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E-COMMERCE

INFORMATION TECHNOLOGY (IT)

PROPERTY INVESTMENT PORTFOLIO

E-COMMERCE

Nature of business

To provide our customers with a seamless, omnichannel shopping experience, enabling them to easily view and purchase our products and services online and smoothly transition between online shopping and our brick-and-mortar stores.

Target market	Footprint
The Group’s retail operations and its customers.	The Group’s online shopping stores are: CTM South Africa – www.ctm.co.za; CTM Kenya – www.ctm.co.ke; CTM Tanzania – www.ctm.co.tz; Italtile Retail South Africa – www.italtile.co.za; TopT – www.topt.co.za; U-Light – www.u-light.co.za

		Trends		% increase
Key performance indicators		2021	2020	2021	2020
Online sales (Rand)
	CTM SA			33	18
	CTM Kenya			33	9
	CTM Tanzania			41	89
	Italtile Retail			95	(6)
	TopT			272	25
	U-Light	#	#	#	#
Quotes generated for all stores (Rand)
	CTM SA			50	47
	CTM Kenya			35	35
	CTM Tanzania			41	107
	Italtile Retail			48	66
	TopT			435	56
	U-Light	#	#	#	#
Visitor sessions
	CTM SA			38	14
	CTM Kenya			48	36
	CTM Tanzania			12	177
	Italtile Retail			23	47
	TopT			81	60
	U-Light	#	#	#	#
^# No full-year comparable data available.

2020/21 priorities	Scorecard
Enhance and differentiate our specialist online shopping experience from other generalist online retailers.
Rapidly grow quotes and sales conversions across all brand webstores.
Effectively utilise conversion rate tools and methods to optimise different user journeys on our online stores.	In progress
Better implementation of delivery tracking, giving customers greater visibility of their delivery timeframes.
Continue to enforce health and safety protocols for employees and customers with regard to Covid-19.

2020/21 major achievements

Significant sales growth and achievement of budget of online stores across the Group.

Redesigned and implemented a new online shopping experience for CTM.

Achieved rapid agile adjustment and zero downtime for online customers in overnight move to remote working through the Covid pandemic and various lockdown levels.

Significant improvement in fast fulfilment of orders including both click-and-collect and next-day deliveries.

2021/22 priorities	2021/22 prospects
Redesign and implement new online shopping experience for Italtile Retail.	Investigate feasibility of implementing Progressive Web apps and headless commerce, and selling via Super apps.
Implement strategies to obtain customer-created content for product enrichment.	Continue to explore and develop leading-edge customercentric technology to improve the shopping experience.
Drive uptake of augmented reality and usage of visualisers.
Enhance digital content and marketing to attract new customers and drive online sales.
Improve data analytics.

INFORMATION TECHNOLOGY (IT)

Nature of business

The IT department provides the Group with a scalable and secure platform that adheres to industry best practices; this has afforded the business the confidence to innovate in a challenging environment. The division embeds technology at the heart of the business thorough implementing agile and innovative solutions that enable the Group to rapidly respond to ever-changing consumer behaviour.
Technology is a competitive advantage and a means to differentiate in the digital era. The Group’s culture of innovation and agile approach to delivering tangible applications has ensured that our customer experience is tailored and memorable across all of the Group’s retail brands.

Strategic positioning	Target market
Delivering sustainable and competitive solutions that align with business objectives and consumer demands in a society featuring volatility, uncertainty, complexity, ambiguity and disruption.	The Group’s retail, distribution and manufacturing operations and key business units including HR, Marketing, Finance and Supply Chain Logistics, as well as the Group’s end customers.

Key performance indicators	Scorecard
Ensure business continuity through business applications that enable individuals or business units to work productively and efficiently from remote locations.
Proactively pursue emerging technologies such as artificial intelligence and social platforms to enhance current revenue streams.

2020/21 priorities	Scorecard
Execute the digital strategy by enhancing online customer experiences to drive the quote conversion rate.
Support supply chain integration through the use of internet of things solutions and leveraging existing IT landscape to fast-track business productivity and efficiency.
Refresh in-store hardware and software for our mobile point of sale solution. This will leverage newer technology platforms and enable contactless payments.

2020/21 major achievements

Designed, implemented and rolled out a purpose-built warehouse solution that drives visibility, productivity and efficiency of the in-store fulfilment process..

Designed, implemented and rolled out a mobile solution for the distribution centres that enhances throughput and visibility of picking, packing and put-away warehouse tasks.

Broadened the range of self-service and automated applications to improve productivity.

Expanded reporting capabilities to improve adoption and assist data-driven decisions.

2021/22 priorities	2021/22 prospects
Design and implement Italtile Retail’s in-store mobile sales process to enhance the customer experience.	Automate and process assistance through the introduction of artificial intelligence methodology to business processes.
Advance the supply chain logistics integration to generate further insight and visibility of the movement of product from manufacture to customer.	Investigate migrating the Group’s ERP system to the next major version that will allow the Group to further expand on data analytics and process automation.
Ensure adherence to data compliancy regulations and improved resilience of the Group’s data architecture and business continuity.
Continue to enforce health and safety protocols concerning Covid-19.
Complete the migration of IT infrastructure to the cloud.

PROPERTY INVESTMENT PORTFOLIO

Retail properties	Manufacturing properties	Environmental sustainability
This portfolio affords strategic advantage to the retail brand operations by ensuring stores are easily accessible, well-presented and maintained, and contribute to an aspirational shopping experience. The portfolio is continuously evaluated and enhanced to ensure optimal returns.	The Group’s manufacturing operations comprise well-maintained state-of-the-art factories which are supplied with high-quality raw materials sourced from productive quarries in close proximity to the plants.	The Group’s sustainability agenda is promoted through the use of cost-effective, energy efficient practices in the construction of new buildings and the renovation of older buildings. Optimal use of natural light, solar technology, new-generation lighting, water-saving taps, rain water harvesting, and environmentally sensitive building materials is prioritised. Our Ceramic Industries factories use the latest technology in their operations and rank among the most energy efficient in the world. The majority of Ceramic Industries' clay requirements are supplied by its own quarries. The quarries have adequate reserves to meet medium to long-term requirements. Raw material quarries are rehabilitated concurrently and once end-of-productive-life is reached.
Target market	Italtile Retail, CTM, TopT and U-Light store networks.

Key statistics		2021	2020
Retail portfolio market value		R3,6 billion	R3,3 billion
Manufacturing portfolio market value		R1,0 billion	R1,0 billion
Total number of stores		201*	192*
	Italtile Retail	13*	13*
	CTM	91*	91*
	TopT	89*	83*
	U-Light	7*	5*
	ELK	2	–
Number of factories (Ceramic Industries)		8	8
Number of quarries (Ceramic Industries)		11	11
Capex incurred (new and refurbishments)
	Retail	R420 million	R274 million
	Manufacturing	R462 million	R180 million
Portfolio changes
	Properties acquired	8	5
	Properties sold	2	–
New stores opened
	Italtile Retail	–	1
	CTM	1	3
	TopT	11	5
	U-Light	2	4
Stores closed
	TopT	4	3
* Excluding webstores.

2020/21 priorities	Scorecard
Sell non-viable sites to ensure the portfolio remains healthy and retains optimal value. Target: three to five properties. Due to the pandemic, the commercial property market was very subdued, and consequently, only two sites were sold.
Review opportunities to convert leased sites to owned properties for high-performing TopT stores in proven markets. Target: three to five stores. Seven properties were acquired, in Burgersfort, Kuruman, Ganyesa, Vryheid, Pretoria West, Ikageng and Giyani.
Given materially higher land and construction costs, improve returns through optimising store size and input costs. While savings on land and construction costs were achieved, there is some room for improvement on this KPI.
Continue to maintain and refurbish older properties in the portfolio to ensure relevant market value.

2020/21 major achievements

Sourced two new sites for CTM and Italtile Retail in Zambia.

Secured a new leased property in Diani, Kenya, to increase our presence in East Africa and tap into new markets.

Continued to optimise returns on the portfolio by relocating two non-performing TopT stores in Giyani and Modimolle, Limpopo, and securing a more suitable property for relocation of Italtile Retail Boksburg. Rental expenses were also reduced through keener negotiations on new and existing leases.

Supported the Group’s programme to incorporate the Easylife Kitchens’ offering into selected existing properties with two pilot stores opened in CTM Montana and Northriding, Gauteng.

2021/22 priorities	2021/22 prospects
Sell non-profitable/non-viable sites to ensure the portfolio remains healthy and retains optimal value (target is four to six sites).	Source and develop suitable new sites in Southern Africa to facilitate the network expansion programme.
Review opportunities to convert leased sites to owned properties for high-performing TopT stores in proven markets (target is three to five stores).	Support expansion of the Group’s existing footprint in East African into untapped markets.
In the context of materially higher land and construction costs, improve returns through optimising store size and input costs.	Optimise returns through relocating non-performing stores and ensuring keen negotiations on rental expenses.
Continue to maintain and refurbish older properties in the portfolio to ensure relevant market value.	Leverage opportunities to incorporate Easylife Kitchens into our current properties to support the Group`s expansion programme.
Continue to enforce health and safety protocols concerning Covid-19.

•	the resilience of our team and robust business model;
•	our continued investment and emphasis on innovating for the future;
•	our unwavering focus on improving the customer shopping experience;
•	our ethos of profit-sharing and partnership with our people: and
•	pandemic related changes in consumer spending patterns.