- Investors

Transcription

- Investors

Welcome & Introduction
Ian Fraser, Brammer plc,
Chief Executive
Intellectual Property Notice
The trademarks, logos and other registered marks of BRAMMER including,
but not limited to, the “BRAMMER” “INSITE” and “GENIE” trademarks and
logos, are the exclusive property of BRAMMER, and may not be used or
reproduced without BRAMMER’S prior written consent.
Corporate Team
Ian Fraser
Chief Executive
Paul Thwaite
Finance Director
Chris Short
Corporate
Development
Director
John Veale
Consultant
Country Managing Directors
Ian Ritchie
UK
Julien Monteiro
France
Jochen Diehm
Germany
Neil Rogers
Regional Managing
Director
Functional Directors
Nigel Trend
Business Integration
Ralf Hellwig
Key Accounts
Carl-Friedrich
Wayand
Purchasing
Jakob Alkil
Group Strategy &
Growth
Philippe Hervieux
Tools & General
Maintenance
Group Results - 2011
• Turnover increased by 22.0% with strong organic
growth of 15.6% driving results
• Acquisition of Buck & Hickman on 30 September
contributed £26.5m to turnover and £0.9m to
operating profit
• Profit before tax* of £29.0m – up 40.8%
• £28.9m operational cash generated, 91% of
operating profit*
• Basic eps* up from 13.9p to 19.8p (42.4%)
• Final dividend: 5.7p per share (increase of 26.7%)
* all stated before amortisation of acquired intangibles and exceptional
items
About Brammer
•
European market leader - with less
than 2% market share
•
Focused product range in
mechanical MRO components - a
€40 billion + market
• Bearings
• Mechanical Power Transmission
• Fluid Power
• Tools and General Maintenance
• Added value services
About Brammer
•
Leading the process of consolidation
in a highly fragmented market
•
Diverse customer base of over
100,000 customers
•
Customer risk is low
•
Largest European customer of our
main strategic suppliers
About Brammer
• 3,178 people
About Brammer
• 3,178 people
• Over 300 locations
About Brammer
• 3,178 people
• In 16 countries
across Europe
About Brammer
• 3,178 people
• In 16 countries
across Europe
• With over 3,500,000
products from the
world’s leading
suppliers
About Brammer
• 3,178 people
• In 16 countries
across Europe
• With over 3,500,000
products from the
world’s leading
suppliers
• Working in your
industry
Buck and Hickman
•
•
•
•
•
•
£105 million revenues
£3.2 million EBITDA
Expertise in Tools and General Maintenance
15,000 customers – most new to Brammer
540 people
Creates leadership position in UK - >£300 million of revenues in
2012
• Turbo boosts European T & GM growth – in a market of at least
€20 billion
• Entirely consistent with strategy
• European Product Division for T & GM created
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
Growth Objective
The Market Opportunity
Bearings
2.0 bn
MPT
5.0 bn
> €40 bn
T&GM+PPE
25.0 bn
Fluid Power
10.0 bn
The results of our Growth
Strategy
Sales per Working Day - Growth
%
2007
2008
2009
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
YTD-11
UK
12.5%
8.3%
-0.4%
5.4%
6.1%
11.7%
9.0%
15.6%
17.4%
17.7%
16.6%
16.8%
Germany
17.4%
8.1%
-30.8%
-6.5%
18.1%
24.5%
22.7%
22.8%
21.1%
14.2%
6.9%
16.1%
France
8.6%
9.4%
-14.6%
4.1%
14.9%
13.2%
12.7%
12.8%
18.0%
13.9%
12.1%
14.2%
Spain
6.7%
8.3%
-22.3%
0.3%
14.0%
9.4%
15.1%
14.6%
14.2%
12.6%
7.6%
12.3%
Netherlands
18.5%
11.4%
-16.6%
3.5%
13.8%
8.5%
15.7%
16.9%
19.5%
16.8%
15.8%
17.2%
-
-
-
-1.2%
27.7%
24.9%
27.4%
32.9%
17.8%
18.0%
29.1%
24.1%
Total
20.3%
12.0%
-16.1%
-0.1%
14.3%
18.0%
15.7%
17.8%
18.3%
15.2%
35.9%
21.8%
Organic
13.6%
8.5%
-16.1%
-0.1%
14.3%
18.0%
15.7%
17.8%
18.3%
15.2%
12.5%
15.9%
Poland
Our performance - 8 Year History
£m
2004
2005
2006
2007
2008
2009
2010
2011
Turnover
270.8
287.4
314.3
379.6
478.4
426.1
468.4
571.5
GP%
30.1%
30.9%
30.5%
30.4%
30.0%
30.1%
30.1%
30.3%
TP
9.8
12.5
15.1
19.9
26.2
18.4
23.0
31.8
TP%
3.6%
4.4%
4.8%
5.2%
5.5%
4.3%
4.9%
5.6%
Operating cash flow 18.7
15.7
11.9
16.7
29.2
33.3
27.5
28.9
Net Debt (€ equiv)
Total Customer
Signed off Cost
Savings
80.7
73.7
80.4
80.9
86.8
44.9
42.8
42.1
0.4
2.6
8.8
15.1
15.0
25.8
30.0
34.9
Total
156.7
181.9
Distributor Supplier Landscape
North America
Power Transmission/Fluid Power
•
•
•
•
Motion
AIT
Kaman
BDI
$4.0 bn
$2.3 bn
$1.0 bn
$0.6 bn
Industrial Products
•
•
•
•
Grainger
Fastenal
MSC
Airgas
$8 bn
$3 bn
$2 bn
$4.5 bn
Distributor Supplier Landscape
•
•
•
•
North America
Europe
Motion
AIT
Kaman
BDI
$4 bn
$2.3 bn
$1.0 bn
$0.6 bn
•
•
•
Industrial Products
•
•
•
•
Grainger
Fastenal
MSC
Airgas
$8 bn
$3 bn
$2 bn
$4.5 bn
Brammer
Eriks
Others
$1.1 bn
$0.9 bn
< $0.5 bn
Industrial Products
•
•
•
Dexis
Orexad
Fabory
$0.5 bn (?)
$1.0 bn (?)
$0.3 bn
Brammer Positioning
• Bearings, PT, Fluid Power specialist
• Tools, general maintenance, health and safety, PPE specialist
• Hence – European Product Division, Tools and general
maintenance
The European Market
• Larger players enjoy economies
of scale so will grow faster than
the market
•
•
•
•
•
•
•
IT
Marketing
Purchasing
Operations and business processes
Branch network will remain important for
foreseeable future
Smaller distributors will be forced into
niches
Local service will remain important
The European Market
•
Market is being redefined by customers
and suppliers
•
•
•
•
•
Bearings
Mechanical Power transmission
Fluid Power
Industrial Products
Ability to supply a wide product range is
becoming increasingly important
Factors Influencing Choice Of Supplier
Q18. Please allocate 100 points across the following factors to indicate their
importance when choosing a supplier of industrial engineering products?
Total
AT
BE
CZ
FR
DE
HU
IT
NL
PL
ES
UK
Product availability, delivery &
28.3 31.8 26.2 23.2 29.1 29.9 19.4 29.9 23.6 27.4 28 28.9
security of supply
Product quality and well
23.3 20.8 17.6 22 24.8 22.3 20.2 26.2 16.1 28.5 26.1 21.3
known brands
Price & payment terms
13.1 18.1 15.8 23.1 13.7 13.7 16 16.2 12.4 15.4 10.4 11.4
Technical & operations
support/advice
11.5 10.4 13.3 8.3 11.7 10.4 7.6
Product range
Purchasing and sales
support/advice
Ease of doing business on a
daily basis (inc. online
transactions)
Understanding and acting on
your future business needs
9
12.7 10.7 13.8 9.2
8.5 6.1 8.3 9.8 7.1 9.2 9.7 5.7 11.6 4.8 8.6
6.1 5.1
9
6.4
6
4.6 5.3 5.4 9.8 4.8 5.5 6.8
5.3 4.1 5.8 4.6 4.2 6.5 14.3 4.7 7.9 4.3 3.5
3.8 3.7
4
10
2.6 3.4 3.4 7.6
3
8
4.9 4.2 3.9 4.4
Base: 1381
The European Market
•
Barriers between specialist distribution
networks are melting away – but a degree
of specialisation remains a vital
component of strategy
•
Customers are seeking REAL added
value – this means hard currency savings
•
Many customer seeking pan-European
pricing
•
Many customers expect supplier to
provide significant information feedback
The European Market
• Major part for the
manufacturer to play in
tripartite agreements
• Brands remain very
important - especially
bearings
Where Branded Products Are Important
Q17. For which parts/products is a highly recognised brand more important to you?
Total
AT
BE
CZ
FR
DE
HU
IT
NL
PL
ES
UK
Total
845
16
26
16
236
96
7
31
60
17
199
140
Bearings
91% 100% 85%
94%
93%
80%
86%
90%
93% 100% 92%
93%
Belts & pulleys
54%
50%
65%
25%
69%
43%
57%
32%
60%
41%
46%
51%
Pneumatics
50%
38%
69%
0%
56%
47%
43%
58%
47%
59%
52%
45%
Motors
50%
56%
62%
38%
42%
43%
0%
61%
52%
24%
60%
55%
Gearboxes
47%
63%
58%
25%
55%
40%
29%
3%
40%
6%
51%
51%
Chains & sprockets
45%
25%
62%
13%
57%
26%
29%
32%
45%
53%
38%
52%
Linear motion parts
41%
31%
38%
13%
53%
46%
29%
39%
28%
35%
35%
38%
Seals
40%
38%
27%
38%
48%
49%
29%
10%
45%
47%
34%
37%
Hydraulics
39%
63%
31%
25%
42%
40%
43%
32%
30%
35%
39%
36%
Clutches & couplings
37%
38%
42%
19%
47%
43%
14%
16%
43%
47%
21%
40%
Tools
34%
31%
42%
19%
38%
28%
29%
23%
48%
35%
28%
36%
Maintenance products
33%
31%
54%
31%
29%
25%
29%
23%
48%
35%
32%
41%
Health & Safety products 20%
19%
27%
0%
17%
15%
0%
16%
40%
12%
17%
26%
Base: 1381
The European Market
• E-commerce is becoming
an essential requirement
• Ability to provide
information back to the
customer likewise
E-Commerce
How would you describe your desire for an e-commerce website from Brammer to allow you to purchase products
online?
UK
8%
Spain
Netherlands
59%
34%
14%
63%
11%
Italy
56%
33%
24%
Germany
57%
32%
France
15%
0%
23%
19%
38%
31%
58%
20%
It is important
40%
26%
60%
It would be nice to have
80%
No desire
100%
The industry is
consolidating…………………
and consolidation favours the
market leader…………………
…...…..but only if you have
the right strategy!!
Strategies in Fragmented
Industries – Michael Porter
•
MRO supply is a hugely fragmented
industry
•
Fragmentation can be overcome
–
–
–
–
•
Create economies of scale
Purchasing
Marketing
Business processes – “formula
facilities”
Tightly managed decentralisation
– Formula facilities
– Tight control and performance
compensation for local managers
Strategies in Fragmented
Industries – Michael Porter
•
Make acquisitions for critical mass
–
–
–
–
Transfer synergy benefits
Purchasing
Marketing
Business processes
•
Respond to industry trends early –
e.g. value proposition and Key
Accounts
•
Increase added value – value
proposition
•
Specialsiation by customer type –
attacking “defensive” segments
Group Strategy & Growth
Jakob Alkil, Brammer
plc, Group Marketing &
Growth Director
Ian Fraser, CEO
Jakob Alkil
Group Growth
Director
GROWTH
Centre
Country
MPT
MARKETING
1 FTE
Fluid Power
1 FTE
Country MPT
15 FTE’s
Country FP
15 FTE’s
Group Print
Production
5 FTE’s
Central team
3.5 FTE’s
Country
marketing
17 FTE’s
Market Segmentation
Key Accounts
Insites™
Product Range Extension
1. Market Segmentation & Results
2. Key Customer Insights
3. Market Potential
4. Fluid Power
5. Marketing driven Growth Initiatives
Brammer - Market Segmentation
• 11 Research Reports
• 12 Industry Guides
• 14 Customer Brochures
Brammer – Market Segmentation
2008 Sales
2009 Sales
2010 Sales
2011 Sales
Food & Drink Sales – 2008 to 2011
90,000
80,000
67,704
79,409
70,000
60,000
50,000
40,000
30,000
44,298
33,003
20,000
10,000
0
2008
2009
2010
2011
Automotive Sales – 2008 to 2011
100,000
90,000
80,000
70,000
60,000
65,330
49,094
45,255
50,000
40,000
30,000
30,996
20,000
10,000
0
2008
2009
2010
2011
Market Segmentation
Key Accounts
Insites™
3. Market Potential
4. Fluid Power
Customer Insight
• 2012 in progress
• 275 Interviews
30 min phone interviews in local
language across 15 countries
• 1200+ e-Survey’s
Associations With Brammer
Q23. When you think of Brammer, the name or Brammer, the company; what words, pictures or associations come to mind?
Source: Results from Brammer Customer Survey 2011
Base: 1381
Product Usage & Purchasing From Brammer
Bearings
89%
Belts & pulleys
83%
37%
Pneumatics
81%
40%
Chains & sprockets
80%
24%
Motors
79%
22%
Clutches & couplings
74%
28%
Gearboxes
73%
24%
Health & Safety products e.g. personal protection equipment…
Linear motion parts e.g. limit switches, soft starts, sensors
Source: Results from Brammer Customer Survey 2011
79%
50%
Hydraulics
Market Opportunity
81%
60%
Tools
Purchase from Brammer
86%
58%
Maintenance products e.g. adhesives, sealants, lubrication oils…
Use
87%
71%
Seals
72%
10%
40%
0%
95%
69%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
% Of Respondents
Base: 1381 (All respondents)
Bearings
2.0 bn
T&GM+PPE
25.0 bn
MPT
5.0 bn
Fluid Power
10.0 bn
Home sales (€’000)
Fluid Power Sales
€12.9bn
Source: CETOP 2011 (excludes AUT, IRL, HUN, CZE)
€13.5bn
€7.6bn
€8.8bn
€13bn
Fluid Power Market 2009
Brammer FP Sales 2009
2.6% Market Share
Hydraulics
27%
Pneumatics
26%
€6.165m
Hydraulics
74%
€75m
Pneumatics
73%
0.5% Market Share
Source: CETOP 2009 (excludes AUT, IRL, HUN, CZE), Brammer View10 December 2010 Report & Country Input
Fluid Power Market 2011
Brammer FP Sales 2011
2.1% Market Share
Pneumatics
25%
€10.868m
Hydraulics
75%
€109m
Pneumatics
53%
0.6% Market Share
Source: CETOP 2011(excludes AUT, IRL, HUN, CZE), Brammer View10 December 2011 Report & Country Input
Hydraulics
47%
Market Segmentation
Key Accounts
Insites™
3. Market Potential
4. Fluid Power
The developing
sphere of the
Social Web
Our new digital direction
•
•
•
•
•
•
•
•
•
Intuitive and easy to use
Stronger aesthetics and content
Focus quality traffic on country URLs
Drive to ‘action’
Improved SEO
Best-in-class user experience
Targeted customer engagement
Tailored information (products and services)
Greater accessibility (mobile devices)
Promising Results
February 2011
February 2012
•
•
•
•
•
•
•
•
•
•
•
•
25,072 pageviews
2,085 Search Traffic
583 Organic Searches
21,617 Direct Traffic
1,370 Referral Traffic
18,980 New Visitors
36,765 pageviews
15,616 Search Traffic
6,124 Organic Searches
11,062 Direct Traffic
10,082 Referral Traffic
25,095 New Visitors
Quick Tips
“The Big Idea”
•
•
•
•
•
•
•
•
•
A series of clips of 30 – 120 seconds duration
Consistent “introduction” and “end tag line”
“tease” and generate interest rather than exhaust a subject
Only for key brand/suppliers (placed rather than featured)
“Credibility” from Brammer is authorised distributor of ALL leading brands
Brammer Product Group Experts from different countries
Subtitled and/or dubbed in 8 different languages
New clip released every month
Funding/production/Placement supported by our preferred suppliers
= Brammer
Brand
Building
= Improved
Key
Supplier
Relations
= Improved
Search
Results
= Engage
New Leads
=Improve
Cross
Selling
= Improved
Sales
Channel Placements
•
•
•
•
•
•
•
•
•
•
email blasts
Corporate/Country Websites
Social Media (YouTube, Linked-In, Facebook etc.)
Trade Exhibitions
Customer Events
National Distribution Centre display screens
Centre of Excellence
Branch display screens
Key Account and Sales teams
European PR Network
100,000+ per month
Henkel/Locitite - December Sales
31%
Open
rate
Emailed
to 7858
in Spain
All other
customers
9.15%
Click
Rate
719 Customers;
= 20% Growth
6.3% Growth
What will PR success look like?
•
Regional evaluation to demonstrate improved
media penetration
•
Transparent and consistent reporting
•
Reprints of articles to drive mail shots and
lead generation
•
Minimum outputs in 2011
– 168 pieces of editorial
– Minimum 400 pieces of coverage
– Advertising Equivalent Value €500k
2011
2012/13
Visit us online: www.brammer.biz
View our latest Quick Tips video:
www.brammertips.com
Key Accounts
Ralf Hellwig, Brammer
plc, Group Key Account
Director
Agenda
1
About Brammer
2
Definition Brammer KA & Organisation
3
KA Segmentation & Platforms
4
Unique selling points
5
Way forward
2
What are Key Accounts?
• Definition European KA
– Multi Site Locations, minimum 2 countries
in Brammer Europe
– Minimum Potential (normally) €2 million
– KA Criteria minimum score 200 points
– BEKAT decision and commitment
– European contract with compliance rules &
implementation support
2
What are Key Accounts?
• Tier1

• Tier2

• Tier3

• Tier4

European groups with
European contract
European groups with
National contract
European groups without
contract
National groups with
national contract
Definition
Brammer Market
KA & Organisation
2
BRAMMER
Key Account
Opportunity
What are Key Accounts? Future
The sales cycle after contract signing has been shortened; delivering instant value to
the customer and a quicker return on investment for Brammer
Brammer Sales Cycle shows a positive shift to the left
Key Enablers
Sales Revenue (M€)
10
Improved Efficiency
5
0
Year 1
Year 2
Contract Period
Brammer Sales Cycle
Typical Sales Cycle
Year 3
•
Improved Field Force Effectiveness
•
Increased Sector Knowledge
•
Improved Project Management Skills
•
Better customer Analytics
•
Improved Process and Procedures
•
Best In Class Sharing
•
Compliance targets tied to contracts
•
Increased focus from our customers to
reduce costs
•
Improved understanding of Brammer’s Value
Proposition and Total Costs of Ownership
3
KA Segmentation & Platforms
Market Segments
•
•
•
•
•
Aerospace
Automotive
Chemical
Recycling
Transport
•
•
•
•
•
•
Electronics
Engineering
FMCG
Food & Drink
Glass
Mining
•
•
•
•
•
•
Metals
Pulp + Paper
Packaging
Utilities
Pharmaceutical
Construction &
Aggregates
4
•
•
•
•
•
•
•
European coverage
Value Proposition
Central Marketing support & Segmentation
Segmented European KA Organisation
Cost Saving approach
European Tools and processes
Insite Services
4
Value Proposition
And we do it through -
What value do we deliver to you?
Products
Services ( Products)
Services (Processes)
Reduce Total
Acquisition Costs
Supplier Reduction
Product Transformation / Adaption
O.E. Parts Conversion
Substitute Parts
Electronic Ordering / Invoicing
Purchase Cards
Blanket Orders
Transaction Analysis Reporting
Consolidated Invoicing
Self Billing
Improve
Production
Efficiency
Performance Measurement
Condition Monitoring
Technical Support
Repairs
Drive Design
Application Advice
Delivery to Line
24/7/365 Service
Reduced Maintenance
Technical Consultancy
Component Kitting
Product & Brand Rationalisation
Stock Profiling
Vendor Managed Inventory
Reduce Working
Capital
Brammer Product
Portfolio
Solutions
Energy Survey / Monitoring
Training
Insite Services
Equipment Surveys
Training
Insite Services
Training
Consignment Stock Management
Insite Services
4
Cost Savings
4
Cost Savings
• 2004
• 2005
• 2006
€3.2m
€6.6m
€13.4m
• 2007
• 2008
• 2009
€35.0m
€26.4m
€34.2m
• 2010
€38.8m
• 2011
>€42m
4
Insite™ Services
Reliability Centred
Maintenance
VMI
Procurement and
Expediting
Preventative
Maintenance
Continuous
Improvement Proj.
Warranty
Management
Condition
Monitoring
Store Room
Management
On Site Sales
Ordering Process
Asset Management
(motors & G’boxes)
Delivery to Line
Component Kitting
Training
Supplier Reduction
Substitute Parts
Cost Savings
Product & Brand
Rationalisation
Consolidated
Invoices
Management
Information
Brammer
Consignment Stock
Blanket Orders
24 /7
Inventory Profiling
Customer Access
Co-ordinated
Supplier Projects
Stores Manager & Buyer
OEM Parts
Conversion
Engineering & Purchasing
Strategic
Innovation Projects
Purchasing Director
Stores
Consultancy
Targeted Cost
Savings
Insite™ Lite
3 Reducing working capital
Technical
Consultancy
Insite™ Med
2 Improving production efficiency
Insite™ Max
Added Value and Customer Benefit
1 Reducing total acquisition costs
Sourcing
Consultancy
4
Some references
Bosch Award
REXAM Award
Eaton Award
5
Way forward
• Growth through existing customers
– i.e. ALCOA
• Growth through product range
extension  T&GMHS and Fluid Power
• Growth through new customers
– i.e. PepsiCO, Amcor, etc.
Tools & General
Maintenance
Philippe Hervieux,
Brammer plc,
European Tools & General
Maintenance Director
Tools & General Maintenance
1.
2.
3.
4.
5.
6.
7.
8.
Range Definition
Market Opportunity
Why Tools & General Maintenance
The UK Experience
Buck & Hickman
Tools & General Maintenance Product Division
Sales Development Plan
2012 Q1 Activities
Growth Objective
Bearings
2.0 bn
MPT
5.0 bn
> €40 bn
T&GM+PPE
25.0 bn
Fluid Power
10.0 bn
EUROPEAN MARKET
€ Billions
HAND TOOLS
5.0
POWER TOOLS
7.0
SAFETY
7.5
OTHER
5.5
Why Tools & Maintenance?
Largest Growth Opportunity
• Size of the market = € 25 bn
Same customers
• Over 250,000 potential contacts
Same customers
• Over 250,000 potential contacts
Key Account request
• 1/3 of our customer quote « vendor
reduction » as a key focus area
Opportunity = Cross Selling
Brammer
Share = 12%
1/3 Loyal
2/3 Promiscuous
4%
24%
28%
7 bn €
Opportunity = Cross Selling
Customers
Vendor
Reduction
Network
Sales
Force
UK Development
3 Customer segments:
• Key Accounts
• Focus on tenders
• Engagement with Key Account teams
• Insites
• Supplier rationalisation
• Innovation introduction
• Regional Accounts
• Catalogue
UK Development
Sales strategy
• Right Products
• Right Price
• Right Availabity
Buck & Hickman Overview
• Established for over 180 years
• The first major tools distributor in the UK
• Still the UK’s leading distributor of Tools,
Maintenance and Health & Safety products
• 2,100 page catalogue regarded as the
‘Industry Bible’
Buck & Hickman Overview cont..
Our customer proposition is based around
delivering excellence in four key areas:
• Products – the definitive source for all your
Tools, Maintenance and Health & Safety
needs
• Service – a team that can be trusted to
deliver the goods
• Relationships – giving service a human face
• Solutions – taking cost out of customers
supply-chain
Buck & Hickman Overview cont..
• £105 million sales in 2011
• 540 FTE employees
• 28 branches
• 100,000 sq ft warehousing and storage in
Coventry NDC
The European Product Division
Mission:
Position Brammer as a specialist in Tools,
General Maintenance and Health & Safety in
Europe
Deliver improved customer satisfaction and
revenue growth
Product Division Structure & Mission
CATEGORY MANAGEMENT
SALES SUPPORT
MARKETING
SUPPLIER DEVELOPMENT
CATEGORY MANAGEMENT
• Range definition
• Products
• Brands
• Supplier negotiations
• Supply chain coordination
• Life cycle management
• Technical support
SALES SUPPORT
• Sales plan definition and support
• Value proposition adaptation
• Customer facing activities
• Key Accounts
• Regional Accounts
• Tender response handling
• Contract implementation
MARKETING
• Catalogue publication
• Marketing plans
• Public relation
• Private label strategy
• Sales campaigns
• Web content
SUPPLIER DEVELOPMENT
• Supplier rationalisation
• Margin improvement programs
• Training
• National field based joint activities
2012 Q1 Activities
Product Division Team
• 11 persons recruited
Range Creation
• Supplier conference held in March.
100 persons from 62 brands.
• 50 supplier negotiations underway.
• 13 supplier agreements concluded.
2012 Q1 Activities
Catalogue
• 70 000 copies in 10 languages
• Range definition progressing alongside
supplier negotiations
Added Value Services
• Proposition definition underway
2012 Q1 Activities
Key Accounts
• Engagement started with Key Accounts
Team.
• Some customer negotiations underway
(Alcoa, PepsiCo …)
1.
2.
3.
4.
5.
6.
7.
8.
Range Definition
Market Opportunity
Why Tools & General Maintenance
The UK Experience
Buck & Hickman
Tools & General Maintenance Product Division
Sales Development Plan
2012 Q1 Activities
Thank You
The UK Business
Ian Ritchie, Brammer UK,
Managing Director
Mike England, Brammer
UK, Sales Director
2
UK
•
•
•
•
•
•
872 FTE people
93 Branch locations
76 Full-time Customer Insites™
75 Part-Time Insites™
101,000 SKU’s
2011 Sales £166.9M
: Average order value £245 (£218 in 2010)
: 2.44 lines per order
: 42% of Sales from Site based services
: 60% of Sales from Key Accounts
3
History
Quarterly SPWD Growth
2006
Q1
Q2
Q3
2007
Q4
Q1
Q2
Q3
2008
Q4
Q1
Q2
Q3
Sales 2003 to 2011
2009
Q4
Q1
Q2
Q3
2010
Q4
Q1
Q2
Q3
180.0
2011
Q4
Q1
Q2
Q3
Q4
17.4% 17.7%
16.6%
160.0
% Sales Per Working Day Growth
15.6%
14.5%
12.7%
140.0
12.1%
11.2% 11.6% 11.3%
11.7%
9.0%
8.4%
7.6%
5.5%
7.1%
6.2%
5.4%
120.0
6.1%
100.0
3.4%
0.9%
80.0
-0.8%
-1.8%
-3.6%
60.0
1900
2003
1900
2004
1900
2005
1900
2006
1900
2007
1900
2008
1900
2009
1900
2010
1900
2011
4
Brammer Strategy - implementation
GROWTH
CAPABILITY
COSTS
Country Organic Growth

People Development
Key Accounts

Business Skills Development
Insites


Geographic Development

SYNERGY

Supplier rationalisation
 Business Processes


European buying
 System integration

Distributed Learning

IT cost reductions
 Brand development

Internal Communications &
Involvement

Capital Employed Management
relationship
 Supplier
management

5
 Growth
 Growth: Organic Growth
• Industry sector focus
• Understand core manufacturing
processes and MRO needs
• Provide access to technical
innovation from world-class
manufacturers
• Proactive focus on providing
operational cost savings
6
Brammer Focus on Nuclear Power Generation
7
8
 Growth: Market segmentation
•
•
•
•
•
•
9
Focus on sustainable industry segments, minimise exposure to cyclicals
Hunting for good quality customers: serious about compliance
Constant focus on Sales Pipeline management
Constant focus on Customer Retention
Constant focus on Cross-Selling the product range
Negotiate multi-year contracts
 Growth: Key Accounts
• Top-down ‘corporate sales team’ aligned to key industry segments
10
 Growth: Differentiating our offering
How we Add Value to Customers
To reduce total acquisition costs, it is necessary to consider
not just the basic product cost, but the entire process costs.
We have developed a number of solutions to make us a
cost-efficient business partner.
Solutions to reduce total acquisition costs
1
Brammer is in the business of keeping production lines
moving. We offer a number of proven services, which
proactively help avoid breakdowns – and keep costly
downtime to a minimum.
Services to improve production efficiency
2
The constant monitoring, and continuous reduction, of working
capital is a key performance indicator for the success of many
businesses. We have developed facilities, competencies,
services and systems to help achieve this.
Expertise and support to reduce working capital
3
Back
11
The Customer Challenge =
Opportunity
 Growth: Differentiating our offering
13
How we DELIVER Value – Documented Cost Savings
: 2011 > £20M of value
: to more than 500 customers
: from > 3,600 signed off added value savings
•INSERT TABLE SHOWING COST SAVINGS EVOLUTION LAST 5 Yrs
Metal Industry - Increased Production Time
Couplings on a particularly punishing application within a metal manufacturer were failing on average twice a week. Each time a failure
occurred, 2 hours of production time was lost. Sean Devaney (Regional Key Account Executive) made a joint visit with Esco to review the
application. Esco offered their T-series coupling incorporating a design advantage which would cut the time needed to change down to 5
minutes. The customer is pleased to report that after 8 weeks, there have been no failures with the new coupling.
Saving - £240,000 Ref: 17523
Power Industry - Material Substitution
An Automated Guided Vehicle used in a plant manufacturing nuclear fuel was failing every 3 weeks or so. The problem
was eventually traced to a containment seal used when the vehicle docks.
Christopher Clarke (Technical Specialist) arranged several joint visits with sealing supply partner Garlock.
redesigning the seal, it has now been in service for 6 months without failing.
After
So sucessful has this modification been that the customer has nominated it for their own global cost saving award in
addition to a similar one for plant safety.
Saving - £11,500
Ref: 17635
Saving - £11,500
Ref: 17635
14
 Growth: Insites™
•
Insite Services provide customers
with dedicated site based resource
- 76 full -time locations in UK
- captive market for Brammer
- accelerated product penetration
•
Part-time Insite™ solution
- 75 locations in UK
•
Each Insite™ is different
- inventory requirements
- product profile
- operating environment
- stores management needs
- etc…
a high value adding service
Power Station
& Bio Mass
Pot Lines (350)
Cast House
Anode Plant
 Growth: Insites™ - Examples
15
Externalise internal core competences to differentiate and add value
 Growth: Insites™ - Before
lopment
16
 Growth: Insites™ - After
17
 Growth: Geographic expansion
18
In UK, being local and close to the Customer is critical
New branches: added 13 since 2005/6 (excl. Buck & Hickman)
2010
Inverness
Pembroke
Reykjavík
: July
: October
: December
2011
Fort William : April
ENTRY STRATEGY
Support committed Key Account Customers and grow from there
19
 Capability
20
 Capability: Differentiating our offering
• Access to world-class brand portfolio
- brand ‘sponsorship’ is mission critical
• Committed supplier relationships
• World-class MRO distribution centre
• Agile, low-cost, minimal human
intervention
• Continuous improvement culture
21
• Striving for World-Class business
systems
• External accreditation / certification
CENTRE OF EXCELLENCE
• Innovative environment to showcase
product & technical expertise
- takes ‘price’ off the table
- great for building supplier rapport
22
• Investing in our people
: > 2,000 training days in 2012
: new Training & Development Centre
- opened August 2011
23
 Costs
Stock : Sales ratio
 Costs:
24
Capital employed management
0.20
0.18
0.16
0.14
0.12
0.10
0.08
• Stock / Sales ratio below 10%
• Focused Debtors Management and Commercial Policy
: customers pay us before we pay suppliers
• Cash generation better than Profit
 Costs:
25
Year on Year Productivity Improvement
• SDA is managed in line with required capacity
• Revenue / Head productivity gains is a given
30.0%
29.0%
28.0%
27.0%
26.0%
25.0%
SDA : Sales %
24.0%
23.0%
MAT
 Synergy
 Synergy:
Supplier relationship management
• One European approach + process
• Virtual Purchasing Team maximise opportunities
• ‘Bottom-up’ aligned management of supplier management
• Driving continuous improvement
: scorecard approach vital
: tangible evidence to customers we are serious and competitive
 Synergy:
Business processes
• Employee Survey
• Customer Survey
• Reporting and KPI’s
• Customer loyalty programmes
• Etc.
 Synergy:
Brand development
• Brammer identity implemented in UK in 2007
: Brammer acquired “BSL” in 1968
• Successful strategy to enable us to reposition our MRO offering
• Thought leadership & Case study PR strategy
• Brammer identity is gaining traction as a
recognised and trusted brand with customers and suppliers
 Synergy:
System integration
• MDM
: centralised Master Data Management MRO Database
: no-one else in European MRO market has this level of granularity
• Data warehouse - transactions consolidated in central system
: providing visibility and drill down for reports / analysis
: key enabler for inventory planning, purchasing tactics, customer
analysis, customer / supplier reporting, etc…..
• Inline – stock visibility throughout Europe
UK: Summary
• The market is not a constraint
: Growth drivers in place
• Focus on the right customers
: right segments
: customers with a compliance culture
• Differentiation is key
: People and ideas make the difference
: adding value to the customer is the order winner
• Make selective investments
: good development roadmap in place
: bolt-on acquisitions work
32
Growth
Acquisitions
Buck & Hickman: Summary
• 182 year old British company
• 28 branches
• £105M t/o (2011 annualised)
: No. 3 by size in £2Bn UK Tools, General Maintenance & Health & Safety market
• Strong key account portfolio, inc:
: Rolls Royce, Siemens, GE, Tata Steel, Westland
• 140 year old “Roebuck” exclusive private label brand
: good quality, good margin Hand Tool range
• 540 employees
• 100,000 sq ft NDC in Coventry
Buck & Hickman: Synergy opportunities
• £7.5M annualised over 3 years
: Purchasing leverage
: Roebuck brand
: Branch co-locations (18)
: Logistics
: Cross-selling
: Marketing
Buck & Hickman: Progress
• Business is performing well, in-line with expectations
• Integration workstream programme to deliver synergies
is on-track
• Future Sales growth pipeline developing
• Leveraging management and supplier relationships to
create European business opportunity
Product Development &
European Purchasing
Carl-Friedrich Wayand,
Brammer plc, European
Purchasing Director
Agenda
European Purchasing
 Organisation
 Supplier Relationship Management including
Product Development
Supplier Relationship
Management
Management
Supplier Strategy
Supplier Segmentation
Supplier Development
Supplier Collaboration
Set up the overall Group Purchasing
Strategy (incl multiple sourcing)
Segmentation based on impact on
Brammer‘s and Supplier‘s business
Measurement of Suppliers‘ performnace in
order to improve on Delivery-QualityCost-Service/Support-Innovation
Management of differentiated Supplier
Relationship based on Strategy and
Segmentation
Management
Supplier Strategy
Supplier
Segmentation
Supplier
Development
Supplier
Collaboration
Set up the overall Group
Purchasing Strategy (incl
multiple sourcing)
Segmentation based on
impact on Brammer‘s and
Supplier‘s business
Measurement of Suppliers‘
performance in order to
improve on Delivery-QualityCost-Service/SupportInnovation
Management of
differentiated Supplier
Relationship based on
Strategy and Segmentation
high
Executive
BRM
Executive
Business
BRM
Low
Growth rate &
Turnover
:
High (>80%)
High
Low (< 20%)
Impact on Supplier’s business
Review
Number of suppliers:
Leverage
Strategic
Strategic
supplier
Operational Review
meetings
Operational review
meetings
Strategic Cost
Management
BRM
Commercial
supplier
Non critical
Bottleneck
l
o
w
high
Impact on Brammer’s business
European Supply
Agreements
Strategic Growth
Agreements
Management
Supplier Strategy
Supplier
Segmentation
Supplier
Development
Supplier
Collaboration
multiple sourcing)
Management of
Low
Growth rate &
Turnover
:
High (>80%)
High
Low (< 20%)
Supplier Strategy
Supply
Base
 Reduce the number of suppliers
 Concentrate the business on key premium suppliers
 Develop a special “partnership” with some of them
 >80% of purchases concentrated on Strategic/Preferred
Suppliers
 < 20% of purchases with Commercial Suppliers
Supplier Relationship Strategy
Strategic / Preferred Suppliers Criteria
 Authorised in every country –
product availability and
support
 Competitive Pricing
 Common profit improvement
 European Supply Agreement
 Geographic development
 Key account support
Strategic / Preferred Suppliers Criteria
 New product development
 Preferential support
 Supply
chain/channel/marketing
requirement
 Willing to engage in three
year planning cycle
 Willing to ‘think outside the
box’ and to implement locally
Supplier Strategy
Strategic /
Preferred Suppliers
Commercial
Suppliers
Is there a difference in the relationship?
Strategic / Preferred Suppliers
 Long term relationship
 Preferential support
 Access to the Brammer’s
pan European distribution
channels
 Common business
understanding
Strategic / Preferred Suppliers
 Alignment of business strategy
in B.R.M.
 Brammer Business growth
provides opportunities
 Common growth (turnover &
market share), faster than the
market
 European Supply Agreement
Commercial Suppliers
 Short term relationship
 Pure commercial relationship
based on terms and conditions
 No access to the Brammer’s
pan European distribution
channels for Key Account and
classical MRO Customer (local,
regional biz relationship)
Commercial Suppliers
 No promotion. Suppliers in
this group are under permanent
review to be phased out.
 Upgrading to preferred level
only possible by exceptional
performance (product and / or
services), combined with
increasing brand recognition.
15
Pyramid Bottom Up and Top Down
Growth rate &
Turnover:
Low
High (>80%)
High
Low (< 20%)
Management
Supplier Strategy
Supplier
Segmentation
Supplier
Development
Supplier
Collaboration
multiple sourcing)
Management of
high
Leverage
Strategic
Strategic
supplier
Commercial
supplier
Non critical
Bottleneck
l
o
w
high
Supplier Segmentation
high
Portfolio
Management:
Input for
Differentiation
Leverage
Strategic
Strategic
supplier
Commercial
supplier
Routine
Bottleneck
low
high
Managment
Status Purchasing Strategies: Product
Group Level
 Health and Safety: WIP (2011 – 2012)
 Tools and maintenance: WIP (2011 – 2012)
*
20
Management
Supplier Strategy
Supplier
Segmentation
Supplier
Development
Supplier
Collaboration
multiple sourcing)
Management of
S.M.S.
Supplier Management System
 Measurement of the main suppliers performance
 Tool for continous improvement
Management
Supplier Strategy
Supplier
Segmentation
Supplier
Development
Supplier
Collaboration
multiple sourcing)
Management of
Management
Supplier Strategy
Supplier
Segmentation
Supplier
Development
Supplier
Collaboration
multiple sourcing)
Management of
Executive
BRM
Executive
Business
BRM
Review
Operational Review
meetings
Operational review
meetings
BRM
European Supply
Agreements
Strategic Cost Mgmt
Strategic Growth
Agreements
Business Review Meetings
for strategic and preferred suppliers
Scope
Who - Brammer
Who - Supplier
Frequency
CEO; CFO; EPD
CEO, Key Account
Manager
1 to 2x year
Executive
High-level
relationship and
strategy
alignment
EPD, Leadbuyer
Key Account Manager
3 to 4 x year
Business Review
European
Business review
European
Supplier Rating
Corrective action
planning
Performance
review;
Corrective action
planning
Purchasing Director;
MD (partly); Sales Mgr
(partly)
Sales mgr., key local
contact
1 to 2 x per
quarter
Executive
BRM
BRM
Operational
OperationalReview
review
meetings
meetings
Management
• Positive margin development
therefore
• Profitable business
therefore
• Win - Win - Win situation
28
Thank You For Your Attention
SKF
Michael Crean, SKF,
Director Service Division
UK
SKF and Brammer
Presented to: Brammer Investor Day
Presented by: Michael Crean, Area Director West Europe
03/05/2012
SKF Group - Innovating since 1907
2012 © SKF Group
One Out of Six is an SKF Bearing
2012 © SKF Group
SKF - A truly global company
Established:
1907
Sales 2011:
SEK 66,216 million
Employees:
46,039
Production sites:
around 130 in 32 countries
SKF presence:
in over 130 countries
Distributors/dealers:
15,000 locations
Global certificates:
ISO 14001
OHSAS 18001 certification
2012 © SKF Group
Net sales by customer segment 2011, excl. Lincoln
13%
Cars and
light trucks
Industrial
distribution
5%
Aerospace
26%
26%
4%
Railway
Commercial
transport
3%
Off-highway
Trucks
10%
Vehicle Service
Market
Two-wheeler
and Electrical
Special industrial
equipment
5%
Energy
6%
Heavy
industry
Industrial business 7%
2012 © SKF Group
5%
General
industry
3%
2012 Sales
66.2Bn SEK
What we are aiming for
OEM
Strengthen aftermarket sales
Industry
Oil platforms
Industry Applications
Gearboxes
Paper mills
Machines
Steel plants
Conveyers
Railways
Pumps
Mines
...
Fans
...
Create OEM sales pull
2012 © SKF Group
End user
1
The Industrial Market
2012 © SKF Group
Delivering SKF Knowledge
2012 © SKF Group
Regional Sales & Service Business
Providing the industrial aftermarket with
value added solutions for improved
overall customer productivity based on:
• Advanced services and technical
competence to optimize plant asset
efficiency for industrial end users
• SKF’s platform products and services
through authorised distributor
channels
• Professional supply chain and
global reach
The Power of Knowledge Engineering
2012 © SKF Group
2
Delivering Value with Distributors
2012 © SKF Group
The Bearing as the Heart of the Machine
Misalignment
Load
Unbalance
Lubrication
Looseness
2012 © SKF Group
From Product to Solution
Each stage has different:
• Direct cost
• Impact
• Value (TCO)
• Customer engagement
Plant performance
Systems and asset
condition
Product groupings
and upgrades
Products
2012 © SKF Group
3
Europe
2012 © SKF Group
Working Together
Growth
Synergies
• Joint visits
• Solution Factory
• Key Account activities
• Key Account engagement
• Segment competence /
collateral
• Business review
structures
• Sample Case
• Support to Insites
Capabilities
• Distributor College
• Sales methodologies
2012 © SKF Group
Costs
• Inventory availability
• Efficient / effective
logistics
• Active effective marketing
Working Together
Brammer Sample Case
SKF New Market Offers
Centre of Excellence
SKF Solution Factory
Mobile Centre of Excellence
SKF Solution Truck
Documented savings
SKF Documented
Solutions Program
2012 © SKF Group
Working Together
• An open working relationship, focused on short and long
term
• Key Account engagement
• Effective Customer relationship management
• Active and on-going focus to document value with
customers
• Delivery of advanced concepts – The Hidden Factory
2012 © SKF Group
Energy and Sustainability
• Addresses an issue of key
importance to many
industries
• Builds on “The bearing as
the heart of the machine”
• Expands on the way
performance of key assets
(fan, gearbox, compressor,
pump, etc) relies on quality
components
2012 © SKF Group
• Brings SKF service
capabilities into play with the
market
• Central to Brammer
SKF Distributor College
Objective:
Provide consistent training for distributors all over the
world to help them serve their customers even better and
sell more
SKF Distributor College - Certificates since 2005
Certificates
Users
Milesto
160 000
140 00
140 000
130 00
120 00
120 000
110 00
100 00
90 000
100 000
80 000
2012 © SKF Group
60 000
50 000
45 000
40 000
35 000
30 000
25 000
20 000
15 000
10 000
5 000
40 000
20 000
-3
0
20
11
-1
2
-3
0
-3
0
20
11
-0
6
-3
0
-1
2
10
20
20
10
-0
6
-3
0
-3
0
-1
2
09
20
20
09
-0
6
-3
0
-3
0
-1
2
08
20
20
08
-0
6
-3
0
-3
0
-1
2
07
20
20
07
-0
6
-3
0
-3
0
-1
2
20
06
-0
6
20
06
-1
2
-3
0
00 000
05
• Reached 140,000 certificates mid February
• New layout of website and courses
• Further new courses being released throughout 2012
• Brammer personnel have completed 9,083 courses in
the last 16 months
70 000
60 000
20
Key points:
80 000
2012 © SKF Group

- Investors

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