Creating value at Jardines
Jardine Matheson is a diversified family group, operating in multiple industries across our core geographies of China and ASEAN. We maintain a sustainable balance of both growth (Indonesia and Vietnam in particular) and developed markets (Hong Kong and Singapore). We have deep roots across the region and have been partnering with founders and management for 190 years to build and grow successful companies. Our Group companies serve millions of people each day and support the communities in which they operate. Today, we have over 400,000 employees and generate a gross revenue of over US$109 billion.
In this section, we take a look at Jardines’ approach to business and how we create value, both at a Group level and for our investee companies.
Throughout its long history, Jardines has successfully grown its businesses by following a series of core investment principles. We have always invested in sectors where there is strong growth, in leading companies, and with people in whom we trust.
We have also always focused on evolving our portfolio to reflect changes in the environment in which we operate and the needs of our customers, and have invested in new sectors and businesses, or divested non-core businesses and exited sectors, whenever it has been appropriate.
Our application of these principles over many years has led to the diverse portfolio we have today, and has delivered steady growth in returns, through economic cycles.
Our stewardship of the Group as a whole and its individual businesses creates value through five core attributes which set us apart from other companies:
Long-term Strategic Approach
We are a family group which takes a long-term view on Asia’s development. We are steadfast in our investment approach, seeing through short-term periods of volatility. Some of our biggest businesses, such as Hongkong Land, DFI Retail Group and Jardine Cycle & Carriage, have been operating successfully for well over a century.
We apply a long-term mindset to managing a truly diversified portfolio of businesses which generate strong and stable cashflows regardless of cycles, while building long-term value for the portfolio as a whole. This is exemplified by our relationship with Astra, which has seen this leading Indonesian conglomerate go from strength to strength over the past 21 years since we first took a stake in the business.
We are well-positioned to capture future growth opportunities, with a focus on the growth markets of the Chinese mainland and ASEAN, while benefitting from our leading positions in the well-established markets of Hong Kong and Singapore.
Enduring Partnerships and Co-operation
We have a track record of building long-term partnerships, collaborating with founders and management to achieve mutual and shared success. Over many decades, we have become the trusted business partner in Asia for leading global brands such as Daimler, Schindler, IKEA and 7-Eleven, as well as local champions like Maxim’s. We currently have over 90 important partnerships across the region.
As a family group, we are uniquely placed to bring continuity and consistency to these relationships from one generation to the next, which gives our partners significant comfort and value.
As well as building enduring partnerships with businesses across Asia, we also focus on creating high levels of collaboration and the sharing of knowledge and experience between our colleagues across our Group businesses.
Localised Knowledge and Relationships
The Group’s unparalleled regional network and connections create a real advantage as we use the deep local knowledge gained to work with our Group companies to evolve their businesses and position them well for future growth.
The management of Jardine Matheson prioritises the maintenance of strong relationships with key businesses, governments and other stakeholders in each of the markets where we operate, and our businesses utilise and benefit from these relationships. We also have individual Country Chairs based in every major market in Asia, who together with the management of our local businesses, play an important role in maintaining and enhancing our local relationships and knowledge. This approach gives us deep first-hand understanding of each of our markets and exceptional levels of access to key stakeholders there. It also helps us source for investment opportunities.
We take a disciplined long-term approach to capital allocation, to maximise financial and strategic value.
Over time, we have developed deep relationships with a diverse portfolio of well-capitalised, leading banks and corporate partners, which have supported our financial strength.
Our approach is underpinned by always maintaining a strong balance sheet and liquidity position, for both Jardine Matheson and its subsidiaries. This position has enabled the Group to move with confidence in making some of our most substantial past acquisitions at times of market dislocation.
Engaged Owner and Operator
We actively build, develop and operate best-in-class businesses to generate sustained value over time. We do so with active leadership, support and governance from the Group, while working closely with the boards and senior management of each of our businesses, who are responsible for implementing strategy and driving performance and growth.
The Group works with our businesses to deliver on our strategic priorities of:
Evolving our Group Portfolio
We have developed from our founding in 1832 into the Group we are today by aligning ourselves with our customers and staying relevant to the needs of Asian consumers. We focus on the growing middle class and urbanisation in our key markets. We invest in new strategic partnerships where we see long-term growth opportunities aligned to our values and priorities.
We have established our reputation as a partner of choice for high-growth Asian businesses, working with a broad range of partners including technology companies, start-ups, OEMs, suppliers and entrepreneurs.
As well as evolving our businesses in traditional sectors, we are expanding our footprint into the new economy through ventures in new areas which align with and address the increasing use of digital technology by consumers.
Entrepreneurial flair and a deep understanding of how Asia is evolving have always been at the heart of our culture and success, and we are actively using these skills to identify new opportunities for the Group to invest alongside our partners in new areas of growth.
Driving Innovation and Operational Excellence
We operate in highly dynamic markets and need to constantly innovate and pivot our businesses to remain relevant and achieve sustained success. In the past few years, Asia has seen a large influx of new capital, the rapid rise of digital companies and an increasing desire among consumers for convenient digital services. In response, we aim to put innovation, operational excellence and an entrepreneurial spirit at the heart of everything we do.
Our businesses have accelerated the pace at which they embrace digital ways of working to improve operations, allowing them to navigate the challenges posed by the pandemic and prepare for future growth. On the B2C front, our businesses are embedding digital in how we anticipate and serve customer needs – developing omnichannel experiences, building data capabilities and embracing start-ups to enable us to react with agility to the changing marketplace. Our Restaurants business saw peaks of 90% of sales coming through digital channels in some locations in 2021.
Our B2B businesses have equally embraced digital as an enabler to anticipate and exceed customer expectations. Gammon (an early adopter of building information modelling) now boasts one of the largest Virtual Design & Construction (VDC) teams in Hong Kong and Shenzhen. We also invest in digital companies that can help to drive growth – both in our core business and across our portfolio in emerging new economy growth areas.
DFI Retail Group’s yuu rewards platform in Hong Kong, launched last year, is helping us move beyond a transactional focus to drive new ways of meeting and anticipating individual customer needs and preferences. The programme now has almost four million members, representing over 60% of Hong Kong’s adult population, and over 90% brand recognition. There are high levels of customer engagement, with nearly 130 billion points issued and a large number of these points have been exchanged for rewards and offers – thus building loyalty for brands and partners.
The yuu ecosystem continues to expand and Maxim’s, Chubb, Allianz and Shell have recently been added as additional partners. The success of yuu has been followed by the piloting in Singapore of CART, a new shopping experience which brings all of DFI Retail Group’s key brands in Singapore onto one platform.
Enhancing Leadership and Entrepreneurialism
Jardines attaches great importance to attracting, developing and retaining leadership talent at the Group level, as well as supporting the management teams in our businesses to do the same for their organisations. As a Group, we strive to develop leaders with an owner mindset and who are entrepreneurial in how they develop their businesses. This has helped Jardines to capitalise on new business opportunities to achieve long-term sustained growth. We continue to enhance our performance management structures to recognise, reward and retain such talents. As the Group increasingly embraces digital ways of working and invests in new economy businesses, we are focused on recruiting and developing digital talent across our Group companies.
The Group actively connects talented individuals in our extended networks with Group businesses where there are talent gaps. Intra-group moves are an integral part of Jardines’ culture, with many of our senior colleagues having worked across a number of our businesses, gaining great breadth of experience. The Group leads talent management and succession planning processes for key management positions across our businesses.
Our Jardines Executive Training Scheme (‘JETS’), Corporate Finance Managers Programme and management learning programmes such as the Advanced Leadership Programme, which is run in partnership with world-class business schools, develop high potential graduate trainees, seasoned finance leaders, and our senior executives, respectively.
At the same time, we value diversity and inclusion and mental wellbeing. Our Jardines employer brand campaign has shown that the more people learn about our story, reach and impact, the more they want to join us.
As a Group, we see sustainability as core to creating long-term value and are committed to integrating it into the strategy and business models of our portfolio companies.
More than ever, we acknowledge the role our Group companies need to play in the journey towards a net zero carbon future. This is an important priority for those of our businesses which have a greater impact on the environment, and which are establishing plans to reduce carbon emissions, balanced with the responsibilities they have to their communities.
Our Sustainability Leadership Council was formed in July 2019 by chief executives from across our Group companies, to address three core pillars:
Each of our businesses is developing an approach to sustainability which is aligned with these priorities but tailored to its own business, sector and market, as well as the interests of its stakeholders. The Group is working closely with each business to help them as they implement their sustainability strategies, providing support, guidance and resources as appropriate. The initiatives being progressed include auditing of carbon emissions and developing plans to promote emissions reduction; reducing single-use plastics and other waste; and supporting mental health, education and livelihoods in our communities.