DCC PLC · LSE:DCC
DCC — Investor Day (September 2013)
35 slides from DCC's investor day presentation, Sep 5, 2013
Slide 1: Analyst Visit to Micro-P
Analyst Visit to Micro-P 5 September 2013 1 1
Slide 2: Agenda
Agenda • Introduction • DCC SerCom • Micro-P – Introduction – Business model – Value added – Vendor strategy – Mobile business • Site Tour • Strategy and Focus for Growth • Q&A 2
Slide 3: DCC SerCom at a glance
DCC SerCom at a glance FY2013 The route to market partner for leading global IT, Revenue £1,850.3m communications and home entertainment brands Operating profit £41.5m ROCE 16.4% IT, 10,000+ communications customers 350 industry & home Consumer & SME leading vendors entertainment Retail, etail, prod
Slide 4: Principal Markets
Principal Markets Revenues by Geography FY2013 Revenues by End User FY2013 7% 9% UK 37% 12% France Consumer SME Ireland 63% Other 72% 4
Slide 5: Market Position
Market Position Benelux / Sweden - Niche Ireland - #1 player UK - #2 player France - #7 player Note – Supply Chain Management unit is HQ’d in Dublin with operations in Ireland, Poland, China & USA 5
Slide 6: Broad Product Portfolio
Broad Product Portfolio Revenues by product type – year ended 31 March 2013 Computing (Tablet/PC/Server) Communications & Mobile 14% Printers, Peripherals 27% 5% Consumer electronics 7% Gaming consoles & peripherals Global supply chain 9% 9% Consumables 9% 10% 10% Storage & Components Other 6
Slide 7: Three Product Pillars
Three Product Pillars IT, Communications and Home Entertainment Products • Devices to access content – central to product strategy • Convergence driving innovation & growth • Unique market position – key differentiator IT Comms Home Ent • Complements our focus on Computing Tablets Digital hub growin
Slide 8: Micro P
Micro P Presented by Gerry O’Keeffe 5 September 2013 8
Slide 9: Experienced Management Team
Micro-P Experienced Management Team Gerry O’Keeffe Group Managing Director 6 years Paul Bryan Managing Director 5 years Steve Townsley Phil Brown Finance Director B2B Sales Director 3 years 2 years Albert Lewis Mike Buley Logistics Director Retail Director 15 years 28 years Jason Chibnall Simon Wood
Slide 10: The IT Channel
The IT Channel Vendors Vendors sometimes sometimes go direct go direct into into Enterprises Retailers 10
Slide 11: FY2013: Sales
FY2013: Sales £’bn Sales £billion 1.2 1.0 0.8 Go Connect Advent Data 0.6 Sharptext Tekdata 0.4 Micro P 0.2 0.0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 11
Slide 12: FY2013: GP Split by product mix
FY2013: GP Split by product mix PC Communication 26% & Mobile 26% Print 6% Networking & Audio Visual & Components Consumer 28% Electronics 14% 12
Slide 13: FY2013: GP Split by Channel
FY2013: GP Split by Channel 2013 Stats: GP Split by Channel Communication/Mobile Communications/Mobile &&Telco Telco 14%14% SMB 32% Etail 20% Retail 34% 13
Slide 14: Keys to our success
Micro-P Keys to our success • Stable, experienced management team; • Relationships, relationships, relationships; • Can do, will do, make it happen, move on; • Micro management, reporting and performance management; • Flexibility, financial strength, commercial acumen; • Keep moving the goal posts;
Slide 15: Value add in the supply chain
Micro-P Value add in the supply chain • We are a constant in a very variable, highly pressurised, complex supply chain; • Managing forecasting across the whole retail landscape for multiple vendors; • Managing price protection, pricing strategy for vendors with multiple retailers, via pass thru; • B
Slide 16: What makes us different?
Micro-P What makes us different? • Innovation • HCA example – Brought together three vendors, two mobile networks and three retailers to design and implement a programme which captured 40% of the Home Computing Access programme. • Proactive Marketing Capability • Dell example – First Dell distributi
Slide 17: Working Capital Management
Working Capital Management Receivables Payables 95% of debts over £25k are insured All vendors have a predetermined payment profile to maximise our credit terms The first £600k of aggregate losses are self insured Micro-P raises approx £15m value of claims on our vendors We have a 100% suc
Slide 18: Business Model
Micro-P Q1 13/14 Mark Kahr Dan Lenan Nerissa Tong Business Model Purchasing Director Head of Commercial Head of Marketing Mike Buley Phil Brown Simon Woodman Mobile Director Retail Director B2B Director 18
Slide 19: Brand Portfolio
Micro-P Brand Portfolio ARCHOS | dbramantero28| AMDIA fama Hla Oper CREATIVE EDIFIER co ra a Jabra CREATIVE JAWBONE | & Dynamode BELKIN Distributor Wireless ove INTERQUARTZ’ | <y ,.. Kensington eS & be z devdio Jab e Hauppauger Hanns KONeETEL wear, Lede bad : iBoardTouch Dialegic NETGEAR i cases Fec
Slide 20: Retail/Etail Model
Micro-P Retail/Etail Model Demand Management Price Support Traditional & TV Logistics certainty Catalogue Grocery W.C Management Etail End User FF Independents White Label Website Extended Range 220 Vendors 25,000 SKU Merchandising and many others and many others 20
Slide 21: B2B Model
Micro-P B2B Model Customer Segments Field BDM Field BOM — = _ — _ — = = MMICRO-P 21
Slide 22: Vendor strategy
Vendor strategy We are committed to forming strategic relationships rather than purely transacting relationships. Selection of strategic vendors is driven by: – Capacity to lead the market by future innovation; – Opportunity to lead us into new markets and customer groups; – Willingness to operate i
Slide 23: Top partner market share
Top 11 partner market share No.1 No.1 No.1 No.1 No.1 No.1 60% 60% 32% 30% 35% 30% PC No.1 No.1 No.1 No.1 No.1 80% 90% 55% 52% 45% PC 23
Slide 24: Mobile: Vendor Approach
Micro-P Mobile Vendor Approach 1. Fulfilment Partner 2. Distribution Partner 3. Go to Market Partner • Low-margin Vendor/Customer • Mid-margin Vendor/Customer • High-margin • Vendor managed customers • Tri-Party Customer management Vendor/Customer • Vendor managed marketing • Vendor managed marketin
Slide 25: Mobile Customers
Micro-P Mobile Mobile Customers Retail & E-tail Retail & E-tail Resellers & VARs Resellers & VARs Telecoms 25
Slide 26: Handsets Financial Results
Micro-P Handsets Financial Results Sales £m 250 200 150 100 50 0 2010 2011 2012 2013 26
Slide 27: Accessories Financial Results
Micro-P Accessories Financial Results Sales £m 20 18 16 14 12 10 8 6 4 2 0 2010 2011 2012 2013 27
Slide 28: Mobile Hardware Division Growth Plans
Micro-P Mobile Hardware Division Growth Plans Brand & Product Value Added Services FY14 Hardware Objectives Portfolio Mix • Marketing services •Nokia • Incentive schemes 1. No.1 SIM Free Supplier •Samsung • Training and Accreditations across customer type •LG • Loan devices • Sony • Roadmap Events •
Slide 29: Case Study: Managing the B2B Channel - Nokia
Case Study Managing the B2B Channel - Nokia NOKIA Traded Accounts 400 350 300 250 200 150 100 50 0 29 29
Slide 30: Award-winning Distributor
Award-winning Distributor 11 awards in 9 months • Microscope Aces Hardware Distributor of the Year 2013 • Mobile Distributor of the year 2013 (Second year running) • PC Retail: Retail Distributor of the year 2013 • PC Retail: Consumer Electronics Distributor of the Year 2013 • Plantronics Partner Sm
Slide 31: Conclusion and Growth Ambitions
Conclusion and Growth Ambitions 31
Slide 32: DCC SerCom - Track Record
DCC SerCom - Track Record 5 Year Revenue Growth Stg£’m 2,000 1,850 5 Year Revenue CAGR 17.0% 1,800 1,599 1,600 1,400 1,353 1,192 1,200 1,069 1,000 844 800 600 400 200 0 2008 2009 2010 2011 2012 2013 Figures shown are reported euro numbers translated into sterling at the average fx rate for each year
Slide 33: PBIT & ROCE track record
PBIT & ROCE track record 5 Year Operating Profit Growth and ROCE 5 Year Op Profit CAGR 10.0% Stg£’m ROCE 16.4% 45 42 16.5% 16.2% 42 16.1% 40 36 16.0% 15.7% 35 15.5% 33 15.3% 15.5% 30 29 26 25 15.0% 20 14.5% 15 14.0% 10 13.5% 5 - 13.0% 2008 2009 2010 2011 2012 2013 Figures shown are reported euro num
Slide 34: DCC SerCom - Vision & Strategy
DCC SerCom - Vision & Strategy DCC SerCom’s vision is to be the leading specialist consumer and SME IT distribution business in Western Europe • With strong local market shares • Generating high levels of ROCE • Expanding into new geographies • The obvious partner for a new vendor to access European
Slide 35: DCC SerCom - Areas of Focus for Future Growth
DCC SerCom - Areas of Focus for Future Growth • Convergence: Be the leading distributor of converged devices in our core markets – Handsets – expand vendor set, continue market share gains – Accessories – first party, white label proposition – higher margin – Home Ent – Xbox One – digital hub – Serv