Brand South Africa

2011/12ANNUAL REPORT

Presentation by Miller M Matolato the Portfolio Committee on Communications

12 October 2012

Brand South Africa

Contents1. Brand South Africa Annual Report Highlights2. Governance 3. Overview of the 2011/12 Strategy Strategy Map4. Nation Brand Performance5. Brand Strategy Development and Management6. Reputation Management7. Country Reports8. Sustainability Report9. Brand SA structure 2011/1210. Financial Statements11. Performance Results

Brand Strategy Development & Management

Reputation Management

Brand Knowledge & Performance Management

Stakeholder and Partner alignment and Integration

Organisational Development

Positively changed perceptions about South Africa amongst target audiences

Articulated and contextualised South African policy

Increased economies of scale and scope

A sustainable organisation

2011/12 Highlights

The International Marketing Council is renamed Brand South Africa after its Trust Deed is amended.

Brand South Africa’s new payoff line, ‘Inspiring new ways’, is approved by Cabinet.

More than 1 500 published articles generated by Brand South Africa’s media campaign.

SouthAfrica.info, the flagship of Brand South Africa’s websites, continued to perform strongly, serving some 450 000 users monthly, making the site one of the busiest in South Africa.

Eight provincial workshops staged to introduce stakeholders to the new name and payoff line.

Brand South Africa participates in COP 17 in Durban, a gathering of the parties to the Kyoto Protocol.

Four international trade initiatives supported. State visits to Mozambique, Norway and United Arab Emirates

supported. The Global South Africans ambassadors programme is extended to

Australasia.










2011/12 Highlights

Brand South Africa takes part in two BRICS summits. Four media delegations from 12 countries were hosted and

familiarised with South Africa’s investment opportunities. The second Brand Africa Forum was hosted by Brand South Africa in

September 2011, providing a forum for global thought leaders. The Formula for South Africanness project launched to further the

goal of social cohesion. A teambuilding exercise was held in November 2011 to promote a

shared understanding of the organisation’s vision and processes. SmartHR, an HR Information Management System was installed and

deployed. A total of 25 contracts and agreements were signed during the year

in the areas of marketing and communications, finance, corporate services and stakeholder relations.

Four CSI projects were supported during the year: Business Women’s Association; Meals on Wheels; Ebenezer Home for the Destitute; and Vega School.

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GOVERNANCE REPORT

GOVERNANCE

Brand South Africa is a Schedule 3A public entity governed by a Trust Deed, signed in 2002 and reports to the Minister in the Presidency responsible for monitoring and performance evaluation.

Trust Deed amendments: name change from International Marketing Council of South Africa to

Brand South Africa; Change in reporting lines from the GCIS to the Presidency; Appointment of new Board members.

• The Accounting Authority, (S49 PFMA), is the Board of Trustees appointed by the President of South Africa.

• The Board comprises 12 independent and 9 provincial members and 3 government representatives.

• Membership is voluntary and Board members receive no remuneration.

• The Board meets four times a year and we had 1 resignation during the year.

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OVERVIEW OF THE 2011/12 STRATEGY

Brand South Africa Mandate

National

Priorities

GDP growth, job creation, poverty eradication, social cohesion, National

Vision for South Africa – Vision 2030

Desired impact

Increased

international

competitiveness

Improved international

reputation

Increased

brand equity

VisionSouth Africa acknowledged as a Top 20 Nation Brand and a Top 30 Nation

in the WEF Global Competitiveness Index by 2020

International

mandate

To build South Africa’s Nation Brand reputation in order to improve South

Africa’s global competitiveness

Domestic

mandate

Build Pride & Patriotism amongst South Africans and contribute to social

cohesion and nation brand ambassadorship

Desired Outcomes and Strategies

Brand SA’s

MANDATE relative

to South Africa’s

needs...

To build South Africa’s Nation Brand reputation

in order to improve South Africa’s global competitiveness

It aims to fulfil this

mandate by

achieving the

following

OUTCOMES

1. Brand Alignment by

stakeholders

2. Increased Pride and

Patriotism amongst South

Africans

3. Positively changed percep-

tions about South Africa

amongst target audiences

1. Brand strategy development and

management… by undertaking

the following

6 STRATEGIES

3. Brand knowledge

management and

performance

management

4. Articulated and

contextualised South

African policy

5. Increased economies of

scale and scope

(sustainable organisational development)

6. A sustainable organisation

2. Reputation management

4. Stakeholder and

partner alignment

and integration

5. Organisational

development

6. Prudent financial

management and

controlExternal FocusInternal Ops

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NATION BRAND PERFORMANCE










GLOBAL CONTEXT

During 1990’s Simon Anholt coined the term ‘Nation Branding’. The way a country is ‘seen’ or ‘perceived’ makes the difference when business leaders consider investing in SA.South Africa improves its position in the annual Anholt-Gfk Roper Nation Brand Index from 37 in 2010 to 36 in 2011.Significant changes in the global environment and international arena:

Global Financial Crisis Greek sovereign debt crisis in the Eurozone SA’s inclusion in the BRIC – nucleus of opportunity. This bloc currently contributes 1/3

of world growth in GDP; and 75% global growth by 2020 (Ernst & Young). SA’s strategic position on the African continent Sub-saharan Africa recognised as a key emerging market to drive global economic

growth Business Monitor International predicts the regions economy of US$ 3.84 billion (by

2021) larger GDP than France. If this growth persists the region will rank among top ten largest economies.

United Nations Conference on Trade and Development (UNCTAD) – a significant decline in inward investment in SA due to reduced merger and acquisition activity in the market. Despite this decreased inward flow of investment ($9 billion in 2008, $5,4 billion in 2009 and $1,6 billion in 2010), investor confidence remained high for SA, (AT Kearney placed SA 11th best investment destination in November 2011).

SOUTH AFRICA’S PERFORMANCE ON KEY PILLARS OF COMPETITIVENESS The figure below indicates the strengths and weaknesses of the

South African environment relative to the BRIC countries.

Source: World Economic Forum’s Global Competitiveness Index

SOUTH AFRICA’S PERFORMANCE ON KEY PILLARS OF COMPETITIVENESS SA is close to or equals the ratings of its BRIC counterparts, on six

of the 12 pillars, namely infrastructure, macroeconomic environment, higher education & training, technological readiness, business sophistication and innovation.

SA outperforms its BRIC peers in three crucial aspects: goods and market efficiency, financial market development and institutions.

SA lags behind its BRIC peers in three pillars, namely health and primary education, labour market efficiency and market size.

A central focus for SA, and in particular, Brand SA should be deeper and more constructive engagements with key markets in the ‘Southern Century’. This concept relates to BRICS and African nations fast changing the operational environments and power constructs that underlie the prevailing international political economic order.

PROJECT THRIVE: KEY RESULTS

Project Thrive has five key research objectives. First: aims to understand the current perceptions of South Africa as an investment

destination among the business elite. Second: determine drivers of investment decisions and how South Africa delivers on

each. Third: identify competitors to South Africa, while also assessing who is open and who is

not open to investing in South Africa. Fourth: assess the awareness and perceptions of South Africa’s policy and regulatory

environments to understand how South Africa is perceived as an investment destination.

Lastly, to evaluate economic sectors in terms of levels of investor awareness of business opportunities.

PROJECT THRIVE: KEY FINDINGS

Overall, only 30% of international investors are investing in SA. Some 40% of all respondents are not at all familiar with SA. Compared to China, India, Brazil, Russia, South Korea, Indonesia,

Turkey, Nigeria, and others, SA ranks fifth as the best in which to do business.

China is first, India second, Brazil third and Russia fourth. Half of all respondents have never done business in SA. The three best countries in which to do business are Germany,

followed by the USA and the UK. Respondents from Zimbabwe (93%), Egypt (25%), Nigeria (21%),

and Kenya (20%)rank SA highly in terms of best place in which to do business.

BOOM SURVEY: KEY FINDINGS

Project Boom assesses how current investors perceive SA as a business destination. It has four primary research objectives.

Firstly, aims to understand the business environment relative to competitor countries according to investors currently active in the market.

Secondly, it develops insight into the differences between views of current investors and perceptions of non-investors.

Thirdly, research findings are used to develop messaging points on SA for potential new investors, and to determine the reputational effect of positive and negative word of mouth.

Lastly, the project highlights and understands investor concerns about conducting business in SA.

During the year under review, 66% of respondents from international multinational corporations (IMNCs) indicated that they will continue investing in South Africa during the next five years.

85% of respondents from SA multinational corporations plan to continue investing in South Africa during the next five years.

South Africa, is ranked second as ‘best place in which to invest’ (at 31%).

First was China (38%), third Brazil (14%), fourth India (7%) and fifth Russia (3%).

WHAT ATTRACTS COMPANIES TO INVEST IN SOUTH AFRICA?

2011 2009 2007

INTERNATIONAL MULTINATIONAL CORPORATIONS (IMNC’S) PERCEPTIONS OF SOUTH AFRICA

What motivates IMNCs to invest in South Africa are; developed infrastructure; growing market; hub for other countries; low cost and business opportunities.

The two headline concerns raised by IMNCs are crime and corruption.

INTERNATIONAL MEDIA COVERAGE 2009 - 2011

Volumes of mentions of SA by country of origin. SA received the most mentions in UK, France, Angola and Zimbabwe.

NATIONAL PERCEPTIONS AUDIT (NPA) 2011

The NPA has been conducted since 2003 to contribute towards the Brand SA mandate of building national pride. It is based on a national representative sample of 2 524 adults aged 15 plus (excluding communities of fewer than 500 people).

The research vehicle is the futurefact survey, which surveys underlying attitudes, values and beliefs of South Africans since 1998.

It identifies trends shaping South African society and to predict how these trends are likely to play out in the future.

The most significant finding of the NPA is that South Africans are, on the whole, positive about the country. The South African mindsets, include enthusiasts; solid citizens;

pessimists; influentials and conventionals. 41% of citizens are enthusiasts who strongly identify with the country. Some 16% of all South Africans are considered to be influentials. They

are usually middle-class South Africans who are actively involved in making South Africa a better place for all.

57% of all South Africans are enthusiastic about the country and will actively contribute to achieving a better life for all.

The SOUTH AFRICAN MINDSET (NPA 2011)

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BRAND STRATEGY DEVELOPMENT &

MANAGEMENT










BRAND ALIGNMENT

This programme ensures that all partners and stakeholders responsible for marketing SA align to the Corporate Identity, messaging and imaging, behaviours and values.

Stakeholder Summits: Conducted in 8 provinces; provincial economic development, trade

promotion and tourism agencies participating. Each Summit presented South Africans who are active Brand

Ambassadors.Mobilisation Campaign: Key driver is the ‘Play Your Part’ campaign Goal is greater social cohesion. Contribute to nation building. Stimulate social conscience and encourage active citizenship. 13-part TV series (SABC 1)









BRAND ALIGNMENT

Brand South Africa online:Served more than five million unique users.SouthAfrica.info portal is our flagship serving some 450 000 users monthly.MediaClubSouthAfrica.com a valuable tool for journalists.PlayYourPart.co.za – is a new site to host the domestic campaign - launched in the last quarter.

Social media:Facebook followers increased by 9.7%.Twitter followers more than doubledLinkedIn.

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REPUTATION MANAGEMENT

DOMESTIC INITIATIVES

Brand Africa ForumSecond Forum hosted in September 2011 with more than 240 delegates and 33 speakers.Cop17December 2011, Brand SA Partnered with the Financial Times to host a roundtable.Mining IndabaHeld in Cape Town in February 2012. Brand SA held a roundtable discussion focussing on an implementation plan for beneficiation, amendments to the Minerals Act and mining sustainability post Cop17.

INTERNATIONAL INITIATIVES

WEF Davos 2012Fourth year, SA enjoyed a major presence at WEF Davos in Swtzerland.BRICSThird BRICS Summit – Sanya, China in April 2011. SA’s status as a globally important emerging country was affirmed.Fourth BRICS Summit – New Delhi, India March 2012. 25 media interviews were facilitated and a CNBC panel discussion brokered. This generated an advertising value equivalency of US$ 125,000.State Visits and ITI’sImportant aspect of Reputation management to ensure articulation of SA policies to international decision makers.ITI initiatives in Shanghai and Beijing; media programmes developed to support visits to Russia, Brazil, Zimbabwe.Support for State Visits to Norway, Russia, UAE, Mozambique and China. International Olympic Committee (IOC) 123rd annual meeting in Durban first session held on the continent.

COMPARATIVE TREND LINE: MEDIA COVERAGE REPORT

Dewani Extradition

Walmart & Massmart approval

Nelson Mandela’s 93rd birthday

COP 17

ANC centenary

Nelson Mandela’s health problems

G20 Summit

Viral Gang rape

SA sanctions on Iranian oil

import

Change of Data Source

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COUNTRY REPORTS

TARGET MARKETS

UK AND USA

USA:SA born population in the USA is now 80 000. Two indabas to support Team South Africa in New York and Washington.Web-based newsletter Team SA News, introduced and an online calendar shared.Market specific materials (collateral) developed.Exhibition: SKA astronomy megaproject.Unprecedented wine sales during a Food exhibition in November 2011 gaining 4000 social media impressions.US-SA Women’s Business Forum in Chicago.UK: Britain has the largest expatriate SA population of some 550 000 (2005).Strengthening the Global SA’s NetworkSupport to Team SA Indaba organised by the High Commissioner in May 2011.SA and UK fund managers consolidate investor confidence in the middle income housing sector in SA.

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SUSTAINABILITY REPORT

HUMAN RESOURCES

Approved posts – 39

Filled positions – 28 (72%)

Vacant posts – 6 (15.4%)

salary bill = 19.5% of Total budget.

Disabled = 0 - HR plan designates a post for a person with disabilities.

Recruitment programme underway to drive the filling of all vacant posts. All vacant posts have been advertised and interviews are underway.

Introduction of a Talent Management programme in new year to improve attraction, retention and succession.

For the period under review Brand SA Employment Equity statistics are as follows:

Black 21 Coloured 1 Indian 1 White 5 Disabled 0

EMPLOYMENT EQUITY STATISTICS AS AT 31ST JUNE 2012

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BRAND SA STRUCTURE 2011/12

BRAND SOUTH AFRICA STRUCTURE 2011 – 2012 (31 March 2012)CEO

Miller Matola

Research ManagerVacant

Digital Content Manager

Barry Hiles

DirectorStrategic Marketing & Communications

Nomsa Chabeli-Mazibuko

Communications Manager:

PR & MediaVacant

Communications Manager:

Marketing/Branding

Sithembile Ntombela

‘CONTENT HUB’ – MARKETING AND COMMUNICATIONS

Asst Brand Manager

Bulelewa Zimba

PR OfficerVacant

Marketing Co-ordinator Phumzile Mbokazi

Director: Corporate Services

Laurie Less

HR Manager

Mirriam Moagi Finance Manager

Vacant

Director FinanceAlice Puoane

Board Secretariat

Masumi Motsileng

OPERATIONS

PALindi Sibiya

ReceptionistVeronica Bishop

Cleaner/Food Services

Irene Nyembe

PAMpho

Mokgosi

AccountantMandla Mokoena

Accounting ClerkLinda Hadebe

DriverJimmy Modiba

Programme Manager:

GovernmentLindiwe Ngcobo

Programme Manager: Business Mpumi Mabuza

Country Manager

(UK)John Battersby

Regional Manager

(Africa and the Middle East)

Vacant

Programme Manager:

Civil Society Leo

Makgamathe

Director: Stakeholder Relations

Iggy Sathekge

Regional Manager

(Asia)Vacant

Country Manager

(USA)Simon Barber

PANadine Khan

TOTAL NO OF POSITIONS : 39

11 vacant inclusive new positions

Project Manager

Zanele MambaPA

Vacant

Programme : Co-ordinator

Vacant


Shereen Hattia


Vacant


Vacant

‘DELIVERY ARM’ – STAKEHOLDER MANAGEMENT

Admin AssistantItumeleng Oliphant

Programme Co-ordinator

Vacant

PA : CEOTanya Du

Plessis

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FINANCIAL STATEMENTS2011/12

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2012

DESCRIPTION NOTES 2012 2011

Current Assets 1 34 271 472 52 098 199

Non – Current Assets 2 2 141 299 2 180 086

TOTAL ASSETS 36 412 771 54 278 285

Current liabilities 3 (27 922 018) (17 283 755)

Non – current liabilities 4 (313 660) (111 418)

NET ASSETS/ ACCUMULATED SURPLUS

8 177 093 36 883 112

NOTES TO THE FINANCIAL POSITION STATEMENT

NOTE 1: CURRENT ASSETS1. The major component of the current assets in 2011/2012is the

receivables due to Q4 tranche that was transferred in Qi of the new year amounting to R31 824 000.

2. In 2010/2012 the major component was Cash and cash equivalent amounting to R50 705 981.

NOTE 2: NON-CURRENT ASSETS1. Non current assets are made up of Property, Plant and Equipment (PPE)

and Intangible Assets with ratio of 8:2.

NOTE 3: CURRENT LIABILITIES1. The major component is the year-end payables/normal creditors

amounting to R26 592 719 and R16 101 917 for 2012 and 2011 respectively.

NOTE 4: NON-CURRENT LIABILITIES1. This is made up of financial lease liability – PPE.

STATEMENT OF FINANCIAL PERFORMANCE

2012 2011

Revenue 1 140 089 000 170 113 000

Other Income 2 2 980 520 7 334 715

Finance Income 1 368 538 1 607 775

Total income 144 438 058 179 055 490

Operating expenses 3 (173 133 395) (154 478 741)

Interest paid (10 684) -

(Deficit)/Surplus (28 706 021) 24 576 749

NOTES ON FINANCIAL PERFORMANCE STATEMENT FOR THE PERIOD ENDING 1 MARCH 2012

NOTE 1 : REVENUE1. The disclosed revenue is purely the approved transfers from

the Executive Authority (GCIS for the first half of the year and the Presidency for the remainder of the year).

NOTE 2: OTHER INCOME1. Partnership income received. NOTE 3: OPERATING EXPENSES

2012 % 2011 %

AUDIT FEES 909 155 0.53% 1 178 944 0.76%

MARKETIONG COSTS 125 339 059 72.39% 121 160 372 78.29%

OTHER OPERATING COSTS 23 544 266 13.60% 14 070 052 9.09%

STAFF RELATED COSTS 23 340 915 13.48% 18 339 373 11.85%

173 133 395 100.00% 154 748 741 100.00%

HIGHLIGHTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDING 31 MARCH 2012

1. During the year under review Brand SA spent most of the rolled-over funds and executed the activities that have been disclosed as commitments in our audited annual report.

2. This resulted in a reported deficit of R25m .3. There is however an accumulated surplus amounting to

R8,177m.4. Brand SA disclosed an audited amount of R7.532m showing

how the surplus will be spent. Approval from NT via The Presidency for the retention of the said surplus has been requested.

HIGHLIGHTS OF THE AUDIT REPORT AS AT 31 MARCH 2012

1. Unqualified financial statements2. Achievements of the predetermined targets for the year

under review is 71% - Brand SA had achieved on both planned targets and tactical activities with an 80:20 split.

3. Unauthorised expenditure amounting to R25m – Brand SA is still awaiting approval of retention of surplus from National Treasury

4. Procurement findings:4.1 Tax clearance certificate – inadequate capacity/ not the

case on all registered service providers and some were copies

4.2 Non- submission of standard bidding documents - inadequate capacity

4.3 Preference points not allocated to quotations over R30 000 – inadequate capacity

4.4 Preference points not applied – inadequate capacity and incorrect preference points applied

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PERFORMANCE RESULTS2011/12

PERFORMANCE RESULTS - AUDITED

Of the total number of planned targets (71) only 54 (76.06%) were achieved.

This represents a 23.95% of total planned targets not achieved during the period under review.

This was mainly due to the delay in the approval of the new payoff line.

Additional all tactical opportunities were achieved.

Re a leboga!

Re a leboga!Thank youEnkosi

Brand South Africa

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