2012 Preliminary Results For the year ended 31 December Proven strategy adds value to customers, delivers growth and increases resilience

Transcription

1 2012 Preliminary Results For the year ended 31 December 2012 Proven strategy adds value to customers, delivers growth and increases resilience

2 Agenda Overview Financial highlights Growth Strategy Market segmentation Key Accounts Insites TM Product range extension Current trading and outlook 2

3 Overview Record Group revenue up 11.9% to million Proven strategy delivered market share gains and growth, despite a challenging economic backdrop Buck and Hickman exceeded all expectations 51.5million validated cost savings in 2012 Strong cash generation and balance sheet Increased dividend up 11.9% reflecting Board s confidence for the future Robust fundamental growth drivers in fragmented 40 billion market 3

4 FINANCIAL HIGHLIGHTS

5 Total sales Statutory +11.9% Buck & Hickman +13.5% Like for like* +2.7% FX -4.3% m Results are stated before amortisation of acquired intangibles and exceptional items * Including incremental growth from Buck & Hickman 5

6 Operating profit Total +17.0% Buck & Hickman +2.8% Like for like* +19.5% FX -5.3% m Results are stated before amortisation of acquired intangibles and exceptional items * Including incremental growth from Buck & Hickman 6

7 Operating margin 4.9% 5.6% 6.6% 5.6% 5.8% Like for like* Total Results are stated before amortisation of acquired intangibles and exceptional items * Including incremental growth from Buck & Hickman 7

8 Earnings and dividend EPS +10.6% DPS +11.9% Results are stated before amortisation of acquired intangibles and exceptional items * Including incremental growth from Buck & Hickman 8

9 Working capital days Receivables Inventories Payables (64.4) (60.6) Total

10 Profit & Loss Buck & 2011 Change Like for Hickman like* 2011 Like for like Buck & Hickman FX 2011 Change Turnover % (25.2) % Gross margin (7.7) Gross % 30.5% 30.3% 24.9% 31.6% 30.6% 25.7% 30.3% 30.3% Sales, Distribution and Administrative Costs Underlying operating profit (157.6) (141.5) (24.4) 11.4% (133.2) (129.5) (5.9) (135.4) 6.1 (141.5) 11.4% % (1.6) % % 5.8% 5.6% 1.9% 6.6% 5.6% 3.4% 5.5% 5.6% m *Like for like, including incremental growth from Buck & Hickman 10

11 Profit & Loss 2.7% 100 basis points 2012 Buck & Hickman 2012 Like for like* 2011 Like for like Buck & Hickman FX 2011 Change Turnover (25.2) % Gross margin (7.7) Gross % 30.5% 24.9% 31.6% 30.6% 25.7% 30.3% 30.3% Sales, Distribution and Administrative Costs Underlying operating profit (157.6) (24.4) (133.2) (129.5) (5.9) (135.4) 6.1 (141.5) 11.4% (1.6) % % 5.8% 1.9% 6.6% 5.6% 3.4% 5.5% 5.6% m *Like for like, including incremental growth from Buck & Hickman 11

12 Ratios Buck & 2011 Change Like for Hickman like* 2011 Like for like Buck & Hickman FX 2011 Change Turnover % (25.2) % Underlying operating profit % (1.6) % Return on Sales 5.8% 1.9% 5.6% 6.6% 5.6% 3.4% 5.5% 5.6% Closing operating capital^ Return on operating capital employed** 34.3% 32.3% 34.4% 33.8% Return on investment*** 17.8% 16.6% 18.7% 17.7% *Like for like, including incremental growth from Buck & Hickman ^Segmental assets including goodwill less liabilities, before current and deferred tax, dividends, cash, loans, deferred consideration & pension liability at constant currency **Underlying operating profit as a percentage of operating capital as defined in * but excluding goodwill and acquired intangibles ***Underlying operating profit as a percentage of operating capital as defined in * 12

13 Sales* contribution by growth driver Key Accounts Insites TM Market segmentation & Product extension 79.3 Buck & Hickman (49.0) Eliminations *At constant currency + Eliminating Key Account sales also included within other categories 13

14 Cash generation Depreciation and amortisation 2.0 Share option charges (11.6) 3.8 Inventories Receivables (7.9) Payables Trade 0.8 Other Operating profit (Before amortisation and exceptionals) 28.6 Operating Cash Flow (Pre-exceptional outflow) m 14

15 Movement in net debt Movement in net debt Opening Exchange (0.6) Movement Operating Cash Flow (8.9) Capital expenditure (net) (4.8) Interest and pension funding (7.9) Tax (3.4) (1.0) Exceptional cash outflow Purchase of own shares (net) (11.5) Acquisition & Deferred Consideration Closing 53.8 (10.2) (19.1) Dividends Net cash outflow m 15

16 Net assets Fixed assets Goodwill Working capital 10.2 Deferred consideration 3.7 (4.9) Tax Net pension liability (19.1) (2.4) Net debt Exchange

17 GROWTH STRATEGY

18 Brammer Growth Strategy Growth Capability Costs Synergies Geographical development Key Accounts development Business Skills Development European Buying Systems Integration Insites TM expansion Distributed Learning Programme Development IT and Other Cost Reductions Brand Development Product range extension Internal Communications and Involvement Capital Employed Management Supplier Relationship Management Country organic growth People Development Supplier Rationalisation Business Best Practice Bearings 12% share of 2bn market MPT 3% share of 5 bn market Fluid Power 1% share of 10 bn market Tools & General Maintenance 1% share of 25 bn market 18

19 Market Segmentation* Focus on more sustainable industry segments, minimise exposure to cyclicals Hunting for good quality customers: serious about compliance Constant focus on: Sales pipeline Customer retention Cross-selling H H H H Pulp, Paper & Packaging +13.2% H H H H Construction & Aggregates -2.8% 15.4 Food and Drink +7.7% H H H H Automotive +1.4% H H H H Metals +3.6% 33.3 Recycling +42.5% Negotiate multi-year contracts Increased knowledge of customer s processes m *Underlying group excluding Buck & Hickman H H H H H H H H Utilities % H H H H

20 Key Accounts Focus on defensive segments Strong pipeline Near double digit growth continues Opportunities from European Product Division development Represents 37% of total sales 13 new contracts won during 2012 SPWD +9.8% Key Account Sales Performance Multi-site Status Scope Sales Variance Tier 1 Tier 2 Tier 3 Tier 4 EU contract National contract No contract National contract Part EU Group Part EU Group Part EU Group National Group 100.9m 113.5m 81.4m 85.3m 27.1m 33.7m 52.9m 55.3m 262.3m 287.8m 12.5% 4.8% 24.4% 4.5% 9.7% 20

21 No. of key Accounts EU KA Revenues (M ) Pan-European Supply Agreements EXPERIENCE AT SCALE More than 500 people serving 50 Pan-EU Key Accounts Key Account support provided in 16 countries 15 Key Accounts are in the Global Fortune 500 list 6 of these in the top Key Milestones and Investments First ever EKAM Employed Investment in European KA Team Central support team established KA Tools established Sector Management established Focus on resilient sectors Account Development Managers Major Investments in KA infrastructure 21

22 Insites TM 54% growth since 2009 in number of Insite TM locations Record 88 new Insites TM opened in full time and 50 new part-time 31 closed Net 57 new Insites TM Growth rate of 9% to million 327 Insites TM operational 22

23 Product Extension Position Brammer as a specialist in Tools, General Maintenance and Health & Safety in Europe Size of the market - 25 billion Over 250,000 potential contacts through cross-selling 1/3 of our customers quote vendor reduction as a key focus area Buck and Hickman Acquired Q ,000 new customers Cross-selling initiatives progressing well Performance ahead of expectations Margin opportunity to impact from supply side synergies and margin improvement programme 23

24 Product Extension* Tools & Maintenance +20.1% Tools & Maintenance Health and Safety Fluid Power Fluid Power +6.4% 49.3 H H H H Seals Mechanical Power Transmission Chains & Sprockets Fluid Power 91.4 Bearings Motors Bearings -7.6% Gearboxes 76.7 Mechanical Power Transmission - Belts & Pulleys Linear Motion - Industrial Automation Non-Bearings +5.2% H H H H Mechanical Power Transmission -1.5% H H H H H H H H m at constant currency *Underlying group excluding Buck & Hickman H H H H

25 European Product Division Cross-selling continues to drive market share gains Supplier conference - March supplier negotiations underway 48 supplier agreements concluded All suppliers will provide pan- European support and contribute to group marketing Catalogue Sept ,000 copies across Europe Catalogue available in 10 languages 50 different brands featuring 17,369 sku s Further brands will be available later in 2013 Excellent sales so far EDC established near Paris 25

26 CURRENT TRADING AND OUTLOOK

27 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Sales per working day - Europe Deseasonalized Brammer SPWD Index vs Seasonally Adjusted European Production Index (EU27-3 month moving average) 180% Rest of Group Buck & Hickman EU Production Index 160% 140% 120% 100% 80% 60% 40% 20% 0% 27

28 Sales per working day - Growth Q1-12 Q2-12 Q3-12 Q UK* 8.3% (0.4)% 8.0% 16.8% 15.6% 9.8% 1.7% 4.0% 7.6% Germany 8.1% (30.8)% 13.6% 16.1% 6.4% -0.7% 3.1% 0.8% 0.6% France 9.4% (14.6)% 11.1% 14.2% 8.9% 3.6% 2.3% 1.3% 3.5% Spain 8.3% (22.3)% 9.5% 12.3% 2.7% 1.0% -1.0% -4.0% -0.3% Netherlands 11.4% (16.6)% 10.3% 17.2% 9.3% 11.6% 8.6% 2.8% 8.5% Poland % 24.1% 11.9% 5.3% 6.1% -7.6% 3.0% Total 12.0% (16.1)% 11.6% 21.8% 29.0% 23.0% 20.8% -0.7% 17.1% Organic* 8.5% (16.1)% 11.6% 15.9% 9.4% 3.9% 0.5% -0.7% 2.9% * Like for like, including incremental growth from Buck & Hickman 28

29 Growth Track Record Total Revenue GP % 30.1% 30.9% 30.5% 30.4% 30.0% 30.1% 30.1% 30.3% 30.5% Operating profit TP % 3.6% 4.4% 4.8% 5.2% 5.5% 4.3% 4.9% 5.6% 5.8% Operating cash flow Net Debt ( equiv) Total Customer Signed off Cost Savings m 29

30 Outlook Will continue to outperform the market by at least 10% per annum Leading consolidation in fragmented market European Product Division progress Continued successful execution of organic growth strategy Investment in quality products, people, systems and marketing 30

31 APPENDICES

32 Brammer footprint Europe s leading distributor of industrial maintenance, repair and overhaul products ( MRO ) Bearings Mechanical Power Transmission Fluid Power Tools & General Maintenance Added value service A fragmented 40 billion + market 300 locations across 16 countries 3.5 million product lines More than 100,000 customers

33 Segments UK Germany France Spain Benelux Eastern Europe Other Total Turnover Sales per working day growth (Like for like) 7.6% 0.6% 3.5% -0.3% 7.5% -9.4% -7.2% 2.9% Underlying operating profit (0.6) 37.2 Return on sales 6.4% 6.8% 5.0% 10.0% 5.2% 1.6% -3.8% 5.8% Return on sales % 6.7% 4.8% 7.8% 5.3% 6.4% 1.1% 5.6% Operating capital employed* Return on operating capital employed Return on operating capital employed % 32.5% 46.7% 67.7% 25.7% 4.7% -4.5% 34.3% 28.1% 42.0% 35.3% 102.9% 24.8% 23.0% 6.1% 32.3% m * Segmental assets excluding goodwill and acquired intangibles less liabilities, before current & deferred tax, dividends, cash, loans, deferred consideration & pension liability 33

34 Exchange rates Dec 12 Dec 11 Dec 10 Average Closing