Solar A/s Class B · OMXCOP:SOLAR_B
Solar A/s Class B — Investor Day (June 2011)
68 slides from Solar A/s Class B's investor day presentation, Jun 9, 2011
Slide 1: Solar Group Capital Market Day
SOLAR GROUP CAPITAL MARKET DAY GROWTH THROUGH ACQUISITIONS AND INTEGRATION Alkmaar, 9 June 2011 Q1 2011 © SOLAR 2011
Slide 2: Agenda
AGENDA 11.00 Welcome by Group CEO Flemming H. Tomdrup Solar’s acquisition model and Performance Management by Group CEO Flemming H. Tomdrup and Group CFO Michael H. Jeppesen Behind the integration of the Dutch plumbing wholesaler Vegro B.V. by CED Frans Soulier, Solar Nederland B.V. Short lunch brea
Slide 3: Main phases of an acquisition
Main phases of an acquisition Due Pre-deal Dilligence Deal Integration Operation Implemen- M&A strategy Evaluation PMI plan tation Follow-up 3
Slide 4: Solar wants to realise acquisitions to increase growth
Solar wants to realise acquisitions to increase growth – published Q1 2006 • Acquisitions will be realised if value-adding Pre-deal • Necessary management must be present in the purchasing Solar company M&A strategy • The strategic rationale for the acquisition must be clear • A well worked-out post
Slide 5: Solar evaluates according to published objectives
Solar evaluates according to published objectives Due • The synergies will be recognised to the Dilligence extent they can be rendered probable • An isolated acquisition must not be of a Evaluation scale that considerably reduces the group’s financial latitude • The risk factors will be carefully as
Slide 6: Decomposition of value and simulation are always carried out
Decomposition of value and simulation are always carried out Stand-alone & synergies value 150,000 100,000 50,000 0 Stand A lo ne + Value Value after + Value + Value M aximum Value Synergies A Synergies A Synergies B Synergies C Strategic Ent. Value For illustration purposes only 6
Slide 7: Decomposition of value and simulation: WACC sensitivity
Decomposition of value and simulation are always carried out WACC sensitivity All amounts in EUR 1,000 EV s tand alone EV strategic 76,021 146,940 WACC 9.0% 94,982 173,618 10.0% 84,521 158,906 10.5% 80,061 152,629 11.0% 76,021 146,940 11.5% 72,346 141,762 12.0% 68,990 137,030 13.0% 63,085 128,698 Fo
Slide 8: A post merger integration plan is prepared
A post merger integration plan is prepared Deal • Growth PMI plan • Efficiency • People 8
Slide 9: The implementation of the PMI begins
The implementation of the PMI begins Integration Implemen- • Quick wins tation • Long term plans 9
Slide 10: Breakdown of strategy into value drivers and KPIs
Breakdown of strategy into value drivers and KPIs to ensure execution of the strategy - Organisational scope - Level 0 - Corporate Level 1 - Country Exchange rate Country Scorecard KPI x x x x x KPI x x x x x KPI x x x x x Report* - Description - Level 2 – Functional departments Sales Market HR Supp
Slide 11: Design of scorecard for three levels in Solar
Design of scorecard for three levels in Solar including both internal and external KPIs - Description - - Scorecard illustration - • The scorecard covers three levels in Solar (country, functional departments and sub-departments) • Multi dimensional and balanced KPIs that can be influenced by Solar
Slide 12: Live demo of scorecard
Live demo of scorecard xCelsius Dashboard_Solar Pilot_v02acrobat9.pdf For illustration purposes only
Slide 13: Performance Management booklet
Performance Management booklet - Description - • Content: - Solar Strategy - How PM supports strategy execution (incl. PM - Performance framework) Management booklet - - Link between Company program, VR, Lean and PM - Principles for target setting and planning Solar - Principles for follow-up Perfor
Slide 14: Performance Management governance structure
Performance Management governance structure - Description - • Defined Performance Management - Performance Management calendar- governance structure incl: Strategy review: validate vision and Must Win Battles and January February March April May June July August September October November December -
Slide 15: Agenda
AGENDA 11.00 Welcome by Group CEO Flemming H. Tomdrup Solar’s acquisition model and Performance Management by Group CEO Flemming H. Tomdrup and Group CFO Michael H. Jeppesen Behind the integration of the Dutch plumbing wholesaler Vegro B.V. by CED Frans Soulier, Solar Nederland B.V. Short lunch brea
Slide 16: History Solar Netherlands B.V.
History Solar Netherlands B.V. 1996 Solar enters the Dutch market by the acquisition of Brinkman & Germeraad, an electrical wholesaler 2002 The acquisition of Electro Automatisering en Smelt, an electrical wholesaler. Integrated in 2003-2004 2007 Entrance in the HWS market by the acquisition of Geco
Slide 17: Post merger integration plan (PMI) The blueprint
Post merger integration plan (PMI) The blueprint This document is the constitution of the integration programme • Approach on the integration • Steps of integration • Guiding principles which will be applied in the integration • Shaping the integration programme in alignment with the strategy Is a w
Slide 18: The blueprint
The blueprint An electronic version of our blueprint will be shown briefly http://ipaper.ipapercms.dk/solargroup/NL/SolarPortal/Integratienieuws/Inte grationblueprint2/ 18
Slide 19: Main phases of the PMI plan
Main phases of the PMI plan Comm. Steering Set PMI The Blue Detailed Execution of activities committee team Print plan the PMI plan 10/12-2008 02-2009 03-2009 04-2009 05-2009 2009 - 2010 Full integration of all the activities 01-01 2011 19
Slide 20: Content of Post Merger Integration plan
Content of Post Merger Integration plan The PMI plan contains the following main subjects: • Growth – Sales and market • Customer segmentation, Key accounts, Cross sales activities, Branch network, Products, Suppliers, Sales promotion • Efficiency – Supply chain • Logistics, Distribution, Purchase •
Slide 21: The learnings
The learnings The blueprint and PMI plan gave us the following main learnings: • Creating the blueprint with the responsible management creates involvement • The approach allows you to create commitment at top level within the organisation • The PMI plan helps you to prioritise, execute and follow u
Slide 22: Agenda
AGENDA 11.00 Welcome by Group CEO Flemming H. Tomdrup Solar’s acquisition model and Performance Management by Group CEO Flemming H. Tomdrup and Group CFO Michael H. Jeppesen Behind the integration of the Dutch plumbing wholesaler Vegro B.V. by CED Frans Soulier, Solar Nederland B.V. Short lunch brea
Slide 23: Agenda
AGENDA 11.00 Welcome by Group CEO Flemming H. Tomdrup Solar’s acquisition model and Performance Management by Group CEO Flemming H. Tomdrup and Group CFO Michael H. Jeppesen Behind the integration of the Dutch plumbing wholesaler Vegro B.V. by CED Frans Soulier, Solar Nederland B.V. Short lunch brea
Slide 24: Solar 8000 makes Solar work as one company
Solar 8000 makes Solar work as one company “WHY WE DO IT” An organisation at central and local level which Performance management and management supports the targets as best as possible commitment • Corporate process owners working • Clearly defined and primarily data driven together with local proc
Slide 25: Solar 8000 Value Creation
25 Solar 8000 Value Creation - how to sustain and continuously improve performance in the Solar Group Results Solar Group “Best Scenario 1: With Benefit Tracking Practice” for Continuous Continue - Keep momentum and Improvement capture the future potential Scenario 2: Without Benefit Tracking The si
Slide 26: Solar 8000 Planning: Must-Do Activities
Solar 8000 Planning: Must-Do Activities During Solar 8000 Rollout Before Solar 8000 Rollout After Solar 8000 Rollout Preparation Deploy • Master Data Organisation • Super user • Backfill of After implementation of Solar Org • Customer Care structure setup organisation 8000 we will revisit the SGS •
Slide 27: Comprehensive Solar 8000 Activity Plan
Comprehensive Solar 8000 Activity Plan 27
Slide 28: One Process model for Solar
One Process model for Solar Core processes Product Life Cycle Phase in & Profit analysis Pricing Catalogues Campaigns Phase out maintenance (margin protection) Purchasing related Procure to Pay master data Sourcing Invoice verification Accounts payable Claims and returns Receive to Ship Transportati
Slide 29: Lean - benefits
Lean - benefits Lean boards, “Boardwalk” and lean thinking facilitate focus and create open discussions Efficient work processes supported by SAP Involvement & mutual goals 29 June 10, 2011
Slide 30: 24/7 up to date valid data for all processes
24/7 up to date VALID DATA for all processes and performance management To fulfill this mission, we established the Master Data Organisation One department for all master data • Material master incl. catalogue data • Vendor master • Customer master • Pricing principles Monitoring and maintenance in
Slide 31: Supply Chain and Supplier Development
31 Supply Chain and Supplier Development Role Description Corporate Product • Overall Supplier responsibility Manager • Defines and maintain strategic supplier list • Open doors at suppliers • Utilise the STEP-model position and progress in meetings with suppliers and Country Product Managers Roles
Slide 32: Supply Chain and Supplier Development
32 Supply Chain and Supplier Development Lead time analysis Audits are ERP lead time Actual lead time* Gap included in the Avg. lead time (days) 7,16 10,79 3,63 activities and part of Solar Service degree June to October LEAN June July August September October Total approach Service degree in % (EDD
Slide 33: Best practice – super users
Best practice – super users Excellent super users are vital for successful implementation. They share the best practice regarding the work processes and the IT system. We use our absolutely best employees for this task. A helpdesk with super users creates great results with best practice. The same g
Slide 34: Customer care center – agile response
Customer care center – agile response A vital part of the Solar 8000 implementation Centralised handling of claims, E-business orders, credits, return of goods and monitoring Integrated with the Cisco based IP telephony system Agility in customer relations by ensuring «back office» assistance to fro
Slide 35: Agenda
AGENDA 11.00 Welcome by Group CEO Flemming H. Tomdrup Solar’s acquisition model and Performance Management by Group CEO Flemming H. Tomdrup and Group CFO Michael H. Jeppesen Behind the integration of the Dutch plumbing wholesaler Vegro B.V. by CED Frans Soulier, Solar Nederland B.V. Short lunch brea
Slide 36: Change with confidence
Change with confidence Main objective for Change Management: minimise impact on productivity of the business Key attention items: • Solar 8000 completes integration • Change management = key • Implement organisational changes early • Monitor performance of the business 36
Slide 37: Project Plan - NL Roll-Out
Project Plan - NL Roll-Out APR MAY JUN JUL AUG SEP OCT NOV DEC 2011 2011 2011 2011 2011 2011 2011 2011 2011 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 Change Management Activities (Communication, Change Leadership and Change R
Slide 38: Change Management – Organisation
Change Management – Organisation • Implement organisational changes early • Ensure every task is covered (role mapping) • Early setup of the Master Data Organisation and Customer Care 38 38
Slide 39: Organisation alignment
Organisation alignment • Launched 1 May 2011 • New process development manager CED • Business Architect responsible for operating model assigned to Solar Executive Assistants Process Development 8000 • Formal launch 1 July • Scope covers Lean, Business • Out of Scope for Solar 8000 Architecture, QA
Slide 40: Change Management – Training
Change Management – Training • Training is main priority • Driving license approach • Process awareness and system training • Super users involved in review & development of the Solar 8000 solution • Internships in Norway 40
Slide 41: Change Management – Engagement
Change Management – Engagement • Change leadership training • Stakeholders involved in organisation design • Change Agent Network • Change management represented at all levels • Approach reflects our integration experience 41
Slide 42: What does it mean to our employees?
What does it mean to our employees? 42
Slide 43: Support for change
Engagement - commitment curve Leadership Change Agents End Users Support for change Commitment Acceptance GO-LIVE Understanding Awareness Time 43
Slide 44: Change Management – Measurement
Change Management – Measurement • Measurement on project, process work stream and from end user perspective • End user readiness assessments 6-8 weeks • Actions in close cooperation with line management 44
Slide 45: Current focus
Current focus • Detailing organisational impact • Assigning people • Training curriculum development • Role mapping • Increasing communication activities • Process awareness training 45 45
Slide 46: Agenda
AGENDA 11.00 Welcome by Group CEO Flemming H. Tomdrup Solar’s acquisition model and Performance Management by Group CEO Flemming H. Tomdrup and Group CFO Michael H. Jeppesen Behind the integration of the Dutch plumbing wholesaler Vegro B.V. by CED Frans Soulier, Solar Nederland B.V. Short lunch brea
Slide 47: Agenda
AGENDA 11.00 Welcome by Group CEO Flemming H. Tomdrup Solar’s acquisition model and Performance Management by Group CEO Flemming H. Tomdrup and Group CFO Michael H. Jeppesen Behind the integration of the Dutch plumbing wholesaler Vegro B.V. by CED Frans Soulier, Solar Nederland B.V. Short lunch brea
Slide 48: Total offer in electro, sanitary and heating
Total offer in electro, sanitary and heating Installation Cable Marine & Offshore Light Industry Communication Security Ventilation Heating Sanitary 48
Slide 49: Solar Nederland delivers products and solutions to customers
Solar Nederland delivers products and solutions to customers within: Residential Industry Marine Utility Public Sector and and and Commercial Offshore Infrastructure Buildings 49
Slide 50: Our wholesale market in numbers
Our wholesale market in numbers Total wholesale market € 3.000 million (systems & products EHWS) Number of installers +/- 5000 4500 small (1 – 25 employees) 450 mid size (25-250 employees) 50 large (> 250 employees) Over 50% of the installers are combined installers Solar’s position by segment Overa
Slide 51: Trends in the market
Trends in the market • Increase of industrial activities • Sustainable Energy is the buzzword • Downturn of commercial construction sector • Downturn of home building sector • M+A strategy in the installation sector is expected • Increasing need for partnerships • Upwards potential related to wholes
Slide 52: Market position Solar Nederland B.V.
Market position Solar Nederland B.V. Electrical market share 2011: 8% Sanitary market share 2011: 13% Heating market share 2011: 24% Total market share 2011: 13% The potential acquisition will increase our market share in the electrical market 52
Slide 53: Our organisation
Our organisation Director Sales & Marketing Secretary office Marketing Business Development E-business RM North RM South RM Southwest RM Northwest Div. Mgr. NA Mgr. Showrooms Technical Product Support NA National (TPS) Head Sales Manager Sales Manager Sales Manager Sales office OEM/Industry Installe
Slide 54: The sales network 2011 and 2009
The sales network 2011 19 Solar branches of which 14 sales offices incl. drive inns 5 drive inns 7 showrooms 3 distribution centres Regional competence center The sales network 2009 36 branches of which 21 Solar branches 15 Vegro branches 12 Vegro showrooms 5 distribution centres 54
Slide 55: Group strategy 2010-2015: #1 in Technical Wholesale
Group strategy 2010-2015 “#1 in Technical Wholesale” • The Group strategy is designed to ensure a significantly increased performance and a continued development of Solar’s position as the number 1 technical wholesaler within electrical, heating, plumbing and ventilation material. 55
Slide 56: Definition of distinguishing values
Definition of 4 distinguishing values Being one strong technical wholesaler! • Total offer in electro, sanitary and heating products and solutions • Technical support, available and close to the customer • Support in business processes • Flexible and alert Excellent logistics and excellent systems a
Slide 57: Agenda
AGENDA 11.00 Welcome by Group CEO Flemming H. Tomdrup Solar’s acquisition model and Performance Management by Group CEO Flemming H. Tomdrup and Group CFO Michael H. Jeppesen Behind the integration of the Dutch plumbing wholesaler Vegro B.V. by CED Frans Soulier, Solar Nederland B.V. Short lunch brea
Slide 58: Communication plan to the market
Communication plan to the market Goals • Increase Solar brand awareness in the HWS market • Secure that the “Vegro” customers recognise the Solar company • Avoid making promises which we cannot fulfil towards customers • Preparing for the future 58
Slide 59: Communication plan to the market
Communication plan to the market What did we do • Inform “Vegro” customers about the new name by: • Introducing the double logo to the “Vegro” customers • Signing of the buildings • Changing all Vegro printing material to the double logo • Our web site • Participation in the largest HWS exhibition i
Slide 60: Communication plan: examples of the double logo
Communication plan to the market Examples of the double logo 60
Slide 61: Communication plan: examples of the double logo
Communication plan to the market Examples of the double logo 61 11-06-10
Slide 62: How did the communication plan work out
Solar in the Netherlands How did the communication plan work out: Across segments: • Preference for Solar among potential customers has increased significantly in all segments since 2009 • Awareness of Solar has increased spectacularly in all three segments but especially in the HWS segment 62
Slide 63: How do we increase our brand audience?
How do we increase our brand audience? Solar NL Potential customers 100% 2011 Preferred 80% Attractive 60% Considered relevant 40% 17% 14% 14% 4% Name is mentioned unaided 1% 20% 5% 24% 21% 31% 15% 0% 4% 6% 5% 2% Solar total Certified Industrial HWS fitters electricians market 2009 100% 80% 60% 40%
Slide 64: How did the communication plan work out
Solar in the Netherlands How did the communication plan work out: Across segments: • Preference for Solar among potential customers has increased significantly in all segments since 2009 • Awareness of Solar has increased spectacularly in all three segments but especially in the HWS segment 64
Slide 65: Awareness of Solar
Awareness of Solar Solar NL 2011 100% Aided awareness Unaided awareness 80% 10% 16% 60% 21% 20% 40% 76% 62% 52% 46% 20% 0% Solar total Certified Industrial HWS fitters electricians market 2009 100% 80% 60% 42% 49% 47% 40% 57% 20% 34% 25% 26% 13% 0% Solar total Certified Industrial HWS fitters electr
Slide 66: Communication plan: future goals
Communication plan to the market What are our future goals? • Single Solar logo after Solar 8000 roll out • Strengthen our brand position to “Top of mind” • Be the best in class as Experts, Involvers and Challengers 66
Slide 67: Communication plan: how to achieve goals
Communication plan to the market How are we going to achieve these goals? • Remove the Vegro part from the double logo on buildings and trucks • All printing material with Solar logo • Communication offensive toward the market on brand positioning • Informing the market about our strength 67
Slide 68: Agenda
AGENDA 11.00 Welcome by Group CEO Flemming H. Tomdrup Solar’s acquisition model and Performance Management by Group CEO Flemming H. Tomdrup and Group CFO Michael H. Jeppesen Behind the integration of the Dutch plumbing wholesaler Vegro B.V. by CED Frans Soulier, Solar Nederland B.V. Short lunch brea