| Home | | |
|
| | Annual Financial Statements 2013 | | | Sustainability Report 2013 | | | Search |
 |
Our business model
Our business model is built on the following key principles:
| – | Developing our people to be skilful, confident and self-motivating; |
| – | Empowering our people; |
| – | Gaining the respect of our customers, suppliers and principals; |
| – | Being the standard for quality service and reliability; |
| – | Adhering to what we know best or can learn; and |
| – | Pursuing financial best practices. |
Through these key principles, we ultimately strive to deliver stakeholder value by:
| – | Generating cash; |
| – | Growing our business; |
| – | Making a positive contribution to society; |
| – | Being a responsible corporate citizen; and |
| – | Generating good returns on capital. |
Our objective is to drive improving returns on capital as this is the ultimate generator of value for shareholders. To deliver on this objective, the group is continuously seeking growth opportunities in and adjacent to existing industries and geographies.
Our deep involvement in all aspects of the motor value chain provides Imperial with a competitive advantage in this market, while generating the cash needed to grow our operations.
Our business model is centred on generating cash in the motor-related businesses to grow the logistics operations, while continually investigating opportunities to enrich our involvement in the motor value chain. The cash generated in our motor-related businesses allows us to take advantage of attractive opportunities within niche sectors of the logistics market in Europe and the fast growing economies in Africa.
When we acquire businesses, we maintain their entrepreneurial spirit and simultaneously mitigate the related acquisition risk by securing the existing management, often by retaining ongoing minority management shareholdings in those businesses. Our shareholder objectives and management incentives are closely aligned, and our businesses strive to achieve maximum efficiency in their industries.
Integrated motor value chain
Our motor-related businesses are involved in far more than simply selling motor vehicles. Imperial plays a key role in virtually every part of the automotive value chain, deriving value at each touch point in a motor vehicle’s life cycle.
| – | Vehicles: Imperial sells over 120 000 new motor vehicles a year – one in every five cars sold in South Africa. We sell a further 63 000 used motor vehicles. The vehicle purchase is a trigger point for the sale of a number of financial and related products. |
| – | Financial Services: our financial services pillar provides customers with a range of financial services and products, including vehicle financing (via joint venture alliances), insurance and maintenance plans. It leverages off Imperial‘s strong distribution and retail network capability in the motor vehicle industry. It is therefore central to our motor value chain and our strategy of building annuity revenue streams around our motor businesses. |
| – | Vehicle maintenance: offers further opportunities to derive value from the value chain. Vehicles under warranty are serviced through our network of 236 dealerships. As we sell more vehicles into the South African market, the car parc grows which further feeds the maintenance and parts business. Revenue from parts and services is thus growing faster than new car revenue and provides a good annuity underpin for the business. |
| – | Insurance event: accidents provide work to our panel shops, rental income to our car rental operations, the sale of parts from our dealerships and parts distributor. |
| – | Aftermarket parts: our businesses continue to play a role in the life cycle of a vehicle once it is out of warranty as well. The aftermarket parts businesses sell parts through a franchise network of 419 stores and workshops, 20 owned stores and 46 franchised stores in the rest of Africa. |
| – | Used vehicles: at the end of the life cycle of the vehicle it may be traded in on a new vehicle, and we sell over 63 000 pre-owned vehicles annually. |
The group continually seeks to maximise its value within and between each area. Growth is underpinned by a focus on ensuring that our business mix remains relevant, and that we continue to deliver value to our customers in all the industries in which we operate.
The addition of new businesses, aligned to our current portfolio, is an ongoing focus across the group in line with the strategy of enhancing returns on capital. The development of financial services, autoparts and industrial distribution are examples of how we enriched our motor industry value chain.
Through this, the group has evolved into a diversified industrial group which offers a well-balanced portfolio of businesses that gives the group the ability to remain resilient through economic cycles.