Investment Proposition

Understanding our business in Six Steps:

Electronics is increasingly pervasive around the world in all areas of our lives. We have a critical role to play in the distribution of new technology, the design of new electronic products and the maintenance and repair of existing products.
Premier Farnell has a clear strategy supported by four key pillars

Focus on the electronic design engineering segment
Focus on high service maintenance, repair and operations segment
Serving customers through their preferred and our most efficient channel: the web
Building our business internationally, especially in fast growing markets

These key drivers underlie the case for investment in Premier Farnell, the trusted source for engineering solutions.

Electronic design engineering market is growing structurally through economic cycles

As users demand more and greater functionality, improved aesthetics and new versions of existing products the design cycle gets shorter and the pressure on engineers increases. It’s a cycle of perpetual revolution fuelling growth and increasing the speed of the design process and the sensitivity of cost to market for new innovations.

Plus this market has 3%-5% higher gross margins than the overall MRO market segment, with customers preferring the more efficient web channel. This has helped us maintain industry leading return on sales (ROS) for the past 5 years with MDD Americas business’ ROS more than doubling from 4% in 2009/10 to 8.5% in 2011/12 through its ongoing transformational journey.

End to end support

In a time critical world, engineers need access to products, support, software, tools and information quickly and in one place. The growing body of environmental legislation also adds a pressure for engineers to create new greener, lower energy products.

By providing them with the solutions they need to be successful in the fast paced world and support through every step of the design process, as well as a superior web experience, Premier Farnell is well placed as the trusted source for electronic design engineers.

Our customer proposition will win share in a fragmented global market place

High service distribution, at either end of the lifecycle of an electronic product, is very fragmented with 80% of the market served by small and medium-sized local competitors.

Our customers demand a broad range of stocked product with trusted, quality information and fast delivery. Engineers are also increasingly demanding support throughout the design process, especially information through the web. As one of only four global distributors able to meet these exacting requirements, Premier Farnell has a significant opportunity to gain market share.

And, as emerging economies become the engineering powerhouses of the future, we have the opportunity to win market share in these territories too.

Advanced web capability in a multichannel offering

The web can transform the shape, structure and efficiency of any organisation, but for us it goes beyond this; it allows us to meet the needs of our customers and build trusted customer relationships. Our web proposition enables us to provide:

Easy access to large amounts of design data, legislative information and the latest product details
Best-in-class search results for customers to find what they need, quickly and easily
Instant access to discussions with engineering experts and industry peers through our industry leading, element14 community
An array of tools to simplify engineering and buying processes
An online workplace for engineers to research and store information they require as well as easily access our range of end to end services and solutions.

Around the world we have a total of 48 transactional websites, 33 of which are in local languages. These websites receive on average 32.5 million page views each quarter.

Multichannel customer support, infrastructure, advanced supply chain

Premier Farnell is striking the balance of the right customer support and channels to service our customers’ needs and be their trusted source. As well as our innovative web proposition, we have 300 local sales resources, over 900 contact centre resources, 200+ technical and engineering resources and are investing in tier one contact centres in every region.

We have a balance level of infrastructure too. With seven distribution centres around the globe, our footprint allows us to deliver 67,000 line items per day, shipping 99.6% next day to meet our customers’ demands.

And with over 400,000 stocked products and 4 million more available in our Marketing and Distribution Division, we are a chosen partner for over 3,500 global suppliers.

Our elements

At the heart of our business are our people and our core values.

Maintaining a high performance culture by investing in our people, recognising their talent and achievements and engaging with our employees through communications and an annual all-employee survey.
Building a sustainable and profitable future with a focus on the planet, people and principles through our Trust Agenda

Premier Farnell