The Power of Premier Farnell

Transcription

1 The Power of Premier Farnell

2 Premier Farnell - History 1939 A.C. Farnell Limited founded 1966 Farnell Electronics floated on the London Stock Exchange 1995 Combined Precision Components (CPC) acquired 1996 Farnell Electronics acquired Premier Industrial Corporation for $2.8 billion ( 1.85billion); Premier Farnell created 2001 Buck & Hickman acquired 2006 Harriet Green appointed CEO, April KENT automotive consumables business sold October 2006 Results of Strategic Business review announced 2

3 Premier Farnell FY 2005/6 Turnover: 773.5m Operating profit: 70.1m* Return on Sales: 9.1%* *Before RoHS inventory provision and reorganisation costs Offices in 21 countries 12 distribution centres worldwide Over 4,650 employees Global reach Business is structured in 2 divisions - Marketing and distribution division (MDD) and Industrial Products Division (IPD) MDD 5 businesses Farnell, Newark, CPC, MCM, BuckHickman InOne. 2005/6 turnover - 706m IPD Akron Brass, TPC Wire & Cable. 2005/6 turnover - 67m 3

4 World-wide reach MCM Ohio Newark InOne Mexico Newark InOne South Carolina Distribution Centres: Regional (NDCs) National (NDCs) BuckHickman InOne Coventry (plus branches) CPC Preston Farnell InOne Leeds Newark InOne Brazil Farnell InOne Liège Farnell Newark InOne Shanghai Farnell Newark InOne Singapore Farnell InOne Sydney North America UK Mainland Europe Asia Pacific (44%) (37%) (15%) MDD net sales by geographic market for year ended 29 January 2006 (4%) 4

5 Service Proposition Small order, high service, customer focussed 99% of shipments delivered next day or to a specific date Leading multi-channel provider of electronic and MRO products via web, call centres, field sales, catalogues and direct mail Substantial market positions in UK and US Operating in major markets growing but fragmented Opportunities for growth geographic, customer, market share, channel expansion Broad spread of products, customers and suppliers 5

6 Our customers Customer Priority Speed to market Cost of inventory / availability Cost of down time Volume of components Low Margin High Margin Design engineers Manufacturer (direct) Volume Volume distribution distribution Small scale production MRO Engineers Production Curve Education Prototype R & D Pilot Manufacturer Service Repair Maintenance Product Life cycle Over 2,000,000 customer contacts; 1,000,000 products 6

7 Multi-channel approach 3500 SUPPLIERS (27 strategic) Inventory Management 300,000 Stocked items, Access to 600,000 more Warehousing 12 Distribution centers 80,000 lines per day - most shipped same-day Logistics 20,000 Parcels per day to 150 Countries E-commerce 25 transactional websites 252 eprocurement customers in pipeline Call Centre 1,200 People 24 Contact centres Field Sales 1,000 People 1,000,000 Customer contacts per annum Direct Marketing 1.2 Million Catalogues/a 18 Million Flyers/a 2 MILLION CUSTOMER DEMAND 7

8 Global Electronic Supplier Partners Leading source for industry technical information, seeding of new technologies/ products, engineering samples and pre/small production seamless extension of the supplier s product marketing activities seeding new technologies to the mass market leveraging web-based new product add processes for NPI, globally Deepening partnerships with strategic suppliers harnessing cross-functional resources to drive multi-channel marketing and sales campaigns extending customer reach in traditional and newer markets Enhanced stocking program increase number of stocked EDE products by 70k to 370k work with supply partners to increase sku s to over 900k 8

9 Business Agenda Process Engaged 150 key staff to define growth, efficiency and enabling plans to lead Premier Farnell into the future. multifunctional / business / site streams External advice on IT, HR and Supply Chain logistics. Stage one review reviews to capture issues, dependencies and further opportunities forced distillation to focus on key growth opportunity and stops Stage two review captured IT constraints. Prioritised against shareholder value. identified gaps in financials. Determined next steps to complete the plan. Produced a coherent business plan, IT phasing and financials. 9

10 Business Strategy Outcomes Develop market leading positions in the fast growing global Electronic Design Engineer (EDE) market. Increase investment in the large and rapidly growing Chinese market Focus on operational and cash efficiencies, enabling the plans as a whole to be self-financing over the three year period. Dividend to be maintained at current level. BHIO unlikely to remain in the Group, but continued focus on profitability. 10

11 On the board Components vital especially semis Technology Key Designing for end application & production In the box Aesthetics & practicality Optimise design & build cost Switches, enclosures, connectors etc Primary influencer Small production Small contract manufacturers sat behind EDE EDE Customers Globally have: Similar service requirements Similar product and supplier needs Similar behaviour and motivations 11

12 Focuses on: Demonstrable growth opportunity (8% CAGR) Builds on RoHS leadership Capitalises on S3 Higher margin segment Leverages excellent product portfolio and supplier base Drives small customer growth to improve US margin Addressable Market 13 billion + Delivered through: Optimise power with suppliers Improved & differentiated service aspects Richer web experience More aligned product & marketing capability Improved product range Supplier direct ship for extended range Plus, leverage halo affect on other customers and suppliers. 12

13 E-Commerce Leadership New S 3 web platform delivers Common, stable, reliable platform globally An enhanced, simpler, more intuitive customer experience ( guided search, simplified registration to check out) Ease of doing business Cost efficient investment Focussing on EDE globally then drives Rapid development of e-services for customers (eg search by design), end to end experience First with unique functionality (eg allow customers rate products) Search routine by each website to tailor to country or brand Continuous focus on data customer & product as key asset Business unit changes content real time, whenever (no IT required) Customers are involved in web design and live content (eg reviews/tips) 13

14 Asia Investment RoHS deadline March 1 Mandarin catalogue of 30,000 products China product stocking of 20,000 products through an enhanced 3PL provider - UPS Chinese transaction processing system to support business 14

15 Business Strategy Financials Targets set ROS % > 10%, RONA >30% Portfolio review BHIO unlikely to remain part of the group Working capital efficiency improved inventory turns and RoHS unwind finance the increased investments Gross margin stability, improved SG&A% delivers our ROS% target and operational gearing Focus on operational and cash efficiencies, enabling the plans as a whole to be self-financing over the three year period. Dividend to be maintained at current level. 15

16 The Power of Premier Farnell: Providing products and services to millions of engineers and purchasing professionals globally Profitable Growth Operational Excellence Financial Performance People Leadership Support EDE Customers Globally Create leading Web experience Maintain Regional MRO Countercyclical East Eur/China Expansion Partner of Choice for Supplier Community Cost efficiency from greater web volumes Restructure cost to serve model in US Drive warehouse cost & quality and Inventory Improvements Reduction of Cash cycle Grow earnings to increase level of dividend cover Cash flow improvement fund investment Deliver operational gearing RONA>30% Clear Vision & Performance Culture Leadership & Talent Development Drive Employee Engagement to enhance profitability Strategy Review Execution Leadership 16

17 The Power of Premier Farnell