standards are being formulated.
  • Established the global privacy office.
  • Data transfer agreements are being established for both internal and external data transfers.

10. Environmental and climate change impacts

  • Inability to comply to future environmental and climate change legislation.
  • Inability to comply with client expectations in terms of ESG performance.
  • Manage the physical impact of climate change on our operations.


  • Loss of licence to operate.
  • Increased cost of compliance, for example carbon taxes.
  • Loss of contract retention (specifically blue-chip clients).
  • Damage to assets.
  • Disruptions to operations and productivity.


  • Formulated an Imperial ESG strategy to integrate into daily business activities and client engagements.
  • Data-driven insights to improve operational efficiency and lower fuel consumption.
  • Implement fleet replacement strategy with best available technology in market.
  • Investigate viability of alternative fuel vehicles.
  • To mitigate water scarcity, we have implemented water efficiency projects and finding alternative water sources (eg rainwater harvesting).


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