Bidvest : Divisional Day May 4 2016 Management update on general trading conditions in the foodservice operations only
May 05, 2016 at 02:45 am EDT
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THE BIDVEST GROUP LIMITED - Divisional Day May 4
5 May 2016
BVT 201605050006A
Divisional Day - May 4 2016 Management update on general trading conditions in the foodservice operations only
The Bidvest Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1946/021180/06)
Share code: BVT
ISIN ZAE000117321
('Bidvest' or 'the Company')
Divisional Day - May 4 2016
Management update on general trading conditions in the foodservice
operations only
Shareholders are advised that the executive management of the Foodservice
group on May 4 2016 met with members of the financial community, including
shareholders and financial analysts, for an update on current market
conditions and the trading environment across the foodservice operations.
Management commented as follows:
1. Foodservice Group current market conditions and trading
- The pleasing performance of the foodservice businesses has been
achieved against a backdrop of zero food inflation, in relatively
negative circumstances globally.
- Management remains focused on executing on the strategic plan to
balance their customer portfolios and on adding value to their customer
offering through innovation and service delivery.
- Trading remains positive, activity levels across all markets are buoyant
and management are expecting good results for the year ending June
2016.
United Kingdom ('UK')
- The businesses continue to grow relatively well in both foodservice
and fresh offerings. The foodservice market is a highly fragmented
industry which presenting lots of opportunity.
- Logistics remains a tough business driven by a few large customers
and tight margins.
- Some uncertainty exists around Brexit which is dampening
consumer confidence however our operations remain agile and
opportunistic enough to adapt to the changing conditions.
Europe
- Western European growth remains sluggish however Eastern
Europe is experiencing stronger growth conditions.
- Our Foodservice operations in this region are realizing the benefits
of timely restructuring and infrastructural investment.
- DAC Italy has settled in well post acquisition and is exploring
expansion opportunities. Global procurement benefits in Italian
product are being realized across the group.
- Czech (Nowaco) has benefitted from excellent ice cream sales; but
we continue to focus on growth of core wholesale business in
Czech, Slovakia and Poland.
- The Belgium business is experiencing a tough trading environment.
The Netherlands business is delivering positive growth as
management focus on moving away from the previous institutionally
focused customer model.
- Spain is a good market where we remain committed to accessing
the right opportunity.
- Further expansion into the region will be considered as we are not
represented or underrepresented in many countries.
Asia
- China presents a huge growth opportunity with a growing middle
class population and increasing demand for Western styled food
products. Organic expansion over the past 8 years of operating in
China has seen expansion into 12 cities - creating a geographic
reach and operational platform that bodes well for future growth.
- Hong Kong has experienced tough trading off lower tourism activity.
- Singapore is well positioned having fully transitioned to a
foodservice model, benefitting from no longer being commodity
traders.
- Further expansion into this region is being explored, using
Singapore as a base for countries such as Malaysia and Vietnam.
Indonesia is also being considered.
Australasia
- The tourism boom has facilitated good growth in Australasia. Both
Australia and New Zealand continue to produce solid results.
- Exponential growth is not anticipated in this region without some
diversification of the current business model. This is being
considered where expanding into allied non-food products
distribution model might be an opportunity.
Emerging markets
- South Africa continues to produce good results in spite of the tough
operating conditions. Strong management, rebalancing the portfolio
and moving towards a wider customer base has all contributed to
the improved result. Expansion into Africa is being pursued via new
agency relationships or business expansion.
- South America faces tough political and economic conditions
however management remain bullish that significant opportunities
exist in the region to consolidate markets to build a strong growth
platform over time.
- Middle East has produced good results in spite of the geopolitical
challenges in the region; indicative of the fact that opportunities
exist in spite of consequent macro-economic conditions.
2. General
- Management is highly motivated by challenge and the opportunity
presented by the unbundling from Bidvest and are excited about
continuing to grow off the current solid platform. The
decentralization philosophy which breeds accountability and
responsibly will remain the cornerstone of the foodservice group.
- Operating across 35 countries, the foodservice group is made up of
committed and passionate people that are best of breed and have
the authority and autonomy to run their business.
- The unbundling presents an opportunity for the foodservice group to
deliver superior growth and shareholder value over time.
- Management remain alert to acquisition opportunities that present
themselves both in current markets and in new territories.
The full presentation was recorded and a playback recording is available on
the group's website www.bidvest.co.za
This management update has not been reviewed or reported on by the
Company's independent auditors.
______________________________________________________________
Johannesburg
May 5 2016
Sponsor
Investec Bank Limited
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The Bidvest Group Limited is a diverse group. Net sales (before intragroup) break down by activity as follows:
- integrated facilities management services (31.3%): facilities management, security services, travel management, airlines, etc.;
- sales of cars (23.6%): activity carried out, at the end of June 2021, with more than 100 car dealers;
- distribution of equipment and office supplies (19.3%);
- manufacturing and trading of industrial equipment and consumer products (15.2%): industrial tools, lifting and handling equipment, agricultural machinery, hardware equipment, household appliances, leisure equipment and accessories, kitchen utensils, household products, electronic equipment, etc.;
- port handling services (6.6%);
- financial services (2.8%);
- other (4.8%): mainly environmental and tourism services, real estate asset management and share acquisition activity.
South Africa accounts for 83.1% of net sales.