Integrated Annual Report 2019

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Creating value through stakeholder engagement

Clicks Group’s stakeholder engagement process focuses mainly on the five primary stakeholders that management believe are most likely to influence the ability to create value in the short, medium and long term. Proactive and transparent relationships enable the group to identify and address the needs, expectations and concerns of these stakeholder groups.

Customers

Clicks targets consumers in the growing middle to upper-income markets (LSM 6 – 10)

UPD customers include Clicks, major private hospital groups, pharmaceutical manufacturers and independent pharmacies

Value created through engagement
Clicks:
  • Meeting customer needs and creating trust in products and practices:
    • 133.5 million customer transactions
    • 44.9 million prescriptions processed
    • 10.5% growth in health and beauty sales
    • Market share gains in all key categories
  • Increasing customer loyalty
    • 8.1 million active ClubCard members
UPD:
  • Meeting customer needs through range, availability and service
    • Over 1 700 corporate and independent pharmacies serviced
    • 266 million units of medicine delivered
    • 99.1% order fulfilment to customers

Shareholders and lending
institutions

Shareholders: Local and international institutional and private investors, as well as fund managers and analysts from the broader investment community

Lending institutions: South African financial institutions which provide funding and trade finance facilities to the group

Value created through engagement
  • High levels of investor interest with 110% of shares traded in the year
  • Attractive investment case with 72% international share ownership
  • R1.2 billion returned to shareholders in dividends and share buy-backs
  • Engagement issues addressed in annual and interim results presentations and webcasts, local and international investor roadshows, integrated report and annual financial statements
  • Meetings with 204 local and international funds and brokerages contributed to better-informed investor community
  • Funding and trade finance facilities provided at competitive rates

Employees

All permanent and part-time employees across the group

Value created through engagement
  • Total staff complement increased by 2.3% to 15 413, with 346 new jobs created
  • Ability to attract and retain staff reflected in turnover of full-time permanent employees of 14.5%
  • R3.4 billion paid to employees
  • R2.8 billion paid to over 7 800 employees under the broad-based ESOP over the past two years
  • Investment of R144 million in training and skills development
  • Transformation of workforce evident in employment equity profile:
    • Black staff 93% of total staff
    • Female staff 64% of total staff

Government and industry
regulators

Department of Health, SA Revenue Service and other government departments, industry regulatory bodies and local authorities. As a listed company, the JSE Limited is the primary regulator

Value created through engagement
  • Slow pace of medicine registration by SA Health Products Regulatory Authority continues to restrict launch of new private label medicine ranges
  • Direct engagement with industry regulators and indirect engagement with regulators through industry bodies
  • Lobby for regulatory reform and fair legislation which will not adversely affect returns to shareholders
  • Paid R262 million in direct and indirect taxes

Suppliers

Local and international suppliers of products and services, including producers of exclusive brands and private label products

Value created through engagement
  • Stable supply of merchandise reflected in supplier infill levels of 84.9% in Clicks and 98.7% in UPD
  • Clicks offers over 12 900 private label and exclusive brand products
  • Consistent supply and maintenance of franchise agreements with The Body Shop International, GNC and Claire’s
  • Continued transformation of the supplier base with 50.2% preferential procurement
  • R26.7 billion paid to suppliers of goods and services