MAKE MORE ELECTROCOMPONENTS - Full-year results for the year ended 31 March 2019

 
MAKE MORE ELECTROCOMPONENTS - Full-year results for the year ended 31 March 2019
ELECTROCOMPONENTS
      Full-year results for the
      year ended 31 March
      2019

                                  MAKE MORE
      21 May 2019
2019 Full-year Results
                                  POSSIBLE
MAKE MORE ELECTROCOMPONENTS - Full-year results for the year ended 31 March 2019
SAFE HARBOUR

This presentation contains certain statements, statistics and
projections that are or may be forward-looking. The accuracy and
completeness of all such statements, including, without limitation,
statements regarding the future financial position, strategy,
projected costs, plans and objectives for the management of
future operations of Electrocomponents plc and its subsidiaries is
not warranted or guaranteed. These statements typically contain
words such as "intends", "expects", "anticipates", "estimates" and
words of similar import. 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. Although
Electrocomponents plc believes that the expectations reflected in
such statements are reasonable, no assurance can be given that
such expectations will prove to be correct. There are a number of
factors, which may be beyond the control of Electrocomponents
plc, which could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking
statements. Other than as required by applicable law or the
applicable rules of any exchange on which our securities may be
listed, Electrocomponents plc has no intention or obligation to
update forward-looking statements contained herein.
Front cover
The image on the front cover represents Hyperloop, a futuristic transport system.
RS Components is a major sponsor of the University of Edinburgh’s team, HYPED, in the
2019 SpaceX Hyperloop Pod Competition to revolutionise terrestrial transportation.
2019 Full-year Results                                                                  2
MAKE MORE ELECTROCOMPONENTS - Full-year results for the year ended 31 March 2019
OVERVIEW

Above market,
                                            8.3% like-for-like(1)                             Adjusted(2)                                       20.8% like-for-like(1)
sustainable growth and                      revenue growth,                                   operating profit                                  growth in adjusted
strong execution                            continuing to drive                               margin rose to                                    profit before tax
                                            share gains in                                    11.7% aided by                                    and 26.8% growth
                                            large, fragmented                                 higher gross margin                               in adjusted
                                            market                                            and cost control                                  earnings per share

                                            Further                                          IESA acquisition                                  Continuing to
                                            improvement in                                   performing well –                                 generate attractive
                                            customer                                         strong double-digit                               return on capital
                                            experience –                                     revenue growth                                    employed of 27.7%
                                            Group NPS(3) up                                  and accretive to
                                            5.1%                                             Group margin

                                    (1)   Like-for-like change excludes the impact of acquisitions and the effects of changes in exchange rates on translation of overseas
                                          operating results, with 2018 converted at 2019 average exchange rates. Revenue is also adjusted to eliminate the impact of
                                          trading days year on year.
                                    (2)   Adjusted excludes amortisation of intangible assets arising on acquisition of businesses, substantial reorganisation costs, asset
                                          write-downs, one-off pension credits or costs, significant tax rate changes and associated income tax.
2019 Full-year Results              (3)   Rolling 12-month Net Promoter Score – a measure of customer satisfaction.                                                           3
MAKE MORE ELECTROCOMPONENTS - Full-year results for the year ended 31 March 2019
AGENDA

                                                                   David Egan
                                                                   CFO
                         1    FINANCIAL RESULTS

                         2    REGIONAL PERFORMANCE

                                                                   Lindsley Ruth
                         3    HOW WE CAN CONTINUE TO DISRUPT AND   CEO
                              ACCELERATE

                         4    CURRENT TRADING & OUTLOOK

2019 Full-year Results                                                             4
MAKE MORE ELECTROCOMPONENTS - Full-year results for the year ended 31 March 2019
1
FINANCIAL
RESULTS

Significant progress

2019 Full-year Results
MAKE MORE ELECTROCOMPONENTS - Full-year results for the year ended 31 March 2019
FINANCIAL HIGHLIGHTS

      Strong revenue growth                                         >             Improving profitability                                          >             EPS and dividend growth                                         >
                Like-for-like(1) revenue growth (%)                                          Adjusted(2) operating profit (£m)                                                         Adjusted(2) EPS (p)
                                                                                                                                                                                                 37.0
              11.6                                                                                                220.3                                                    28.4
                                    8.9                   8.3                               177.1

                                                                                                                                 20.8%                                                                           26.8%
                                                                                                                                           (1)
             RS Pro               Digital               Group                               2018                  2019         Like-for-like change                       2018                   2019         Like-for-like(1) change

                         Gross margin (%)                                               Adjusted(2) operating profit margin (%)                                             Full-year dividend per share (p)(3)
                                                                                                                                                                                                14.80
             44.0                  44.5                                                                            11.7                                                  13.25
                                                                                             10.4

                                                  0.2 pts                                                                        1.1pts                                                                          11.7%
                                                            (1)                                                                            (1)
             2018                  2019        Like-for-like change                         2018                  2019         Like-for-like change                      2018                   2019                    Change

                                                                   Significant growth in profit and earnings per share
(1)  Like-for-like change excludes the impact of acquisitions and the effects of changes in exchange rates on translation of overseas operating results, with 2018 converted at 2019 average exchange rates. Revenue
     is also adjusted to eliminate the impact of trading days year on year.
(2) Adjusted excludes amortisation of intangible assets arising on acquisition of businesses, substantial reorganisation costs, asset write-downs, one-off pension credits or costs, significant tax rate changes and
     associated income tax.
 2019Proposed
       Full-year Results                                                                                                                                                                                                                6
(3)               full-year dividend to be approved at the AGM.
MAKE MORE ELECTROCOMPONENTS - Full-year results for the year ended 31 March 2019
DRIVING OPERATIONAL EXCELLENCE – GROSS MARGIN

 Progress                                                            >   Going forward                                                    >
  0.5 percentage point improvement to 44.5%                             Long term our aim remains to drive stable and where possible
       – 0.4 percentage point accretion from acquisitions                improved gross margin to support the delivery of our target of
                                                                         mid-teen adjusted operating profit margin:
       – 0.1 percentage points dilution from translational foreign
         exchange                                                         Improving product mix:
                                                                           – New product introductions at RS PRO
       – 0.2 percentage point like-for-like improvement
                                                                           – Driving faster growth in single-board computing via OKdo
  Like-for-like improvement driven by our own actions to:
                                                                             could provide offset
       – Grow higher-margin products, strong growth at RS PRO
                                                                          Controls and process – discipline on discounting
       – Improve discount discipline – good progress at Allied
                                                                          Dynamic pricing tool to be rolled out in APAC, the Americas
       – Enhance pricing – dynamic pricing tool rolled out in EMEA        Smarter purchasing – global sourcing initiatives

                                                  Continued focus on driving profitability

2019 Full-year Results                                                                                                                        7
MAKE MORE ELECTROCOMPONENTS - Full-year results for the year ended 31 March 2019
DRIVING OPERATIONAL EXCELLENCE – OPERATING PROFIT MARGIN

    Operating profit margin
     We are focused on driving towards a best-in-class mid-teen adjusted operating profit margin
     Revenue growth, higher gross margin and improvement in adjusted operating profit conversion ratio to 26.3% (2018: 23.6%) drove a
      1.3 percentage point improvement in adjusted operating profit margin to 11.7% (2018: 10.4%)

                                 10.4%         0.2%          2.4%         0.2%       (0.7)%            (0.6)%          (0.3)%          0.2%          (0.1)%         11.7%
                           14%
                           13%
      Adjusted operating

                           12%
        profit margin

                           11%
                           10%
                           9%
                           8%
                           7%
                           6%
                                 FY18      Acquisitions    Revenue    Gross Margin   Inflation         Digital        People           PIP 2         Other           FY19
                                                            Growth

                                                                                                 Disciplined investment – During 2019 adjusted operating costs
                                 Revenue growth and gross margin                                 grew at 5.7% on a like-for-like basis. 60% of the increase related to
                                 improvement – Market growth and                                 inflation and volume increases. The majority of the balance was
                                 market share gains, plus improving                              driven by increased investment in digital, talent and innovation
                                 product mix                                                     offset by the £4 million PIP 2 savings Adjusted operating costs as a
                                                                                                 percentage of revenue fell to 32.8% (2018: 33.6%)
2019 Full-year Results                                                                                                                                                      8
SUMMARY INCOME STATEMENT

Highlights                                                          £m                                                          2019                                                      2018
 Revenue saw a benefit from currency
  (£1.3 million) and extra trading days                                                                 Reported          Adjustments Adjusted(1) Reported                          Adjustments Adjusted(1)
  (£8.4 million)
                                                                    Revenue                               1,884.4                  -               1,884.4          1,705.3                  -               1,705.3
 Net finance costs increased to £6.1 million
  (2018: £4.0 million)                                              Operating profit                        201.0                19.3               220.3             172.6                 4.5               177.1
 Adjusted PBT excludes:
      –    £13.1 million primarily labour-related restructuring
                                                                    Net finance costs                       (6.1)                  -                 (6.1)            (4.0)                  -                 (4.0)
           costs
                                                                    Share of profit of JV                    0.3                   -                  0.3                -                   -                    -
      –    £4.4 million amortisation of intangible assets arising
           on acquisitions
                                                                    Profit before tax                       195.2                19.3               214.5             168.6                 4.5               173.1
      –    £1.8 million one-off pension costs

 2019 adjusted effective tax rate of 24%                           Income tax expense                     (47.1)               (3.6)               (50.7)           (19.0)               (28.8)              (47.8)
  (2018: 28%)
                                                                    Profit for the period                   148.1                15.7               163.8             149.6               (24.3)              125.3

                                                                    Earnings per share (p)                  33.4                  3.6                37.0              33.9                (5.5)               28.4
                                                                    (1)   Adjusted excludes amortisation of intangible assets arising on acquisition of businesses, substantial reorganisation costs, asset write-downs,
                                                                          one-off pension credits or costs, significant tax rate changes and associated income tax.

2019 Full-year Results                                                                                                                                                                                                     9
CASH FLOW

Highlights                                                           £m                                                                                                    2019                  2018
 Cash generated from operations increased                           EBITDA                                                                                                232.9                 198.4
  to £184.2 million (2018: £168.9 million)                           Add back impairments and (profit) / loss on disposal of
                                                                                                                                                                             2.3                   1.7
 Working capital as a percentage of sales                           non-current assets
  increased by 2.0 percentage points to 22.2%                        Movement in working capital                                                                           (64.8)                (38.5)
      –    0.8 percentage points of increase related to
           acquisitions                                              Movement in provisions                                                                                  5.9                   1.9
      –    Balance relates to investment in additional inventory     Other                                                                                                   7.9                   5.4
 2019 capex was 1.8 times depreciation                              Cash generated from operations                                                                        184.2                 168.9
  (2018: 1.0 times)                                                  Net interest paid                                                                                      (6.1)                 (4.2)
 Adjusted operating cash flow conversion(1)
                                                                     Income tax paid                                                                                       (50.8)                (37.8)
  64.2% (2018: 83.1%)
 Net debt increased to £122.4 million (2018:                        Net cash from operating activities                                                                    127.3                 126.9
  £65.0 million). Net debt to adjusted EBITDA of                     Net capital expenditure                                                                               (50.8)                (24.2)
  0.5x (2018: 0.3x)
                                                                     Free cash flow                                                                                         76.5                 102.7
 Additional short-term investment of around
  £26 million in fast-moving inventory in H2 to                      Add back cash effect of               adjustments(2)                                                    8.0                   2.4
  ensure we can maintain customer service                            Adjusted free cash flow                                                                                84.5                 105.1
  during the UK’s exit from the EU                                 (1)   Adjusted operating cash flow conversion is adjusted free cash flow before income tax and net interest paid as a percentage of adjusted
                                                                         operating profit.
                                                                   (2)   Adjusted excludes the impact of substantial reorganisation cash flows.

2019 Full-year Results                                                                                                                                                                                            10
2
REGIONAL
PERFORMANCE

We are focused on
growing market share

2019 Full-year Results
REGIONAL PERFORMANCE – EMEA

Highlights                                                                                                                                                                                      Like-for-like(1)
                                                                       £m                                                                        2019                        2018
 8.5% like-for-like revenue growth                                                                                                                                                                change
      –    Over two-thirds of growth market share gains
                                                                        Northern Europe revenue                                                  529.5                       454.3                   9.7%
      –    All sub-regions showing growth

 Leadership and talent                                                 Southern Europe revenue                                                  367.7                       344.8                   6.1%
      –    New country leaders in Italy, Spain and Austria

      –    Continued investment in talent
                                                                        Central Europe revenue                                                   265.1                       238.8                  10.3%
 Driving new customer growth
      –    Brand awareness and digital marketing driving
           customer count
                                                                        Emerging markets revenue                                                  47.7                        45.6                   5.0%

 Growing our share of customer wallet
      –    Improvement of 5.5% in NPS
                                                                  EMEA revenue                                                                 1,210.0                      1,083.5                  8.5%

      –    Strong growth in value-added solutions in
           Northern Europe                                        EMEA operating profit                                                          193.5                       161.0                  16.2%
      –    Sales effectiveness training across region

 16.2% like-for-like operating profit growth                     EMEA operating profit margin                                                  16.0%                       14.9%                   0.9 pts
  and further improvement in operating
                                                                 (1)   Like-for-like adjusted for currency and to exclude the impact of acquisitions; revenue also adjusted for trading days.
  profit margin to 16.0%

                                                             Significant market share gains driving growth
2019 Full-year Results                                                                                                                                                                                             12
REGIONAL PERFORMANCE – Americas

Highlights                                                                                                                                                       Like-for-like(1)
                                                                   £m                                                                         2019       2018
 8.6% like-for-like revenue growth                                                                                                                                 change
      –    Half market / half share gain
                                                              Revenue                                                                         483.6      440.8        8.6%
      –    Moderation in market growth in H2

 Adding new customers                                        Operating profit                                                                    62.1   51.4        19.4%
      –    Increased brand awareness and digital marketing

 Selling more to existing customers                          Operating profit margin                                                         12.8%      11.7%       1.1 pts
      –    Improved customer experience, NPS up 2.3%

      –    Range expansion – 25,000 new stocked products,
           7,000 new RS PRO products online

      –    Focus on sales force effectiveness

 Gross margin improvement
      –    Discount discipline

      –    RS PRO growth

 19.4% like-for-like growth in operating profit,
  further improvement in operating profit
  margin to 12.8%                                            (1)   Like-for-like adjusted for currency; revenue also adjusted for trading days.

                                                Strong growth, gross margin improvement and tight cost control
2019 Full-year Results                                                                                                                                                              13
REGIONAL PERFORMANCE – Asia Pacific

Highlights                                                                                                                                                               Like-for-like(1)
                                                                           £m                                                                         2019      2018
 6.2% like-for-like revenue growth                                                                                                                                         change
      –    Market share gains: Australia / New Zealand,
           South East Asia                                            Revenue                                                                         190.8     181.0         6.2%
      –    Digital performance issues impacting growth in
           China / Japan                                              Operating profit / (loss)                                                           3.0   (0.9)
 We have fixed many of the basics
                                                                      Operating profit / (loss) margin                                                1.6%      (0.5)%       2.4 pts
      –    Customer experience NPS up 12.3%

      –    Improved efficiency - migrating activities into our
           shared business centre of expertise in Foshan

 We need to build our capabilities to be
  successful in China and Japan
      –    Building leadership and capabilities - appointed
           new leader for Greater China May 2019

      –    Working to improve local online experience

      –    Building local offer

 Region now profitable – we will continue
  to drive greater scale and are focused on
                                                                     (1)   Like-for-like adjusted for currency; revenue also adjusted for trading days.
  improving our local offer

                                                            Profitable, building capabilities to drive faster growth
2019 Full-year Results                                                                                                                                                                      14
3
HOW WE CAN
CONTINUE TO
DISRUPT AND
ACCELERATE

2019 Full-year Results
A SIGNIFICANT MARKET OPPORTUNITY

                                                                           c.£300bn
Our market today                                                              Global                    Our market is large                   $155bn
                                                                            Electronic                                                     Global A&C (4)
    Large & highly fragmented                                             component                        and highly                        market
                                                                             market                      fragmented. We                     Source: Business
    Our customers are looking for                                           Source:                                                             Wire
                                                                            DiscoverIE                   have significant
     fewer partners:
                                                                                                          scope to grow
         – Digital partner                                                                                 market share                                              $880bn
                                                                                     >$140bn                                                                       US MRO (1) &
         – One-stop shop                                                                 US MRO (1)     organically and via                                       OEM (5) market
         – Value-added solutions
                                                                                                                                                                    Source: WESCO
                                                                                          market
                                                                                     Source: Fastenal
                                                                                                            acquisition
    Our competition
         – Largely offline                                                                                                    c.$1 trillion
                                                                                                                                 US B2B (3)
         – Small and regional                                                                                                  e-commerce
                                                                              c.$608bn                   c.£400bn                 market                         $343bn
         – Single product / niche focus                                      Global MRO (1)
                                                                                                        Global MRO (1),       Source: Forrester                Semiconductor
                                                                                                        HSE (2) market           Research                        and IP&E (6)
   (1)     MRO is Maintenance, Repair and Operations.                           market                        Source:
                                                                               Source: W.W.                                                                        market
   (2)     HSE is High Service Electronics.                                                             Electrocomponents
                                                                                 Grainger                                                                        Source: Avnet
   (3)     B2B is Business-to-Business.
   (4)     A&C is Automation and Control.
   (5)     OEM is an Original Equipment Manufacturer.
   (6)     IPE is Interconnect, Passive and Electromechanical.

                                                             Top 50 players represent around 30% of the global market
2019 Full-year Results                                                                                                                                                              16
WHAT WE HAVE DONE SO FAR

What?                                                                     Key benefits?                                           Outcome

      1 Focused back on the customer                                      1 RS NPS(1), a measure of customer satisfaction,
                                                                              has risen 34% since September 2015

      2 Significantly accelerated digital                                 2 70,000 more visitors to our site each day than in
          investment to around 4% of                                          2017, digital revenue growth of 9% in 2019 vs 6%
          revenue per annum                                                   in 2015

                                                                                                                                    Market share gain and
      3 Further enhanced our offer                                        3 RS PRO, value-added solutions, OKdo, RS
                                                                              Electronics                                           margin improvement
      4 Transformed leadership                                            4 New leaders for all three of our regions and six
                                                                              out of eight of our sub-regions

      5 Stabilised gross margin                                           5 Three consecutive years of gross margin
                                                                              improvement

      6 Improved efficiency and begun                                     6 11pts improvement in adjusted operating profit
          to build lean and scalable model                                    conversion over last 4 years
(1)    NPS is defined as the rolling three-month RS Net Promoter Score.
(2)    CAGR is defined as the compound annual growth rate.

                              2015-2019 like-for-like revenue CAGR(2) of 7% and adjusted operating profit CAGR(2) of 27%
2019 Full-year Results                                                                                                                                      17
SUCCESSFULLY DRIVING MARKET SHARE

 Strong revenue growth across board                        >        Increasing average order value across existing and new customers                                     >
                   Like-for-like revenue growth %
                                                                               700,000                                                                            £200
                                                                                         Average order value (AOV) – we are
                                                                                         selling more to our customer base…
                                                                               650,000                                                                            £190

                                                                                                                                                                         Average order value
              EMEA                                8.5                                                 Digital marketing
                                                                                                      step-up

                                                                   Customers
                                                                               600,000                                                                            £180

         Americas                                8.6
                                                                               550,000                                                                            £170
                                                                                                                  …and growing our customer count via
                                                                                                                   digital and more effective marketing
                                                                               500,000                                                                            £160

                                                                                         Apr

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      Asia Pacific                      6.2

                                                                                             FY2016            FY2017             FY2018                 FY2019

      Estimated market growth       Estimated market share gains                                      Average order value (AOV)   B2B customer numbers

                                 When we are first choice, our research shows customers spend 25% more with us
2019 Full-year Results                                                                                                                                                               18
WE HAVE SIGNIFICANT SCOPE TO ADD MORE CUSTOMERS

                                                                                                                   20                                                                       200,000
        We have >170k customers in the

                                                                                Multiple of UK manufacturing GDP
         UK today and that number
         continues to grow                                                                                         15                                                                       150,000

                                                                                                                                                                                                      Customers
        Our customer count in the UK is
            – > 2x that of the US                                                                                  10                                                                       100,000

            – > 2.5x that of Germany
                                                                                                                   5                                                                        50,000
            – > 8x that of China
        Manufacturing GDP shows the
         market opportunity in these                                                                               0                                                                        0
         territories is a multiple of that of                                                                             UK         Germany          Japan            US           China
         the UK                                                                                                                    Manufacturing GDP(1)       Number of customers

                                                                                                                    Even in our largest market, the UK, our market share remains
AND TO SELL MORE TO CUSTOMERS BY GOING BROADER & DEEPER

                                                                                                                       Limited range       Part range   Full range
                                                                                                                         Competitors
Becoming first choice                                               Using Europe as an example
                                                                                                             BLE                           Industrial
  Our customers are short of time and are                                                               1   2     3        4          5            6       7
   looking to consolidate their supplier base                                  Semiconductors
                                                                      BLE      Passives
  Our suppliers are looking for a partner                                     Connectors
   who can show more of their range
                                                                               Electrical / Enclosures
                                                                               Controls
                                                                               Mechanical
We can sell more to our customer                                     IA&C
                                                                               Fluid Power
base                                                                           Sensors & Switches
                                                                               Cable
  Deeper range – show more of our
                                                                               Test & Measure
   suppliers range either on a stocked or
                                                                               Electromechanical
   non-stocked basis                                                  IIT
                                                                               Interconnect
  Broader range – expand into new                                             PPE
   categories which our customers buy                                          Hand tools
   today from our competition                                                  Power tools
   (1)     BLE is Board-level electronics.                           TCFM      Janitorial
   (2)     IA &C is Industrial automation & control.
   (3)     IIT is Industrial interconnect and test.                            Consumables
   (4)     TCFM is Tools, consumables and facilities maintenance.
                                                                               Private label

                             The prize is large – we have significant scope to grow customer numbers and sell more to existing customers

2019 Full-year Results                                                                                                                                               20
WHAT WE ARE DOING

Differentiating to disrupt                                    Actions and investment                         Benefits
  1 Digital leadership
                        Ease of use                          Continued investment in
                        ‘Faster than real-time’                Digital leadership (around 4% of revenue       Sustainable market share
                         Personalised                            per annum)
                                                                                                               gains > 2x market growth
  2 Transformation of our technology                         Increased capital expenditure
                        Scalable                               c. £20 million investment in
                        Product and content excellence
                                                                  –   Unrivalled choice – broader & deeper
                        Data and insight                                                                         Progress towards
                                                                      range focused on product and
  3 Best-in-class supply chain                                       content excellence
                        Scalable and automated
                                                                                                                  mid-teen adjusted
                        Customer centric                         –   Transformation of our technology          operating profit margin
  4 Unrivalled choice                                          c. £60 million investment to
                        Broader and deeper range
                                                                  –   Expand & automate supply chain –
                        Stocked and non-stocked
                                                                      German distribution centre expansion          Returns broadly
  5 Value-added solutions
                        Design                               Continued rollout of                                  consistent with
                        Procurement and inventory              Value-added solutions across the globe –            Group ROCE
                         management                              minimal investment required
                        Maintenance

                                                   We are focused on where we can go over the next five years
2019 Full-year Results                                                                                                                    21
DIGITAL LEADERSHIP

What?                                                 Key benefits?
    Brand awareness: we are building our
     brands to drive more traffic to our sites
    Digital marketing: we are also investing in       1 Faster traffic growth
     pay per click and search engine
     optimisation

    Mobile: we are investing to drive a                                                             Growing our customer
     best-in-class mobile experience
                                                                                                      count and improving
    Website speed: we will continue to work to         Best-in-class online experience – driving
     make our sites faster and easier to use
                                                       2
                                                         improved conversion
                                                                                                       average order size
    Search: we are making it easier for our
     customers to find the products they need

    Data and personalisation: we will use our
     data to personalise a customer’s online
                                                       3 Growth in average order value
     journey – showing relevant products,
     bundles and solutions

                                                 How we can continue to disrupt and accelerate
2019 Full-year Results                                                                                                      22
TRANSFORMATION OF OUR TECHNOLOGY

What?                                                   Key benefits?
   We are investing to future proof and simplify         Future proofing our technology
   our technology estate with focus in the
                                                         Scalability
   following areas
                                                         Simplification – allowing us to make change
    User experience – agile teams working on
                                                          quicker and more efficiently
     search, mobile, website speed,
     personalisation                                     Flexibility
    Product and content management                      Medium-term efficiencies
     solution
                                                                                                        To support growth and
    Supply chain – DC management systems
                                                                                                        drive improved returns
    Data and technology infrastructure –
     upgrades and replacement of legacy
     systems

                                                   How we can continue to disrupt and accelerate
2019 Full-year Results                                                                                                           23
BEST-IN-CLASS SUPPLY CHAIN

What?                                                  Key benefits?
    Americas DC expansion on track for                 Scalability: ensuring we have the right capacity in
     completion in summer 2020                           the right place to support our five-year growth
                                                         plan
        –     > 2x capacity
                                                        Improved customer service
        –     Highly automated
                                                        New capabilities: in areas such as electronics,
    Initiating two-year c. £60 million project to       value-added solutions
     expand German DC
                                                        Increased automation: Auto-pack, automated            To support growth and
        –     > 2x capacity                              storage and retrieval improving DC efficiency
                                                                                                               drive improved returns
        –     Highly automated                          Savings: We expect savings in areas such as
                                                         freight and labour as a by-product of our
        –     Will become replenishment hub for          initiatives in this area
              EMEA

    Lean continuous improvement
    Transport optimisation

                                                  How we can continue to disrupt and accelerate
2019 Full-year Results                                                                                                                  24
UNRIVALLED CHOICE

What?                                                 Key benefits?
    We are building capabilities and                  Ability to sell our customers more
     infrastructure to significantly scale our
     range of products and solutions                   Improved data and content capabilities

    Giving the Group scope to double our                –   Enhance customer experience
     stocked range and significantly expand              –   Data driven decision making
     our non-stocked range to offer broader
     choice to customers                               Faster, automated product introduction
                                                       More efficient management of inventory and risk
                                                                                                          Higher share of
How?
                                                                                                          customer spend

    Build a scalable product data
     architecture – product information
     management and document
     management solution for EMEA / APAC
    DC expansion

                                                 How we can continue to disrupt and accelerate
2019 Full-year Results                                                                                                      25
VALUE-ADDED SOLUTIONS

                                                                             Our brands                        Our solutions
What?                                                                                                  Design tools

    We are focused on making our                          Design                                      OKdo design, prototyping and
     customers’ lives easier                                                                            cloud services

    We are enhancing our range of solutions
     across design, procurement, inventory                                                             eProcurement
     management and maintenance phases
     of our customers’ journey through the               Procurement                                   Purchasing manager
     product lifecycle
    We are expanding our current solutions
     across the globe as well as looking for                                                           Store management
     further opportunities to introduce new               Inventory                                    Vending solutions
     solutions to customers                              management
                                                                                                       ScanStock

                                                                                                       Calibration

                                                         Maintenance                                   Condition-monitoring
                                                                                                       Predictive maintenance / IIoT(1)

   (1)     IIoT is Industrial Internet of Things.

                                                    How we can continue to disrupt and accelerate
2019 Full-year Results                                                                                                                     26
4
CURRENT
TRADING AND
OUTLOOK

Well positioned to show
good progress in
current financial year

2019 Full-year Results
AN ENCOURAGING START TO 2020

We have continued to                    April like-for-like revenue trends moderated to low
see like-for-like                        single-digit growth, impacted by holidays. However, May
revenue growth in the                    has started encouragingly with Group like-for-like revenue
                                         growth closer to the trends seen during Q4 2019
first seven weeks of the
                                        EMEA (64% of revenue) continues to see strong growth and
first half.
                                         market share gains, more than offsetting softness in the
We remain confident of                   Americas (26% of revenue). Asia Pacific (10% of revenue) is
delivering another year                  seeing similar trends to Q4
of good progress.                       We are tightly managing our operating costs, while
                                         investing to drive longer-term growth
                                        We remain confident of delivering another year of good
                                         progress

2019 Full-year Results                                                                                 28
IN A NUTSHELL

  1                                                     2                                                      3                                                        4
  UNIQUELY POSITIONED IN                                DRIVING MARKET                                         BUILDING A LEAN AND                                      STRONG CASH AND
  ATTRACTIVE MARKET                                     SHARE GAINS                                            SCALABLE MODEL                                           ATTRACTIVE RETURNS
   Global player in large fragmented marketplace       We aim to grow at two times the market, driving         We have made good progress to date                      High cash conversion
    ‒ Market valued at c. £400 billion                  share gains by:                                          ‒ Stabilised and improved gross margin                  Reinvest cash to build scale and drive faster
    ‒ Market growing at GDP +                            Growing customer count                                 ‒ Adjusted operating profit margin increase of           growth
    ‒ Top 50 players account for c. 30% of the global     ‒ Become first choice; grow promoter base                5.0 percentage points since 2015                      Progressive dividend policy
      market                                              ‒ Drive more traffic to websites                      In the future we aim to drive scalability and lower     Accelerate strategy via disciplined value-accretive
   Uniquely positioned to take market share              ‒ Increase online conversion by improving              our cost to serve by:                                    acquisitions to:
    ‒ One of few global players                             experience                                           ‒ Simplifying technology estate                          ‒ Drive market share gains
    ‒ Leader in digital                                  Selling more to existing customers                     ‒ Increasing the use of automation in supply             ‒ Add new product verticals
    ‒ Providing one-stop shop for customers               ‒ First choice customers spend 25% more                  chain                                                  ‒ Accelerate value-added solutions offer
                                                          ‒ Scale range and add new product verticals            ‒ Rolling out global shared services and
                                                          ‒ Rollout value-added solutions proposition              automation
                                                          ‒ Sell the full offer; improve sales effectiveness    Long-term aspiration is to achieve a mid-teen
                                                                                                                 adjusted operating profit margin

                                                                                                               Mid-teen                                                  > 80%*
  c. £400bn                                              2x                                                    adjusted operating profit margin                          adjusted operating cash flow
  market opportunity                                     market growth rate                                    target                                                    conversion
                                                                                                                                                                       * Our aim post-investment in strategic initiatives in
                                                                                                                                                                       2020 and 2021.
2019 Full-year Results                                                                                                                                                                                                          29
5
Q&A

Thank you for your
continued interest in
Electrocomponents

2019 Full-year Results
6
APPENDIX

2019 Full-year Results
BASIS OF PREPARATION

                         Unless otherwise stated:
                          Figures have been prepared using International Financial Reporting Standards as adopted by the
                           European Union
                          Adjusted measures of profitability and cash flow exclude amortisation of intangible assets arising on
                           acquisition of businesses, substantial reorganisation costs, asset write-downs, one-off pension credits
                           or costs, significant tax rate changes and associated income tax
                          Like-for-like change excludes the impact of acquisitions and the effects of changes in exchange
                           rates on translation of overseas operating results, with 2018 converted at 2019 average exchange
                           rates. Revenue is also adjusted to eliminate the impact of trading days year on year
                          Changes in profit, cash flow, debt and share-related measures such as earnings per share are,
                           unless otherwise stated, at reported exchange rates
                          Sign conventions: % changes in revenue and costs are positive if improving profit and negative if
                           reducing profit
                          A net charge of £19.3 million (2018: £4.5 million) was reported for items excluded from adjusted
                           profit before tax

2019 Full-year Results                                                                                                               32
GUIDANCE POINTS

Trading days
                                                     Foreign exchange
      Expect around £7 million positive
       impact on revenue from additional                    Currency movements decreased 2019 adjusted profit before tax by
       trading days in the year to March 2020                £0.1 million
Other guidance points                                       If May rates persist we would expect around a £0.4 million benefit to
                                                             adjusted profit before tax in the full year *
      Capex – c. £80 million in both 2020 and
       2021 – capital expenditure to depreciation
       of around 2.7x in both years
      Inventory turn: similar to 2019
                                                     Foreign exchange rates (average for the period)
      2020 effective tax rate: similar to 2019
      Cash tax: In 2020 we will see around                                                      2019 rates                           2018 rates                         2019 rates*
       £11 million impact from timing of UK tax
       payments
                                                     Euro                                             1.13                                 1.13                                1.14
      Remain committed to a progressive
       dividend policy. In the normal course the
                                                     USD                                              1.31                                 1.33                                1.28
       interim dividend will be equivalent to 40%
       of prior year full-year dividend
                                                    * 2019 adjusted profit before tax converted at 2020 forecast average rates, using 17 May 2019 closing rates extrapolated for rest of year.

2019 Full-year Results                                                                                                                                                                           33
PERFORMANCE HAS BEEN GOOD BUT WE HAVE ROOM TO IMPROVE

                                                         Adjusted operating profit (£m)                                           Return on Capital Employed (ROCE)
 Over the last four years
  performance has been good but                                                           95.9    104.0
                                                                                                          116.3
  we still have room for                                                 75.5     81.2
                                                                                                                                                                      28.6%
                                                                 57.7                                                                                                                 27.7%
  improvement                                    33.8
                                                         48.2                                                                                                                 26.4%
                                                                                                                                                              25.2%
 We have made a good step
                                                                                                                                                      22.0%
  forward on customer experience
                                                 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 H2 19
  and financial performance                                                                                                                   17.6%
 We have outperformed our                              Adjusted earnings per share (p)                                               14.5%
                                                                                                                              13.4%
  market by digitally acquiring new
  customers and driving a higher
  share of wallet with existing                                                           15.4     17.2
                                                                                                           19.8

  customers                                                       9.1
                                                                         11.9     13.0
                                                         7.4
 We need to pick up the pace of                  5.2

  change if want to drive scale and
  become the disruptor in our                    H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 H2 19                              H1 16 FY16 H1 17 FY17 H1 18 FY18 H1 19 FY19
  market place
                                           (1)    Adjusted excludes amortisation of intangible assets arising on acquisition of businesses, substantial reorganisation costs, asset write-downs,
                                                  one-off pension credits or costs, significant tax rate changes and associated income tax.
                                           (2)    ROCE is adjusted operating profit for 12 months expressed a percentage of net assets excluding net debt and retirement benefit obligations.

                                We are focused on where we can go over the next five years
2019 Full-year Results                                                                                                                                                                             34
GROUP FINANCIAL HIGHLIGHTS

                                        (£m)                                                                 H1 2018        H1Like-for-
                                                                                                                                2017
                                                                                            2019      2018      Change          like
                                         Adjusted cash generated from operations                             45.5             82.1
                                                                                                                              change
                                        Revenue (£m)                                       1,884.4   1,705.3      10.5%         8.3%
                                         Net interest paid                                                   (2.5)            (2.6)
                                        Gross profit (£m)                                   838.6     749.8       11.8%         9.2%
                                         Income tax
                                        Adjusted      paid profit (£m)
                                                  operating                                 220.3     177.1 (16.2)24.4%       (9.2)
                                                                                                                               20.8%
                                        Adjusted
                                        AdjustedPBT
                                                  net(£m)
                                                        cash inflow from operating activities214.5   173.1    26.823.9%        20.8%
                                                                                                                              70.3
                                        Adjusted EPS (p)                                      37.0    28.4         30.3%       26.8%
                                        Net capital expenditure                                               (9.4)           (8.4)
                                        Adjusted free cash flow (£m)                          84.5   105.1        (19.6)%
                                        Adjusted (1) free cash flow
                                        Net debt (£m)                                        122.4    65.0    17.4            61.9

                                         Outflow related to restructuring                                     (0.7)           (3.0)
                                        Like-for-like revenue growth (%)                     8.3      12.8
                                         Free cash flow post restructuring                                   16.7              58.9
                                        Gross margin (%)                                     44.5     44.0       0.5 pts       0.2 pts
                                         Net debtoperating profit margin (%)
                                        Adjusted                                             11.7     10.4 (124.5)
                                                                                                                 1.3 pts     (140.9)
                                                                                                                               1.1 pts
                                        Adjusted operating profit conversion (%)             26.3     23.6        2.7 pts      2.5 pts
                                        Adjusted operating cash flow conversion (%)          64.2     83.1
                                        Net debt to adjusted EBITDA (x)                      0.5      0.3
                                        Return on capital employed (%)                       27.7     28.6

2019 Full-year Results                                                                                                                    35
KEY PERFORMANCE INDICATORS

KPI changes                                                                            2019   2018   Change
                                         Like-for-like revenue growth (%)              8.3    12.8
      We have changed our Net
                                         Group Net Promoter Score                      54.0   51.4    5.1%
       Promoter Score from RS to Group
                                         Adjusted operating profit conversion (%)      26.3   23.6   2.7 pts
      We have changed Group Lost
       Time Accident frequency to All    Adjusted operating profit margin (%)          11.7   10.4   1.3 pts
       Accidents                         Adjusted EPS (p)                              37.0   28.4   30.3%
                                         Return on capital employed (%)                27.7   28.6
                                         Adjusted operating cash flow conversion (%)   64.2   83.1
                                         All Accidents                                  56    59

                                                    Driving an improved performance for
                                                    customers, suppliers and shareholders

2019 Full-year Results                                                                                         36
ADJUSTED OPERATING COSTS

         Cost discipline
                        Like-for-like adjusted operating cost growth of 5.7%, less than revenue growth of 8.3%. Adjusted operating cost as percentage
                         of revenue fell to 32.8% (2018: 33.6%)
                        Improvement in adjusted operating profit conversion to 26.3% (2018: 23.6%)

                                                    Like-for-like change            2.3%           1.0%             2.1%        0.9%          0.1%            (0.7)%
               Adjusted operating cost (£m)

                                              630
                                              620
                                              610
                                              600
                                              590
                                              580
                                              570
                                              560
                                              550
                                                        FY18        Acquisition   Inflation       Volume           Digital      People       Other          PIP Saving           FY19

             Inflation – 2.3% inflationary rises in                                     Volume-related costs – During 2019 we            Disciplined investment – We continue to
             wages                                                                      saw higher variable costs driven by              invest in digital and talent to support future
                                                                                        revenue growth                                   revenue growth

2019 Full-year Results                                                                                                                                                                    37
NET DEBT MOVEMENTS

Strong balance sheet                             £m                                                                      2019      2018
      Net debt rose to £122.4 million, with     Net debt at 1 April                                                     (65.0)    (112.9)
       the increase largely due to the           Adjusted free cash flow(1)                                               84.5     105.1
       acquisition of IESA and associated
                                                 Acquisition of businesses                                               (34.6)       -
       loans
                                                 Cash and cash equivalents acquired with businesses                       1.3         -
      In May 2018 the Group arranged a
                                                 Loans and finance leases acquired with businesses                       (42.1)       -
       new flexible two-year loan, which is
       now £75 million                           Cash effect of         adjustments(1)                                    (8.0)     (2.4)

      Net debt: EBITDA 0.5x (2018: 0.3x)        Equity dividends paid                                                   (58.9)    (55.4)
                                                 New shares issued                                                        2.6       1.7
                                                 Purchase of own shares by Employee Benefit Trust                         (2.3)     (3.5)

Pension                                          Translation differences                                                  0.1       2.4
                                                 Net debt at 31 March                                                    (122.4)   (65.0)
      Combined deficit £83.6 million
                                               (1)   Adjusted excludes the impact of substantial reorganisation costs.
       (March 2018: £72.4 million)

2019 Full-year Results                                                                                                                       38
IMPACT OF FOREIGN EXCHANGE

Translation Exposure                          Euro and USD movements to Sterling                              € to £         $ to £

      Reported profit sensitivity to a one
                                              1.50
       cent movement in:
                                              1.40
      – Euro: £1.4 million                    1.30
      – USD: £0.5 million                     1.20
                                              1.10
                                              1.00

                                              Transaction Exposure
                                                 Group treasury maintains 3-7 month hedging to smooth impact of currency
                                                  movements
                                                 Key exposures: net buyer of US dollars, net seller of euros and other currencies
                                                 Gross margin impacted over time from weakening in sterling versus:
                                                  –   USD: negative impact
                                                  –   Euro and other currencies: positive impact

2019 Full-year Results                                                                                                                39
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