Investor Presentation
Transcription
Investor Presentation
Premier Farnell plc Investor Presentation 17 May 2013 About Premier Farnell 3,500 Suppliers From design to repair, we support over 2 million customers across electronics, including design engineers, purchasing professionals and MRO engineers ELECTRONIC COMPONENTS e.g. SOFTWARE / SERVICES e.g. 3rd Party Logistics 2 Reach and Resources Reach Resources • Over 2 million customers in over 150 industries • Over 4,400 employees • Over 620 MDD field sales staff • Operations in 35 countries • Over 600 MDD contact centre staff • 3,500 leading suppliers • • Over 500,000 stocked products + four million available on demand 48 transactional websites with 33 in local languages • Leading element14 community • Leader in environmental legislation • • Over 170,000 registered members on the element14 Community element14 Knode, online workspace for EDEs • Technical Support • Tier 1 centres in each region • Live Chat 24/5 • Over 200 Global Technical Support Engineers 3 Global Reach; Regional Presence AMERICAS EUROPE ASIA PACIFIC • 4 countries • 5 websites • 2 warehouses • 260 sales staff • 290 call centre staff • 23 countries • 23 websites • 3 warehouses • 250 sales staff • 250 call centre staff • 9 countries •11 websites Including mandarin • 3 warehouses • 110 sales staff •70 contact centre staff 4 Diverse Customer Base We serve a wide range of industry segments AMERICAS EUROPE • 9 branches • 5 websites • 2 warehouses • 1 contact centre • 195 sales staff • 332 call centre staff • 8 countries • 23 websites • 2 warehouses • 270 employees • 110 field sales • 260 call centre staff Laboratory apparatus and analytical, optical and measuring instruments Electronic components and accessories Computer programming, data processing, computer related services Manufacturing industries Telecommunications equipment Electrical industrial apparatus Computer and office equipment Wholesale trade - durable goods Research, development and testing services Engineering industries Transportation Medical equipment ASIA PACIFIC Infrastructure Environmental services • Singapore HQ Government Services • 3 warehouses Space and • 630related staff Bio-technology • 11 websites Military equipment Including mandarin Wireless technology Oil and gas equipment Marine Business/management Services Controls Industrial/electrical machinery, equipment and supplies Miscellaneous non-durable goods 5 Our Strategy Strategic Evolution Strategy evolved to focus on optimising operating performance around growth, efficiency, profitability and cashflow Focus on customer centric segments of electronics market A differentiating multichannel environment Internationalise our model; focus on Emerging Markets • Customer insight will drive our proposition • Serving customers in the way they prefer • Benefit from globalisation of electronics • Better meet customers needs to drive active customer growth • Increase efficiency through transactional eCommerce • Grow faster in markets such as China and India 7 Our Marketplace 8 Industry Megatrends Three Major Trends in our Industry Increased innovation More engineers needed Increasing number of graduates Pervasion of electronics is driving innovation 6% long term growth New environmental legislation adds further pressure Increased competitiveness Reduced cost/time to market 1. Pervasion of electronics leads to structural market growth 2. Emerging economies increasing electronics engineering - Invested in infrastructure in APAC ahead of the curve - Krakow call centre positions us to benefit from growth in Eastern Europe - Innovative web capability attracts customers globally - Suppliers want to enter faster growing markets - Superb proposition in emerging markets 3. Supply chain consolidation - Suppliers need efficient channel to market - Customers want single source of products - Customers want trusted ,branded product - Suppliers want a trusted, global partner and insights from global marketplace - We stock 500k products from 3,500 top brands 9 Leading Customer Proposition Delivering High Service What do customers want? How do we meet their needs? What do engineers want? Great product availability Fast delivery Trusted, quality product information Support throughout the design process How do we meet their needs? 500,000 products; 3,500 suppliers 99.9% orders delivered same or next day Community Knode 24/5 support team End to End Service - concept to production What is unique about our proposition? World class global linecard Strong local presence; global influence Unique element14 Community Embest CadSoft Eagle Community Knode 11 Extensive Supplier Linecard 3,500 suppliers + 500,000 products = Single, trusted source for our customers 12 Partnering with Suppliers Aggressive addition of new products across, at pace • Over 1,500 NPIs added every week • Newest technologies attract customers Breadth & depth supports key vertical markets, across the product life cycle Best-in-class NPI support • “Marketing Machine” • element14 Community • Expert Technical Support 24/5 • New Product Success Tracking 13 Our Multichannel Sales Strategy Field sales executives Contact centres including our new Krakow centre for European telesales and telemarketing Direct Mail >480,000 Customer touches/year through product publications and Journals Advertising E-Mail Marketing >6m reach across 26 countries per month, on and offline >13m Marketing emails sent per year Search Engine Marketing >7k new customers acquired per month >1.2m visits to the site per month >57m customer touches per year, across 9 channles, channles, generating >12,000 New Customers /Month /Month Vertical Market Microsites (Robotics, Wireless, Sensing, Lighting, Alternative Energy, Medical) >6K Visitors/month viewing applications and solutions Social Media / Video / Webinars Web Merchandising >52k‘Likes’ & daily reach of 10k on Facebook >10k followers across local language Twitter accounts >500 (avg) attendees per webinar >26m page views across 29 local language sites per month >2.5m page views on the homepage per month element14 Community >100K visitors/week 14 Easier Web Experience Unique web proposition: • • • • Data and information Award winning Community Online workplace, the Knode Professional buying workflow management tools Investing in the web • • To enhance our customers’ experience To enable us to go faster with future online enhancements 15 Award Winning Community 16 Complete Customer Solutions Components Community Dev Tools Legislation Procurement Solutions PCB Services Test & Measurment Engineers and Buyers are at the heart of what we do Tech. Support CAD Software App. Notes & Data Dev Boards 17 Concept to Build and Beyond Support from start of design process provides opportunity through the electronics cycle • 80% of design decisions are fixed before the Application Design phase • Focus on front end of design cycle through leveraging development tools to drive customer acquisition and create demand • Follow the customer through their design cycle culminating in component sales 18 What Our Customers Say About Us “The navigation and ordering process are easy to work. Thanks!” “You always stand behind your products and ship your orders in a timely fashion…That’s why I keep coming back.” Easy to do business with Totally reliable Right products selection Future focused Global access, local service Expert resource “My contact is always responsive to our requests and goes above and beyond for us.” “Really helpful to talk to a professional who knows. It would take me forever to find what I was looking for.” 19 Financial results Key Financial Results Key Financials £m Continuing operations (unaudited) Q4 12/13 £m Q4 11/12 £m Q4 Growth Full Year 12/13 £m Full Year 11/12 £m Full Year Growth Total revenue 239.3 233.4 -3.0% 952.0 973.1 -2.8% Adjusted operating profit Adjusting items 23.9 25.5 -3.4% 96.0 107.3 -7.8% 2.8 - (5.1) 16.1 Total operating profit 26.7 25.5 8.0% 90.9 123.4 -24.7% Adjusted profit before tax 18.7 20.3 -7.9% 75.7 88.5 -14.5% Total profit before taxation 21.5 20.3 5.9% 70.6 104.6 -32.5% Adjusted EPS 3.6p 4.0p -10.0% 14.8p 17.4p -14.9% Basic EPS 4.0p 4.0p 13.6p 21.2p -35.8% 21 Interim Management Statement Sales growth(a) Q1 2013/14 Europe 2.5% APAC(b) 7.2% MDD Europe & APAC 3.2% MDD Americas -0.7% MDD Other 10.4% MDD Division 2.4% IPD Division 7.4% Group 2.8% Outlook “We are pleased that our actions to enhance our proposition and drive sales have enabled the Group to return to positive growth in the first quarter. However, current market conditions remain challenging with indicators still weak in all our global markets.” “We continue to enhance our customer proposition as we invest in inventory, systems and our differentiating multichannel sales strategy, starting with our new global web platform which is currently being implemented in North America.” “We remain confident in our ability to implement our strategic vision and optimise the business’ performance to grow our active customer base, gain market share and drive financial performance.” Laurence Bain, CEO Notes: •Sales growth is based on sales per day for continuing businesses at constant exchange rates and for like periods. •Excluding the acquisition of Embest, APAC grew 3.2% year on year. The Group acquired Embest in the second quarter of our 2012/13 financial year. 22 Key Performance Indicators KPI FY13 FY12 FY11 MDD customer growth 4% 1.3% 2.7% 5.9% Sales per day growth 6% -2.8% 1.6% 21.4% Emerging markets growth 10% 7.5% 21.1% 97.9% % of MDD sales from eCommerce 70% 56.8% 55.0% 47.8% Return on net operating assets >30% 34.6% 37.1% 42.0% Profitability Operating margin 10%-12% 10.1% 11.0% 11.0% Cashflow Free cash flow as a % of sales 6% 6.1% 4.9% 3.5% Growth Efficiency 23 FY13 Segmental Performance Revenue £m MDD Europe & APAC(1) Adjusted Operating Profit £m (ROS %) FY 12/13 FY 11/12 Growth(a) 422.6 443.1 -3.4% MDD Americas(2) 353.8 369.1 -6.2% MDD Other(3) 107.2 99.4 5.5% MDD Total(4) 883.6 911.6 -3.6% IPD Division(5) 68.4 61.5 8.1% - - - 952.0 973.1 -2.8% Head office costs(6) Group FY 12/13 FY 11/12 62.3 71.0 (14.7%) (16.0%) 25.2 31.3 (7.1%) (8.5%) 10.6 9.3 (9.9%) (9.4%) 98.1 111.6 (11.1%) (12.2%) 11.3 9.5 (16.5%) (15.4%) (13.4) (13.8) 96.0 107.3 (10.1%) (11.0%) Growth(a) -7.6% -20.2% 14.0% -9.4% 17.8% -7.8% 24 Strong Cash Flow £m Q4 12/13 Q4 11/12 FY12/13 FY 11/12 Adjusted operating profit 23.9 25.5 96.0 107.3 Depreciation and amortisation 4.7 4.5 18.4 18.2 Additional pension scheme funding (0.3) (1.0) (2.6) (3.4) Other non-cash items (0.3) 0.2 1.9 1.7 Working capital 11.9 10.9 6.6 (13.6) Cash generated from continuing operations 39.9 40.1 120.3 110.2 Adjusted operating cash flow conversion 167% 157% 125% 103% Net capital expenditure (5.3) (5.0) (21.8) (21.7) Interest and preference dividends (7.6) (5.6) (18.0) (14.4) Tax (5.4) (6.5) (22.4) (26.9) Adjusted free cash flow 21.6 23.0 58.1 47.2 Adjusted free cash flow % to revenue 9.0% 9.9% 6.1% 4.9% 25 Net Debt £m Jan 2013 Jan 2012 114.4 125.5 229.6 237.1 2.0 1.9 102.8 1.0 Between 1 and 2 years 0.1 100.9 Between 2 and 5 years 160.1 138.9 96.0 115.2 359.0 356.0 EBITDA (excluding adjusting items) Including preference shares: Net debt Net debt:EBITDA Maturity profile of loans (including preference shares) Due within 1 year After 5 years 26 Sustainable Dividend 10.0 9.0 Dividends Paid 8.0 6.0p 7.0 6.0 5.0p 5.0p 5.0p 5.0p 5.0p 5.0p 5.0p 5.2p 5.2p 6.0p 6.0p 5.2p Final Dividend 5.0 Interim Dividend 4.0 3.0 2004/05 4.2p 4.2p 4.4p 4.4p 4.4p 2012/13 2003/04 4.0p 2011/12 2002/03 4.0p 2010/11 2001/02 4.0p 2009/10 4.0p 2008/09 4.0p 2007/08 4.0p 2006/07 4.0p 2005/06 4.0p 2000/01 2.0 1.0 0.0 Financial Year 27 Recent Financial Performance 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 Sales per day growth(a) % 4.6% 1.0% (9.7)% 21.4% 1.6% (2.8)% MDD sales via eCommerce % 27.6% 32.0% 38.8% 47.6% 55.0% 56.8% Gross margin % 39.7% 39.6% 39.8% 41.1% 39.6% 38.7% Operating margin % 11.8% 11.0% 9.1% 11.3% 11.0% 10.1% Cash conversion % 111% 118% 145% 92% 103% 125% 28 Notes on Presentation • • • • • • Throughout this presentation, in order to reflect underlying business performance, sales growth is based on sales per day for continuing businesses at constant exchange rates and for like periods, and growth in operating profit is calculated at constant exchange rates, unless otherwise stated. References to financial results refer to “adjusted” numbers unless otherwise stated (see note (b) below). Current year adjusted operating profit, profit before tax, and earnings per share in the table above exclude first quarter restructuring costs of £7.5m, second quarter acquisition costs of £0.4m related to the purchase of the entire share capital of Shenzhen Embest Technology Co Ltd (Embest), and fourth quarter restructuring costs of £6.4m offset by a one-off net gain of £9.2m arising from the buyout of pension rights relating to the Group’s US defined benefit pension plan. In the prior year, adjusted operating profit, profit before tax, and earnings per share, excluded the net pre-tax gain of £18.9m from business disposals and excluded restructuring costs of £2.8m. Free cash flow comprises total cash generated from operations, excluding cash flows related to restructuring, less net capital expenditure, interest, preference dividends and tax payments. Free cash flow also excludes net proceeds from the sale of businesses. Proposed final dividend for approval by shareholders at the company’s Annual General Meeting on 18 June 2013. Operating cash flow conversion represents operating cash flow (before capital expenditure) as a percentage of adjusted operating profit. SIA data from Semiconductor Industry Association publication, AFDEC data from Association of Franchised Distributors of Electronic Components, PMI data from relevant Purchasing Managers Index published source in each market. 29 Safeharbour This presentation contains certain forward-looking statements relating to the business of the Group and certain of its plans and objectives, including, but not limited to, future capital expenditures, future ordinary expenditures and future actions to be taken by the Group in connection with such capital and ordinary expenditures, the expected benefits and future actions to be taken by the Group in respect of certain sales and marketing initiatives, operating efficiencies and economies of scale. By their nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Actual expenditures made and actions taken may differ materially from the Group's expectations contained in the forward-looking statements as a result of various factors, many of which are beyond the control of the Group. These factors include, but are not limited to, the implementation of initiatives supporting the Group’s strategy, the effect of legislation and regulatory enactments, recruitment and integration of new personnel, the implementation of cost-saving initiatives to offset current market conditions, continued use and acceptance of e-commerce programs and systems, the ability to expand into new markets and territories, the implementation of new sales and marketing initiatives, changes in demand for electronic, electrical, electromagnetic and industrial products, rapid changes in distribution of products and customer expectations, the ability to introduce and customers’ acceptance of new services, products and product lines, product availability, the impact of competitive pricing, fluctuations in foreign currencies, and changes in interest rates and overall market conditions, particularly the impact of changes in world-wide and national economies. The Group does not intend to update the forward-looking statements made herein. 30
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