For the past two years, we have strived as a Group to explore avenues to better manage our environmental impact. We believe that it is crucial that we, as individuals, companies and consumers, become more mindful in our strategic management, as well as day-to-day decisions and activities. We also believe in offering products and services that are both innovative and more environmentally friendly.

Sustainable Development Goals (SDGs) sensitisation

In January 2016, world leaders agreed on an action plan based on 17 goals that will help make the world a better place to live in by 2030. All countries, including Mauritius, are called upon to contribute to the protection of our planet.

Thus, our ambition is to raise awareness among the Group's employees on these 17 SDGs so they become more engaged in sustainability actions both at work and in their everyday life. Each week, for a duration of 17 weeks, an internal communication is sent for each one of the 17 SDGs, illustrating examples of simple actions that can be taken to implement them.

Simultaneously, a quiz competition is organised at regular intervals to provide a fun and engaging way to learn. In order to develop intrapreneurship, we will further encourage employees to come up with projects based on what they have learnt. The winners of the best projects will be rewarded.

Energy Management

After analysing the results and recommendations given by ISODOM regarding our transport fleet, we decided to support the migration from fossil-based energy to other alternatives such as renewable sources for our transport activities. We have modulated our car scheme to encourage our employees to switch to hybrid and electric cars. We are also promoting an incremental improvement of our fuel management system. The importance of an accurate fuel measurement system is key in helping us keep track of the fuel used by our transport fleet. We have recently implemented a card-based fuel monitoring system within the Group that will allow us to improve fuel efficiency, while sensitising vehicle users on how their driving style will impact fuel consumption, emissions, and costs.

In terms of electricity use, we observed a 10.3% reduction in Co₂e emissions this year. However, this is mostly attributed to the COVID-19 lockdown, as well as some gains in efficiency at Gros Cailloux (see Resource Management overleaf). Furthermore, we are transitioning from a low-voltage metering system to medium-voltage metering at our Geoffroy and Poudre D’Or sites. This will not only help us improve efficiency but also enable us to benefit from more advantageous tariffs.

During the year, we increased our total headcount by 7.6%, reaching a total of 1,399 employees locally. We are proud that, at the time of writing, none of our employees have lost their jobs as a direct result of COVID-19.

In terms of gender parity at Group level, we have positively noted that the gender gap is closing with an increase of 3% in women with respect to our total workforce. The biggest increase in women employment is at staff level.

Despite this improvement, we still have a disproportionate number of men (77%). We have also noted a decrease of 1% in the proportion of women occupying Senior Management positions.

It is important to highlight that the Group follows the recommendations of the Equal Opportunities Commission (EOC) and is committed to providing equal opportunities and treatment to all its employees in terms of recruitment, training, promotion, transfer, benefits, and discipline, without discriminating on the basis of any personal characteristics as enunciated by the prevailing legislations.

Engagement and satisfaction

This year, we carried out an Employee Engagement survey within the Group which assessed how engaged and enabled employees feel.

Occupational Health and Safety

We are saddened to report one fatal accident at UBP this year.

In October 2019, we lost one of our colleagues, Mr Swaley Cheekhoory after he was hit by a third party truck at our Geoffroy site. Mr Cheekhoory, 55 years old, had been working with us for over 31 years. It has been an honour and a privilege to count him as one of us and he will be deeply missed and remembered.

“This tragic event comes to remind us, in a brutal way, that some of our professions are risky, by their very nature. Our strict safety rules help mitigate, if not eliminate, most of these risks. There is no such thing as zero risk, but the only way to get as close as possible to it is to make security a state of mind, and not just a set of rules. It is our duty to all, without exception, if we are to be able to say: never again.” Stéphane Ulcoq, Group CEO.

The lagging indicators, incident and severity rates, follow the same trend as for the past three years. The lockdown period due to COVID-19 has reduced the number of working days, causing an increase in rates. One fatality increased the lost time to 260 calendar days, in addition to one road accident involving seven workers.

Our leading indicators towards creating a safer workplace

At the time of writing, 741 employees have followed the “work in complete safety” training course. Several types of hazards were discussed such as falling on the same level and from machines, electrocution, chemicals, fire, noise pollution, working at height, handling heavy objects, and more general risks which have been added such as road accidents or violence at work.

Other proactive actions were undertaken to review the different risk assessments, job safety analysis, health surveillance of our workers, performing fire drills and organizing regular meetings where workers expressed their concerns about health and safety issues.

COVID-19 IMPACTS

We have reduced overtime and travelling allowances, not basic salaries.

In May 2020, we published our ‘Back to Work’ guidelines in preparation for the post-lockdown opening of the country’s economic activities. Overall, whenever possible, we encourage the Work from Home modality and digital meetings. Luckily, at the time of writing, there are no active COVID-19 cases within the public, meaning that face-to-face meetings and working in the office have also been possible when required. At this time, no UBP employee has been tested positive.

In terms of Health and Safety on-site, the guidelines covered various topics including:

For the smooth running of operations and on-site precautions:

(1) Disinfection and cleaning of the Company’s premises, (2) Masks, gloves and safety glasses, (3) Company’s transport arrangement, (4) Time & attendance and body temperature checks, (5) Opening of doors, (6) Wearing/removing a personal protective equipment (mask, gloves and safety glasses) and (7) Getting back home.

Other day-to-day activities:

(1) Work from Home for specific employees usually not involved in production, (2) Digital meetings, (3) Deliveries, (4) Learning and training, (5) Messrooms, canteens and meeting rooms, (6) Welcoming visitors and guests and, of course, (7) What to do in the event of symptoms.

Supporting our employees

NOU BAZ LIR

Dictionaries, encyclopaedias, grammar books and novels are among the many books that will soon be at the fingertips of all our employees.

Our Book Happiness Project initiated in June 2019 has been rebranded - Nou Baz Lir.

We care for the overall experience of our employees, hence they were invited to find a name for their new library via a poll on our Facebook page.

This initiative stemmed from a partnership with the Mauritian Association ‘Food For Thoughts’ that had about 4500 books for children aged 6-17 and adults, recovered from libraries in France. These books were made available to UBP as part of a welfare project to create libraries for our employees.

Geoffroy production plant, UBP Engineering division, Espace Maison and Gros Cailloux are the first pilot sites to be equipped.

HUMAN

Knowledge Transfer Programme

In an increasingly competitive world, our Group is banking on the fact that employee experience is a growth driver. This is why we choose to value management based on collective intelligence. Our employees have extensive knowledge about their individual roles, business processes, the data that supports their positions, including how to work as efficiently as possible. As a number of employees are expecting to retire within the next five years, we are currently putting together a Knowledge Transfer Programme which will be integrated in our internal training academy. While the details of this programme are yet to be finalised, the aim is to enable the collective sharing of valuable experiences between our employees to guarantee a sustained improvement in the Group’s development and performance, to increase the skills of our employees, reduce the turnover rate of the new generations and to enable them to acquire new skills that promote motivation. The programme’s objective is to create connections and relationships between the different generations. This human approach is in line with our DNA as a business.

ORGANISATIONAL

Monitoring operational performance

We have recruited a Group Financial Controller whose role is to design dashboards and develop management tools in order to better monitor performance and drive efficiency within the Group.

Data and information management

We recently hired a new Risk and Compliance Officer whose role includes ensuring compliance with the prevailing data protection laws via a well-defined Data Protection Management Programme (DPMP). She will assist in the implementation of a new SharePoint system that will allow us to better manage our data and information, in a centralised and secure way. This system will work together with our new CRM being developed within our group campanies.

ISO certifications

Following its ISO 9001 certification a few years ago, Drymix has been levelling up its accreditations as a proof of its expertise, reliability and impartiality. The new version of ISO 9001 emphasises risk management. In order to meet this requirement, Drymix has implemented a quality assurance system to minimise risks of non-conforming products.

In the same vein, Drymix’s laboratory is committed to undertaking a real quality journey. It will soon be the first local and regional laboratory to obtain the ISO/IEC 17025 accreditation for the testing of tile adhesives. The implementation of the ISO/ IEC 17025 standard in Drymix’s laboratory was an enriching experience for all the laboratory staff, as the standard aims at ensuring a high level of professionalism and instilling a work culture built on critical thinking and rigorous methodologies that every laboratory, accredited or not, must demonstrate in order to produce reliable testing results.

IT systems

At Espace Maison, we believe in blending digitalisation with the conventional way of doing business. The current digitalisation strategies typically focus on increasing productivity. Demonstrating agility and maintaining efficiency are, however, equally important as evidenced by the COVID-19 pandemic. Over time, and now more than ever, we have understood that our future lies in digitalisation. Some of the measures we have taken this year include the introduction of a mobile app for employees in June 2020 and the launch of Club Espace Pro, a service and mobile app dedicated to professionals in the industry. Our vision for the future is to integrate Virtual Reality (VR) and Augmented Reality (AR) into our way of conducting business.

Since January 2020, the Group has shifted from onpremise solutions to a cloud Office 365 solution for a more reliable and secure backup of our data. Office 365 further enables us to create, collaborate and communicate seamlessly, thereby enhancing effectiveness within the Group. This was all the more useful in keeping everyone connected during the lockdown.

Our Application and Database servers, which were until now hosted in-house, were also relocated to a Tier 4 colocation data centre. The Tier 4 data centre certification provides us with the following advantages: 99.995% uptime per year, a fully redundant infrastructure, 96- hour power outage protection and low annual downtime of 26.3 minutes. In terms of security, redundancy, performance, infrastructure, compliance and costs, the Group will benefit greatly.

While we have progressed in the area of digitalisation, we are aware that much remains to be done. We intend to continue introducing digital tools that enhance our organisational efficiency.

RELATIONAL

Building on the B2B market

At Espace Maison, the launching of Espace Pro unveiled the many potential business opportunities within the B2B segment. Consequently, appropriate strategies have to be adopted to position Espace Maison as a B2B player. We further aim at developing an annual Pro Book displaying our whole range of products and new ins. In our opinion, the B2B market offers great opportunities for growth provided that it is supported by a superior after-sales service.

At UBP, our UBP Partner Programme offers a dedicated platform to our truck owners, many of whom are our direct buyers. We provided dedicated personal support during the lockdown period, which helped strengthen our relationship with this specific segment. In a view to attract and retain customers, UBP is now looking forward to revisiting its customer journey, which will include a unique hotline concept.

In the wake of COVID-19, serving our stakeholders has never been more crucial. As inscribed in our Code of Ethics, our ambition as a national player and responsible citizen is to continue to be part of the long-term sustainable development of our communities through meaningful civic and social actions. This is in line with our values and our raison d’être “Building together a better living environment”. The Group also highly encourages the participation of employees in community activities.

MAINTAINING ETHICAL RELATIONSHIPS

Over the years, our Group has built and maintained public confidence by being committed to conducting business with the highest level of ethical standards, integrity and fairness in its dealings. This remains one of our top priorities and material matters as a Group. Our ethical obligations and responsibilities are described on our website.

For more information, please refer to the Corporate Governance report.

OUR CSR FOCUS AREAS FOR FY2020

Total amount spent: Rs 1.9 million

Education and inclusion are two major focus areas that are at the heart of our sustainability agenda and therefore represent over 50% of our CSR budget. Our ambition is to be a committed partner to NGOs that are specifically devoted to developing and empowering future generations.

OUR SPONSORING FOCUS AREAS FOR FY2020

A new Sponsoring Committee was set up during the year. It comprises representatives from the Communication, Finance, Human Resources, Production, Sales and Sustainability departments. The eight members assess requests for sponsoring falling under five predefined focus areas: Exclusion, Education, Sport, Culture, Environment, and Socio-Economic Development. Sponsoring requests are submitted to the Committee, which analyses them based on set criteria before approval. Every fiscal year, the composition of the committee changes to give other employees the opportunity to get involved in sponsored projects.

Total amount spent: Rs 1.6 million

Sport has been a fundamental component of our sponsorship efforts and budget for many years. We diligently participate in major national sporting events, including the UBP National Tennis Championships, as we believe that sports is a school of life with the transformative power to drive positive change. It contributes to the holistic development of the youth by instilling values like hard work, team spirit, discipline, fair play and respect, while building capacities like leadership and communication skills.

In these troubled times, the committee has chosen to focus on projects aimed at limiting exclusion. We have responded favourably to the call of several associations for improved living conditions of vulnerable groups.

During the year under review, we observed a decline in most of our inputs and outputs. We noted a slight decline as from January 2020, a hard crash in April, and an upward curve again in May-June as we obtained our work access permits (WAPs) to resume production after the lockdown was lifted. In the months of May to June, production and sales picked up rapidly and were slightly above the pre COVID-19 monthly average. As a result, it seems the short and medium term impact has not been overly severe.

CORE BUSINESS (LOCALLY)

We experienced a decrease in most of our outputs compared to FY2019, except for precast slabs. The surface area of precast slabs sold increased by 13.6%, due to the shifting of customers from traditional in-situ concrete construction to precast concrete slabs to catch up on delays in construction projects caused by the lockdown. Our precast products offered a better alternative in achieving time and quality effectiveness.

The impact of the lockdown on our aggregates and blocks sales figures are illustrated in the two graphs below. As previously mentioned, the impact on the Group was short-lived as we were able to quickly pick up steam.

SALES TREND OVER THE PAST FIVE YEARS

The graphs below show the long-term trends in sales of aggregates and blocks. This also serves as an interesting overview of the construction sector over the past few years. As mentioned in our 2019 Integrated Report, trends in FY2019 were extremely conducive for us and we were well positioned to harness the opportunities brought to us by these economic macro-trends. The impact of COVID-19 on our Group and on the construction sector seems to be a rather short-term one; however, the pandemic is far from over and other affected sectors and the rest of the world are still reeling from the shock. Although indicators show stability for us, we remain vigilant and are continuing to work on the improvement of our strategic and operational agility.

The layout of our concrete blocks production:

GROS CAILLOUX

In line with our strategy to adopt smart agricultural practices, we are pleased to note a decrease in our various inputs in terms of fertilizers, chemicals, and pesticides per hectare. This decrease is also due to formulation amendments that were made to correct high magnesium contents in the soil. On the other hand, the lower herbicide consumption is mainly attributed to the decrease in acreage under sugar cane.

We have reduced our sugar cane plantations due to the falling sugar prices worldwide, abandoning crops with lower yields and favouring vegetables cultivation instead. However, despite an increase in vegetables output, overall yields for our major crops were significantly lower than expected. Bad weather conditions coupled with thefts during the lockdown exacerbated the situation.

Revenue generated by our leisure park has seen a decline and has yet to return to pre COVID-19 levels.

OUR NEW PRODUCTION FACILITY

A new facility is being set up at La Mecque, in the west of the island. The Building and Land Use Permit (BLUP) was issued in August 2020 and we aim at beginning operation by the end of 2020. The site will be equipped with one mobile crushing plant purchased during FY2019 that has been so far used as a backup unit. With the help of the mobile plant, we can quickly move from site to site, with minimal logistical hassle. We can now operate closer to the quarry site, thereby reducing transport and other recurring costs. Commissioning and start-ups of such units also require less time.

UBP main CAPEX Investments for FY2020

FINANCIAL PERFORMANCE REVIEW

Prior to the COVID-19 outbreak, our performance for FY2020 was on track to be a record one. The construction industry’s growth rate for calendar year 2019 was 8.5% (2018: 9.5%) while the forecasted growth rate for 2020 was yet encouraging with several major public infrastructure and property development projects underway and in the pipeline. Post-COVID, the latest available indicators for calendar year 2020 predicts a decline of around 20% based on a modest private sector construction-related investment and a pick-up of public infrastructure construction works during the second semester of 2020. This turnaround has impacted severely our performance and resulted in a drop of our Group net profit from Rs 207.3 million in FY2019 to Rs 21.9 million for the financial year under review.

Hence, after four years of growth, our Group revenue for FY2020 decreased by 11% to Rs 2.9 billion from Rs 3.2 billion in FY2019. This drop was mainly attributable to our core business activities segment and this despite an increase of 7% to 8% in our selling prices effective partly as from February 2020.

Between July and December 2019, our Group revenue increased by 6.1% compared to previous year, driven mainly by our core business and retail segments. During the first quarter of 2020, our core business revenue went down by 13.4% compared to the same period in 2019 due partly to delays encountered by ongoing major projects and to the bad weather conditions prevailing and also to the lockdown imposed as from March 20, 2020. Hence, our Group revenue for the nine months period ended March 31, 2020 increased by only 1% compared to previous year.

Upon resuming our activities as from mid-May 2020, our core business sales were boosted by the need for construction sites to catch up on progress of works while the revenue from our retail activities was positively impacted by higher spending from customers post-COVID and by promotional sales. Despite this, our revenue for the quarter to June 2020 dropped by 47.4% to Rs 422.5 million compared to Rs 803.7 million for the same quarter in 2019.

Consequently, our 11% Group revenue drop for the year under review was attributable respectively to a drop of 13.6% and 3.7% in our core business and retail segments revenues and an increase of 9.2% in our agricultural segment revenue, attributable mainly to our landscaping activities.