Integrated Annual Report
for the year ended December 2019
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Financial Statements
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How we sustain the value we create
Through our business activities we positively and negatively impact the capitals and strive to manage these trade-offs responsibly, while sustaining value.
People, intellectual capability and governance
Human and intellectual capital:
The unique set of skills, experiences and perspectives of our people constantly innovating to save our customers money
Inputs

51,000 FTEs

2018: 48,500

Sophisticated merchandise and distribution systems and processes
114 Private Label brands within our portfolio

2018: 136

Sound compliance and governance processes
Two sustainable packaging workshops held to devise sustainability specification

How we sustain value
  • Training and upskilling our associates to better serve our customer and business needs
  • Maintaining a diverse and inclusive culture
  • Optimising supplier distribution and price efficiencies through our procurement scale
  • Ensuring the highest ethical standards in our operating environment and business practices
Outcomes
  • R8.0 billion paid in salaries, wages and other benefits
  • R200.4 million invested in upskilling staff (2018: R230.2m)
  • Staff turnover of 17%
  • Developed a sustainability specification for recyclability of bags used
Quality relationships with key stakeholders
Social and relationship capital:
The value added to our business through our relationships with our stakeholders
Inputs

Our loyal customer base

(the heart of our business)

Our associates
Our suppliers
The communities in which we operate
Government and regulators

How we sustain value
  • Maintaining strong relationships with our key suppliers and service providers
  • Continued informed engagement with regulators
  • Trust from our communities
  • Loyalty from our customers
Outcomes
  • BBBEE Level 4
  • Over R1bn procured from SDP suppliers since inception
  • R13.2 million invested in CSI initiatives (2018: R25.4m)
  • >89% voting outcome for all AGM resolutions
Assets needed for our operations
Manufactured capital:
The physical infrastructure and information technology systems through which we sell our products and services
Inputs

443 stores covering 1,675,052m² trading space

2018: 436 stores

14 DCs and four large item depots
R791.5m capital expenditure – store expansion

2018: R833.6m

R580.3m capital expenditure – store maintenance

2018: R772.4m

How we sustain value
  • Investing in new stores
  • Maintaining and refurbishing current stores
  • Investing in our omnichannel offering
Outcomes
  • 7 net stores opened
  • 1.6% increase in trading space
  • Increased customer collection points
  • Delay in SAP ERP implementation
Funding available for our operations
Financial capital:
The funds accessible to be utilised by the Group
Inputs

R4.8 billion in equity

2018: R6.3 billion

R7.8 billion available funding facilities

2018: R9.1 billion

R1.7 billion cash generated from operations

2018: R2.9 billion

How we sustain value
  • Utilising finance facilities responsibly in implementing our turnaround plan and developing our stores, capabilities and investment in IT
Outcomes
  • 3.0% increase in sales
  • 79.3% decrease in profit before interest and taxation
  • 45.0% down on EBITDA
  • 182.9% decrease in headline earnings
Natural resources
Natural capital:
The natural resources required by our business, directly or through our supply chain
Inputs

211.6 kWh/m² store-purchased energy intensity

2018: 204.9 kWh/m²

0.46 kL/m² estimated water consumption

2018: 0.56 kL/m²

 

How we sustain value
  • Continue being a responsible corporate citizen by advocating responsible business practices in all spheres of business
Outcomes
  • 0.02 scope 1 emissions intensity (tCO2e/m²) (2018: 0.02)
  • 0.19 scope 2 emissions intensity (tCO2e/m²)
  • Diverted approximately 17,091 tonnes of waste from landfill (2018: 15,354 tonnes)