How we create value

Financial capital

• Revenue of R18.8 billion;
• Gross profit: R2.38 billion;
• Capital expenditure: R71 million;
• Finance activities: R820 million;
• Lease payments: R50 million;
• Taxes paid R205 million;
• Disposal of Blue Label Mexico: R191 million.

• A strong balance sheet and sufficient working capital to fund the operations that support long-term sustainability;
• Investments into technology, processes, and key personnel that ensure sustainability and competitive advantage;
• Economic benefits to employees, partners, and suppliers;
• Good stewardship of our investors' financial capital.

We leverage financial capital to invest in our business and to grow our competitive market position. This has a positive impact on human, intellectual, and social and relationship capitals. We create jobs, support the growth of small businesses, and relentlessly drive financial inclusion for the mass market.

There is an important trade-off between short and long-term investment associated with financial capital. It is important to balance the interest of short-term benefits with those of long-term sustainable growth objectives. While both are important for different stakeholders at different times, it is a key focus in our strategic decision-making process.

Manufactured capital

Capital expenditure: R71 million.

• Ability to deliver valuable services and solutions in response to changing consumer demands;
• Strategically located outlets offering convenient customer access to products and services;
• Secure and productive working environments.

By investing in equipment, outlets, and distribution capacity, we increase our manufactured capital, but negatively impact natural capital and, in the short term, financial capital.

Automation of routine tasks through technology may in the long term reduce human capital.

Intellectual capital

• Purchase of intangible assets: R37 million;
• Accelerating our digitisation projects to fast track our ability to be responsive to our new environment;
• Improved responses to changing consumer needs;
• Brand reinforcement and market communication;
• Accelerated deployment of new technologies;
• Effective controls and processes;
• Full legal and regulatory compliance;
• Risk identification and mitigation.

• Creative solutions increase productivity, cost savings, and synergies;
• Proprietary systems/solutions add value and secure sophisticated contracts.

Our technical innovation and entrepreneurial drive are central to effectively serving the unbanked market segment.

Improved investment in business processes and new systems is growing our intellectual capital and indirectly benefiting our human, and social and relationship capitals, but negatively impacting financial capital in the short term.

Human capital

• Excellent customer service;
• Salary and benefits spend: R637 million;
• Talent pipeline and learnerships in line with BLT pipeline requirements;
• Staff retention rate: 91%;
• Converting our entire organisation to work from home from the inception of lockdown level 5;
• Occupational Health and Safety audit completed;
• 70% of respondents in our Engagement Survey are content at work.

• A vibrant, diverse, and flexible workforce, committed to the long-term success of Blue Label;
• Improved effectiveness, skills, and expertise.

Significant people-related investments in initiatives decreases our financial capital in the short term, but positively impacts our human, social and relationship capitals. Over the longer term, this enables us to have the people and capabilities required to deliver our strategy and performance targets.

In turn, our appeal as an employer of choice and our brand value increases our intellectual capital.

Social and relationship capital

• Brand reinforcement and market communication;
• Understanding our customers;
• Partnerships with the best providers of forward-thinking technology solutions and services;
• CSI spend: R8.5 million;
• Youth development and entrepreneurship programmes;
• Computer literacy programmes for children;
• COVID-19 relief funding.

• Business efficiency through collaboration with producers and suppliers;
• Building trust and respect;
• Social relevance in the communities we operate in;
• Brand reinforcement and market communication;
• Sustained confidence from shareholders and investors.

Trusted, long-term partnerships with customers. Stakeholder-related investments reduce our financial capital in the short term but positively impacts our social and relationship capital. Over the longer term this enables us to have a community of stakeholders that are loyal and supportive to our brand and provide our social licence to operate.

Natural capital

The combined effort of environmental awareness and the impact of COVID-19 saw a significant decrease in the usage of all natural resources.

• Responsible management of waste and emissions;
• Focus on sustainable use of our resources.

While certain business activities impact our natural capital (for example, use of fossil fuels and related emissions), these positively impact the human, social and relationship, and financial capitals.

We are aware of the environmental impacts of our operations and activities and focus on the responsible use of resources. Blue Label views digital products and services as having significant potential to deliver positive environmental outcomes.