Investment Proposition

Understanding Premier Farnell in Six Steps:

 

As a global, high service technology company, Premier Farnell plc is predominantly engaged in the marketing and distribution of products and services in the time-critical and innovation-focused electronic components distribution sector.

Through our extensive proposition with of over 600,000 products from over 3,000 leading suppliers, we support customers, ranging from electronics design engineers to purchasing professionals and electronics enthusiasts around the world.

The slides below explain how Premier Farnell is positioned to benefit from the evolving electronics marketplace.

 

Industry Megatrends

 

Three key megatrends in our industry support our long term, structural opportunity for growth

A.    The pervasion of electronics leads to a virtuous circle of structural growth in the electronics design market
 

B.    Electronics design and production is increasingly global and customers benefit from a single, global distribution partner

C.    Consolidation of large, fragmented electronics supply chain will favour the established, global high service distributors

Our high service customer proposition

 

Wherever they are in the world, no matter which industry or individual roles our customers occupy, they have a common objective. They want to select the appropriate technical products; to do business easily; and to receive products in a way that makes their processes as efficient as possible.

Achieving this objective is at the heart of high service distribution and to do so our proposition centres on meeting five critical customer requirements:

  1. Access to a broad range of in stock products
  2. Trusted product information
  3. Being easy to do business with
  4. Fast delivery
  5. End-to-end service

Partnering with Suppliers globally
 

We offer suppliers the opportunity to seed new products to an extensive, global customer base across a wide range of industry segments, as well as providing an efficient channel for low volume sales.

Our multichannel sales strategy, including the award-winning element14 community, provides suppliers with a differentiating route to market and access to unparalleled customer insights. Suppliers benefit from insightful data on emerging technologies, evolving customer trends and our innovative global eSupplier strategy.

We are now following the design earlier than ever before by increasing our capability in the early stages of the design lifecycle and new product introduction. 

Multichannel sales and marketing resources
 

Providing effective marketing and sales channels as we connect suppliers to customers is fundamental to the value that our business creates.

We do this through our 1270 contact centre and field sales staff, our 250 technical engineers, our transactional websites in over 30 languages, eProcurement solutions and the element14 community which has over 220,000 members.

In 2013/2014, our new web platform was completed successfully implemented in North America. The roll-out will take place in Europe and Asia Pacific through the course of this year. 

 

Focus on Optimising Financial Performance
 

With a wealth of industry experience, Premier Farnell’s management team is focused on optimising the business through the economic cycles for the benefit of our stakeholders.

We measure the Group’s performance and progress of our strategic plans against its key performance indicators (KPIs).

As a business whose end markets are impacted by the economic cycles, we recognise that our performance in relation to these KPIs will fluctuate in the short term, particularly when taken in isolation.

As we execute our strategy, we believe that, over the course of an economic cycle, we will deliver these KPIs and by doing so the Group will optimise its financial performance.

 

Key performance indicator

Target

Achieved in 2013/14

Growth

Active customer growth

4%

-0.3%

 

Sales per day growth

6%

2.6%

 

Emerging market growth

10%

14.9%

Efficiency

% of MDD sales from eCommerce

70%

55.1%

 

Return on net operating assets

>30%

32.3%

Profitability

Operating margin

10%-12%

9.5%

Cash flow

Free cash flow as a % of sales

6% through the cycle

3.7%

Values for Success
 

At Premier Farnell, we believe that our success will be driven by our values:

  • Customers and suppliers are at the heart of everything we do
  • Only by working together can we deliver results
  • We must innovate; learning and adapting faster than anyone else
  • Developing people is crucial to our success
  • Integrity and trust are fundamental to our culture

These values are integral to all that we do. They guide and shape our actions as we look to lead in our industry.