By turning the spotlight on enhancing the efficiency of our operations, we are shaping our business for a profitable and sustainable future for the benefit of all our stakeholders – targeting US$100 million cumulative revenue, cost savings and productivity improvements over the next four years, to 2021.
TIME FOR CHANGE
The Group has in recent years faced short and medium-term price pressures, challenging operational conditions and increasing costs related primarily to deeper mining, increased waste and longer haul distances. These factors have placed increasing pressure on margins and cash flow, in particular over the past two years. In response, management embarked on streamlining the business in 2016 with continued cost control focus in early 2017. In February 2017, the Group identified the need for a formal business review process, For more information on the Business Transformation tracking please refer to the 2017 and 2018 Annual Report and Accounts, 2018 Half-year Report and relevent trading updates the roll-out of the Group-wide Business Transformation commenced in the second half of 2017.
A dedicated Business Transformation team, headed by the Chief Business Transformation Officer, and fully supported by the Chairman and Board of Directors, has been tasked to ensure the successful implementation and ongoing sustainability of all revenue, cost reduction and productivity improvement opportunities. These opportunities were primarily generated by the entire workforce through focused idea generation sessions to drive bottom-up innovation and ownership.
The organisational health of the Group underpins the success and sustainability of the Business Transformation and through an organisational health index (OHI) survey, areas requiring improvement were identified and are being addressed. For more information on the Business Transformation tracking please refer to the 2017 and 2018 Annual Report and Accounts, 2018 Half-year Report and relevent trading updates. The Business Transformation employee recognition and reward scheme, which will be self-funded through the gains of the Business Transformation, has been developed and implemented to recognise and reward the dedication and performance of the Group’s employees in driving the Business Transformation
Through a vigorous planning phase, more than 200 initiatives were initially identified, targeting cumulative cash cost savings and productivity improvements of approximately US$100 million over the next four years (net of implementation costs and fees). Thereafter, an annual run rate improvement of approximately US$30 million has been targeted from 2022 onwards compared to the 2017 cost base.
The implementation phase of the Business Transformation commenced in the fourth quarter of 2017 and has continued its momentum For more information on the Business Transformation tracking please refer to the 2017 and 2018 Annual Report and Accounts, 2018 Half-year Report and relevent trading updates.
For more information on the Business Transformation tracking refer to the latest Annual Report and Accounts, Half-year Reports, relevant trading updates and press releases.