Results Financial Year Ended 30 January 2011

Transcription

1 Results Financial Year Ended 30 January 2011

2 Strategy for Profitable Growth Premier Farnell Q

3 Financial Highlights Highest Q4 sales for more than 10 years, with sales up 13.9% In Q4 MDD had its strongest absolute sales per day performance for the year. Q4 gross margin improved to 41.8%, up 1.5 percentage points. For the quarter, the Group s return on sales was 11.7%, up 1.2 percentage points. MDD delivered a Q4 return on sales of 13.1%. Q4 Group operating profit grew 31.6%, the highest level for more than 10 years. Full year Group underlying cash flow conversion at 91.7%. The Board has recommended a final dividend of 6.0 pence per share, an increase of 15.4% on the prior year. Premier Farnell Q

4 Strategic Highlights In Q4 our MDD active customer base grew 5.9% YoY. ecommerce accounted for 51.1% of MDD sales in Q4, the first time over half of MDD sales have come via e- channels. Full year EDE sales per day growth of 38.3% has contributed to our MDD exiting the year with 53.7% EDE sales penetration. Emerging markets of Greater China, India and Eastern Europe delivered sales growth in Q4 of 39.8%, 74.0% and 51.2%, respectively. Intial launch a new rapid prototyping service available to EDEs directly through the element14, as we begin building a holistic EDE ecosystem proposition. Premier Farnell Q

5 Q Key Financial Results m (Continuing operations) (d) Q Q Growth (a) Revenue % Operating profit % Profit before tax % Basic earnings per share 4.6p 3.5p 31% Free cash flow (b) % Final Dividend (c) 6.0p 5.2p 15.4% Notes: (a) 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. (b) Free cash flow comprises total cash generated from operations, excluding cash flows related to restructuring, less net capital expenditure, interest, preference dividends and tax payment. (c) Proposed final dividend for approval by shareholders at the company s Annual General Meeting on 14 June (d) Results for continuing operations in 2009/10 and 2010/11 include the results of TPC Wire and Cable which was disposed of on 31 January 2011, after the Group s financial year end. All numbers within this presentation include TPC Wire and Cable unless otherwise stated. Premier Farnell Q

6 FY 2011 Key Financial Results m (Continuing operations) (e) FY 2011 FY 2010 Growth (a) Revenue % Underlying operating profit (b) % Total operating profit % Underlying profit before tax (b) % Total profit before tax % Underlying earnings per share (b) 18.3p 10.7p 71% Basic earnings per share 18.3p 10.4p 76% Free cash flow (c) % Ordinary Dividend 10.4p 9.4p 10.6% Notes: (a) 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. (b) Underlying operating profit, profit before taxation and earnings per share in the prior year excludes restructuring costs of 7.6 million and the one-off gain arising of 6.3 million from the reorganisation of the Group s North American pension plans. (c) 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. (d) Proposed final dividend for approval by shareholders at the company s Annual General Meeting on 14 June (e) Results for continuing operations in 2009/10 and 2010/11 include the results of TPC Wire and Cable which was disposed of on 31 January 2011, after the Group s financial year end. All numbers within this presentation include TPC Wire and Cable unless otherwise stated. Premier Farnell Q

7 Cash flow m Q FY 2011 FY 2010 Underlying operating profit Depreciation and amortisation Additional pension scheme funding (1.0) (3.9) (2.9) Other non-cash items Working capital (8.5) (31.7) 12.8 Cash generated from continuing operations Underlying operating cash flow conversion 93% 92% 145% Net capital expenditure (6.5) (19.1) (11.9) Interest and preference dividends (6.4) (16.1) (15.5) Tax (8.8) (29.6) (11.6) Free cash flow Free cash flow % to revenue 1.9% 3.8% 8.3% Note: Excluding the impact of restructuring costs Premier Farnell Q

8 Q Financial Scorecard Key Performance Indicators Goal Achieved in Q4 Sales per day growth 6-8% 13.9% Gross margin % Stability 41.8% ( 1.5% YoY) Return on sales % 12%-15% 11.7% Return on net operating assets % >30% 42.5% Working capital as a % of sales 22% 23.9% Free cash flow as a % of sales 6% 1.9% % of MDD sales from ecommerce 70% 51.1% % of MDD sales from EDE 50%-70% 53.7% % all sales from developing markets 30% 22.9% MDD active customer growth 6% 5.9% element14 Google Page Rank 7 6 Excluding the impact of prior year restructuring costs Premier Farnell Q

9 Q4 MDD Operational Performance MDD Sales grew 14.6% YoY Return on sales at 13.1%, a 1.8% YoY improvement MDD Americas Q4 sales grew 11.0% YoY, with a return on sales of 9.0% Full year profit grew 129.9% MDD Europe Sales grew 23.0% YoY In Eastern Europe sales grew 51.2% YoY MDD Asia Pacific Sales grew 12.4% YoY Sales in Greater China and India were up 39.8% and 74.0%, respectively. Premier Farnell Q

10 Our Digital Sales Channels Region Q4 ecommerce penetration Europe 67.1% APAC 56.8% Americas 36.9% Premier Farnell Q

11 Our Digital Relationship Q4 engagement level of element14 community customers grew 47.3% on the prior quarter In Q4, The Ben Heck Show, our online television program, topped 1 million views Merged the solid-state lighting technology community with a new lighting transactional micro-site Premier Farnell Q

12 Investing for the Future New EDE Products Added to Portfolio 54,000 44,000 72,500 Initial launch of rapid prototyping service Extension of TDK relationship Release of new version of EAGLE CAD Software Q Engineers employed, globally Franchises Signed in EDE Customer Growth 7.5% Premier Farnell Q

13 Q4 Performance of CPC and MCM CPC Full year sales grew 6.4%, with Q4 sales up 2.9% YoY Q4 ecommerce sales increased by 11.2% on the prior year to account for 39.9% sales MCM Full year sales grew 6.9% Q4 web sales grew 10.5% YoY and now represent the largest sales channel Premier Farnell Q

14 Q4 Industrial Products Division Akron Brass Return to growth with sales up 1.6% YoY International business grew to a record level of 28.6% of total sales in Q4 TPC Wire & Cable As previously announced, since the year end the Group completed the sale of TPC Wire and Cable Premier Farnell Q

15 Questions and Answers

16 In Summary 10 year high in sales and group operating profit Continue to drive market share gains and execute our proven global strategy. Momentum from Q4 has continued into the new financial year As we look ahead, the Group is well positioned to deliver sales growth in excess of target range Premier Farnell Q

17 Appendices

18 Transforming our Distribution Businesses MDD Americas MDD Europe MDD Asia Pacific Revenues Q4 2010/ m 90.3m 15.4m FY 2009/ m 273.6m 43.4m Q4 2009/ m 74.0m 12.3m Underlying operating margins Q4 2010/11 FY 2009/10 Q4 2009/10 9.0% 4.0% 6.2% 17.5% 15.3% 16.6% EDE : MRO % split 40:60 67:33 61:39 ecommerce as % of sales Q4 2010/ % 67.1% 56.8% FY 2009/ % 56.0% 43.2% Q4 2009/ % 58.8% 50.9% Premier Farnell Q

19 The Evolution of our Success Metrics Success Metrics - Unchanged FY08-FY10 FY11-FY13 Sales per day growth 6%-8% 6%-8% Gross margin % Stable Stable Return on net operating assets % >30% >30% Free cash flow as a % of sales 6% 6% Employee engagement High Performance High Performance Benchmark Benchmark Success Metrics - Revised FY08-FY10 FY11-FY13 Return on sales % 12% 12%-15% % sales from ecommerce 50%-70% 70% % sales from developing markets 20% 30% Working capital as a % of sales <25.1% <22% Success Metrics - New FY08-FY10 FY11-FY13 MDD active customer growth - 6% per annum element14 Google Page Rank - 7 CSR programme - BiTC Platinum Plus Premier Farnell Q

20 Transition of our Web Strategy 2006/7 Q4 2010/11 MDD Americas ecommerce Penetration 16.9% 36.9% MDD EAP ecommerce Penetration 29.2% 65.8% Total MDD ecommerce Penetration 23.0% 51.1% Average global page views/month 15.7 m 15.7m Q4 element14 Customer Visits - >500,000 Local Language Websites Innovation Employees Premier Farnell Q

21 Q4 Segmental Performance (c) Revenue ( m) Operating Profit m (Operating Margin - %) Q Q Growth (a) Q Q Growth (b) MDD Americas % 8.2 (9.0%) Europe and Asia Pacific % 18.5 (17.5%) Other Distribution % 2.4 (9.7%) MDD Total % 29.1 (13.1%) IPD % 3.9 (18.9%) Group % 28.3 (11.7%) 4.9 (6.2%) 14.3 (16.6%) 2.2 (9.2%) 21.4 (11.3%) 3.2 (17.4%) 21.7 (10.5%) 60.8% 34.1% 9.1% 37.9% 18.2% 31.6% (a) Based on sales per day for continuing operations at constant exchange rates (b) At constant exchange rates (c) Results for continuing operations in 2009/10 and 2010/11 include the results of TPC Wire & Cable which was disposed of on 31 January 2011, after the Group s financial year end. Premier Farnell Q

22 FY Segmental Performance (c) MDD Revenue ( m) Underlying Operating Profit m (Underlying Operating Margin - %) FY 2011 FY 2010 Growth (a) FY 2011 FY 2010 Growth (b) Americas % 29.1 (7.5%) Europe and Asia Pacific % 74.7 (17.6%) Other Distribution % 9.3 (9.5%) MDD Total % (12.5%) IPD % 14.2 (17.1%) Group % (11.3%) 12.3 (4.0%) 48.5 (15.3%) 9.0 (9.8%) 69.8 (9.7%) 13.6 (17.7%) 72.7 (9.1%) 129.9% 46.9% 3.1% 55.9% 1.6% 48.1% (a) Based on sales per day for continuing operations at constant exchange rates (b) At constant exchange rates (c) Results for continuing operations in 2009/10 and 2010/11 include the results of TPC Wire & Cable which was disposed of on 31 January 2011, after the Group s financial year end. Premier Farnell Q

23 Market Diversity Business Resilience 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 Infrastructure Environmental services Government Services Space and related Bio-technology Military equipment Wireless technology Oil and gas equipment Marine Business/management Services Controls Industrial/electrical machinery, equipment and supplies Miscellaneous non-durable goods Premier Farnell Q

24 EDE: Segmentation Growth Drivers Smart technology: 3 Global wind market will grow 11% to more than $78 billion over the next 5 years with the fastest growth anticipated in the U.K Global smart grid technology market is forecasted to grow by a staggering 150% between 2009 and 2014 to reach $171 billion. The U.S. market is expected to double over that period to reach about $43 billion Solar technology is expected to grow by 28%, to a world market of $173 billion by The fastest growing solar technology segment, concentrated solar power, is expected to grow 42% in four years, from $700 million in 2010 to $3 billion in Power management Analog IC market forecast to grow at a CAGR of 11 percent, with the market reaching $15.5 billion in sales by The Electronic Design Automation tools market is projected to grow at a CAGR of 9.7 percent out to Design services in India alone are currently expected to reach revenues totalling $43bn in 2015, from just $3.2bn in OLEDs and LEDs will see average growth rates of 20 percent annually, with the market totalling $17.4 billion by 2015 becoming the fifth largest electronics segment 1 1 Source: Databeans 2 Source: Frost and Sullivan 3 Source: SBI Premier Farnell Q

25 EDE: Segmentation - LEDs Solid State Lighting (LEDs etc) market is estimated to grow at a CAGR of 20% in the next 5 years Different technical segments will be impacted The signs and Displays represents a big part of the growth In the EU incandescent lighting will likely be banned for new installations in the near future Source: European conference euroled, August 2008; Optoelectronics Industry Development Association, November 2007 Premier Farnell Q

26 EDE: Segmentation Solar/Photovoltaics Industrial Market trends create opportunities for growth and will make design engineers shift industries and way of work US$10 Billion market in 2013 Will change the focus of companies for R&D Financially supported by government initiatives and stimulus Germany, US and China are current leaders in this area Source: report March 2009 «Global Market outlook until 2013»; IDTechEx 2009 report «Printed, Organic & Flexible Electronics Forecasts, Players & Opportunities ; isuppli research «Discontinuity across the Photovoltaic supply chain to continue», July 2009 The solar power / photovoltaic market and capacity utilisation Premier Farnell Q

27 Net Debt m Jan 2011 Jan 2010 EBITDA* Including preference shares: Net debt Net debt:ebitda* Excluding preference shares Net debt Net debt:ebitda* Maturity profile of loans (including preference shares) Due within 1 year Between 1 and 2 years Between 2 and 5 years After 5 years Excluding the impact of restructuring costs in the prior year Premier Farnell Q

28 Safe Harbour 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, continued use and acceptance of e-commerce programs and systems, the implementation of new IT 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. Premier Farnell Q