Brammer plc. The pan-european Distributor

Transcription

1 1 Brammer plc The pan-european Distributor

2 2 Agenda Financials About Brammer Growth Market Segmentation Key Accounts Insites Product Range Extension Strategy The Future Questions

3 3 Half Year Results 6m to 30th June 2011 Turnover up 45.2m, up 19.7%. At constant currency, turnover increased 42.0m (18.8%). There were no acquisitions Profit before tax up 4.6m from 9.7m to 14.3m* New banking facilities for 100m in place to 2016 Interest covered 13.45x (June x) Net debt to EBITDA ratio 1.27x (June x) Net borrowings compared to H is up 0.4m to 40.6m after absorbing 4.7m adverse currency impact * before amortisation of acquired intangibles

4 Half Year Results 6m to 30th June Turnover higher by 19.7% Profit before tax of 14.3m up 47%* Basic eps up from 6.4p* to 10.0p (up 56%) Dividend: 2.7p per share up from 2.1p (up 28.6%) * all stated before amortisation of acquired intangibles

5 5 Working Capital Operating cash generation of 5.6m* (H m) Cash to cash cycle is 67.5 days, three days lower than prior period (June days, December days) Working capital under control, with increase in debtors and stock driven by a growing business Inventory turn improvement continued in 2011, up 8.3% from H * stated before amortisation of acquired intangibles and exceptional items and net of capex

6 Half Year Results 6m to 30th June

7 Half Year Results 6m to 30th June

8 8 Half Year Results: Ratios 6m to 30th June 2011 * Segmental assets including goodwill less liabilities, before current & deferred tax, dividends, cash, loans, deferred consideration & pension liability ** Underlying operating profit as a percentage of operating capital as defined in * but excluding goodwill & acquired intangibles *** Underlying operating profit as a percentage of operating capital as defined in *

9 9 Half Year Results: 6m to 30th June 2011 m H Underlying operating profit - as reported* Excluding effect of Bonus Share option related charges (0.1) Adjusted operating profit Return on sales (adjusted) 4.0% 5.8% 7.6% *stated pre amortisation and exceptionals items

10 Cash Flow 6m to 30th June

11 Working Capital at 30th June - Actual Rates 11

12 12 Working Capital at 30th June 2011 Cash to cash cycle

13 Balance Sheet at 30th June Actual Rates 13

14 14 Half Year Results: Ratios Segments: 6m to 30th June 2011 m UK DE FR ES Blux Eeu Other Fx Total Turnover Turnover growth/(decline) (SPWD) 16.5% 21.9% 15.4% 14.4% 14.6% 26.0% 16.1% 18.1% Underlying operating profit Return on sales 5.3% 6.1% 4.5% 8.0% 6.0% 7.0% 0.0% 5.6% Return on sales H % 5.2% 4.2% 7.5% 5.0% 5.2% 1.2% 4.8% Capital employed * Return on capital employed 55.6% 47.4% 41.8% 72.0% 26.3% 24.0% 0.0% 34.2% Return on capital employed H % 31.9% 36.0% 65.2% 19.5% 15.2% 1.8% 27.8% * Segmental assets excluding goodwill and acquired intangibles less liabilities, before exceptional provisions, current & deferred tax, dividends, cash, loans, deferred consideration & pension liability

15 15 Exchange Rates Jun-11 Dec-10 Jun-10 Average Closing

16 16 Brammer plc 2011

17 17 Brammer plc The European Leader in Mechanical MRO Supplies and Services

18 18 Agenda Financials About Brammer Growth Market Segmentation Key Accounts Insites Product Range Extension Strategy The Future Questions

19 19 About Brammer European market leader <3% market share Focused product range in mechanical MRO components - a 25 billion market Bearings Mechanical Power Transmission Fluid Power Tools and General Maintenance Added value services

20 20 About Brammer Leading the process of consolidation in a highly fragmented market Diverse customer base of over 100,000 customers Customer risk is low Top 10 customers in any one country typically account for less than 10% of sales Largest European customer of our main strategic suppliers

21 21 About Brammer 2,559 people

22 22 About Brammer 2,559 people Over 300 locations

23 23 About Brammer 2,559 people Over 300 locations In 15 countries across Europe

24 24 About Brammer 2,559 people Over 300 locations In 15 countries across Europe With over 4,300,000 products from the world s leading suppliers

25 25 About Brammer 2,559 people Over 300 locations In 15 countries across Europe With over 4,300,000 products from the world s leading suppliers Working in your industry

26 26 Brammer Our Strategy Growth Capability Costs Synergies Country organic growth People Development Supplier Rationalisation Business Best Practice Key Accounts Business Skills Development European Buying Systems Integration Insites Distributed Learning Programme Development IT and Other Cost Reductions Brand Development Product range extension Internal Communications and Involvement Capital Employed Management Supplier Relationship Management Geographical development

27 Growth Objective The Market Opportunity 27 Bearings 2.0bn Seals 0.5bn MPT 5.0bn Fluid Power 10.0bn Tools and Gen. Maintenance 10.0bn

28 28 Growth Market Segmentation

29 29 Market Segmentation Current Segments Food & Drink Pulp, Paper & Packaging Construction & Aggregates Utilities Recycling Automotive Refining Metals

30 30 Market Segmentation H continued focus on implementing material over the last 7 years Training programme developed including online and face-to-face learning Building on success Customer testimonials leading to segment leadership

31 31 Market Segmentation Sales to targeted segments have continued to deliver strong growth Food & Drink grew by 8.8 million, or 35.9%, to 33.3 million UK up by 60.3% to 15.1 million DE up by 29.4% to 2.6 million NL up by 57.8% to 1 million ES up by 21.2% to 3.6 million Automotive grew by 46.2% to 24.7 million Metals grew by 33.6% to 33.4 million

32 32 Growth Key Accounts

33 Key Accounts Sales 33 Performance 2011 YTD June 2011 Total Brammer Multi-Site Status Scope Year variance Total YTD 2010 Value Tier 1 EU Contract 34,2% Part EU Group YTD 2011 Value Tier 2 National Contract Part EU Group YTD 2010 Value ,2% YTD 2011 Value Tier 3 No Contract Part EU Group YTD 2010 Value ,5% YTD 2011 Value Tier 4 National Contract National Group YTD 2010 Value ,9% YTD 2011 Value YTD Total 2010 Value ,2% YTD Total 2011 Value

34 34 Key Accounts 6 new contracts won Beckton & Dickinson Delphi Georgia-Pacific Johnson Controls Rockwool Whirlpool 24.2% growth overall 2,279 documented customer cost savings yielding 23m ( 19.2m) for our customers turbo boost contract implementation to achieve Brammer guaranteed savings a continuing theme

35 Reference List of Pan-European Supply Agreements 35

36 36 Key Accounts New Key Account Toolkit implemented Latest best practice gathered to update toolkit Processes and tools defined in a procedures manual - mandatory approach developed

37 37 Key Accounts Particular emphasis on those tools and processes which will accelerate contract implementation turbo boosting Regular review and consistent approach across Europe

38 38 Key Accounts Continued focus on key sectors of expertise Food & Drink up 20.3% to 30.3 million Automotive up 42.7% to 21 million FMCG up 46% to 4.7 million Chemical up 7.6% to 3.6 million Packaging up 29.1% to 6.6 million

39 39 Growth Insites

40 40 What is an Insite? Definition A self contained Brammer office on a customer s site Provided by the customer With a direct link to the Brammer ERP systems and stock With agreed menu of services

41 Definition of Insites Full Time 41 One or more BRAMMER personnel working within their own clearly established workspaces Minimum of 4 hours a day, 5 days a week Services provided can be a combination of: Creation of stock profile Purchasing management Technical advice Sales visits Delivery services

42 Definition of Insites Part time 42 One or more BRAMMER personnel working within their own clearly established workspaces Minimum of 3 hours a day, 2 days a week Services provided can be a combination of: Any of the activities offered by a full-time Insite Creation of stock profile Purchasing management Technical advice Sales visits Delivery services

43 43 Insites Insite Development 22 new Insites (11 FT/11 PT) 16 Full-Time 53 Part-Time (47 closed due to factory closures) 244 Insites across the Group 94 Full-Time 150 Part-Time Increase of 28.4% to 43.2 million

44 44 Growth Product Range Extension

45 45 Product Range Extension Bearings Linear Belts Chains Health Tools Gearboxes Motors Fluid SealsPower and Motion and Pulleys Sprockets Safety Maintenance Tools & Maintenance Health and Safety Seals Mechanical Power Transmission Chains & Sprockets Motors Linear Motion - Industrial Automation Fluid Power Bearings Gearboxes Mechanical Power Transmission - Belts & Pulleys

46 46 Product Range Extension New product range introduction continues on the continent At constant rates Bearings are up 16.5%, Non-bearings are up 20% Continued focus on Fluid Power and Tools & Maintenance throughout continental Europe New European Product Group Manager Fluid Power New European Product Group Manager - Tools & Maintenance

47 47 Product Range Extension Catalogue supporting Tools and General Maintenance and Fluid Power launched in France, Spain, Germany & Austria Mechanical Power Transmission up 12.1% to 37.1 million Fluid Power up 24.8% to 44.6 million Tools & General Maintenance up 28.3% to 17.6 million Huge opportunity for further growth through cross-selling 0.7% market share in Tools and General Maintenance 1% share in Fluid Power compared with 10% share in Bearings.

48 48 Product range Extension Cross-selling continuing to benefit base business Overall first half growth of 19.7% 24.2% in Key Accounts 15.6% growth in base business

49 49 Product Range Extension Base business growth of 15.6% driven by 21.2% growth in Fluid Power 22.1% growth in Tools & General Maintenance 25.2% growth in Fasteners and Standard Parts

50 50 Growth Strategy

51 The results of our Growth 51 Strategy Sales per Working Day - Growth % Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 YTD-11 UK 12.5% 8.3% 3.4% -1.8% -3.6% 0.9% 5.4% 6.1% 11.7% 9.0% 15.6% 17.4% 16.5% Germany 17.4% 8.1% -22.9% -37.9% -35.1% -26.3% -6.5% 18.1% 24.5% 22.7% 22.8% 21.1% 21.9% France 8.6% 9.4% -14.7% -21.8% -15.8% -4.9% 4.1% 14.9% 13.2% 12.7% 12.8% 18.0% 15.4% Spain 6.7% 8.3% -24.7% -24.7% -26.9% -10.8% 0.3% 14.0% 9.4% 15.1% 14.6% 14.2% 14.4% Netherlands 18.5% 11.4% -12.8% -23.2% -13.8% -16.1% 3.5% 13.8% 8.5% 15.7% 16.9% 19.5% 18.2% Poland % 0.7% 7.5% -0.7% -1.2% 27.7% 24.9% 27.4% 32.9% 17.8% 24.6% Total 20.3% 12.0% -10.8% -21.7% -19.8% -11.4% -0.1% 14.3% 18.0% 15.7% 17.8% 18.3% 18.1%

52 52 Acquired Businesses No new businesses acquired in 2011 Selective bolt-ons being considered No new territories planned at this stage We would look to fund acquisitive growth by free cash flow

53 53 Our performance - 7 Year History m Total Turnover GP% 30.1% 30.9% 30.5% 30.4% 30.0% 30.1% 30.1% 30.2% TP TP% 3.6% 4.4% 4.8% 5.2% 5.5% 4.3% 4.9% 5.6% Operating cash flow Net Debt ( equiv) Total Customer Signed off Cost Savings

54 SPWD Overview consecutive months of growth

55 55 Growth The Future

56 56 The Future 25 months of sequential growth Market share gains evident, driven by Key Accounts, Insites, and Product Range Extension June YTD sales up 19.7%. Good growth continues in July Gross margins holding steady (for 8 th year)

57 57 The Future Good cash flow, driven by continued improved working capital ratios Bank facilities secure through to 2016 Significant reduction in cost base maintained

58 58 The Future Continued improvement in working capital management, particularly inventory Providing the ability to take advantage of growth opportunities To drive further consolidation in a fragmented market

59 59 Brammer plc 2011

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