Our strategy

         

Our strategic direction remains clear: Balancing short term actions with longer term value creation objectives

We revised our strategy three years ago after engaging with our shareholders to determine their concerns, expectations and priorities A further revision was undertaken in 2020. We reflected on a number of key questions:

What is the full potential of each business in the portfolio today in the context of the constraints of their existing markets?

  

Are there opportunities within each of our chosen business segments to further expand the Group?

  

What else would we need to deliver on our growth for value ambitions?
 

OUR AMBITION IS BOLD

To sustainably double the intrinsic value of our business every four years, enabled by the managing for value operating model.

 

OUR VISION

We create enduring economic and social value for our stakeholders by building businesses that serve industrial customers
 

OUR STRATEGY

Seeks to create value by balancing our long term growth ambitions while focusing on achieving acceptable returns for our shareholders in the medium term. This will continue to be underpinned by our sustainable development framework. In order to adapt to this new operating context and achieve our ambition, the Group will drive the strategy by addressing three critical levers in the short to medium term:

 

FIX AND OPTIMISE OUR EXISTING PORTFOLIO

In terms of fix and optimise, we continue to reassess the performance of the businesses and identify opportunities to unlock value in the current environment. The quick implementation of austerity measures by management is expected to bolster performance in the short term and support results in the medium to long term. Equipment southern Africa has made great progress in rightsizing and streamlining operations in Botswana and Angola with ROIC improving period-on-period. The Logistics business turnaround is ongoing, and the Group is continuously assessing performance and the medium term outlook in light of the current environment. We previously disclosed our intention to dilute our interest to 50% of the equity in Avis Fleet. Given the current market environment, a decision was taken to place this initiative on hold. This position will be re-assessed at the appropriate time and in the context of the Group's strategy and a further review of the portfolio in light of the changing market conditions and longer-term structural changes expected in several segments. Avis Fleet is now reported as part of continuing operations for the full year and going forward. Further to this, management and the board took a decision to integrate the Avis Budget and Avis Fleet businesses in an effort to unlock synergies and value. This operating model is centred on the ever-evolving needs and requirements of customers and presents an opportunity to offer integrated end-to-end mobility solutions to customers, while creating further efficiencies through the consolidation of common processes. The review of the Automotive portfolio is ongoing amid the changing environment. The review has resulted in Car Rental and Avis Fleet being integrated into a single unit to ensure the realisation of benefits of scale between these two businesses and also address gaps in product portfolio driven through a single focused management team. Options around the optimal deployment of capital in Motor Retail remain under due consideration. The Group is also considering market conditions in the Logistics business and evaluating its future options around this business.
 

Implement an active shareholder operating model

We have also made a conscious effort to change the nature of the Group to become an active shareholder by focusing on five key pillars:

STRATEGY AND M&A

Sets strategy for the Group and drives transactions through a centralised M&A function
 
LEADERSHIP AND TALENT

Managed centrally and deployed to the best available opportunities in the Group
 
PERFORMANCE MANAGEMENT

Monitor, measure and reward performance linked to Group priorities
 
RESOURCE ALLOCATION

Allocation of financial, human, time and other organisational resources, based on performance and alignment to strategy
 
RESPONSIBLE CORPORATE

Conducting our business in a responsible manner that contributes to positive socio-economic and environmental outcomes that are aligned with our stakeholder expectations as well as governance
 

ADD HIGH GROWTH BUSINESSES TO OUR PORTFOLIO

Our key priority moves to programmatic M&A in line with our established set of guardrails and verticals that will provide us a platform from which to grow further. We will pursue the mergers and acquisitions program by pivoting the portfolio into chosen segments building off the current base towards an industrial company with a business-to-business operating model focusing on Industrial Equipment and Services and Consumer Industries in food and ingredients. We have the right competencies and the right experience, we are also considering leveraging our offshore ownership structures by capitalising on opportunities in developed markets.
 

The active shareholder model, a key strategic enabler for changing the nature of the Group's operating model focused on building select core competencies to support the execution of the Group's overall strategy and effectively allocate resources. The managing for value model at the corporate centre continued, creating active centres of excellence in the areas of finance, strategy, mergers and acquisitions (M&A), human capital and corporate affairs as a key enabler to our strategy. These corporate functions provide Group-led strategic direction and facilitate collaboration to deliver on the Group strategy. Further changes have been implemented to the corporate centre functions to ensure a more cost effective and directed functions. The roll-out of the Barloworld Business Systems (BBS) continues with significant progress made in the improvement of employee engagement and ways of working throughout the Group. Opportunities to unlock value and implement new ways of working in line with required changes in our trading environment were leveraged to improve efficiencies in all businesses. The redevelopment of the Barlow Park at 180 Katherine Street precinct in Sandton is being assessed in line with current market conditions.