Brammer Invend TM. > Convenience & simplicity > Reduce consumption > Lower inventory costs > Improve productivity. 28 th July 2015

Transcription

1 Brammer Invend TM > Convenience & simplicity > Reduce consumption > Lower inventory costs > Improve productivity 28 th July 2015

2 Agenda What is Invend? Benefits for Brammer s customers Benefits for Brammer Progress to date Brammer Invend for Key Accounts Brammer Invend Infrastructure Financial model Brammer s competitive advantage 2

3 What is Invend?

4 What is Brammer Invend? A fully managed industrial vending service that reduces consumption of fast moving industrial products, lowers inventory costs & improves productivity Fully managed service: We handle everything from installation to restocking No up-front investment: No need for the customer to invest in machines & software, he only pays for the products used plus a monthly software/data management fee Easy installation and operation: All the customer needs to get started is an internet connection and power supply Provides control over usage and access: Gives the customer realtime visibility and control of end user and cost centre usage 4

5 How It Works: Machine set-up and installation We help the customer select the right lines from our Invend product range and agree stock levels We configure the machine to suit the chosen products We help the customer to select product lines & agree stock levels then manage machine delivery, installation & training 03 We deliver and install the machine We show the customer how to set-up and manage end 04 users 5

6 How It Works: Restocking and reporting End users enter their unique code using a keypad or scanning a barcode label if authorised, the required product is dispensed An automated process means we know when the stock in the machine is running low End users have convenient and controlled access to products whilst an automated process allows us to replenish items when required 03 Our local branch restocks the machine & invoices for the items the customer has used 04 Invend provides the customer with a range of reports to keep him in control of usage 6

7 Brammer Invend : Product choice Invend can stock a broad range of fast moving industrial consumables: over 30,000 certified vendable products

8 Invend Machine Overview 1 2 Invend TM Coil Ideal for hand tools, cutting tools, abrasives, adhesives & PPE items such as gloves and safety glasses > Manage up to 60 individual products > Easy to use touch screen interface & bar code Scanner > High levels of control over item issues > Visibility of products through glass front Invend TM Carousel Ideal for a wide range of industrial consumables such as hand tools, cutting tools, abrasives, adhesives & PPE such as gloves, glasses & ear protection > Manage up to 560 individual products > Flexibility to carry a wide range within small footprint > Easy to use touch screen user interface > High levels of control over item issues 3 Invend TM Locker Suitable for large items or bulk issues of expendable items such as lubricants and boxed gloves > Operates in combination with the Invend TM Coil or Carousel > Manage up to 12 individual products > Visibility of products through glass front 8

9 Invend Technology Ethernet Customer Firewall Firewall Internet Invend TM Machine Port 80 & 443 Invend TM Server 9

10 Benefits for Brammer s customers

11 Why Brammer Invend? Invend offers: Reduced product consumption. By controlling the use of fast-moving industrial consumables, a customer can typically cut spend by 25 to 40% Health and Safety Compliance. The customer knows what has been vended when, and to whom. Reduced replenishment costs and simplified processes. We handle restocking, saving the customer money and reducing wasted staff time Lower inventory costs, greater efficiency, and improved productivity. The customer only pays for the items he uses, removing the need to carry the cost of inventory. Products are available when and where the customer needs them, allowing the customer s staff to use time productively, instead of visiting stores to restock 11

12 Who Benefits? 24/7 availability across the customer s business Purchasing Production and Maintenance Stores Health and Safety Reduces consumable MRO usage by 25-40% Reduces suppliers and total cost of ownership Improves usage reporting by user and cost centre Improves control and availability of required products Reduces wasted walk and waiting time associated with visits to stores Saves wasted staff time by removing the need to order, replenish and raise paper work for fast moving MRO items Only approved PPE equipment is available on the shop floor Audit trail of issued health and safety items 12

13 Benefits for Customers 13

14 Benefits for Brammer

15 Invend Direct and Indirect Growth 1. Invend generates DIRECT GROWTH Direct growth is the revenue generated through the machine Almost all of the business transacted through the machine is new business to Brammer Mainly PPE and TGM: NOT cannibalising existing business 2. Invend generates INDIRECT GROWTH Through better customer engagement and visibility the customer sites with Invend machines grow faster than the rest of the business Indirect growth is the additional revenue attributable to the Invend presence at customer site outside of the vending machine Indirect growth is across ALL product ranges 15

16 Indirect Growth In selling Invend we have engaged with: Health and Safety Managers Purchasing Managers Production Managers Maintenance Managers Factory Managers Multiple critical customer collisions during pre-sales process Post-installation, Brammer is front of mind through: Invend machines are a very visible Brammer presence on the customer site Direct access to customer site for replenishers we are a trusted part of the customer s supply chain 16

17 Comparison of Product Mix H vs H like for like sales across 317 sites YTD JUNE INVEND CUSTOMER TOTAL SALES YTD JUNE DIRECT SALES MIX TGM 85% CHEMICALS 8% OTHERS 7% 100% GROWTH GROWTH % MIX BEARINGS 1,550 1, % 8.3% LINEAR MOTION % 1.5% POWER TRANSMISSION 3,823 3, % 17.4% FLUID POWER 4,424 4, % 22.1% CHEMICALS % 4.5% FASTENERS % 1.8% TGM 3,384 6,382 2, % 28.5% SEALS 962 1, % 4.9% SERVICES % 2.7% OTHERS 1,223 1, % 8.3% 17,178 22,366 5, % 100.0% We sell more of ALL product groups to customer sites with vending machines All values in 000s 17

18 Progress To Date

19 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Cumulative Number of Machines Signed in Agreements Agreements have now been signed for 1,206 machines 19

20 Updates Quarter on Quarter Q1 Q2 Q3 Q4 Machines Signed Q1 Q2 Q3 Q4 Machine Installations Q1 Q2 Q3 Q4 Machines Live

21 Updates Quarter on Quarter Q1 Q2 Q3 Q4 Total Account Sales ,370,694 11,995,246 for sites with vending machines ,092,425 4,756,445 6,708,560 8,237, , , , ,711 Q1 Q2 Q3 Q4 Invend Growth Rate % 24.7% % 47.5% 62.1% 48.4% % 35.9% 106.5% Q2 two days shorter than Q1 All values in uros 21

22 Invend Update - June Signed 136 machines in June Installed 74 machines in June Live machines 845 Pipeline of 316 machines to install YTD Total 1, people directly involved in Invend TM 22

23 Key Accounts vs Regional Accounts (2015 June YTD) Regional Base Business Key Accounts Number Customers Number of sites Number of Machines end Q * Number of machines end Q * Average Machines per site H a/c Growth 63% 24% H1 Account Sales 4,595k 17,771k *Excludes 28 machines at Alcoa in the Nordic region. Related sales numbers also excluded for consistency. 23

24 Brammer Invend for Key Accounts

25 Invend and the Brammer Value Proposition Brammer has a unique cost savings program that helps you save money Three key focus areas 01 Reduce your total 02 Improve your 03 Reduce your acquisition costs production efficiency working capital Reduced Consumption Completely automated process Walk and wait time saving 24/7/365 availability Stock owned by Brammer until dispensing All saving definitions and calculation methodologies are captured and agreed in a cost saving overview document 25

26 Invend saves costs for our customers 74 Cost Savings already logged 22 Cost Savings forms signed off by customers for a total value of 175 k 26

27 Invend for Key Accounts # MACHINES AT KEY ACCOUNTS 83 customers sites machines live Q Q Q Q Q Q Q Q Q Q2 27

28 Quarterly Invend sales QTR INVEND SALES Current annual direct sales run rate > 3m Accelerating trend Q Q Q Q Q Q Q Q Q Q2 28

29 Some Customer References 29

30 Rapid deployment within large European customers Nine Key Account customers already have Invend TM machines live in more than one country Most advanced customer has 79 machines installed on 32 sites across 4 countries and more to come! 30

31 The Brammer Invend Infrastructure

32 Specialist Invend Team Dec Dec Jan Feb Mar Apr May June Resource summary '13 '14 '15 '15 '15 '15 '15 '15 Nb Invend Attack Vans INVEND MANAGER INVEND SALES EXECUTIVES PROPOSALS COORDINATOR INSTALLATION COORDINATOR DATA & PRICING/ DEMAND COORDINATOR SUPPORT/ REPORTING TOTAL FTE (excl Telesales) Additional (telesales, Installation, Helpdesk, Team leaders) Centre Team TOTAL FTE Total annualised spend of 6 million Our business development efficiency has increased consistently in each of the last 6 quarters the number of staff has plateaued but the number of agreements per person per month has increased significantly We have capacity in place to win 300 agreements per month, as efficiency continues to improve 32

33 Infrastructure 117 people 21 Invend Attack Vans Order book across 15 countries Invend Certified Product Database 30k+ Fully integrated into ERPs 33

34 Benefits for Brammer the Financial Model

35 Total Sales to Invend Customer Sites Solid growth and steady margins, consistent with Brammer s average All values in uros 35

36 Invend Modelling profitability per machine Model Assumptions First full year annualised Direct Growth = 8k by year end First full year annualised Indirect Growth = 16k by year end Both Direct and Indirect Growth increase further over time Gross Profit similar to Brammer s current average Drop-through after Incremental SDA = 10% Trading Profit Average machine cost = 8k ROCE = 30% per annum Machine life > 10 years Depreciation 7 years straight line Machine inventory turns > 12 times Funded from cash flow and existing facilities 36 These assumptions have been proven

37 Brammer s Competitive Advantage and Barriers to Entry

38 Competitive Advantage Differentiator from our competitors purchase your PPE and use the Invend Service for control Customers with Invend are buying new product ranges from Brammer (TGM & PPE) No cannibalisation of existing Brammer business, even though customer consumption of vended items reduces Machine behind the machine is a differentiator. It is complex to consistently deploy 100s of machines across Europe Large investment We have so far spent over 10 million of S,D&A solely on developing the vending concept Difficult for others to replicate 15 countries live (UK, IE, IS, NO, PL, ES, FR, BE, NL, DE, CZ, IT, CH, AT, PT) 38

39 Barriers to Entry It is complex to deploy consistently Our One Brammer approach to Best Practice (Synergies) has come into its own: Marketing Sales process Quotation process Machine configuration Machine installation IT infrastructure and Customer reporting Product development Replenishment process 39

40 Economies of Scale Brammer specific competitive advantage The Machine behind the machine - huge investment made Breadth and capability of the supply chain Inventory & Infrastructure - warehousing, branch network, purchasing Relationship with Suppliers and bargaining power 27,000 suppliers significant growth with TGM & PPE suppliers Access to existing customers Over 100,000 customer sites in 23 countries Only 200 customers and 317 customer sites have so far adopted vending 0.3% of customer sites, but these customers now represent 5% of revenues and are our fastest growing group of customers Access to existing Key Accounts!! Sell once, win dozens of machines.. We become further embedded at the customer 40

41 Barriers to Entry Capital Requirements 8000 investment per machine Customer is charged a monthly software fee The machine is free to the customer Returns are generated from direct and indirect sales growth Indirect growth is double direct growth To get indirect growth you need the full product range PPE TGM Bearings Mechanical/Electrical Power Transmission Fluid Power Model does not work without full product range 41

42 The Machine behind the Machine Local Sales Force Regional Build Centres Packaging Support & Training Product Templates 42 Local Branch Fulfilment

43 Potential Upsides Product substitution with Brammer own-brand products will increase margin significantly - - Faster development of PPE/TGM spend leading to better pricing and rebates SDA efficiency improvements linked to machine density 43

44 Summary

45 Summary Invend is a great solution for customers Productivity, Availability, Consumption reduction, Compliance Invend is complementary to, and leverages our Key Account and TGM growth drivers Invend delivers proven profitable growth for Brammer: Direct sales growth and Indirect sales growth, in a ratio of 1:2 Customer sites with Invend are proven to grow faster than the rest of the business The industrial vending market is an undeveloped channel to market, represents a huge opportunity, and has high barriers to entry Brammer is Number One in Europe, and we will extend our lead 45

46 Questions 46