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Transformation report

The Group regards transformation as a social, moral and strategic business imperative. Management recognises that as a responsible corporate citizen, the Group has an obligation to contribute to bringing about a more equal and inclusive society - starting within our own business. Our transformation strategy is closely aligned to the objective of the B-BBEE Codes and we employ an integrated approach to accelerate transformation across the Code's five criteria.

B-BBEE CODES

Employment Equity Committees, comprising senior management, are tasked with driving transformation – including B-BBEE – in the Group. The Committees meet quarterly to gauge and manage progress against set targets.

Sustained focus and implementation of a range of meaningful interventions over recent years has enabled the Group to improve its B-BBEE status from non-compliant in 2016 to compliant at level 2 in 2024. The rating for the year under review is lower than the prior year due to less spend in this area, as a result of the adverse trading environment and the Group's weaker performance. Although every effort will be made to maintain a high score, in light of continued unfavourable conditions, this rating is expected to decline further in the year ahead.

B-BBEE SCORE ANALYSIS

Our B-BBEE verification certificate is published below.

B-BBEE 2024

Level 2

98,03

 

Ownership

21,26

Level 4

Management control

12,31

Level 7

Skills
development

16,61

Level 4

Enterprise and supplier
development

21,26

Level 1

Socio-economic
development

12,31

Level 1

Our qualifying and recognised spend on the B-BBEE scorecard totalled R112 million (2023: R142 million), allocated primarily to:

  • skills development, including bursary spend of R46 million (2023: R58 million);
  • supplier and enterprise development grants of R2,1 million (2023: R4 million); and
  • donations to the Italtile and Ceramic Foundation Trust ("Foundation") of R15 million (2023: R25 million).

Skills development

The Group continued to invest in a range of skills development programmes focused on employees from previously disadvantaged groups. These included:

  • sponsored partnerships with academic institutions to further the education and develop the leadership competencies of 115 employees (2023: 35);
  • 111 employees were sponsored with bursaries (2023: 78);
  • a total of 67 bursaries (2023: 31) sponsored for children of our employees studying at higher educational institutions;
  • 81 bursaries (2023: 128) awarded to external students studying at higher educational institutions;
  • in total we provided 16 internships (2023: eight) and 121 learnerships (2023: 247) for both qualified students and inexperienced job seekers, with 50 of those learners (2023: 27) ultimately being employed in the Group; and
  • accredited training academies, and local and international courses and e-learning tuition across our brands for our employees, our franchisees and their employees. These training interventions reached 4 731 Group employees and franchisees (2023: 3 397) during the year.

Enterprise and supplier development

In addition to our spend with suppliers with improved B-BBEE credentials (including black ownership), the Group recognises the importance of meaningful Enterprise Development and Supplier Development initiatives to create jobs and grow a sustainable resource of successful black-owned businesses.

In this regard, the Group supports a number of black-owned businesses with grants and/or preferential rate funding. Beneficiaries of such include suppliers of finished goods, service providers, and funds focused on investing and growing black-owned businesses.

Recognised weighted B-BBEE procurement spend on our B-BBEE scorecard was as follows:

Category 2024
Rm
2023
Rm
2022
Rm
2021
Rm
2020
Rm
Qualifying small enterprises 861 759 733 709 389
Exempted micro enterprises 467 121 732 467 301
51%+ black-owned suppliers 1 567 1 476 1 533 1 202 894
30% black female-owned suppliers 786 902 898 580 417

The qualifying and recognised annual value of contributions (made up predominantly of grants and loans) for supplier development and enterprise development for 2024 totalled R52 million (2023: R62 million).

Socio-economic development

The Group's spend on socio-economic development exceeded 1% of net profit after tax. Contributions of product and/or cash were also made to eligible schools and charities, with the largest donation made to the Foundation. The Foundation is the Group's broad-based black ownership scheme, whose goal is the transformation and upliftment of previously disadvantaged communities through distributions made to public benefit activities related to education, sport and conservation.

The Foundation's spend of R33 million for 2024 (2023: R33 million) was allocated to the following categories:

  • Education: 40% (2023: 40%);
  • Sport: 40% (2023: 40%);
  • Conservation: 10% (2023: 10%); and
  • Other: 10% (2023: 10%).

PEOPLE PROFILE

Through our employment equity initiatives, we strive to align to the national economically active population statistics where possible. Equal gender representation is a focus in recruitment and appointments across the Group, especially at management level. Maternity benefits were also recently revised in order to attract more females into the business.

The Group's employment demographic is as follows:

OUTLOOK

The Group will continue to vigorously drive its empowerment agenda. Given the current unfavourable trading environment and concomitant reduced spend in this area, we will target a level 3 rating in the year ahead, through the following initiatives:

Management control:

  • advance and/or appoint black females for management positions at all levels; and
  • employ black disabled individuals.

Skills development:

  • invest in learning programmes and bursaries aligned to the industries the Group operates in for individuals from under-represented demographic groups;
  • invest in learning programmes for disabled individuals from under-represented demographic groups;
  • place previously unemployed individuals from under-represented demographic groups in learnerships (both internally and in hosted external programmes); and
  • retain individuals from under-represented demographic groups on a permanent basis post-learnerships.

Enterprise and supplier development:

  • where possible, divert spend to exempt micro-enterprises ("EMEs") or qualifying small enterprises ("QSEs"), with a particular focus on 51%+ black-owned and/or 31%+ black women-owned businesses;
  • continue to encourage and support suppliers with their own transformation and empowerment initiatives;
  • fund qualifying EME and QSE suppliers;
  • continue funding a majority black-owned property company (in which the Group has a minority stake);
  • contribute to incubator or similar initiatives; and
  • extend favourable settlement trading terms for empowered suppliers.