SABC
Parliamentar
y
Presentation
April 2011
Opening Visual
2
Fiscal Review
Although challenging, the past fiscal has seen the enterprise attain major
achievements for the SABC, not only on the broadcast front by also on the
operationally
Board Stability
• Regular scheduled meetings
• Approval of corporate plan
Governance
• All risk policies in place
• High level of compliance with Government Guarantee (GG) requirements
• Strong response to AG Report
• Corporate plan and performance contracts fro executives complying with
Government requirements in terms of policies
• Audit of performance has commenced
SABC Parliamentary Presentation April 2011
3
Fiscal Review
Financial
• Revenue
• Cost
• Cash
Strategic
• Revised operating model
• Revised organisational structure
• Stable labour relations
• Digital media division established
• DTT infrastructure rollout approved
SABC Parliamentary Presentation April 2011
4
Fiscal Review
Stakeholders
• Commercial relationships stabilised
• International content suppliers relationships stabilised
• Local content relationships improving
•
•
•
•
Recommissons have been taking place
New RFP Book is being finalised which has secure funding provided
for
Residual payments to artist are being finalised
Residual payments to RISA, NORM and SARREL have been agreed,
pending final arbitration
SABC Parliamentary Presentation April 2011
5
Complete Confidence In Organisations
SABC Parliamentary Presentation April 2011
6
Source: futurefact 2009
Agenda
1
Financial Overview
2
Turnaround Strategy
3
Business Review
4
Governance Review
5
Enterprise Strategy
6
Annexure
SABC Parliamentary Presentation April
2011
Year End Forecast - 31 March 2011
9
SABC Ltd, Income Statement
2011/12
GG
Revenue
Advertising Revenue
Budget
4,563,048 4,233,210
Variance % change
329,838
Sponsorship Revenue
828,362
655,003
173,359
Trade Exchange
TV Licence fees
104,000
968,000
235,755
909,334
-131,755
58,666
191,000 135,194
132,000
-76,412
0
89,000
6,786,410 6,181,084
55,806
208,412
-89,000
605,326
Government Grants
Other Revenue
Content & Commercial Explo
Total Revenue & Other Income
Detailed Explanation and Analysis between the GG targets and the FY
2011-2012 Financial Budget
-7.8% The budget compiled by the Group Sales and Marketing Team indicates the
following: The Advertising market is soft due to the challenges being posed
by the Multi Media Platform, the advent of the Internet and Mobi advertising.
The impact of these new entrants has lead to the market fragmentation, has
and continues to affect the SABC negatively.The compilation of the
advertising revenue targets by the interim board did not consider these
challenges.
-26.5% The compilation of the Sponsorship targets is incorrect. The targest that
were compiled in 2009 by the Interim Board inflated the growth in this sector
of revenue and double counted the increase by R70m
55.9%
-6.5% The compilation of the TV Licence revenue by the Interim Board assumed
an increase in TV Licence. However the draft PSB Bill indicated that the TV
Licence will be abolished. The SABC did not make the request for the
increase to the Shareholder due to this. As the PSB Bill is still under
consideration by the Shareholder, the SABC will be submitting a request for
the TV Licence increase. The R59m is the impact of the non-increase for the
last 2 years.
-41.3% No additional government grant funding obtained
272.7%
100.0%
-9.8%
11
Expenses
Employee Compensation & Benefits
-1,422,000
-1,606,001
184,001
Amort. & Imp. Prog, Film, & Sports Rights
Amortisation of Computer Software
Advertising collection costs
Impairm/(Reversal)Trade & Other Rec Cre
Signal Distribution and Linking Costs
-2,008,000
-68,921
-809,410
0
-523,000
-1,466,318
-50,877
-706,351
0
-548,878
-541,682
-18,044
-103,059
0
25,878
Broadcast Costs
-228,020
-275,288
47,268
Other Expenses - Operational
-317,640
-423,493
105,853
-36,000
-147,667
111,667
Other expenses
-561,006
-600,105
39,099
Total Expenses
-5,973,997
-5,824,977
-149,020
-2.6%
812,413
356,107
456,306
-128.1%
Depreciation and Impairment
Total Depreciation & Amortisation
EBIT
-321,893
-321,893
490,520
-237,741
-237,741
118,366
-84,152
-84,152
372,154
-35.4%
-35.4%
-314.4%
Net Financing (Income)/Loss
-262,509
-105,910
-156,599
Total Net Financing (Income)/Loss
-262,509
-105,910
-156,599
0
0
228,011
0
0
12,456
Professional and Consulting Fees
EBITDA
Income Tax Expense
Total Income Tax Expenses
NOPAT
11.5% Current budget based on reduction of headcount and conversion to Cost to
Company packages but also accommodates filling key vacancies. The
current total costs of employee benefits is made up as follows: The GG
targets: R1.5 billion less R122m (being the reduction strategy currently
being implemented plus the new vacancies requested by the business of
R108m.
The employee cost also include the impact of the Post Retirement Medical
Aid and the impact of the Pension Fund Actuarial losses/ (gains) which the
GG targets did not take into account.
The value of these employee benefits is R47m
-36.9%
-35.5%
-14.6%
4.7% Additional requests for studio upgrades, low power transmitters and FM
transmitters as well as websites
17.2% Additional requests for 24 hour news channel, news agencies costs and
also provision for Needletime
25.0% Additional requests accommodate 24 Hour News Channel, DTT and Digital
Media costs and Corporate Recruitment Fees for HR
75.6% Additional requests for Turnaround Planning Unit, Digital Media and website
development, re-launching of CRM, legal fees for outstanding litigation,
design of new commission scheme as well as various Technology projects
6.5% Additional request accommodates Training (incl Training for Turnkey
Projects)
-147.9% The difference is due to non-accessing the second tranche of Nedbank
Loan and the lower borrowing levels.
-147.9%
0
0
215,555 -1730.5%
12
Cash Flow Forecast
36 Month Cash Flow Forecast
1 000 000
639 421
500 000
201 179
14 935
0
(42 721)
(500 000)
(692 484)
(1 000 000)
(1 500 000)
(1 806 454)
(2 000 000)
FY10/11 Proj
FY11/12
FY12/13
FY13/14
Base model cash close balance
Cash Balance after Loan
Cash Balance after Loan and Risks
Cash Balance after Loan, Risk and DTT
Base model cash close balance Less Turnaround
SABC Parliamentary Presentation April 2011
13
Cash Flow Forecast
• After taking into account the key assumptions as well
as the key factors affecting the SABC’s cash flows, the
cash flows are forecasted for the 36 month
projected cash flow forecast have been established.
• The projected 36 months cash flow is driven by a
number of scenarios:
1.
2.
3.
4.
5.
Cash Close balance
Cash loan after loan and risk
Base model cash close balance less turnaround
Cash balance after loan
Cash balance after loan, risk & DTT
SABC Parliamentary Presentation April 2011
14
Cash Flow Forecast
1. Base Model
• The base case is modelled on the approved Operating
expenditure, Capital expenditure and Production budget
submitted to Board in February 2011.
• Included in the base model is the pre-funding for the DTT
capital expenditure to the value of R139m (excluding VAT).
• The model does not take any risks or additional events into
account.
• The scenario shows that FY11/12 will have a positive cash
flow but a negative cash flow will take place in FY12/13 when
12 re-payments of the R1bn loan must take place.
SABC Parliamentary Presentation April 2011
15
Assumptions Used to Compile Baseline
Below is a list of key drivers and assumptions used to compile the three year baseline
Free Cash Flow Analysis 2012 Budget
31-Mar-11
FY 2011/12 Cash Closing Balances
Free Cash Flow including CAPEX
and Debt Repayments
Free Cash Flow before Debt
Free Cash Flow Before Debt and
Capex
R'000
R'000
R'000
50 936
50 936
50 936
Nedbank Loan Repayments
0
111 111
111 111
Finance Leases
0
56 180
56 180
MTEF Request for 11/12 to 13/14 not
funded for Capital Expenditure
0
0
408 380
50 936
218 227
626 607
SABC Parliamentary Presentation April 2011
17
Cash Flow Forecast
36 Month Cash Flow Forecast
1 000 000
639 421
500 000
201 179
14 935
0
(42 721)
(500 000)
(692 484)
(1 000 000)
(1 500 000)
(1 806 454)
(2 000 000)
FY10/11 Proj
FY11/12
FY12/13
FY13/14
Base model cash close balance
Cash Balance after Loan
Cash Balance after Loan and Risks
Cash Balance after Loan, Risk and DTT
Base model cash close balance Less Turnaround
SABC Parliamentary Presentation April 2011
19
Projected Funding Statement
SABC Parliamentary Presentation April
2011
Cash Flow Forecast - Restructured
Cash Flow Scenarios
Base model cash close balance
Restructure Loan profile
Cash Balance after Loan
Risks
Cash Balance after Loan and Risks
DTT
Cash Balance after Loan, Risk and DTT
Base model cash close balance Less Turnaround
Base model cash close balance
Adjusted for: Corporate plan - Inflation adjusted
Content inefficiencies
Sales inefficiencies
FY10/11 Proj
R'000
639 421
0
639 421
0
639 421
0
639 421
FY11/12
R'000
50 936
79 034
129 970
127 644
257 614
(200 000)
57 614
FY12/13
R'000
(174 469)
208 866
34 398
(203 642)
(169 245)
(492 032)
(661 277)
FY13/14
R'000
14 935
186 243
201 179
(243 900)
(42 721)
(649 763)
(692 484)
639 421
639 421
0
0
0
(451 424)
50 936
(477 466)
(24 894)
0
(1 440 680)
(174 469)
(506 810)
(625 828)
(133 573)
(1 806 454)
14 935
(537 472)
(1 035 849)
(248 068)
SABC Parliamentary Presentation April 2011
21
Debt to Equity and Current Ratio - Baseline
SABC Debt Equity Ratio
Total Borrowings
Long-term
Short-term (short-term debt)
Total Equity
Total Debt/ Total Equity Ratio
2010/11
2011/12
2012/13
2013/14
1 342 438
1 182 887
797 735
412 595
1 175 147
792 696
407 555
13 059
167 291
390 191
390 180
399 536
944 423
956 879
1 053 344
1 359 653
1.42
1.24
0.76
0.30
1 175 147
944 423
792 696
956 879
407 555
1 053 344
13 059
1 359 653
1.24
0.83
0.39
0.01
2 597 093
1 541 755
2 042 165
2 248 241
1 884 995
2 246 139
1 996 238
2 109 271
1.68
0.91
0.84
0.95
1 584 063
1 541 755
708 814
2 248 241
722 925
2 246 139
781 439
2 109 271
1.03
0.32
0.32
0.37
Long-term debt/Equity Ratio
Long Term Debt
Total Equity
Long-term debt/ Equity Ratio
SABC Current Ratio
Current assts
Current liabilities
Current Ratio
Quick Ratio
Current assts (less inventory)
Current liabilities
Quick Ratio
23
Three year Income Statement Forecast
PROJECTED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2011
SABC
FY10/11
Projected
Revenue
Gross Classical Advertising
Gross Sponsorships
SWC 2010 revenue
Other
(Projection adjusted SAP)
Gross TV Licences
Government Grants
Trade exchange revenue
Total Revenue
Less: Expenditure
Advertising Collection cost
(Avg Projection adj)
TV Licence Collection cost
SWC 2010 costs
Broadcast costs
Advertising funded programmes
Signal Distribution
Marketing (Avg Projection adjusted SAP)
Employee Compensation & Benefits
Professional and Consulting Fees
(Avg Projection adjusted)
Other Personnel costs
(Avg Projection adjusted)
Other Opex costs
Other Admin costs
Other (Profits)/losses
Trade exchange costs
Trade Exchange rev/cost diffs
Amortised Prog, Film & Sport rights
SWC 2010
Amortised Computer Software
Depreciation of PPE
Other (profits)/losses
Employee Benefit revaluation
Pension fund asset used
Operating profit before interest and tax
Less: Net Financing loss
Interest Received
Interest Paid
Profit/ (Loss) before income tax
Income Tax
Current year Income Tax
Profit/ (loss) for the year
FY11/12
forecast
FY12/13
forecast
FY13/14
forecast
R'000
R'000
R'000
R'000
3 933 650
518 530
205 672
216 696
861 804
128 839
85 109
5 950 300
(6 049 594 )
(670 002)
(126 009)
(67 297)
(217 311)
4 251 792
639 854
4 695 041
695 228
5 111 573
742 069
0
251 029
909 334
145 465
127 796
6 325 270
(6 206 905)
(712 574)
(189 275)
0
(248 460)
0
(491 642)
(75 984)
(1 638 441)
(147 031)
(34 549)
(274 258)
(56 884)
149
(75 526)
0
0
0
0
0
0
0
0
0
0
0
(99 294)
(105 377)
23 929
(129 306)
(2 04 671)
0
215 791
(119 325)
0
0
0
381 705
(75 396)
0
(119 325)
96 466
0
0
12 456
0
(100 841)
(370 242)
0
0
0
0
0
0
0
0
(1 583 577)
(92 841)
(312 937)
118 365
(105 909)
11 744
(117 653)
12 456
0
(127 796)
(1 514 841)
(45 822)
(242 793)
(1 002)
0
(619 678)
(260 022)
(1 820 018)
(108 702)
(144 332)
(515 332)
(72 172)
(127 796)
(1 469 679)
0
(289 829)
(584 326)
(245 188)
(1 723 042)
(158 702)
(136 642)
(456 696)
(68 055)
(127 796)
0
291 245
1 147 708
73 891
127 796
7 494 282
(7 112 577)
(856 130)
(243 906)
(269 336)
(550 494)
(230 992)
(1 627 562)
(158 702)
(129 070)
(408 569)
(64 115)
(1 5 95 699)
(161 532)
(54 685)
(212 390)
(150 503)
(2 04 671)
0
280 007
1 023 647
78 740
127 796
6 900 459
(6 684 668)
(786 962)
(207 304)
0
(75 396)
306 309
0
0
96 466
0
0
306 309
24
Projected Cash Position as at February 2011
(after adjustments in the month of March)
Below is a list of key drivers and assumptions used to compile the three year baseline
SABC
CALL
0
0
1,500
34,000
0
35,500
INVESTMENT REPORT
FIXED
178,000
120,000
92,000
65,000
136,000
591,000
MARCH 2011
NCD
LOAN
-
-
CURREN
INSTITUTION
T
5,000 183,000 ABSA
831 120,831 SCMB
104 93,604 RMB
99,000 INVESTEC
1,044 137,044 NEDBANK
6,979 633,479 GRAND TOTAL
29%
19%
15%
16%
22%
100%
Payment move from march to april
*South African Football Association (move from 15/3)
Vodacom Challenge
*CREDITORS - RISA (move from 20/9/10 & 29/10/10)
Superport (PSL 10/11)
(10,418,206.00)
(14,629,426.48)
(27,000,000.00)
(30,000,000.00)
(82,047,632.48)
26
Debt position as at end February 2011 and
projected to 31 March 2014
4. Borrowings/Debt
4.1 Loans
Open Balance
FY10/11
FY11/12
FY 12/13
R'000
R'000
R'000
FY13/14
R'000
1 000 000
1 000 000
888 889
555 556
-
(111 111)
(333 333)
(333 333)
1 000 000
888 889
555 556
222 222
-
(111 111)
(333 333)
(333 333)
349 234
342 438
293 998
242 180
42 382
7 740
5 040
5 040
Less Capital repayments
(49 177)
(56 180)
(56 858)
(56 847)
Close Balance
342 438
293 998
242 180
190 373
(6 795)
(48 440)
(51 818)
(51 807)
Less Repayments
Close Balance
Cash generated/(used)
4.2 Asset Leases
Open Balance
Plus Additional Borrowings
Cash generated/(used)
SABC Parliamentary Presentation April 2011
27
Projected Funding Statement
BASE MODEL with
RESTRUCTURED LOAN
Cash balances
Open Balance
Cash generated/(used)
Close Balance
Liquidity level
Borrowings required to maintain Liquidity
Facilities available
Own Cash
Close Balance
Asset Based Finance (ABF)
ABF generated/(used)
ABF close balance
2nd Tranch of Gov Funding
Cash (used)
Close Balance
Overnight Loans
Cash (used)
Close Balance
Medium Term Loans
Cash (used)
Close Balance
Total Borrowings
FY10/11
Projected
FY11/12
forecast
FY12/13
forecast
FY13/14
forecast
R'000
R'000
R'000
R'000
337 604
301 817
639 421
300 000
0
FY10/11 Proj
R'000
639 421
(509 451)
129 970
300 000
170 030
FY11/12
R'000
129 970
(95 573)
34 398
300 000
265 602
FY12/13
R'000
639 421
129 970
0
100 000
34 398
166 781
201 179
300 000
98 821
FY13/14
R'000
0
0
(50 000)
50 000
(50 000)
0
0
0
0
473 000
0
473 000
0
473 000
0
473 000
0
350 000
(120 030)
229 970
(215 602)
14 368
(14 368)
0
0
0
0
(84 454)
84 454
0
(170 030)
(265 602)
(98 821)
SABC Parliamentary Presentation April 2011
28
Conclusion
• In all of the scenarios presented, it is evident that liquidity pressures will
persist for the next coming two years and that will correspond with the
period when two significant repayments of the Nedbank Loan will be
required.
• The pressures are indicated by the declining cash flow positions for the
next two financial years, for all scenarios.
• For this reason, it is proposed that the SABC will need to re-structure the
current loan in place to manage liquidity over the next 12 – 36 months
[this re-structuring of the loan is used in scenarios 2,3 and 4]. This also
reduces the interest cost and liquidity pressures
• These cash flow pressures are further exacerbated by initial and
subsequent capital outlay for the technology programmes and the
acquisition of programme, film and sports rights.
SABC Parliamentary Presentation April 2011
29
•
•
•
•
•
•
Conclusion
However, for FY13/14, it is evident that all scenarios reflect an upward trend
[excluding scenario 5, which excludes all the effects of the turnaround
initiatives].
The drivers around this improvement will be the reduced pressures around
the cash outflow requirements (i.e. repayment of the Nedbank Loan and the
reduced capital outlay for the programme, film and sports rights).
The improvement will also be driven by the exploitation of the new digital
media space and increased efficiencies with regards to content and sales
efficiencies.
The negative cash position(s) forecasts are also exacerbated by the countries
move to Digital Terrestrial Transmission (DTT)
It is evident from the cash flow forecast outlined in scenario four that the
SABC needs funding to carry out the implementation of DTT, as without the
necessary funding as the Corporation we will not be able to internally fund the
project.
The non-funding of the migration to DTT will lead to the Corporation
not being financially sustainable.
SABC Parliamentary Presentation April 2011
30
Conclusion
• The organisation has therefore, in its MTEF
submission, requested the following:
o Rollover of existing funding
o Fund of R408m for DTT
o Permit additional borrowing or restructuring of
the Nedbank Loan
SABC Parliamentary Presentation April 2011
31
Agenda
1
Financial Overview
2
Turnaround Strategy
3
Business Review
4
Governance Review
5
Enterprise Strategy
6
Annexure
SABC Parliamentary Presentation April
2011
Turnaround Strategy
• With the approval of the SABC Turnaround Strategy in
November 2010, the turnaround strategy has been in
implementation mode
o Initiatives were clearly identified and allocated to respective
Group Executive members as Portfolio Owners
o Project Charters and project plans drafted and signed off by
Group Executive
o Turnaround project resource requirements reviewed and
budget requests made
o Turnaround Steering Committee established
o Project management office and governance structure set
SABC Parliamentary Presentation April 2011
33
Project Reporting
• As part of the fortnightly project reporting update each
Executive is responsible for reporting back on the initiatives
within their area.
• Project Co-ordinators provide independent evaluation of
project progress
• Project reporting is done by means of robots to indicate
progress
SABC Parliamentary Presentation April 2011
34
Consolidated Dashboard
37% 48%
9%
0
2
1
1
Richard Waghorn
1
2
6
0
Charlotte Mampane
0
2
2
1
Overall Steercom #2
70%
Robin Nicholson
0
1
2
0
Overall Steercom #3
Ntsietso Mofokeng
22%
0
6
1
0
Anton Heunis
0
0
6
1
Lerato Nage
2
3
4
1
James Mathebula
0
0
1
0
Juanita van Rensburg
0
1
3
3
Bessie Tugwana
0
0
4
0
Phil Molefe
0
2
2
0
Sizwe Nzimande
0
2
1
0
Leslie Ntloko
1
2
0
0
Justice Ndaba
1
10
5
1
Hlaudi
0
0
1
2
Chief Operating Officer
0
1
5
0
Portfolio
6%
Itani Tseisi
Steercom Project Progress
Project Confirmation
Overall Steercom #1
Overall Steercom #4
Overall Steercom #5
Project Evaluation
SABC Parliamentary Presentation April 2011
30%
4%
29% 51% 16%
33%
6%
37% 48%
9%
43%
35
Description
Progress
Top Ten
Design and implement a group wide performance management system
Sport Cost Reduction
Working Capital: Average Debtor Day Reduction
Improve Procurement’s effectiveness and reduce third party spend
Establish a Digital Media division
Enhance content planning and acquisition processes
Review and Align DAF with the Risk and Compliance framework
Improve the SABC brand reputation and perception
Pricing Methodology
Wasteful Expenditure: Fruitless and Unauthorised expenditure
SABC Parliamentary Presentation April 2011
36
Description
Progress
Top Sixteen
Audience Segment and Brand Position for SABC3
Launch of the 24-hour Satellite News Channel
Total Cost of Employment
Recruitment and Selection
Training
Change management strategy and communication plan
SABC Parliamentary Presentation April 2011
37
Agenda
1
Financial Overview
2
Turnaround Strategy
3
Business Review
4
Governance Review
5
Enterprise Strategy
6
Annexure
SABC Parliamentary Presentation April
2011
Mandate Review
• As part of the licence conditions of SABC PBS radio stations and television
channels, specific mandate requirements need to meet in terms of
minutes of broadcast per week, these are:
o Radio






o
Stations to broadcast in the prescribed principal language
Local music broadcast
News and Current Affairs programming
Children’s programming
Specific Genres i.e. Information Knowledge Building, drama
Education programming
Television






News and Current Affairs programming
Local content
Any other language besides English
Minority language
Specific Genres i.e. Information Knowledge Building, drama,
Education programming
o Sport of National Interest
SABC Parliamentary Presentation April 2011
39
Mandate Review
• SABC Radio has meet all its 'mandate conditions and
has exceed in some, such as local music delivery
• SABC Television has delivered on all its mandate
conditions except for its inability to deliver on certain
genre as a result of the amended schedules across all
three Channels during the 2010 FIFA World Cup.
• Television continue to experience challenges in the
delivery of programing in minority languages due to
a lack of capacity within production industry of
minority language talent
SABC Parliamentary Presentation April 2011
40
Agenda
1
Financial Overview
2
Turnaround Strategy
3
Business Review
4
Governance Review
5
Enterprise Strategy
6
Annexure
SABC Parliamentary Presentation April
2011
Auditor General Report
• The organisation has and continues to actively
monitor and address issues raised by the Auditor
General
• Monthly reporting is done by respective areas on the
progress on addressing issues raised by AG in their
respective area
• An enterprise wide review was conducted mid 2010
on the status on the AG recommendations
• An annual review is currently underway
SABC Parliamentary Presentation April 2011
42
Risk Management
• The events of 2008/2009 financial Year and a loss amounting
to R910million, which gave rise to the Auditor General’s
report in 2009/2010 financial year, necessitated the
assessment of risk management culture within the
organisation.
• The assessment results indicated the need for the review of
the risk management instruments (policies, framework and
strategies) and the development of additional ones.
• SABC Board approved project which was concluded in March
2011.
SABC Parliamentary Presentation April 2011
43
Risk Management
The following instruments were reviewed and enhanced to achieve the effective risk
management:
1. Risk Management Policy:
o The Risk Management policy sets out the overall philosophy, principles,
requirements and responsibilities for a sound approach to risk management
within the SABC.
o The balancing of risk and reward is an integral part of improved performance,
growth and sustainable value creation.
2. Risk Management Framework
o The Risk Management Framework is a high level view of the SABC risk
management process and procedures to assist in implementing and
embedding the risk management discipline in the organisation. It’s primary
purpose is to:
Describe the SABC’s risk management philosophy, approach, process and reporting;
 Guide the implementation of the risk management process in a uniform manner
across the SABC; and
 Educate line managers and employees on the essential tasks of risk
management.

SABC Parliamentary Presentation April 2011
44
Risk Management
3. Fraud and Corruption Prevention Policy:
o The Fraud and Corruption Prevention Policy is established to clearly
indicate the SABC’s stance towards fraud and corruption and seeks to
support the SABC’s business and operational strategies, and the
achievement of its public service mandate.
o This Policy is based on the National Treasury Regulations Fraud
Prevention Plans, the Prevention and Combating of Corrupt Activities
Act, 12 of 2004 and the Public Finance and Management Act, 1 of
1999.
SABC Parliamentary Presentation April 2011
45
Risk Management
The following New Instruments were Developed;
1. Whistle Blowing Policy:
o Whistle Blowing Policy is intended to provide overall guidance for the reporting of
concerns and to further encourage and enable staff and others that the SABC deals
with to raise concerns within the SABC rather than overlooking the problem or
reporting such concerns through inappropriate channels.
2. Fraud and Corruption Prevention and Response Plan:
o The purpose of Fraud and Corruption Prevention Plan is to provide an overview of
the SABC’s approach to the prevention and detection of fraud and corruption.
o The Plan recognizes basic fraud and corruption prevention measures, which are in
place at the SABC.
o The Plan is dynamic and it will continuously evolve as the SABC makes changes and
improvements in its drive to promote ethics, as well as to fight fraud and
corruption.
o SABC’s response to mitigate any exposure to fraud and corruption will focus on
creating awareness and promoting ethical business conduct.
SABC Parliamentary Presentation April 2011
46
Risk Management
3. Risk Management Strategy (Road Map)
o The risk culture assessment identified some gaps within risk
management, that require management attention and a decision to
aim for the intelligent risk maturity level, necessitated the strategy to
achieve the maturity level. This is level is in line with King III
requirement will be on the SABC.
4.
Key/Strategic Risk Profile with Mitigation Plans
o Management and Board identified key / strategic risks with mitigation
strategy, the mitigation strategies are initiatives in the turnaround
plan.
o Regular continuous monitoring and corrective actions is undertaken to
ensure that the mitigations are in place to reduce the residual risk or
the impact of the consequence should a risk occur.
SABC Parliamentary Presentation April 2011
47
Agenda
1
Financial Overview
2
Turnaround Strategy
3
Business Review
4
Governance Review
5
Enterprise Strategy
6
•
Key Focus Areas
•
Operating Model & Human Capital
•
Organisational Performance Measures
Annexure
SABC Parliamentary Presentation April
2011
SABC Corporate Pillars
The Board has adopted a set of Corporate Pillars that informs the SABC’s
Strategic Focus areas and operational plans
1.
2.
3.
4.
5.
6.
7.
Programming
Platform Management
News and Current Affairs
Governance
Human Capital Services
Financial Management
Stakeholder Management
SABC Parliamentary Presentation April 2011
49
SABC’s Strategic Intent
The organisation through its turnaround and operational plans has identified seven
key drives of value which form its strategic intent as it enters into its medium term
planning.
•
•
•
•
•
•
•
Putting broadcasting and broadcasters back in the forefront of what the
organisation is about and editorial integrity back into the platforms and
programmes of the SABC in particular News.
Building brands that reflect excellence and the South African identity in every way
Building a digital SABC and integrating the digital future into all plans and actions
Having an operating model that is simple and easily understood, supported by an
organisational design that assigns accountability directly to those charged with
execution of the Enterprise plans and good governance
Building an organisation that is economical, efficient and effective
Focusing on the performance of the Enterprise at every level and holding
individuals accountable for delivery
Managing and reporting on strategy development and implementation,
operational performance and risk management
SABC Parliamentary Presentation April 2011
50
Strategic Focus
SABC Television
• SABC Television’s key focus within the upcoming fiscal will be:
o Recapturing lost market share within the ever growing
competitive market, whilst delivering on its public service
mandate audience delivery to move from 59% to 60%
o Implementation of the SABC3 turnaround strategy, which is
aimed at returning the channel to a competitive commercial
channel
o Strategic Position of SABC within the DTT space as we prepare
for the launch in 2012
o Investment in both brand and programme marketing activities
to drive audiences to the platform
SABC Parliamentary Presentation April 2011
51
Strategic Focus
SABC Television
• With the implementation of the new operating model, there
is now one unit responsible for content channel management
and content acquisition, thereby ensuring that all content
acquisition is aligned with Channel requirements
• Focus will be placed in the current fiscal on the acquisition of
new programming on both the local and international front,
so as to drive audiences to Channels as well as ensure an
effective, efficient and economical enterprise
• The Television unit is prepped to deliver on DTT
SABC Parliamentary Presentation April 2011
52
Strategic Focus
DTT
• The anticipated launch of DTT in 2012, will see the SABC moving to a
digital multichannel environment
• The enterprise, as the Public Service Broadcaster is enthused and ready to
play it part in the countries transition into the digital platform
• Channel and programming line up preparation is currently underway to
ensure the enterprise is ready for a 2012 commercial launch of the
platform
• To deliver thereon, it will need to make capital investments in
infrastructure, which it has requested funding to support, as without such
funding the enterprise will find itself under financial pressure
SABC Parliamentary Presentation April 2011
53
Strategic Focus
SABC Radio
• SABC Radio, with its’ reach of over 30 million listeners daily
will drive to renew its position as key news and current affairs
provider
• The impending new entrees into the fiercely contested
metropolitan areas, will see a more aggressive positioning of
SABC’s Radio stations as they strive to deliver value to their
listeners
• Particular focus will be made to the repositioning of under
performing stations such as ; True FM, Ikewekwezi FM,
Monghana FM , SAFM, Umhlobo Wenene FM
SABC Parliamentary Presentation April 2011
54
Strategic Focus
SABC Radio
• Talent Management will be a key driver to the success of the
stations
• SABC Radio will be strengthening its digital offering as well as
expanding its transmitter network to increase access and also
improve signal allowing for clearer sound in areas previously
experiencing signal challenges
• Research will be conduced to determine the tastes and
interests of listeners, aimed at further improving Radio’s
offering
• Implementation of integrated marketing solutions to address
both brand and programming strategies
SABC Parliamentary Presentation April 2011
55
Strategic Focus
SABC News
• At the core of public service broadcasting is
the provision of news and current affairs
• The upgrade of the News facilities as well as
the renewed brand and programming
emphasis will ensure that the SABC News
image is restored and audiences recouped
SABC Parliamentary Presentation April 2011
56
Strategic Focus
24 Hour News Channel
• With the vision of being the global provider of
African content and the reference point on African
issues, SABC News will be launching a 24 Hour News
Channel as part of SABC’s DTT offering
• This is driven by the need to:
o Entrench SABC News as a leading African public
broadcaster in a multichannel environment
o Contribute to the creation of a better South Africa, in a
better Africa, and a better world for all
o Increase audience share in News programming
SABC Parliamentary Presentation April 2011
57
Strategic Focus
24 Hour News Channel
• The 24 News channel aims to:
o Ensure South Africans are adequately informed about developments
in the country, the region, the Continent & the World
o Prepare for DTT Launch with a 24 Hour News Channel
o Certain programming will be available on terrestrial from launch
(SABC2 overnight)
o Learn new work flows for digital television
o Drive the information campaign on key national issues
o Provide live broadcasts of events/activities of national importance.
o Included in the budget, R66m plus R17m in the Local Government
Elections Budget 2011, which will be used to fund the Channel going
forward
o Channel will utilise the existing News broadcasting facilities
already contracted
SABC Parliamentary Presentation April 2011
58
Strategic Focus
Sport
• The enterprise is currently drafting its Sport strategy
which is aimed at ensuring the SABC is able to deliver
the mandate more effectively and efficiently
• Particular focus for the enterprise has been on:
o Sport of National Interest regulation
o Collaboration with DoSR in the development of a Sport
Strategy
o Major rights negotiations
o Capacity building for 2010 SWC and Rugby WC,
culminating in the 2012 Olympics
SABC Parliamentary Presentation April 2011
59
Strategic Focus
Editorial Management
• With the establishment of the Editorial, Policy &
Governance unit, the enterprise will drive editorial
management from a strategic level, ensuring a
framework is established and compliance is enforced
• The Editorial unit will act in an advisory capacity to
the GCEO (Editor In Chief)
• Drive editorial renewal through outreach activities
SABC Parliamentary Presentation April 2011
60
Strategic Focus
Mandate Delivery
• SABC continues to ensure it delivers on its mandate
requirements on both radio and television
• To ensure increased access to public broadcast
services on radio and television, continued
distribution of low power transmitters, in areas
around the country previously without SABC services
will occur, with 100 new transmitters activated
annually to 2014
• The establishment of the Digital Medial unit, allows
for SABC to extend its public service delivery on to
the digital platform
SABC Parliamentary Presentation April 2011
61
Strategic Focus
Commercial Sales
• New operating model for the Commercial Sales
division will see a realignment of the division to
ensure it is more effective and efficient as well as
addressing its governance challenges
• Its performance and budget for the future is as
follows:
Budget
Actual
FY09
FY10
FY11
FY12
R4.2b
R3.7b
R4, 0b
R4.9b
R3,5b
R3,4b
R4, 0b
SABC Parliamentary Presentation April 2011
62
Strategic Focus
SABC Provinces
• SABC has reviewed its approach and operating
model for its Provinces
• The role of General Managers has been
revised with direct responsibility and
accountability for the full function of the
Province
SABC Parliamentary Presentation April 2011
63
Provinces
Regions
Regional General Manager
Core Services
Sales
Radio
Marketing
Digital Media
News
TV
Sport
Broadcasting &
Distribution
External Stakeholder
Management
Business Partners
Finance
Information
Technology
Procurement
Human Capital
Services
Notes:
• Business Partners are located in the Regions.
• Policies must ensure that approval for capex budget and accountability is situated at
Shared Services Centre to drive economies of scale
• RGM accountable for approval of small goods and services at the regional office
Support to be provided by corporate level:
Property & Facilities
Management
Internal Audit
Quality and Risk
Management
Strategy & Planning
Finance
Information
Technology
Procurement
Human Capital
Services
Legal
General Notes
• Regional Core Functions, i.e. Radio, TV, Digital Media, Sports and News must comply with corporate policy. Regional performance
will be monitored against the corporate strategies and policies
• Business Partners report indirectly to the RGM and directly into the relevant function at head office e.g. Finance. People in core
functions report to the RGM
Strategic Focus
Marketing & Brand Building
• The lack of focus in marketing over the past 3
years has resulted in a decline in audiences
and listernship on SABC Platforms
• The revitalisation of SABC’s marketing efforts
have seen:
o A focus on South African excellence
o Appointment of strong credible marketer
o Budget allocation to drive marketing strategy
SABC Parliamentary Presentation April 2011
65
Strategic Focus
Business Unit Objectives
• With an Enterprise driven strategy, each business
unit’s performance contract will be derived from the
enterprise dashboard. Ensuring that each BU’s
strategy is aligned with enterprise strategy and
performance can be more effectively managed
SABC Parliamentary Presentation April 2011
66
Agenda
1
Financial Overview
2
Turnaround Strategy
3
Business Review
4
Governance Review
5
Enterprise Strategy
6
•
Key Focus Areas
•
Operating Model & Human Capital
•
Organisational Performance Measures
Annexure
SABC Parliamentary Presentation April
2011
People
• Skills shortages in critical areas such as technology continue to
pose problems in many industries in South Africa
• Broadcasting is one of the areas that have been hard hit by
these skills shortages
• To address these, the SABC has initiated various skills
development interventions and programs.
• The SABC has implemented various interventions to try and
address this, that include:
o
o
o
o
Technical training
Journalism Internships
Broadcast Engineering and
Business Unit specific interventions
SABC Parliamentary Presentation April 2011
68
People
• Furthermore, companywide interventions that include but not
limited to:
o Skills Audit (not yet completed),
o Succession Planning,
o Leadership Development Program and Middle Management Program
launched with GIBS were initiated.
o Also, SAP, TVBMS and computer training were internally
conducted thus creating efficiencies and reducing consultant
and provider costs.
o The SABC also gained accreditation an ICDL training and
assessment center, as well as conducting training on
Accounting Technicians in Finance continued.
SABC Parliamentary Presentation April 2011
69
Performance Management
• Driving a culture of responsibility and accountability, is of
optimum importance for the enterprise
• Consequently the implementation of an organisation wide
performance management system has been rated as No1 in
level of importance of all turnaround strategy initiatives
• Enterprise and Divisional dashboards have been established
and all Performance contracts for FY11/12 have been aligned
with these and signed with all Group Executives
• Performance contracting for the next level of the organisation
will be completed by end April 2011
SABC Parliamentary Presentation April 2011
70
SABC Operating Model
• In ensuring a economical, efficient and effective enterprise,
the SABC is currently reviewing its operating model
• The review of the organisational operating model has been a
key focus of the organisation as part of its delivery of the
SABC Turnaround Strategy
• The high level operating model has been approved by the
SABC Board and implemented within the business
• The enterprise is currently engage in drilling down into the
each Division’s operating model and thereafter their optimal
efficient and effective structure , whilst maintaining
compliance with the Broadcast Act
• This will go a long way towards addressing the organisations
challenges with regards to Head Count and skill set
SABC Parliamentary Presentation April 2011
71
The SABC Headcount Status: 2007 - 2011
Scale
110
115
120
125
130
200
300
401
402
403
404
405
406
407
408
409
Grand Total
Dec-07
5
12
81
148
240
9
646
438
384
448
546
495
162
98
36
23
3771
Dec-08
Dec-09
5
11
89
174
279
5
697
459
444
538
566
484
168
93
28
17
4057
4
10
81
162
282
5
650
444
425
547
540
498
180
89
25
16
3958
Dec-10
5
7
69
154
261
5
601
425
397
522
513
482
158
73
25
14
3711
Feb-11
3
8
64
155
264
5
595
424
394
518
512
488
156
73
25
15
3699
SABC Parliamentary Presentation April 2011
Reduction
Since 2008
-2
-3
-25
-19
-15
0
-102
-35
-50
-20
-54
4
-12
-20
-3
-2
-358
% Reduction
-40.00%
-27.27%
-28.09%
-10.92%
-5.38%
0.00%
-14.63%
-7.63%
-11.26%
-3.72%
-9.54%
0.83%
-7.14%
-21.51%
-10.71%
-11.76%
-8.82%
72
Principles of the Organisational Design
The organisation aims to achieve 3000 employees in 3 years, it has a current staff complement of
3699. The move towards a digital SABC will require new skills, up skilling of some employees and
redundancy of some positions. The enterprises approach to meeting its objective is as follows:
Drivers of Change
Approach
Exiting of analogue facilities
•
•
•
•
•
Training
Early retirement
Out placement
Voluntary retrenchment
Forced retrenchment ( last resort)
Growth of digital (incl. implementation of digital
playout facilities
DTT
•
•
•
•
•
Re-train
Out placement
Contract expiry
Redundancy
Voluntary retrenchment
Management Rationalisation
•
•
•
•
•
•
•
Training
Out placement
Early retirement
Contract expiry
Redundancy
Voluntary retrenchment
Forced retrenchment ( last resort)
Targeted headcount
•
All of the above
SABC Parliamentary Presentation April 2011
73
Agenda
1
Financial Overview
2
Turnaround Strategy
3
Business Review
4
Governance Review
5
Enterprise Strategy
6
•
Key Focus Areas
•
Operating Model & Human Capital
•
Organisational Performance Measures
Annexure
SABC Parliamentary Presentation April
2011
Performance Measures FY11/12
Efficiency
54%
Share of TV advertising
revenue
Mandate
Audiences
Content Costs
Maintained
Revenue
With turnaround being a key focus of the enterprise, its performance measures for the
fiscal, as detailed in its Corporate Plan, are aimed at driving operational and financial
efficiency whilst delivering on its public service mandate
60%
Audience Share
TV
Reduced impairments
Headcount reduction to
the targeted operating
model
Review and revised
editorial policy
45%
Share of Radio
advertising revenue
TV License Fee
Collection target
achieved
Expand alternative
revenue stream
Establishment of Digital
Media Unit
Turnaround SABC3
67%
Audience Share
Radio
Mandate Delivery across all genres and
platforms
Local Government Elections
SABC Parliamentary Presentation April 2011
75
Resourcing the Strategy
• The austerity measures employed by the
organisation over the past three years, has resulted
in a decreased and in some cases, lack of investment
in many core business activities i.e.:
o Local and international content that will assist the SABC
Channels in driving audiences and therefore increased
revenue
o Marketing expenditure to promote both SABC brands as
well as promotion of programming which drives views to
channels
o Infrastructure upgrade to support operational efficiency
o Human Capital skill sets to assist the organisation in
transitioning into a digital broadcaster
SABC Parliamentary Presentation April 2011
76
Agenda
1
Financial Overview
2
Turnaround Strategy
3
Business Review
4
Governance Review
5
Enterprise Strategy
6
Annexure
SABC Parliamentary Presentation April
2011
Compliance with Shareholder
Compact
78
Compliance with Shareholder Compact
SABC Board Undertaking
Delivery
Commit to exercising strategic leadership, enterprise and integrity in
directing the SABC to fulfill its mandate as outlined in the
Broadcasting Charter and to ensure that the SABC is financially
sustainable.
Achieved
Endeavour to ensure that the SABC is financially viable and properly
managed, so as to protect and enhance the interests of the SABC in
the fulfillment of its mandate.
Achieved
• Improved financial position of
the enterprise
Use its best endeavours to respond to any request from the
Shareholder for information or any circumstance requiring a
decision, within 30 (thirty) days of receipt of such written request.
Achieved
SABC Parliamentary Presentation April 2011
79
Compliance with Shareholder Compact
SABC Board Undertaking
Delivery
Ensure that members of the Board have sufficient information, knowledge
and access to expertise to ensure that they are able to fulfill their fiduciary
responsibilities to the SABC and shall furthermore ensure that Board
members are inducted on appointment and trained in accordance with King
III, as well as all relevant legislation pertaining to the SABC
Achieved
Annually review and evaluate SABC performance as a collective, the
performance of the Chairperson of the Board of Directors, the performance
of the Deputy Chairperson of the Board of Directors, the performance of
individual Directors, the performance of Committees of the Board of
Directors and the performance of Chairpersons’ of Board Committees.
Not achieved
- Not signed
The Board of Directors undertakes to establish an appropriate mechanism
for reporting the results of the performance evaluation referred above to
the Shareholder, which mechanism shall be known as an Evaluation Report.
Partially achieved
Report submitted against
Government Guarantee
SABC Parliamentary Presentation April 2011
80
Compliance with Shareholder Compact
SABC Board Undertaking
Delivery
Ensure the development and implementation of appropriate and
effective performance management policies and systems to regularly
review the performance of members of the Group Executive
Committee which may include review, reports and remedial measure
Achieved
Performance agreement signed.
The Board of Directors undertakes in line with the PFMA, related
Treasury Regulations and best practice, to comprehensively evaluate
the core risks facing the SABC
Achieved
•
Achieved
•
•
Develop an effective and pro-active Risk Management Strategy as
well as the mitigation of such risks which will be submitted to the
Shareholder;
Regularly and independently evaluate the effectiveness of the Risk
Management Strategy; and
Report to the Shareholder in its quarterly reports on the effective
implementation of the Risk Management Strategy.
SABC Parliamentary Presentation April 2011
81
Compliance with Shareholder Compact
SABC Board Undertaking
Delivery
In line with the PFMA, related Treasury Regulations and best practice,
to develop and implement a Fraud Prevention Plan and to report to the
Shareholder on implementation of such Plan.
Achieved
At least on a quarterly basis, assess the assumption that the SABC is a
going concern and to develop procedures and mechanisms to fulfill this
responsibility so as to enable it to identify issues which it considers
have the potential to provoke a need to re-examine the going concern
assumption. The Board of Directors further undertakes to promptly
notify the Shareholder and the Minister of Finance of any conclusions it
reaches in this regard and/or of any events, activities or circumstance
which might negatively affect this assumption.
Achieved.
Quarterly report submitted to
shareholder
SABC Parliamentary Presentation April 2011
82
Compliance with Shareholder Compact
SABC Board Undertaking
Delivery
Formally require the Audit Committee of Board to, on an ongoing basis,
assess the assumption that the Corporation is a going concern and to
report on such to the Board. Any such reports from Audit Committee
shall be furnished to the Shareholder and the Minister of Finance if
they indicate that any events, activities or circumstance might
negatively affect the assumption of the SABC as a going concern.
Not achieved
Audit Committee considered, but
formal report not tabled yet
in fulfilling its responsibilities outlines above undertakes to include in it
quarterly reports to the Shareholder as well as in any other
extraordinary reports relating to the SABC’s status as a going concern,
liquidity risk disclosures that may include but not be limited to:
• Any significant adverse variation in operating cash flows
• Any significant reduction in revenues or margins forecast and
• Any failure to obtain renewal or extension of bank facilities that
had been anticipated.
Achieved
SABC Parliamentary Presentation April 2011
83
SABC Performance Measures
FY11-14
84
Key Performance Indicators
Pillar 2: Platform Management
Strategic Intent
Putting Broadcasting and Broadcasters back in the forefront of what the organisation is about and editorial
integrity back into the platforms and programmes of the SABC in particular News
Strategic Objective Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Provide content
Sport
 Reduce cost of
Reduce Rights cost
that drives
programming that
Production by
by 5% over the next
audiences and
delivers ROI
10% across the
36 months
delivers public
board on sport
value, whilst
production
meeting both the
 Hot talent loss
public service
reduction by 10%
mandate and
Reduced
Reduce the number of The annual
The annual
sustainability of
impairments
titles that are impaired impairment value
impairment value
the organisation
by 50%
to be below 10% of to be below 5% of
foreign
foreign
transmission
transmission
budget
budget
Local
Avg. Cost per minute
Avg. Cost per
Avg. Cost per
commissioned
per genre limited to
minute per genre
minute per genre
Content Cost
2% increase
to increase by not
to increase by not
containment by %
more than 50% of
more than 75% of
CPI
CPI
Key Performance Indicators
Pillar 2: Platform Management
Strategic Intent
Putting Broadcasting and Broadcasters back in the forefront of what the organisation is about and editorial
integrity back into the platforms and programmes of the SABC in particular News
Strategic Objective Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Provide content
Foreign license
Reduce new deal
Deal values to increase Deal values to
that drives
costs containment values by 10%
by 50% of CPI
increase by 75%
audiences and
by %
(Measured in US$,
(Measured in US$)
of CPI
delivers public
excluding SABC3
(Measured in
value, whilst
procurement)
US$)
meeting both the
Education delivery Deliver mandate hours Deliver mandate hours Deliver mandate
public service
on radio,
in line with license
in line with license
hours in line
mandate and
television &
conditions
conditions
with license
sustainability of
outreach
conditions
the organisation
Key Performance Indicators
Pillar 2: Platform Management
Strategic Intent
Putting Broadcasting and Broadcasters back in the forefront of what the organisation is about and editorial
integrity back into the platforms and programmes of the SABC in particular News
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Reestablishment of the
 Centralisation of Research delivery Research delivery
market intelligence
services
to meet
to meet
function to drive business  Department
organisational
organisational
decision making informed
resourced
requests
requests
by audience requirements  Research
Delivery of public
delivery to meet
service broadcasting
organisational
that achieves the
requests
organisation’s
Television Audience
60%
57%
55%
mandate delivery,
delivery
drives audiences,
Turnaround strategy for
16% LSM 7-10
16% LSM 7-10
16% LSM 7-10
and creates public
SABC3 to deliver on
value
audience targets
All Radio listenership
67%
68%
68%
increased to 68%
ICASA Mandate delivered
As per ICASA mandate
for Radio & TV
Key Performance Indicators
Pillar 2: Platform Management
Strategic Intent
Putting Broadcasting and Broadcasters back in the forefront of what the organisation is about and editorial
integrity back into the platforms and programmes of the SABC in particular News
Building the digital SABC and integrating the digital future into all plans and actions
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Plan of delivery for
Business case signed off and
Commercial
Expansion of
commercial launch of platform ready for launch
launch
transmission
DTT Platform
coverage
Delivery of public
service broadcasting
 Digital Media and
 Establishment of Digital
that achieves the
Technology division
Media division and
organisation’s
established
implement operating model
mandate delivery,
drives audiences,
 Business unit
and structure for the
and creates public
structure resourced
combined division (Digital
value
Media and Technology)
 Recruit resources to staff
future IT business unit
Key Performance Indicators
Pillar 2: Platform Management
Strategic Intent
Putting Broadcasting and Broadcasters back in the forefront of what the organisation is about and editorial
integrity back into the platforms and programmes of the SABC in particular News
Building the digital SABC and integrating the digital future into all plans and actions
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
 Delivery of public
 Public value
 Research results  Research results
value as per research
research
FY11/12
FY12/13
findings
conducted
implemented
implemented
Delivery of public
 Meet public
service broadcasting  Research that shows  Meet public value  Meet public
SABC meets public
targets as set
value targets as
value targets as
that achieves the
value (targets to be
set
set
organisation’s
mandate delivery,
set)
drives audiences,
100 low power
In total, 200 low
In total, 300 low
 Increased reach of
and creates public
transmitters
power transmitters power
SABC services
value
operational
operational
transmitters
through the rollout
operational
of low power
transmitters
Key Performance Indicators
Pillar 2: Platform Management
Strategic Intent
Building the digital SABC and integrating the digital future into all plans and actions
Strategic Objective Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Complete on site
Complete migration
N/A
Digital Playout
build, and the
and training, and
Centre project
commission and
facility fully operational
implemented
testing
Delivery of public
Digital Library
Overall solution design System build completed Acceptance
service broadcasting project
completed and initial and Acceptance Phase Phase 2
that achieves the
implemented
implementation
1 completed
completed and
organisation’s
under-way
solution handed
mandate delivery,
over to the SABC
drives audiences,
Storage Area
Complete
N/A
N/A
and creates public Network project
implementation and
value
implemented
facility operational
Both studios
Upgrades to
N/A
N/A
completed and
Studios 1 and 2
operational
Implemented
Key Performance Indicators
Pillar 2: Platform Management
Strategic Intent
Building the digital SABC and integrating the digital future into all plans and actions
Strategic Objective Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
3 FCCs completed
4 FCCs completed and N/A
Critical
and operational
operational (in total)
infrastructure in
Delivery of public
Final Control
service
broadcasting that Centre
implemented
achieves the
organisation’s
mandate delivery, Newsroom
System implemented N/A
N/A
drives audiences, production and
and operational
and creates public
computer system
value
implemented
Key Performance Indicators
Pillar 3: News
Strategic Intent
• South African news provider of choice
• Building brands that reflect excellence and the South African identity in every way
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Provide distinctive
public service
broadcasting
through compelling
nation news that is
regionally focused
and international
news from an
African perspective
News programming that
delivers audiences and
achieves slot targets .
Improve audiences from 7%
to 10%
24 hour news channel
launched
Stem further loss of
audiences Achieve 7%
audiences
Stabilise audience
base. Achieve 8%
audiences
Grow audiences to
10%
Launch the 24 Hour
News Service, by April
2011
Local Government Elections Ensure a successful,

Provision of platform
fair and balanced
for citizens, politicians broadcast coverage
and parties to relay
with national -reach.
their campaign
messages

Balanced analysis of
election issues

Broadcast of IEC
results
Grow distribution
into Africa from
FY11/12 base
Commence
preparations for
the 2014 general
elections.
Grow the brand and
audiences by 10%
from FY12/13 figures
Implement an
effective, fair and
balanced election
broadcast coverage
plan on both radio
and television.
Key Performance Indicators
Pillar 4: Governance
Strategic Intent
• Having an operating model that is simple and easily understood, supported by an organisational design
that assigns accountability directly to those charged with execution of the Enterprise plans and good
governance
• Focusing on the performance of the organisation at every level and holding individuals accountable for
delivery
Strategic Objective Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Review of
Headcount
15% reduction
5% reduction
Total head
operational
reduction to the
count at 3000
policies and
targeted
procedures to
operating model
ensure
Review and
Launch updated,
IS BC9000
alignment with
revised editorial
relevant Editorial
accreditation
new operating
policy
Policy
model
Key Performance Indicators
Pillar 4: Governance
Strategic Intent
• Having an operating model that is simple and easily understood, supported by an organisational design that
assigns accountability directly to those charged with execution of the Enterprise plans and good governance
• Focusing on the performance of the organisation at every level and holding individuals accountable for
delivery
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Ensure
Business
 Annual
 Annual
 Annual
operational
performance
performance
performance
performance
efficiency so as
management
contracting
contracting
contracting
to drive business
 Quarterly
 Quarterly
 Quarterly
performance
evaluation
evaluation
evaluation
Individual
 Annual
 Annual
 Annual
performance
performance
performance
performance
management
contracting and
contracting and
contracting and
 Quarterly
 Quarterly
 Quarterly
evaluation
evaluation
evaluation
Trade Union
 Annual
 Annual
 Annual
Relationship
performance
performance
performance
Management
contracting and
contracting and
contracting and
 Quarterly
 Quarterly
 Quarterly
evaluation
evaluation
evaluation
Key Performance Indicators
Pillar 4: Governance
Strategic Intent
Having an operating model that is simple and easily understood, supported by an organisational design that
assigns accountability directly to those charged with execution of the Enterprise plans and good governance
Strategic Objective Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Embed risk
Application of the
management into organisational Risk
the day-to-day
management
August 2011
March 2013
March 2014
activities of the
framework
February 2012
February 2013
February 2014
company
Risk reporting
structures
Conduct internal
risk assessment
workshops to
review and update
SABC risk register
Key Performance Indicators
Pillar 4: Governance
Strategic Intent
Having an operating model that is simple and easily understood, supported by an organisational design that
assigns accountability directly to those charged with execution of the Enterprise plans and good governance
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Embed risk
Increase controls
management into around fruitless and
the day-to-day
wasteful expenditure
March 2012
March 2013
March 2014
activities of the
 Review of
company
procurement
March 2012
processes
March 2012
 Review of DAF
 Review and
refinement of the
internal audit
Key Performance Indicators
Pillar 4: Governance
Strategic Intent
Having an operating model that is simple and easily understood, supported by an organisational design that
assigns accountability directly to those charged with execution of the Enterprise plans and good governance
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Embed risk
Embed risk
 Evaluation of the
Ensure cost of
Ensure cost of
management into
management into the
optimal cost of
compliance is
compliance is
the day-to-day
day-to-day activities of
compliance as a
within percentage
within
activities of the
the company
percentage of
of revenue
percentage of
company
revenue
revenue
 Reduce cost of
compliance by to
agreed percentage
of revenue
 Evaluation of the
Ensure cost of
Ensure cost of
optimal cost of
governance is
governance is
governance as a
within percentage
within
percentage of
of revenue
percentage of
revenue
revenue
 Reduce cost of
governance to
agreed percentage
of revenue
Key Performance Indicators
Pillar 5: People
Strategic Intent
Having an operating model that is simple and easily understood, supported by an organisational design that
assigns accountability directly to those charged with execution of the Enterprise plans and good governance
Focusing on the performance of the organisation at every level and holding individuals accountable for
delivery
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Performance
April 2011
Management Reward linked to
performance strategy
Attraction,
& implementation
retention and
Quarterly
4 Quarterly reviews for 4 Quarterly
4 Quarterly
development of
all staff
reviews for all
reviews for all
resources to drive organisation wide
performance review
staff
staff
organisational
delivery.
Leadership
Development &
Evaluation &
Evaluation &
development
implementation
Implementation Implementation
programme
implemented
Key Performance Indicators
Pillar 5: People
Strategic Intent
•Having an operating model that is simple and easily understood, supported by an organisational design that assigns
accountability directly to those charged with execution of the Enterprise plans and good governance
•Focusing on the performance of the organisation at every level and holding individuals accountable for delivery
Strategic
Key Deliverables
Key Performance Indicator / Target
Objective
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Organisation design,
Organogram approved and On-going review, support On-going
work study, job
cascaded. Job profiles
and enablement
review,
profiles and
determined by
support and
competency profiles
Organisation Design and
enablement
graded by remuneration
Attraction,
department. Roles and
retention and
responsibilities defined.
development of
Competency profiles
resources to
determined.
drive
Training of staff to
Comprehensive training
 Increase bursary intake
organisational
ensure business
strategy aligned to SABC
to 150
delivery.
proficiency and
business operating model  Identify 2% best minds
effectiveness
and strategic direction
per scale code and
have them on an
accelerated leadership
programme
Key Performance Indicators
Pillar 5: People
Strategic Intent
•Having an operating model that is simple and easily understood, supported by an organisational design that assigns
accountability directly to those charged with execution of the Enterprise plans and good governance
Strategic
Key Deliverables
Key Performance Indicator / Target
Objective
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Review cost impact policies:
Leave Policy
Acting Policy
Sept 2011
13th Cheque Policy
April 2011
Attraction,
Senior Managers Car
June 2011
On going assessment Ongoing
retention and
Scheme Policy
April 2011
and review
assessment
development of
Transfer Policy
December 2011
July 2012
and review
resources to
Travel Policy
Sept 2011
drive
Adhoc Rewarding of Staff
March 2012
organisational
Consolidated
March 2012
delivery.
Remuneration Policy
Change to TCOE
April 2011
for new hires
Medical aid Policy Review
March 2012
Key Performance Indicators
Pillar 5: People
Strategic Intent
Building the digital SABC and integrating the digital future into all plans and actions
Having an operating model that is simple and easily understood, supported by an organisational design that assigns
accountability directly to those charged with execution of the Enterprise plans and good governance
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
March 2012
Skills audit completed
Review and align new
Review and align
 Confirmed Job
roles – 50% delivery
new roles – 100%
Families
delivery
 Conduct Audit and
report on gaps
 Design strategies to
close gaps
Attraction, retention
and development of Succession Planning
 Succession Policy 100% implementation of Benchmarking for
resources to drive
Policy and plan in place  Development
interventions, LDP, EDP, EDP
organisational
and executed
Plans for
MDP
delivery.
potential
successors
o Redesigned
and SABC
tailored
leadership
pipeline
Key Performance Indicators
Pillar 6: Financial Health
Strategic Intent
Building an organisation that is economical, efficient and effective
Building the digital SABC and integrating the digital future into all plans and actions
Strategic Objective Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Revenue Targets
met
R4.050 bln.
R4.213 bln
R4.384 bln
Increase revenues
by ensuring
organisational
effectiveness,
efficient service
delivery and the
establishment and
development of
alternative income
streams
Maintain Cost of
Sales Ratio of
5.5%.
Manage working
capital - Reduce
debtors days
Share of
Advertising
revenue
maintained
Government
Subsidy requests
made
Based on Revenue Budget.
5.5%
Cost of Sales 5% (R217m)
5.5%
73 days
69 days
TV – 54%
Radio – 45%
 Lowest-income
households with TV sets
 Concessionary TV
licence holders
73 days
Key Performance Indicators
Pillar 6: Financial Health
Strategic Intent
Building an organisation that is economical, efficient and effective
Building the digital SABC and integrating the digital future into all plans and actions
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
R1.019 bln
TV Licence
R1.040 bln
R1.061 bln
collection targets met
Increase revenues
by ensuring
organisational
effectiveness,
efficient service
delivery and the
establishment and
development of
alternative income
streams
Maintain acceptable cost-to
revenue-ratios:
19%
 Collection cost as % of
10%
operating revenue
 External operating costs
as % of operating
revenue
Increased revenues from
alternative revenue
streams
R51.3m
 Digital Media
 Content exploitation
 Co-production
19%
10%
19%
10%
R54m
R58m
Key Performance Indicators
Pillar 6: Financial Health
Strategic Intent
Building an organisation that is economical, efficient and effective
Building the digital SABC and integrating the digital future into all plans and actions
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Enhance organisational  Reduce cost of
 Reduce Rights
funding for sport of
Production by 10%
cost by 5% of
Increase revenues
national interest
across the board on
FY10/11 figure
by ensuring
sport production
organisational
effectiveness,
 Asset management
 Create organisational
 Strategy
efficient service
strategy developed
structure for Property
implementation
delivery and the
and implemented
and Facilities function
establishment and
and transfer all staff in
development of
to that structure (May
alternative income
2011)
streams
 Approved property
strategy (Jan 2012)
Key Performance Indicators
Pillar 6: Financial Health
Strategic Intent
Building an organisation that is economical, efficient and effective
Building the digital SABC and integrating the digital future into all plans and actions
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
•
Enhance operational
 Supply chain
 Centralisation of
 Creation of Bid
 Implement
efficiency that drives the
management
Procurement (June
Spec Committees
Vendor
performance of the
strategy
2011)
(April 2012)
Management
organisation in a digital
implemented
 Creation of Bid Spec
processes
era; through the
 Realise Savings
Committees (June
development of an
2011)
optimal operating
model, efficient
processes, astute
intellectual property and
supply chain
management as well as a
robust risk management
framework
Key Performance Indicators
Pillar 7: Stakeholder Management
Strategic Intent
Building brands that reflect excellence and South African identity in every way
Building the digital SABC and integrating the digital future into all plans and actions
Strategic Objective Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Enterprise
 Strategy developed  Implementation on  Implementati
stakeholder
 Implementation on
strategy
on on
management plan
strategy
 Resourcing the
strategy
Engagement of
implemented
 Resourcing the
structure 100%
stakeholders to
structure 50%
complete
enhance business
complete
relations thereby
creating better
Regional structure  Strategy approved
 Implementation on  Implementati
environment for
revised &
and new reporting
strategy
on on
execution of
implemented
lines established
strategy
business processes
5 brands win awards in 6 brands in win in top 10 brands win in
Brand &
Top 10 brands survey 10 brands survey or brands surveys
Reputation of
or awards ceremonies awards ceremonies
or awards
SABC improved
Key Performance Indicators
Pillar 7: Stakeholder Management
Strategic Intent
Building brands that reflect excellence and South African identity in every way
Building the digital SABC and integrating the digital future into all plans and actions
Strategic Objective
Key Deliverables
Key Performance Indicator / Target
FY11/12
Medium Term Targets
FY12/13
FY 13/14
Win
60%
of Win
70%
of Win 75% of
Own all the national
categories in all categories in all categories in all
awards, SAMA, SAFTA,
awards
awards
Louries, National Sports, awards
Engagement of
News
stakeholders to
Strategic marketing plan  Recruitment of
enhance business
and implementation
Marketing Head
relations thereby
thereof in all marketing
(June 2011)
creating better
areas :
 Strategy approved
environment for
 Television
(Sep 2011)
execution of
 Implementation
business processes  Radio
 News
 Sport
 Trade marketing
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