Blue Label Telecoms Integrated Annual Report 2019

ABOUT US 1 – 21 LEADERSHIP 22 – 29 PERFORMANCE 30 – 73 GOVERNANCE 74 – 120 SHAREHOLDERS’ INFORMATION AND ADMINISTRATION 121 – IBC 3G Group. Although these businesses are sound entities, the need to reduce debt and provide the Group with cash resources through the unwinding of the CEC book will further strengthen our trading ability. Blue Label is focusing on going back to basics, resuming our impressive positive cash flow generation and to rebuild trust with all our stakeholders. The proceeds from the disposal of these entities of R994 million will be used to reduce interest-bearing debt and further strengthen our balance sheet. These disposals do not affect the core trading and distribution operations in any way. We thank all these employees for their valuable contribution to the Blue Label Group and wish them well in the future. The finance book relating to the Comm Equipment Company (CEC) division within the 3G Group will remain in the Blue Label stable. This book is valued at R3.1 billion and we will look to wind down a major portion of this book, further increasing our cash resources. TECHNOLOGY Technology has always been at the heart of Blue Label’s business. Technology innovation is how we started this business and how we will continue to take it into the future. The 2019 financial year has seen us renew investments into our technology platforms to sustain the increased volume requirements generated through the growth of our business. Critical objectives for the modernisation and digital transformation roadmap were set and achieved in line with this priority, catering for the necessary required scalability and rapid delivery. We reported last year on the creation of our new Customer Interaction Centre (CIC) to specifically support customer service and lower the cost of servicing our extended reach in the informal markets. The CIC allows us to automatically monitor every device we have in market to assess and measure data, such as volume and time of use and stock levels. We can therefore proactively service our customers and ensure that the spokes servicing our hubs are resourced correctly. These types of initiatives allow Blue Label to significantly improve customer centricity and profitably, reconcile billions of nano transactions, deliver margin expansion, and provide for further volume growth. We have also spent time and effort on further training and upskilling our own staff with regard to capability management and customer service. It is imperative that this training improves our ability to service our customers and provides our staff with the skills needed to further their own careers. We aim to be an employer of choice. In addition, unlike some of our competitors that employ ‘stop and drop’ strategies, we spend meaningful time with our merchants to train them on our devices and the myriad of products and services available for their own revenue growth. We also provide them with ongoing marketing support. Our business grows as our customers’ businesses grow. Further information on the performance of our core Group companies can be found in the operational review on page 56. ASSET DISPOSALS The Board took a decision to dispose of the Blue Label mobile business and the handset division of the Blue Label integrated annual report 2019 31