Integrated Annual Report 2017

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Stakeholder engagement

Clicks Group’s stakeholder engagement process focuses mainly on the five primary stakeholders that management believes are the most likely to influence the ability to create sustainable shareholder value. Proactive and transparent relationships with these stakeholders enable the group to identify and address issues, opportunities and risks. Performance indicators have been developed for each primary stakeholder group to determine the quality of the engagement and relationship.

Rationale for engaging Engagement issues Outcome of engagement
Customers
  • Meet customer needs by providing products and services
  • Create trust in products and pharmacy practices
  • Customer loyalty and retention
  • Grow market share
  • Product range in store and online
  • Service levels
  • Price competitiveness
  • Pharmacy and clinic services
  • ClubCard benefits
Clicks:
  • 622 stores
  • 473 pharmacies
  • 45% of households live within 5 km of a Clicks store
  • ClubCard active membership increased to 7.0 million (2016: 6.2 million) and accounts for over 77% of sales (2016: 77%)
  • Clicks app launched in 2017
  • Online shopping available in South Africa
  • Market share gains in all categories
  • Clicks independently rated by customers as first for price and value in health and beauty retailing
UPD:
  • Five distribution centres in South Africa and one in Botswana
  • Servicing over 2 000 corporate and independent pharmacies
  • 96.1% order fulfilment to customers (2016: 96.0%)
Shareholders and lending institutions
  • Facilitate access to capital by attracting investors
  • Facilitate attractive debt funding facilities from financial institutions
  • Better informed investor community
  • Balanced analysis of company
  • Fair market rating relative to peers
  • Group strategy
  • Current trading environment
  • Trading and financial performance
  • Store and pharmacy expansion plans
  • Regulatory environment
  • Capital management
  • Prospects
  • Return on equity 44.1%
  • Total shareholder return 25.2%
  • Engagement issues addressed in annual and interim results presentations and webcasts, local and international investor roadshows, Integrated Report and annual financial statements.
  • Met with 222 local and international funds and brokerages (2016: 219)
  • Research coverage by 12 brokerages (2016: 11)
  • 82.9% of shares traded (2016: 90.3%)
  • International share ownership 66.1% (2016: 68.6%)
  • Access to adequate group funding and trade finance facilities
Employees
  • Attract, motivate and retain talent
  • Increase productivity
  • Engender loyalty
  • Accelerate transformation
  • Remuneration and benefits
  • Performance management
  • Personal development
  • Career path planning
  • Training and skills development
  • Employee share ownership plan (ESOP)
  • Full-time staff turnover 15.9% (2016: 17.0%)
  • Employment equity
    • Black staff 91% of total staff (2016: 91%)
    • Female staff 63% of total staff (2016: 62%)
  • Training and skills development spend R125.8 million (2016: R95.7 million)
  • 539 learners through Pharmacy Healthcare Academy (2016: 423)
  • 64 pharmacy interns engaged (2016: 83)
  • Fair and responsible remuneration for role performed based on external benchmarks
  • 5 882 employees are shareholders through the broad-based ESOP
Government and industry regulators
  • Legislative and regulatory compliance
  • Lobby for regulatory reform and fair legislation which will improve access to affordable medicines
  • Best-practice governance standards
  • Pharmacy licences
  • Registration of medicines
  • Complementary and alternative medicines
  • Ongoing engagement with regulators
  • Insight into regulatory framework
  • Formal submissions made in response to draft regulations
Suppliers
  • Ensure stable supply of merchandise
  • Quality standards maintained
  • Understand market movement and new product launches that may change buying patterns
  • Brand exclusivity
  • Quality and safety standards
  • Product availability and exclusivity
  • Product innovation, strength of brands
  • Private label products
  • Transformation and BBBEE scorecards
  • Legislative compliance
  • Supplier infill levels
    • Clicks 85.2% (2016: 83.8%)
    • UPD 96.1% (2016: 96.0%)
  • 72.8% (2016: 75.8%) spend on BBBEE empowered suppliers
  • Consistent supply and maintenance of franchise agreements with The Body Shop International, GNC and Claire’s
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