a. | Strategic positioning |
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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. |
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b. | Strategic pillars |
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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:
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c. | How our strategy addresses our challenges and progress recorded |
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2019 and 2020 have been years of significant strategic focus, rationalisation and restructuring as we undertook the following:
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’. |
CHALLENGE | STRATEGIC RESPONSE | PROGRESS MADE | ||
Growing the business – focused capital allocation |
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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:
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Simplifying the business from a complex, regional portfolio into an integrated Market Access and Logistics business |
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Commoditised businesses |
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Investment in digital, data and innovation |
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Moving from a decentralised to operating as ‘One Imperial’ – leveraging synergies, expertise, clients etc |
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Creating shared and sustainable value – focusing on ESG |
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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.