Preliminary summarised results
for the year ended 30 June 2020



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, third-party logistics (3PL) 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, automotive industry, chemicals and industrial verticals. In order 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. This will allow 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 business ie 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 progress 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 us to 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. 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. 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, being Africa and market access. 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.

Strategic pillars

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 – which is summarised in six strategic pillars:

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 want simplicity, flexibility and visibility of their supply chains. 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 and insights for Imperial and our clients. 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.
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.
Extensive Africa footprint providing end-to-end market access and logistics solutions, serving as a ‘Gateway to Africa’: As a leading Market Access business of pharmaceuticals and consumer goods 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.
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.
Go digital, be digital, enable digital: Go digital, be digital, enable digital: Imperial’s digital strategy centres on the use of best-in-class and emerging technology to provide clients with the innovative solutions they require to differentiate themselves from their competitors. We embrace market disruptors and leverage innovation so that our clients will not only survive – but thrive – well into the future. Digitalisation, data, new technologies and automation – including the rise of ecommerce, online consumer engagement and tele-medicine – shape our business models and help future proof our business and our industry. As such, investment in and prioritising digital and data initiatives as core enablers to our strategy will be critical in transforming Imperial going forward, which includes expanding our services into e-commerce, e-commerce fulfilment and digital freight exchanges. It will also improve efficiency, facilitate revenue growth and create new revenue streams.
Integrating ESG practices: As a purpose-driven organisation, Imperial focuses on people, profit and planet. We make a difference to peoples’ 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 make everyday life better. In delivering on our purpose and protecting our licence to operate, we proactively manage and invest in ESG as part of our daily course of business.

How our strategy addresses our challenges and progress recorded


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

  • refined our positioning as the ‘Gateway to Africa’ and ‘One Imperial’
  • simplified and reduced complexity
  • 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 to our strategy.

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 – such as removing significant costs, the closure of the CPG business, the disposals of the European shipping business and Pharmed, and focusing the business on cash flow generation and capital management – have contributed to Imperial’s resilience as we now navigate these uncertain times. Further cost reductions in South Africa of c.R200 million are planned for F2021.

Despite Covid-19 related restrictions, our business remains focused on strategic delivery and growth opportunities. While the virus has added complexities to our day-to-day operations, we are not deviating 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’.

Growing the business – focused capital allocation  
  • solid organic and acquisitive growth to F2025
  • all acquisitions are assessed on the following criteria:
    • achieving strategic objective of ‘Gateway to Africa’
    • strong organic growth
    • must achieve required returns (WACC plus 3%)
    • how Imperial adds value and leverages synergy opportunities
  • integration, efficiency, cross-selling and upselling opportunities across Market Access and Logistics
  • capital will also be allocated to group-wide systems, digital and data initiatives, processes and people which are critical to our strategy and achieving ‘One Imperial’
  • four new acquisitions in Market Access and Logistics Businesses in Africa, mainly in healthcare and consumer industries, to the value of c.R900 million
  • acquired minorities and moved Imperial Clearing and Forwarding into Logistics International
  • acquired Turkish air and sea freight forwarding company, Mex Logistics
  • established LLP capability
  • contract renewal rate is c.80%, with encouraging pipeline
  • new business revenue of approximately R6,2 billion per annum secured in 2020
  • expanded Simplified Solutions in Healthcare model – added four new principals
  • expanded Market Access capability in South Africa – signed first principal
  • expanded demand generation, light contract manufacturing and brand partnership services
  • added sourcing and procurement capabilities to industries other than healthcare
Asset intensity   Transforming Imperial from an asset-heavy 3PL logistics player to an innovative asset-right business using data and technology as a differentiator – achieved through:
  • investment in digital and data initiatives
  • asset-light acquisitions
  • transforming contract logistics and road freight to move from asset-heavy industries to asset-light industries
  • improve efficiency, reduce costs and investment in hard assets, reducing our asset intensity
  • Revenue as a percentage of PPE, transport fleet and working capital (including rights-of-use assets) for each business:
    • Market Access: c.29%
    • Logistics Africa: c.32%
    • Logistics International: c. 35%
  • Significant growth and capital allocated in Market Access, which is an asset light, premium business
Simplifying the business from a complex, regional portfolio into an integrated Market Access and Logistics business  
  • transforming into an integrated logistics business – offering an end-to-end service
  • provide simplicity, flexibility and visibility to our clients
  • new organisational structure focused on two solutions (market access and logistics)
  • regional structure will be secondary
  • organised Imperial based on the solutions we offer and less so on regions
  • Imperial now operates within two overarching solutions – market access and logistics
  • heads of key industries appointed for Market Access
  • reorganised commercial function to sell as ‘One Imperial’
  • cost saving of c.R200 million in South Africa planned from F2021
Commoditised businesses  
  • exiting non-core, underperforming, low return on effort and investment businesses
  • investing in new-age businesses
  • focusing on data and technology – remaining relevant
  • sold European shipping business – at a competitive price
  • entered agreement for the sale of Pharmed. Exited CPG
  • further consolidation of freight business in South Africa
  • progressing well with the acquisition of e-commerce fulfilment, e-commerce and digital freight capabilities
Investment in digital, data and innovation  
  • move away from asset-heavy, traditional “walls and wheels” logistics, to forward-thinking and innovative solutions
  • proactive ongoing investment in digital and data initiatives is top of mind and core to strategy
  • capital will be allocated to:
    • an innovation fund with significant activity and opportunities identified
    • executing digital and data initiatives to facilitate transformational shift
  • appointed a group Chief Digital Officer
  • three investments concluded in our venture fund: digital distributor, digital freight forwarder and a point-of-care diagnostics enabler
  • progressing well with the acquisition of ecommerce fulfilment and ecommerce capabilities
  • key digital initiatives include:
    • digital fleet
    • mobile commerce
    • value from data
    • ecommerce and fulfilment
    • control towers
    • point of sale integration
Moving from a decentralised to operating as ‘One Imperial’ – leveraging synergies, expertise, clients etc  
  • transitioning the brand positioning to ‘One Imperial’ brand through brand migration and architecture process
  • aligning processes and organisational design to ‘One Imperial’ – roll out of a single finance, HR, IT and communications systems
  • client-value proposition centred on selling as ‘One Imperial’ and leverage cross-selling and upselling opportunities
  • people proposition is centred around collaboration and being part of a ‘One Imperial’ business
  • investing in talent pipeline and leveraging skills/expertise across the group
  • appointed a group Chief People Officer
  • key black and female management appointments made
  • commenced transformation of our culture which is key to achieving our ‘One Imperial’ strategic intent
  • established a shared set of values to drive a fundamental shift in the current culture
  • established and advancing 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
Creating shared and sustainable value – focusing on ESG  
  • shifting to a purpose-driven organisation
  • pillar of our strategy includes investing in and integrating ESG initiatives into daily business activities, which will be tracked and measured
  • continuing to invest in communities through strategic CSI initiatives across regions focusing on healthcare, education, safety, skills and sport development
  • integrated ESG into strategy and business practices – including establishing a corporate social investment (CSI)/ESG committee
  • developed and rolling out group-wide ESG and climate change policies and guidelines (the first for the group)
  • advancing ESG reporting standards and global membership – Imperial is now a signatory of the UN Global Compact

Pro forma disclaimer

To provide a more meaningful assessment of the group’s performance for the year, pro forma information and non-IFRS measures have been included under the operating performance and group financial performance section of this preliminary summarised audited results for the year ended 30 June 2020.

The directors of Imperial Logistics Limited are responsible for compiling the pro forma financial information on the basis applicable of the criteria as detailed in paragraphs 8.15 to 8.34 of the JSE Listings Requirements and the SAICA Guide on Pro forma Financial Information, revised and issued in September 2014 (applicable criteria). The pro forma information does not constitute financial statements fairly presented in accordance with IFRS. The pro forma information has been prepared for illustrative purposes only and because of its nature may not fairly present the group’s financial position, results of operations and cash flows. The group’s external auditor, Deloitte & Touche, has issued an unmodified reporting accountants’ report on the pro forma information on 25 August 2020. A copy of their report is available on request.