R57 million invested in learning and development | ![]() |
![]() Bertina Engelbrecht
|
Our sustainability strategy recognises that the group cannot achieve business success without caring for the social and environmental systems upon which our operations depend. We apply this philosophy throughout our value chain, from suppliers to customers, from products to processes and from our buildings to our brands.
The initial focus of our sustainability strategy is on driving efficiency, transformation, product-related opportunities and challenges, and supply chain initiatives into an integrated sustainability programme. We will embed our approach through performance-based management and broad communication with all our stakeholders.
The key commitments which form the foundation of our sustainability strategy are:
An external consultancy has been engaged to assist in developing targets that will be based on local and international benchmarks. These targets will be incorporated into the group and business unit annual and three-year operating plans and disclosed in the annual report from 2011.
![]() |
![]() |
||||||||||||||
|
In the 2009 annual report sustainability priorities were outlined for 2010 and pleasing progress has been made against most of these priorities.
indicator | Sustainability priorities for 2010 | Performance against priorities in 2010 |
---|---|---|
![]() |
|
|
![]() |
|
|
![]() |
|
|
Successes | Challenges | Priorities for 2011 | |
---|---|---|---|
![]() |
|
|
|
![]() |
|
|
|
![]() |
|
|
|
The group qualified for inclusion in the index for the first time in 2010. Qualification for the index is based on an assessment of the environmental, social, governance and sustainability practices of listed companies.
A range of sustainability indicators have been identified across the groups financial and trading performance, employees, transformation and environmental management to benchmark progress on sustainability practices within the group. These indicators are regularly reviewed to take account of changes and progress within the businesses and are reported under economic, social and environmental.
Sustainability indicators | 2010 | 2009 | 2008 | 2007 | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Economic | |||||||||||
Headline earnings | Rm | 576 | 478 | 400 | 357 | ||||||
Diluted headline earnings per share | cents | 211.4 | 165.9 | 131.5 | 103.0 | ||||||
Return on shareholders’ interest (ROE) | % | 50.8 | 42.3 | 32.8 | 24.7 | ||||||
Return on total assets | % | 13.9 | 12.3 | 10.5 | 9.3 | ||||||
Distributions per share | cents | 106.2 | 84.0 | 61.1 | 48.2 | ||||||
Change in market capitalisation (net of treasury shares) | R'm | 4 377 | 1 109 | (321) | 1 223 | ||||||
Wealth created through cash value added | R'm | 2 820 | 2 400 | 2 113 | 2 112 | ||||||
Total leased trading area | m2 | 278 621 | 267 776 | 259 884 | 252 239 | ||||||
Number of stores | 561 | 540 | 519 | 500 | |||||||
In-store dispensaries | 251 | 207 | 157 | 125 | |||||||
In-store clinics | 93 | 105 | 97 | 92 | |||||||
Market share | |||||||||||
– Clicks: front shop health | % | 38.7 | 37.2 | 35.5 | ** | ||||||
Clicks: retail pharmacy | % | 13.6 | 11.1 | 9.0 | ** | ||||||
– Clicks: beauty personal care | % | 24.9 | 24.4 | 25 | 25 | ||||||
Musica: CD | % | 45 | 44 | 41 | 38 | ||||||
Musica: DVD | % | 23 | 23 | 22 | 20 | ||||||
Musica: Gaming software | % | 9 | 9 | 9 | 9 | ||||||
UPD: private wholesale distribution | % | 23.7 | 23.6 | 26.4 | 25.6 | ||||||
Social*** | |||||||||||
Permanent staff | 8 064 | 7 585 | 7 122 | 9 076 | |||||||
Staff turnover | % | 19.8 | 26.1 | 21.2 | 23.4 | ||||||
Skills development as a % of basic payroll | % | 4.4 | 4.3 | 3.6 | 2.8 | ||||||
Employee wellness utilisation | % | 27 | 21 | 19 | 18 | ||||||
Employment equity | |||||||||||
– Black staff as a % of total staff | % | 84.7 | 84.3 | 84.2 | 86.9 | ||||||
– Black senior and top management | % | 17.8 | 11.5 | 18 | 24 | ||||||
– Black middle management | % | 42.9 | 41 | 35 | 37 | ||||||
– Black junior management | % | 67.2 | 65 | 80 | 86 | ||||||
– Black directors | % | 40 | 33 | 36 | 22 | ||||||
– Women as a % of total staff | % | 62.7 | 62 | 62 | 60 | ||||||
– Women senior/top management | % | 34.7 | 32 | 36 | 43 | ||||||
– Women middle management | % | 50 | 45 | 53 | 58 | ||||||
– Women junior management | % | 64.2 | 63 | 62 | 63 | ||||||
– Women directors | % | 33 | 33 | 27 | 9 | ||||||
Transformation rating | Level | 5 | 5 | 6 | 7 | ||||||
Corporate social investment spend | R'm | 9.8 | 14.4 | 9.8 | 0.4 | ||||||
Environmental | |||||||||||
Carbon emissions (CO²e) | Tons | 151 404 | 134 341 | 127 014 | * | ||||||
Electricity consumption | kWh | 108 153 | 90 499 | 86 811 | * | ||||||
|
Value added statement for the year ended 31 August
2009 | ||
---|---|---|
2010 | (restated)* | |
R m | Rm | |
Turnover | 13 276 | 12 175 |
Paid to suppliers for goods and services | (11 092) | (10 354) |
Value added | 2 184 | 1 821 |
Other income and finance income | 636 | 579 |
Wealth created | 2 820 | 2 400 |
![]() |
||
The groups transformation strategy is aligned to the Department of Trade and Industrys codes of good practice. The commitment to sustainable transformation is entrenched through the board transformation committee, the group internal transformation committee in which both the chief executive and the group human resources director participate, and business unit transformation forums which are responsible for implementation.
The group maintained its externally verified level 5 rating and increased its BBBEE score from 55.41 in 2009 to 58.37 in 2010. The group did not meet its targeted level 4 rating owing mainly to the lack of training for employees with disabilities and identifying a suitable enterprise development programme within the Clicks brand. Encouraging progress has been made in the areas of employment equity and skills development. The launch of an enterprise development initiative by the Clicks Group in the new financial year is expected to have a major impact on the group achieving level 4 BBBEE compliance.
2011 | ||||
---|---|---|---|---|
BBBEE category | targets | 2010 | 2009 | 2008 |
Ownership | | 0.49 | 2.26 | 2.53 |
Management control | 8.8 | 7.85 | 7.79 | 7.64 |
Employment equity | 10 | 10.43 | 6.07 | 6.20 |
Skills development | 15 | 12.20 | 11.53 | 9.90 |
Preferential procurement | 14 | 13.82 | 13.51 | 11.71 |
Enterprise development | 15 | 8.66 | 9.25 | 9.37 |
Socio-economic development | 5 | 4.92 | 5.00 | 5.00 |
Total | 67.8 | 58.37 | 55.41 | 52.35 |
Level | 4 | 5 | 5 | 6 |
We are committed to procuring from locally based and empowered suppliers and encourage suppliers to externally verify their BBBEE status. During the financial year, 30% of the total procurement spend was from level 4 and higher rated suppliers.
The UPD owner-driver scheme demonstrates the commitment to transformation and socio-economic development. The scheme was established in 2003 and currently has 52 owner-drivers contracted to deliver products to pharmacies, including Clicks, hospitals and clinics.
UPD spent R28.6 million for services from the owner-driver scheme and a further R0.7 million to the management company operating the scheme.
Clicks Group is committed to creating a diverse workforce which reflects the demographics of South Africa through the advancement of previously disadvantaged people and the empowerment of women.
Increasing the representation of black people and women at the middle, senior and top management levels is a high priority for the transformation forums at both the group and business unit level.
In 2009 the group implemented the total rewards strategy which is aimed at driving a high performance culture that consistently delivers above average returns to shareholders through employees who are motivated and fully engaged.
The total rewards strategy has resulted in the implementation of the human resources governance framework which has aligned the principles of pay and performance, improved the leave management process, reduced staff turnover, and created internal equity through grading and structured pay bands.
Salaries and benefits are competitively positioned in relation to the retail industry and general market and 20% above the minimum wage determination for the retail sector. Employees are entitled to statutory benefits, including annual leave, maternity leave, paternity leave and family responsibility leave. Employees can also qualify for an annual performance bonus and receive discounts at group stores.
Clicks Group has a formal recognition agreement with the South African Commercial Catering and Allied Workers Union (SACCAWU) which represents 39% of full-time permanent employees in the bargaining unit and 29% of the employees of the Clicks business unit. 35% of the permanent employees within UPD are represented by the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (CEPPAWU).
Between February and March 2010, 157 Clicks employees were locked out of their stores following a dispute with SACCAWU on company operating principles and procedures. The union referred the matter as an offensive lockout dispute to the Labour Court. The court ruled in favour of the company with costs against the union. The matter was referred to the CCMA, after which 82 employees were reinstated subject to agreeing to abide to operational procedures and principles.
The table below provides detail on the groups workforce profile by race, gender and occupational level at year-end.
Female | Male | ||||||||
---|---|---|---|---|---|---|---|---|---|
Occupational level | African | Coloured | Indian | White | African | Coloured | Indian | White | Total |
Top management | | 1 | | 3 | | | 1 | 11 | 16 |
Senior management | 2 | 2 | 4 | 21 | 4 | 3 | | 43 | 79 |
Professionally qualified | 18 | 34 | 16 | 102 | 23 | 37 | 18 | 92 | 340 |
Skilled | 277 | 330 | 100 | 426 | 271 | 152 | 55 | 153 | 1 764 |
Semi-skilled | 2 037 | 1 229 | 141 | 271 | 1 518 | 417 | 61 | 112 | 5 786 |
Unskilled | 33 | 10 | 1 | | 28 | 6 | | 1 | 79 |
Total | 2 367 | 1 606 | 262 | 823 | 1 844 | 615 | 135 | 412 | 8 064 |
Responsible pharmacist of the year, Waheed Abdurahman (left), at the Clicks store in Cavendish Connect in Cape Town.
2010 | 2009 | ||
---|---|---|---|
Permanent staff at start of year | 7 585 | 7 122 | |
Add: Recruitments | 1 995 | 2 230 | |
Acquisition of Direct Medicines | – | 129 | |
Less: Resignations | (1 197) | (1 436) | |
Deaths | (15) | (40) | |
Dismissals | (264) | (359) | |
Retirements | (28) | (37) | |
Retrenchments | (12) | (24) | |
Permanent staff at year-end | 8 064 | 7 585 | |
Permanent staff turnover % | 19.8 | 26.1 |
The employee turnover rate has declined from 26.1% to 19.8% which can be attributed to a range of factors, including the implementation of the total rewards strategy, an employee retention scheme and the focus on learning and development. The opening of a net 21 stores across the retail businesses and 44 pharmacies during the year contributed to a 6.3% employment growth. Employee retention improved as the number of resignations declined by 16.6% over the year.
The employee wellness programme is aligned to the groups total rewards strategy and encourages employees to take responsibility for their physical, mental and emotional well-being. This contributes to a productive organisational culture in which employees are mentally, physically and emotionally present.
The programme is a work-based advisory, counselling and support programme which provides free life and wellness management services to employees in all official languages. Employees and their family members have access to confidential professional counselling; financial and legal advice; trauma and health management services; management and supervisory support; and HIV testing, management and support.
Employee wellness programme | 2010 | 2009 | 2008 |
---|---|---|---|
Employee utilisation | 2 016 | 1 427 | 1 309 |
Family utilisation | 571 | 167 | 74 |
Total utilisation rate | 27% | 21% | 19% |
Manager referrals | 132 | 55 | 23 |
High-risk cases | 9 | 16 | 34 |
Employees on HIV programmes | 55 | 63 | 55 |
The refocusing of the employee wellness programme through the use of the Clicks in-store radio channel, business unit engagement, site visits and wellness days has resulted in the increase in utilisation.
Through the employee wellness programme over 1 100 employees received voluntary HIV/AIDS counselling and testing during the health screening days at the head office and eight distribution centres across the country. There are currently 55 employees registered on the HIV/AIDS management programme which provides free antiretroviral and support services.
The group increased its investment in skills development to R57 million (2009: R39.7 million), which equates to 4.4% (2009: 4.3%) of basic payroll costs.
A total of 4 527 employees attended learning and development programmes, with black employees representing 85% of the total employees trained. Workplace experience opportunities were granted to 54 students and graduates through the internship programme.
Description | 2010 | 2009 |
---|---|---|
Employees trained | 4 527 | 4 523 |
Training spend as a % of payroll | 4.4 | 4.3 |
Training spend (Rm) | 56.8 | 39.7 |
Delegates on management development programmes | 47 | * |
Delegates on retail learnership and skills programmes | 331 | 306 |
Delegates on pharmacy learnership programmes | 430 | 228 |
Interns and graduates on workplace experience programmes | 54 | 48 |
Delegates on health and safety programmes | 65 | 105 |
* Not reported |
The Pharmacy Healthcare Academy, which is registered with the SA Pharmacy Council, continues to make a difference in the pharmacy skills shortage challenge facing the group and the industry. Over 550 delegates registered for the pharmacists assistant basic and post-basic learnership programme over the financial year.
The academy also had over 500 delegates, including pharmacists, nurses and interns, attending courses throughout the year.
The health and safety of employees, suppliers and customers is an important aspect of our business. Health and safety committees have been established across the group and ongoing training is provided to health and safety representatives and employees alike. A health and safety policy covers employees, contractors and customers.
The group is committed to investing 1% of profit after tax through the Clicks Foundation to contribute to social and economic development. Over the past year the group invested R9.8 million (2009: R14.4 million) towards community development.
The focus of the corporate social investment is on health and well-being. The business units are required to identify and implement projects which are relevant to their business and which are aligned to these focus areas.
Musica continued to support the Carel du Toit School for the hearing-impaired, Marion Institute and Dance for All. Both Clicks and Musica have donated products to the value of R9 million towards these and other various non-governmental organisations.
UPD supported the Topsy Foundation and provided funding towards the purchase of two vehicles, as well as product donations.
The Body Shop launched the Stop Sex Trafficking of Children and Young People in partnership with ECPAT (End Child Prostitution, Pornography and the Trafficking of Children for Sexual Purposes). The campaign is aimed at raising awareness and funds for victims of trafficking. The Body Shop made a further financial donation of R70 000 towards the Homestead.
Employees are encouraged to participate in a payroll giving initiative and to volunteer time, money and goods towards community social investment projects. Employees have identified beneficiaries in their communities and co-ordinated programmes to collect and distribute gifts.
Clicks supports governments vision of making healthcare more affordable and accessible. Through its national network of over 251 pharmacies and 93 primary care clinics, Clicks provides a convenient and affordable alternative for basic primary healthcare. In 2010 Clicks partnered with the Department of Health in the national HIV counselling and testing campaign to encourage South Africans to know their HIV status.
The group aims to embed environmental management into its operations to ensure sustainable business practices. The board audit and risk committee has ultimate accountability for environmental sustainability, while the group human resources director has responsibility for the implementation of the environmental management policy. An internal committee of volunteers from all business units is tasked with internal co-ordination, raising employee awareness and reporting on environmental management.
The group continued its participation in the global Carbon Disclosure Project (CDP). The project assesses the potential risks and opportunities relating to climate change and greenhouse gas emissions (GHG). The group partnered with Global Carbon Exchange to conduct an energy efficiency audit to improve the level of understanding of energy usage, areas of inefficient energy usage, the cost of technology to implement savings and related opportunities.
An evaluation of the groups carbon footprint was again commissioned, based on internationally recognised GHG protocols.
Scope 1 emissions | |||
---|---|---|---|
(CO²e) metric tons | 2010 | 2009 | 2008 |
Company-owned cars | 1 761 | 2 322 | 2 182 |
Fugitive emissions | 2 173 | 3 588 | 2 841 |
Generators | 24 | 33 | 231 |
Scope 2 emissions | |||
(CO²e) metric tons | |||
Purchased electricity | 108 153 | 90 499 | 86 811 |
Scope 3 emissions | |||
(CO²e) metric tons | |||
Business travel | 1 790 | 2 089 | 2 107 |
Product distribution | 16 096 | 15 675 | 13 941 |
Employee commute | 21 407 | 20 135 | 18 901 |
Total | 151 404 | 134 341 | 127 014 |
The groups electricity utilisation increased to 108 153 CO²e owing to store growth and extended trading hours.
The group has adopted the Green Building Council of South Africa and the SANS regulations for energy efficient lighting specifications for all new stores.
The installation of energy efficient lighting, metal halides, lighting sensors and timers has resulted in a 25% energy saving on new light fittings and a further 15% energy saving on circuits, sensors and timers.
The Clicks brand has piloted the green store model in line with the Green Building Council of South Africa and SANS specifications and regulations.
Over the past year 1 367 tons (2009: 1 150 tons) of plastic, cardboard and paper were recycled. Recycling at head office has been outsourced to the Oasis Association, a non-profit community-based organisation which promotes the reuse of goods and materials.
While customers are becoming increasingly environmentally conscious, value will always remain key. Clicks is in the process of developing environmentally friendly private label products that are both price competitive and offer innovative product, packaging and sourcing alternatives.
Clicks will launch product ranges that are used in everyday life and can have an immediate impact on the environment.
Packaging solutions include increasing the recycled content of packaging, for example developing shopping bags and water bottles with a high percentage of recycled material, reducing unnecessary packaging and branding products with the universal recycling logo.
Clicks will also create a more sustainable supply chain by identifying enterprise development opportunities in the sourcing of private label merchandise.
As part of the global The Body Shop brand, the local franchise markets naturally-inspired cosmetics and toiletries, including several certified organic products. Sustainability is a core value of The Body Shop and the brand is committed to fair trade, community upliftment and non-exploitation of scarce resources.