DISTELL GROUP HOLDINGS LIMITED WE ARE DISTELL
Distell is a business with deep roots in South Africa with a growing African and international presence. We are Africa's leading producer and global marketer of wines, spirits, ciders and other ready-to-drinks (RTDs).
CREATING AND SHARING VALUE
Our purpose captures the customer and consumer experience associated with our award-winning brands. It recognises our role as a corporate citizen and our obligation to act responsibly and pursue excellence in everything we do.
OUR PERFORMANCE IN 2021
The year has been undoubtedly challenging. However, it also presented an opportunity for us to realign the Group's strategy. Distell has proven to be a resilient African business with a strong and diverse portfolio. This will enable us to thrive in the long term.
Brands
CIDERS & RTD'S
We pioneered the cider category in South Africa to become the second largest global producer of ciders:
- Savanna
- Hunter's
- Extreme
- Bernini
SPIRITS
Our premium and accessible spirit brands include local brands in key African markets:
- Amarula
- Bunnahabhain
- Scottish Leader
- Viceroy
WINES
Distell owns key wine brands, including:
- 4th Street
- Drostdy-Hof
- Nederburg
- Sedgwick's Old Brown
www.distell.co.za
01 INTRODUCING OUR 2021 | 02 WE ARE DISTELL | 03 DISTELL IN CONTEXT | 04 OUR STRATEGY |
INTEGRATED REPORT | Our business model | The material trends shaping our strategy | Our strategic ambitions |
CONTENT SUMMARY | Our brand portfolio | Our key strategic risks and opportunities | Our geographic goals |
Our stakeholders | Material challenges and trade-offs | Our strategic drivers | |
About this report |
INTRODUCING OUR
05 OUR PERFORMANCE IN 2021 | 06 CORPORATE GOVERNANCE REPORT | 07 SUMMARY CONSOLIDATED | 08 SUPPLEMENTARY |
Leadership messages | Message from our lead independent director | FINANCIAL STATEMENTS | INFORMATION |
Performance against our strategy | Key board topics for the year | Auditor's report | |
Executive management team | Board | ||
Group structure | |||
Board of directors | Audit committee report | ||
Analysis of shareholders | |||
Remuneration report | |||
Definitions and ratios | |||
Risk and compliance committee report | |||
Accreditation and certification | |||
Social and ethics committee report | |||
2021 INTEGRATED REPORT
OUR STRATEGY
In 2021, as part of the formulation of our vision to make a difference by creating shared value in our chosen markets, we refocused our business strategy to integrate
OUR PERFORMANCE IN 2021
We explain our performance in 2021, including perspectives from our leadership and achievements against our strategic ambitions, goals and drivers.
In 2021, we asked ourselves: "What do we need to do to stay relevant to all stakeholders in the longer term?". We considered the environment we operate in, changing customer and consumer needs, the competitive landscape and stakeholders' growing concerns around environmental, social and governance (ESG) issues to stay relevant to all stakeholders in the longer term. This set us on the path of a shared value journey, with the vision:
Making a difference by creating shared value in our chosen markets.
This new vision speaks to a transformative journey, while remaining committed to our purpose of creating memorable moments and crafting a better future; and staying true to our values of customer and consumer focus, excellence and 'One Distell'. Our vision was approved by the board of directors (board), and this report tells the story of how we aim to achieve it:
it more fully with the Group's sustainability strategy.
Our strategic ambitions, | Our geographic goals, | Our strategic drivers, |
page 40 | page 42 | page 43 |
Creating shared | Defend and grow in | Grow consumer |
From our chairman, page 47
From our Group CEO, page 50
value | South Africa | love for our brands |
From our Group CFO, page 56
About this report, page 2
WE ARE DISTELL
Our operating and business models, page 8 | Our brand portfolio, | Our stakeholders, page 18 | ||||
Our operations are driven through three regional business divisions: | Our ability to deliver on strategy is dependent on a diverse group of | |||||
South | Venture | page 16 | stakeholders who have a legitimate interest in the way we conduct | |||
Africa | Our balanced repertoire of brands resonates | our business: | ||||
Africa | Business | |||||
with a broad spectrum of consumers. | ||||||
To fulfill our purpose and reach our vision, Distell relies on the following resources: | The products mentioned in | Employees | Consumers | Trade customers | ||
Financial | Manufactured | Social and | this report are not for sale to | Strategic business | ||
relationship | persons under the age of 18. | Suppliers | Investors | |||
Sustainable growth | Expand in | Growth through |
and returns | Africa | innovation |
Build international | Leverage our scale | |
premium spirits | asset base | |
Foster a winning | ||
culture | ||
Transform our | ||
strategic capabilities |
Performance against our strategy, page 65
As always, we appeal to all | partners | |||||||||
Intellectual | Human | Natural | ||||||||
consumers who have chosen | Industry | Government | Communities | |||||||
to drink alcohol to enjoy | bodies | |||||||||
These resources are transformed through the business activities and | ||||||||||
our products with care and | ||||||||||
processes along our value chain to produce our brand portfolio and | ||||||||||
responsibility. | The environment | |||||||||
value for our business and our stakeholders. | ||||||||||
DISTELL IN CONTEXT | ||||||||||
To determine what is material to include in this | The material trends shaping | Our key strategic risks and opportunities, page 31 | ||||||||
report - keeping in mind the context of our unique | our strategy, page 27 | • | The alcohol policy landscape | • | Supply chain risks | |||||
business model and the needs and expectations | • Macro-economic trends in our regions | • | Increasing competition | • | Brand equity erosion | |||||
of our stakeholders - we considered the Group's | • | Information communication technology (ICT) and cyber security • | Our international market | |||||||
of operation | ||||||||||
key strategic risks and opportunities, as well as the | • | Digital maturity | • Our licence to trade | |||||||
• | Category trends | |||||||||
material trends shaping our strategy. | • | The African market | • | South African wine | ||||||
• | Consumer trends | |||||||||
• | Talent and capabilities | industry glut | ||||||||
2 0 2 1 I N T E G R A T E D A N N U A L R E P O R T
Executive management team, page 92 | Board, page 96 | |||||
CORPORATE GOVERNANCE REPORT | ||||||
Message from our | Key board topics | Audit | Remuneration | Risk and | Social and | |
compliance | ethics | |||||
lead independent | for the 2021 | Board, | committee | |||
report, | committee | committee | ||||
director, | financial year, | page 103 | report, | |||
page 113 | report, | report, | ||||
page 98 | page 100 | page 109 | ||||
page 133 | page 136 | |||||
SUMMARY CONSOLIDATED FINANCIAL STATEMENTS, PAGE 140
SUPPLEMENTARY INFORMATION, PAGE 162
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01 INTRODUCING OUR 2021 | 02 WE ARE DISTELL | 03 DISTELL IN CONTEXT | 04 OUR STRATEGY |
INTEGRATED REPORT | Our business model | The material trends shaping our strategy | Our strategic ambitions |
Content summary | Our brand portfolio | Our key strategic risks and opportunities | Our geographic goals |
Our stakeholders | Material challenges and trade-offs | Our strategic drivers | |
ABOUT THIS REPORT | |||
ABOUT THIS REPORT
05 OUR PERFORMANCE IN 2021 | 06 CORPORATE GOVERNANCE REPORT | 07 SUMMARY CONSOLIDATED | 08 SUPPLEMENTARY |
Leadership messages | Message from our lead independent director | FINANCIAL STATEMENTS | INFORMATION |
Performance against our strategy | Key board topics for the year | Auditor's report | |
Executive management team | Board | ||
Group structure | |||
Board of directors | Audit committee report | ||
Analysis of shareholders | |||
Remuneration report | |||
Definitions and ratios | |||
Risk and compliance committee report | |||
Accreditation and certification | |||
Social and ethics committee report | |||
The following business functions acted as the custodians of the information supplied in this report:
Integrated report | Corporate governance report | Remuneration report | Summary consolidated financial statements |
Investor relations | Company secretary | Reward | Finance |
Content guidance
We considered, used and applied a range of content guidance documents in the preparation of our
Content gathering
Supported by their operational teams and internal reporting throughout the year, the following contributors provided the information disclosed in this report. Information was gathered through focused and in-depth interviews, facilitated by the investor relations function:
This integrated report (the report) reflects the performance of Distell Group Holdings Limited (Distell, the Group or the Company) for the financial year ended
30 June 2021 (FY21 or
AUDIENCE AND REPORTING SUITE
This report, which includes our summary consolidated financial statements, is Distell's primary report aimed at all stakeholders, particularly our shareholders and the local and offshore investment community who provide our financial capital.
It is part of a suite of publications we produce to best meet our stakeholders' needs and expectations. These publications and additional information relating to presentations, events and results are available online at www.distell.co.za/investor-centre:
Our summary consolidated financial statements, notice to shareholders and separate proxy form,
PREPARING, REVIEWING AND APPROVING THIS REPORT
The board applies materiality to determine what content is included in our integrated report, focusing on those matters that are most impactful for the Group and likely to influence value creation, preservation or erosion over time. This enables us to report effectively to our stakeholders.
The processes for preparing, reviewing and
reporting elements:
- The requirements of the International Integrated Reporting Council's Integrated Reporting () Framework
- The South African Companies Act, No. 71 of 2008, as amended (the Companies Act)
- The JSE Listings Requirements
- The principles outlined in King IV
- International Financial Reporting Standards (IFRS)
- The reporting guides provided by the South African Institute of Chartered Accountants (SAICA) and the Accounting Practices Committee, where applicable
Richard Rushton, | Lucas Verwey, | Kate Rycroft, |
Group chief executive officer (CEO) | Group chief financial officer (CFO) | managing director: Venture Business |
Donovan Hegland, | André Opperman, | Wim Bührmann, |
director: growth and innovation | director: human resources | managing director: southern Africa |
Len Volschenk, | Kershen Pillay, | Johan van Zyl, |
managing director: Africa | director: corporate services | director: supply chain |
In addition, to gather information for the report, the reporting team consulted Lizelle Malan, Group company secretary; Carin Fouche, Group manager: corporate strategy; Ilani van Zyl, global lead: reward and various members of their teams.
The following board members were also interviewed: Jannie Durand, non-executive chairman; André Parker, independent non-executive director; Gugu Dingaan, independent non-executive director.
Information on material sustainability issues is obtained from our separate sustainability report, which is drafted according to its own rigorous process of preparation, review and approval.
the year) and our outlook for the future.
It focuses on the Group's financial and non- financial performance, including our extensive worldwide distribution network, supported by local production capability and joint venture and associate partnerships.
which provide information to enable shareholders to participate in the annual general meeting (AGM).
Our complete annual financial statements, a comprehensive report of the Group's financial performance for the year.
Our sustainability report, which highlights Distell's non-financial performance for the year.
approving this report are:
Assurance
While third-party assurance was not sought for all information contained in this report, certain information was independently assessed and verified:
- The summary consolidated financial statements were audited by the external auditors, PwC, and an unqualified opinion was issued.
- Broad-basedblack economic empowerment (B-BBEE) performance was independently assessed and verified by AQRate.
- Certain environmental information, including our greenhouse gas (GHG) emissions.
- In adherence to the principle of combined assurance, we follow an audit trail for non-financial disclosures and performance data and validate this information through an internal audit process.
- The content of the report has been reviewed by the board and management to confirm the reliability and completeness
of the information included and to ensure that we continue to meet the reporting and disclosure needs of local and international investors.
Refer to page 167 for a full list of our accreditations and certifications.
Review
All members of the executive committee then reviewed the report to ensure accuracy and materiality.
Our statement of compliance with the King IV Report on
Corporate Governance™ for South Africa, 2016 (King IV).
Approval
The audit committee, which has oversight responsibility for integrated reporting, recommended the report for approval by the board.
The board reviewed the report's contents, preparation and presentation, including the appropriateness of the reporting frameworks used. The board believes the report is an accurate representation of the prospects and performance of the Group. The board approved the 2021 integrated report in Stellenbosch on 25 August 2021 for release to shareholders on 20 September 2021.
1 | Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved. |
002 | 2 0 2 1 I N T E G R A T E D A N N U A L R E P O R T |
Jannie Durand | Richard Rushton | Catharina Sevillano-Barredo |
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01 INTRODUCING OUR 2021 | 02 WE ARE DISTELL | 03 DISTELL IN CONTEXT | 04 OUR STRATEGY |
INTEGRATED REPORT | Our business model | The material trends shaping our strategy | Our strategic ambitions |
Content summary | Our brand portfolio | Our key strategic risks and opportunities | Our geographic goals |
Our stakeholders | Material challenges and trade-offs | Our strategic drivers | |
ABOUT THIS REPORT | |||
05 OUR PERFORMANCE IN 2021 | 06 CORPORATE GOVERNANCE REPORT | 07 SUMMARY CONSOLIDATED | 08 SUPPLEMENTARY |
Leadership messages | Message from our lead independent director | FINANCIAL STATEMENTS | INFORMATION |
Performance against our strategy | Key board topics for the year | Auditor's report | |
Executive management team | Board | ||
Group structure | |||
Board of directors | Audit committee report | ||
Analysis of shareholders | |||
Remuneration report | |||
Definitions and ratios | |||
Risk and compliance committee report | |||
Accreditation and certification | |||
Social and ethics committee report | |||
OUR SALIENT METRICS AND COMPARABILITY
The financial, economic, social and environmental metrics we report remain broadly comparable to and consistent with our 2020 report.
However, the following should be considered: in March 2020, the World Health Organization formally recognised COVID-19 as a pandemic. Governments around the world took various actions to curb the pandemic, including social distancing, limits on public gatherings and restrictions on movement between countries and provinces.
In South Africa, the response included periods of bans or restrictions on the sale of alcohol. In both the 2020 and 2021 financial years, 20% of the trading period was lost. Due to the timing and extent of restrictions, our overall results in 2020 were significantly impacted by the disruption. Our immediate priority was to manage
Group revenue (R million)
180 26 | 22 | 255 28 |
370 |
2019 | 2020 | 2021 |
Group volumes ('000 litres)
449 715 | 667 700 |
635 554 |
2019 | 2020 | 2021 |
Normalised EBITDA adjusted for forex1, 2 (R million)
617 3 | 830 3 |
045 2 |
2019 | 2020 | 2021 |
Normalised headline earnings adjusted for forex2 (R million)
865 1 | 924 1 |
478
2019 | 2020 | 2021 |
FORWARD-LOOKING STATEMENTS
Due to the future-orientated principle of integrated reporting, many of the statements in this report constitute forward-looking statements. These are not guarantees or predictions of future performance. The Group faces risks, opportunities and other factors beyond its control. These or other uncertainties may cause our actual future results to be materially different from those expressed in this report. Readers are therefore advised not to place undue reliance on forward-looking statements, as we do not undertake to update these.
FEEDBACK
Your feedback is important to us and we welcome your input to enhance our reporting content and processes. Please send your comments to Investor.Relations@distell.co.za or call +27 21 809 7000. Readers can also interact with us on the following social media platforms:
the short-term challenges and put measures in place for recovery to thrive in the long term. These measures proved successful in 2021, with most performance metrics recovering to pre-pandemic (2019) levels,
and in some cases showing significant improvement.
These unusual circumstances affect the comparability
of financial and non-financial information between 2020 and 2021. For this reason, we include 2019 metrics in this report to provide stakeholders with a broader view on which to base comparisons.
004
Reported EBITDA (R million)
769 3
453 2 | 1 |
887 |
201920202021
2 0 2 1 I N T E G R A T E D A N N U A L R E P O R T
Reported headline earnings (R million)
692 1 433 1
517
2019 | 2020 | 2021 |
Return on invested capital (ROIC) (normalised forex) (%)
13,5 | 13,6 |
5,0
2019 | 2020 | 2021 |
Total dividends per share (cents)
423,0
174,0
0,0 | ||
2019 | 2020 | 2021 |
1
2
2021 and 2020 numbers for normalised headline earnings and EBITDA have been restated to exclude the impact of the prospective implementation of IFRS 16 Leases on 1 July 2019 as it is now treated consistently in both financial years. 2019 numbers are extracted without adjustments from the comparative numbers in the consolidated annual financial statements for the year ended 30 June 2020.
Foreign currencies and abnormal transactions affect the Group's performance. Where relevant in this report, adjusted non-IFRS measures are presented. These adjusted measures represent pro forma financial information. A reconciliation of the pro forma financial information to the equivalent IFRS metrics is provided in note 13 to the summary consolidated financial statements.
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01 | INTRODUCING OUR 2021 | 02 | WE ARE DISTELL | 03 |
INTEGRATED REPORT | Our business model | |||
Content summary | Our brand portfolio | |||
Our stakeholders | ||||
About this report | ||||
DISTELL IN CONTEXT | 04 OUR STRATEGY |
The material trends shaping our strategy | Our strategic ambitions |
Our key strategic risks and opportunities | Our geographic goals |
Material challenges and trade-offs | Our strategic drivers |
05 OUR PERFORMANCE IN 2021 | 06 CORPORATE GOVERNANCE REPORT | 07 SUMMARY CONSOLIDATED | 08 SUPPLEMENTARY |
Leadership messages | Message from our lead independent director | FINANCIAL STATEMENTS | INFORMATION |
Performance against our strategy | Key board topics for the year | Auditor's report | |
Executive management team | Board | ||
Group structure | |||
Board of directors | Audit committee report | ||
Analysis of shareholders | |||
Remuneration report | |||
Definitions and ratios | |||
Risk and compliance committee report | |||
Accreditation and certification | |||
Social and ethics committee report | |||
WE ARE
DISTELL
The Group first listed on the JSE Limited (JSE) in 2001 under the consumer goods sector, and relisted as an investment holding company on 1 June 2018 due to the collapse of the Capevin/Distell shareholding structure. Distell is an operating subsidiary of Remgro Limited, which holds an economic interest of 31% of the Group's shares.
Distell is a business with deep roots in South Africa and a growing African and international presence. We are Africa's leading producer and marketer of ciders, ready-to-drink beverages (RTDs), spirits and wines, enjoyed responsibly by people across the world. Our brand portfolio offers consumers a choice for every occasion and provides unique moments
OUR VISION |
OUR PURPOSE |
OUR VALUES |
Making a difference by creating shared value in our chosen markets
Creating memorable moments, crafting a better future
Customer and consumer focus: We are passionate about our customers and consumers.
Excellence: We are committed to excellence in everything we do.
One Distell: We win by collaborating with integrity, honesty and respect.
We aim to build the Distell of tomorrow, while helping to regenerate economies and communities, and allowing the environment to thrive.
Our purpose captures the customer and consumer experience associated with our award-winning brands. It recognises our role as a corporate citizen and our obligation to act responsibly and pursue excellence in everything we do.
Our values reflect what we stand for as an organisation and act as guiding principles. At the foundation of these values is a total commitment to our consumers and customers, characterised by an unwavering passion to serve their needs with integrity and excellence.
of social enjoyment. The value we create enriches the lives of our employees, shareholders and the communities in which we live and work.
006 | 2 0 2 1 I N T E G R A T E D A N N U A L R E P O R T |
THE BEHAVIOURS THAT | • We delight our consumers by putting them first | |
• | As our customers grow, we grow | |
UNDERPIN OUR VALUES | • | We think and act like business owners |
- We challenge, then commit
- We are digitally fluent
- We fail fast and learn faster
- We dare to care
- We build trust together
- Together, we play to win
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Distell Group Holdings Limited published this content on 21 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 September 2021 10:01:04 UTC.
