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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