interview with the group ceo

At the start of FY2022, I voiced my hope that the worst was behind us and I anticipated things to get back to normal. I am both proud and relieved that this statement has proven to be true for IBL Group, albeit some lingering fragility on the socio- economic front.

For over a year and a half, between March 2020 to October 2021, and straddling three of our financial years, the pandemic brought the tourism industry in Mauritius to its knees. Travel was restricted and borders remained closed as the island attempted to stem a humanitarian crisis. Businesses and households had to — and continue to — endure the challenges of disrupted supply chains, soaring shipping costs, hikes in food, fuel and commodities prices, and reduced spending power. Despite this backdrop, most businesses across the group weathered the storm and emerged operationally and financially stronger. The full reopening of borders in October 2021 brought some much-needed relief to the tourism industry, with positive ripple effects on the rest of the economy and on business confidence.

Besides our Hospitality cluster, which unquestionably benefitted from this environment, we saw our Agro & Energy, Commercial & Distribution and Seafood clusters return to growth. Looking back, I am incredibly proud of the resilience and ingenuity of IBL's team members and businesses alike. It is a fact that the pandemic disrupted our activities to an extent no one could have anticipated. However, every disruption provided the impetus to learn and improve. The crisis called for a judicious and targeted deployment of resources and an innovative mindset to cater to new demands in terms of products, services and channels. We were able to demonstrably achieve both.

The past year was also a year of renewal and historic alignment for the group. We are fully aware that high inflation is causing hardships in Mauritius and weighing heavily on families across the country. The war in Ukraine is amplifying this situation and is particularly detrimental to lower-income households and the most vulnerable segments of the population.

As a group with considerable reach and a large sphere of influence, it became vital for us to respond with bolder ambitions and to rethink our potential together. We set out on a course to re-emphasise sustainability's central place as part of the purposeful legacy IBL wishes to leave behind for future generations.

Much of the credit for the group’s much stronger financial performance compared to last year can be ascribed to the Hospitality cluster’s remarkable rebound, which recorded operating profits of Rs 1.6 Bn after two loss-making years. And this despite inflationary pressures and travel restrictions in several markets we either operate in or serve. Our Real Estate and Logistics businesses also improved with the reopening of borders, whilst other businesses such as Afrasia, DTOS and CNOI, which serve many foreign clients, could go back to growing their businesses. As a result, operating profits have increased substantially compared to last year, and for many, profits were higher than before the pandemic.

Beyond delivering strong financial performances, several strategic milestones were achieved:

• In some ways, FY2022 marked a new era in UBP’s chapter. It pursued its transformation into a vertically integrated solutions provider for the construction industry by consolidating Premixed Concrete Ltd as a subsidiary. Building on the improved performances of its overseas subsidiaries, UBP signed a Sales and Purchase Agreement in June 2022 to acquire several manufacturing and trading companies from a key player in the industry in Reunion. Once the conditions of the deal have been satisfied in Q3 2023, this acquisition will strengthen UBP’s presence in Reunion and ramp up its production capacity in the region.
• With travel surging worldwide due to pent-up demand, the Hospitality cluster came roaring back. New management contracts were signed in the UAE and China, and LUX* Grand Baie, the group’s flagship hotel, opened in December 2021 to very favourable response. Our hotels across the world are earning international acclaim and enjoying high occupancy rates due to the ability to constantly raise the bar and meet the expectations of discerning travellers from any part of the world.
• CNOI continues to position itself as a world-class shipbuilding and ship-repair yard. It grew its capacity by over 50% and has already surpassed its own objectives. Additionally, in November 2021, CNOI acquired a 1,500-ton ship- lifting system – the world’s largest mobile boat hoist – enabling up to five ships to be dry-docked simultaneously. This increased capacity will enable CNOI to capture new markets for careering and shipbuilding in the years ahead.
• Winners reaped the benefits of its operational efficiency and a sharper focus. It reaffirmed its commitment towards the Planet and People by revealing a new identity and mission – We are all Winners – at the opening of its new outlet at Victoria Urban Terminal. The pilot store, which offers a larger variety of fresh produce and is equipped with energy-saving equipment, will be progressively replicated in all other Winners outlets to reflect its sustainability commitments.
• Among our associates, Alteo delivered a much-improved performance, with revenues up by 46%. Its residential projects were successfully sold out, and serviced land sales also improved at Anahita. With the announcement of its forthcoming Smart City, Anahita Beau Champ, Alteo aims to develop its landbank on the East Coast in an integrated and sustainable way. To further entrench its position as a seasoned property developer, Alteo decided to restructure into two listed companies: Alteo will consolidate its operations in Mauritius, while Miwa Sugar Ltd will focus on developing its East African sugar operations.

Seeing our businesses transform and achieve milestones of this scale even through waves of uncertainty, I am confident that the unique expertise and competitive advantages that IBL has developed over the years are built on solid foundations. This is why I am full of optimism for our Beyond Borders Strategy, which also gathered steam during the year and will carry the group into the next phase of growth.

Our regional office in Nairobi has a strong team in place to facilitate the development of our network and M&A activities in the region. In June 2022, we reached an agreement to invest in Naivas International, which marks not just one of the major highlights of the year, but also a major milestone in IBL's history. Alongside a consortium of investors, including French and German finance institutions Proparco and DEG respectively, we acquired a combined 40% stake in Kenya's leading supermarket chain in terms of market share and numbers of stores. The acquisition was led to fruition by brilliant M&A, legal and operational teams, making it IBL's highest-value acquisition in terms of figures since our existence.

This investment was considered carefully and we are satisfied that it fulfils our strict investment parameters and objectives. Naivas, which currently has 84 outlets across Kenya, is the fastest-growing supermarket chain in the country thanks to its strong business model and footprint in the mall space. Opportunities for cross-fertilisation are sizable. Our capital, management expertise and governance practices should provide the impetus for Naivas to scale up its network in new cities and regions. For IBL, this is an opportunity to leverage synergies with our logistics, healthcare and renewable energy activities. Much like Winners, Naivas is present in the small towns and villages and is deeply connected to the social DNA of the country, making this acquisition a good strategic fit.

IBL Link is also set to invest in early-stage digital startups in Africa through its new venture capital arm, DotExe Ventures. The fund is still awaiting regulatory approval but is expected to deepen IBL's knowledge of the technological ecosystem and enable us to participate in the extraordinary growth of venture investment in Africa, which stood at US$ 4 billion in 2022. We recognise that there is a learning curve to this craft, and we are committed to it.

Our healthcare operations progressed with the launch of Life Together as the group's new life sciences and health brand. Its mission is to provide traditional and alternative healthcare, with an approach rooted in human values and being as close as possible to patients. Building on our existing expertise in clinical testing and the distribution of pharmaceuticals, we increased our stake in La Clinique Bon Pasteur and acquired NovaLAB to strengthen our clinical R&D activities. Other projects are advancing, such as the construction of C+S as part of a Health and Wellness destination on the West Coast and unique home hospitalisation services in the North. The cluster is confident that its strong knowledge base will enable it to capture market share in the Indian Ocean and mainland Africa. Several partnerships are being explored to this end.

Likewise, Renewable Energy is an attractive area of growth. The Seafood cluster's circular business model and Alteo’s production of biomass energy are meaningful examples of the expertise IBL has developed in niche areas. To take its ambitions further and tap into highly selective solutions beyond solar power, IBL Energy confirmed the addition of new members to its Board. Energie des Mascareignes, a biogas plant launched in December 2021, will further close the loop on waste emanating from Princes Tuna sites, bringing it closer to its vision to become carbon neutral by 2030. Another project set to revolutionise energy production is the deployment of the world's first airborne wind system on the East Coast of Mauritius, which has the potential to significantly reduce the dependence of fossil fuels in the Indian Ocean.

Once again, I would like to emphasise the importance of having the right talents and expertise as we forge ahead in our regional expansion. With this in mind, I am pleased to announce two new important additions to IBL's Board of Directors: Georges Desvaux and William Egbe, who hail from France and Cameroon respectively. They are recognised global leaders with a wealth of experience in Africa, who will both contribute unique perspectives to our growth plans on the continent.

Alongside this, our Human Capital strategy continued to evolve to support our overarching objectives and regional ambitions. Continuous training, talent management and leadership development through the IBL Performance Academy will be critical in ensuring that our workforce is equipped with the skills, capabilities and growth mindset to succeed both in Mauritius and abroad, and that we nurture a strong pipeline of top-tier leaders to steer the implementation of our strategies. It is worth mentioning that over 209 employees across the group expressed an interest to relocate to East Africa in pursuit of their professional and personal ambitions. Pages 84-88 lay out how IBL's Human Capital function intends to play an instrumental role in facilitating the expatriation of our team members to East Africa.

As I look back at IBL's 190-year history, I am struck by how far the group has evolved. I have been fortunate to be part of several historic moments, from when it was still GML, to the amalgamation process, to the nine-cluster strong conglomerate we are today. Yet, the past two years have without a doubt been one of the most difficult, as well as ground-breaking moments in our history. Our innate entrepreneurial and innovative spirit, which was passed on to us by our visionary founders, carried us through the crisis and fuelled transformation at an unprecedented speed and scale. This was apparent in the number and quality of projects that got off the ground, in the increased synergies between entities and clusters, and in the high service levels our businesses were able to maintain.

Innovation continues to be given its rightful importance through numerous workshops conducted at all levels of the group, and through the annual IBL Excellence & Innovation Award, which aims to bring out the creativity of our people and reward out-of-the-box thinkers and entrepreneurs. This also applies to how we think about sustainability.

There has never been a more vital time for businesses to embrace sustainability as a core tenet of their strategy. The pandemic marked new beginnings for IBL in this respect. We took a long and hard look at our sustainability projects and methods — and there are many we are proud of. However, with environmental and social challenges growing ever more urgent, we became aware that the most important undertaking for us at IBL is to leave behind a positive and lasting legacy. Inspired by the recent advances made collectively to brave the pandemic, there is no doubt in my mind that our collaborative spirit can set us apart in building inclusive societies.

The first step was for us to perform a diagnostic of where we are and what has been done across all of our businesses and clusters, and gain an understanding of where we fell short. We began with discussions and workshops with IBL's leadership and senior management teams to identify how to catalyse environmental and social change within their respective businesses, while also expanding economic opportunities.

We then engaged with the Embedding project to adopt a methodology that will enable us to develop a roadmap unique to our group, to our core competencies and to our operating environment. It is a scientific and evidence-based approach that will help us understand the depth of our impacts and our social and environmental limits, and accordingly, offer a contextual plan of action, as well as tangible evidence of progress. Each cluster will build an industry-specific roadmap using what we call the Prioritisation Radar, and sustainability champions have been appointed to serve as strong voices to bring our vision to life.

During the Fresque du Climat awareness sessions, which took place between November 2021 and May 2022, I announced the first group-level pilot project: Sustainable Mobility. As an employer of over 24,000 people, we consider it our duty to be changemakers, and decarbonising our logistics and the commute of our workforce is one area where we can make a measurable contribution to climate action. We expect to launch the project at the end of 2022, after gathering sufficient data and information to make electric mobility a success.

A similar approach is being adopted by Fondation Joseph Lagesse (FJL) through its Research & Evaluation unit, whose aim is to measure, monitor and improve our social impact through data. FJL, which celebrated 15 years of existence in 2021, has served as a valuable partner for several communities in Mauritius. Its areas of focus have been refined to address the most critical issues of our lifetime through literacy, capacity-building and philanthropic programmes.

The transformation of Bois Marchand and Chemin Rail is a powerful testimony to FJL's decade-long commitment to reducing poverty sustainably.

We have a long way to go, but I am confident that together, we are moving towards more purposeful and meaningful actions.

IBL is entering a new year on a very strong footing, with even more positive prospects on the horizon. The deal concluded with Naivas International is a strong statement of both our willingness and ability to establish a presence in Africa. Our growth plan is to pursue our Beyond Borders Strategy across key regions in East Africa as well as neighbouring islands when attractive opportunities arise.

Concurrently, we are keeping a watchful eye on the unfolding war in Ukraine, inflation, benchmark interest rate hikes and shifting market trends, which could present hurdles or additional challenges.

I am grateful to the Board of Directors, under the chairmanship of Jan Boullé, for its guidance and support throughout this year. I would like to express a special note of gratitude to Pierre Guénant, who sadly passed away in September 2022. He was an accomplished entrepreneur who made outstanding contributions to IBL over the course of seven years, as Chair of the Strategic Committee and an inspiring mentor to me. His departure will be deeply felt, and our heartfelt condolences go out to his family.

I would also like to welcome our new Board members, George Desvaux and William Egbe, who will bring solid experience and proven track records in their respective fields. To our strategic partners, thank you for your trust and confidence in us.

I would like to congratulate our employees for valiantly confronting the pandemic and for demonstrating that we are more than capable of rising to the challenges. I feel immensely proud to be leading a group of talented and hard-working people. IBL is committed to investing in all of you and helping you bring out your full potential.

My final message would be that together, we have endured some of the most difficult years in our lifetime. And we have come out stronger. I look forward to another year of striving for excellence together, at every level, in everything that we do, and to continue writing new chapters in our story where we continue creating sustainable value and prosperity.