INTEGRATED ANNUAL REPORT 2011 GRI RESPONSES  

Group vision and strategy

An integrated approach

Vision aims to deliver significant incremental value for all stakeholders
Group strategic focus areas concentrate attention on key economic, social and environmental imperatives
Key performance indicators and targets set
Risks identified and addressed
Profitable growth opportunities identified and operational plans developed
Strategy endorsed by board and reviewed regularly
Employees central to implementation and success of strategy

Central to our value-based management approach is responsible citizenship and creating long-term value for our stakeholders. We integrate the management of our economic, social and environmental issues in a strong governance environment, underpinned by ethical leadership articulated in our worldwide code of conduct.

Barloworld’s integrated approach to stakeholder value creation is reflected in our 10 pillars of sustainability (pdf - 72kb) which guide our activities and act as a filter against which future opportunities are assessed.

Our vision

20153: To deliver significant incremental value for our stakeholders through 2015...

… by being a recognised market leader in providing integrated solutions in distribution, rental, fleet management, product support and logistics to customers in our chosen business segments and geographies.

 

Our strategy

A systematic, structured and integrated strategic planning process throughout the group culminates in the Barloworld strategy, which is regularly reviewed. The strategy is informed by the group’s long-standing value-based management approach which requires long-term value creation for all stakeholders, and responsible corporate citizenship.

The key components of our strategy are directed at achieving our Vision 20153. Our strategic focus areas are consistent throughout all operations and identify critical success factors with corresponding action plans and key performance indicators. The focus on 2015 is to drive current behaviour to achieve tangible long-term goals. Short-term objectives with specific targets are also developed.

Strategic focus area Imperative Progress
Integrated customer solutions
Market leadership in targeted segments
through delivering integrated customer solutions

Good market leadership progress by divisions
Significant facility expansion across southern Africa and Russia that includes a component rebuild centre in Russia
Integrated logistics operations into our Automotive division to realise synergies and a significant platform to enhance our integrated customer offering
People
Drive employee engagement (overall score above 75% for all businesses)
Leadership retention, development and succession aligned with strategic growth priorities
Ensure required talent available
Scores range between 68% and 89% in employee survey
Intellectual capital review of top leadership conducted annually
Significant investment in expanded training facilities
Significant investment in skills development and training across the group. Training spend up by 48% over 2010
Empowerment and transformation
Leadership position in industrial sector
dti B-BBEE level 2 or 3 for each South African business unit
Drive localisation, gender and disability equity, and diversity across the group
Ranked as top empowered company in general industrial sector for second year running
All but one business achieved dti B-BBEE level 2 rating
Central aspect of people management
Sustainable development
Aspirational target of 12% non-renewable energy and greenhouse gas efficiency improvements by end 2014 (2009 baseline)
Cumulative cost savings through sustainability initiatives
Pursue emerging commercial ‘green’ opportunities
Off 2009 baseline:
– Energy efficiency improved by 10.8%
– Emission efficiency improved by 13.6%
Related savings against a business as usual scenario due to efficiency improvements
Opportunities identified in strategic plans including power systems
Financial returns
Top-quartile financial returns on average through the cycle (at or above our cost of equity, and measured against relevant peer groups in our chosen business segments)
Internal targets and hurdle rates set for all businesses
Group ROE improved from 3.2% to 8.6% as a result of focus and attention on internal hurdle rates
Successful disposal of our Scandinavian car rental operations released capital which has been allocated to identified higher-return operations in our growth strategy
Exited loss making Logistics non-corporate trader business
Profitable growth
Increase group operating profit by executing turnaround and growth strategies
Strategic growth opportunities pursued
Top-quartile growth in total shareholder returns over five years to 2015
Operating profit up by 51% over 2010
Successful acquisition of remaining 50% share of Equipment Russia
Our global power systems strategy is gaining momentum as management teams are appointed and resources allocated to target segments
Strategic growth segments identified (page 6)

20153Driven by you

Barloworld’s 2015³ vision – to deliver significant incremental value for our stakeholders through 2015 – was launched to 181 members of senior management around the world at the Barloworld global leader’s conference in March 2011.

The primary objectives of this conference were to inspire the group’s leadership team, access their collective wisdom and create a committed, cohesive and coherent approach to our new 2015³ vision.

Barloworld is well positioned to achieve the ambitious targets set out in its five-year strategic plan which capitalises on growth opportunities emerging in various geographies and market sectors, opportunities that will enable us to drive improved financial returns and value creation for all our stakeholders.

To achieve 2015³, our group will think and work as a team. We are all guided by the same broad strategic focus areas, the same pillars of sustainability, the same code of conduct, and the same bold goal.