Strategic positioning and progress
Imperial continues to record significant progress in its strategic
journey to transform 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’, with committed and well-skilled executive
management teams. Top of mind is to ensure that Imperial
remains a business of scale, despite significant asset disposals
and restructuring, and that both organic and acquisitive growth
are prioritised. We continue to navigate the macro‑economic
challenges well, with investment in growth and driving digital
and innovation being key focus areas.
During the past 12 to 18 months, the strategic actions and
decisions we took to reorganise, rationalise, simplify, improve
our profitability and competitiveness, strengthen the balance
sheet and grow our business has resulted in significant value
being unlocked for our key stakeholders.
Despite the challenges that COVID-19 placed on our
day-to-day operations, we continued to focus on the following:
- strengthened our positioning as the ‘Gateway to Africa’ and ‘One Imperial’;
- simplified and reduced complexity;
- strengthened our financial position;
- assessed, addressed and exited non-core, low return on effort and underperforming businesses;
- reduced cost significantly;
- added new contracts;
- concluded strategic acquisitions;
- changed the organisational structure to operate based on capabilities with focused commercial teams in place;
- achieved good progress in digital and IT initiatives;
- defined our path as a transformational organisation rather than a transactional one; and
- placed significant focus on our people and organisational design and ESG as core enablers of our strategy.
How our strategy addresses our challenges
|Growing the business
– focused capital
- Solid organic and acquisitive growth.
- All acquisitions assessed on following criteria:
- achieving strategic objective of ‘Gateway to Africa’
- strong organic growth
- achieve required returns (WACC plus 3%)
- how Imperial adds value and leverages synergies opportunities
- Integration, efficiency, cross-selling and upselling opportunities across Market Access and Logistics.
- Capital allocated to group-wide systems, digital and data initiatives, processes and people which are critical to our strategy and achieving ‘One Imperial’.
- Contract renewal rate is 88%, with encouraging pipeline.
- New business revenue of c.R5,9 billion p.a. secured in June 2021.
- Material contract with P&G secured in the Consumer industry in Nigeria.
- Five new clients onboarded onto our Multi Market Aggregation solutions in Healthcare.
- Concluded strategic acquisitions of c.R120 million
- Announced the acquisition of Deep Catch, which will provide a new category expansion, a new capability, and an extensive network in Market Access.
- Announced the acquisition of the J&J Group, which will transform and expand Imperial’s reach in Africa.
- Concluded 25% B-BBEE transaction in Logistics South Africa to become 51% B-BBEE owned and 30% women-owned.
- Developed Integrated Commercial Solutions capability in Market Access Healthcare business.
- Backward integration in Healthcare in South Africa through our 49% investment in Kiara Health since August 2020.
Transforming Imperial to an innovative asset‑right
business using data and technology as a
differentiator, and achieved through:
- Investment in digital and data initiatives.
- Asset-right acquisitions.
- Transforming contract logistics and road
freight to move from asset heavy industries
to asset light.
- Improve efficiency, reduce costs and
investment in hard assets, reducing our
- Reduced costs of c.R200 million (annualised) in Logistics Africa.
- Consolidated road freight businesses in Logistics Africa.
- Partnership with Lori Systems to expand ability to offer spot-based sub-contracted road freight through the digital freight exchange.
- Significant new business gained in LLP (c.R1,3 billion).
- Concluded Parcel Ninja acquisition (e-commerce fulfilment).
business from a
portfolio into an
access and logistics
- 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), with centre-led functions.
- Reorganised from a regional structure to an integrated business;
- Significant investment and progress in establishing Logistics Africa, Market Access and ‘One Imperial’ commercial and key account management function.
- Exiting non-core, underperforming, low return on investment businesses.
- Investing in new-age businesses.
- Focusing on data and technology – remaining relevant.
- Exited Pharmed.
- Sold European and South American shipping.
- Progress with Digital Fleet Management, enabling our Road Freight Business.
- Project Blue Fleet is recording good progress, with the renegotiation of supply agreements for our largest cost items in Logistics Africa (fuel, vehicle and tyres) close to being concluded.
- Progress made on a business performance insights platform across the business.
- Progress with partnerships to enable digital distributorships in our Market Access business.
|Investment in digital,
data and innovation
- Proactive ongoing investment in digital and data initiatives is top of mind and core to our strategy.
- Capital will be allocated to:
- an innovation fund with significant activity and opportunities identified
- executing digital and data initiatives to facilitate transformational shift.
- Imperial’s joint venture with technology provider, One Network, was selected as the preferred partner to steward OpenLMIS.
- The Imperial Venture Fund (IVF) now has nine portfolio companies:
- Field Intelligence, a digital pharmaceutical
distributor operating in Nigeria and Kenya.
- Shypple, a digital freight forwarder operating
between Asia and Europe.
- RedBird, a provider of rapid diagnostic tests
to pharmacies in Ghana.
- Lori Systems, a digital road freight exchange
operating in East and West Africa.
- Fulfilment Bridge, a cross-border digital
logistics service provider serving e-commerce
merchants in MENA.
- MDaaS Global, the health-tech company
building and operating a network of modern,
tech-enabled diagnostic centres across
- Clockwork Logistics, a B2B provider of a
highly configurable delivery platform and
- Cheefa, an asset-light, e-pharmacy marketplace
that creates a distribution channel to end
consumers in Egypt and Saudi Arabia.
- Portcast, a Singapore-based B2B SaaS
platform that provides real-time vessel and
container tracking and dynamic demand
operating as ‘One
Imperial’ – leveraging
- Aligning processes and organisational
design to ‘One Imperial’ – roll-out of a
single finance, human resources, IT and
- Client value proposition centred on selling
as ‘One Imperial’ and leveraging cross‑selling
and upselling opportunities.
- People proposition is centred around
collaboration and being part of a ‘One
- Investing in talent pipeline and leveraging
skills/expertise across the group.
- Organisational structures to enable ‘One Imperial’
strategy finalised and implemented.
- Introduced and rolling-out a consistent ‘One
Imperial’ people model and the associated ways
of work for all our people practices.
- Progressing plans to introduce a centre-led
training initiative regarding digitisation, and
driver and controller training.
- Various communication initiatives to promote
- Established a co-creation lab for increased
collaboration with key principles and clients, to
facilitate selling as ‘One Imperial’.
- Invested c.R290 million in ‘One Imperial’ initiatives
|Creating shared and
sustainable value –
focusing on ESG
- Shifting to a purpose-driven organisation includes investing in and integrating environmental, social and governance (ESG) imperatives into daily business activities.
- Prioritising people and planet in addition to profit.
- Approved and implementing group ESG strategy,
with specific, measurable targets and KPIs.
- R24,2 million invested in communities through
strategic CSI initiatives across regions focusing
on healthcare, education, safety and skills
development (F2020: R21,2 million).
- Advancing ESG rating and reporting standards
— favourable ratings received from EcoVadis, ISS,
MSCI and CDP.
- Significantly improved diversity of the leadership
team: five out of 10 Logistics Africa Exco members
are now female and six out of 10 Logistics Africa
Exco members are non-white.
DP World makes an offer to acquire 100% stake in Imperial
As previously announced, in July 2021 Imperial entered into a
transaction implementation agreement regarding a cash offer
of R66 per share from DP World to acquire all outstanding
shares of Imperial, implying an estimated aggregate cash
consideration of c.R12,7 billion. This offer represents a
premium of 39,5% to the Imperial share price as at 7 July 2021,
the day prior to the firm intention announcement, and a 34,2%
premium to the 30-day volume weighted average price of
Imperial. Imperial’s Logistics International business is within
the scope of the offer. DP World, a global infrastructure-led
supply chain solutions provider with 136 business units in
61 countries across six continents, is interested in acquiring
Imperial and all its businesses to expand DP World’s African
and European network. This bears testament to the significant
progress we have made against our strategy since 2019, as well
as our strong presence, positioning, capabilities and networks
in key markets in Africa and Europe (including the UK).
The proposed transaction will be value-enhancing for Imperial
as the group will benefit from DP World’s leading technology,
global networks and key trade-lane volumes, while enabling
us to build on our ‘Gateway to Africa’ strategic and growth
ambitions. Combining DP World’s world-class infrastructure,
specifically its investment and expertise in ports on the African
and European continents, with Imperial’s logistics and market
access platforms will enable us to offer integrated end‑to‑end
solutions along key trade lanes into and out of Africa and
accelerate our position in Europe, driving greater supply chain
efficiencies and ultimately enhancing value for all stakeholders.
Imperial’s Logistics International business and operations are
also aligned with DP World’s strategic expansion plans on
the European continent. As such, our Logistics International
business is within the scope of the offer from DP World and will
not be sold separately under this proposed offer.
The proposed transaction is still subject to outstanding
regulatory and shareholder approvals, and other conditions