Strategic focus areas

STRATEGY AND KEY IMPERATIVES

Strategic clarity is key to the Group's goal to deliver sustainable value for all stakeholders.

The Group's five-year strategy is developed and implemented through an effective decision making framework and is reviewed annually in terms of its relevance to evolving external and internal conditions. The Board is responsible for setting clear strategic direction, while management is held accountable for delivering measurable results.

Strategic priority 1: OPERATIONAL EXCELLENCE
Imperative	Progress achieved in 2023
Grow sales volumes and improve manufacturing efficiency	Subdued demand and increased competition resulted in a decrease in sales volumes, which impacted the ability of manufacturing to operate efficiently without full loading.
Cost leadership and productivity improvements	Costs remained well controlled.

Strategic priority 2: FASHION LEADERSHIP
Imperative	Progress achieved in 2023
Maintain investment in our strong brands and new product development	Commissioned Ezee Tile's new flagship factory. Introduced new products across several merchandise categories. Our priority is to expand new product development as well as improve marketing initiatives to ensure customers are aware of the fashion offering and benefits of new products.

Strategic priority 3: LEADERSHIP EFFECTIVENESS AND PRESERVATION OF CORPORATE CULTURE
Imperative	Progress achieved in 2023
Introduce outcomes-based training programmes that are better aligned to meet the Group's personnel requirements and enhance the state of readiness of candidates to fulfil successful leadership roles	Graduates from the CTM Future Leader Programme and TopT's Management Training have performed well in operations. The programmes will continue to be run and improved.
Instil high-performance culture	Entrenched culture of setting, measuring and performance monitoring of KPIs.
Optimise employee engagement	The engagement score of 74% remained at a high level. We are satisfied with this score, given the prevailing low levels of confidence in the country at present and the Group's weaker results.

Strategic priority 4: OMNI-CHANNEL
Imperative	Progress achieved in 2023
Grow the contribution of the webstores and ensure that Italtile remains at the forefront of technological innovation to the benefit of customers	Webstore sales contribution increased in 2023. We completed initiatives to improve the mobile and web experience as well as end-to-end customer satisfaction, particularly improving last-mile delivery. Integration of digital marketing focus to drive webstore visits has been improved with a dedicated resource.

Strategic priority 5: ORGANIC GROWTH
Imperative	Progress achieved in 2023
Expand retail footprint	Net increase of five stores in 2023, including one store opened in Kenya.
Expand capacity of Centaurus Australia	Delayed due to current backlog in building completion and interest rate cycle slowdown.
Expand manufacturing footprint	Feasibility study for additional production facilities underway.
Explore new international geographies	On hold until investment conditions improve in global markets.

Strategic priority 6: ENERGY SECURITY AND TRANSITION TO RENEWABLE RESOURCES
Imperative	Progress achieved in 2023
Migrate to electricity generated by renewables	2,7 MW installed at Gryphon and 0,6 MW at Samca Wall. Opportunities are being explored to expand this capacity by a further 2 MW in 2024.
Alternative gas supply	Suitable contracts and alternates to replace Sasol gas under consideration with IGUA-SA. Gas delivery from the Renergen partnership in place and process operating successfully on gas. Implementation of a biogas solution is being actively investigated
Combined heat and power solution	Currently investigating viability of creating a power island at one site to self-generate enough electricity to be independent from the electricity grid. Currently on hold pending clarity from Sasol/National Energy Regulator of South Africa ("NERSA") on gas pricing.

Strategic priority 7: ACQUISITIONS
Imperative	Progress achieved in 2023
Investigate acquisitions of businesses with complementary products which have attractive returns on capital	No suitable acquisition targets were identified in the year under review.