Material Matters
The Board regards material matters as those matters that could materiality impact how the Group creates or erodes value over the short, medium and long term. The Group revisits its material matters annually, taking shifts in the macro-environment, industry and market trends and changing stakeholder needs into account.
When identifying relevant matters, the Group considers current and potential matters that:
- could substantively affect value creation, including matters related to risks, strategy, governance, performance and prospects;
- are reflected in key stakeholdersโ expectations or concerns; and
- are a focus or priority at Board and executive level.
When evaluating the importance of relevant matters, the Group considers short, medium and long-term quantitative and qualitative impacts across all material areas of the business. The magnitude of potential impact and likelihood of occurrence are also considered.
The 2023 material matters remain unchanged from 2022, and the Board is satisfied that they continue to accurately represent factors that could substantively affect the Groupโs ability to create and sustain value over the short, medium and long term. A risk outlook has been added to reflect the Groupโs thinking on the evolution and future relevance of the risk-related aspects. However, this is not an exhaustive list of all the potential risks and they are not listed in any specific order of priority.
More context is provided on these matters throughout the report, including in the Chairperson, Group CEO, and CFO reports and in the divisional performance sections. Our strategy further considers these matters. Other specific further reading references are provided with each matter.
MANAGING MACRO-SOCIOECONOMIC VOLATILITY
LEVEL OF CONTROL: LOW
Socio-economic volatility impacts the Groupโs ability to grow, directly affecting the cost of doing business and levels of consumer spend.
MITIGATING ACTIONS AND OPPORTUNITIESThe Group is well positioned to capitalise on the opportunities arising from volatile markets and shifting consumer behaviour. Diversification plays a pivotal role in fortifying the Group against unpredictable operating conditions, with technology providing a strong foundation for client retention and acquisition and market share gains. The Group has an integrated approach to acquisitions, strong financial management principles and a clearย capital allocation approach. |
RISK OUTLOOK: INCREASINGThe ripple effects of geopolitical events and high global inflation will likely result in slow global GDP growth. This will place the consumer under growing pressure, eroding buyer confidence and reducing discretionary spend. The impact of surging inflation will be heightened by product shortages and soaring prices in the oil, energy and food sectors. The ongoing conflict in Ukraine has had far-reaching repercussions for the global economy, manifesting in higher commodity prices and supply chain disruptions. With no clear resolution in sight, this situation looks likely to persist throughout 2023 and beyond. The economic consequences are particularly pronounced in Germany and central Europe, where energy-intensive industries face a protracted struggle to maintain competitiveness. In South Africa, unemployment, loadshedding, crime and social unrest will continue to impede growth. The 2024 general elections are also likely to bring significant upheaval toย South Africaโs already volatile political landscape. |
ENABLING TECHNOLOGY TO CREATE VALUE AND SAFEGUARD ASSETS
LEVEL OF CONTROL: HIGH
Technology is a key differentiator for the Group, enabling it to deliver solutions that help clients meet ambitious objectives and leverage growth opportunities.
As technology advances and our lives become increasingly interconnected, the growing risk of cybercrime poses a significant threat to individuals, businesses and governments worldwide. This demands constant vigilance and proactive measures to safeguard against malicious cyber activities.
MITIGATING ACTIONS AND OPPORTUNITIESSuper Group distinguishes itself through leading-edge innovations that enable the business to anticipate change, reduce costs, enhance efficiency and maintain a competitive edge. Our technological expertise is a cornerstone of our investment proposition. We continually invest in digital products and innovative solutions that enhance competitive advantage and develop IT-based solutions to improve supply chain transparency, visibility and efficiency. We also evolve the technology that underpins the Groupโs systems and facilities. Our vigilance against cybercrime includes investing in robust Cyber security protocols and state-of-the-art tools and technologies. We rigorously assess the methodologies, tools and technologies required to prevent cybercrime, conduct regular security audits and establish incident response plans. Employees receive comprehensive training on cyber awareness. Read more in our Digital and IT performance section. |
RISK OUTLOOK: INCREASINGGiven the rapidly evolving nature of cyber threats, achieving complete immunity remains challenging. Fuelled by the expanding digital landscape, the widespread use of internet-connected devices and the increasing reliance on online platforms and services, cybercrime is expected to continue to increase. Advancements in hacking techniques, the underground economy of cybercrime-as-a-service and the anonymity provided by cryptocurrencies have also contributed to theย escalation of cyber threats. |
MITIGATING SUPPLY AND LOGISTICS CONSTRAINTS
LEVEL OF CONTROL: LOW
Global logistics and supply chain disruptions continue to impact the Group, its clients and consumers. These disruptions result in shortages of essential materials and finished goods, heightened logistical constraints and longer lead times.
MITIGATING ACTIONS AND OPPORTUNITIESAutomotive:
Commodities:
Fast-moving consumer goods (FMCG):
Fleet solutions:
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RISK OUTLOOK: INCREASINGThe Group anticipates an escalation of supply chainย disruptions in the foreseeable future. Mounting geopolitical tensions, fluctuating oil and gas prices, the conflict in Ukraine and rising inflation will have adverse effects on manufacturing and logistics, causing ongoing disruptions in supply chain lead times and impacting sufficiency of supply. Delivery delays for ocean freight have increased significantly, with the backlog in Europe worsened by its proximity to the war in Ukraine. Although there are some improvements at the Beitbridge border crossing between South Africa and Zimbabwe, lengthy delays persist. Production in multiple sectors remains hampered by limited availability and rising costs of raw materials, resulting in longer lead times and significant product shortages. The supply of semiconductors remains volatile, with supply challenges expected to extend into late 2023 and early 2024, and the shortage of new vehicles set toย persist. |
ANTICIPATING CLIMATE CHANGE AND ITS PHYSICAL AND TRANSITION RISKS
LEVEL OF CONTROL: MEDIUM/LOW
The Group recognises that climate change can have a significant impact on the business and stakeholders. The need to anticipate and mitigate related physical and transition risks โ including business continuity, resource scarcity, reputational damage, regulatory uncertainty, rising insurance costs and disrupted supply chains โ is critical. These risks could amplify the supply volatility of raw materials, escalate production costs, impose capacity constraints and raise compliance expenses.
Failing to meet sustainability goals could negatively impact the Groupโs licence to operate and damage its credibility among clients, investors and other stakeholders.
MITIGATING ACTIONS AND OPPORTUNITIESSuper Groupโs growth strategy encompasses economic, environmental and social dimensions, ensuring sustainable growth while benefiting stakeholders, society and the environment. The Group continues to integrate ESG perspectives into strategies, business models, processes, policies and systems. It is implementing sustainability initiatives that impact both the environment and organisational effectiveness in a positive manner. Operational and vehicle technologies are cutting-edge, emphasising low-emission solutions and alternative energy supply. Read more on environmental performance. |
RISK OUTLOOK: INCREASINGWith efforts to mitigate climate change failing to keep pace with global warming, extreme weather events, biodiversity loss and food security remain among the worldโs most pressing issues. As a result, regulatory and government interventions will continue to intensify in response to these challenges. There is also growing awareness and activism on climate change issues, with increasing pressure on businesses to contribute to a more resilient and environmentally responsibleย future. |