COMPANY PROFILE
2015
Imperial Holdings
+27 11 372 6500 | www.imperial.co.za
company profile
A revenue milestone Editorial: Ajuanne Payne
In this months edition of IndustrySA, we were keen to look at one of South Africa’s most iconic companies – the mobility giant that is Imperial Holdings. The continued success story of the local, turned international company is one of a company consistently leading the pack and with 52,000 employees and revenues of over R100 billion in 2014, Imperial Holdings continues to build on over 60 years of experience, leading the industry sector both locally and across the continent.
From humble beginnings in 1948 as a single motor dealership grew Imperial Holdings – the diversified industrial services and retail group that is the leading third-party logistics provider in Southern Africa. The group’s activities span logistics, vehicle distribution and retail, car rental, parts and industrial products distribution and financial services, with five dedicated business segments that handle these different areas of operation. In order to streamline their operations and ensure continued growth and entrepreneurship across the companies, each business segment is autonomously managed and encouraged to operate almost independently, while retaining the considerable benefits of being one cog in the much larger Imperial Holdings machine.
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THE CURRENT MARKET Imperial Holdings has performed well over the past year, despite certain pressures on the South African market. Evidently on the whole over the past few decades the country’s economy has seen significant progress; however it is currently dealing with some difficult external factors. Some of the pressures on commerce and industry in South Africa at the moment include slower economic growth, volatile currency issues, a large amount of consumer debt, high unemployment and electricity shortages. Due in part to these hurdles, the progress of businesses and foreign investment in the country has been impeded to a certain extent this year and last. Over two thirds of Imperial’s revenues and profits were generated in this somewhat uncertain
Imperial Holdings
environment during 2014. With significant socio-economic change also expected throughout the Southern African region over the next decade the company will need to adapt itself correspondingly, both locally and crossborder, to ensure they are ideally positioned to experience continued growth. The National Development Plan (NDP) was implemented in February 2013 with the main aims of eliminating poverty and reducing inequality in South Africa by 2030. It ‘defines a desired destination and identifies the role different sectors of society need to play in reaching that goal’ and is the government plan dedicated to growing the local economy – laying the foundations for further improving the lives of locals across all sections of society.
Mark Lamberti, CEO of Imperial Holdings, commented further on the company’s dedication to the NDP in the years to come: “Imperial is committed firstly to aligning its strategies and plans in support of relevant NDP initiatives, and secondly to working directly with government and indirectly through business associations, in pursuit of the growth and development objectives of the NDP. “Debates about whether or not growth will create jobs in the short term, cannot divert us from the primacy of growth as the foundation of long term progress for every citizen.” Not only is Imperial Holdings committed to the NDP out of a dedication to the betterment of the country where it has its roots, but also because, for a company of this size, positive change in the
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company profile the first time, the second record operating profits, the third record revenue and operating profit from four of the group’s five divisions.” The financial results were indeed a significant milestone for Imperial Holdings and further evidence of its resilience and adaptability within the mobility industry. At the divisional level, with continued growth and record profits recorded across four of the five segments, Imperial Holdings is really outperforming itself. The group’s Logistics Africa division saw a 38% growth in operating profit to R1.3 billion and the Logistics International division grew by 5% to R1 billion. In the Vehicle, Rental and Aftermarket Parts division, operating profit grew by 16% to R1.6 billion and the Financial Services division saw its profits growing by 14% to R1.1 billion.
A BLUEPRINT FOR SUCCESS
economy as a whole will very quickly and directly affect its profitability. Conversely, and perhaps most importantly, the group is of a size to have real influence and drive change.
A REVENUE MILESTONE The group has consistently displayed year-on-year growth over the past decade – and 2014 was no different. Imperial Holdings reported an increase of 12% in revenues to R103.567 billion from R92.382 billion in 2013. Record profit of R6.185 billion was also achieved, with 27% of that coming from the group’s operations outside of South Africa. Lamberti commented further on the success, explaining that: “Despite a tightening of economic conditions in the second half, there were three laudable features of Imperial Holdings’ financial performance in 2014. “The first was revenue exceeding R100 billion for
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Imperial Holdings can attribute much of its success to staying true to its roots as a motor dealer and diversifying within its area of expertise. Not to be confused with a conglomerate operating out of different sectors, the company somehow manages to strike the delicate balance between maintaining its pioneering attitude, while also not straying too far from that which made it the household name it is today – its extensive track record within logistics and vehicle distribution and retail and across the mobility sector as a whole. Lamberti commented further on this key strategy, explaining that: “As the listed parent of various business units that compete in the marketplace for goods and services, Imperial Holdings must achieve two objectives. It must add value to its business units in excess of the tangible or intangible costs of doing so, and it must add value for shareholders by diversifying in a manner they could not. “The evolution of Imperial Holdings has proven this to be the case. The development of the group over decades has sought to enhance the scale, competitiveness and performance of existing businesses, while utilising established capabilities to found or acquire businesses in allied markets and lines of trade not easily accessed by the public markets. “The resources and capabilities that today enable Imperial Holdings subsidiaries to compete and mitigate risk can be traced back to the group’s genesis as a motor dealer. Although our embedded
Imperial Holdings entrepreneurial ethos will cause us always to be vigilant and opportunistic in considering new developments, we intend to tighten our focus on three major lines of mobility: consumer and industrial logistics; vehicle import, distribution, dealerships, retail, rental and aftermarket parts; and vehicle-related financial services.” In order to ensure the further development of the Imperial group and its leadership in the mobility industry, the company is dedicated to founding, acquiring, merging, integrating and disposing of assets and companies strategically. There is also significant focus within Imperial Holdings on honing the skills of its executives and staff-members as a whole in order to improve profitability and reduce costs – it is a company that understands the value of investing in its staff. “While the human capital management of Imperial Holding’s around 52 000 employees is dealt with on a decentralised basis,” explains Lamberti, “the impact of executive capability on the progress of the group demands a broader intradivisional perspective.
“Imperial Holding’s is therefore in the process of implementing practices and processes to identify, select, develop, compensate and retain executive leaders throughout Imperial, whose performance and potential positions them among the top quartile in their field of expertise. “This talent pool will be viewed as a group resource to be deployed wherever required in the interests of Imperial Holding’s performance and sustainability.” It is the company’s core strategies and wealth of industry knowledge that secured it such praiseworthy financial results for 2014 and will continue to direct it to bigger and better things in the years to come. Lamberti explains further that the company always aims to add value, benchmarking its legitimacy “precisely by continuous verification that the value of any subsidiary would be less under different ownership or as an independent entity. “Simply put, Imperial has no right to be invested in businesses or assets whose long term value is not enhanced by its ownership.”
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Consistently delivering range, quality automotive brands, service and best value • • • • •
ACCESSORIES BODY PANEL COOLING DIESEL AND TURBO ELECTRICAL
• • • • •
ENGINE FUEL BRAKE & CLUTCH DRIVELINE IGNITION
• SERVICE PARTS • SUSPENSION & STEERING • TOOLS • WHEEL & BRAKE
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