How we create value
Value creation, preservation or erosion over time contributes to the increase, decrease or transformation of the Group’s capitals through its business activities and outputs. We are always guided by our Business Philosophy, through good and bad times, which directs our consistent focus on long-term value creation.
Our ability to create value for our shareholders is inextricably linked to the value we create for our customers and employees, as well as other stakeholders including suppliers, regulators, lenders, landlords, governments and the broader society in which we trade, as illustrated in the accompanying value-creation model. Our Vision, which is a synergistic element of our Business Philosophy, defines ‘value’ for our shareholders, our customers and our employees, and provides focus to our strategic objectives.
For further detail on the Group’s stakeholders and the engagement issues addressed with these stakeholders over the past year, refer to Managing Stakeholder Relationships.
Employees
Human capital
Social and relationship capital
Through our employees we strive to create value by meeting the fashion, quality and service needs of our customers, and by providing the Group’s business support services.
Vision for employees if we are operating according to our Values:
I am totally committed because my team members and I are encouraged to contribute innovatively, and celebrate and reward excellence in contribution.’
Customers
Intellectual capital
Manufactured capital
Social and relationship capital
Our customers are the consumers of our products and services, and are our primary source of revenue. This revenue-generating capability enables us to ultimately create financial value for shareholders.
Truworths Vision for customers if we are fulfilling our Purpose:
‘Truworths helps me look attractive and feel successful and confident. Shopping at Truworths is exciting because it offers wide ranges of curated and tasteful fashion of superb quality and intrinsic value in real and virtual retail emporiums that are visually appealing and are staffed by passionate and knowledgeable staff.’
Office Vision for customers:
‘I love shopping at Office because I trust that they will help me look fashionable and be well informed on international fashion footwear trends. Office creates a world-class experience and is staffed by fashion footwear experts.’
Employees
Human capital
Social and relationship capital
Through our employees we strive to create value by meeting the fashion, quality and service needs of our customers, and by providing the Group’s business support services.
Vision for employees if we are operating according to our Values:
I am totally committed because my team members and I are encouraged to contribute innovatively, and celebrate and reward excellence in contribution.’
How we create value
- Providing employment and creating job opportunities
- Transforming the employee base to reflect diversity and equality
- Preserving jobs through cautious human resource practices
- Creating an environment where employees are motivated and encouraged to contribute innovatively
- Paying employees market-related salaries and benefits, and rewarding employees for excellence through incentive schemes
- Encouraging learning and sharing of knowledge and developing staff to exceed customer expectations
HOW WE MEASURE THE VALUE CREATED
- Job creation, through the number of full-time equivalent employees
- Diversity, employment equity and gender equality, through the percentage of employees from designated groups
- Employee satisfaction and retention, through annual turnover rate of permanent employees
- Commitment to training and development, through skills development spend
- Organisational surveys which measure perceptions of our adherence to our Values
- Examination of our exit interviews to understand where we are falling short on delivering on our Values
Customers
Intellectual capital
Manufactured capital
Social and relationship capital
Our customers are the consumers of our products and services, and are our primary source of revenue. This revenue-generating capability enables us to ultimately create financial value for shareholders.
Truworths Vision for customers if we are fulfilling our Purpose:
‘Truworths helps me look attractive and feel successful and confident. Shopping at Truworths is exciting because it offers wide ranges of curated and tasteful fashion of superb quality and intrinsic value in real and virtual retail emporiums that are visually appealing and are staffed by passionate and knowledgeable staff.’
Office Vision for customers:
‘I love shopping at Office because I trust that they will help me look fashionable and be well informed on international fashion footwear trends. Office creates a world-class experience and is staffed by fashion footwear experts.’
How we create value
- Offering fashion clothing and footwear which enables customers to look attractive, feel successful and confident
- Selling wide ranges of curated and tasteful apparel, footwear and homeware of superb quality and intrinsic value
- Showcasing unique aspirational fashion brands through an extensive footprint of exciting and visually appealing stores supported by the convenience of online shopping
- Enabling customers to buy merchandise by offering wide-ranging payment methods, including account and lay-by facilities in Truworths
- Developing knowledgeable employees to service customers with passion
- Launching new merchandising brands and store concepts to maintain appeal to customers
- Enhancing the online and e-commerce offering for customers
HOW WE MEASURE THE VALUE CREATED
- The net promoter score measures customers’ likelihood of recommending Truworths and Office respectively
- Growth in new account applications and the number of active accounts are indicators of the demand for Truworths’ merchandise
- Social media following is an indication of brand loyalty, fashionability and desirability of merchandise
How we create value
- Providing employment and creating job opportunities
- Transforming the employee base to reflect diversity and equality
- Preserving jobs through cautious human resource practices
- Creating an environment where employees are motivated and encouraged to contribute innovatively
- Paying employees market-related salaries and benefits, and rewarding employees for excellence through incentive schemes
- Encouraging learning and sharing of knowledge and developing staff to exceed customer expectations
HOW WE MEASURE THE VALUE CREATED
- Job creation, through the number of full-time equivalent employees
- Diversity, employment equity and gender equality, through the percentage of employees from designated groups
- Employee satisfaction and retention, through annual turnover rate of permanent employees
- Commitment to training and development, through skills development spend
- Organisational surveys which measure perceptions of our adherence to our Values
- Examination of our exit interviews to understand where we are falling short on delivering on our Values
How we create value
- Offering fashion clothing and footwear which enables customers to look attractive, feel successful and confident
- Selling wide ranges of curated and tasteful apparel, footwear and homeware of superb quality and intrinsic value
- Showcasing unique aspirational fashion brands through an extensive footprint of exciting and visually appealing stores supported by the convenience of online shopping
- Enabling customers to buy merchandise by offering wide-ranging payment methods, including account and lay-by facilities in Truworths
- Developing knowledgeable employees to service customers with passion
- Launching new merchandising brands and store concepts to maintain appeal to customers
- Enhancing the online and e-commerce offering for customers
HOW WE MEASURE THE VALUE CREATED
- The net promoter score measures customers’ likelihood of recommending Truworths and Office respectively
- Growth in new account applications and the number of active accounts are indicators of the demand for Truworths’ merchandise
- Social media following is an indication of brand loyalty, fashionability and desirability of merchandise
HOW WE CREATE VALUE
- Generating competitive financial returns
- Maintaining a strong balance sheet
- Investing in stores, distribution facilities, technology and infrastructure for future growth
- Retaining income for continued growth and for the organic and acquisitive expansion of the business
- Ensuring best-practice governance and risk management principles are applied across the business
Refer to Value-creating Business Model
HOW WE CREATE VALUE
- Generating competitive financial returns
- Maintaining a strong balance sheet
- Investing in stores, distribution facilities, technology and infrastructure for future growth
- Retaining income for continued growth and for the organic and acquisitive expansion of the business
- Ensuring best-practice governance and risk management principles are applied across the business
Refer to Value-creating Business Model
Shareholders
Financial capital
Our shareholders are the principal providers of financial capital and by delivering sustainable, long-term value, the Group ensures continued access to capital.
Vision for shareholders if we are fulfilling our Business Philosophy:
'We are long-term investors in Truworths International because we trust in management’s capacity to execute innovative strategies which deliver significant value over time.’
OTHER GROUP STAKEHOLDERS
Social and relationship capital
Natural capital
Our broader stakeholder base includes those groupings that have a material direct or indirect impact on our business and influence our ability to create value in the long term.
How we create value
- Delivering on short and medium-term action plans and projects to achieve the strategic objectives of the Group
- Growing revenue faster than expenses over time
- Executing our merchandising strategies, thereby managing inventory levels to ensure that gross profit margin and inventory turn are within guided target ranges
- Maintaining tight control of operating expenses to ensure that operating profit margin is within the guided target range
- Generating healthy financial returns and maintaining an efficient capital structure to ensure that return on equity, return on assets and asset turnover are within guided target ranges
- Efficiently managing the debtors book
- Prudently managing cash, working capital and gearing levels
- Returning excess funds to shareholders through dividends and share repurchases
HOW WE MEASURE THE VALUE CREATED
- Return on invested capital greater than the weighted average cost of capital
- Medium-term growth in headline earnings per share being greater than inflation
- Dividend yield
- Long-term share price appreciation
How we create value
- Contributing to national and local governments, and regulatory institutions
- Supporting local and offshore manufacturers of products, lenders, service providers and property landlords
- Assisting in growing and developing society through good corporate citizenship, transformation and black economic empowerment
- Adopting sustainable business practices aimed at minimising our impact on the environment and contributing to the betterment of society
HOW WE MEASURE THE VALUE CREATED
- Government: contribution of corporate taxes and duties, and legislative compliance
- Suppliers and landlords: purchases of merchandise, other services and rentals paid
- Lenders: meeting interest and capital repayment obligations timeously
- Communities and broader society: social value created through corporate social investment, supplier and enterprise development, and environmental programmes
Shareholders
Financial capital
Our shareholders are the principal providers of financial capital and by delivering sustainable, long-term value, the Group ensures continued access to capital.
Vision for shareholders if we are fulfilling our Business Philosophy:
'We are long-term investors in Truworths International because we trust in management’s capacity to execute innovative strategies which deliver significant value over time.’
How we create value
- Delivering on short and medium-term action plans and projects to achieve the strategic objectives of the Group
- Growing revenue faster than expenses over time
- Executing our merchandising strategies, thereby managing inventory levels to ensure that gross profit margin and inventory turn are within guided target ranges
- Maintaining tight control of operating expenses to ensure that operating profit margin is within the guided target range
- Generating healthy financial returns and maintaining an efficient capital structure to ensure that return on equity, return on assets and asset turnover are within guided target ranges
- Efficiently managing the debtors book
- Prudently managing cash, working capital and gearing levels
- Returning excess funds to shareholders through dividends and share repurchases
HOW WE MEASURE THE VALUE CREATED
- Return on invested capital greater than the weighted average cost of capital
- Medium-term growth in headline earnings per share being greater than inflation
- Dividend yield
- Long-term share price appreciation
OTHER GROUP STAKEHOLDERS
Social and relationship capital
Natural capital
Our broader stakeholder base includes those groupings that have a material direct or indirect impact on our business and influence our ability to create value in the long term.
How we create value
- Contributing to national and local governments, and regulatory institutions
- Supporting local and offshore manufacturers of products, lenders, service providers and property landlords
- Assisting in growing and developing society through good corporate citizenship, transformation and black economic empowerment
- Adopting sustainable business practices aimed at minimising our impact on the environment and contributing to the betterment of society
HOW WE MEASURE THE VALUE CREATED
- Government: contribution of corporate taxes and duties, and legislative compliance
- Suppliers and landlords: purchases of merchandise, other services and rentals paid
- Lenders: meeting interest and capital repayment obligations timeously
- Communities and broader society: social value created through corporate social investment, supplier and enterprise development, and environmental programmes